Will Increases in Financial Aid Be Enough? | 03.27.09

Posted in FAFSA, Financial Aid, Stafford Loan By Student Loan Network Staff

Recently, President Obama has been talking about his plans to make college more affordable for families and students. The President’s plan is to increase the Pell grant, and make Federal student loans more accessible to students. Students from Kent State University recently asked Obama about his plans and when exactly those changes would take effect:

Student asks Obama about costs of higher education

Sandra Hernandez, The 33 News

March 26, 2009

President Barack Obama started off by saying, “I’m looking forward to taking your questions.”

This one came from 3 sophomores at Ken State University in Ohio:
“What proposals do you have to make college more affordable and to make student loans easier to get and when will your national service program be available so we can take advantage of the scholarship thank you Mr. President.”

President Obama proposes expanding national service and students would get an educational stipend.He is also pushing for more direct loans without banks as intermediaries.

“That then allows us to either lower student loan rates, or expand grants. We want to increase the amount of the pell grant so that it catches up with inflation.”

Students applying for financial aid at UT Arlington felt encouraged.

Harley Nguyen says, “If they increased the pell grant that would help out a lot.”

Erica Horak says, “That’s kinda one of the reasons why I’m going back to school  because I know that they’re increasing financial aid and making it easier for people to go back.”

Financial aid is the top story in the campus newspaper with news that Sallie Mae will require students to make interest payments on their loans while they’re in school.

5th grade teacher Teresa Williams owes some 75-thousand dollars in loans she has another solution all together.

“I have loans that date back to 1995 from undergraduate and I have a masters and I’m about to start a doctorate program so yeah, I have loans, lots of loans. I’m waiting on them to be forgiven so come on Obama,” she says.

While it is great that President Obama is talking about increasing aid for potential students, I still don’t see an answer as to when all of this will take effect. I also do not see the benefit of making all loans Direct. The Department of Education, in its current state, can barely manage the loans they service now…and they service less than half of Federal loans in existence. I am all for making loans more accessible and increasing the Pell grant and the Stafford loan maximum amounts…but lets do it so it helps students out NOW…not years from now.

Also, while it is great to increase financial aid, it doesn’t help much when schools are forced to increase their tuition as well. Are we really getting anywhere? Increasing aid coupled with increasing tuition really just leaves the student in the same spot: broke and forced to private loans that can be increasingly difficult to pay back. The repercussions of this has the majority of recent grads  and graduates in years to come  crippled by looming private loan debt. How does this help the economy? Increases in financial aid are great, but increase it so it comes somewhat near the average of what a college education costs today. As it stands now, and even with Obama’s proposed increases, the maximum amount of Federal Aid a student can get does not come any where near the cost of a private university.

Points Code: wewantmore

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