Subsidized Stafford loan at risk of termination


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DACA students are left out of the CARES Act, a relief fund for those impacted by COVID-19. 

Taylor Adams

Students at Iowa State may see changes to financial aid in the upcoming year as a new proposal from the Trump administration would eliminate the subsidized Stafford loan.

“Any given year you have about 70 to 80 percent of our students who are receiving financial aid of some sort or another,” said Roberta Johnson, director of financial aid.

One widely utilized form of financial aid, the subsidized portion of the Stafford loan, is not part of President Donald Trump’s 2019 budget proposal. 

“It means this is going to make college more expensive for the neediest students,” Johnson said. “Right now, the neediest students don’t have to pay interest while enrolled in school.”

The students most in need of financial help would have additional barriers in coming to Iowa State and might cause them to not enroll. In fact, Johnson said, over 30 percent of students nationwide decline student loans that are not subsidized.

“The question would’ve changed to ‘do I really need to go to college?’” said Michael Young, senior in criminal justice studies, about what college would have been like without a subsidized loan.

Fewer enrollments could affect Iowa State’s budget, policy decisions, how many faculty members are employed and even tuition.

Johnson said, for a lot of students, the subsidized student loan is the only way to go without paying directly out of pocket.

“I just think that the consequences of not having a subsidized loan out there particularly for students who don’t have other options for them is just going to restrict their options even further,” Johnson said.

Other alternatives like the Parent Plus Loan or private student loans are not available to everyone. Both of these options require a certain credit score or a willing cosigner with a certain credit score.

“Daily, we have students coming into our office whose parents cannot borrow through the Parent Plus Loan and who could not qualify to be a cosigner for those students,” Johnson said. “Increasingly, students are turning to work.”

Johnson said some of the reasoning behind taking away the loan could lie in saving tax dollars and the drive to privatize student loans. She said some think the government should get out of the “lending business” and go back to the private banks being in the business.

While this is part of the 2019 budget proposal, Johnson said passage relies on how midterm elections go, as it isn’t a bipartisan reform.

Young outlined the importance of voting when it comes to issues like these.

“Even if you don’t see yourself as a liberal or conservative, you have to put your voice out there and vote,” Young said. “It is important to have an understanding of who our country is electing into those positions of power that determine how your life will be governed.”