As more families worry whether a college education is worth the costs and the debt, more schools are helping graduates with low-to-moderate incomes pay off their student loans.
Law schools have used these loan repayment assistance programs, commonly known as LRAPs, since the 1980s to encourage students to pursue public-interest careers. Now, a wide range of colleges are launching the programs to give undergraduates some breathing room as they enter the workforce.
It has become a recruitment tool as colleges compete for a shrinking pool of high school graduates, and an incentive for students to complete their education and stay on top of their loan payments.
This fall, Saint Mary’s University of Minnesota began offering first-year and transfer students a guarantee that if their postgraduation income is under $60,000, the Catholic university will cover a portion of their education debt.
The program, dubbed the Cardinal Pledge, reimburses a portion of payments on federal, private and Parent Plus loans until a graduate’s income exceeds the threshold or the loans are repaid. Students sign up for the benefit at no cost. After graduation, they must work at least 30 hours a week and make timely payments on their loans.
“We have a significant number of students who feel a vocation to careers in service, education, nonprofits or other fields where compensation isn’t high,” said Michael McMahon, vice president for enrollment management at Saint Mary’s. “This program just offers a critical safety net so they can feel more confident about pursuing that purpose.”
About 61 percent of Saint Mary’s undergraduates receive federal student loans, and the median total debt after graduation is roughly $20,500, according to the Education Department’s College Scorecard. The school’s total cost of attendance for the 2026-2027 academic year is more than $60,000, but the department pegs the average annual price after scholarships and grants at $20,422.
When Olivia Clark, 18, received emails about the Cardinal Pledge over the summer, she thought it was too good to be true. The offer didn’t sink in until she sat through a presentation during freshman orientation.
Clark, who is majoring in elementary education, signed up even though scholarships from Saint Mary’s and her parents’ savings paid for school this year. She said her college fund can’t cover all four years, and she will eventually need to borrow.
“It’s reassuring to have something to fall back on … and to know I won’t be buried in debt,” Clark said. “I know I won’t have much money to spare when I graduate and begin teaching. The pledge gives me that security to know debt won’t hold me back.”
Saint Mary’s launched a smaller repayment program eight years ago with help from Ardeo Education Solutions, and turned to the Indiana-based company again to manage its latest guarantee.
Ardeo runs LRAPs for more than 270 colleges and universities, 80 of which offer the repayment benefit to undergraduates. Ardeo founder and president Peter Samuelson said programs targeting undergraduates have grown roughly 20 percent over the past year.
“The last couple of years we’ve seen a real pickup in interest,” said Samuelson, who was inspired by his own experience as a beneficiary of Yale Law School’s loan assistance program. “Colleges are dealing with the demographic change, fewer graduates, endless policy changes … and that makes a lot of people interested.”
Colleges pay Ardeo on average $1,000 per borrower per year — a fee designed to cover the administration of the program, which operates a lot like insurance. The fees cover a pool of borrowers, with the understanding that not everyone in the group will need the assistance. That way, the money is enough to support graduates who do need the help.
At Belmont University in Tennessee, a little over 40 students have signed up for the school’s repayment program since it launched 18 months ago, said Chris Gage, vice president for enrollment services at the private university. The program is limited to undergraduates in about 10 of 135 academic programs, reflecting the university’s focus on fields that have traditionally offered lower pay.
According to the College Scorecard, the median earnings of a Belmont graduate is $56,202, just a hair above the repayment program’s $55,000 threshold. Federal data shows that about a third of students at Belmont, where the average net cost is $32,648 a year, take out federal student loans.
While the university offers generous financial aid, its investment in the repayment program raises the question of whether the money would be better spent on more scholarships to lessen the need to borrow. Gage said Belmont has upped its financial aid budget over the last four years, and the loan repayment guarantee complements the increased institutional aid.
“This is just another tool in the toolbox to help make Belmont a realization for students,” he said.
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