Student Financial Aid Crunch

Tighter Credit conditions are making it tough for students and schools when it comes to student loans. MPB's Lawayne Childrey reports.

It cost roughly 26 thousand dollars a year to attend Millsap’s College in Jackson. That's no small change for Sophomore, kimbeerly Samson who depends on loans to help pay her way.

"I tried to go to summer school last year and it was kind of hard to get into summer school because I couldn’t get a loan to do to not having a credit worthy co-buyer or co signer as they call them it was no way to get approved for a loan or even get any other type of financial aid in order to get into summer school."

Recent surveys by the National Association of Independent Colleges and Universities indicates schools across the country are being hit hard by the current economic crisis. Patrick James, Director of Financial Aid at Millsap’s says the trend holds true even on one the state’s most affluent private college campuses.

"Millsap’s is just like anybody else that may have had money in the market. We don't have as much money as we did two years ago just because of the economy. Just like mine and your retirement accounts are probably taking a hit Millsap’s is also taking a hit. And so we don't have as much money to give out to students if they can't qualify for loans."

Universities also depend on endowments to makeup the financial aid shortfall and those numbers are shrinking too. Craig Powell, is the Chief executive officer with Connect EDU., a firm that studies financial Aid trends across the country. He says the depressed economy has sparked a trickledown effect on everything from federal loan dollars, to alumni contributions. He believes combination is helping to close the door on alternative loans for families who really need them.

"Meaning many of the alternative student loan banks are no longer offering those loans. Uh, and those institutions that are providing loans are providing them at such a high FICA score approval that they often times price many of the families that need them out of the market."

During these tough times, many students are turning to less expensive community colleges to help fulfill their educational needs. Some like Samson are even contemplating even more dramatic moves.

"It really just makes you question if you should be in school or if you should take time off to work. but people tell you don't take time off to work because then you'll get into the habit of earning money and you won't want to go back to school. And it's just hard sometimes because it doesn't seem like there are any other opportunities for you to do better for yourself."

The State college Board is asking lawmakers to authorize a need/merit based scholarship program to encourage community and junior college honor graduates to pursue a higher degree in engineering, mathematics, nursing, teaching, or science. For MPB News, I’m Lawayne Childrey.