Assessing the Components of College Financial Aid

No one desiring a college education should be denied that experience. They should receive encouragement from family and friends, and every effort should be made to ensure they have the opportunity to walk the hallowed halls of the institution of their choice. However, not everyone who wants to attend a college or university is able to do so. With each passing year, the price for higher education gets more and more expensive. These rising costs increase the demand for financial aid, such as the Pell Grant and students loans, among prospective and current college students.

Recently, Congress enacted a bill that makes changes to its Pell Grant program. The first change involves requiring recipients of a Pell Grant to at least have a high school diploma or a GED. The second change limits the amount of years a college student can receive a Pell Grant. It’s this second modification that may have a disparaging effect on college students, especially upperclassmen. Students may lose out on completing their degree due to the lack of financial assistance they normally would receive from the Pell Grant.

Less access to Pell Grants will encourage more borrowing for education through student loans. While student loans can be a big help for prospective and current college students, it can become a life-time of heartache for a graduating student. Student loan debt can add up quickly, especially with the rising cost of education. Four years of college can easily equal $50,000 of debt. Most starting jobs outside of college pay nearly half that amount annually in salary.

Another change enacted by Congress affects the interest accumulated while students are in school. The six-month grace period normally given to college graduates on the interest earned on their student loans will be temporarily removed. This will ultimately make the total amount of the student loan much more expensive.

Graduating students will enter into a workforce where the competition for employment is strong. Inexperienced and experienced workers compete for the same limited number of job openings. While earning a college degree doesn’t guarantee employment, many know that it opens doors that previously wouldn’t be open without the degree. Unfortunately, the growing expenses involved with going to college may keep potential students from starting or even completing a degree program. It will also make repaying their student loan debt more difficult.