Although the opportunity to turn in forms for the Free Application for Federal Student Aid (FAFSA) ends at midnight tonight, responses to recent changes in financial aid programs will probably continue.
Financial Aid Office Director Ron Andrade estimated that his department will receive about 17,000 applications by tonight’s deadline. The U.S. Dept. of Education uses a student’s FAFSA to determine their eligibility for federally subsidized loans, grants – such as Pell Grants – and work-study funds.
Out of the thousands of applications received by his office, Andrade said, about 4,000 to 5,000 are from students who will never go to UCSB, as both prospective freshmen and transfer students must submit a FAFSA the year prior to attending a university.
UCSB receives about 13,000 applications from undergraduate and graduate students enrolled at UCSB, Andrade said. The UCSB end of the process begins with requesting additional documentation and verifying a variety of things such as income or citizenship and residence status, he said.
“Half of our applications need to be verified in one way or the other, and they will make it to the aid-awarding process eventually, but only after their data and information is verified,” said Andrade.
Andrade refuted popular notions that students from wealthy families have nothing to gain by filing a FAFSA.
“Every student has an eligibility we define for them. Even if the student is coming from an extremely wealthy family, they can still receive aid through loans,” Andrade said.
While the Financial Aid Office readies itself for thousands of applications, Associated Students External Vice President of Statewide Affairs Bill Shiebler said students should be reminded that a lack of federal loans and rate hikes have recently been imposed on students due to passage of Congress’ Budget Reconciliation Bill.
Shiebler, a third-year sociology major who sits on the Financial Aid Advisory Committee, said he has filed a FAFSA in previous years, but will not do so this year. He said the federal government recently increased loan interest fees to help pay for a $35-billion budget deficit, simultaneously voting in a $70-billion tax break for Americans in the highest income brackets.
“If you want the nitty-gritty on it, it’s that there is a lot of pressure on the banks that are contracted for the loans, and the federal government passed those fees onto students,” Shiebler said.
Shiebler said the federal government’s actions will cost students accepting federal student loans an extra $6,000. Students nationwide are affected, with about 67,000 students in the UC system.
Compared to current federal interest rates, which vary around 6 to 8 percent, Shiebler said many private companies offer better interest rates, but are unable to handle a large enough volume to accommodate all student loans.
“Even private companies could handle it,” he said. “The principal is that education should be a fundamental right – we don’t want to have a government that doesn’t support education.”
However, Andrade said, interest rate hikes on federal student loans is not necessarily a bad thing.
“What really happened is that they made some changes to the regulations governing the loan programs,” he said. “There will be some interest payments, and there will be some changes over the fees that students pay. So that does have the effect of students having to pay a little more, but there were some new grant programs created with that money – it wasn’t just all plowed back into budget control.”
Andrade said the change comes after a financially beneficial time for university students.
“Because we have just finished an era of historically low interest rates, many students were able to lock into a less than 4-percent interest rate, and that wasn’t benefiting current students, but, rather, it was drying up resources that could be used for current students,” Andrade said.
Shiebler replied to Andrade’s statements with disagreement.
“I would have to say I completely disagree with him, that I don’t agree with him a tiny bit.”