Mar 3, 2009

Students anticipate their share of $787 billion

by Amanda Sullivan

Paying for college has always been a challenge but the nation’s recent economic recession has made it even more difficult for individuals and families. Parents and students are feeling the pinch of tightened purses,
requiring them to seek more aid from schools and the government.

“I have had to take out ridiculous loans because my family has no means to afford my education, and now it will take me a lifetime to pay off my debt,” sophomore Kim Curry said.

“It’s … hard because (my mom) doesn’t make that much money, and she has bills on top of my tuition and everything is getting more expensive,” sophomore Dana Bradshaw said.

Because of these recent cries for extended financial help from residential students, colleges have begun fundraising to assist students with tuition woes.

“Schools are paying for the increase in the requests through fund-raising appeals and by digging deeper into their own endowments and budgets,” according to the Wall Street Journal.

To verify the need for most financial assistance, universities require students to complete the Free Application for Federal Student Aid (FAFSA). The basis for need is established with the information from the parents and students’ tax forms from the previous year.

However, the current lack of job opportunities and pay cuts may not be reflected on the previous year’s taxes, making it difficult to acquire funding for college. The recession has caused the unemployment rate to skyrocket from last year’s 6 percent to January 2009’s 7.6 percent, according to the Bureau of Labor Statics (BLS). Furthermore, the BLS reported that the unemployment rate of teenagers sits at 20.8 percent, which affects many college freshmen and some sophomores.

“If you haven’t been personally affected by this recession, you probably know someone who has — a friend, a neighbor, a member of your family,” President Barack Obama said in his address to the joint session of Congress on Feb. 24. “You don’t need to hear another list of statistics to know that our economy is in crisis, because you live it everyday.”

The recently passed $787 billion Economic Payment Stimulus Package allows approximately $128.2 billion for education and job training. The bill raises the maximum Pell grant from $4,850 to $5,350, an increase of $500, which accounts for $15.6 billion of the package.

“The stimulus provides the largest-ever increase in Pell-Grant funding…,” Secretary of LU College Democrats Jan Michael Dervish said. “The stimulus plan will also help create jobs, including jobs requiring bachelor’s and master’s degrees that students are currently investing in.”

“In the short term, college students will likely benefit from the stimulus plan by the increase in the amount of available scholarship money,” Dean and Law Professor Matthew Staver said. “However, whether they realize it or not, each student is now also responsible for the equivalent of a $30,000 loan that they will have to pay back in taxes.”

Staver was referring to the amount of money borrowed to create the stimulus package that will have to be paid back to the government in the form of future taxes.

Chancellor Jerry Falwell Jr. believes that the bill could signal a return for the U.S. to the 70s, although with a decidedly less groovy feel.

“The United States would normally fund a spending package like this by borrowing money from countries like China and Japan. However, the economies of those countries are also in distress so the US will have to print money to pay for all the new spending. This will lead to high interest rates and runaway inflation like we had in the late 1970s,” Falwell said.

The education portion of the stimulus also includes a tax break to help cover the cost of college.

“Because of this plan, families who are struggling to pay tuition costs will receive a $2,500 tax credit for all four years of college,” Obama said.

The president also told Americans that volunteering in local communities would help them to pay for college.

“I know that the price of tuition is higher than ever, which is why if you are willing to volunteer in your neighborhood or give back to your community or serve your country, we will make sure that you can afford a higher education,” Obama said.

Despite the large numbers, tax breaks and the volunteer’s incentive provided by the president’s stimulus package, students may still have difficulty obtaining loans or scholarships.

In fact, Liberty students may have noticed an increase in calls or e-mails from the Student Advocate Office (SAO). The SAO is part of the informative effort on campus.

“We (were) notifying students by phone and e-mail encouraging them to file the Free Application for Student Aid (FAFSA) early by the March 1 deadline so that they can maximize all of the Federal Financial Aid they are eligible for,” SAO Team Leader Timi Plyter said.

The SAO works to help students understand that the most crucial element to acquiring financial support is to complete FAFSA. The deadline for the application was March 1. The application may still be turned in even though the deadline has passed. However, students who submit their application sooner rather later are more likely to receive aid.

“Some funds are limited, so early filing is paramount,” Plyter said.
In addition to raising awareness about FAFSA, the SAO also notifies students of other ways to incur financial help..

“We let them know that they have a financial aid adviser that is available to them at all times who can go over the terms of the stimulus bill and how it will affect them,” Plyter said.

Once the FAFSA has been processed and evaluated, the student will receive an award letter stating the amount and detailing the specifics.
The office is also in charge of notifying students of scholarship opportunities. The SAO offers workshops, and then sets the students free to utilize what they have learned regarding scholarships.

“We hold Scholarship Search Symposiums several times throughout the semester to teach students how to find free funds for college from sources outside the university,” Plyter said. “We also have binders in our office that contain scholarships that we have found online and invite any student to bring their laptop to the office and use the books to explore possibilities.”

The SAO encourages students to research and apply for outside scholarships because they have the potential to benefit the student financially.

“Scholarships can help tremendously to offset the remaining costs, and when those monies are sent to the school, the Financial Aid office handles them for the student.”

Students interested in financial aid should contact the SAO at (434) 582-7200 or call the Financial Aid office at (434) 582-2270.

Contact Amanda Sullivan at
amsullivan3@liberty.edu.

 


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