Interview With...

Jack Williams
Director of the Office of Student Financial Services, Rider University

Jack Williams has been director of the Office of Student Financial Services at Rider University (Lawrenceville, NJ) since 1995. Williams began his financial aid career in 1987 at Northeastern University in Boston, Massachusetts. Rider University has two campuses located in Lawrenceville and Princeton, New Jersey.
Approximately 85 percent of all students receive some form of financial assistance. Rider’s total loan portfolio exceeds $25,000,000.

What are the biggest challenges facing financial aid offices today?
Meeting the rising costs of education without additional funding resources
from the federal and state governments is a daily challenge. Without the additional
funding resources to meet today’s costs, alternative loan borrowing is
skyrocketing. A second challenge is maintaining quality customer service in
an ever-changing technological environment. Perfecting the implementation
of required and necessary technology often creates pitfalls for students.

Congress is now starting the process of reauthorizing the student loan programs. What should Congress’ priorities for the student loan program be?
Congress needs to have an in-depth understanding of the complexities of the
rising costs of education. Greater demands are being placed on colleges and
universities to deliver better services and to produce qualified graduates for a
complex labor market. In some ways, college expenses are similar to hospital
expenses since they both have to function 24/7. This factor, along with the
state-of-the-art, technological demands, places a unique financial burden that
differs from other enterprises. Congress addressing the need for increasing
loan limits will help keep pace with the rising costs.

One controversial issue is whether loan limits should be increased. What are
your views on this?
The reality is that costs continue to rise each year. Loan limits need to keep
pace with rising costs. I favor the tier approach. As students progress through
their academic career, they should be able to make more of a financial investment
in their future.

Some say private label, non-federal student loans are currently meeting the needs of students and that no increase in FFEL or Direct Loan borrowing limits is needed. Do you agree?
No, I do not agree. Private label loans are not available for all students. Students and parents with good credit histories are receiving loans with competitive interest rates. Students and parents with poor credit histories are either being denied loans or are receiving loans with graduated interest rates.

What do you think of the private label loan programs now in the marketplace?
Most of the loans I have reviewed are acceptable. However, there are a few loans that I would not recommend. I do not agree with any loan that allows students to borrow beyond the cost of education or does not require a school certification. Generally, lenders solicit recommendations from school administrators before they create a private label loan program. Most administrators want to have a control over the amount of money students and families are borrowing.

Two groups representing students in Washington, PIRG and the U.S. Student Association, are opposed to increasing student loan borrowing limits. Are the views of these two groups consistent with those of the students on your campus?
I have not polled our students’ views on this topic. If Rider students were knowledgeable of all the details surrounding the issues of increasing loan limits, I do believe they would support an increase. No student wants an increase in loan amounts if he or she can get an increase in a grant instead. However, federal grants are not available to a large portion of students who attend college. Consequently, many students who do not receive federal grants do need help financing their education. Increased loan limits will support helping those students.

Another controversial student loan issue is whether the law on prohibited inducements needs to be changed. In your view, are inappropriate things going on in the marketplace today that necessitate a review of current law? What are you seeing and how could a change in the law address the problem?
I do not believe legislation is necessary to address this issue. Many lenders are doing a good job working with schools to provide loan funds for students. It is not fair to scrutinize their delivery of services because one or two lenders are trying to buy the favor of schools. Schools should be above board and allow competition to prevail for their students. Personally, I would not enter into any inducement agreement with a lender. Many lenders have excellent products and services without making such contracts. The answer is not in changing the legislation, it is in the marketplace keeping the lenders competitive.

Let’s focus for a minute on student debt. How much debt is too much for a student?
There is no one answer to this question. There is too much debt for a student when he or she graduates and cannot acquire gainful employment sufficient to repay the debts incurred while the student was in school. Student debt is not always limited to student loans. Students acquire debt through credit cards, automobile loans, etc. Many students live beyond their means while they are in school. Consumer debt results from the purchase of depreciating goods while student loan debt is an investment in one’s future earning potential

Some in the student loan community suggest that the low cohort default rates of the last several years suggest that debt burden is not a problem for most students. Do you agree?
No. I see no definitive connection between the two issues.

To what do you attribute the record low default rates?
Low cohort default rates are snapshots of loans in repayment. They do not give the entire picture of the lifespan of a loan. Secondly, a great deal of effort has been given by lenders with default prevention techniques. Many lenders work with borrowers to accommodate their financial conditions when they go into repayment. Students have more options today then they have had in the past to avoid default status.

Are loan forgiveness programs the solution to borrower debt burdens?
No. Loan forgiveness programs are designed to encourage students to use their educational training to assist with a needed, specialized workforce. I do not believe students should be guided by financial repayment conditions when selecting a career path.

Loan consolidation has become the single hottest student loan issue in Washington. Do you like what’s happening with loan consolidation?
I do not want to see any more attention given to this issue if it is going to cost taxpayer dollars. With the rising costs of education, I want to see funding made available to increase current student aid programs. Public policy should be: fund access for students, not reduce cost for graduates in the workforce.

What, if anything, should Congress do about it?
Congress needs to drop the consolidation issue and focus on the pressing issues with reauthorization. Spending time, money, and energy on loan consolidation is not helping current students. Today’s student is being faced with a greater expense in education than his or her predecessor. Funding has not kept pace with rising costs. Congress needs to acknowledge the urgency of this matter and address it now and not continue to delay reauthorization for another one or two years.

Interviewed by Ashley Carlton
This article is reprinted with permission of HIgher Education Washington, Inc.