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Like campuses nationwide thinking creatively about financial-aid offerings aimed at attracting, retaining and supporting more students in the face of higher education headwinds, Cornell College has unveiled a new “debt reduction pledge” to pay as much as half a student’s federal loan debt.
The commitment — which the college intends to offer select students annually, starting with 65 freshmen enrolled for the 2022-23 school year — comes with some caveats, including a $12,000 cap.
Students chosen to receive the Cornell debt-help at the time of graduation must finish in four years, live on campus the whole time, stay in good academic standing and remain enrolled full-time. In announcing the “Debt Reduction Pledge” last month, the college said the program “works in conjunction with all of Cornell’s current financial assistance support and will not impact any aid, scholarships, work study, or other funding you will receive as an admitted student.”
Cornell — a private liberal arts college in Mount Vernon — is not unique in formulating creative aid options and offerings aimed at decreasing the cost of getting a degree in this time of growing financial concerns facing families.
Grinnell College, for example, last fall announced it is eliminating loans and replacing them with scholarships in all need-based financial aid packages — helping to “lower the debt burden on students.”
Nor is Cornell — which aims to promote its new pledge as it recruits for next fall — alone in its efforts to expand enrollment and marketing tools.
Take Pella’s private Central College, which in 2019 announced plans to slash $20,000 from its tuition sticker price to infuse more clarity in the actual cost to attend. That cost often was markedly lower than it seemed due to an abundance of financial aid options to offset that sticker price.
Numerous loan forgiveness or repayment programs are meant to encourage workforce development in specific career fields, according to Mark Wiederspan, executive director of Iowa College Aid, the state’s student financial aid agency.
“I think what is unique about this one is the applicability of it to actual college students,” Wiederspan said of the Cornell program.
Where traditional loan forgiveness programs offered by the government might relieve payments if graduates take certain jobs in public service like teaching or nursing, for example, Cornell ties its debt-reduction pledge to success over students’ four years on its campus.
For those selected under Cornell’s plan, the college would pay up to $12,00 if a student takes out $24,000 or more of federal loans. If a selected student takes out less than $24,000, Cornell would pay half the final bill — meaning the college would cover $4,000 of a student’s $8,000 federal loan, for example.
The $12,000 cap is meaningful because it’s the most students can borrow in federal loans for their first two years, according to Cornell Director of Admission Drew Shradel.
“It’s an awesome way for students to attend college for two out of the four years, essentially debt-free,” Shradel said in a statement. “You’ll be able to focus on your studies and not have to worry about as much debt because the college is going to pick up half of your federal loans.”
Iowa College Aid reported that Cornell’s graduating class of 2020 had the second-highest average debt upon graduation among the state’s 47 public, private and community colleges at $39,924. That was the average debt of the 132 Cornell 2020 graduates who had debt when they left — 67 percent of its 196 graduates that year. In total, the graduates combined for $5.3 million.
Davenport’s Saint Ambrose University’s $41,287 average debt upon graduation was the highest in the state. The regents’ public universities averaged $27,733; private colleges and universities averaged $32,726; and community colleges averaged $13,422.
Although Iowa’s private colleges offer substantial financial aid packages to many students, Iowa College Aid reports the average tuition and fees for private colleges in 2020 continued its climb to $31,013 — about $10,000 above the 2010 average a decade earlier.
While the rates are lower, costs to attend regent universities or community colleges also have climbed over the years, and Cornell Vice President for Enrollment Management Wendy Beckemeyer said her campus’ new pledge aims to keep higher education accessible.
“With this pledge, it’s very rewarding to know that more people will have access to higher education,” Beckemeyer said. “Cornell’s Debt Reduction Pledge is going to impact their lives and the lives of others. Research shows if you have a college education you are more likely to give blood, volunteer, vote, and you are more likely to have kids that do well in school, do well in math, and go to college. This is an opportunity to make a significant difference.”
Cornell hasn’t drafted clear metrics for how it will choose recipients, because Beckemeyer said, “we want this program to be accessible to everyone.”
The pledge is available to students from across the country — not just Iowans, she said. They’re fielding interest and applications through Feb. 1 for the next academic year. “And then we’ll let everyone know on March 1,” she said.
One key difference in this aid program is that — unlike scholarships that give money directly to students — Cornell sends the aid to the loan provider. In that it doesn’t come until the end of the four college years, Beckemeyer said the program serves as a reminder “the institution is betting on you.”
Although Wiederspan said research exists that shows these types of programs are successful in keeping students in school, it’s a bit unclear on how successful they are in increasing enrollment.
“But I think that you'll start discovering that some institutions are going to try to figure out clever ways of providing financial aid or declining tuition,” he said.
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