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Money lender races to keep up
By
RACHEL SHEPHERD HARRISBURG, Pa – If you are a college student in Pennsylvania, you have probably heard of or dealt with the Pennsylvania Higher Education Assistance Agency, or PHEAA. PHEAA allocates billions of dollars in grant and loan money each year to assist students in the costs of education. However, the amount of grant money they distribute has a limit, while tuition rates continue to rise. Penn State University was among these schools. The tuition rose 13.5 percent for the 2002-03 school year. Upper-division students, the thrust of students at the Capital Campus, witnessed an increase of $502 per semester while graduate students pay an additional $534 per semester. PHEAA is only allowed to lend up to $5,500 a year to each student and no more than $23,000 over the course of an undergraduate’s education. This has caused some Penn State students to go elsewhere to find the money to finance their education. Shari Hatcher, an accounting major, said, “I had to take out a bigger loan [this year].” Mike Behney, a communications major, said he does not even bother with PHEAA to pay tuition as high as Penn State. “I loan money from my local bank,” he said. “and I still don’t have to pay loans back until after graduation. It was easier [to go to the bank] because I had loans for cars and other things already.” Carolyn Julian, Penn State Capital College student aid advisor, called herself the “troubleshooter” for the students. She said while her direct affiliation with PHEAA is limited, she has insight as to how things work and who to contact for grant and loan questions. “Unfortunately, tuition and aid increases have not increased at the same pace,” she said. “I am experiencing more and more students turning to alternative loans for funding.” Fortunately, student enrollment has not appeared to decline. Julian said she did not see a sufficient drop in student enrollment due to the increase in tuition. “If there is a decline,” she said. “and I don’t think there is, it’s due to ‘other reasons’.” She explained that the most decline she has seen this semester is due to the veterans who are military reservists receiving their orders for the current conflict. Students at other schools within the state said the PHEAA covered the costs of the tuition and even gave some students money back. At the Indiana University of Pennsylvania (IUP), the cost of undergraduate tuition is $2,189 per semester, nearly half the cost of the tuition at PSU. Matthew Kegg, a history education major at IUP, said, “The money I received was more than adequate to fulfill my educational needs.” Kegg explained that he was able to pay for his books, supplies and even his car insurance with the refund he received from PHEAA. Harrisburg Area Community College (HACC) students already receive a break from the local school districts because they assist in paying a portion of the tuition. The average cost for tuition of a sponsoring school district student is about $1700 a semester. Many HACC students transfer to Penn State Capital College to finish their degrees. However, due to the rising costs of tuition at Penn State, some opt to not transfer early or even at all. Ashley Fisher, who will attend Millersville University next spring, considered taking a semester of classes at Penn State. However, the cost of Penn State changed her plans. “With the cost being over four grand a semester, I think I will stay at HACC until next spring, when I am ready to go to Millersville,” she said. Fisher also said the grants and loans she received from PHEAA were adequate in paying tuition and even some of her bills. While PHEAA is among the nation’s top three school lenders, they still have trouble keeping up with the ever-increasing tuition rates. Julian said she is concerned about the rising student loan debt. “Their loan debt is increasing more and more,” she said. “I hope students will be in a position to handle this debt when they graduate.” All stories in this magazine are the intellectual property of the individual
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