College affordability includes five components: (1) tuition, (2) time to graduate, (3) state funding, (4) financial aid, and (5) operating efficiencies. State funding has been cut significantly over the past six years and is at an all-time low and financial aid has been frozen, despite the efficiencies the UW System has achieved. The UW System 2020FWD plan helps students graduate more quickly so they spend less on tuition, while also helping high school students come into the university system with more college credits under their belt. The Board of Regents has also approved a request for an increase in financial aid that goes directly to students.
State and federal financial aid continues to decline. When you freeze tuition, freeze financial aid, and cut state funding, you chip away at the money used to help ensure we can offer the classes our students need. When you cut classes, it takes longer to graduate. While freezing tuition may save a couple hundred dollars a year, students and families may end up paying more in the long run, said President Cross.
Grants
State funding for the Wisconsin Grant Program has remained flat at $58.3 million since the 2010-11 academic year. In turn, the average grant award amount has fallen from $2,161 to $1,773 to address the increase in the number of students who need financial aid.
In , the Board of Regents recommended increasing state funding for financial aid by $19,152,300 for the 2017-19 biennium. The Wisconsin Higher Educational Aids Board (HEAB) would provide this funding directly to students.
Peoria Heights cash advance payday loan
Student Loans
In the 2014-15 academic year, 26% of students who graduated the UW System with a bachelor’s degree graduated with no debt.
The Institute for College Access and Success (TICAS) 2014 report on student debt reports that the average debt at Wisconsin public and private non-profit four-year institutions is $28,810, making Wisconsin 17th in the nation. The national average was slightly higher at $28,950.
While we help educate our students about their financing options so they can graduate with as little debt as possible, more students are taking out loans because Wisconsin’s financial aid has been frozen and there’s simply more students who need financial assistance, said President Cross. Of course, students would prefer to use grants to pay for college, but when federal and state funding declines, it makes college more expensive for students and expands their reliance on loans to finance their education.
According to the UW System Student Financial Aid 2014-15 Informational Memorandum, the federal government provided 89% of student loans. Over time, students have been relying more on federal unsubsidized loans, as well as loans from private banking institutions. Unsubsidized loans and private loans have risen by 12% over the past ten years and now comprise 67% of student borrowing, or $585.2 million.
Default Rates
- UW System’s student loan default rate of 4.6% is significantly lower than the national, state and surrounding Midwest
- The national student loan default rate averages 11.8%
- Wisconsin’s statewide rate (including for-profit colleges) is 9.2%.
- Wisconsin’s default rate of 9.2% is lower than all the surrounding Midwestern states
Solutions to Help Students and Families
All institutions have financial aid experts to assist and counsel students about their financial aid options. In addition to recommending an increase in state financial aid by $19,152,300 in the 2017-19 biennial budget, the UW System has included the following solutions below to help students in its 2020FWD strategic framework:
- Strengthening The Educational Pipeline: help students at all points in the educational pipeline from early childhood through secondary school, college, and lifelong learning. The UW System will partner with other educational entities and local communities to help maximize the number of students who enter and remain in the educational system, including those from underrepresented groups. It will also develop policies and adopt practices that will help UW students graduate more quickly in order to reduce the cost of their education. This includes managing academic courses and programs offered at institutions, as well as regularly reviewing standards and practices supporting the collaborative management of electives and enrollment.