Cornell College to Repay Up to $ 12,000 in Federal Student Loans to Graduates
Cornell College, a small liberal arts college located in Mount Vernon, Iowa, today announced a debt reduction pledge, under which it will repay federal student debt up to a maximum of $ 12,000 at time of graduation.
The engagement will begin with 65 freshmen enrolling at Cornell for the 2022-2023 academic year. There are four conditions for students to be eligible for payment. They must:
- graduated from Cornell in four years,
- live on campus,
- maintain a good academic level,
- and remain enrolled as a full-time student throughout the four years.
While some colleges have used private donations and higher education emergency aid funds to cover tuition and fees that students owe them, Cornell’s vice president for enrollment management, Wendy Beckemeyer believes that the scope of the new program is unique. “We want Cornell to make a difference in higher education, and mainstream programs are not providing solutions to today’s access and affordability issues,” she said. “The Debt Reduction Commitment is another thing we can do to help students access quality education and reduce their debt, so our graduates can take the next steps in their lives with less worry. financial. “
Here’s how Cornell sets up the deal:
- If a student takes $ 24,000 or more in federal loans, the college will pay up to $ 12,000 upon graduation from the individual.
- If the student takes less than $ 24,000, the college will cover half of the federal bill for delinquent student loans.
The amount of $ 12,000 was chosen because it is the maximum amount of federal loans that dependent undergraduates can borrow in their first two years.
Cornell will not require students to complete additional complicated forms to participate in the program other than the FAFSA and a short Cornell form through which they can apply for the program. Payment will be made directly to Federal Student Loans Officers, on their behalf, before the first loan payment is due.
Cornell’s Debt Reduction Commitment will be available in addition to all of its other institutional financial aid and will not affect any scholarship, work-study or any other financial aid that students may receive.
Cornell has yet to set out all the details of how applicants will be selected for the program, but this will likely involve a combination of factors such as student success, financial need (determined from the FAFSA) and overall composition of the incoming class. .
Cornell’s entry class this fall numbered around 400 students, so if the deal is kept as it is currently structured and entry classes remain the same size, just over 15% of incoming students would be eligible. Beckemeyer told me that the intention is to study the impact of the program during its early years and – depending on its impact – possibly to increase the number of students receiving the engagement in the future.
Cornell made the news in August this year when he launched his “Freeway Scholarship,” an annual $ 30,000 scholarship available to freshmen in neighboring states of Wisconsin, Illinois, Missouri, Minnesota and Nebraska applying for admission for the 2022-23 school year.
This scholarship is renewable for four years for students from the five Midwestern states, plus Kansas City, Kansas. The basic idea was to reduce Cornell’s tuition fees to a price comparable to that of flagship public universities in those states. With this help, Cornell claims it will be less than $ 3,250 off the average for these five universities.
The Freeway Scholarship was itself an extension of Cornell’s Iowa Promise Scholarship, which went into effect this fall and provided $ 30,000 to students who were residents of Iowa, putting the total cost of attending Cornell in line with the three Iowa State Universities – the University of Iowa, Iowa State University and the University of Northern Iowa. As part of Cornell’s recent round of financial incentives, it also introduced a $ 25,000 Freeway scholarship for transfer students from the Midwest.
Cornell’s new offering comes at a time when student debt remains a major concern for consumers and policymakers. Nationally, student borrowers owe a total of $ 1.6 trillion in federal and private student loans.
According to the Institute for College Access & Success, 62% of undergraduate students graduating in 2019 had student debt and their average debt was $ 28,950. At Cornell itself, 61% of students take out federal loans and their overall median debt is around $ 27,000.
While President Biden has yet to respond to calls for a large-scale student loan debt cancellation, his administration has used various mechanisms to write off more than $ 10 billion in student loans. But that still leaves a lot of students with unpaid debts. Cornell’s new pledge will significantly reduce that debt for a subset of its future graduates. Now let’s see how many other institutions are offering something similar to their students.