CCRI’s Assistant Dean Tracy Karasinski and executive director of the Rhode Island Student Loan Authority Charles Kelley joined Congressman Jim Langevin Thursday morning at the Warwick Mall to tout steps being taken at the federal level to make a college education more affordable.
Langevin talked about the Income Based Repayment (IBR) program, a new repayment plan for college graduates, lower student loan interest rates and noted that the Pell Grant has been increased to $5,350.
“This is a tangible step forward in achieving college affordability in lower income families,” said Langevin of the IBR.
The IBR is a repayment plan for the major types of federal loans made to students. It is designed so that students who graduate from college can repay their loans and still afford to pay bills and other expenses.
After graduating, the student will pay no more than 15 percent of their discretionary income to repay a student loan.
Also, the interest rate on all need-based federal subsidized loans dropped from 6 percent in 2008 to 5.6 percent as of July 1, and is expected to continue to drop to 3.4 percent by 2011. Any student repaying a Stafford, Grad PLUS or Consolidation loan made under the Direct Loan or FFEL program for any type of education (undergraduate, graduate, professional, job training) is eligible for the IBR program. However, any loans that are currently in default, parent PLUS Loans or consolidation loans that repaid a parent PLUS Loan, are not eligible to be repaid using the plan.
After graduating from college, students must ask lenders to evaluate whether the debt from federal student loans is high compared to income and family size of the student. If the monthly payment under the IBR plan is less than what would be paid under a standard 10-year repayment plan, the loan can then be paid under the IBR plan. However, with the average college graduate $22,000 in debt in 2009, CCRI does not recommend student loans.
“The Pell Grant,” said Karasinski, “can more than cover the cost of tuition.”
The Pell Grant was increased by more than $600 this year, and Lita King spoke to the importance of the grant and scholarships for college students on Thursday morning. King, a Central High School graduate of the class of 1989, says that she wouldn’t be in college without a Pell Grant.
“Knowledge is power,” King says, “and we have to make sure we go out there and get educated about everything available to us.”
King started taking classes at CCRI in January 2008. She is now in her fourth semester there. After five semesters, she hopes to transfer to Johnson & Wales University to earn her bachelor’s degree in the Culinary Arts.
“You always have to take the next step until you have the ultimate power, which, in my case, is my degree,” says King. “Getting my degree will show my three sons that there are opportunities out there to help people like me become successful. Hopefully my sons will have the same chance I had to go to college.”
Karasinski said the increase in the Pell Grant is “putting real money in the hands of real students who desperately need it.” When the Pell Grant was introduced nearly 40 years ago, it covered nearly 80 percent of the cost of tuition. Now, it barely covers 40 percent of that cost. Therefore, by increasing the grant, a higher percentage of the tuition costs will be covered.
Run by the Rhode Island Student Loan Authority, the College Planning Center, located in the Warwick Mall, searches for scholarships and student loans available for individual students to make the process easier on both students and parents as they plan for college.
In these difficult economic times, Kelley reported that the center is in demand.
As of June 18, center staff had helped 11,229 students complete financial aid applications as compared to a total of 14,745 for all of 2008.
“And we’re only half way through the year,” he said.
Dawn Ginelli, mother of a student who will start college in the fall, utilized the College Planning Center’s services to search for financial aid for her daughter Jackie, a graduate of North Providence High School’s class of 2009.
“I wouldn’t have had the same knowledge about financial aid as I have now had I not used this program,” says Ginelli.
The College Planning Center performs scholarship searches, notifies families of college ratings and even helped the Ginelli family complete the FAFSA form.
“I will definitely use the center again when my second daughter goes to college,” said Ginelli.
At the conclusion of Thursday’s announcement, it became apparent Congressman Langevin counts himself among those who take education seriously. When asked what the IBR will cost the government, Langevin was uncertain of the specific amount.
“Whatever the cost will be, I believe that any cost is worth paying for a program like this,” he said.
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