Student loans being cut

[yankeeyosh]

Congre$$ is at it again...http://www.cnn.com/2005/EDUCATION/12/20/congress.education.ap/index.html

Outside of a select group of students, I don't see much benefit out of this...frankly, this will already exacerbate the current loan situation. Add on the increase in loan interest if you don't consolidate by June 30, and this could get ugly...

[cameralady]

Working at an institution of higher ed, I heard rumblings about this before. I'm surprised this is just getting press coverage now. I don't understand why Congress is doing this.

[yankeeyosh]

http://www.cnn.com/2006/POLITICS/02/02/budgetcuts.ap/index.html

Congre$$ just passed it, and Bu$h did the signing...

[SpaceMonkey]

Yeah! That'll get kids excited about math and science again! :googly:

[cameralady]

I still don't get the rationale. It's only a drop in the bucket in terms of the whole deficit.

To the students of tomorrow, you are screwed.

Signed,
Jaded twenty-something :rolleyes:

ETA: If fewer students would be able to afford going to big name schools due to student loan cuts, would this cause a significant decrease in enrollment at these big name institutions?

[yankeeyosh]

ETA: If fewer students would be able to afford going to big name schools due to student loan cuts, would this cause a significant decrease in enrollment at these big name institutions?

Are you referring to enrollment or applicants? Either way, I say no...HYP is still hyped, and will always be hyped. Besides, the Ivies frankly have some of the best financial aid packages of all schools...despite the price.

[yankeeyosh]

Now I hear Bu$h wants to freeze Pell Grants too based on what I heard on ABC News...boy oh boy...I admit, I support him on a number of issues, but this is definitely not one of them. I seriously hope that Congre$$ has enough sense to back off this plan.

[unpopular]

Pretty soon, the only way to maintain a middle-class lifestyle will be to join the military.

[MollyMe]

Really, the government has no obligations to provide these student loan programs.

[Cali_Amparo]

Really, the government has no obligations to provide these student loan programs.

I agree.

My parents made too much money for me to qualify for any kind of government assistance for college so I went to a state school. There's options besides government aid. I know plenty of people who went to junior college for two years and then transferred to four year schools. It's not sexy but you gotta do what you gotta do.

[yankeeyosh]

Really, the government has no obligations to provide these student loan programs.

Well, the sad truth is that they have to. One could argue that these student loan programs are driving up student debt, and they may have an argument. In 1992, when the government did their last major revamping of the loan program, student indebtedness skyrocketed at the same time. The class of 92 had an average loan debt of about $7,000, while the classes of the early 00s had over $20,000 in debt. The problem is, when the loan programs are cut, private loan companies will take over. They are much worse than government backed loans for several reasons: 1) interest rates are higher, 2) they generally need a co-signor, 3) there are fewer payback options, and 4) (the biggie) aggregate loan amounts can be much higher...the Federal loan program caps off aggregate loan amounts to roughly $22-23K, while with private loans, you can literally be signing a promissory note for $100K at age 18.

Student loans are a necessity this day in age. With tuition as high as it is, there really is no other option for the majority of us. And I personally think it is a shame that the government is cutting back on them.

[29 forever]

Pretty soon, the only way to maintain a middle-class lifestyle will be to join the military.

Sad isn't it? With the way Bush's economy is going, that will be your only option if you don't want to work at Mickey D's or Wal-Mart. I guess they figure who needs college if those are your only options.

[cameralady]

Are you referring to enrollment or applicants? Either way, I say no...HYP is still hyped, and will always be hyped.
Yes, they will always be hyped, but if, say, a good portion of middle-class and working class Americans can't afford to go to such schools, what will happen then?


Besides, the Ivies frankly have some of the best financial aid packages of all schools...despite the price.

I went to an Ivy. Yes, they did give me a grant, which was about 40%-50% of the total yearly cost, but loans (Stafford and Perkins) were also included in the package. Cut those out and would someone like me, who comes from a working class family, have been able to go? Probably not. I probably would have opted for a CUNY school.

[yankeeyosh]

Yes, they will always be hyped, but if, say, a good portion of middle-class and working class Americans can't afford to go to such schools, what will happen then?

I don't think it will matter. With the future of the economy in doubt, and with parents now starting their kids on the fast track while in the womb with Mozart for Babies, I can only see the demand for the Ivies and similar schools to increase over time, even among not-so-well off families




I went to an Ivy. Yes, they did give me a grant, which was about 40%-50% of the total yearly cost, but loans (Stafford and Perkins) were also included in the package. Cut those out and would someone like me, who comes from a working class family, have been able to go? Probably not. I probably would have opted for a CUNY school.

I did too...and I knew plenty of people who were in major debt...up to $60K or so. However, for working class families, the Ivy League schools DO promise to give full financial aid outside the EFC. And some schools, like Harvard and Yale, give the vast majority in grants, with only a relatively nominal loan responsibility. Princeton even guarantees no loans, as long as you can meet the EFC (which is another issue in itself, but still, it's a sweet deal...and this may actually exacerbate the demand pressure)

[SunDevil]

Student loans are a necessity this day in age. With tuition as high as it is, there really is no other option for the majority of us. And I personally think it is a shame that the government is cutting back on them.

Tuition is going up more each year($). Most people take 5 years to finish($$). And now loan reconsolidation is no more. You lock in the interest rate at the time you get the loan.

The recently passed Budget Deficit Act legislation not only dramatically increases the interest rate on new loans, it takes away a borrower's right to consolidate their student loans while in school and denies their right to reconsolidate their loans, once out of school. That means even if you find a better lender offering better terms, you can't switch your student loan to another lender to refinance, as you can any other loan, such as a mortgage. And this begins July 1st.

I don't think that military will give you a middle class lifestyle unless you stay in for more than 5 years. And even then, you will be moving around quite a bit. And fighting in foreign countries for various reasons.

If the democrats can't win back the congress in this election, I will lose all faith in the system I think. Well at least a large segment of Americans.