Milwaukee and Madison colleges of technology to write off millions of student debt
Technical Colleges in Milwaukee and Madison will use nearly $ 10 million in federal stimulus assistance to clear account balances for debt owed by students during the COVID-19 pandemic.
The Milwaukee Area Technical College announced its $ 5.75 million plan on Tuesday. The college will also invest an additional $ 1 million from the money it received under the American Rescue Plan Act for grants of $ 500 to students who have encountered difficulties while paying off their account balances.
“This will hopefully impact some of the neediest students in our student body and hopefully encourage them to re-enroll in school,” said Monica McNaughton, director of student accounts at MATC. “But even if they don’t, it kind of gives them that reset, so when they do decide to come back, it doesn’t weigh on their heads.”
MATC’s announcement comes just days after Madison Area Technical College – also known as Madison College – announced it would clear more than $ 4 million in outstanding student balances under the same model.
The two join a few other community colleges across the country taking this approach, including Bergen Community College in New Jersey, El Paso Community College in Texas, and the Philadelphia Community College.
MATC officials said the forgiveness plan will reach nearly 7,000 students, eliminating an average of $ 825 in debt. Madison College said the money would reach nearly 4,500 students with an average debt elimination of $ 898.
The MATC estimated that the most money forgiven for a student would be around $ 5,000. Madison College’s biggest forgiven bill will be $ 6,830.
Students do not have to ask for debt forgiveness; the money will be applied directly to any eligible outstanding balance. The money will go to the students, whether or not they are currently enrolled, have their citizenship status or no longer have other financial aid.
The remission only covers debts owed directly to the college for semesters from Spring 2020 to Spring 2021. The money does not cover federal or private student loans.
Administrators from both schools specifically noted that debt elimination has important implications for students attending university under the Deferred Action Policy for Childhood Arrivals (DACA). While these students are generally not eligible for FAFSA and other financial aid, their bills will be waived under the new plans.
Also receiving help: Thousands of part-time students who make up the majority of Milwaukee and Madison campuses.
The CARES Act, which brought the first round of pandemic stimulus money to colleges, was heavily criticized for giving less relief to technical students as colleges received money based on on-time enrollment. full, not the total number of students. Nine in 10 MATC students are part-time, as are 65% of Madison College students.
“This gives us the ability to provide support to every student who attended college… between Spring 2020 and our current term,” Keyimani Alford, Dean of Student Access and Success at Madison College, said in About the American Rescue Plan Act.
“Almost all of our students have been affected”
The American Rescue Plan Act is the latest of three rounds of federal stimulus funds sent to colleges during the pandemic, known collectively as the Higher Education Emergency Relief Funds. The money was divided into two pots: one for student aid and one for institutional use.
But the debt forgiveness method allows tech colleges to help students and make up for college losses without taking money out of the “student aid” pot. Instead, colleges use the institutional part for debt cancellation.
“We’re going to be spending a little over 50% of (American Rescue Plan Act dollars) on students, so we’re pretty happy about that,” MATC president Vicki Martin said in an interview Monday.
The MATC effectively adds $ 6.75 million in student aid to the $ 18.51 million already set aside under the American Rescue Plan Act. Madison College has $ 11 million in emergency grants available to students in addition to its $ 4 million forgiveness plan.
Having money beyond debt cancellation is important when you consider the challenges that MATC and Madison College administrators face.
When the first round of federal aid went out, “students were literally asking for nothing but groceries and toilet paper,” McNaughton said.
Students face financial hardship even if they manage to pay the bills, the administrators added.
In one case, McNaughton said, a student paid off all of her debts just to call the school to ask them to get their money back after facing several personal emergencies.
“I think almost all of our students have been affected,” McNaughton said of the pandemic.
Faced with money problems, more and more students are dropping out.
MATC has seen student retention rates drop at all levels during the pandemic: 72% of full-time students in the fall 2020 cohort returned for the spring semester, compared to 78% of the fall cohort 2019. Only 56% of part-time students in the fall 2020 cohort returned in the spring, compared to 62% of the fall 2019 cohort.
At Madison College, a fall 2019 survey found that over 70% of students paid for college directly with their disposable income or savings. So when the pandemic resulted in layoffs and time off, their primary means of paying for college, among so many other things, was gone, Alford said.
“Some students said, ‘I’m not going to register for the next term because I still have this debt that I owe to college and I have to try to pay it off before I try to register for classes.” , did he declare. .
Alford said the pandemic taught the college important lessons about breaking down barriers that prevent students from seeking help.
For one thing, the two colleges are undoubtedly wiping out student debt, so the students won’t have to do anything on their own.
They also strive to make applying for emergency grants as easy as possible: Madison College asks for little more than the student’s name, program, ID number, and a description of the financial support they are receiving. he’s looking for.
Alford said these are the things colleges will need to consider going forward, knowing that the effect of stimulus money, while major, is limited to one-time funds.
MATC already has a debt cancellation program for students who have dropped out of school, although it comes with the caveat that students must re-enroll to receive the money. Alford said Madison College will also be considering how to keep students in school despite financial difficulties.
“We continue to have these conversations with our foundation, to say that once this money is lost, we need to make sure that we really focus our efforts over the next year to bring in partners who can help us achieve the goals student needs, ”he said.
Milwaukee Area Technical College students seeking more information should email [email protected]