AU will begin holding workshops to educate students on effectively managing their loans following changes in financial aid funding in the Deficit Reduction Act of 2005, according to a report from the Office of Management and Budget.
The financial aid office will be sending out a newsletter regarding the issues specifically concerning students. According to Brian Lee Sang, director of the Office of Financial Aid, they will also be holding consolidation workshops to teach students how and why they should consolidate their loans.
The Deficit Reduction Act, a bill intended to reduce federal spending by $29 billion over the next 10 years, will raise the interest rate on student loans and students will not be able to consolidate their loans after July, according to Sang. The current interest rate on student loans is 4.7 percent. After July the interest rate will raise to 6.8 percent.
"I think it's outrageous for the government to cut financial aid when it's something that clearly needs to go up, not down," said Rachel Shattuck, a senior in the School of International Service and the School of Communication. "So many families already can't pay what the schools and government say that we can afford. It's unfair for them to cut the already low sums we're getting."
Sang said AU plans to let families know about Parent Loans for Undergraduate Students, commonly called PLUS loans.
Under the bill, the rate on PLUS loans would increase from 7.9 percent to 8.5 percent, according to OMB. The new rate applies only to loans disbursed on or after July 1 and would be fixed for the life of the loan.
"This bill severely impacts students," Sang said. "I think eventually students will get wind of this and they will be outraged by it ... if there was an outrage from students prior to all of this, perhaps this bill would have failed
and saved students thousands of
dollars."
"They're supposed to make higher education easier to obtain, not harder," said Erika Neenan, a sophomore in the School of Public Affairs. "I hope it doesn't change any of my loans."
Sixty-eight percent of college students take out loans to pay for their education, according to United States Student Association president Eddy Morales.
"I hope that students will look forward to publication pieces so students will become more aware," Sang said. "I want them to understand how it impacts them and look forward to our consolidation training"
