Press-Republican

January 19, 2009

NY gov wants college grants cut, loans boosted

By VALERIE BAUMAN

ALBANY, N.Y. (AP) — College students in New York don't just worry about tests, graduation and spring break any more. They can't afford to.

Besides a $600 tuition increase at public colleges, hundreds of thousands of students who get money through the Tuition Assistance Program could be hurt by Gov. David Paterson's proposal to cut the grants and enforce stricter requirements to be eligible for help. Paterson is trying to ease some of the burden with a plan to help students get loans with an interest rate significantly below private loans.

"Given the current credit squeeze, the governor's proposal will help students," said Blair Horner, legislative director for the New York Public Interest Research Group. "Unfortunately, with this governor, what one hand giveth the other taketh away. The governor's making it easier for students to get loans while proposing to cut their financial aid, which makes no sense."

But good government groups argue the $47 million cuts to TAP grants would reduce higher education access, because it would require students to take more credits — 15 instead of nine. That means students who work, support dependents, or need time with their children would have to spend more time in school instead.

That could force some students to decide between dropping out, keeping their job and caring for family members. According to the Division of the Budget, the credit requirement could help some students by forcing them to finish school before their TAP grants run out.

With tuition increases, tuition at State University of New York schools is $4,970 per semester while City University of New York campuses cost $4,600 per semester. It costs a New Yorker about $15,000 a year, including living expenses and fees, to attend a state school.

Roberto LoBianco, 20, pays his tuition at Queensborough Community College, a CUNY school, through TAP. He plans to transfer to Hunter College in the next year, and to get a job to offset the tuition increase and help his family with bills.

"I'm probably going to have to start helping with some of the expenses," LoBianco said. "Right now my Mom isn't getting as many hours at work as she used to."

But if Paterson's plan to raise the credit requirement goes into effect, he'll have to take an additional class to maintain his aid, and his course load would make it impossible to work.

Paterson also proposes increasing the minimum grade point average for eligibility from 1.1 to 1.8 and requiring that public pensions be counted as income when calculating a student's economic eligibility. Private pensions are already counted.

The New York Higher Education Loan Program, known as NYHELPS, might help students like LoBianco secure loans with an interest rate lower than those currently available in the private loan market — about 8 percent. That's as much as 10 percent less than current rates for conventional private bank loans.

The partnership between the state, private lenders and schools would help about 45,000 New York state residents who are enrolled in a public or private school in the state. They could get as much as $10,000 a year through the program if they're already getting all state and federal student aid they're entitled to.

"This new student loan program will help ensure New Yorkers have access to the funds they need to finance their college educations," said Matt Anderson, a spokesman with the Division of the Budget. "Even in times of fiscal difficulty, we need to make smart investments in New York's future."

To get the loans, students would have to be enrolled at least half time, and have an eligible co-signer in New York.

For students attending two-year colleges, the total amount that may be borrowed is $20,000. Four-year undergraduate students may borrow a total of $50,000, and a total of up to $70,000 may be borrowed for undergraduate and graduate study.

In 2009-10, the State of New York Mortgage Agency would issue $350 million in tax-free bonds to finance the new fixed rate loans. NYHELPS would also offer a variable rate option, and would set aside $50 million to address student defaults, so their interest rates remain low.

The burden of paying for college has increased for all families, but substantially more for low- and middle-income families, according to a report by the National Center for Public Policy and Higher Education, a nonpartisan organization that promotes access to higher education.

Nationally, families in the lowest-income group — the bottom 20 percent of the population — pay 55 percent of their income to attend public four-year colleges and universities, even after accounting for all student financial aid, according to the report. In 2000 that number was 39 percent.

The wealthiest families in the top 20 percent of the population pay 9 percent of their income — up from 7 percent in 2000 — toward higher education.