|One college is taking an unusual approach to the problem of mounting student debt: It's no longer accepting applicants who need to take out loans.
The College of the Ozarks, a private, evangelical Christian school in Missouri, may be the first institution of higher education to take the step, Reuters reports.
The reason for banning loans? "Debt is a big problem all over the country," Jerry Davis, president of the four-year school, told Reuters. "Kids nowadays are not very sophisticated with money."
But many would say the bigger problem is the surge in education costs, prompting families and students to borrow money for earning a college degree.
The average cost of a four-year college topped $22,000 for the 2010-11 academic year, almost triple what students paid just two decades ago, according to the U.S. Department of Education.
The College of the Ozarks isn't cheap, either. Tuition for the 2012-13 academic year is $17,900, but its website tells families (italics are from the school), "Don't panic!" So, how does it expect students, who can no longer take out loans, to afford the school?
The school previously had a policy that students must work on campus, defraying some of their costs, while federal and state aid also help. And scholarships are available, if needed. The college's home page advertises the school as "Hard Work U.," and notes "debt is openly discouraged." Or as Davis told Reuters: "This is a work college, not a debt college."
The school's president said it no longer works with students or banks in covering costs via loans. About 99 students will be affected by the policy change, because they carry private loans to help offset the cost of boarding or other expenses, the story adds. Davis added that he's confident the college can accommodate all students, but those who insist on loans will need to transfer to another school, according to the report.
Nationally, the average student debt for the class of 2011 jumped to $26,600, up from $25,250 in 2010, according to the Project on Student Debt.
At the same time, however, many graduates are struggling to find jobs that can pay enough to cover both their loan repayments and the cost of living. Two years after leaving school, students who graduated in 2010 defaulted on their federal loans at a rate of 9.1%, up from 8.8% for the previous class, according to the Department of Education.