With multi-billion dollar corporations going under, some of the effects are hitting close to home, but most financial aid for students should remain safe.
While the government may soon be handing out $700 billion to help stabilize financial markets , student loan opportunities won’t be affected by the spending, Minnesota Department of Higher Education spokeswoman Barb Schlaefer said.
Nothing has changed in terms of loans and grants because of what’s happened on Wall Street, she said.
There is more pressure on the federal government, however, to cut costs to pay for the War in Iraq and the potential bailout, University Office of Student Finance Director Kris Wright said.
“It’s going to make it more difficult to make education a high priority,” she said. “On the other hand, I can’t imagine a Democratic congress not wanting to fund increases to the Pell that President Bush agreed to.”
According to statistics, 63 percent of University students received some form of grant or scholarship in 2007, Wright said. The same statistics showed the total University loan volume was over $3.7 million.
Wright said the number of students requesting financial aid has increased in previous years, and she expects the number to continue to rise.
Finance Senior Lecturer Rick Nelson said he expects it to be more expensive for everyone to borrow in the near future.
“The markets tell us that people expect rates to go up a little bit, but what actually happens between now and then depends on what happens in the economy,” Nelson said. “So we can’t predict future interest rates and have never been able to.”
Nelson said the point of the bailout is the fear that if nothing is done, credit won’t be available for anybody, including students.
The University offers many loan programs, but higher interest rates and consolidation temporarily eliminated Perkins loans, which usually awarded $3 to $4 million annually, Wright said.
While many loans and grants are available, the rising cost of tuition makes it difficult for students to receive sufficient financial aid.
“As tuition and cost have risen, students have to look more to financial aid rather than savings or current income,” Wright said.
Clinical lab science junior Raquel Julik said she has received loans and grants throughout her college career.
“Tuition is going up, but the money they’re giving me for grants is not going up at all,” she said. “I don’t even think the loans are much. Well, if it is, it’s not enough.”
Chemical engineering first-year Jacob Johnson , who said he’ll receive loans for all four years he’s in college, said current economic problems are affecting his dad’s 401k.
“I know he’s been losing a lot of money recently,” Johnson said.
Some students don’t think the bailout is right, including civil engineering first-year Adam Shaw.
“I don’t think my money should go to people who can’t obviously manage a business,” Shaw said.
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