Spring Arbor University — a Christian liberal arts college in Spring Arbor Township, Mich. — will be providing the My LRAP Association’s Loan Repayment Assistance Program to all incoming freshmen starting fall 2013, according to their website.

The Loan Repayment Assistance Program repays part or all of some students’ loans under certain circumstances.

With all the students potentially taking out loans to pay Biola’s $31,004 tuition per year, Jonathan Seruyange, assistant director of Financial Aid, said that Financial Aid considered putting a program like the Loan Repayment Assistance Program into effect, but also remarked that Biola prefers to be proactive instead of reactive.

“We prefer to have our strategy up front instead of repaying loans to a scholarship budget or loan program,” Seruyange said.

Under Spring Arbor’s Loan Repayment Assistance Program, if a graduate is gainfully employed but has an income less than $20,000, they will be reimbursed for the entirety of their loans. If their income is between $20,000 and $37,000, the graduate will only receive assistance equal to half the payment amount each month. Assistance continues until the loans are fully repaid or income increases to more than $37,000.

Brett Ellis, a financial aid representative from Spring Arbor, noted that the university found that the significant number of students going into ministry-related careers were finding it hard to repay loans after graduation. They also observed that students in other fields of study were having difficulty finding employment in their field.

STUDENT LOANS AND THE LOAN REPAYMENT ASSISTANCE PROGRAM

About 20 million Americans attend college each year, according to American Student Assistance, a non-profit organization that seeks to help students manage and repay college loan debt. Out of these attendees, 12 million borrow money in student loans. In 2012, the ASA noted there were nearly 37 million borrowers with outstanding student loans. When a borrower is 90 days past due on a payment, they are considered in delinquency.

The ASA indicates that the combined delinquency rate is 36.9 percent, with 48 percent of those people attributing it to unemployment or underemployment. In order to help students with their loans after graduating, some schools, like Spring Arbor, have made use of the Loan Repayment Assistance Program.

“The LRAP seemed interesting,” Ellis said. “So we started pilots [test runs] five years ago at 25 to 30 students per year.”

Ellis reported that not only did the pilots influence students in their choice to attend, but that the graduation rate rose 15 to 20 percent and retention rose 10 to 12 percent. However, not everyone sees the Loan Repayment Assistance Program as a good idea.

“It would give people an incentive to get a low-income job to not have to pay it back,” said Biola senior English major Micayla Hardisty.

A GOVERNMENT OPTION

Although Biola prefers to take the proactive route, Seruyange brought up similar options through the federal government.

One option, the Income-Based Repayment Plan, is similar to the Loan Repayment Assistance Program, but is only available for Stafford, Direct, Grad PLUS, Direct Student PLUS and certain Consolidation loans. Consolidation loans are those which are granted to those who have Direct loans in grace, repayment, deferment or default status.

Sophomore biblical studies major Chandler Rogers expressed a desire for Biola to adopt a repayment program.

“Biola is expensive and generosity helps out students,” Rogers said. “It would allow students who want to be here to actually be here.”

The department is doing what it can to provide financial assistance to students, Seruyange said.

WHAT FINANCIAL AID IS DOING

“Financial Aid regularly looks at the school’s revenue to add more to the department budget,” Seruyange said. Seruyange also noted that with increased revenue, the department has been able to increase the discount rate, or the average amount reduced from tuition after financial aid is taken into consideration. Furthermore, Financial Aid has also implemented some strategies to lessen this financial burden.

Seruyange mentioned scholarships given to individual students that meet special criteria, such as The East Los Angeles Community Union Scholarship, given to low-income first-generation students with a 2.5 grade point average. If no enrolled student matches the specifications, Financial Aid withholds the funds until one such student is found. For other students, the department made available an online Financial Literacy Module that provides information on budgets and credit. It has been in place for a year.

“We try to make resources available and make sure students are better educated about how to handle budgets and finances,” Seruyange said.