Cuts to federal financial aid worries Catholic schools, impacts students

HUNTINGTON, Ind. (Our Sunday Visitor) - Xavier University of Louisiana had been in session one week when Hurricane Katrina hit New Orleans. With up to two feet of water in the buildings, no boiler or electricity, this school, founded by the Sisters of the Blessed Sacrament, shut down.

Seventy-five percent of the students eventually returned to Xavier, but the school year is far from being over. The classes that had to restart in January will run through August, a whole summer after most financial aid runs out for the year. This fall, due to federal legislation and budgeting, financial aid will be more expensive than ever. That's got Mildred Higgins worried. "The changes in financial-aid rules are really going to hurt students, especially those already at risk," said Higgins, Xavier's financial-aid administrator. "They're overburdened with loans that will take a lifetime to pay off." More for the money The Deficit Reduction Omnibus Reconciliation Act, passed in February, aims to cut some $40 billion in federal spending over the next five years. About $13 billion - one-third the total - is coming in cuts to education lenders. Interest on Stafford student loans will rise from a variable rate of 4.7 percent at present to a fixed rate of 6.8 percent on July 1, when the new regulations take effect. PLUS loans - which parents of dependent undergrads can take to help pay for their student's education - will come with interest rising from 6.1 to 8.5 percent under the new rules. Another change is cuts in work-study funding, said Angela Vandekker, director of financial aid for the Bronx's Fordham University. "The president's budget has cut work study consistently for the past 3-4 years," said Vandekker, whose Jesuit university's tuition runs $30,000 a year. "Work study not only helps students financially, but it helps them build their resumes." The Department of Education admits interest rates will affect borrowers in the long run, but projects that the total number of loans will increase by one million over the next year. "There will actually be more money for student loans than ever before," said Education Department spokesman Chad Colby. "Access to grants is increasing." Class impacts While the federal government prepares to launch two new grant programs, students from low-income families are being hit by a number that is, in fact, not changing. That's the amount of the federal Pell grant, which has stalled at a $4,050 cap for the fifth year in a row. "Everything associated with being a student - tuition, books, room and board - is increasing," said Eric Weems, financial aid director for Loyola University in Chicago. "When the Pell grant doesn't increase, you're losing purchasing power." Pell grants have not kept pace with education costs, which have increased 67 percent over the last decade, according to the National Center for Education Statistics. Approximately 25 percent of Loyola's 8,000 undergrads fall into an income bracket that makes them eligible for a Pell grant. Weems said that stagnation of the grant will hurt enrollment from the neediest group of students. That may deter lower-income students from choosing many of the country's almost 300 Catholic colleges and universities. Private schools cost an average of 25 percent more than public institutions. Making the grade Financial-aid experts are urging students to look beyond obtaining loans for school. The federal government will, in fact, be funding more grants - free money for students from working- and middle-class families. Pell Grants will remain capped at $4,050 next year. But Pell-eligible students in their first year can also apply for a new Academic Competitiveness Grant of $750. Sophomores can get $1,300. Another new program is called the National SMART (Science and Mathematics Access to Retain Talent) Grant. Pell-eligible students in their third or fourth year can apply for $4,000. There are also billions of dollars in scholarships that go untapped every year. Bryan Terry, associate vice president for enrollment services at Seton Hall University in New Jersey, said funding a college education can be as painless as taking on a new car payment. "It's really all about planning. Families need to start planning when their student is a freshman or sophomore in high school," Tarry said. Mildred Higgins of Xavier University thinks Americans also need to fight for more federal investment in education. Nowhere is the struggle more evident than in Xavier's hometown of New Orleans. "A lot of Congress is not sympathetic to education, and students need to raise a political voice before the next budget authorization," said Higgins. "When students raise their voices, the legislature will listen." - - - Steven Saint writes from Colorado.

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Republished with permission by Catholic Online from the Nov. 2, 2007, issue of Our Sunday Visitor newspaper (www.osv.com) in Huntington, Ind., a Catholic Online Preferred Publishing Partner.