As more American citizen students are finding it harder to get LOANS, our government continues to give away our money to illegal aliens.

We're talking LOANS here, not grants. American students are being punished by our own government!

http://www.pittsburghlive.com/x/pittsbu ... 54438.html

PHEAA will suspend all new student loans
By Brad Bumsted and Bill Zlatos
TRIBUNE-REVIEW
Wednesday, February 27, 2008


HARRISBURG -- The Pennsylvania Higher Education Assistance Agency will suspend all new student loans on March 7 as a result of the national credit crunch.
Banks will still provide loans to students, and the immediate impact should be minimal, PHEAA officials said Tuesday.

PHEAA acting CEO James Preston said student loans make up 30 percent of the agency's overall revenue.

PHEAA Chairman Rep. Bill Adolph, R-Delaware County, said, "Short-term we can get through this, but if disruptions in global markets continue, we are not going to be able to handle the differences (from reduced revenues that fund programs), and all the public service programs PHEAA has contributed to over the past decade will not be there."


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PHEAA and its nonprofit foundation run programs from student grants to nursing loan forgiveness.
Adolph and Preston testified before the House Appropriations Committee yesterday, and some members expressed concern about the impact and what the Legislature can do. Adolph said there's little that can be done because it is a national crisis.

Rep. Jake Wheatley, D-Hill District, said PHEAA's explanation of the effect on consumers was "really confusing to me."

"It's very important that education be accessible," he said. "I can't go back (to my constituents) and say it's too complicated to handle and you wait another year (for a loan.)"

Wheatley said he is concerned that low-income people who need college loans may face more hurdles if they are forced to go to banks.

PHEAA has been under fire since state Auditor General Jack Wagner disclosed that the agency had awarded millions of dollars in employee bonuses since July 2004 and spent $108,000 on an amusement park outing for employees in April.

Adolph's and Preston's testimony came the same day that officials from the University of Pittsburgh, Penn State, Temple and Lincoln universities told the appropriations panel that declining state financial support is forcing up tuition.

Nationally, the cost of going to college in 2007-08 was $13,589 at a four-year public institution and $32,307 at a private, nonprofitinstitution, according to the College Board in New York City.

PHEAA is not the only student lender squeezed by the credit crunch.


Lobbyists for Sallie Mae and other lenders are urging Congress to take action to strengthen the student loan market, according to The Hill, a Washington-based newspaper. It reported Monday that more than a dozen auctions for bonds backed by student loans have failed in recent weeks, including some backed by federally subsidized loans.


If Congress fails to provide more aid and markets don't improve, all student loans could eventually disappear, Preston said.

Preston said the national crisis is unprecedented in recent history. "I've been in banking 25 years, and I've never seen this much disruption," he said.

It is happening as a result of the so-called subprime crisis that has wracked the mortgage industry, in which questionable loans were made to clients with spotty credit as housing prices ballooned, then collapsed. A subsequent high rate of defaults and foreclosures has had a widespread ripple effect on credit.

"We're having problems getting access to capital. We're not able to sell our bonds at auction," said PHEAA spokesman Keith New.

PHEAA suspended loans in a two-step process: out-of-state loans were suspended two weeks ago and the remainder, including loans to Pennsylvania residents, will stop on March 7. It won't affect about 2.7 million students, former students and parents with existing loans.

"With the crunch in markets, it just doesn't make sense to borrow money and give it away," said Sen. Sean Logan, D-Monroeville, PHEAA's vice chairman.

Amanda Reed, a member of the Student Government Board at the University of Pittsburgh, expressed concern about the action.

"We have a pretty big out-of-state population," said Reed, 20, a sophomore from Harrisburg. "Pitt gets more expensive every year. This would be a big portion of their student aid taken away."

About 80 percent of the undergraduates at Carnegie Mellon University are from out of state. William Elliott, vice president for enrollment at CMU, said he expects that most out-of-state students get their loans from their home state.

"Obviously, we'll have to look at this," he said.

Layoffs at PHEAA are not out of the question, officials said.

"At this point, I think everything is on the table," said Logan. "We're looking at every option."

Officials from Pittsburgh Public Schools said PHEAA's announcement will not directly affect The Pittsburgh Promise, a program to give graduates of the school district scholarships of up to $5,000, starting with the Class of 2008.


District spokeswoman Lisa Fischetti said Promise scholarships are based on the amount of federal and state grants a student gets, not loans.


"Certainly, it has an effect on the ability of kids to pursue education after high school," she said. "The choice they make will definitely be affected -- which college they will be pursuing."


In 2006, graduates of Pennsylvania colleges and universities owed an average of $22,776, according to The Project on Student Debt, a nonprofit group based in Berkeley, Calif. It's the eighth-highest amount in the country.

At a summit called last week by PHEAA, policy makers urged the federal government to provide short- and long-range aid.

Congress cut $20 billion from the Federal Family Education Loan program in October. The program helps 80 percent of students pay for college.