The U.S. Department of Education has approved 51 schools from across the country to participate in a financial aid experiment focusing on reducing student loan debt, according to the Student Loan Report.
The goal of the study is to keep students aware of their escalating debt as they’re working towards their degrees. “You’d be surprised how many don’t realize how it’s mounted,” said Jill Price, director of financial aid at Nicolet College in Wisconsin, one of the schools participating in the experiment. “They ask, ‘How much do I have out there? How much am I going to repay?'”
While undergraduate students currently undergo loan counseling when taking out their first loan or exit counseling when they leave school, they are not required to be counseled during their academic career, which can last several years.
With this study, students receiving federal financial aid will be randomly selected and placed in one of two groups. The first group—the control group—will receive financial aid in the same manner, going through an entrance or exit counseling session with no additional interviews required while in school.
The second group—the experimental group—will be required to receive some form of counseling regarding their loans while in school. The additional counseling could be in the form of in-person sessions with the school’s financial aid department or through online tools set up by the school or U.S. Department of Education. It could also be a combination of both.
The hope is that the study will keep the experimental group in the loop about their debt amount, as well as help them decide whether they need the full amount of a loan offered or if they need a loan at all. This can enable students to take on less debt during their education.
The program will be implemented at the 51 schools by the beginning of the 2017-18 academic year and students randomly selected for the study will be required to participate.