Avoiding Default
How have the 90/10 rules effected your tuition rates and with raises in tuition and higher payments do you feel more default situations have occured?
Our tuition rates have decreased---so the 90/10 rule doesn't apply here.
I feel our FA counselors do an excellent job of explaining the rules/regulations. They are readily accessible to students who have many questions throughout the program. They meet with students several times during program and also have exit interviews.
Before the student leave the building after his/her financial aid appointment, the admissions representative should ask the student if he/she understand their FA packaging. if the student do not understand it, take them back to the FA administrator.
In all scenarios when someone really wants something they will find a way if not they will make excuses.. the 90/10 rule is of no issue for those who really want it.
I am currently working in an admissions position however i have worked in FA before. While working in FA i was also given the gift of trying to improve our default rate. What i discovered was that most student were very poorly educated about simple way for them to understand and be responsible with there aid. For one, most of the student i come in contact we not familiar with NSLDS. With this tool alone they can be aware of their FA history, lender contact info, as well as look into questions or concerns they might have with the pretty comprehensive Q & A section they have on there. Now taking the extra step of showing them the site and giving them something to hold onto with the website will not insure they will be resposible but in it cant hurt and it seems to help. Once i stated doing this with my students, especially the ones with prior FA history they were not only better informed but they also could start to see a clear path for them to manage the loans, but also see the oppertunity FA gives them more clearly as them investing in themselves. The only other main this that helps with improving the defualt rate is having updated contact info. In the school im currently at I proposed working in conjuction with carrer services and FA to have an event for graduates. This would also provide an oppertunity for the school to work on both FA and Carrer service cohorts as well as continuing a positive relationship with grad who could possible help to provide the school with referrals, etc. So far nothing has come from my proposal
I am in academics. I am not allowed to talk about FA with students either.
I am in Admissions we do not talk about FA with the students into details just the tuition.
Financial aid department needs to be clear with prospective student before signing any documents. Any expectations and payments need to be clearly defined and explained. This will help to improve the defult rate.
If I am caught discussing FA with a student I can be fired immediately. Do I think this could help reinforce the repayment obligation YES, but I am required to follow the rules.
My institution has always done good with the 90/10 rule. We have some programs that are a little higher cost and the students in those programs do typically have payments. I don't think that the 90/10 has increased the default rate because there has been a reduction in how much funds a student can utalize with the school cost so it cuts down on the total loans a student is taking out. I think the big problem with the default rates are the fact that students don't communicate with their loan carrier or they have no idea who they are. Students move around a lot and change addresses and phone numbers often so they don't always get the mail or phone calls from the lender. Lenders have a lot of great programs for students but the students just don't communicate with them to find out what options they have.
Unfortunately with some institutions when it comes to tuition rates their philosophy is never mind the mule just keep loading the wagon. We have frozen our tuition rates. Our graduates are doing extremely well financially but why take the extra money if you don't need it? If we did raise it a bit I don't think if would hurt our default rate. We've seen our incomes go up over the last 2 years but I think in light of the economic problems most people are having in their homes and the inflation we are beginning to see parents don't have the money to help their children like they use to. Being a parent myself I can see the hurt in their eyes. If schools don't hold the line on tuition there will definitely be an increase in defaults. The economy just can't sustain it.
Camron,
Thank you for sharing your insight and opinions relating to the 90/10 rule.
Kimberly Stein
The 90/10 rule has not increased the college's tuition rates nor has it caused an increase in our default rate. Our tuition rates have stayed the same for years and we work very hard to keep that cost down.
One way we are proactive in reducing default rates is by providing a tuition freeze program that locks the cost of the program at a set rate upon enrollment and as long as the student is continuously enrolled in school, the tuition rate will never increase.
I am not familiar with the contributing factors to our tuition rate so I am unable to accurately answer the first question. I would assume it hasn't had much of an impact on the cost but it has certainly had an impact in terms of how students fund their education.
The 90/10 rule does make it difficult to not raise tuition. However, an institutions financial aid department needs to be clear and concise when discussing the student obligations. We have no bearing on the outcomes of these statements nor are we involved. That is really where you leave it to the professional in financial aid to assist the students.
I feel that the 90/10 rule is very beneficial for students. I say this because it gets the student in the habit of making payments, but it also encourages student success. Students that do have out of pocket expenses are more likely to take their education seriously, as they are seeing the investment in their education. In some cases I can see how the 90/10 rule can effect the cost of an educational program. For some programs achieving 90/10 is difficult to do when the federal aid programs can cover the cost of a students education. Many students looking to further their education are suffering economically and it is not in their budgets to pay towards their tuition. I could probably talk about this issue all day as it ha positives and negatives.
Our school usually increases their tuition annually from my understanding, but I haven't seen any direct connection between the annual tuition increase and the default rate. It's something I hadn't thought of until this discussion forum, so I'm curious to see if there is a connection here.
I don't feel that the 90/10 shoudl be shouldering the burden of our nation's default situations. Based on my observations within the admissions role, I've found students to be in default regardless of how much their previous institution costs were. I think the bigger picture is not the high cost of education but students utilizing student loans without being properly educated on the how federal funding works, and being aware of the amount of total debt they're taking on. A student at a private institution could be taking out less loans to pay for tuition, books, and fees than maybe a student at a community college who is maxing out their loans each semester to receive a stipend. In my opinion, the more resources and education students receive regarding financial aid the better prepared they can be to make the best decisions toward funding their education.
