Tag Archives: student loans

Grants & Loans

As an update, also check out Richard Vedder’s post about the Pell-mell grant and alternate reform ideas.

 

With the feeble economy on just about everyone’s minds, there’s been some interesting news percolating about education and student loans.  The Inside HigherEd published a news piece about the $845 per student Pell Grant to help make up for the federal government’s shortfall.  As a cross section of California schools for in-state residents, here are a few stats:

UC Berkeley $12,461.50/year
CSU East Bay $4,872/year
Contra Costa College $570/year

So, for students at a CSU or a community college will still be fine with the cap and the UC students just have a slightly larger shortfall between costs and grant funding.  Given the 52% jump in Pell Grant enrollment, the relatively small difference in total amounts compared to the larger number of people participating seems the most logical decision to make.

While grant funding is going down, student loan debts are going up, according to the Project on Student Debt.  On average, a student has $24,000 in loans upon graduation in 2009 (To learn more about a state or campus average, check out their interactive map.). As the NY Times reports, this vast usage of loans creates a much larger problem than our other credit-based indulgence; “Mark Kantrowitz, the publisher of Finaid.org and Fastweb.com, estimates total student debt at about $896 billion — more than the nation’s credit-card debt.”

And, sadly enough, the general poor financial management and difficulty in getting a job leaves only about 1/3 of those who took out loans with the ability to repay their loans on time, according to the Institute of Higher Education Policy.

So what does this all mean?  Well, for my information competency students, I think this means I, and possibly other librarians, need to consider finances as part of the information literacy umbrella that has been missed in other education settings.  Searching the web is more than just knowing Google’s Boolean symbols; it can be a tool to educate students about the real income potential, what taxes are and how they work, and how they can structure their education towards a career that can support their needs and maybe a few wants.  This is the real, day-to-day power of information and the only hope to resolve this instant-gratification, impulse-buying, advertising-driven, debt-laden, consumerist mentality that has also allowed people to outspend what they could realistic earn.  Thoughts?

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Is there hope for us?

While health care continues to flounder, it appears that the House has had instead had some success in addressing the financial aid and loan situation for students.  In the Student Aid and Fiscal Responsibility Act, the federal government, instead of private lenders, would back student loans, increase Pell grants funding, and allocate funds for *community colleges*, school construction, and early childhood education.  As a grad student indebted to both the federal government and a private lender, I have to say that my federal government plan is a better deal, especially given the loan consolidation with a locked-in fixed-interest of only about 5%.  Compared to my credit cards, this is a dream.  But, now as I’m moving away from being a student and transitioning into a professional position (hopefully at a CC), I’m curious how this funding may actually work and if there is any actual hope that the libraries will benefit.

Looking at the bill itself, Sec. 351.2.a states that each State will receive funding for modernization and construction based on “the amount equal to the total number of students in the State who are enrolled in community colleges and who are pursuing a degree or certificate that is not a bachelor’s, master’s, professional, or other advanced degree, relative to the total number of such students in all States, combined” (115 of the PDF); in short, funds to match the proportion of students in CCs compared to the rest of the US.  That seems fair enough.  So helping match capital campaign funding, capitalize a revolving loan fund, or reduce costs of loans. But, how does the library fit in?  Well, after approving safety and repairs, libraries are eligible for modernization and the “installation or upgrading of educational tech infrastructure” somewhat fals into our realm.  Therefore, maybe new online course software, some funding to create online tutorials, assistance in funding online collections are all possibilities based upon this phrasing. For now, the funding, beginning in 2011, will be $2.5 billion (125).

As for the community college initiative, Sec. 501-505, we get some more possibilities for funding curriculum.  For starters, what sort of budget are we looking at?  Sec. 501 projects $730 million for each year from 2010-2013 and $680 million for 2014-2019; the individual awards themselves will be at least $1 million.  Yep, that ought to help make up for some of CA’s shortfall, but wait, the criteria has changed for funding eligibility.  Now, grants are awarded ” on a competitive basis” for “innovative programs,” “programs of demonstrated effectiveness” based on DOE or DOL evaluations or other research, or “lead to completion of a […degree] leading to a skilled occupation in a high-demand industry” (161).  In addition, Sec. 505 even offers support for Open Online Education “to develop, evaluate, and disseminate free high-quality online training, high school courses, and postsecondary education courses” (178).  Libraries fit this item remarkably!  I mean, haven’t most of us been doing this to some extent since the increased demands by patrons and faculty for online content and guides have led to virtual library tours, citation guide videos, and animated “how to evaluate search results” cartoons?

Overall, the House appears to have done a decent job representing the CCs and the students on this one.  Let’s see what the Senate has to say….