October 3, 2012 By
While students who come from high and middle income families are fairly comfortable and familiar with student loans and the opportunities enmeshed within loan culture in general, lower income families tend to be more hesitant. Financial aid advisers have found many lower income families are so put off by the high tuition at some schools that they don’t even want their kids to apply. With the pervasive nature of student debt and the problems it causes for so many, there is certainly more than a little wisdom in this view point. However, in this society, lacking a college education severely limits opportunity. With rising tuition costs throughout the higher education system, this could also lead to more and more schools taking on an off-limit status for lower income students. Fortunately, there are considerable efforts underway to stem the tide.
A lot of schools have begun to offer financial aid packages to lower income students that don’t even include loans. Which is great because a lot of lower income households hear “loan” and immediately head for the door. Generally speaking, schools define low income as families who bring in less than $40,000 a year, who meet the requirements for Pell Grant eligibility, or are below 200% of the poverty line. Schools that have cut loans from these financial aid packages are often referred to as ‘free-tuition’ schools. In lieu of student loans, some of these schools have substituted grant opportunities and options like work study assignments.
Another huge way to avert problematic debt isn’t to avoid getting loans in the first place, but instead make sure to take advantage to the government’s more generous loan repayment programs. Options like Income-Based Repayment are perfect for low-income students; it’s important when procuring loans to be sure they are federal direct loans, which are eligible for Income-Based Repayment. This repayment plan allows for incredibly low monthly payments that are derived from the individual’s income and then offers loan forgiveness after 25 years.
With so many ways to keep student loans at a manageable level or even avert them entirely, there’s nothing keeping smart, capable students out of great schools. Significantly, some of first schools to offer alternatives to high student loans, options like no loans, loan caps, no parental contributions and Pell grant matches, are members of the Ivy League. Princeton and Yale, for instance, have both seen significant increases of enrolled lower income students as a direct result of these efforts.
Organizing student finances is a complicated and stressful business, but there are groups that can help students optimize their debt and stop student loans from feeling unmanageable. The human capacity for creativity is enormous. Looking at the world around us, we see the work of great minds everywhere. When this great gift of our creative capacity is combined with the technology available to us today and excellent training, anything is possible. Around us we find awe inspiring feats of engineering and architecture, moving work created by the entertainment industry, brilliant discoveries in the scientific world. With a college education there is no feat of human invention that can’t be achieved when we enable young people to grow and realize their dreams.