For some students: No repayment plan, no loan

"It's not a handout," DiCroce said of student loans. "It's not something that goes away when the college experience is completed or not completed. There's a commitment to repay a loan that has as much weight to it as any other kind of borrowing one might do. My concern, as we are ramping up our financial aid program, is keeping a close eye on our default rates, as one of our measures of accountability. It just became clear that we needed to take a step beyond what the feds require. Where is our responsibility to educate a borrower on this type of investment?"

With this in mind, last summer, DiCroce charged her administrative team to come up with a new set of steps, in addition to those required by the Education Department, for approval of student loan requests at Tidewater.

"When you look at the current loan process, one could argue it's oversimplified," said Daniel DeMarte, Tidewater's vice president for academic and student affairs. "In about a half an hour, a savvy student could zip through it and have access to thousands of dollars. Nowhere in the process does it slow you down to realize that you're borrowing a lot of money. We needed to get them to slow down and require them to do some more thinking before we disburse anything. To do that we need to get them to think ahead, 'What's the return on investment?' The second step is to keep in front of them and not forget that they borrowed money."

When Tidewater's central financial aid office receives a student direct loan request next fall, it will prepare a student loan repayment plan for each application. This student loan repayment plan provides a summary of the student's borrowing history, at Tidewater and all other institutions, and estimates a monthly payment based on the existing debt and the new loan request. The plan outlines the obligations of loan repayment and demands student acknowledgment of them. In one example provided by college officials, a student who borrows $7,500 is told that one year after graduation, he or she would need to make an estimated monthly payment of $86.

The student must then fill out two budget worksheets. One asks the student to estimate his or her current monthly expenses — from rent and transportation to insurance and childcare — and income. The worksheet ends showing the student his or her remaining discretionary funds. Tidewater officials hope students will consider how their estimated student loan payments might fit into their current budgets if they left college, either by dropping out or by graduating.

The second worksheet asks students to fill out a similar budget to anticipate their financial situation after graduation. It includes resources to help them estimate their future job titles and average starting salaries in specific fields. Student loan payment is part of their new projected monthly expenses on this worksheet, which notes that loan repayments should never exceed 15% of one's monthly income.

Tidewater students will then submit both the loan repayment plan and the worksheet to the central financial aid office, constituting their official acceptance of the loan and accompanying responsibilities. After these documents are processed, the loan award will be made. Tidewater officials stress that "no loan funds will be made until the

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