DMI Blog

Maureen Lane

Good Grant, Bad Loan

New York State higher education statistics show that a lot of money goes to colleges and universities. Here at the State University of New York (SUNY) alone it is over a billion dollars. We have grants and loans making up about 92% of the financial aid going to students and ultimately to SUNY.

Grants, like Pell Grants (a federal program) and Tuition Assistance Program (a New York State program), represent about 36% of financial aid, while loans account for around 56% of financial aid. Loans are paid back and schools, banks, and other corporate entities make out financially on these deals. Students attain degrees but are saddled with whopping loan repayments that can suppress economic security in the short term and maybe have long-term ramifications.

Other assistance programs, like federal work-study, allow students to apply what they are learning on campus to jobs at college. This is a great federally funded program, but it only represents 1.5% of the aid to SUNY students.

With the rising poverty rates in NYS, only about 20% of students qualify for welfare and various income supports. More students should qualify for grants in NYS by any common sense standard, but the Pell and TAP eligibility formulations change over time to capture less and less of the middle class. And all too often, students who do qualify are not applying to college.

Last Friday, Welfare Rights Initiative (WRI) student leaders went to a local High School in Harlem. They went to reach back to kids like themselves who come from poor/low and middle-income families to let them know there is a place for them at the City University of New York (CUNY). WRI student leaders report that high schoolers who are not performing at top levels often are told they need to think about getting a job not going to college.

Increasingly we know that not getting higher education can trap young people into low wage jobs. We need to retool skills for a workforce that is constantly challenged to change with market demands. Why not passionately encourage young people to access higher education while they are in their teens? College enhances the critical thinking and problem solving that can translate to people rolling with the market punches. With a college education, when there are job demand shifts graduates can move with them more easily.

Government has a place - a big one - in providing access to higher education. Loans making up the large chunk of financial aid are not the way to provide access. Grants need to be expanded. We are after economic security for NYS and its entire population. What is good for NY families is access to education. Access to education needs to be the big dog wagging the tail of our economy. To do otherwise, is to have the tail wagging the dog.

Maureen Lane: Author Bio | Other Posts
Posted at 6:00 AM, Mar 22, 2006 in Economic Opportunity | Education | Financial Justice
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