Financial Aid News 133: More consequences of ending federal student loans

Student Financial Aid News

From Inside Higher Ed:
Several states are cutting back the payments they make to help residents pay back student loans they took out to enter high-demand fields such as teaching and nursing, The New York Times reported. The loan forgiveness programs are typically sponsored by state lending agencies and nonprofit organizations in the student loan industry whose ability to finance the programs is impaired by the industry’s shrinking revenues, the newspaper reported.

Commentary

The whole article in the Times is worth a read. If you were banking on student loan forgiveness after graduation, that rug is swiftly being yanked out from underneath you.

The cause of this? The reduction in student loan subsidies from the College Cost Reduction and Access Act of 2007 combined with President Obama’s stated intent to eliminate the Family Federal Education Loan Program. The non-profit agencies like Kentucky’s state agency rely on the income generated by the FFEL program to fund loan forgiveness programs. With that income diminishing by the day and targeted for elimination entirely, these programs will slowly but surely vanish.

The stated goal of these efforts to reduce profitability in federal student loans – saving taxpayer dollars – will indeed be met in the short term, but at the expense of fewer teachers, public defenders, nurses, and soldiers, in the case of Pennsylvania’s PHEAA program, which for budget reasons has had to suspend its forgiveness program for soldiers on active duty.

If you’d like to voice your support for the FFEL federal student loan program, contact your Senator and Representatives very soon, before the legislation to end FFEL (and most agency-sponsored loan forgiveness programs) vanishes.

Scholarship Update

The San Fransisco Chapter of the Construction Specifications Institute is offering two scholarships — 1 @ $3,000 and 1 @ $2,000 to any CAED sophmore or above with a 2.75 GPA or above.

The application requires:

* Application Form
* Transcript
* 500 Word Essay
* Two (2) Reference Letters
* Possible Interview

Details at our free college scholarship search site.

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