How One University Helps Student-Aid Recipients Make Good Choices

Nashville — Duke University is one of a handful of wealthy colleges with very generous student-aid policies. The university is need-blind in admissions and meets admitted students’ full demonstrated need. Its aid awards to the neediest students don’t include any loans, and for even the highest-income students loans are capped at $5,000 a year.

The university’s goal is to minimize student borrowing and ensure that students who do borrow take out the best available loans, Alison Rabil, assistant vice provost and director of financial aid, said in a presentation here on Monday at the National Association of Student Financial Aid Administrators’ annual meeting.

With those policies, it’s no surprise that the average debt at graduation for Duke students is on the low side. “We tell them it’s a really good used car,” Ms. Rabil said, “or a really bad new one. We think it’s worth it.”

Even though student debt doesn’t seem to be a big problem for Duke students, the financial-aid staff—which includes eight counselors and a separate loan-office staff that also works with graduate students—does a number of things to help students make good financial decisions.

Duke won’t certify a private loan until a student maxes out on federal ones. And it requires students to do their loan counseling in person. “You can’t get your diploma without seeing somebody,” Ms. Rabil said. The university would like to start doing loan counseling annually, so that borrowers are never surprised to see their cumulative debt.

The office monitors the purchases high-need students make on their student accounts. If the charges are unusually high, the university will freeze the account until the student talks to a financial-aid counselor about what is going on.

Duke also assigns each student to the same financial-aid counselor for all four years on the campus. When the office needs to reach out to the student, the communication comes from that person rather than a general financial-aid email address. Over time, Ms. Rabil said, some students start to contact their counselors proactively. And what financial-aid office wouldn’t prefer talking students out of a financial mistake to helping them recover from one they already made?

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