Following a year of an economic recession and persistently high unemployment rates, St. Edward’s University is preparing for an increase in student need for financial aid.

Director of Student Financial Services Doris Constantine said the expected increase during the 2010-2011 academic year will be similar to the increase last year.

Students’ need for aid was less dramatic this year than anticipated, but Steven Peterson, assistant director of Student Financial Services, said the economic impact this year was greater than in past years.

Like most other universities, the endowment fund of St. Edward’s decreased during the recession. St. Edward’s Controller Paul Sintef said that the university’s endowment decreased from June 30, 2008 to June 30, 2009, but that the trend has changed.

“The good news is the endowments’ value has increased since June 30, 2009 through December 31, 2009,” Sintef said.

The endowment level was approximately $47 million as of Dec. 31.

Even though 56 percent of the endowment fund goes to financial aid, the university did not decrease financial aid from the endowment fund this academic year, according to Sintef.

In addition to the economy, St. Edward’s tuition will increase next fall.

The flat rate tuition per semester next school year will increase to $13,042 for full-time students and to $870 per-credit-hour for part-time students.

Students’ need for aid may be definite, but whether the U.S. Congress will pass legislation to end the Federal Family Education Loan Program, from which many St. Edward’s students borrow loans, remains uncertain.

The U.S. Senate has yet to deliberate on the Student Aid and Fiscal Responsibility Act of 2009, which eliminates the loan program.

“At this point, there are so many unknowns,” Constantine said.

The Student Aid and Fiscal Responsibility Act was passed by the U.S. House of Representatives last September, but the contentious bill has since taken a backseat to the health care debate.

Since the U.S. Congress usually enacts legislation on July 1, this bill would have to pass the U.S. Senate before then to apply to the 2010-2011 school year.

“Worst case scenario and we did not find out until June, all we have to do is communicate to students by the Web,” Constantine said. “If the legislation passes, we will be in contact within 48 hours.”

Whether or not lenders who offer loans through this program will continue to due so also remains a mystery.

“The majority of lenders we talk to are waiting to see if the legislation passes,” Constantine said.

Constantine said that Student Financial Services will make a decision to switch students to the direct loan program after spring break even if the bill does not pass and it becomes clear that lenders stop offering loans through this program.

St. Edward’s has already begun the transition to the Federal Direct Loan program by offering over 200 direct loans to incoming freshmen, according to Constantine and Peterson.

“We do not want anxiety or concern,” Constantine said. “Everyone who wants a student loan will get one.”

Two announcements made by President Obama in his State of the Union Address regarding student financial aid are contingent on the mandated switch to the Federal Direct Loan program.

The estimated $87 billion from the Federal Direct Loan program would allow for larger Pell grants and more student loan forgiveness.

The maximum Pell grant is going to increase from $5,350-$5,550 to $5,710 in 2011.

This increase in Pell grants most likely will mean an increase in aid for those who already receive this grant, not an expansion of the grant to other needy students.

This results from the way a student’s Pell grant eligibility is calculated, which is solely on income.

Constantine said a student who usually receives a Pell grant might lose eligibility for the grant if their family’s income increases as little as $2,000.

 

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