Sheila Bair's Novel Idea: Have Colleges Help Pay Student Debt

April 20, 2016 | | MarketWatch |

Washington College’s initiative could encourage students to finish school, said Mark Huelsman, a senior policy analyst at Demos, a left-leaning think tank. “It’s certainly a good thing,” Heulsman said. “It can provide an incentive for students to complete and we know that the student debt crisis is fueled in large part by those who take on debt but don’t graduate.”

Bair described the funds as a sort of “reward” for students on the precipice of graduation. “There’s nothing that breaks my heart more than a kid who goes to school for a couple of years and then has some debt and doesn’t have a degree,” Bair said.

Still Huelsman said he’d also like to see colleges and donors do more to reduce the cost of school up front so that students don’t have to take on as much debt. Students who receive federal financial aid pay $30,255 per year on average to attend Washington College, according to government data . Nearly 70% of students there take on federal loans and have a typical total debt of $27,000. In addition to George’s Brigade, Washington College announced a tuition freeze for the upcoming year at the school, Bair added.

Huelsman said he wouldn’t be surprised to see other schools, particularly small liberal arts colleges, piggy back off Washington’s idea. Many smaller schools have struggled to attract students and stay afloat amid a downward trend in the number of students graduating high school and increased concern from families about college affordability and the relative value of a degree.