LITTLE ROCK — For what is believed to be the first time, federal student loans in Arkansas decreased in volume in the 2012-13 academic year, the Arkansas Student Loan Authority said Tuesday.
Loans decreased from $701.3 million in 2011-12 to $672.4 million in 2012-13, a drop of $28.9 million or 4.1 percent, the agency said in a news release.
The agency said the decline was thought to be partially a result of reduced enrollment in Arkansas colleges and universities. Enrollment declined from 176,201 in the fall of 2012 to 174,012 in the fall of 2013, a 1.2 percent decline.
Also believed to be behind the decrease in loans is an increased emphasis by colleges and universities on responsible borrowing as part of default prevention plans.
In a survey, institutions told the Student Loan Authority they have implemented measures such as offering one-on-one counseling for students seeking a loan; offering loan seminars and financial literacy courses; not including loans in student’s initial financial aid packages; encouraging students to cover their costs with scholarships and grants and emphasizing that loans should be a last resort; decreasing “cost of attendance” budgets; and making required changes to “satisfactory academic progress” measurements.
Institutions are motivated to reduce loan default rates because those rates may directly impact their eligibility for federal student aid, the agency said.
The agency said that according to the Project on Student Debt, Arkansas ranks 34th in the nation in the average debt of a student graduating with a four-year degree in Arkansas at $23,048. The state ranks 29th in the percentage of students graduating in debt at 56 percent.