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A small liberal arts college in southern Michigan said it will pay student loans for graduates who can’t find a job or don’t make enough money.
Adrian College announced its new program, dubbed AdrianPlus, on Sept. 13, saying next year’s freshmen and transfer students will be eligible for free loan assistance upon graduation, given a few conditions:
- Adrian College will cover the monthly loan payments for graduates who earn $20,000 or less.
- Graduates with incomes above $37,000 will pay their own student loans.
- For those earning between $20,000 and $37,000, the college will help pay their loans on a sliding scale, based on income.
- Loan assistance continues until the debt has been paid off or the graduate reaches a salary of more than $37,000.
The college didn’t go into further details in its announcement or on its website, other than to say qualifying students will receive a letter outlining the specifics of the program.
Located in Adrian, Mich., a town of about 21,000, the college was established in 1859 and has an enrollment of about 1,700. The institution offers more than 40 majors and pre-professional programs, and this year’s full tuition, fees, room and board costs just less than $40,000. The average debt load for the class of 2012 was $30,645, according to U.S. News & World Report. The report has also ranked Adrian as a Best Value School.
“This is a way for us to say that we understand that student debt is a concern of families, and we want to do our part to help you with that,” said Jeffrey Docking, president of Adrian College. The college posted a video announcement from the president on its website. “We believe, of course, that the best education that young people can get is a private liberal arts college education, and we don’t want money to be a reason that students don’t attend Adrian.”
It would be interesting to see how Adrian College’s acceptance rate looks next year, when the first class eligible for the program will apply for admission. U.S. News & World Report pegs the acceptance rate at 62.7%, and the school intentionally keeps a low enrollment to preserve its small-class teaching philosophy.
Another intriguing factor of this program is how students will respond: Will they be more willing to accept lower-paying jobs? Will they be more inclined to take out loans?
Dealing With Student Loan Debt
With student loans, taking out more than can be handled financially is one of the biggest problems facing borrowers. A good rule of thumb is to graduate with debt less than or equal to one’s expected annual income. For those who don’t attend a school like Adrian, there are a few options for adjusting payments when unemployment or low income makes the bills difficult to pay, and those who work in public service are often eligible for loan forgiveness.
Regardless of the terms of the programs, all students with loans need to stay on top of their debt. No matter who’s paying, student borrowers need to know their loan servicers, keep up with their debt profile by requesting their free annual credit report and make sure payments are made on time in order to build good credit. Especially for young people, keeping track of your credit health through frequent monitoring, like using Credit.com’s free Credit Report Card to get your credit score and an overview of your credit profile, will help establish strong personal finance habits.