A growing group of private colleges is providing student loan repayments, helping students gain some financial security after they graduate.
“LRAP is just a buffer to help us get on our feet,” says Holly Lutton, 24, of Huntington, Indiana, who graduated in 2014 with a degree in youth ministry from Huntington University with $19,000 in student debt.
Loan repayment assistance programs, or LRAPs, give college graduates who meet a certain criteria, such as income, funds to help make the monthly payments on their student loans.
The youth pastor says she made minimum wage in Indiana — $7.25 an hour — after graduating, and her college’s LRAP program paid 100 percent of her monthly student loan payments until she was given a pay raise the following year.
“I’m just able to live more securely right now,” says Lutton, who tells parents from her youth ministry to look at colleges that offer LRAPs. “They can get an education and know they’re not going to come out the other end drowning in debt.”
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The average student debt burden for members of the class of 2014 who borrowed was $28,110, according to U.S. News data. Around 69 percent of 2014 graduates borrowed money to attend college, according to the 1,054 ranked colleges reporting that figure to U.S. News.
Student debt burdens are typically higher for college grads who attend private college compared with those who graduate from public schools, according to the Institute for College Access & Success.
Here are some facts to know about LRAPs offered at private four-year colleges.
— These are more likely to be found at Christian schools: “The majority of schools offering these programs are private Christian colleges,” says Peter Samuelson, president of the LRAP Association, an Illinois-based company that services loan programs for more than 100 colleges.
Many of the schools that use the LRAP Association to manage their program charge around $25,000 to $40,000 in tuition a year, Samuelson says.
College officials from several schools say their repayment programs are used as an enrollment tool.
“We felt that it really addresses the concern that prospective students had about the cost value of higher education,” says Ryan Spear, director of admission at Houghton College, a Christian college in Western New York.
The New York college charged $29,458 for tuition and fees for the 2015-2016 school year, according to U.S. News data. A 2015 survey by U.S. News found that a typical Houghton College student who borrowed, on average, holds $26,550 in debt after graduating.
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— Income determines eligibility for most undergraduate LRAPs: Most private colleges offering the benefit limit eligibility by income, says the LRAP Association president.
Adrian College, a liberal arts college — which , according to U.S. News data , charged $33,610 in tuition and fees last school year — offers its LRAP to graduates who make less than $37,000. The move is aimed to bolster enrollment, one college administrator says.
The Michigan college increased its enrollment by 18 percent over the last three years since introducing the program, says Frank Hribar, vice president of enrollment and student affairs at Adrian College.
“Our goal is graduate them with earnings greater than $37,000 a year,” Hribar says.
At colleges that offer LRAPs, students are typically reimbursed at 100 percent for private, federal and Parent PLUS loan payments if they make less than $20,000. These program continue to pay a percentage until the student earns more than $37,000 annually, experts say.
“The day they graduate, if they are making less than $37,000, then the college , through AdrianPlus , will pay all or some of their quarterly loan payments,” Hribar says. “It’s prorated from $20,000.”
[Follow steps to stay on top of an income-driven repayment plan.]
But there are a couple other caveats: In most cases, such as in the Adrian Plus plan offered at Adrian College, students have to enroll in an income-driven plan and work at least 30 hours a week to qualify for repayment assistance.
— Some colleges use type of employment to determine eligibility: While most undergraduate LRAPs determine eligibility based on household income, some — similar to law school LRAPs — set the criteria by type of employment.
Tufts University, for example, which was the first program to include undergraduates in its LRAP in 2008, determines its awards based on type of employment. The program requires its college grads to work in either the nonprofit or public sector for eligibility.
“For everyone who meets the criteria — at the most — we try to give them at least something,” says Patricia Reilly, director of financial aid at Tufts University, who says more than 50 bachelor degree graduates received an award last year.
Different colleges do different things with their LRAPs, says Samuelson from LRAP Association, advising prospective students and parents to factor this into their decision making.
“Certainly parents and students, when they’re looking at colleges, should ask whether it’s available to everyone,” he says.
Trying to fund your education? Get tips and more in the U.S. News Paying for College center.
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Colleges That Offer Loan Assistance to Grads originally appeared on usnews.com
