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For the first time, student financial aid has been recommended as a budget priority in Virginia by the State Council for Higher Education in Virginia.
The SCHEV report that made financial aid a priority asks for an additional $31.5 million to the Virginia budget.
“It’ll be hard for them to get all of that,” said William Bosher of the Commonwealth Educational Policy Institute.
Bosher, who was interviewed just 12 days before his death on Nov. 30, 2014, may have been correct. When Virginia Governor Terry McAuliffe introduced his budget proposal in December, it only added $2.5 million in additional financial aid funding and $10 million for institutions to invest in the latest research technology. McAuliffe’s proposal still has yet to make it through the General Assembly.
According to the Institute for College Access and Success, 59 percent of Virginia graduates cross the stage with some amount of debt. These students average $25,780 in outstanding payments.
“Student debt is a concern,” said Matthew Reed, the program director at the Institute for College Access and Success. “As college costs go up, many families turn to borrowing.”
A November report from The Institute for College Access and Success stated that the amount students borrow grew 2 percent between the 2012 and 2013 school years.
This debt can influence a graduate’s decisions for years after obtaining their degree, Reed said. People will put off buying a home, starting a family, and may even change career paths because of debt, he added.
Reed said The Institute for College Access and Success recommends that lawmakers continue or increase all funding.
Bosher said that to continue to fight the debt dilemma, lawmakers will have to pressure schools to keep costs down. This includes fees, which institutions regularly increase as a way of getting around tuition hikes.
He said that educating students about spending their loans responsibly will help.
“Since it is available at such low interest it is frequently used for everything from housing, cars and things that are not directly educationally related,” he said.
Reed added that students should avoid private loans, which are typically more risky, and look instead at grants, scholarships and federal loans.
“If it looks like you have to get private loans to go to school you might want to consider other options at that point,” he said.
Bosher said the root cause of this trend is similar to what caused the housing crash of 2008: Everyone wants a college education, regardless of their financial background.
“Until the supply meets the demand, while every young person who has a financial need and has that need met through some assistance program, then this discussion will always exist,” Bosher said.
Reed said that despite the increasing debt, college remains a solid investment for those who choose to go.
A previous SCHEV report found that those with a bachelor’s degree make almost $13,000 more than those with no higher education.
“It’s a return-on-investment decision,” Bosher said. “I don’t believe every young person needs to go to college. I believe everyone needs more education, but that isn’t always in the form of a two- or four-year degree.”
Bosher explained that he thinks the present financial aid model is essentially broken and that a lot of tension is created between needs and resources.
This tension is evident on the website for financial aid at Virginia Commonwealth University.
“Certain programs have limited funding so there are more students eligible than there are funds available,” reads the message that greets students. “As a result, these funds are awarded on a first-come, first-served basis.”
A different attitude is prescribed at the University of Richmond, a private school across town from VCU.
“The University of Richmond prides itself on having some of the best financial aid resources anywhere — and helping students and their families understand the aid process,” the University of Richmond’s website reads. “Richmond promises to meet 100 (percent) of demonstrated need for every admitted student.”
Bosher said that a student will likely have less debt from more expensive colleges than from cheaper state schools because deep wells of money and endowments allow private schools to meet needs more effectively.