Thin patience and pockets
Financial aid and loan reform can’t wait any longer
Published: Thursday, December 6, 2012
Updated: Thursday, December 6, 2012 23:12
There is no greater embarrassment to our country’s higher education system than our sad excuse of a financial aid and protection system for students.
According to 2010 numbers, the average per-borrow debt of bachelor’s degree recipients is approximately $22,000, up nearly $3,000 from the last decade. Federal student loans are now increasing at a rate of $20 billion per month. Federal student loans alone are now over $1 trillion.
Yet students, professors and administrators all seem to be in denial over the severity of the situation. The issue gets a lot of attention on the network news and in political debates, but it seems the people that it affects the most are silent.
You leave high school with little to no knowledge of what will happen when you enter the grand double doors of Prestigious University and what will occur in the four or more years. You are told by high school guidance counselors if your grades are good enough, the school will award you scholarships and grants, and if you need additional help, you can take out loans from the government or have your parents do so. Best of all, you don’t have to pay these loans back until after you graduate. It sounds positively utopian.
What you’re not told about is the details behind the Expected Family Contribution (EFC), caps on the amount of financial aid you’re actually able to receive per semester and accrued interest. Even if everything goes according to plan, you coast and ignore your total debt until after you graduate, only to be blinded by how much it actually is when you have to start paying it back.
Because private lenders started a trend of giving out money without considering if borrowers would or could repay, student loan defaults rose this year for the sixth year in a row. Of the 4.1 million borrowers who began making payments in late 2009 and early 2010, 9.1 percent defaulted on their loans within two years.
It’s hard to fathom that schools whose presidents can afford to buy a small town or two will turn their backs on you when you’re short a couple thousand dollars, but it happens. According to the 2012 Princeton Review ranking, New York University (NYU) has the worst financial aid in the country. Despite a basically worthless system that does little to help students with the most need, the school’s president John Sexton takes home fragments of those $60,000 tuition bills each year in his $1.3 million salary.
Private university presidents have made as much as $4.91 million, and public university presidents have made as much as $1.99 million. According to a Sep. 25 FOIL request, our own president Satish Tripathi makes $385,000 per year, and that’s without factoring in the money her gets from UB Foundation. Yet every year for some students, getting proper financial aid is like maneuvering through a minefield blindfolded.
Last fall, UB’s Office of Financial Aid implemented a new financial aid process. Prior to this, refund checks and financial aid were distributed to student accounts before the school year started up. Now, financial aid isn’t credited until after the drop/add period at the earliest. While all this is going on, UB continues to raise tuition. Because of UB 2020, UB raises its tuition 8 percent (approximately $300) each year for five years, leveling out at $6,470 (it’s currently at $5,570 without fees).
Unfortunately for students who spent four years sweating over their textbooks to get their bachelor’s degree, the master’s degree is quickly (or maybe already is) the new bachelor’s. The actual concept of spending more money to acquire a master’s degree is not even a possibility, so students are forced to pay for an education that will not make their money back unless some luck comes along.
In this year’s State of the Union address, President Obama announced he would be aiming to hold the line on student loan interest rates for one year, increase Pell Grants, double student work-study jobs and require colleges and universities to justify tuition increases. We haven’t even seen even a ripple of change yet.
We are getting scammed, but we don’t have another choice but to let it happen. The best-case scenario for students is to graduate, get a great paying job with your bachelor’s degree and start paying off your student loans. Considering the fact that 53.5 percent of bachelor’s degree-holders under the age of 25 in 2011 were jobless or underemployed, this just doesn’t happen.
There’s absolutely no reason students should struggle more to stay enrolled in an institution than to actually complete the courses in said institution. The goal to put students through school is so they can better themselves and make at least enough money to start paying back their loans. Without financial aid reform, they won’t even have that chance.