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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Feb 8, 2013

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The University of Texas just launched four new financial aid programs that will help with the ever-increasing college loan debt that today’s students are burdened with.

With nearly half of all undergraduates borrowing college loans prior to graduation, the University of Texas is no different.

Marjorie Smith, executive vice president and provost, told loans.org that the average college loan debt for students graduating from the University of Texas is $26,097. To combat this, the University of Texas at Austin has introduced new aid programs that are open to students who complete certain requirements.

David Laude, senior vice provost for enrollment and graduation management, expanded on the details of these programs in a news release and stressed the importance of keeping students on track to graduate.

“It is essential that we use discretionary aid strategically to define a class that will graduate in four years. Every one of these new initiatives incentivizes students to behave in ways that are consistent with four-year graduation,” said Laude.

The first of these initiatives is the Job Success Program. It will let students earn up to $20,000 in college loan forgiveness so long as they spend 15 to 20 hours per week in academic preparation, leadership training, or servicing the university. The program is actually intended to give participants more responsibilities on campus as they evolve through the program’s run. Students will also have to maintain a certain GPA level.

The second of these programs is the Freshmen On-track Program. This program will dispense one-time $1,000 scholarships to eligible sophomores. These scholarships will be awarded to students that have completed 30 credit hours and taken leadership training in their freshman year while maintaining a minimum GPA.

The third program is called the Presidential Award Scholarship Enrichment Program. Students in this program can receive $1,000 to $1,500 towards research, internships and studying abroad. On top of this, they can receive up to $15,000 in scholarships per year for up to four years. In order to qualify, students must have overcome a great deal of adversity and excelled academically in their high school years.

The final program is the Summer Bridging Program. This program is only open to incoming freshmen. It will replace the lost summer Pell Grant program scholarships with new funds.

Should these programs prove effective after the first year, then the university will decide how to improve the distribution of discretionary scholarship money. However, Laude predicts that the programs will become cornerstones of the university’s financial aid strategies.

Smith explained that for the time being, only first-time-in-college students will be eligible for entry into the program. The program may be expanded to include other types of students in due time.

“The one-time money will be allocated for the first three years of the programs, and if they prove successful, a gradual reallocation of existing permanent discretionary money used for recruitment might occur,” said Smith.

Smith expects at least 1,400 students to join the programs.

(Reported in collaboration with Isaac Juarez.)