Some of the toughest questions college students face are not found on any exam—they come with every student’s decisions on how to finance their education. “How much should I borrow?” “What type of loan should I take?” And then, there’s the high anxiety question: “How much debt will I be able to afford and how will I pay it off?”
To guide students through these crucial decisions, Wilson officials have implemented a groundbreaking loan buyback program that also teaches all new students financial literacy, beginning in their first-year seminar courses. Students are attracted to the loan buyback of up to $10,000, but the key to the program is to get them thinking—and talking—about finances, according to College President Barbara K. Mistick. “It’s pretty universal that people don’t like to talk about finances,” she said. “That was one of our motivations in starting this program—to get students and their families talking about their college debt and to create an awareness of exactly what they are getting themselves into.”
Unveiled in 2013 as the first of its kind in higher education, Wilson’s loan buyback program gives students who meet certain academic requirements monetary awards when they graduate. Under the plan, the College pays $5,000, $7,500 and $10,000 towards the federal Stafford loans of first-time college students who earn a diploma in four years or less of continuous, full-time enrollment at Wilson. The three-tier award system is based on a student’s grade point average, and became available to students entering Wilson in the fall of 2014.
The College has already seen its first two graduates benefit from the loan buyback program. Cassandra Watkins ’17 and Brant Swartz ’17 both graduated cum laude in May and qualified to receive $5,000 each. The monetary awards came a year sooner than expected because Swartz and Watkins—who entered Wilson as freshmen in fall 2014—graduated in just three years.
Watkins, who earned her bachelor’s degree in veterinary medical technology, took classes every January-Term in order to graduate early. After graduation, she completed an internship at Akron Veterinary Referral and Emergency Hospital in Ohio to finish her degree. Watkins praised the financial sessions she attended at Wilson as informative and helpful. “They helped me to understand what I was borrowing and informed me how to plan for how much to take out each semester, and what that money should be used for,” she said. “I felt that I was gaining valuable information that could save me money down the line.”
Swartz is currently enrolled in Wilson’s 3+1 program with Vermont Law School. After receiving his undergraduate degree in environmental sustainability from Wilson, he began studying at VLS this fall for his master’s degree in environmental law and policy. The buyback program “definitely was an extra incentive not to let my G.P.A. slip,” he said.
Wilson’s loan buyback program was Mistick’s brainchild, and for her, it’s not just about giving monetary awards to students at graduation. She sees the program—which also invites eligible students to meet informally as a group with College officials to discuss finances several times a year—as the key to successfully teaching them financial literacy.
Mistick cites some sobering statistics. Only five states require high schools to provide a financial literacy course and approximately 72 percent of parents do not discuss finances with their college-age children. “If parents aren’t talking to their kids about money and most high schools aren’t teaching them, where are the students going to get the information to make those responsible lending choices?” Mistick said. “Students are consumers of student loans and they need to be informed.”
Financial literacy is incorporated into Wilson’s required First-Year Seminars, Vice President for Student Development Mary Beth Williams said. “Money is a scary topic for students and for their parents. Most parents have never talked about the hard realities of financial literacy with their children, and students are left to figure it out on their own during their college years.” Often students end up signing up for credit cards and loan agreements, completely blind to how these debts can hurt their future buying power. “This program serves to help empower students by educating them on financial literacy,” Williams said.
The buyback is keyed to federal Stafford loans because those loans pay only for enrollment costs, according to Mistick. Other student loans, such as Plus loans, will pay for things such as car loans or groceries. Students often use those loans like credit cards, not realizing how the interest adds up, Mistick said. “We want them to be making wise decisions about their debt,” she said. “That’s why another one of the requirements is to finish in four years. You can keep your debt down so much more if you’re not taking an extra year or two to finish.”
In order to qualify for the buyback, along with keeping up their grades and attending the financial literacy sessions, students must also demonstrate campus community involvement in order to develop skills beyond the classroom and to enhance the life of the College, according to Williams. Swartz was a member of the Wilson College Government Association and Watkins was VMT Club president and volunteered for horse shows.
Mistick believes it is part of the College’s obligation to talk about how to manage student debt. “We want students to be committed to their own success,” she said. “I am confident we are on a unique path here. Students learn how to learn when they’re at Wilson, but they also learn how to live—and part of learning how to live is learning how to manage financially.”