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NEWS
[ Monday, Jan. 22, 1990 ]
 
PHEAA's funds low, trouble may be ahead

Collegian Staff Writer

The Pennsylvania Higher Education Assistance Agency has found a temporary source of funds for its Stafford non-subsidized loan program through this semester. But the program may be in trouble for the 1990-91 year, a PHEAA spokesman said.

PHEAA indicated last fall the program was running short on funds, said Robert Evans, University financial aid director. Loan disbursements and approvals for Spring Semester were delayed until Dec. 29, when PHEAA announced they had temporarily solved the funding problem.

Most universities were very patient about the delays while PHEAA worked on a solution to the funding problem, said John Ebersole, a PHEAA spokesman.

PHEAA is currently working to secure funds for the next academic year, said Ebersole.

An announcement on the future of the non-subsidized loan program will be made in February or early March, Evans said. The University starts processing loans in April for the 1990-91 school year.

Under the Reagan administration, more stringent restrictions were imposed on the federal loan program which led to the development of the non-subsidized program, he said.

Stafford non-subsidized loans are aimed at students who do not qualify for federal Stafford loans, formerly Guaranteed Student Loans, Ebersole said.

Currently, if a student does not qualify for a federal Stafford loan, that student automatically qualifies for the non-subsidized loan program, said Evans.

The non-subsidized loan program is extremely popular, because it helps many middle-income families who would otherwise be unable to get loans under the new requirements, Ebersole said.

This year the state demand for non-subsidized loans totaled around $100 million, said Ebersole. PHEAA expects a demand of $150 million for next year.

Evans said if the program ends, about 5,000 University students receiving almost $11 million in non-subsidized loans will be impacted by PHEAA's decision.

"(But) they're not talking about killing the program," Evans said.

To keep the program alive, PHEAA is considering several program changes including an income ceiling - a maximum income for eligibility, Evans added.

PHEAA may also adjust the amount of money loaned to any one person, he said.

A third possible change may be asking universities to help subsidize the program, Evans said.

 

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