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curiouswombat in whirlybirds

Money, Money Money...

I wonder if the current credit squeeze on both sides of the Atlantic will make finances for our students harder?

Petzi sent me this link to do with student finance in the USA.

One British bank (HSBC) has already stopped giving interest-free over-drafts to students - I don't know about any of the others.

I have heard a rumour, unsubstaniated but from an ex-teacher, that our own I-o-M government might be going to means-test its payment of student fees in future.

::waits hopefully for daughter to get job in future to keep me in a manner to which I would like to be accustomed, after all this pay-out for her education...!::


The credit crunch here shouldn't prevent any eligible students from getting a federally-funded student loan, although the companies that are pulling out of the market are whining because they can no longer earn huge profits. There are not-for-profit agencies, one of them run by the government itself, that can step in and provide loans.

The real crunch is in the private loan market, which has been growing rapidly along with the cost of postsecondary education. Once kids have borrowed the maximum the government will underwrite, they go to lenders who charge high interest rates. Many of them fled the business even before the credit crunch because the Democratic Congress was investigating them. Others are being more careful who they lend to because these are unsecured loans. Therefore, I don't know if lack of availability is entirely a bad thing because it may keep some students from overborrowing. No one should leave school with $100k in debt and a Philosophy degree.
Nursing students in our state are given the opportunity to have a portion of the final two years of their tuition reimbursed if they sign up with a sponsoring hospital and contract to work for them for two years.

If a student knows where she wants to go, it's a marvelous way to get a degree with little outgo. Our daughter doesn't know where life will take her and is considering letting that money pass her by. She is paying her own way, so we are trying very hard not to interfere, but it seems a shame not to take advantage of such a sterling opportunity. It isn't often in life one is offered a substantial amount of free money!
I think it is a good idea too. Two years gauranteed work as a staff nurse in a familiar hospital is more a bonus than a big weight to carry, I reckon.

In Britain nursing students are treated slightly differently to ordinary ones - many of them get a bursary and so do not have the overwhelming debt when they qualify - but the bursary is not big.
My daughter was looking at a government job that would help her pay for loans (she's studying international relations) but the follies of this administration have soured her on the idea. I hope she'll think again, because we need motivated people to rebuild some of the damage.

I don't think they realize how much that money means until they're out on their own.
kids have borrowed the maximum the government will underwrite, they go to lenders who charge high interest rates.
I think British kids may well do something similar - I'm not sure what the top amount is that they can borrow as a proper student loan (government funded and no interest or need to pay back until earning slightly more than the minimum wage) - but many of them do seem to also have big bank loans on graduation.

No one should leave school with $100k in debt and a Philosophy degree.

Amen to that.

F is entitled to about £4,750, I think. Not actually enough to pay her rent for the year. Beyond that there's an overdraft - she's with HSBC! Then there's the £3,000 top-up, which is now higher than that as it's allowed to go up at the rate of inflation. So her government-underwritten loans add up to around £8,000 a year, crudely-speaking. We pay her rent and she more or less manages to live on the loan and what she earns waitressing once or twice a week. Her total debt when she leaves university will thus be in the vicinty of £24,000, not counting overdraft or any money we can find to help out. It makes me very cross.
I thought it must be about that much - that's something like our maximum grant and the amount that we have to promise to make their living expenses up to to get their fees paid.

We have £5,400 covenanted to her every year ( basically the max we are allowed) and she actually gets more like £7,500 a year from us in total, plus whatever she earns herself, and last year she also got a tax credit of about £400 - to her great joy! As her fees are paid, so far she is on course for not owing anything at the end of her BA, unless she gets an overdraft during the second half of it. Which, she recognises, makes her a very unusual student.

January 2013



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