In an effort to provide relief for student loans, the United States Department of Education (DOE) announced earlier this year that all federal student aid would have a 0% interest rate from March 13 through Dec. 31, 2020. The change applies to former students who were in repayment of their loans, either after graduating from or dropping out of college. The DOE also created an administrative forbearance, which allows federal loan borrowers to temporarily halt making monthly payments until the end of the year.
According to Paula Walters, director of finance at Southern Adventist University, the ruling mainly affects alumni and former students.
“Students that are currently at Southern—their loans are actually in deferment,” Walters said. “So that just means they aren’t actually making payments. They’re not required to make payments on their loans until they’ve graduated.”
Walters said Southern had already been deferring the interest on past accounts through the end of September, but now plans on aligning with the federal outline. She stressed the importance of filling out FAFSA forms by Nov. 30 for the next school year, as economic conditions can change in unexpected ways.
Because of the financial difficulties that many students face due to the pandemic, Walters said Student Finance aims to provide support throughout the semester.
“Each semester we go through what’s called the ‘drop process,’” she said. “We’re looking at students’ accounts and seeing past due amounts, determining if [the student] has to go through the process.”
The “drop process” involves examining the payment plan that a student and his or her guardians must make, before the student starts classes, to ensure that they will be able to complete the semester without financial difficulty. Additionally, it sets amounts that students must pay throughout the semester in order to remain enrolled in classes.
“I know it seems kind of like a negative thing,” Walters said. “But the reason for doing that, other than just wanting to make sure that the student can actually afford to be here, is also just making sure that we are not setting the student up to just bring on more debt.”
According to Walters, the university has been more lenient with this policy this semester, and the list of dropped students is actually much lower than it has been previously.
The university has also been providing scholarship programs for students looking to contribute to their bills. One of the most utilized programs is the Work Initiative Scholarship Endowment (WISE), which is a donor-funded, work-matching program that some students qualify for based on merit and financial need.
“Students [in WISE] have to work either on-campus or off-campus; it doesn’t matter,” Walters said. “As long as they are putting at least 50% of their earnings on their school bill, we match it up to $3,000 per year.”
The program keeps track of the student’s pay stub in order to correctly match the bill payments. The application deadline for WISE is usually Sept. 30, but Student Finance is looking to extend it into October.