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Keystone College First In PA To Offer Loan Repayment For Low-Earning Graduates

Keystone College


Keystone College is a small liberal arts school in a rural area outside of the city of Scranton. No part of that preceding sentence screams "high earning potential."

But for graduates of Keystone College, salary might not be the most important consideration when getting a job after graduation. Many students want to go into the non-profit world, become teachers or pursue careers in the arts. Others want to stay close to family in Northeastern Pennsylvania, even if it means taking a lower-paying job. 

But wait, there's loans

Where salary becomes a lot more relevant is when there are student loans on the table. That's why Keystone College has launched the Keystone Commitment, a loan repayment program for graduates earning less than $40,000 a year. Keystone College is the first school in Pennsylvania to offer this loan repayment of this type to all students. 

"The students would pay the loans, because they are in their name or their parents name and we want them to build good credit," said Janine Becker, vice president for enrollment and marketing at Keystone College. "Then they would submit those payments for reimbursement at some level depending on their salary at that point." 

Graduates earning $20,000 or less would have their loan payments reimbursed fully, while those earning $30,000 would get 50 percent repaid. It's a sliding scale up to $40,000. They can receive up to $70,000 in repayment, but the average Keystone College student graduates with $36,000 in debt. 

The Keystone Commitment is funded through the college, at no additional cost to students. Tuition is about $24,000 a year. Because not every student has loans, and not every student will qualify for the reimbursement, Becker says this is a better investment than just skimming that amount off the top of tuition.

"If we reduced tuition per student, it wouldn't be enough to allow our families to not have to borrow," said Becker. "But we see that taking out loans for education is a worry for our families, so we're trying to give them some relief from that worry."  

Living lives of purpose

This loan repayment is coordinated through an organization called the Loan Repayment Assistance Program. LRAP works with 130 colleges around the country, based on a model originally developed for law schools. 

Yale Law School, 30 years ago, was seeing yield, the percent of accepted students who enroll, decline. They found "they were missing out on students who wanted to live, as they put it, lives of purpose, in jobs that didn't pay enormous amounts of money," says Jonathan Shores, vice president of client services at LRAP. "They were worried about repaying the cost of loans to go to Yale, so they weren't enrolling." 

Yale launched the first loan repayment program to help support public defenders, civil servants and other low-earning professions that their graduates chose to pursue. A graduate of Yale's program went on to form LRAP eight years ago, bringing the loan repayment model to undergraduate institutions. 

Shores says the program is so appealing to students, it can often pay for itself as enrollment increases. Oklahoma Wesleyan University saw yield grow by 12.7 percent after they started repaying loans, according to LRAP figures.

Keystone College is surrounded by a lot of universities in Northeastern Pennsylvania, and Becker says standing out from the pack is part of the puzzle.

"Like any college, we'd like to have our fair share of the market, so we'd like to see greater enrollment for us," said Becker. "But really its about the families that struggle with that tuition bill and students who are facing a big loan debt." 

Find this report and others at the site of our news partner, Keystone Crossroads.

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