Indiana University initiatives continue to pay off in reduced student borrowing
FOR IMMEDIATE RELEASE
BLOOMINGTON, Ind. -- Borrowing by Indiana University students has been reduced by nearly $100 million in the four years since the university began a multi-faceted financial literacy program and started adopting policies to increase student financial assistance and promote on-time graduation.
The total federal, university and private loans taken out by students on the seven IU-administered campuses decreased by $98.7 million, or 15 percent, between the 2011-12 and 2015-16 school years.
“Indiana University has focused on reducing student debt as an essential element of keeping an IU education affordable and accessible, a key priority of the Bicentennial Strategic Plan,” said John Applegate, executive vice president for university academic affairs. “Through the dedicated work of many people, we have seen truly impressive reductions in student borrowing in the past four years.”
Federal loans to IU students decreased by $113.7 million or 23 percent over the four-year period. Private and external loan volume increased by modest amounts.
For IU undergraduates:
- Total student loan volume decreased by $70 million, or 17 percent, over four years.
- Federal student loan volume decreased by $82 million, or 22 percent.
- Total loan volume for students who are Indiana residents decreased by $67.2 million, or 20 percent.
“IU students have lowered their borrowing substantially, saving themselves many millions of dollars in future interest payments,” said James Kennedy, associate vice president of University Student Services and Systems. “We attribute these savings to our comprehensive financial literacy program and other initiatives that reflect the university’s commitment to student success and degree completion.”
Indiana University created the Office of Financial Literacy in 2012 to help students with decisions about budgeting, financial management and borrowing. The office, within the Office of the Vice President and Chief Financial Officer, established the MoneySmarts program to provide easily accessible, student-focused assistance, including peer advising, podcasts and campus presentations.
“We are very pleased with the results we have seen thus far and excited about new initiatives we are developing for even greater success,” said Phil Schuman, director of financial literacy.
The University Student Services and Systems office, part of the Office of the Executive Vice President for University Academic Affairs, reviewed and revised its financial aid processes and procedures with the campuses to make them more transparent and effective. In 2012-13, IU began sending annual student debt letters providing student borrowers with information about their loans and estimated repayment expectations. The letter has been widely praised and adopted by other colleges and universities.
IU also created initiatives aimed at controlling the cost of education, including incentives for full-time enrollment and on-time graduation and a “banded tuition” approach in which students pay the same tuition if enrolled in between 12 and 18 credit hours. Tuition for Indiana resident students at IU Bloomington was frozen in 2015-16 and 2016-17.
Total student borrowing and federal loans have decreased every year since the initiatives began in 2012-13. Loan reductions have been steady and consistent for both undergraduates and graduate students.
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associate vice president of University Student Services and Systems
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