In an attempt to drive up enrollment rates, one college in Michigan is offering an insurance policy for tuition—asserting that it will make student loan payments on behalf of graduates who earn less than $37,000 annually.
Adrian College (Adrian) President Jeffrey Docking said in an interview on Fox News that the program will apply to incoming freshmen and transfer students who have at least two years of education remaining.
"Higher education needs big, bold, creative initiatives to get students to still consider private education," Docking says. "This is Adrian College’s attempt to really make a big statement on how far we’re willing to go to help kids and families."
For alumni earning less than $20,000 per year, the college will make full monthly payments, while those earning between $20,000 and $37,000 per year will receive payments on a sliding scale. There is no time limit on the plan, but total payments per student will cap at $70,000.
Who defaults on student loans?
To qualify, students must work at least 30 hours per week, and it cannot be at a family business.
"You never know when the economy is going to go south. In '08 and '09, so many of those kids made the right decision, and there wasn't a job waiting for them. And we're saying, 'We're going to take care of you, and we understand you don't want you to leave with a mortgage, and if you do, you're going to be OK if you can't find a job,'" Docking told Fox.
The plan is expected to cost Adrian about $550,000, sourced from the operating budget—meaning the school needed to enroll at least 30 students to recover its investment. So far, it has brought in 50, upping the total freshmen enrollment to 570, says Docking, who calls the return "fantastic."
Docking said the idea came from a conversation four years ago with the then-president of Spring Arbor University who said he was having a tough time recruiting students due to their fears of not finding a high-paying job and paying off loan debt after graduation.
Study: Students who borrow more, earn more
"At the end of the day, it's to help the kids," he says, "It helps with retention, and students are less likely to quit college. They say to themselves, 'If I hang in there, I have this guarantee as a safety net'" ("Fox and Friends," Fox News, 12/28; Cherry, Daily Telegram, 12/29; Decarr, Education News, 1/5).
Next in Today's Briefing
Three colleges innovating with holistic admissions