For Release December 10, 1998
Changes in Financial Aid for College Students
ABERDEEN—When Congress changed federal financial aid from grants to loans, it increased the burden of paying for postsecondary education for many students. "This is a national trend," said Regents Executive Director Robert T. Tad Perry, "and South Dakota is no different. That is the bad news, but the good news is that there is a lot of financial aid available if a student looks for it."
Perry noted that a report on financial aid, presented to the South Dakota Board of Regents today at its regular business meeting on the campus of Northern State University, showed that trends in South Dakota reflect what is happening across the country. "At the beginning of this decade about 60 percent of financial aid at the regental universities was awarded as obligation aid, which refers both to loans and to work-study. Now obligation aid is about 75 percent of financial aid. This means that students are borrowing more money to pay for their tuition and other expenses of going to college."
Some financial aid awards are dependent on federal campus-based program funding levels, the date of application, program eligibility requirements, and whether a student is enrolled full-time or part-time. Any student who qualifies will receive a Pell grant, which is distributed by the federal government. Other federal grants require that a university match the federal money, so even if a student qualifies for a supplementary grant, he or she may not receive it if the university does not have enough money to fund it, the Regents were told.
The Regents also reviewed examples of financial aid calculations. The expected contribution from the family varies, depending on the adjusted gross income. "Families need to remember that every student’s situation is unique. The Regents looked at examples, which show that those students who have access to more resources will receive less financial aid. Regardless of family income, however, a student who wants to go to college can find a means to do so," said Perry.
Even though more financial aid is awarded in the form of loans, the federal government has recently changed the interest rates, and the repayment requirements. In 1997 Congress created the Hope scholarship, which allows families to take a tax credit up to $1500 for tuition and fees. In 1998 Congress changed the law to allow borrowers up to 25 years to repay loans. Some loan forgiveness is available for certain kinds of employment following graduation.
In South Dakota through tuition and fees students now contribute about 42 percent of the support for their education. The state appropriates the rest. At the beginning of this decade student-paid tuition and fees covered less than 36 percent.
For more information contact: Carol Stonefield, Board of Regents: (605) 773-3455.