By Daniel Montaño, Staff Reporter
Editor’s note: It is important to note that everyone’s financial aid situation is different on a case-by-case basis. Students should call 224- 3090 to schedule an appointment with a financial advisor to discuss any financial aid concerns.
Starting in the fall 2013 semester, Financial Aid is restricting access to loans and increasing the award for work-study students, said Joseph Ryan, associate director of Financial Aid.
Due to an increase in defaulted student loans, Ryan said that CNM will only be offering student loans to sophomore students with 30 or more credits, and the only loans offered will be subsidized, which are loans that don’t accrue interest until after the student has finished school. Unsubsidized loans that begin accruing interest immediately will not be offered to any students at all, he said. That does not mean, however, that loans will not be available to students.
If students wish to receive loans but does not see any offered on myCNM, students will then have to schedule an appointment to meet with a financial aid advisor in order to have loans granted to them, he said.
“We’re just trying to educate our students more about what student loans are, and trying to help them see that there are other things they could be doing that could help them cover their expenses without taking a student loan,” he said.
CNM is also reducing the amount of unsubsidized loans students can take out— by $2000 in most cases, Ryan said.
Students taking developmental courses or lower level college prep courses will not be eligible for any unsubsidized student loans whatsoever, unless they are enrolled in a coordinated entry program, such as Nursing or Diagnostic Medical Stenography, Ryan said.
The changes to unsubsidized loans
come by way of a federal student aid program CNM is participating in and are being put in place to reduce defaulted student loans, he said.
“CNM is going to be taking part in the Department of Education’s Experimental Site Initiative. They allow schools who take part to modify how they participate in federal financial aid. CNM is taking part in an experiment that deals with ‘over-borrowing’,” Ryan said.
While access to loans has been restricted, the award for work-study has gone up from $7500 to $9000 per year, Ryan said.
The increase in the work-study award was approved in order to cover a raise given to work-study employees in the spring 2013 semester, which Ryan said had led to problems with some work-study employees.
After the raise went into effect, some employees actually surpassed the $7500 allotted to them, and were either unable to work for the remainder of the fiscal year, which ends July 1, or were forced to forgo some or all of their loans in order to continue work, he said.
“It shouldn’t happen next year, we’re taking a ballpark estimate with the $9000 and we built in a buffer which should get us through, but we’ll look at it closer to the summer (2014) term and see where we’re at with all of our students,” he said.
Because the award for work-study has gone up, Ryan said that some work-study students might not be able to take out the full amount of loans that have been awarded to them.
Students will have to look at their ‘award overview’ section in the financial aid tab on myCNM and pay close attention to the amount listed under ‘initial need,’ he said.
If the amount listed minus the total of loans and grants accepted by the student is less than $9000, Ryan said that the student might not qualify for a full work-study award.
“What happens a lot of times with work-study and student loans is that they kind of counteract each other, so if you want work-study you have to take less in loans, and if you want higher loans than you might not be eligible for work-study. It’s hard to get both at the same time,” Ryan said.
Students do have, and have always had, the option to take out a lower amount in student loans in order to qualify for a full work-study award, he said.
Students also have the option of taking a reduced work-study award, which would translate to lower hours worked per pay-period and thus less money per paycheck, but Ryan said that students should focus on working more so they can avoid paying back loans and interest.
“I would always encourage students to take less student loans and more work-study because that way you’re working and earning money as opposed to borrowing money with interest that you would have to pay back with the loan. So I think that’s always the smarter bet to make,” he said.
The change in how student loans are handled is coming as a response to the amount of student loans issued at CNM that have gone into default, that has jumped from around 13 percent in recent years to “the mid 20s” in the past year, Ryan said.
There is a penalty for any school that has a high default rate for multiple years, including institutional suspension that would cause the school in question to lose federal funding, and Ryan said that CNM is trying to avoid any penalties before they happen but that CNM will always support its students in need.
“The Department of Education has made it clear that we cannot deny a student a loan. If they want a loan we will give it to them if they have eligibility for it,” he said.
For more information, or to schedule an appointment with a financial aid advisor, call 224-3090.
2013 to 2014 Financial
Subsidized loans only offered to sophomores or higher
Unsubsidized loans not offered at all Eligible students not offered loans
must speak to an advisor to get loans
Students taking college prep courses not eligible for unsubsidized loans
Maximum unsubsidized loans reduced by $2000 per year
Work-study award increased
by $1500 a year
Categories: Front Page News