New law paves way for student affordability

ASHLEY COOK NEWS EDITOR AAC722@CABRINI EDU

Financial aid offices across the United States, including Cabrini’s, are working to understand the implications of a major new law passed by Congress this fall that made significant changes in financial aid.

The College Cost Reduction and Access Act, signed on Sept. 27, 2007, will make college more affordable for lowincome students by increasing funding for Federal Pell Grants by more than $11.4 billion over the next five years. The Pell Grant program helps ensure that low-income students have access to higher education by providing need-based grants to help students meet education costs.

“This plan will help to ensure that students from low- income backgrounds are given a fair chance to get a better education,” Adriana DePalma, history and political science major said. “I think it’s about time congress thought about low-income students’ dreams.”

According to NASFAA.org, included in the law are attachments that will pay up to $16,000 for students to become teachers at certain schools and in certain subjects. Graduates working in certain public service jobs, such as firefighters, may also be eligible for partial loan forgiveness

The law allows students with federal student loans with private companies to consolidate or reconsolidate into the Direct Loan program beginning July 1, 2008 in order to qualify for public service loan forgiveness.

The Act decreases payments to commercial lenders and guaranty agencies participating in the

Federal Family Education Loan Program. It also authorizes increases in the amount of Federal Pell Grants and establishes the Teacher Education Assistance for College and Higher Education Grant Program, TEACH.

According to NASFAA. org, beginning July 1, 2008, the TEACH Grant program will provide up to $4,000 a year in grant aid to undergraduate and graduate students and students enrolled in a post-baccalaureate teacher credential program, or current or prospective teachers. Eligible undergraduate and post-baccalaureate students may not receive more than $16,000 and graduate students may receive no more than $8,000 in total TEACH Grants.

Students enrolled less than full-time will have their TEACH Grant reduced according to a schedule established by the Department in regulations.

CCRAA will lower the interest rates on some student loans and expand loan repayment options for student borrowers. The Act also creates a new loan forgiveness plan for public service employees. In addition, the Act also provides funding for several institutional grant programs aimed at improving minority-serving institutions.

The bill the President signed will expand this program by allowing the maximum Pell award to increase from $4,310 in 2007 to $5,400 by 2012.

According to whitehouse.gov, The President promises to work with Congress to ensure that the increases in funding for Pell Grants not paid for in this bill are paid for with reductions in other areas of spending - not by raising taxes on the American people.

The Administration will closely monitor the effects of the bill’s provisions to ensure they do not cause unintended consequences, increase taxpayer costs, or upset the vital competitive balance between the Federal Family Education Loan and Direct Loan programs

The President will also continue working with Congress to expand access and affordability in higher education.

“It seems that any effort to enhance Pell Grants serves the common good,” Dr. Jolyon Girard, history and political science professor, said. Girard said that there are those who would argue that the government should allocate more funds for the program, and others maintain that it is too much additional funding. “Those always tend to be the liberal and conservative aspects of any legislation involving federal fund-

Financial Aid : Huh?

As the editors of the Loquitur sat down to discuss the editorial topic of the week, financial aid, most seemed to draw a collective blank. Only three editors could give a strong opinion and even they admitted the situation wasn’t black and white. Paying off student loans is inevitable. We should have a better understanding of the key points that will have a greater impact on our wallets.

Why don’t we have a better understanding? Is it partly because the loan programs are so complicated?

Sen. Hillary Clinton’s plan would add $8 billion a year in new funds in tuition tax credit, increase Pell Grants, provide $500 million in grants to community colleges, create a “Graduation Fund,” increase the education award in the AmeriCorp program, and simplify the application process for federal financial aid. Clinton’s plan would also require public colleges to publish information about employment rates and earnings of their students after graduation, eliminate the guaranteed student loan program, and require colleges to set multi-year tuition rates. Both candidates plan to eliminate the Family Federal Education Loan Program and replace the loan program with the government’s Direct Loan program.

The Federal government makes loans available to us in two ways, through the Direct Loan program, or funneled through private lenders like banks and companies like Sallie Mae. The Direct Loan program has lower rates and more of the money can actually go to students. The government loans funneled through private lenders sends a smaller percent of money through to students because of higher fees the banks and companies collect from the government.

Admittedly, some people think the marketplace is better than the government for everything. We understand that fear, but in this case, it’s been shown clearly that companies like Sallie Mae have violated our trust and that the government actually is a better lending source.

Although the editors agreed that colleges should release information on graduation, job placement and earning rates after graduation, we think that if the government tries to make us better consumers, it should work hard to develop an accurate system.

Every year at Cabrini the cost of tuition increases by a few thousand dollars. Clinton’s plan requiring colleges to set multi-year tuition rates would allow for students and their families to better financially plan. Some fear that if allowed, the government would start imposing policies on all businesses. Yet, students find it frustrating that year after year tuition is increasing and we aren’t necessarily getting a better education.

Clinton’s plan to simplify the process of applying for federal financial aid by checking a box on your federal income tax returns and in return the Educational Department would provide you with how much you can expect to receive in federal grants and loans seems like an answered prayer to the complicated process.

After studying the financial aid program of Clinton, we can come to a few conclusions. One is that this is an important topic. We ourselves are embarrassed how little we knew going into this. We are also surprised at how little attention higher education gets in this campaign. Why are Clinton and Obama the only ones to have any plan at all? Why has it not come up in any of the debates? Do the other candidates and the reporters who ask the questions not think affordable higher education is important to the future?