In an effort to market itself as a strong investment for scarce higher education dollars, Adrian College has made a startling promise. If, after graduation, its former students don’t land a decent job, the school will make their student loan payments until they do.
Starting with next year’s freshmen and transfer sophomores, Adrian College in Michigan will cover the loan payments of all graduates who don’t earn at least $20,000 a year. For those earning between $20,000 and $37,000, the school will cover part of the monthly payment.
Anticipating tougher financial times ahead, small colleges around the country have been making a number of moves to make themselves more appealing to students. A few have dropped tuition by as much as a third, but so far only Adrian has put what amounts to a financial guarantee that its graduates won’t find themselves in a financial lurch when they leave.
In Michigan, the average student loan debt is about $27,000 per student, and more than 60% of all Michigan graduates leave college with student loan debt.
The Adrian program works like this: Get a job after graduation that pays less than $20,000 a year, and the college will make the complete monthly student loan payment until the individual makes more than $37,000 a year. Get a job that pays between $20,000 and $37,000, and the college will make payments on a sliding scale. If students go directly on to graduate school, the program kicks in once they leave the grad school.
There is no time limit for the payment plan to run out, but Adrian caps total loan payments at $70,000 per student.
David Jesse of the Detroit Free Press reports that the plan represents an acknowledgment by the school that student loan debt – as well as how to pay it off – is now one of the major concerns of families and students choosing colleges. According to Adrian President Jeffrey Docking, these concerns are magnified with smaller colleges that don’t have a proven track record of placing their graduates in jobs as well as typically carry a higher price tag than a large state school.
It costs about $39,500 a year to go to Adrian, located about 90 minutes southwest of Detroit. The average student pays around $20,000 when financial aid is factored in, and 43% of Adrian students qualify for Pell Grants, which are given out to lower-income students.
About 85% of Adrian students graduate with student loan debt, federal data shows, and the average debt is $17,000.
To qualify for the program, students have to be enrolled full-time and make satisfactory academic progress toward a degree, said Frank Hribar, vice president for enrollment.
“We don’t expect a lot of Adrian students to (need) the program upon graduation,” he said.