College won't accept students who need loans

A Missouri school says borrowing to pay for a degree is no longer acceptable. Applicants are expected to work instead.

By Aimee Picchi Mar 20, 2013 10:52AM

Image: College fund stored in glass jar in kitchen © Vstock LLC, Tetra images, Getty ImagesUpdated 12:40 p.m. ET

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.

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Mar 20, 2013 2:09PM
College would be more affordable if students didn't have to take classes that don't pertain to their major.  While these other courses are perhaps helpful in a general way, in today's  reality of high unemployment and high debt, maybe non-major classes should be excluded or be optional for those who can afford college.  Maybe instead of college, we should have "trade" schools for each major!!!!!  Of course that would close down most colleges but it would let people learn their profession and  (hopefully) get a job without being in debt for a great many years.
Mar 20, 2013 2:16PM

$22,000year  x  4 years (hopefully)  x 3 kids=  $264,000


Community College  $1500  x 2 +  2 years state school living at home x $10,000 x 3 kids=$69,000


A good way to cut student debt. 

Mar 20, 2013 11:29AM
About time.  I blame the high schools personally.  They always told me go to college no matter the cost.  Stupid advice.  College isn't the answere to all life's problems.  Intact it could destroy ones life depending how much debt you built up.  Lucky I had common sense and work my way threw college and did not need to take a loan out In order to get my bachelors. High school should instead teach people the importance of managing money then the importance of college.  
Mar 20, 2013 3:16PM

My daughter's best friend attends COO, and in exchange for working 15 hours per week on campus plus two annual 40-hour work weeks during breaks, every student EARNS FULL TUTITION.  She as already worked 2 internships in her degree field as a junior and has job offers waiting upon graduation.  Also, many students are given the oppertunity to stay on campus and work during the summer, and in return they EARN their room & board. 


COO grads are in high demand because they graduate with the ability to work and an appreciation for the education they've worked hard to EARN.  Teaching someone how to work and giving them a great education so they are able to compete in the job market is a gift beyond desription.  That's better than any hand-out. 


 And by the way,  the student body is several thousand strong and the wait list to get into COO is incredible long. Wish my daughter went there........

Mar 20, 2013 3:51PM
I wonder why they pay football, basketball coaches etc such high wages. They would rather up the tuition rates for the many just to get a few coaches million dollar wages. Get rid of these wages and the junk classes they make students take. It would solve a lot of financial problems. 
Mar 20, 2013 2:05PM

Some colleges have endowments so big that they never would have to charge their students tuition…ever!!!  And I’m not just talking about Ivy League colleges.

Mar 20, 2013 2:31PM

Work while in college is mentioned in this article.  I found out quite by accident that work is indeed helpful in other ways than merely defraying undergraduate costs.  It's great for managing time, either in a semester or quarter system.  How does it help?  Well, if you're inclined to be a wee bit too social.  In fact, I appreciate the quarter system, too, in that there's no time to fool around with a mid-term "just around the corner."   To avoid encountering humongous loans, it might be an option to attend a  two-year community college, then transfer into college for your junior and senior years.

Mar 20, 2013 2:37PM

Student loans should be accepted or rejected based on the degree.


Degree in Engineering = Approved.


Degree in Art History = Denied.

Mar 20, 2013 4:15PM
"work my way threw college"??  How about "worked my way through college"?  I guess some of us received a better education than others.........
Mar 20, 2013 3:16PM
This isn't new for this college, this is part of their model. The College of the Ozarks makes all of its students work on campus because it gives them the opportunity to apply the concepts that they learn in the classroom. Additionally, students can apply for multiple scholarships that will pay for the remainder of their tuition.

In my opinion The College of the Ozarks has the best tuition model in the country because it put both the academic and professional (work) onus on the student and the university actually gives the student an opportunity to gain work experience while they are completing their degree.
Mar 20, 2013 3:45PM

Even better -- no parental loans - student can get loans / work. It astounds me how many American families bankrupt themselves and fret over "getting the kids through college". That's THEIR job, not the parents. Wake up, parents!!  Parents should be saving for their 401k, and students for their own college.  Kids - you can't have everything handed to you on a platter, no matter what "society" says!


We have 2 off to college in the autumn, and they'll have scholarships and loans. As a middle class family on 2 incomes, we simply cannot afford even one kid's college costs.


The REAL problem is the bloated colleges themselves. What on earth is that bloated endowment for anyway? Not all for new fancy buildings, that's for sure. Use it to get quality students.


Finally - not everyone should go to college - that will DEBASE the degree. Some are better off working vocationally, and will end up happier, and everyone benefits from their practical skills.

Mar 20, 2013 11:53AM

Literally, the dumbest thing I've ever read.  Well, Jerry Davis, you might have been able to pay your way through school by working because A) the tuition was actually affordable and B) Jobs for college students were plentiful, but that is not the way of the world today.


Good luck explaining this to your professors when you need to lay them off because you have a 95% drop in enrollment.

Mar 20, 2013 3:55PM
College isn't for everyone. My oldest brother got his Phd in biophysics. My next oldest brother barely made it out of high school. He was an apprentice millwright at the Ford Rouge plant in Dearborn. When he finished that, he headed out west and did construction. His last job was building bridges. 
Mar 20, 2013 4:30PM
This is incredibly disconcerting! I'm a college senior and I have 3 jobs ON CAMPUS, working over 30 hours per week (plus taking a 6 class course load, which is 18 credits, and thus 18 hours a week spent in class).  Even with those three jobs, plus my federal and state aid, I still couldn't pay that tuition.  This is just another way the working poor are disadvantaged and are not given opportunities to advance in society.
Mar 20, 2013 3:09PM

we THE PEOPLE BENEFIT FROM EVERY increase in earning power ,from taxation, and college educated are less prone to violence and other crime. It would behoove us to provide a college education for our citizens and then if an expensive education is wanted . that is up to the person  to pay for the difference.

The current system only promotes bankers and other bloodsuckers who bleed our nations work force. 

Debt is a form of slavery. 

Mar 20, 2013 4:09PM
What we need to do is to get rid of fluff courses, and eliminate BA in Liberal Arts all together.  A total restructure of the college system.  There is nothing in 4 years of Lib Arts than is even remotely helpful, or can't be leanned on youtube - and college really should be geared toward STEM studies.  Have a BA in Psych - and in one class about addiction - I found out addiction is mostly in the mind.  My prof was appalled when I called him to the mat and said, "so I just spent $1000 and 10 weeks to find out addiction is in the mind?"  Who can justify that?  I might as well have bought the books used for under $60 and learned that on my own...  and that is why college is a rip off.   
Mar 20, 2013 1:32PM
Some of those posting against getting a college education might want to know that the unemployment rate for those with a college degree is about half (under 5%) than those without a college degree.  We need more kids going to college not less.  I worked my way through college and took out loans.  Financially it was a very wise decision.  I do agree that college costs have become much, much too exepnsive.  With that said, where is the charity of Christ at this school?
Mar 20, 2013 3:37PM

I'd submit that a return on investment (ROI) analysis be required for any college loan limiting it to the amount that would provide economic break even on the college investment within seven years of graduating using a 6% discount factor for all anticipated future cash flows.

Mar 20, 2013 2:39PM
Mar 20, 2013 5:11PM
Before knocking Cof O, you might be interested in having past students and grads tell you exactly how this place works and has worked for quite a few years without having to go into massive debt to get a college education and yes along the way some actual street smarts such as working in the dairy on campus, the building industry, restaurant and hotel management ,etc.  C of O affords so many students who would not be able to attend college otherwise the chance.  Yes it is a so called "religious" entity but students of all faiths have gone there plus some with no faith.  If you are willing to work hard, party at good clean fun (no drinking nor drugging) then this would be your ideal place to go.  If all your student wants to go to college for is the partying, sports,etc. then no it isn't the place.  No football team, a good basketball and baseball program, girls and boys, etc.  
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