Bush plan would increase freshman loans

President George W. Bush's 2005 budget proposal, released Feb. 2, will initiate a new distribution plan for Federal Stafford Loans. If implemented, the proposal would raise the amount a college freshman can borrow from the federal student loan program from $2,625 to $3,000.\nCurrently, students may only borrow $23,000 for their entire undergraduate career. But even if Congress approves Bush's request to allow freshmen $375 more, the maximum amount allotted to borrow will still remain at $23,000, with the money coming from upperclassman loans.\nThe $23,000 maximum has been in effect for more than a decade, and some do not believe this is a sufficient amount to help students pursue a college degree.\n"It saddens me to know where we are at this point in the 21st century -- to know that we have gotten ourselves into this situation," said Bill Ehrich, associate director of the IU Office of Student Financial Assistance. "There are a lot of people that have great aspirations, but it gets more and more difficult each year to make this happen."\nAccording to the IU Office of Financial Assistance, the estimated cost of attendance for an in-state freshman is budgeted at $16,708 per year, and $27,892 for non-residents. This cost includes room and board, books and supplies, transportation, fees and miscellaneous cost expenditures.\nThe maximum student loan allotted for a freshman is currently $2,625. This leaves in-state students a $13,083 balance and non-residents a $25,267 balance they must fund through their own sources, such as financial aid, Pell Grants, bank loans, federal Parent Loans for Undergraduate Students, work study programs or cash out of their pocket.\n"I had some money saved, and then I had some scholarships," recent graduate Brandon York said. "I paid one third, my mom paid one third and my dad paid one third."\nDuring the past 14 years, the average amount of student loans accumulated by IUB students has risen substantially, according to IU's Office of Student Financial Assistance. During the 1990-1991 school year, the average IUB senior had accumulated $7,620 in student loans. Last year (2002-2003), the average had risen to $19,377.\nStudents must begin repayment of these loans six months after graduation. This too has been a problem among students.\n"We should not have to pay them (student loans) back six months after we graduate because we are not even into our career," senior Rickesha Ewing-Spates said.\nThis budget has left much to be desired for many people. The Coalition for Better Student Loans,, has proposed to raise the maximum overall limit to $30,000, bringing the freshman loan option to $4,000 and sophomores' to $6,000. In the remaining years, the student would receive up to $20,000 in what The Chronical of Higher Education called "flexible borrowing accounts."\nThese loan maximum increases do not come cheap to the government.\nAccording to the Congressional Budget Office, over the next ten years this proposal would cost the government $20 billion.\n"They need to stop trying to send all of our damn money overseas to rebuild a country that we tore up and take care of home," Ewing-Spates said.\nAnother part of Bush's proposed budget includes a $33 million pilot program which would reward low-income students with an additional $1,000 in Pell Grants during their first year of college. With this money comes the stipulation that students must participate in college-preparatory courses in high school.\nStudents reach eligibility after participating in state-scholarship programs, which are currently operating in 14 states. These programs provide scholarships to students who complete three years of mathematics and science, as well as four years of English and social studies and courses in foreign language.\nIf this budget is approved, the maximum Pell Grant would remain at $4,050 for the third year in a row. Other programs which use Pell Grants, such as college work study and supplemental educational opportunity grants, will remain at their 2004 maximums.\nAccording to The Chronicle of Higher Education, additional proposals in the budget include revising the formula the government uses to distribute money for the three campus-based federal student-aid programs: college work-study, supplemental educational opportunity grants and Perkins loans. Other proposals require students to pay a fee equal to 1 percent of the amount the student has borrowed to student loan-guarantee agencies and expand extended repayment options for borrowers.\n Some students say these proposals are not making the grade.\n"They should stop marketing college like it is a business -- it is a place of learning," senior Isaac Kinsey said. "You go to college to learn how to make more money, but you start out behind. Once I graduate college, I will be 30 stacks in the hole."\n-- Contact staff writer Amber Nicholas at amrnicho@indiana.edu.