In the wake of the recent recession, many individuals are struggling with debt. This includes students, as many of these individuals face financial challenges regarding student loans. Some colleges are trying to find ways to address this issue.
Florida State College at Jacksonville (FSCJ) has recently passed a new school rule that is aimed at addressing student debt.
The new rule establishes a debt ceiling for federal student loans. The amount of this ceiling varies based on the type of degree a student is pursuing and his or her dependent status. If a student reaches this ceiling and he or she is not on pace to graduate on schedule, the rule allows the school to restrict the student’s ability to receive additional federal student loans. An official with the school said that the institution only plans to use this restrictive ability in “extreme situations.”
What is the aim of this rule? Reportedly, the school’s goal in passing this rule is to protect students from overwhelming debt. The hope is that the rule will allow the school to discourage students in certain circumstances from taking on unnecessary debt.
However, there are some concerns that arise as to whether such a rule can actually protect students from debt. These concerns are rooted in the fact that the school can’t limit a student’s ability to pursue state student loans or private sources of credit, such as credit cards. Thus, an important question arises. Will restricting a student’s access to federal loans actually discourage him or her from taking on excessive debt or will it simply push the student into taking on debt that might have less favorable terms?
As one can see, some interesting issues arise in connection to the new rule passed by FSCJ. It will be interesting to see how often the school uses the restrictive ability that the rule allows and whether other schools in the state and the country will start to adopt similar rules. It will also be interesting to see what impacts this rule and one’s like it ultimately have on students.
Source: The Florida Times-Union, “FSCJ to set ceiling for some students’ debt,” Kate Howard, 9 May 2011
