The University of Texas at Austin will initiate a program next year for 200 incoming freshman that will reduce student loans if they graduate in four years.
The two main goals of the pilot program are to encourage students to graduate more quickly and to help reduce student loans.
The university’s director of student financial services, Tom Melecki, said the pilot program will be offered to incoming freshmen in fall 2013. The students are picked randomly from a group of students who are borrowing Federal Direct Unsubsidized Loans.
“We think [the pilot program] meets two goals,” Melecki said. “One is raising our four-year graduation rate, and students will get out of the university more quickly, and that encourages less expense at the university. Then, the second thing is helping reduce their debt further by rewarding them for doing that by paying down some of their loan debt while they are in school.”
The money that is helping to cut down student loans is coming from funds set aside by the university.
According to Melecki, Texas state law mandates that the university must set aside money for financial aid, which is required to be given in the form of grants, scholarships, loans, work study jobs or loan repayment assistance to students who are in need. The loan repayment assistance helps make college more affordable to students.
Students that are placed into the program must also be involved in the Texas Interdisciplinary Plan, which offers academic support to students by encouraging and aiding them to complete 15 hours of their degree requirements by the end of each semester.
Steinhardt associate professor of higher education Robert Teranishi believes that the pilot program being offered to students at the University of Texas at Austin will benefit students when coupled with institutional support.
“Student motivation is only one part of the equation” Teranishi said. “There are many instances where students are not getting access to proper advisement or access to classes required to graduate. These institutional barriers need to be addressed to affect real change in time to degree.”
The four-year graduation rate at the University of Texas at Austin is 52 percent, and the university hopes to raise the rate to 70 percent in the next four years. The graduation rate for four years at NYU is 78 percent.
But NYU spokesman Philip Lentz said the program proposed at the University of Texas at Austin would not be appropriate for NYU.
“The program instituted at the University of Texas, which is aimed at improving its graduate rate, would not be an appropriate incentive at NYU because our four-year graduation rate is much stronger,” Lentz said. “Also, the University of Texas has a very different funding model than NYU. It is a public university while NYU is a private university that has significant investments to help provide its students with financial aid.”
CAS sophomore Amanda Goetze said the program could relieve some of the debt burden she is anticipating.
“The thought of paying back the student loans I’ve taken out to pay for an education at NYU is dautning, especially considering it is outrageously expensive,” Goetze said. “The sheer size of the financial burden that [the loans] would put on me in the future is incredible. Any program that reduces that burden would be infinitely beneficial.”
Neela Qadir is a contributing writer. Email her at [email protected]