Time to Degree Directly Correlates to Increase in Cost
Data show that $8,000 in additional loan debt is added for each year after the fourth year. Repeated coursework, wait lists for program admission, program changes, and enrollment in enrichment courses not required for graduation can lead to added semesters of enrollment and compound student debt. The longer a student is enrolled, the greater likelihood they will reach their lifetime limits on Pell Grant and Direct Loan. Not having access to those financial resources when they are ready to finish a degree leads to more costly borrowing through alternative loan programs.
Aid Eligibility is Limited
Annual limits for federal aid are scheduled related to lifetime limits. Funding for the Federal Pell Grant is exhausted after 6 years of full-time enrollment. Direct loan eligibility runs out in approximately 5 years. In addition, new borrowers after July 1, 2013 risk losing their subsidized loan benefit if they remain enrolled for longer than 150% of the published length of their program. For a 4 yr degree a student has 6 years to complete the program before losing eligibility (3 years maximum while enrolled in a 2 yr associate degree). Loss of eligibility can lead to a substantial increase in loan debt due to interest accrual while in school.
True Costs of Withdrawing
Students considering a class withdraw after the 4th class day will not only pay double for that course if a retake is required, but they may also experience an economic hardship if their resulting Satisfactory Academic Progress completion rate is affected. If aid is suspended due to not meeting Satisfactory Academic Progress, students often resort to alternative loan options which yield higher interest rates. Students who drop classes from their schedule also risk postponing the completion of their degree which leads to higher interest accrual balances and potential for defaulting on loans that go into repayment if the student is not enrolled. If students complete a total withdrawal, financial aid must be returned according to federal regulations. This often results in financial aid payments being reversed and the students are left owing a large balance to the University, preventing future registration.
Emphasis on Primary Degree Completion
Only the primary degree, per the Banner Student Record, is reviewed for financial aid eligibility. Annual Direct Loan awards are based on the number of credit hours earned and the student’s program. Students working towards an Associate’s degree and are at junior or senior level in credits earned, will get less in loans even if a Bachelor’s degree is listed as secondary.
Further, students are evaluated on their primary degree for their annual Satisfactory Academic Progress (SAP) review, which will affect their Degree Progression requirements. Timely program changes are important, for example, for students moving from an Associate’s to a Bachelor’s degree since students can only attempt 90 credit hours for their Associate’s degree. If students are transitioning to a Bachelor program from an Associate’s and their primary program is not changed in Banner, they will be identified as not meeting the SAP requirements.
Full Time Enrollment is the Best Utilization of Aid
Students are eligible to receive their full disbursement of loan even if they enroll half-time, which can result in limits being reached when the student has not completed all program requirements. Full time enrollment is the best utilization of financial aid unless the student is in their last semester or has no other option.
Impact of No Grade Reported
It is important to note that NGR grades, or no grade reported, affect students and their financial aid in two ways. First, for fall 2012 Financial Aid had 64 students that were suspended from receiving future financial aid. Of the 64 students 17 had an NGR. The impact to students is either that they have been suspended from receiving financial aid and have had spring aid canceled unnecessarily if the actual grade, when reported, proved beneficial to the student; or, if based on the grades available, they are fine, but when the NGR is reported it results in the student not meeting Satisfactory Academic Progress and Financial Aid must be taken away (whenever this NGR grade is reported, including after the start of next semester). Secondly, NGR can also affect Federal compliance related to a total withdrawal. The Offices of Records and Financial Aid have 30 days from the end of a semester to identify and determine if a student has not earned any credits. If students have NGR grades, it cannot be determined if total withdrawals must be processed and threatens audit compliance which is reviewed annually. The University has been cited on this in the past for not meeting the 30 day deadline. Even one incident of non-compliance could bring sanctions to the University.