Before the class of 2016 receives diplomas from Washington College this May, the liberal arts school in Chestertown, Md., will give them a memorable graduation gift: money to pay off student debt.
All graduating seniors who took out federal student loans this semester will receive a grant from the college to repay the debt. Awards will vary, but the 119 seniors who took out federal loans will have them reduced by an average $2,630, according to the school. Graduates, who carry an average balance of $25,794 in federal loans, will ultimately see an average 10.2 percent reduction in that debt.
“We want our students to be both academically and financially prepared when they graduate from college,” Sheila C. Bair, president of Washington College, said Monday. “And we are just getting started.”
The generous gift, totaling $313,933, is a part of the college’s Dam the Debt program. Bair, the former head of the Federal Deposit Insurance Corp., launched the initiative shortly after taking the helm at the small private college on the Eastern Shore in September. Since then, she has secured donations from TD Bank, Santander Bank, BB&T bank and Blooom, a financial services firm.
The campaign has raised nearly $1 million to date, with a goal of raising at least $2 million more for future grants. Next year, the college plans to offer the grant to seniors with federal loans each semester as funding allows.
After taking grants, scholarships and tax credits into account, one year at Washington College, including tuition, fees, and room and board, costs an average $30,255 for a full-time student, according to the Obama administration’s College Scorecard. Families that earn $30,000 or less can expect to pay a little more than half that amount. To help those families, Bair started George’s Brigade, a scholarship that covers college expenses of high performing, high-need students.
“Washington College is a tight-knit community,” Bair said. “And this kind of targeted philanthropy will help ensure that this community lives on for years to come.”