Understanding "Self Help" in the Financial Aid Award

April 8, 2022
A post by Stephanie Dupaul, Vice President for Enrollment Management

Friends, countrymen, bear with me, because I’m about to say something that will send some families over a ledge: loans are not (always) a terrible thing.

Despite the drama and angst surrounding educational loans, no one should draw a line in the sand and never even consider a student loan. Families don’t often realize that the average student loan debt coming out of a school like Richmond is less than they may someday pay to finance a gently used car – and their education is going to go a lot further than a car, without the annoying warranty renewal phone calls!

At Richmond, 60% of students graduate without loan debt. We have a number of financial aid programs that provide all-grant aid for cohorts of students based on income levels, community partnerships, and high schools attended, which keeps our loan percentages low. For those with loans, the average total loan debt at graduation is less than $30,000.

Nationally, some students do have too much loan debt. While “too much” is subjective, we do know that students attending schools that don’t meet full need and those attending for-profit institutions have higher levels of debt. Some parents also utilize Parent PLUS loans, which can be a helpful federal loan program – however, these loans can be as high as the cost of attendance, are in the parent’s name, and the parent has payment responsibility. Parents considering Parent PLUS loans because they don’t want their child to have any debt should do the math and think about how these loans will impact their retirement planning.

Loan debt is not the end of the world, but families should try to stay within the federal unsubsidized and subsidized loan programs – not venture into PLUS or private loans. If the student can do that, they should not accumulate loan debt that limits their future options, and parents should not be living in their child’s basement in retirement!

Work It
Work study might be part of a student’s financial aid award. If so, this amount is not credited toward the student’s bill. Instead, the student needs to get a job on campus; they will then work and be paid for hours worked through the year. If work study is part of a student’s financial plan, they should ask a few questions. How many students work on campus? How many jobs are available? What is the pay rate? Are there raises for performance or continued employment?

At Richmond, over 1,000 students work on campus, and we post about 1,500 jobs each semester. Our starting salary for student worker is $11 per hour, and we do provide annual raises. And our research has shown that students who work on campus have higher retention rates than those who do not – so working on campus has benefits beyond the paycheck!