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More need-based financial aid
A Times Editorial
Published June 18, 2005
The diploma is on the wall by now, but new college graduates will be coping for years with unfinished business at their alma maters. College students who take out loans leave school owing an average of $20,500, according to the College Loan Corp., and often spend years climbing out of that hole. The U.S. Department of Education has provided some modest help to current students by allowing them to consolidate their loans before interest rates increase later this year. However, that is is a short-term solution that doesn't address the financial needs of low- and middle-income students who can't afford college without taking on an enormous amount of debt.
Students who take advantage of the Education Department's debt consolidation policy will be forced to give up a six-month grace period and begin repaying loans immediately after graduation. In return, they will be able to consolidate loans and lock in interest rates for government-backed Stafford loans from banks or commercial lenders. The option always has been available to students borrowing directly from the government, and those with private loans weren't concerned that they couldn't consolidate their debt as long as interest rates continued to fall.
However, the initiative does not address the broader problem. In too many states, including Florida, there is not enough need-based financial aid. Florida provides ample assistance to the state's best students through merit-based programs such as Bright Futures, but a lack of need-based assistance makes college an unreachable goal for too many.
Recent tinkering with the federal formula used to determine financial aid eligibility doesn't help the situation. Families with the same income and assets as in 2000 would have to pay an extra $1,749 to be eligible for financial aid in 2005, after adjusting for inflation, according to calculations by the New York Times. This move, in combination with another federal change that makes thousands of students ineligible for Pell Grants, further squeezes low- and middle-income students.
A significant increase in need-based financial aid is the only way to ensure low- and middle-income students can even get through the front door.
[Last modified June 18, 2005, 00:45:19]
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