Higher college tuition and the national economic meltdown are threatening to keep more young people out of college.
To cover the extra cost, for example, students at Syracuse University, a private college, are increasingly looking at loans and grants to pay for their college tuition.
“The economic situation is a concern for the university because we want students to continue their education here. And the financial aid they have now they will continue to receive. But most undergraduates are dependent on parents and its going to be harder if the parents are unemployed,” says Kaye Devesky, director at the Syracuse University financial aid office.
The national cost of college tuition is higher than ever — and on the rise. In New York, for example, Governor David Paterson recently announced a proposal to raise tuition at the state’s public universities by $600. And the governor is also proposing steep cuts in spending on education.
Consider these dollar signs of the average national costs of a four-year education:
• Public colleges average $28,000 a year.
• Private colleges average about $35,000 a year.
• Syracuse University is $46,000 a year.
The rising cost of college tuition means more students need financial aid for college. More than half of college students receive an average of $6,000 in aid to help pay for their education, according to the U.S. census.gov/” target=”_blank”>Census Bureau. At the same time, the economic recession and stock market collapse have hurt the endowments of private colleges, giving them less money to spend on financial aid.
At Syracuse University, the chancellor, Nancy Cantor, says S.U. is privately funding many of its financial aid packages for now. In an interview, she expressed concern about the ripple effect of the state government’s cuts. “Now with Paterson’s cuts, who knows what will happen,” Cantor said.
Overall, federal loans and grants like a Pell grant, Stafford loan and the PLUS loan are among the most popular forms of financial aid.
Pell grants are funds from the federal government to undergraduates that don’t have to be paid back by the student. The average award is less than $3,000 and only the neediest students qualify. Federal Stafford loans have lower interest rates than those from private lenders, but they too have restrictions on who qualifies. Stafford loans offer a maximum of $31,000. A federal PLUS loan allows parents to borrow money from the government or through private lenders, to cover the costs of their child’s college. They can borrow up to the full cost of attendance, but it comes with a high 8.5-percent interest rate.
The nation’s credit crunch is a source of concern to Fran Clark, program coordinator for New York Public Interest Research Group, or NYPIRG. It is among the groups that lobby for more federal and state funding for higher education.
Financial aid is drying up and private loans are getting harder to qualify for, he said. “The economy has an impact on everything from rates of tuition they charge to the amount of money they have for financial aid,” says Clark.
Students who are about to face another semester of tuition are being told by financial aid advisors to see how much money they can get from the government before they turn to private lenders.
For example, Syracuse University’s financial aid director, Kaye Devesky says most Syracuse University students pay for college with help from federal Stafford and PLUS loans. “It’s still touch and go because there are a lot less lenders,” said Devesky, “and students that rely on private loans might have to look around for other lenders, other sources of funding or different co-signers.”
(Chloe Sommers is a broadcast journalism graduate student.)
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