Financial fears

College students still wary of fiscal cliff situation

President Barack Obama signed a bill into law that saved the country from falling over the so-called fiscal cliff, but college students may not be in the clear just yet.

While some problems have been solved for now, the deal reached Jan. 2 simply put off other issues, including the debt ceiling and other budget cuts, until March.

Cuts to programs such as Free Application for Student Aid, or FAFSA, is just one example of the still looming threat to college students.

As of now, Title IV Financial Aid, which is the federal financial aid for students, is up for discussion. It is unclear whether aid will be left alone, decreased or increased.

Financial aid expert and founder of Finaid.org, Mark Kantrowitz, told The Choice, a New York Times blog, that “across the board spending cuts would mean an 8.2 percent reduction in student aid funding.”

According to Kantrowitz, unless Congress acts before March 1, fewer students will be able to get work-study jobs and Federal Supplemental Educational Opportunity Grants. Programs such as these would experience significant cuts.

Additionally, Kantrowitz noted that fees for federal education loans could potentially increase and the maximum Pell Grant could be cut by as much as $400.

“If the past is a prologue, there will be more brinkmanship on Feb. 28,” Kantrowitz said in his interview with The Choice.

Many Ferris students rely on financial aid to make higher education fiscally possible. Even with aid, college graduates find themselves with an increasing amount of debt.

“This whole situation creates so much uncertainty,” senior Ferris political science major Kurt Melville said. “So many people rely on money from the government to get through school.”

Of Michigan’s public universities, Ferris students graduate with the most average debt at an alarming $35,468, according to the Institute for College Access and Success.

In December, the Big Rapids Pioneer reported that more than 50 percent of current Ferris students qualify as low-income and are eligible for Pell Grants. With many students barely staying financially afloat as is, cuts to these programs would be devastating.

However, the new legislation did bring some good news. The American Opportunity Tax Credit of $2,500 to help offset the cost of tuition, fees and course materials was extended through 2017.

In addition, the Tuition and Fees Deduction will continue through the end of 2013, allowing anyone making less than $65,000 per year to claim up to $4,000 in tuition expenses.

“The government is trying to help, but the truth is that our financial aid system is broken,” Melville said. “It works really well for low-income people, and wealthy people don’t have to bother with it. But, there are lots of middle class kids who could really benefit society once educated who get left out. It’s still tough for us to come up with $20,000 a year.”