Student loan debt has been in the news lately. According to the Consumer Finance Protection Burea’s student loan ombudsman Rohit Chopra, the student loan debt market is “too big to fail.” It was disclosed recently that student loans now top over $1 trillion.
According to Chopra, “Students borrowed $117 billion in federal student loans just last year. And students continue to borrow private student loans, which lack the income-based repayment and deferment options of federal student loans. If current trends continue, there will be consequences not just for young people, but for all of us.”
Another student loan issue in the news right now is the federal Stafford Loans. These subsidized student loans are set to expire this summer. If they are not renewed by congress, interest rates on those student loans will double to 6.8 percent.
Lots of schools are responding to this issue and the tough worldwide economy in different ways. Schools like Burlington College in Vermont and Mount Holyoke College in Massachusetts are freezing their tuitions. Burlington College has stated they will not raise tuition for four year and Mount Holyoke is enacting their first tuition freeze since the 1960s.
Some schools are thinking about out-of-the-box methods to entice students to attend. Ashland University in Ohio will begin to offer bachelor degrees next year that will only take 3 years to complete. Also in Ohio, Baldwin-Wallace College is starting a “Four-Year Graduation Guarantee” program. If a student who maintains a 2.0 GPA at Baldwin does not graduate in 4 years, the college will pick up the tab for the remaining tuition costs.
Schools are also finding ways to create programs that offer a combination of Bachelor and Masters degrees in only 4 years. Simmons College in Boston and Wilson College in Pennsylvania are a couple schools that are going in this direction.
Some schools are lowering credit hours required to graduate. Lipscomb University in Texas is lowering their graduation requirement from 132 credits to 126. This is the equivalent of 2 classes on average.
The student loan landscape is constantly evolving. Make sure to utilize Cappex to stay up to date on all things college.