Major shift in federal college lending?

[OccamsRazor]

My neighbor's child recently applied and was accepted to an out of state university. When they received the reply from the university with options for federal funding/loans... it was DRASTICALLY low. Keep in mind, my neighbor makes GOOD money at their work so I can't imagine why the offer was so low after FAFSA inputs.
After further discussion, they said when the university was contacted, they were told "there have been major changes in the federal lending programs and they cannot offer nearly as much as they used to."
So... do you think, based on this, that colleges will keep their prices steep and get less students leading to eventual closures OR will they shift to lower costs to keep students coming in?
Have we seen the end of miserable crying recent graduates whining about owing $150K in student loans?
For scope.. this university wants to charge ~$40K per year and they only offered ~$3.5K per year total in loans.

 

[glhs837]

40k a year. Insane unless that also covers all food, lodging and stupid stuff like registration fees and books.

 

[vraiblonde]

it was DRASTICALLY low. Keep in mind, my neighbor makes GOOD money at their work so I can't imagine why the offer was so low after FAFSA inputs.

They probably figured he didn't need the loan, he could just pay for it outright.

Dunno.

 

[vraiblonde]

40k a year. Insane unless that also covers all food, lodging and stupid stuff like registration fees and books.

That's about right for a public school.

According to the internet, in-state tuition at UMD is around $12k/year. Out of state is $40k. Not including room/meals/expenses.

Total cost for NYU is around $90k/year. When my daughter went 10 years ago it was around $50k. They have a program where you get free tuition if your family makes under $100k/yr, BUT that's just tuition - room/board/books/etc will run you around $35k.

 

[OccamsRazor]

40k a year. Insane unless that also covers all food, lodging and stupid stuff like registration fees and books.

Yes. That included room and board, tuition, books, and miscellaneous estimated expenses. $40K was the LOW estimate. High was ~$50K

They probably figured he didn't need the loan, he could just pay for it outright.

Dunno.

IDK. Problem is that they were counting on being able to get about 10-15K per year in loans to cover what would remain after grants, scholarships, and personal payments. Can't even get that now (I believe they were offered a total of $4K per year in loans)

 

[Kyle]

Perhaps that’s all they loan on gender studies, history of patriarchy and Death to America degrees.

 

[black dog]

Do four years in the Armed Service of your choice and then you get paid to go to college.

 

[vraiblonde]

Do four years in the Armed Service of your choice and then you get paid to go to college.

Better yet, make a career out of the military, retire with pension after 20 years when you're 38, embark on a second career and you're set.

 

[OccamsRazor]

Perhaps that’s all they loan on gender studies, history of patriarchy and Death to America degrees.

Apparently it's the same for Engineering as well... since that is what they want to major in..

 

[vraiblonde]

Apparently it's the same for Engineering as well... since that is what they want to major in..

When I'm Imperial Queen of the Universe basket weaving classes, which I consider expensive babysitting for rich people, will be high enough to give a significant break to kids majoring in something real. "Beyonce Studies" would be $20k per credit; medical/engineering/etc would be $100 per credit.

 

[OccamsRazor]

My point is that according to what is happening, something will have to give. No more massive loans from Uncle Sugar so either colleges will need to lower costs OR they will receive drastically lower enrollments. I don't see many American families being able to shell out $100K over 4 years nowadays. Like I said, my neighbor makes damn good money and even they can't afford ~25-30K per year out of pocket.

 

[LightRoasted]

For your consideration ...

My point is that according to what is happening, something will have to give. No more massive loans from Uncle Sugar so either colleges will need to lower costs OR they will receive drastically lower enrollments. I don't see many American families being able to shell out $100K over 4 years nowadays. Like I said, my neighbor makes damn good money and even they can't afford ~25-30K per year out of pocket.

When enrollments begin to slide drastically lower, tuition will follow. Then the universities will try to make up lower revenues with post admission BS fees and add-ons.

 

[PeoplesElbow]

So many end up wasting money on their "dream school" only to end up dropping out because the sudden rush of freedom is too much to handle responsibly maybe they figure they will start low. Way back when I got my loans your freshman year the loans weren't anywhere near enough to cover things and I went to a cheap school.

For an engineering degree about all that matters is the school is ABET accredited, beyond that the education should be all very similar.

Universities blew their wads the last 20 years building huge capital investments thinking enrollment would never go down and are now having a hard time paying for it.