By David Sheridan, Director of Financial Aid at Columbia University School of International and Public Affairs
Financial aid has long been on elected officials’ radar; names such as Pell, Perkins, Stafford and Ford that have been part of the financial aid lexicon for decades are, after all, names of federal lawmakers who championed Title IV aid programs.
But we’ve never seen it elevated to this level of awareness; paying for college is now a front-burner issue for many presidential hopefuls, and the primary reason for this is that Americans owe over $1 trillion in student loans. So it was no surprise that the program for the 2019 NASFAA National Conference included at least a dozen sessions for attendees to discuss various aspects of student borrowing. There is always a lot to learn.
When perusing the agenda and deciding what sessions to attend, “Who Struggles to Repay Their Student Loans and What Can Colleges Do to Help?” caught my eye. Presented by Colleen Campbell from the Center for American Progress (a former aid administrator), Helen Faith from Lane Community College, and Neha Dalal from the Institute for College Access & Success, the session offered significant insight and data showing populations encountering the greatest challenges to repayment. We know about average debt and default rates, but did you know that Pell Grant recipients who earn a bachelor’s degree are five times more likely to default than higher income students? And that on average, they borrow $4,500 more than non-Pell recipients? Or that borrowers who successfully complete certificate programs default at a similar rate to borrowers who drop out? That African American bachelor’s degree recipients are seven times more likely to default within 12 years than white borrowers? Underrepresented students, non-traditional students, students who are parents … all at more risk of difficulty in repayment.
There are many issues at play here; America suffers from wage inequality along gender and racial lines, and there’s little we can do in our offices to change that. But what can we do? What data have you collected about your own borrowers, while they’re enrolled or afterwards? How do borrowing levels among different groups of students factor into institutional policy regarding packaging or emergency aid? Are your student budgets realistic and transparent? Are there ways, as Lane Community College has done, to provide additional information about borrowing as part of application or award notification procedures? Knowing this information, should we consider different loan counseling and default prevention initiatives?
Yes, many students borrow and repay successfully. But as we approach America’s second trillion dollars of student loans, there’s still much to be learned as to how we can make this a more effective process for students and taxpayers as well as our places of employment.
Publication Date: 7/2/2019