Running head: STUDENT DEBT CRISIS

Molly MacPhail
Student Debt Crisis
Capstone Project Post University
June 19, 2019
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STUDENT DEBT CRISIS

Abstract

The purpose of this project was to address the student debt crisis in America and focus on

ways our college financial aid departments can help students prepare for it if they decide to use

student loans for school. By creating a financial aid department training, students will feel more

at ease taking on student loans if they know all the ins and outs of their risks. This training will

strengthen financial aid counselors and advisors working with college students daily. Tuition,

financial aid, work study programs, and student loan repayment options will be covered. It also

provides a detailed list of current companies that offer loan repayment benefits for employees.

This financial aid training will incorporate new policies for colleges to adhere to and offer more

help to students struggling financially. This financial fitness training will help increase student

preparedness entering the workforce, after graduation.

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Problem Statement

Today, more than half of America's college graduates are either unemployed or working

in a job that doesn't require a bachelor's degree. Graduates are now more likely to work as food

service helpers, than engineers and chemists. There are many things that contribute to this recent

problem. I believe the first thing is to consider the cost of education. A degree is more expensive

now than it’s ever been, and students are drowning in debt at high rates. When you’re working at

McDonald’s, it’s much harder to pay back loans.

The second thing I believe contributes to this problem is that when those college

graduates decide to work at low-paid or low skill jobs, they’re also displacing a less educated

worker. More graduates in this work field, are very likely putting someone with just a high

school diploma out of work. There aren’t enough jobs out there to accommodate the amount of

graduates these days. This results in falling wages for college graduates and employment

problems that now exist.

Thirty years ago, a college degree was a valuable credential, and graduates didn’t need to

work two jobs just to pay back their student loans. The market is now flooded, and these degrees

matter less than specific skills. For example, associate and technical degrees may be more

financially valuable now than a liberal arts degree. Specific skills are needed in the workplace

now, and employers are looking for exactly that. Some of the fastest growing job categories are

expected to be in medicine and nursing, which don’t always require a four-year degree. When I

was growing up, “college for all” was instilled in my brain. Now, schools should be more aware
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of this problem and start implementing more specific skill training programs that will lead to a

more successful employment rate among graduates.

Literature Review

Colleges and Universities are increasing their cost every year, and students can’t keep up

without taking out student loans. The difference of cost between public and private schools is

astounding and the surge of demand is overwhelming for schools to keep up with, without

raising costs. Unfortunately, students are getting the short end of the stick. This has resulted in an

increase in community college programs and a demand in technical degrees.

I’m interested in this topic because I am one of the thousands with a high amount of

student loan debt, and I want to promote solutions that will benefit students in my position. The

problem I’m focusing on is tuition increase and why it’s increasing in this country. Some of the

causes are surges in demand for higher education, an increase in faculty members and staff, and a

lack in public and state funding. There are many proposed solutions to helping students with

their debt. The three that I’ll be discussing include student debt cancellation and what it means

for the country, employee benefit programs that include repayment assistant, and repayment

timelines that are currently in place and why extending those would help students in debt.

Tuition Increase

There was a 213 percent increase between 1987 and 2018. Glater expresses, “students at

public four-year institutions paid an average of $3,190 in tuition for the 1987-1988 school year,

and they now pay $9,970” (Glater, 2018). This has caused the overall student debt in America to

be 1.2 trillion dollars. Student debt has become a huge issue in our country but as much as the
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tuition increases, wages are not increasing as much. Pratt’s article explains, “the average annual

growth in wages went up 0.3% between January 1989 and January 2016” (Pratt, 2019). The cost

of attending a public college has increased almost eight times faster than job wages have. In

Wasik’s article, he discusses the similar statistic, “the cost of a four-year degree is $104,480, and

median wages stop at $59,039” (Wasik, 2015).

Because of the increase in tuition in America, a lot of students are graduating with a huge

amount of debt. This makes it hard to find jobs that pay enough to help pay off loans, but also

save in other areas. Scott’s article on student loans discusses, “many young professionals are

having to choose between saving for retirement or paying back student loans” (Scott, 2018).

There is a disconnect between cost of tuition and flattening of wages in America. Most students

with debt can’t find a job out of college that pays enough to live and ay back loans. The answer

for most is to continue education with a graduate degree that ultimately puts them into more debt

Even with this solution, some recent graduates have still had to start at the bottom of a company

to work their way up, getting paid the same as they would without a graduate degree.

Causes

One of the biggest factors affecting college tuition is the overall economic climate. As

HR Magazine explains in their article, “public funding for higher education has reached historic

lows” (HR Magazine, 2018). Intuitions inevitably need to increase their tuition to continue

operating as they always have been.

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Scott explains, “the top forty richest schools in the country receive almost half of all gift

revenue” (Scott, 2018). This means that most institutions don't have the funds available to

subsidize tuition for their students anymore.

Another reason for tuition increase includes demand in higher education. As more and

more students enroll in colleges, the increase in staff and faculty also increases. In Taibbi’s

article, he explains, “most colleges are on board with this increase because it allows for updating

their base, staff salaries, facilities and programs” (Taibbi, 2017). Colleges can now name their

price and choose to maintain an increase their tuition for quality at the expense of students’

pockets. “The demand in degrees for a stable career means the enrollment of students will

increase as well” (Bass, 2018). When this happens, more faculty and staff are needed to sustain

those needs, therefore increasing the tuition to help pay for those roles.

Many of the people who have the largest loans and are the most likely to default are also

the people who got the worst credentials and poorest quality training when they graduated or

potentially didn’t even graduate. In 2002, a bachelor’s degree made 75% more than someone

with just a high school diploma, and today its risen to 84%. Still, not all debt is created equal

with student debt, and the payoffs aren’t either. For example, “women who work full-time sill

earn 25% less than men and African Americans and Latinos could except to earn almost a million

dollars less than Caucasian and Asians” (Frotman, 2018).

Solutions

There are many proposed solutions to conquering the student debt crisis. One of the most

popular solutions is the employee benefit program. Pratt’s article explains more about this
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solution, “as the demands of student loans have increased, so should the involvement of

employers” (Pratt, 2019). Employers are the ones demanding the higher education and should

therefore be able to assist them with the cost of higher education. Pratt continues, “employers

have a responsibility to evolve with the ever-growing financial demands placed on anyone

seeking a higher education degree” (Pratt, 2019).

Edwards’ article explains the same strategy. “Organizations offering their employees

monthly contributions toward their balances, have established themselves as innovators in this

student debt crisis” (Edwards, 2015). If employers want the best applicants who put time into

getting a graduate degree, I think they should feel obligated to compensate for that. Edwards

explains, “85 percent of employees accept a job from a company that provides this benefit” (PT

in Motion, 2018).

With some of the programs out there like this, I think there should be a benefit to the

employer as well, so it doesn’t escalate. Employers should have restrictions for employees to use

this benefit, such as an employee must stay with the company a certain amount of time to start

the benefit or increase the benefit. Taibbi’s article states, “young people are more open to

switching jobs, these benefits will help companies retain their employees” (Taibbi, 2017).

Another proposed solution is canceling student debt entirely. The total student

loan debt right now in America is 1.2 trillion dollars. If this were to suddenly be eliminated, the

GDP could boost up to 108 million dollars per year on average within the first 10 years after

cancellation. Wasik’s article goes over this in detail. “Getting rid of the debt would also lower the

average unemployment rate by 0.22 to 0.36 percentage” (Wasik, 2015). However, canceling

wouldn’t come free. Because over 90% of student debt is owned by the government, if debt is
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cancelled this means that taxpayers would lose out on the interest and principals on payments of

borrowers who got the loans. Most political figures think this a bit too radical to propose, but I

think if there’s more research that’s done openly to the public, then voters would be more

inclined to vote for something like this. If there is more information on how this could help

students and our country, then this could be a possible solution.

Another solution is the repayment options for loans themselves. Right now, there

are multiple repayment options, but there is a ten-year repayment timeline for most. This means

that monthly payments are high for those in a lot of debt, therefore putting other things on hold.

This includes a house, car loan, and even children. Some of the proposed solutions that include

this is an increase in the Pell grant that helps low-income students financially afford college.

Right now, it only allows students a certain amount to have towards school, and it’s also only

allocated to undergraduate degrees. PT in Motion describes another option that includes

increasing the amount of time allocated to pay back loans, to twenty years instead of ten (PT in

Motion, 2018).

Income-driven repayment options have been created in the U.S. By linking the amount of

the monthly payment to an individual’s income, it can help with not missing a payment.

However, there are other more seamless options that wouldn’t require borrowers to report to the

department of education.

Conclusion

After reviewing tuition increase, causes of the increase, and solutions for students with

debt, there is still much more that can be discussed. There are many articles that promote
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different opinions on how to attack the student debt crisis, but more so than any other, is the

proposed idea of the employment benefit program. I think this idea helps both students and their

employer, instead of just cancelling all debt and increasing taxes. The causes of tuition increase

really affect how the solutions can be proposed and played out. If there is a demand in

enrollment, but an increase in debt for students and the country at the same time, then something

must give. “Students can’t afford to pay back loans with entry-level jobs anymore, many are

forced to go into default” (Frotman, 2018). More options should be discussed openly with the

public to make those potential students feel better about getting a degree and seeing its worth.

There are studies out there now that show the positive effects of having a degree, but there are

even scarier studies that show how much graduates are suffering at the cost of it. I think an

increase in specialized skills and technical degrees will become evident in the future, and more

employee benefit programs will come into play when employers have no choice to but to hire

students with a large amount of debt.

Research Design and Methodology

The Research Design and Methodology section of my paper will include a mixed

methods and system wide study from surveys, original data and focus groups with students to

examine personal experiences from those with student debt.

First, I want to hold five focus groups among four different institutions with

undergraduate students who are experiencing high amounts of debt with paying for schools. In

total, I’ll look at thirty-one undergraduate students of diverse racial and ethnic backgrounds,

ages, and class standings. Case studies are holistic and context-sensitive forms of inquiry. A

Holistic design is more appropriate for my capstone project because my focus groups will be
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personal experiences from students who have debt now, in the present. It provides an abstract

view of the problems, and my theory of why students are in debt is already a global concept.

Two of the campuses I’ll look at are nonresidential campuses located in large urban areas.

Most students will live off campus and attend classes by way of car or public transportation. The

two other campuses will be in smaller cities where most students do live on campus, and there

are other schools such as private and public colleges surrounding it. All these campuses will

differ by cost greatly, as the smaller campuses will pay less for tuition based on where they’re

located.

For this study, I’ll be using a case study methodology. It’s more appropriate for looking at

a phenomenon, such as that of student debt. I can take a more holistic approach and provide an

understanding of students’ experiences. Undergraduate students will be recruited among four

campuses, and student participation will be on-site within the campus including, food courts,

libraries, and student centers. I’ll need a to provide some sort of compensation for participation,

so I think a gift card for a food court restaurant might be enough. The focus group sizes will vary

from two to fourteen participants within each. I want the students to vary in sex, ethnic

background, year in college, residential status, and race. I want to speak only to students who

range within the ages of 18 and 25 years.

My focus groups will be guided by scripts and topics about student debt to promote

authentic discussion and conversations. This approach will be most appropriate with these

students because it supports fluid conversations across diverse groups. The scripts and questions

will focus on students’ experiences in three areas: how students pay for educational expenses and

how those means have changed over time; experiences with debt in the forms of loans from
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federal, state, and private sources, as well as with consumer debt; and awareness, use, and

critiques of resources and sources of support used to navigate paying for school. I’ll take this

holistic approach and focus on understanding students' common experiences, then look at

comparisons across campuses.

I want all these interviews to be private and transcribed verbatim for study purposes.

Even though students get a gift cad for compensation, I want to make sure it’s clear that their

answers and discussions will be completely anonymous when the study is finalized and that they

can ensure full confidence that their privacy will be treated delicately.

My overall goal in the research section is to gain student trust and promote fluid

conversations. I really want to know why they themselves think they have student debt and what

they think the solutions is. I want to know if they have friends or family members that also have

debt and if they do, have they’ve been able to find work to help pay it off. I want to ask if an

employee benefit program would be something they’d be interested in after graduating from

college to help with their debt. Lastly, I want to know if they’ve ever felt like a degree wasn’t

worth the debt after all said and done. If they could, would they still go to school after high

school knowing how much debt they would have by the end. My goal by the end of the

interviews is to create a financial aid awareness training for college financial aid departments. I

want these questions that students have about debt to be answered by these professionals. I also

want the department staff to be fully aware of risks of student loans, repayment options, and even

ways to help with student debt after college.

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Evaluation and Assessment

Self-Assessment

This project was self-assessed by the creator. The self-assessment is completed in Appendix C.

The greatest strengths are clarity, and implementation. The goal if this project is to see it

implemented in a real-world setting on colleges across the United States. In my deliverable, I

advised to interview students at thirty different colleges, but it is truly meant to be implemented

at every college possible. Although time constraints for this project did not allow for the project

to be implemented right now, I hope that other experts will implement it someday. It is my hope

that each detail is clear enough for implementation at this point, even if not by myself.

Expert Evaluations

This project was evaluated by three professionals. Two are higher education professionals, and

one is a former elementary school teacher. The feedback provided by these professionals was

through a questionnaire sent via google forms and available to be seen in Appendix C. Each

assessment of feedback was very similar regarding what each thought of the project and the

flaws they saw. Once feedback was reviewed, I reconstructed a few things, so the project flowed

more evenly and stayed on the right track. Each assessment of feedback provided an outside

perspective that I as the creator needed to see. As professionals working in education, they each

have a good understanding of tuition increase in America and how student debt can affect

students’ lives. The professionals overall agreed that this project’s topic is valuable and important

for current and future students who need more knowledge on student loans and debt.

Some suggestions from the professionals that were considered when revising this project were:

 Would higher education administration have enough resources to implement this

training?
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 How much time would it take to implement this program?

 Is there anything like this program available now?

Many of these concerns were considered when making final revisions on the deliverable

aspect of this project. The training provided is complete according to the creator and can be

accessed by anyone who wants it. I think the overall cost of this program will be very low, as it

only needs the time for training among colleges.

If this project were to be implemented, I think a formal meeting with administration at colleges

needs to occur to map out the importance of the training and show outcomes as well. This will

take time to gather data from students who were subjected to the aspects of the training

information. Once enough data has been gathered, there will be enough force behind the

importance of trainings such as this.

Discussion & Reflection

Through the implementation of this project, I learned much more than I imagined. The

creation and design of a complete four-week training from start to finish was challenging, but I

was able to keep the end goal in mind continuously. The feedback from the panel reviews and

my professor were priceless in getting a new set of eyes on my project. Their feedback proved to

be the best part about designing something like this to implement into the real world. The most

challenging thing to me was getting feedback early on but then getting different feedback in the

later stages from my panel review. I was challenged to constantly change things and started to

lose focus on the result. Once handed out to others, the end goal got lost and that was something

I needed to fix immediately. The goal of this project has a lot of personal and emotional interest

for me, and I needed it to be perfect by the end as it is something I want to see changed in our

society.
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Master of Science in Higher Education Administration Outcomes

The following outcomes were available on the Post University website in accordance with

the outcomes for my specific program. There are a few I would like to elaborate on.

 Identify and discuss the history, philosophy, and changes in trends in higher education.

In my first course at Post University, I learned about the history of higher education. When the

first college was created, as well as when women could go to school. As a woman, this was

hugely inspiring to me to continue the program and see how my influence can affect the world.

 Analyze theories and approaches of leadership and change management as they apply to

organizational needs and culture.

This outcome was more prevalent during my third course as I learned much more about the

hierarchy of higher education and how decisions really do get made. Leadership in higher

education is not a one-way street, and there are many people involved that work very hard to

incorporate policies, rules, etc. It was very interesting to see how the flow of decision making is

done is some schools, but to also compare that with other organizations and which ones seem to

work better than others. I’ve been able to understand the importance of employee input, and

student input, when it comes to making changes in a higher education setting.

Describe contemporary student populations and analyze demographic trends in postsecondary

education.

 Develop the awareness and skills necessary to practice social justice and demonstrate

cultural competency higher education.

This specific outcome and courses involved was one of the main reasons I chose the capstone

project that I did. As a student with loan debt myself, I’ve been aware of social injustice being

done to students who cannot afford college without student loans. I have been affected by the
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struggles of student loans and repayment options, and I wanted there to be more education

surrounding this during college to help students make better choices before they decide to pursue

a loan. I was not given these options on school and only found out about interest rate and

monthly payments after I graduated. Something has to change, and I hope my project can be seen

as a start to this change.

The Post University Master of Science in Higher Education Administration

This degree has provided me with a well-rounded education. The most beneficial learning

that I received through this program was from the discussions with my classmates and

instructors. My experience with the discussion boards was small before Post University and as

they can become tedious during the latter stages of a degree program, they have shown me how

much of a teaching tool they can be.

This program has made me a stronger student and the skills that I developed throughout

this program have already impacted me in a positive way. At the start of the program, I was

working in admissions for a for-profit college, but by then end I have now decided to start

teaching elementary school. I want to continue my education in teaching specifically after this

degree and hope to continue at Post. There were many things to take away from this degree, even

if I am not working in higher education now. This program has challenged me week after week,

especially the capstone project. I’d like to think I met each challenge with success and that it

shows in this final project. This degree is a symbol in my life of setting a goal and achieving it. I

am very proud of what I have accomplished, even nine years after gaining my Undergraduate

degree. Things take time, and I will continue to make goals and strive to achieve them now that I

know I can.
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References

Bass, J., & McCann, C. (2018). Everything You Always Wanted to Know about Higher
Education Policy. Washington Monthly, 50(9/10), 63.
Edwards, H. S., Altman, A., Miller, Z. J., & Thompson, M. (2015). But Can America Afford
This Approach to Solving Student Debt? Time, 186(22/23), 92.
Frotman, S. (2018). Broken Promises: How Debt-Financed Higher Education Rewrote
America’s Social Contract and Fueled a Quiet Crisis. Utah Law Review, 2018(4), 811.
Glater, J. D. (2018). The Narrative and Rhetoric of Student Debt. Utah Law Review, 2018(4),
885–895
Pratt, D. A. (2019). Focus On... Student Loan Repayment Assistance. Journal of Pension
Benefits: Issues in Administration, 26(2), 14–20.
Scott, R. H., & Bloom, S. M. (2018). Is There a Student Loan-Debt Bubble? Not Yet, but Soon.
Challenge (05775132), 61(3), 231–239.
Student Debt Looms Large in the News. (2018). PT in Motion, 10(6), 53.
Student Debt Weighs Heavy. (2018). HR Magazine, 63(6), 12.
Taibbi, M. (2017). THE GREAT COLLEGE-LOAN SWINDLE. (cover story). Rolling Stone,
(1300), 28.
Wasik, J. F. (2015). Debt And Deceit. Forbes, 196(2), 82–87
Www.post.edu
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The Project Management Plan

1. The purpose of my project is to expose the student debt crisis and bring forth solutions

for students currently in crisis. I will approach the Employee Benefit Program as an

option for helping students with student loan debt after graduation.

2. The learners of this project include 30 current students at four liberal arts higher

education institutions. The audience includes employers, university administration and

future students of these institutions.

3. By the end of completing this project, my learners will be able to identify tuition

assistance programs, student loan repayment options, including employee benefit

programs and student loan forgiveness. University administration will be able to create

ways to enhance their financial aid and career services departments to include a list of

employers who have benefit programs. They’ll also be able to describe all student loan

forgiveness options, including specific student loan interest rates, deferment and

forbearance information, Teacher and Public Service forgiveness programs, and mock

interview/resume assistance.

Project Timeline
Project name: Student Debt Crisis

Project committee: Student focus groups, school administration, interviewers, student loan
resources, employee benefit program administrators.

Consultation: Five focus groups among four different institutions with undergraduate students
who are experiencing high amounts of debt with paying for schools. In total, I’ll look at thirty-
one undergraduate students of diverse racial and ethnic backgrounds, ages, and class standings.
Employers who currently have an employee benefit program to help with student loan
repayment.

Identified need: Increase of employee benefit programs among employers, tuition assistance
programs amongst institutions, increase in student loan forgiveness programs
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Project objectives: To expose the student debt crisis and offer solutions. Including employee
benefit programs, tuition assistance, and student loan forgiveness options.

8 - Week Calendar
Week 1
Research history of employer benefit programs and efficiency/ research interviews of students
done in the past Research data on tuition increases in United States.

Week 2
Select schools to hold focus groups of students, contact students to interview and school
administration. Contact employers who currently have an employee benefit program.

Week 4
Create draft of project research and data from interviews and focus groups.

Week 5
Develop scripts and topics about student debt to promote authentic discussion and conversations
for focus groups. Develop a system wide study with survey and interview data from students and
university administration, to bring forth to employers not exhibiting an employee benefit
program.

Week 6
Select my panel at Post University to use for my Capstone project. They’ll need to be interested in
my project and supportive of what I’m hoping to accomplish.

Week 7
Prepare my report and create my Share Fair for feedback from fellow classmates. Complete
project by incorporating feedback from panel review experts.

Week 8
Post to PLE for completion of Capstone project

 
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Appendix B

Financial Aid Department Four-Week Training

Week 1: Financial Aid Basics

Objective: To understand what financial aid is, and what it means for students. Understand the

eligibility requirements and the difference between grants, scholarships, and loans.

FEDERAL STUDENT LOANS VS. PRIVATE LOANS (PowerPoint Presentation)

Filling out the FAFSA, applying for grants and scholarships, and lining up work-study or

part-time job opportunities are all important precursors to taking out a student loan. Unlike those

steps, taking out a loan will require repaying what you borrow, plus interest.

 Interest rates on federal loans are fixed. The interest rates on private student loans

can be variable or fixed and are usually higher.

 Undergraduate borrowers who can demonstrate financial need could receive a

federal subsidized loan, meaning the government pays the interest until you

graduate. Private loans are never subsidized. You pay all the interest.

 Federal loans offer flexible repayment options and loan forgiveness programs.

Private loans have few repayment options and no loan forgiveness programs.

 Federal loans don’t have to be repaid until you graduate or drop below half-time

status as a student. Many private loans ask for repayment while you’re still in

school (Pratt, D. A. (2019).

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Maximum borrowing amounts depend on grade level and dependency status, plus the cost of

attendance. Loan servicers are chosen by the federal government or school, which serves as the

lender. Paid interest might be more easily tax-deductible (Pratt, D. A. (2019).

HOW TO AWARD STUDENTS

 Must be made reasonably available to all eligible students

 No award limits but may not exceed need
 Student’s academic workload should be considered
 Net earnings should be used for awarding and packaging
 Gross amount excluding job-related expenses and non-refundable taxes

Week 2: Federal Student Loan Details

Objective: To define the different types of student loans available to students and their terms and

interest rates.

TYPES OF STUDENT LOANS (PowerPoint Presentation)

1. Direct subsidized federal loans

Also known as Stafford loans. With subsidized debt, the Department of Education will cover

the interest that accrues on your loans while you’re enrolled at least half-time in school.

 Interest rate: 3.76% for undergraduates, 5.31% for postgraduates (for loans

disbursed July 1, 2016, to July 1, 2017)

 Max borrowed: $5,500 to $12,500 for undergraduates, $20,500 for graduates.
 Loan fee: 1.069% (for loans disbursed Oct. 1, 2016, and Oct. 1, 2017)
 Terms: 10 to 25 years (Frontman, 2018).
2. Direct unsubsidized federal loans
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Unlike subsidized federal loans, the unsubsidized version is also accessible to graduate and

professional students, and awarding of the loan is not based on financial need or merit. In other

words, almost everyone is eligible for this loan, if they’re enrolled at least half-time in school.

 Interest rate: 3.76% for undergraduates, 5.31% for postgraduates (for loans

disbursed July 1, 2016, to July 1, 2017)

 Max borrowed: $5,500 to $12,500 for undergraduates, $20,500 for graduates
 Loan fee: 1.069% (for loans disbursed Oct. 1, 2016, and Oct. 1, 2017)
 Terms: 10 to 25 years (Frontman, 2018).
3. Direct PLUS loans

PLUS loans, whether they’re for students or parents are unique in that they require the

applicant to undergo a credit check. The Direct PLUS loan, specifically, was built for graduate

and professional students who have had more time to improve their credit score (unlike

undergraduates entering college, who might have never held a credit card). To qualify for PLUS

loans, a bad (or limited) credit history can be helped by an endorser who has strong marks on a

credit report. Direct PLUS loans also give their borrowers until six months after they finish or

leave school to begin making payments.

 Interest rate: 6.31% (for loans disbursed July 1, 2016, to July 1, 2017)
 Max borrowed: The cost of attendance minus any other financial aid
 Loan fee: 4.276% (for loans disbursed Oct. 1, 2016, and Oct. 1, 2017)
 Terms: 10 to 25 years (Frontman, 2018).
4. Parent PLUS loans

This loan type is for biological, adoptive, and stepparents to support their dependent

undergraduates. A key difference between Parent PLUS loans and other types of loans is that

parents are expected to make payments while their children are in school, though they may

request deferment during the loan application process.

 Interest rate: 6.31% (for loans disbursed July 1, 2016, to July 1, 2017)
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 Max borrowed: The cost of attendance minus any other financial aid
 Loan fee: 4.276% (for loans disbursed Oct. 1, 2016, and Oct. 1, 2017)
 Terms: 10 to 25 years (Frontman, 2018).

5. Direct Consolidation Loans

Consolidating any of the federal loan types above allows graduates (or dropouts) to pool

multiple loans into a single loan with a single loan servicer. This means you can make a single

monthly payment, too. That payment would also likely be lower than your past loans, as the

repayment period can be extended up to 20 years. Although consolidation is convenient, it’s not

right for everyone. It might give one borrower access to income-driven repayment options, but it

might erase another’s progress toward Public Service Loan Forgiveness.

 Interest rate: The weighted average of the interest rates on your existing loans
 Loan fee: n/a
 Terms: Up to 30 years (Frontman, 2018).
6. Private student loans

Even some private lenders will tell you to consider taking out federal loans before weighing

their own products. This is because of the protections mentioned above that the government

affords its borrowers. Those same private lenders, however, will present their student loan

options as customizable to your financial situation, while positioning the federal government’s as

one-size-fits-all.

 Variable interest rates are offered, in addition to fixed rates.

 While cosigners are almost always required, a strong credit history can lower your

interest rate.
 Repayment options, from deferment programs to in-school payments, can make

your monthly bill more manageable (Frontman, 2018).

7. In-school loans for students and parents

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STUDENT DEBT CRISIS

The beauty of in-school student loans in the private marketplace is that there are many to

choose from. Whether you’re a college freshman, a scholar seeking a doctoral degree, or are the

parent of one — there’s something for everyone. Sallie Mae, for example, offers 11 different

education loans, from paying for the private kindergarten of your toddler to financing your study

for the bar exam. But with varying loan types come more choices. Take repayment as one

example: College Ave, one of Sallie Mae’s competitors, offers undergraduates four options while

they’re in school:

1. Defer payments entirely

2. $25 monthly payments
3. Interest-only payments
4. Full principal-and-interest payments (Scott, 2018).
8. Refinanced loans for graduates

Whereas the federal government’s Direct Consolidation Loan allows borrowers to

combine multiple federal loans into one, private lenders offer the option of refinancing federal

and private loans into one new loan. The key difference here is that consolidating federal loans

doesn’t directly save you money; it might cost you more, as the repayment term could lengthen.

 Refinancing, however, could award you a lower interest rate and help you save on

the total cost of your debt.

 A solid credit score and steady income can help you qualify for the lowest interest

rates (Scott, 2018).

9. Direct Consolidation Loan

Consolidating any of the federal loan types above allows graduates (or dropouts) to pool

multiple loans into a single loan with a single loan servicer. This means you can make a single

monthly payment, too. That payment would also likely be lower than your past loans, as the

repayment period can be extended up to 20 years. Although consolidation is convenient, it’s not
 24
STUDENT DEBT CRISIS

right for everyone. It might give one borrower access to income-driven repayment options, but it

might erase another’s progress toward Public Service Loan Forgiveness.

 Interest rate: The weighted average of the interest rates on your existing loans
 Loan fee: n/a
 Terms: Up to 30 years (Glater, 2018).

Week 3: Student Loan Forgiveness Programs

Objective: To describe the different tuition assistance and student loan forgiveness options to

students.

1. Public Service Loan Forgiveness (Handout Appendix D)

The Public Service Loan Forgiveness program (PSLF) offers complete loan forgiveness to

those who work in the public sector. This includes non-profit employees, Peace Corps

volunteers, public school teachers and staff, and government employees to name a few. In the

Public Service Loan Forgiveness program, you may qualify for complete student loan

forgiveness after “10 years or 120 payments instead of the standard 20-25-year forgiveness. Plus,

there is no dollar cap on the amount of money that you can have forgiven through PSFL. Any

qualifying loan balance that remains after 10 years is forgiven in its entirety” (Brass, 2018). Best

of all, the IRS does not view the forgiven debt as taxable income. The PSLF program cares more

about who you work for rather than what you do. To qualify, you must work or volunteer for one

of the following:

 A government organization at any level

 A tax-exempt 501(c)(3) not-for-profit organization
 A not-for-profit organization that provides qualifying public services
 Working full-time (Brass, 2018).
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STUDENT DEBT CRISIS

The Public Service Loan Forgiveness program forgives any non-defaulted loan borrowed

under the William D. Ford Federal Direct Loan Program. Other loans like Federal Perkins Loans

or Federal Family Education can become eligible for PSLF if you consolidate them into a Direct

Consolidated Loan (Brass, 2018).

2. Teacher Loan Forgiveness

The Teacher Loan Forgiveness program (TLF) is a form of student loan forgiveness that

is separate from the Direct Loan or Obama Student Loan Forgiveness program. This program

awards educators with a principal reduction of their federal loans. It was designed to

encourage students to enter the education field and to incentivize teachers to continue

teaching. “Qualifying teachers receive a tax-exempt principal reduction of either $5,000 or

$17,500 on their federal loans” (Pratt, D. A. (2019). This drops their overall loan balance,

making monthly loan payments smaller and thus more manageable. For some teachers, this

eliminates their federal student loan balance altogether. The second perk of the teacher loan

forgiveness program is that it allows teachers to remain eligible for the Public Service Loan

Forgiveness program. Under this program, their remaining federal loan balance would be

forgiven after 10 years of on-time payments. “This means teachers get a principal reduction

after five years and then complete forgiveness after an additional 10 years. Compared to the

standard forgiveness term of 20 to 25 years, this is a great option” (Pratt, D. A. (2019).

Teachers must also meet eligibility criteria that deem them “highly qualified.” To start, highly

qualified teachers must have:

 at least a bachelor’s degree

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STUDENT DEBT CRISIS

 received full state certification as a teacher

 not had licensure or certification requirements waived for any reason

Loans you want to be forgiven must have been taken out before you finish your five years of

consecutive teaching service. Second, you can only seek forgiveness for the following loan

types:

 Direct subsidized loans

 Direct unsubsidized loans

 Subsidized federal Stafford loans

 Unsubsidized federal Stafford loans (Brass, 2018).

3. Disability Discharge Student Loan Forgiveness

Total and Permanent Disability Discharge program (TPD) helps borrowers suffering from

a disability by offering a complete discharge on their federal loans. Unfortunately, most private

lenders do not offer disability discharge for private student loans. The few that do are Sallie Mae,

Wells Fargo, Discover, and New York Higher Education Services Corp.

If accepted for the disability discharge, you would receive complete loan forgiveness.

You will no longer owe any money in either principal or interest. To receive immediate disability

discharge, qualifying borrowers must prove that they are totally and permanently disabled. You

must have documentation from the Veterans Affairs Office, the Social Security Office, or your
 27
STUDENT DEBT CRISIS

physician. The burden of proof is high and relies heavily on that official documentation. In

general, you must have been disabled for at least 60 months or expect to be disabled for at least

60 months to qualify. Those with disabilities expected to result in death are also eligible. Your

loans must be eligible too. TPD discharge relieves you from repaying loans made under the:

 William D. Ford Federal Direct Loan Program

 Federal Family Education Loan Program

 Federal Perkins Loan Program (Brass, 2018).

4. Bankruptcy and Undue Hardship Student Loan Discharge

If you can prove “undue hardship”, the court has several options. In most cases, the

proceedings will result in one of the following:

 Your loans are fully discharged, and you no longer have to make any payments.

 Your loans are partially discharged, and you must repay a portion of the loan.

 Your loan takes on new terms like a lower interest rate or a longer repayment term

 You must still repay your loan (Brass, 2018).

To discharge your student loans through bankruptcy, you must prove that paying back

your loans would be an undue hardship. You need to meet the following three criteria:
 28
STUDENT DEBT CRISIS

 Based on your current financial situation, paying back your loan would make it

impossible for you to maintain a minimal standard of living for yourself and your

family

 Your current financial situation is persistent and will continue for a large part of

your loan repayment period

 You have made a good faith effort and done what you can to repay your student

loans (Brass, 2018).

Some courts will look at your income, expenses, loan amount, and other circumstances to

decide. The best way to find out how courts in your jurisdiction define “undue hardship” is to

speak with a local bankruptcy attorney.

5. Student Loan Forgiveness for Nurses

Nurses have access to several counties, state, and federal student debt forgiveness programs.

If you currently work for a hospital or clinic, your employer may even help with repaying your

nursing school loans. The two main federal programs are the Nurse Corps Loan Repayment

Program and the National Health Service Corps (NHSC) Loan Repayment Program.

The Nurse Corps Loan Repayment program pays off a portion of your nursing school debt in

exchange for a service commitment in an area of high need. To participate in the Nurse Corps

Loan Repayment program, you must meet the following criteria:

 Be a United States citizen

 Have a bachelor’s, associate, diploma, or graduate degree in nursing

 29
STUDENT DEBT CRISIS

 Work full-time as a licensed nurse, advanced practice registered nurse, or nurse

faculty member

 Work in a critical shortage facility in a high need area or at an eligible school of

nursing

 Have completed the nursing programs that you took out the loans for

 Be licensed to practice in the state where you intend to practice (Brass, 2018).

The National Health Service Corps (NHSC) offers medical professionals, including select

nurses, debt forgiveness in exchange for a two-year service commitment. Unlike Nurse Corps,

this program awards loan forgiveness to eligible nurses who work full-time or part-time.

6. Military College Loan Repayment Program (MCLRP)

To incentivize qualified individuals to join the military or the reserves, many U.S. military

branches offer student loan forgiveness programs. To qualify, you must join the Army, Air Force,

Coast Guard, National Guard, or Navy as a recruit, reenlist, or move from active duty to the

Army or Navy reserves.

The program follows these specific eligibility requirements:

 Active duty military members must have no previous military experience

 Army recruits or reenlisting members must sign on for a minimum of three years

of service

 Army members must have a high school diploma and a score of at least 50 on the

Armed Forces Vocational Aptitude Battery

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STUDENT DEBT CRISIS

 Members of the Army on active duty, the Army Reserves, the Army National

Guard, and the Air National Guard, you must join or reenlist in a shortage military

occupational specialty or air force specialty code

 Air Force or Navy re-enlistees must sign on for a minimum of four years of

service (Edwards, 2015).

7. Obama Student Loan Forgiveness Program

“Obama Student Loan Forgiveness” is a nickname for the William D. Ford Direct Loan

program. The name came about when President Obama reformed part of the Direct Loan

program in 2010 by signing the Health Care and Education Reconciliation Act of 2010. Because

of expanded funding for federal student loans, more borrowers gained access to more options

with loan repayment. President Obama made the following changes to federal student loan

forgiveness:

 The federal government will no longer give subsidies to private lending

institutions for federally backed loans.

 Borrowers of new loans starting in 2014 will qualify to make payments based on

10% of their discretionary income.

 New borrowers would also be eligible for student loan forgiveness after 20 years

instead of 25 on qualifying payments.

 The money will be used to fund poor and minority students and increase college

funding (Bass, 2018).

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STUDENT DEBT CRISIS

Week 4: Employee Benefit Programs

Objective: To be able to explain to students that different companies and employers who offer

employee benefit programs. (Handout Appendix E)

Student loans are now the second largest consumer debt category after mortgages. On

average, graduates of the Class of 2016 owe $37,000 in student loans, and graduates of the Class

of 2017 owe almost $40,000 in student loan debt. To attract and retain recent graduates’

companies are expanding their employee benefit programs to help reduce student loan debt for

their employees.

The top-ten programs include the following:

Fidelity

Employees at the manager level and below of this leading financial services company are

eligible to receive up to $2,000 per year (up to $10,000 total) toward repayment of their student

loans. The “Step Ahead Student Loan Assistance” benefit also provides employees with online

tools to help them better manage their student loan debt. Fidelity estimates that approximately

25% of its employees have student loan debt. Another positive: since the student loan benefit is

paid monthly, an employee who leaves Fidelity does not have to repay the benefit.

Aetna

This healthcare company offers up to $2,000 in matching student loan payments (up to

$10,000) for full-time employees and $1,000 (up to $5,000) for part-time employees. To qualify,

an employee must have earned an undergraduate or graduate degree within three years of

applying for the program.

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STUDENT DEBT CRISIS

Penguin Random House

Penguin Random House is the first book publishing company to offer student loan

repayment assistance. Penguin Random House will pay $1,200 per year (up to $9,000) in student

loan repayment benefits for any full-time employee who has worked at the company at least one

year. Gradifi is administering the student loan benefit.

PricewaterhouseCoopers (PwC)

The global accounting and consulting firm offers associates and senior associates up to

$1,200 per year up to $7,200 toward an employee’s student loan debt. PwC is working with

Gradifi, an employee benefit platform, to assist with its student loan repayment plan.

Abbott

The health care company is helping its employee repay student loans and save for

retirement in a unique way. If an employee contributes 2% of their paycheck to student loan

repayment, Abbott will provide a 5% match to the employee's 401k retirement plan.

Nvidia

The technology company offers its full-time and part-time employees up to $6,000 per

year (up to $30,000) in student loan repayment benefits. Each month, Nvidia will pay the lesser

of $500 and the employee’s required total monthly student loan payment amount. To be eligible,

employees must work at the company for at least three months and have graduated within the last

three years.

First Republic

The private bank and wealth management company provides its employees with a tiered

student loan repayment benefit. The student loan repayment benefit is $1,200 the first year of

employment, $1,800 the second year and $2,400 in all subsequent years. There is no lifetime cap
 33
STUDENT DEBT CRISIS

on the student loan repayment benefit. Both full-time and part-time employees are eligible, as are

employees who have borrowed an educational loan on behalf of their child.

Chegg

The education and technology company offer both full-time and part-time employees up

to $1,000 annually to help repay their student loans. There is no cap on the amount of student

loan repayment that employees can receive. Like Fidelity, Chegg partnered with Tuition.io to

administer the student loan repayment benefit.

Live Nation

The live entertainment events promoter and venue operator offers its employees $100 per

month to repay their student loans, with a total benefit of $6,000 in student loan repayment.

Staples

The retailer helps full-time sales associates repay their student loans with $1,200 per year

(Pratt, 2019).

Self- Assessment Appendix C

Molly EDU699
 34
STUDENT DEBT CRISIS

MacPhail
Capstone Post
Project University

ELEMENT Exemplary Proficient Partially Unsatisfactor POINTS

Proficient y

PROCESS: 3 points 2 Points 1 point 0 points

Adhered to Realistic Somewhat Somewhat Did not meet 3 points

timeline of expectations realistic realistic
project. were set for expectations expectations
completing were set for were set for
tasks. The completing completing
expected tasks. The tasks. Some of
results were expected the expected
delivered results were results were
before delivered on delivered on
intended the intended time but the
deadline. deadline. quality was
compromised.
Evidence of Project can be Project can be Project can be Did not meet 3 points
professional easily understood partially
growth understood and understood
and implemented and
implemented by implemented
by professionals. by
professionals. professionals.
All resources
are relevant.
Shows personal Responded Welcomed Responded Did not meet 3 points
value in the well to peer peer and apprehensivel
project and expert expert y to peer and
feedback. feedback. expert
Used Used most of feedback.
feedback to the feedback Used some of
make to make the feedback
appropriate appropriate to make
changes. changes. changes.
PRODUCT:
 35
STUDENT DEBT CRISIS

Project shows Project is Project is Project lacks Did not meet 2 points - I was
competence in detailed in detailed and some detail able to stay on
the MS Higher depth, well developed and some track but could
Education developed with concepts concepts are have explained
Administration and learned applied. more on the
program demonstrates throughout outcomes of
various the MS this program.
concepts program
learned
Project shows The project The project The project Did not meet 2 points -
ability to apply clearly demonstrates demonstrates many concepts
concepts demonstrates an an were
learned an understandin understanding incorporated
understandin g of 2 of 1 or no but not all
g of 3 or more program program learned in this
program outcomes. outcomes. course
outcomes.

PRESENTATION
& PAPER:

Research Includes all Includes most Does not Did not meet 2 points - I
process and elements of elements include think this
implementatio deliverable complete project could
n deliverable have been
implemented
if I had done
more
reasearch
early on and
delivered the
project to local
school
administration
.
Writing style & Writing is Writing is Writing is not Did not meet 3 points
APA concise, detailed, but of master’s
grammatically grammatical level quality,
correct and errors are lacks
professional. present. 1-2 cohesiveness
No APA APA errors. and has 3-4
errors. APA errors.
References References References Not listed at Did not meet 3 points
are lsited are not listed all
correctly correctly
 36
STUDENT DEBT CRISIS

Commitment Presentation Presentation Presentation is Did not meet 3 points

and originality is is well designed with
aesthetically designed and some detail
pleasing, has one APA and two APA
exceptionally error. errors.
designed and
no APA errors.

TOTAL POINTS 24/27 points

Adapted from Capstone Project Instructions, https://post.blackboard.com/bbcswebdav/pid-

3373231-dt-content-rid-26907364_1/courses/EDU699.901014086384/Capstone%20Project
%20Assignment%20Instructions%202016.pdfand Digital Footprint Awareness,
https://post.blackboard.com/bbcswebdav/pid-3373232-dt-content-rid-26907384_1/xid-
26907384_1.

Review of Panel by Experts

Access Review here:

https://docs.google.com/forms/d/e/1FAIpQLScb3QKHVgr_45GEMnDXFJivsbSiXBXGFOIZjS-
ilTDlGm9-lw/viewform

Students 101 Training Program

Please take time to review my Financial Aid Department training program entitled: “Students
101”. For this questionnaire, the “project” refers to the training program and weekly steps, while
the “learners” refers to members of the financial aid department at higher education institutions.
Thank you for your feedback!

Name * Jacob Starr

 37
STUDENT DEBT CRISIS

Position * 4th Grade Teacher, Austin ISD

1. This project identifies a problem (student loan debt) that is significant to the success of
students and explains its importance to learners.
Strongly Agree
1
2
3
4
5
Strongly Disagree

2. This program exposes learners to different strategies and viewpoints and offers valid
information.
Strongly Agree
1
2
3
4
5
Strongly Disagree

3. This program gives learners discussion opportunities to observe their current practices and
explore ways of improving.
Strongly Agree
1
2
3
4
 38
STUDENT DEBT CRISIS

5
Strongly Disagree

4. What do you believe to be some of the strengths of this project?

 Clarity of the project is well thought out

5. What do you believe to be some of the weaknesses of this project?

 Are there programs like this available already?

6. What suggestions do you have for improving this project?

 Think about the idea of not interviewing students but instead focusing on financial
aid departments and what they are currently trained on.

This content is neither created nor endorsed by Google. Report Abuse - Terms of Service
Google Forms.

Name * Breann Solis

Position * Admissions Counselor at American Intercontinental University

1. This project identifies a problem (student loan debt) that is significant to the success of
students and explains its importance to learners.
Strongly Agree
1
2
3
4
5
Strongly Disagree

2. This program exposes learners to different strategies and viewpoints and offers valid
information.
 39
STUDENT DEBT CRISIS

Strongly Agree
1
2
3
4
5
Strongly Disagree

3. This program gives learners discussion opportunities to observe their current practices and
explore ways of improving.
Strongly Agree
1
2
3
4
5
Strongly Disagree

4. What do you believe to be some of the strengths of this project?

• Possibility of implementation is exciting

5. What do you believe to be some of the weaknesses of this project?

• How long will this take to implement nationally?

6. What suggestions do you have for improving this project?

• How will you be introducing this training to colleges? Will it be through
administration or student groups?

Name * Krissy Dyson

 40
STUDENT DEBT CRISIS

Position * Financial Aid Advisor at University of Texas at Austin

1. This project identifies a problem (student loan debt) that is significant to the success of
students and explains its importance to learners.
Strongly Agree
1
2
3
4
5
Strongly Disagree

2. This program exposes learners to different strategies and viewpoints and offers valid
information.
Strongly Agree
1
2
3
4
5
Strongly Disagree

3. This program gives learners discussion opportunities to observe their current practices and
explore ways of improving.
Strongly Agree
1
2
3
4
 41
STUDENT DEBT CRISIS

5
Strongly Disagree

4. What do you believe to be some of the strengths of this project?

• Goal of project is admirable and concise

5. What do you believe to be some of the weaknesses of this project?

 Will higher education administration be willing to implement if there is a fee to
incorporate?

6. What suggestions do you have for improving this project?

 Look at data from previous programs to compare weakness and strengths.
 42
STUDENT DEBT CRISIS

Appendix D
Financial Aid Training Handout – Student Loan Forgiveness Programs

Appendix E
 43
STUDENT DEBT CRISIS

Handout for Employee Benefit Programs