Obama’s proposed budget reduces scholarship funding, increases interest paid on graduate loans
Many students can not afford to attend college without some form of government aid. This money-borrowing often results in the accumulation of thousands of dollars of debt.
About 65.6 percent of four-year undergraduate students in 2007-08 graduated with not only a Bachelor’s degree, but debt as well. Those who owed money averaged $23,186 of debt, according to finaid.org. This amount excludes PLUS Loans but includes Stafford, Perkins, state, college and private loans.
Last year, USC’s tuition increased by 6.9 percent, but scholarship amounts remained the same. The gap between awards and cost left current and potential students worried about covering all of their expenses.
“Everything is unbalanced,” first-year nursing student Jessica Smith said. “If scholarships don’t increase along with tuition, it’s going to make lots of people not want to go to college because of the costs.”
In addition to the increase in tuition, President Obama proposed a budget plan for 2012 that would cut about $100 billion from higher education programs — such as the Pell Grant -— that many students rely on to attend college.
The budget plan, which has yet to be approved by Congress, includes two major changes. One would end the year-round collection of the Pell Grant.
The other would reduce loan subsidies for graduate and professional students. The government currently pays the interest collecting on loans for these students as long as they remain in school. This new policy would end the government’s payment, resulting in grad students having to pay the accrued interest upon graduation. An official in Obama’s administration said these changes could potentially save a combined total of $9 billion in one year.
But Obama hopes to increase the maximum Pell Grant award to $5,550, which does not have to be repaid. This increase may prove to be helpful to many students struggling with college expenses, but a predicted shortfall for the year 2012 would result in the maximum award being cut nearly in half to meet demand.
Fourth-year accounting student Justin Muller is anticipating the cost of graduate school by seeking out ways to curb the financial debt.
“I am aware that the tuition costs for the Marriage and Family Therapy programs I have applied to will be higher since they are all out-of-state schools,” Muller said. “I am easing this pressure by applying to numerous graduate assistantship positions that will cut some of the graduate school costs. Also, I use my family and my friends as support systems while I find ways to pay for school and deal with the other pressures that come along with graduating.”
USC Financial Aid Director Ed Miller said increasing tuition should not sway students from the university as there are numerous financial aid opportunities available.
“Rising costs affects students but not to the extent where they cannot attend the university,” he said. “There are means where students can attend that are not limited to scholarships and grants. We help as much as we can to ensure every student has an equal opportunity.”