Several weeks ago I was informed I was not eligible for financial aid. My first thought was “why not?” It didn’t make sense to me how a mid-twenties, single female couldn’t get financial aid. I was told I was not eligible because I made over $10,000 dollars last year. Well yeah, I would have to make that plus some if I’m living on my own, not wanting to pick the alternative of being a bum. I have to survive somehow. I decided to research my curiosity about how the financial aid system works and was surprised by the process and how my feelings have hardened even more towards student loans.
It was interesting to find that our federal government doesn’t decide who gets the aid exactly. Instead, they decide how much to give to each institution. This is based off their FM, federal methodology, a series of formulas that calculates a number with the help of my FAFSA, to which a student could pay to an institution based off the EFC, or expected family income. So who decides who gets financial aid? Our schools do. After they receive the funds from the government, the institution inputs our FAFSA information into their system using the EFC and their IM, institutional methodology, a series of formulas used to calculate who is eligible for grants and aid.
It appears to me that if the cost of school is 10 percent of your annual income, then a student is in a good financial position to pay for their own school. The school does consider everything between tuition, room and board, books, etc. To be honest, when I initially started my investigation I was pretty upset and confused why I got shafted on financial help. But after reading how the process works, it made sense to me on how they calculated their numbers.
According to our financial aid system, I’m eligible for student loans. Notice that if you didn’t receive a scholarship or a grant, then getting a loan is encouraged to help pay for your education. To the federal government, student loans are also financial aid but in my book a loan is not an aid, it’s a gray cloud looming over me until I pay it back. When I think of loans I think of Proverbs 22:7, “The borrower is slave to the lender.” Isn’t that the truth. I’m not a fan of loans, period.
The student loans offered are at very low interest rates that you pay back either when you graduate or when you “take a break” from school. The payments are not large but they do take a long time to repay. With the low interest rates and the low payments, it seems worth it to most; after all you’ll be making enough money when you graduate to pay it, right?
When it was suggested by several people that I get a student loan, I was almost offended. I don’t want a student loan. I am working towards being debt free and part of that plan is to pay my way through college as much as I can.
A job after graduation is not guaranteed. Therefore, no job equals no income equals can’t pay my loans. We see this happening now with graduating students; they can’t find jobs because our economy is in the dumps. I was reading recent articles online posted by LA Times, Miami Herald, NY Times and so many other prestigious news agencies about the for-profit schools’ shares plummeting. My negative feelings towards loans became even more deeply rooted.
What this means is that students are not repaying their students loans. Only 54 percent of students at public schools are repaying their loans while slightly more are repaying at private institutions, up to 56 percent, based off the government data released on Aug. 13, 2010 regarding the financial aid repayment rates. This is damaging news for public institutions because if students aren’t paying their loans back, our schools may lose their funding. This will make it harder for current and future students to be awarded grant money along with finding alternate ways to pay for school.
If schools lose their funding, tuition will probably sky rocket and students will have no idea how they will pay for college because there are no funds available. I believe we have to make changes now with our financial obligations in order to prevent ourselves and future students from losing the education we deserve because there is not enough money available to help.
I have a plan for this semester and maybe next to ensure I pay cash for my education. My plan includes taking on whatever extra jobs are available, sacrificing social joys and my alone quality time so I don’t have to take out loans for school. But do most students have a plan? I would have to say no; financial responsibility isn’t really taught to a child or young adults, nor is it emphasized in the society I grew up in. I recognized that our economy has been doing poorly because people were just borrowing as much as they can with no idea how they’re going to pay back. And now we’re all paying for these irresponsible decisions. This same pattern is happening with student loans, too.
I know that it is harder to be responsible and say no to certain things in life because the big picture is unseen and we want to live in the ‘now’. But I think if I want financial aid by the time I get to transfer to the university, things are going to have to change with how we give aid to students and to who receives it. Are the right people getting financial aid?