Students Use Personal Loans to Fund College as Admission Changes

College Admission Policies Changing

Williams College in Massachusetts is facing financial aid cutbacks. More students will resort to personal loans as a result. (Photo: flickr.com)

More students are using personal loans to fund their college costs due to changes in financial aid policies. Along with the rest of the world, colleges and universities are feeling the financial strain of the recessionary economy. They are cutting spending, putting off new projects and programs and instituting hiring freezes. Some experts are speculating that schools soon will be forced to make more cutbacks in the financial aid programs.

Morton Schapiro, president of Massachusetts’ Williams College, is in just that position. Williams College has had a long-standing reputation for not considering a student’s financial situation when deciding on their acceptance. Called a “need-blind” policy, this is a way for students of varying income levels to get accepted to the school of their choice without having to worry about financing. Shapiro agreed that this policy may not be able to withstand the recession. “The major dial you turn for most financial crises is that you admit more students who can pay, as a way of increasing revenues…with the tremendous decline in wealth, I think fewer people will hold to the need-blind [policy].”

Even Worse News

Molly Corbett Broad, president of the American Council of Education, stated that endowments are getting smaller while enrollments are getting larger. “The farther down the food chain you go in terms of endowment per student,” she stated, “the harder it will be to sustain need-blind admissions.”

This change in policy could affect all universities and colleges on some level. Douglas Bennett of Indiana’s Earlham College, is one of the strong proponents of college admission reform. At Earlham College, almost 20 percent of the students are from low-income families and receive some form of financial aid. Bennett stated, “If you are truly need-blind, you can go broke…It is like writing a blank check to the world.”

Endowments

As of now only schools with large endowments are impervious to the recession, but even they are experiencing declines in funding. As Bennett added, “Nobody thinks the market will turn around and go back to do what it did before. That means everyone is having to plan for a more difficult and turbulent financial environment to bring our expenses in line with resources.” Students are bracing for the after effect of the economy by looking at second jobs, personal loans and family aid. They know that the scholarships and financial aid that once was available is no longer there.

The Goal of Educational Institutions

Regardless of the economy, the goal of colleges and universities is to make the degree accessible to as many students as possible. Many are looking at their projected budgets and project management scheduling as a sure-fire place to cut back. Stanford University is cutting five percent straight across the board in every department and cutting $45 million from its operating budget. The school is planning on issuing moderate yearly raises to staff in an effort to remain “committed to its financial aid” plan. Ms. Lapin, Stanford spokeswoman, added, “Maintaining access to Stanford for top students, regardless of costs, remains a top priority.”

Students of the Future

Students of the future face some hefty financing problems to fund their college years. Hopefully, with the help of personal loans, family assistance and part-time jobs, they will be able to complete their degrees. If colleges and universities are equally committed to making school affordable, sticking staunchly to their financial aid plans, students will be able to reach their goal of a higher education.