The Observer, January 26, 2007
Volume XXXIX, Issue 14
Loan legislation will have little effect on students
With textbooks scattered across the floor, an endless stack of papers in hand, and a blue towel turban resting on her wet hair, freshman Jessica Gamberoni juggles the pressure of the new semester with a sense of urgency, albeit with a big smile on her face. Gamberoni is one of thousands of students across the Case campus who battle the demands of university life along with another struggle: paying for college.
The rising costs of college and the debt students face after graduation has been a hot issue in the media these days. Nearly 60 percent of all undergraduates come out of college with some sort of debt.
"The biggest issue (for the students) is covering costs, just figuring out what grants and loans they are eligible for," said Mike Techman, clerk of the financial aid office here on campus.
On Jan. 17, the new Democratic majority in the House of Representatives resoundingly passed legislation 356-71 in favor of lowering rates on subsidized loans offered to college students, from 6.8 percent to 3.4 percent, a process that will take five years to be fully completed.
Of the thousands of Case students who do qualify for these types of loans, most will not be able to take advantage of the legislation, if it is even signed into effect by President Bush. Yet lowering the interest rates students have to pay back once they get into the working world may not be the best-case scenario for college students.
"Attacking interest is not helping students pay for college," said financial aid director Donald Chenelle.
A graduate of John Carroll University, Chenelle built the financial aid program at Case Western Reserve from the bottom up, still serving as director after more than thirty years.
"What we have here is a matter of philosophy for the United States. Either they can continue to subsidize loans for students who will graduate, work, and pay off the loans, or they can put money into grants and pay funds to students who are looking for the opportunity to pursue a post-secondary education," said Chenelle. "6.8 percent versus 3.4 percent, it's a very low number no matter what. It won't change a thing."
As far as affecting how students receive money, the legislation, if signed into law, "will not affect how Case hands out money," said Chenelle.
"I guess it's good that they are doing this…it's good for future generations. It's just saddening that the people on the loan now can't benefit ," said Gamberoni.
As a middle- to low-income student on the subsidized Stafford loan, Gamberoni has worked summer jobs, is involved in work study, receives some money from her parents, and fought for high school scholarships to be able to attend Case.
Her biggest issue with the Case system was the lack of a scholarship because she qualified for so many federal loans.
"Here at Case if you're poor, you can't get scholarships. It's not fair. People on financial aid are the most active on campus, getting jobs here and there, pursuing work study and research. Anything can help. If cutting interest rates on subsidized loans is all we can get, we'll take it. It's less money to pay off when you get out," said Gamberoni.
So in spite of the good news that came out of Washington this past Wednesday, the reality is that much can still be done.
Thirty years ago 70 percent of college students were Caucasian, but by 2018, minorities, many of them from low- to middle-income brackets, will make up the majority of college-bound students. These same students are going to need more money, otherwise more and more debt will pile on them once they get out, if they even get out.
The odds are not good. A student from the high-income bracket is five times more likely to get a bachelor's degree than a student from the lowest income bracket.
Congress ultimately "could make money available to both," said Chenelle, "but other priorities such as Iraq or other programs seem to be taking precedence."
Ultimately, current Case students aren't getting much out of the legislation, but some relief is being offered in the future. However, with an administration that has continued to hold loan limits stagnant, a practice just now being challenged after 15 years, perhaps the future Case students will be out of luck as well.
