Georgia leaders hope to educate students on borrowing for college

The University System of Georgia is preparing a new program to make students better aware of college costs, particularly borrowing, and how much they’ll have to pay after graduation.

The plans, scheduled to start in early 2019, include giving students detailed student-award letters with the recommended borrowing amount, sending students messages — possibly via text message and/or email — explaining how much they’ll owe in student loans, and utilizing artificial intelligence and chatbots to answer questions during the financial aid application process.

“We want (students) to know more and borrow less,” the system’s chancellor, Steve Wrigley, said of the goals of the initiative in a recent interview with The Atlanta Journal-Constitution.

In Georgia, like much of the nation, students are borrowing more to attend college. In 2010-11, students who graduated from some of Georgia’s top public colleges, such as the University of Georgia or Georgia Tech, borrowed an average of $16,705, according to a recent Southern Regional Education Board report. By 2015-16, the average amount borrowed was $21,907, the report found — a 31 percent increase. In all, students and parents in the University System borrow more than $1.5 billion a year, officials said.

Nearly one-half of University System students are getting federal loans to pay for school, Wrigley said. On average, students borrow about $6,200 a year, he said.

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More than half of the first-year, full-time students in 18 University System campuses received grants for students from low-income households during the 2016-17 school year, according to system data.

Starting in July, PricewaterhouseCoopers will make $100 a month direct-to-lender payments toward student loans on behalf of employees not in management who sign up for the benefit. (Photo courtesy Fotolia/TNS) (Handout/TNS)

Wrigley believes some of the borrowing is unnecessary and hopes to reduce it by sharing more information with students about their options.

“They can cover the costs, particularly if they’re on (the HOPE Scholarship),” he said.

HOPE covers nearly all tuition costs at many University System campuses, but it does not pay for student housing and fees. Wrigley noted the system has tried to cut costs in other ways, such as using more online textbooks, which he said saves students about $19 million a year. The chancellor said he has a long-term goal of students being able to earn a bachelor’s degree without buying a textbook.

Since 2007, the amount of student loan debt held by the federal government has tripled, from about $500 billion to an estimated $1.5 trillion, according to U.S. Education Secretary Betsy DeVos. About 43 percent of student loans are considered in distress, meaning they’re delinquent, at risk of default or students aren’t paying enough, DeVos said. She warned last month during a speech in Atlanta of a national higher education “crisis” in how the federal government and colleges distribute, administer and manage federal student loans.

Some schools mislead students, she said, using phrases such as “aid” to describe student loans. DeVos said her office is working to be more transparent about debt, such as sharing information with students — her office created an app for this — about how much they owe.

Wrigley cited a Indiana University System program, “MoneySmarts,” as an example of what he’s trying to accomplish. The Indiana system has a financial well-being consultant, an online system to calculate student debt and podcasts on managing your credit score. One podcast title that may be popular with many students and parents: “How Not To Move Back In With Your Parents.”

Wrigley said that system has reduced student debt by 10 percent.

“It’s a fairly new effort, so we’re still learning,” Wrigley said of Georgia’s approach.

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