Why Doesn’t CalSouthern Participate in Federal Financial Aid Programs?
It’s a question we hear quite frequently and it’s understandable. Few universities take this position. They are motivated to accept federal financial aid (in the form of tuition payments) in order to meet operating costs and either build reserve funds or show a profit.
Of course, CalSouthern requires revenue to operate, too. But, our founder Dr. Donald Hecht has chosen, as a matter of policy, not to participate in federal financial aid programs, and the university has no intention to do so in the future. Simply put, the university has long believed that federal financial aid subjects students to unmanageable debt and contributes to the rising cost of higher education.
This position is borne out in the statistics. Today, the Consumer Finance Protection Bureau estimates America’s total student debt at more than $1 trillion—more than that owed on credit cards or car loans. According to The Project for Student Debt, average student debt for undergrads is $26,600, while master’s and doctoral students owe an average of $40,000 and $60,000, respectively, according to a recent article in The Chronicle of Higher Education. (Keep in mind that the total cost of that debt, when you add in the interest, is likely to be more than twice that amount.)
Meanwhile, over the last 30 years, tuition at four-year colleges has jumped 250 percent, while a typical family’s income has gone up by only 16 percent, according to White House figures and as noted in a 2013 speech by President Obama.
A recent article in Forbes magazine summed it up most succinctly: “Tuition has increased at a rate higher than inflation for 30 years, and the end result is higher student debt and an entire generation at a loss as to how they will pay off their loans….”
It’s a real crisis. Ultimately, it’s the graduate who is left holding the bag. They struggle under the pressure of the enormous debt burden. Often, their educational, professional and personal/familial options are narrowed as they work to make their monthly loan payments. The debt obligation follows them for decades. And not even bankruptcy can discharge student loan debt owed to the federal government, which has the IRS as its collection agent.
Since its inception, CalSouthern, led by Dr. Hecht, has taken a different approach: we price our tuition reasonably, and it’s “locked in” at the time of enrollment so that the amount you pay never increases. And by offering a variety of payment plans, with zero interest, students are able to graduate with minimal or even no debt—and the freedom to pursue their personal and professional goals and dreams.
Dr. Hecht is a passionate critic of the current federal financial aid system. To read a longer article that details his position, please click here.