Recently, Adrian College president made a very interesting statement that said “The College will pay all or PART of the student loans of its graduates if they cannot find a job that pay more than $37,000 a year. This statement has been nicely prepared where the escape clause is part of the big marketing campaign. Let us check the latest numbers which are taken from the College Navigator.
All Undergraduate Students: Table 1 – Aids Received

The number tells us that 80% undergrad students received Federal student loans, and for this particular academic year (2012-13), the total amount of loans awarded for the school were $9.96 million. The College average fall enrollments are around 1600 students. Let us simplify the amount of student loans taken by freshmen students to $2.8million (considerably less than $9.96, for we only consider first year, full-time degree seeking freshmen, data showed average 400 counts in the past 10 years). Supposed that the 4 year graduation rate is 20% and six-year grad rate is 34%. Overall grad rate as reported by College Navigator is 54%.
Based on this fact, let us calculate if the College is able to keep its promise. Make it simple, no tuition, fees or room & board increases and retention assumed to be 70%.
• The amount of total aids received from the federal government (for those who graduate in 4 year): ($2.8million * 4 year * 20% )*70%= $1.56million.
• The amount of total aids received from the federal government (for those who graduate in 6 year): ($2.8million * 6 year * 34% )*70%= $3.99million.
If none of the graduates make $37K or more on its first job, right after college then Adrian College, according to its administrator statement has to pay $5.55million ($1.56 plus $3.99 million) back to Uncle Sam (assuming interest is zero). Suppose that 75% (this is really fantastic) of its graduates earn more than $37K a year then they still have to pay back to federal government about $1.39million (25% out of $5.55million).

The question that one has is where the money will be coming from because in the past 10 years (look the chart below), the College has always been in a red.  The average deficit in the past 10 years was $6.5million.  In such a case, the loop hole clause (“The College will pay all or PART of the student loans of its graduates) will be used in that the College may just pay part of it.  The school can pay $100, $10 or even $1.00 and the students have to pay the rest. Therefore, the administrator statement is correct in that the College pays part of the student loan as it has promised, even if it is only a $1.00. The bottom line is that this is another example of misleading statement. Several other points that readers have to pay attention of are that the administrator says the College will pick 30, 40 to 50 students (NOT All Students)  to begin with. How to decide who are eligible to participate in the program has not been mentioned yet.
Check before you buy is the words of wisdom. This could be an example of a marketing gimmick comes out of desperation to jack the enrollment up (please read here for recent Gallup poll results on Liberal Arts Colleges enrollment challenges).