Tuition increases, aid remains the same

By Kelly Finlan and Jana Fagotti
February 12, 2004

The skyrocketing price of higher education has risen anywhere from 1.2 percent to 11 percent nationwide, according to highereducation.org. The increased weight of footing the bill has college lobbyists and student advocates looking for funding to ease the burden.

Under a new plan proposed by President Bush on Monday, Feb. 6, first year college students would have $3,000 in federal funding available to them, up from the $2,625 available now. The limit to undergraduate students, overall, would remain at $23,000, a ceiling set 11 years ago.

When the $23,000 limit was set during the Reauthorization of 1986, the pricing was based on a five-year college student. Currently a freshman is eligible for $2,625, a sophomore for $3,500 and $5,500 for junior and senior years.

This puts the average four-year college student at a disadvantage because he or she only has access to $17,125. The government holds an additional $5,500 for the occasional fifth-year college student.

Bush’s new plan would increase the amount of money available per year, but the overall federal loan would remain at $23,000.

PELL grants, undergraduate need-based funds that do not need to be paid back, and federal PLUS loans, unsubsidized fixed-interest loans issued to parents of college students, will also be available supplements, according to The Chronicle.

Critics have expressed disappointment in the plan, arguing that the lack of increased funding leaves low-income students unfunded despite the $33 million according to The Chronicle.

The Coalition for Better Student Loans is calling for a new ceiling of $30,000 to be set. The new limit would allocate $4,000 to first-year students and $6,000 to sophomores. Third- and fourth-year students would have “flexible borrowing accounts,” up to $10,000 each year that they can borrow or leave, depending on their need, according to The Chronicle.

The National Association of Student Financial Aid Administrations proposed an allowance of $7,500 a year for four years, totaling $22,500. This is just one among thousands of lobbying groups who propose new plans to extend federal loan limits each year.

Raising the allowable limit on federal loans would come at a cost of $20 billion because the federal government is required to pay the interest on subsidized federal loans and the difference in the interest on loans with rates higher than 8.25 percent, according to The Chronicle, and with a deficit that will increase more than $475 billion this year alone, many are reluctant to increasespending.

Democratic presidential front-runner John Kerry, D-Mass., proposes a plan of augmented federal assistance to middle-class families.

Tax credits, reimbursements for money paid, would be offered for amounts up to $4,000. The first $1,000 would be covered in its entirety, and half of everything up to $3,000 after that would be refunded on a year-to-year basis, according to The Chronicle of Higher Education.

Kerry also endorses the “service for college” initiative, which rewards students who are committed to service, be it community or military-based, with college assistance. “For every young person who gives two years of service, America will pay the cost of four years of their state’s college tuition,” according to Kerry’s campaign website.

Private schools will qualify for assistance under Kerry’s plan as well.

Funding for the added student aid would come from the elimination of the corporate loopholes that allow companies to avoid paying taxes as well as the repeal of the Bush tax cuts of 2001, according to The Chronicle.

With the possible rise of federal borrowing, there is a great fear that college tuition will dramatically rise nationwide, according to Mike Colahan, director of financial aid. “This college would be very resistant to that,” Colahan said. “At Cabrini, people work hard to keep prices down. It would be inconsistent of this college to raise prices simply because another source did.”

Posted to the web by Marisa Gallelli

Kelly Finlan and Jana Fagotti

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