The University of Texas at Austin is incentivizing on-time graduation in order to reduce student debt. It’s all part of a monumental push to save students money while ensuring a quality education.
University of Texas at Austin officials announced last Thursday an innovative pilot plan to forgive student debt and encourage graduation in four years, both policies designed to make college cheaper and more effective for the 39,977 undergraduates that call the Forty Acres home. The plan involves forgiving a portion of a select group of students’ federal loan debt under certain conditions, including taking enough hours to finish on time. The University describes it in detail:
For this pilot project, the University will select 200 freshmen entering in the fall of 2013 who have been awarded Federal Direct Unsubsidized Loans on the basis of financial need. Half of the students would be offered loan forgiveness in the amount of $1,000 on the principal, plus interest accrued if they successfully complete 15 hours of their degree requirements by the end of each semester. The other half would be offered $2,000 in forgiveness, plus interest accrued, if they successfully complete 30 hours of applicable degree requirements by the end of the academic year.
As University officials noted, the plan is inspired by the popular B-on-Time Loan program, which offers student loan debt forgiveness to Texans who graduate within four years and who maintain a B average or above.
Over 14,000 UT-Austin undergraduate students borrowed $60.1 million in the Federal Direct Unsubsidized Loans last year, according to the Office of Student Financial Services. Most Texas students (53 percent) have some form of student loan debt, averaging $20,919 according the Project on Student Debt.
Meanwhile, cost of living in Austin continues to change with the market, and students have seen tuition increase since tuition deregulation in 2003. Though the UT System Board of Regents voted to freeze undergraduate tuition at UT-Austin for the next two years, the University still must contend with graduation rates in an effort to keep college affordable for a diverse array of current and future Longhorns.
Put simply, the longer you stay in school, the more it costs. Four-year graduation rates are a major focus of both policymakers and administrators, and it has risen to the top of President Powers’ agenda. Earlier this year, the Task Force on Undergraduate Graduation Rates, a group made up of UT-Austin faculty, administrators, and students, announced the goal of a 70 percent four-year graduation rate by 2016.
UT-Austin currently leads all state universities in Texas the in four-year graduation rates, and has increased its rate by 59 percent since 1983.
“Improving success for all students is the goal of our effort to raise UT’s four-year graduation rate,” Powers said in his State of the University address last month. “Even in the last six years, we have raised our four-year graduation rate from 48 percent to 52 percent. But that’s not enough. Last year I set a goal of raising that rate to 70 percent in the next five years.”
The numbers don’t lie. Take a look at some of the figures below and see how debt, graduation, and policy align for students at UT-Austin.