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Thursday, Aug. 20, 2009 10:11 am

College loans fall as applications increase

Officials trying to find more money to finish the year

At least 267,000 Illinois college students will receive little to no state financial aid this year, according to the Illinois Student Assistance Commission.

Executive director Andy Davis says that applications for student aid in Illinois have increased by 25 to 30 percent in 2009 — likely due to greater financial instability of students and their parents.

“Presumably, more people are applying, because more people are out of work,” Davis says. “For dependent students, more parents are financially depressed because the job market or housing market has weakened.”

Last August, Davis told Illinois Times [see “Deep in debt,” Aug. 21, 2008] that nearly $200 million of federal grant money went unapplied for annually in Illinois. This year ISAC, which offers the Monetary Award Program, the state’s largest need-based grant program that provides student aid that doesn’t need to be repaid, as well as other federal and state loan programs and scholarship opportunities, stepped up its outreach efforts and pushed students to submit their Free Application for Federal Student Aid. This application screens and qualifies students for all state and federal funding opportunities.

By March, says ISAC spokesperson Paul Palien, the organization had received so many applications eligible for MAP — an almost $400 million fund in 2008 — that officials planned to stop making award announcements in June. Instead, they were forced to stop on May 15, after receiving 137,000 applications.

The state’s fiscal crisis has only worsened ISAC’s inability to provide financial aid to all applicants. In the fiscal year 2010 budget, signed by Governor Pat Quinn in July, ISAC’s requested appropriation was cut from $440 million to $220 million.

ISAC will direct $194 million of its state appropriation to MAP. In line with budget cuts, the organization will award a maximum of $2,600 to each student for the fall semester. Last year MAP recipients were awarded $5,000 for both fall and spring semesters.

“The ones that receive the award letter will be fully funded for fall,” Palien says, “but come spring, there won’t be any money for MAP.”

ISAC estimates that as many as 130,000 more applicants who are eligible for MAP will not receive any funding this year.

Budget cuts also extended to ISAC’s other programs. The Silas Purnell Illinois Incentive for Access Program provided $500 to needy students for computer-related expenses and books in 2008, but can only provide partial-year awards of $250 this year. The Illinois Veteran Grant will provide $5.75 million for summer-term awards, but no funding for fall and spring terms. The Golden Apple Scholars Program of Illinois provided $3.9 million to students training to be teachers in 2008, but will provide $2.9 million this year.

ISAC estimates that the one-two punch of application increases and funding decreases could drive Illinois students to borrow up to $200 million in higher interest, non-subsidized private loans. If these students cannot obtain private loans, ISAC says, they may drop out of college.
“We’re working with the students, with the schools and the parents to see if we can’t find a way to get the legislators and the governor to fund this program in the second half of the year,” Davis says. “It’s going to be tough, but we’re going to do our best to see what we can do to continue this program.”

Contact Amanda Robert at arobert@illinoistimes.com.
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