Loan Repayment Assistance Programs (LRAPs) have been around since the late 1980s, but, for some, many questions remain. With so many tools coming and going in higher education, it’s easy to see how the details can get lost. Below are answers to 4 key questions about LRAPs.
1. Aren’t LRAPs a type of student loan?
No. Loan Repayment Assistance Programs offer a powerful promise to students and families who will have to borrow from lenders (federal and private) to attend your institution. The promise is simple: come to this institution and if income after graduation is modest (less than 43K in most cases), the program helps repay student and parent loans.
2. Aren’t LRAPs only of interest to financial aid offices?
No. In fact, LRAPs are a powerful strategic enrollment management tool. Students and families concerned about borrowing because of uncertainty about employment after graduation, or having a gap in their ability to afford their portion after receiving their aid package, are given peace of mind to borrow, enroll, and pursue programs with confidence. They know the safety-net of the LRAP will be there when they graduate to get them started on the right foot. Both financial aid offices and enrollment teams benefit from the work Ardeo does to administer the program on the institution’s behalf.
3. Aren’t LRAPs just for smaller colleges and universities?
No. We work with a wide variety of institutions by size and type. In fact, included among our partners are institutions within the top 10% in the nation by size* of incoming class. No matter the size, we tailor our work with each of our partners to develop usage strategies that are customized for their unique enrollment needs. Fear of debt among students and families who are making higher education choices is a universal problem for institutions of many sizes and types. LRAPs are a powerful way to eliminate those fears.
4. Aren’t LRAPs something you have to offer to the entire incoming class?
No. LRAPs can be selectively offered among targeted populations. Additionally, LRAPs have been shown to be more efficient than institutional aid at moving prospective students to enroll. We know that most colleges are already offering as much institutional aid as they can afford. Research by CREDO shows that to enroll a non-matriculant prospect with additional aid is expensive, with 98% needing $4,000 or more to change a decision; our per-student fee is much less.