NASFAA Mention: Morehouse College Commencement Speaker Gift to Graduates With Student Loans and Its Aftermath
"When billionaire investor Robert F. Smith delivered the commencement address at Morehouse College in Atlanta and promised to pay off the student loans of all Class of 2019 graduates, the news went viral. As students celebrated, financial aid administrators were left to manage the logistics. Higher ed administrators across the country, meanwhile, are imagining what such a gift would mean for their institutions," University Business reports.
"'It’s an exciting time,' says Kristen Gast, director of financial aid at Southern Oregon University, who has been following the Morehouse story closely. 'The students are graduating with no debt and are able to plan their lives without the burden of $40,000 [in student loans]. But at the same time, the financial aid office has to know where to direct the funds, how to get them to the students, and how to communicate what it means to have their loans paid off.'
'That probably creates a lot of questions and concern and anxiety about how it is going to be administered,' she adds.
... Deciding how to release the funds is surely another big to-do item.
Gast suggests that they might issue a scholarship to each student in an amount that reflects their total debt.
Karen McCarthy, director of policy analysis for the National Association of Student Financial Aid Administrators (NASFAA), suspects Morehouse might act as a pass-through entity that transfers the funds between the donor and student loan servicers.
Privacy issues would prevent the college from providing its donor with information about what each student owed. Also, says McCarthy, cutting checks for each student to pay off their own debt would be too risky.
Regardless of how Morehouse officials decide to administer the gift, the process could take weeks—or months—to complete."
NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.
Publication Date: 7/3/2019
