Students Are Left To Suffer, Thanks to Government Rulings
By: Jason Collazo
The government’s recent struggles with the debt ceiling have been good for no one overall, but perhaps no one will be walking away sorer than the nation’s college students. How so? According to a recent article by the Associated Press, a bipartisan group of lawmakers has “plans to identify at least another $1.2 trillion in deficit reductions by Thanksgiving.”
A holiday that once was comforting to students, on break visiting family and friends at home, will come as a cold reality to this coming year. College programs are chief among those government programs at risk of costly government cuts.
There are several ways students are really at risk here, to be much more specific. Take subsidized loans, for example, an ever-popular option amongst the college age group. Come July 2012, and graduate and professional students will no longer be eligible for these. As the name somewhat implies, these loans are crucial to many because the government will not charge interest on them. That leaves college and professional students in a bad way next summer. And taking out an unsubsidized loan isn’t a panacea by any means; according to finaid.org, that can take debt up a staggering 16 percent for students after graduating.
The $17 billion the government will be saving itself by doing this will then be released into Pell Grants. This is only a temporary solution, however. The government seems to be doing this so it won’t have to make immediate cuts. Pell Grants, though, are of very high importance: they are for the most financially needy of students. The students that receive them come from families which make $40,000 or less. These students will still be able to get up to $5,550 per year.
Do you remember (maybe) when you were a student and could get a discount on a loan, if paid on time? Not anymore! The government cut those, too. And federal loans, with their fixed interest rates? The government has done a commendable job of keeping it at 6.8 percent, but those days might be just as much as history as the dinosaurs and war heroes students study about.
Tax breaks that help make the cost of college more affordable are in jeopardy as well- those lawmakers will have the chance to reform the applicable laws – and 529 college saving plans also stand to lose.
So what can you do? As a college student, or a parent? Well one thing- keep your eye on what is transpiring both in Washington and on Wall Street. Don’t make any drastic decisions (such as the idea to pay for your tuition with a credit card or postponing any educational plans) and maybe consider any unneeded costs that you can. Wait out the storm and hopefully things will cheer up, soon.
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