Responsible Borrowing Initiatives Bob Collins, Western Governors University JoEllen Soucier, Houston Community College October 12, 2017 San Antonio, TX Texas Association of Student Financial Aid Administrators
WGU Financial Aid Delivery Model Monthly starts first day of every month Academic year is 12 consecutive months Two six-month payment periods (non-standard terms) Tuition and fees (learning resources) = $3000 Fixed price: all you can learn for $6000/year No tuition increase since 2008 Accelerate time-to-degree completion Undergraduate average: 2.5 years to graduate Texas Association of Student Financial Aid Administrators
Responsible Borrowing Initiatives ED Experimental sites Unequal Loan Disbursements WGU implemented July 2014 – ED sunset June 2016 Borrow only what is needed to pay costs when charges are incurred Nursing College: Science Fee Teachers College: Demonstration Teaching Fee Multiple disbursements required if payment period > 4.5 months Need fix in HEA Reauthorization – section(s) 428 G and 455 (Direct Loans) Limiting Unsubsidized Direct Loans WGU implemented January 2013 – ED almost sunset June 2017 Restrict borrowing to direct costs only (tuition and fees) Texas Association of Student Financial Aid Administrators
Limiting Unsubsidized Direct Loans - Selection Criteria $30,000 Outstanding Principal Balance (Avg. OPB: $43K) Limited to $6,500 per Academic Year Undergrad Student $40,000 Outstanding Principal Balance (Avg. OPB: $62K) Limited to $7,500 per Academic Year Graduate Student Texas Association of Student Financial Aid Administrators
Texas Association of Student Financial Aid Administrators
Help students make an informed decision, borrow wisely My Financial Aid Plan Modified CFPB Shopping Sheet (July 2013) Personalized to student program of study and grade level Recognizes annual/aggregate federal student loan limits Direct (tuition) vs Indirect (living allowances) costs Custom recommendation: borrow only unmet direct costs Help students make an informed decision, borrow wisely Texas Association of Student Financial Aid Administrators
My Financial Aid Plan Behavioral economics: how small changes in decision framing can have significant, positive impacts From July 2013 – June 2016, average borrowing per student went from $7,870 per year to $4,640 per year, a 41% reduction Texas Association of Student Financial Aid Administrators
Do you want to be awarded federal student loans? Accept Recommended Loans Decline all loans I want less than recommended I want more than recommended 65% 10% 3% 22% Texas Association of Student Financial Aid Administrators
Texas Association of Student Financial Aid Administrators
Institutional impact Cohort default rates (3 year – FY2014) Texas Association of Student Financial Aid Administrators
Student Loan Scenario Calculator Impressive Results, Next Iteration: Need more fluid process, develop gaming technology Full visibility of total student loan debt & estimated monthly payments Informed decision at time of action (i.e. requesting loan amount) Encourage interest only in-school payments on unsubsidized loans Texas Association of Student Financial Aid Administrators
Texas Association of Student Financial Aid Administrators
Texas Association of Student Financial Aid Administrators
Texas Association of Student Financial Aid Administrators
Texas Association of Student Financial Aid Administrators
Leadership / Collaboration / Strategic Partnerships Outsource – partner with SaaS provider (Campus Logic) Allow WGU to focus on its core mission to improve quality of and expand access to postsecondary education Develop and deliver My FA Plan – July 2013 through June 2016 Insource – impressive results, need more fluid process (2016 - ?) Allow WGU to focus on its mission of affordability Develop, deliver, continually enhance Student Loan Scenario calculator No more amplifiers of problem ($1.4 trillion student debt) Need more communicators of solutions Texas Association of Student Financial Aid Administrators
Replicability / Scalability / Sustainability WGU has proof of concept RBI can be adopted and adapted to meet demographic needs Borrow only what you need, not the maximum allowable Presentations at numerous professional associations College affordability Texas Higher Education Coordinating Board Tennessee College Affordability public forum Public policy agencies, NGO’s, NFP organizations, elected officials Texas Association of Student Financial Aid Administrators
Topic Point 1 Point 2 Point 3 Texas Association of Student Financial Aid Administrators
Topic Point 1 Point 2 Point 3 Texas Association of Student Financial Aid Administrators
Help students make an informed decision, borrow wisely. Thank you! Bob Collins – robert.collins@wgu.edu Contact Information for Presenters