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.