In the 2012 State of the Union address, President Barack Obama emphasized the relationship between an affordable college education, a growing middle class and a strong national economy.
The fiscal year 2013 budget proposal reflects this announcement, specifically with college education.
Obama has proposed a 2.5 percent increase in educational spending.
Butler students should understand that the president’s administration is providing an increased support for federal student financial-aid programs.
But Obama struck out—he missed an opportunity to truly help future students pay for college, even with a $1.7 billion increase from fiscal year 2012.
Obama’s budget uses a variety of tools in an attempt to keep post-secondary education within reach for many American families, including increased grant and work-study funding, and expands access to student loans.
But current and future Butler students will unfortunately not gain much help at all—and this is coming from a very pro-Obama voter.
There are four main components in the budget that deal directly with financial aid that Butler students should be aware of.
First, the budget calls for increased funding for the federal work-study program by $150 million.
The Obama administration states that this increase will provide work-study grants for an additional 110,000 students.
However, not that many Butler students are in this program to begin with, and it will not substantially increase if this proposal is enacted.
Melissa Smurdon, director of financial aid, said Butler has a little fewer than 300 students working in this program.
Strike one.
Second, Obama has proposed an increase in the maximum Pell Grant from $5,550 to $5,636.
It is hard to imagine that this will provide dramatic relief for college students. Though the Obama administration says this small increase will ensure access to almost 10 million needy students, it seems like a drop in the bucket when tuition at Butler is north of $30,000.
Strike two.
The third factor in the budget proposal is actually one that is a necessity for Butler students.
With a looming increase of the interest rate on federal Stafford loans occurring on July 1, 2012, Obama has proposed a freeze on the rate hike.
If enacted, Butler students will continue to pay a 3.4 percent interest rate on Stafford loans rather than the 6.8 percent increase as of July 1.
Almost a home run, but the ball went foul at the last second.
The fourth and final component Butler students should be aware of is the federal Perkins loans program.
About 800 students are enrolled in this program at Butler. The Obama administration has proposed an increase for Federal Perkins Loans offered by the Department of Education from $1 billion to $8.5 billion.
However, Judy Renschler, loan coordinator in student accounts, said that no money has been provided by the government for this program and this proposal will increase the interest rate to 6.8 percent.
“I get concerned with the cost of the loans increasing for students,” Smurdon said. “Having more available is more positive but in the end, it will cost more,” Smurdon said.
“Having said that, Butler students do an exceptional job. We have a really low default rate, and our students pay them back and this is a good contribute for Butler.”
Yet, due to the instability of these programs proposed by presidential administrations, and the hike in interest rates for these loans, I am calling strike three on this proposal.
