The climate of economic stagnancy and gainful employment scarcity only serves to exacerbate the competitiveness of the current job market. Within such a climate, student loan lenders look for creative ways to increase bottom line, mitigate loss, and ultimately protect their investment: The Student. Under the current lending paradigm, students are granted loans based on their (and their parent’s or other cosigner’s) creditworthiness and ability to service the loan. Income is also a qualifying factor in the case of subsidized loans (low interest loans granted by the Federal Government via the Dept. of Education like Direct Loans and Salle Mae).
I myself qualified for and received one of these subsidized loans having come from a family of four boys and a widowed mother who had only ever been a housewife. I utilized this loan to attend private school in New Hampshire and quickly realized the financial absurdity of having ten-figure student loan debt when I had no idea what career I wanted to study for. Subsequently, I moved back to Florida, where I was eligible for in-state tuition rates subsidized by the state lottery. Between the in-state tuition rates and qualifying for a Pell Grant, I got my degree the ideal way, for free.
My college experience serves as the anti-thesis of the pro-GPA requirement argument which claims students will be more motivated to maintain their GPA if they stand to lose their financing. By this logic, students who attend college for free are less motivated to succeed. Both claims are false as I attended school for free and upon graduation was invited to Harvard where I studied for another couple years.
Since I didn’t have to stress about finances (I lived at home with Mom and commuted while working part-time at Dunkin Donuts) I was able to stress about other things like getting elected Student Government President, securing my positions on various All-Academic teams (PTK, FCCAA) and other extracurricular activities that ultimately led to the Harvard invitation. In fact, the harder I worked at college, the more I was able to pocket stipends and scholarships and effectively got paid to succeed.
In the end my academic success was largely fueled by rewards, not penalties. Instead, it would be more beneficial to use the GPA requirement as a reward system in which students who maintain a high GPA are rewarded with lower interest rates and those who do not meet the requirement pay the agreed upon interest rate. Such lending practices are fine in the private market (where they will quickly die), but if mandated upon government-sponsored student loans, they will prove disastrous as many students would be financially precluded from an education just for being average.