One University Saved Students $31M In Student Loans By Sending Them A Letter

“Know before you owe” took on a different meaning for students at Indiana University this year. A new initiative by the school resulted in students borrowing nearly $31 million less than in previous years.

How could that be possible, you ask? With a simple letter informing students, before they took out additional loans for the next school term, what their monthly loan payment would be after graduation, Bloomberg reports.

In all, the university’s share of federal undergraduate Stafford loans dropped 11%, from $279.6 million to $249 million in just nine months – easily outpacing the national decline rate of 2%.

School officials say the new initiative, which began in the 2012-2013 school year, not only allows students to reevaluate their current loan tab and make needed changes, but it also expands their understanding of finacial aid and loans.

“If they know at all times their debt, and the repayment, it helps with a lot of planning,” associate vice president and director of financial aid at the university, Jim Kennedy tells Bloomberg.

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