Black Education / Schools : College Financial Aid System Facing Stiff Test

KWABENA

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CHICAGO – Finding financial aid for college this year promises to be tougher than any final exam. The quest for money that begins for students and parents every January has taken on new urgency in 2009 amid fears that loans and grants will be scarcer than in the past due to the recession.

"The financing system for college is in real crisis," said Barmak Nassirian, associate executive director of the American Association of College Registrars and Admissions Officers. "Every one of the participants in the system is experiencing hardship — higher education institutions, states, aid donors and families all are cash-strapped."

Federal student loans remain readily available — with some funding even increased recently by Congress. But the prospect that grants and scholarships may be cut at many schools, combined with the shrinking availability of private loans, has fueled widespread angst at a time when more people than ever are seeking help. Applications for federal aid for the current academic year already are running 10 percent above last year's record pace, according to the Department of Education.

Savings held in Section 529 plans — the state-sponsored investment funds for college that are popular for their tax breaks — have been depleted by the worst bear market in decades and home equity values have plummeted. That has sapped two sources most tapped by parents to fund their children's higher education. Colleges' endowments have been similarly walloped.

Read the remainder of this article by clicking here: http://news.yahoo.com/s/ap/20090125/ap_on_bi_ge/college_financial_aid

I thank Heaven that I have not taken out any loans!

KWABENA
 
We are less than 2 days into the new semester (although I will be taking off this semester for personal reasons). Although it is nothing new to me, because I have stood out and seen many generations of New / Transfer students, it is going to get much worse. For starters, we actually think that deferring so much of our payments is going to help us. Sure, it will help us as we go about the semester, but who knows what will be happening by the time we graduate?

I was speaking with my mother (who is over 40) yesterday about this - even she is struggling to pay back all of that money in loans. Then again that's besides the point-

There are powerful people who are engineering the financial disaster that leads to tuition freezes, hiring freezes, unreasonable fees added to tuition bills, room and board rip-offs, extra money per credit hour - by the time the average student realizes this, they will be too overloaded with coursework to give it attention. The easy way out would be to say "well it doesn't matter. I will get a good career, and pay everything off in 4-5 years. That makes sense, until you realize that 40-50 million other graduates are trying to do the same thing, when obviously they are not studying the same thing, and not everyone's field of study is in high demand at this time. So what is the guarantee?

There are also students (this is where our minds are) who are taking out over $5,000 worth of loans just to get a "phat" refund check. Once they get that refund check, they are buying new clothes, sneakers, outfits, sound systems; trying to come to class looking like a celebrity. They are also taking more credits (as a full-time student you are charged when taking more than 12 credits per semester) so they can graduate faster. This is easy grounds for making the statement that "we are passing through courses, but courses are not passing through us." We have all these credits, about to graduate, and don't know nothing, but how to study notes and pass an exam. The younger the generation, my brotha, the worse it will get. When I say this, I am speaking of every ethnicity and nationality.

Maybe it might depend on the school, but here, we are being prepared to become digi-slaves for the next century. Moreover, we are being told that we will have a great future, and make a whole lot of money, but then every bit of it will be blown due to outrageous living expenses, car notes, taking care of children; it doesn't look bright to me. Add on to that life insurance, health insurance, car insurance, ... I had one class last semester where we did this activity. Everyone had to write on one sheet of paper what concerns we had for the future for ourselves, and what concerns we had for our families on another sheet. Would you know most of us said Financial - loans, insurance, mortgage, no retirement, no pensions, and I can go on and on. Point is, the light is not as bright as we are being made to believe.

The mere fact that grants and scholarships are declining but loans and lenders available are rising, is a big clue to what is to come not only for us, but for the current generations in high school. Do as I am doing - get finances straight as early as possible!

KWABENA
 
See...this is exactly what I am talking about. An article published in my University's student newspaper:

Graduates struggle to repay loans
Marissa Lang
Issue date: 1/28/09

Many national experts on student finances agree this is a problem that will affect not just those who currently qualify for rehabilitation, but also students who currently have loans or who are looking to take out loans to finance the rising costs of higher education.

"This is a problem that is going to continue," said Edie Irons, a spokeswoman for the Project on Student Debt. "Because with this economic climate, the biggest single issue facing students may just be making their payments."

Irons went on to say that students having trouble making payments on their loans should consolidate as much as possible and try to stay away from "riskier" and "more expensive" private loans that are not subject to federal assistance and "should be used only as a last resort."

But students said they often have little choice between the two.

"I have both federal and private loans," sophomore criminal justice and criminology major Kevin Mawyer said. "You can't just get the federal ones because they have caps on [the amount they will lend] and for some people, that's not enough. I'm about $26,000 in debt now; I'm working two jobs to help pay some of it off, but ultimately, the loans are all in my name."

Alan Collinge, author and founder of Student Loan Justice - an organization that advocates the passage of a Student Borrower Bill of Rights to increase transparency and accountability in the government's loan agencies - pointed out that Mawyer is not alone. More students have turned to student loans as a standard way to finance their education in recent years than ever before.

"Thirty years ago, student loans barely existed," Collinge said. "Today, the average undergraduate borrower leaves school with $23,000 in student loan debt. As a nation, we owe, collectively, about $600 billion in student loan debt."

Collinge and other advocates insist the problem is not the lack of rehabilitation resources, but rather the very foundation of the student loan system.

Click here to read the rest of the article: http://media.www.diamondbackonline....aduates.Struggle.To.Repay.Loans-3600471.shtml

I say again - Do not take out Loans! As a matter of fact, I will be a bit more lenient and say be very careful as you decide on how to finance your way through college. The article features a sophomore undergraduate student who is a full-time student, works two jobs, and owes approximately $26,000 in loans. That is a critical position to be in, because your academic, physical, and financial well-being are all at high risk. The future outlook for those interested in attending college is not as good as it seems...

KWABENA
 

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