SALT counseling
New program to help UCC avoid serious financial aid sanctions
UCC is still struggling to get a grip on the financial chaos caused by student loans which haven’t been repaid. The current student loan default rate is 23.9 percent, up a substantial amount from the 17.5 percent in 2011-2012.
The future holds even more unfavorable conditions. The financial aid office estimates that UCC’s default rate will be at 38.2 percent at the end of September 2013.
Originally, the default rate was calculated in two year periods. The federal government is now requiring colleges to report a three year cohort of data instead of only two years due to the Higher Education Opportunity Act of 2008. Because of this adjustment, the percentage has increased drastically.
A previous issue of The Mainstream reported that the student loan default rate was at 23.9 percent. This calculation was done before the extra year was added in when the percentage increased to 38.2 percent.
The 38.2 percent estimate is a warning for both students and staff.
If the default rate for the three year cohorts is at or between 30 to 39 percent at the end of September 2014, the college will undergo sanctions for three years which means close oversight.
“Any school with a three-year CDR of 30 percent or more must establish a default prevention task force and submit a default management plan,” according to the U.S. Department of Education. UCC will still be able to offer loans during this time.
If the default rate reaches 40 percent, however, the college will immediately lose all ability and right to offer Pell grants and loans for that year as well as the two following years. UCC does have the right to appeal such action.
There is a light at the end of the tunnel. The college has contracted with an organization called SALT in hopes of improving the student loan default rate. SALT is not an acronym but a reference to ancient times when salt, a precious commodity, was used for barter.
Today, SALT is a comprehensive money coaching solution to assist with student loan and debt. It is funded through the American Student Assistance association which administers the federal guarantee on student loans.
ASA helps students manage their student loans successfully. ASA encourages students to develop their financial savvy, understand the options available for financing higher education, and remain on the path to loan repayment.
This financial program provides counselors to answer borrowers’ questions and to provide information on student loan options. Borrower advocates are trained to resolve student loan issues for the sake of the student.
SALT combines online education and tools with outreach and counseling help. Digital tools, live experiences and counseling are made available to students in hopes of helping them be more conscious of their financial habits. The tools go beyond financial planning and can help students and alumni find jobs, internships, scholarships and other learning opportunities.
The goal of SALT at UCC is twofold. It will help guide students in financial turmoil toward the right path as well as aid students who may already be in good financial standing.
Financial aid offers two different types of loans, subsidized which doesn’t require a student to pay interest while in school and unsubsidized which does require a student to pay interest while in school. “What we do now when we award students is we offer them the subsidized loan, which is the better of the two, and we offer work study,” Michelle Bergman, director of Financial Aid, said. “We want students to work, get something to put on your resume, earn the opportunity to get a letter of recommendation so that when you graduate you’re getting a degree and have some experience to go with it. That’s what we want them to do instead of just taking the loan debt,” Bergman said.
This program will benefit both students presently attending UCC as well as alumni. SALT will have a soft roll-out on May 8 and will work with the college for the next two years. More information can be found on SALT’s website, saltmoney.org.