College’s promise on loans draws students

ADRIAN, Mich. — When it came time to pick a college, Abby Slusher leaned toward a private school near her southeastern Michigan home for the small campus and class sizes. Her mother pushed Adrian College for another rea- son: a new program guaranteeing every graduate would make more than $37,000 or get some or all student loans reimbursed.

Adrian is among the first colleges to take out insurance policies on all incoming freshmen and transfer students who have student loans and at least two years of school remaining.

“She said, ‘Look at me, I’m still trying to pay my student loans off — this would be great. I don’t want you in this situation,’ ” said Slusher, 18, who is studying to become a social worker. “And seeing her in this situation, I don’t want that.”

The idea has been around for a few decades at Yale Law School and for specific programs elsewhere, such as seminary and social work degrees. Some small, religious schools started offering guarantees to all new students in recent years, but Adrian Presi- dent Jeffrey Docking is taking it further by framing the program as a solution to skyrocketing tuition costs and student loan defaults. His crusade has gotten the attention of U.S. lawmakers and education officials.

“Obviously, we feel like this is a big solution to a big problem — may- be the biggest problem right now in higher education,” Docking said. “We felt like we needed to make a grand statement.”

Adrian paid roughly $575,000 this year, or $1,165 per student, to take out policies on 495 students. For those who graduate and get a job that pays less than $20,000 a year, the college will make full monthly student loan payments until they make $37,000 a year. With a job that pays $20,000 to $37,000, the college will make payments on a sliding scale.

There’s no time limit for the payment plan, but the college caps total loan payments at $70,000 per student. Adrian’s annual cost of tuition, room and board is about $40,000 before any forms of financial aid.

The school has 1,700 students.

Docking already sees benefits: The entering freshmen class is up about 50 students to 570; to break even, the school determined it needed about two dozen new students who took out loans. He credits the program in part for the enrollment increase but says other efforts, like launching a varsity bass fishing team, have served as a lure.

But Mark Kantrowicz, publisher of college planning and financing website called Edvisors, says programs like Adrian’s have limited impact.

“Obviously, loan repayment assistance provides assistance after the fact, and that has value,” he said. “But it would be better to charge less in the first place.”