Economy casts cloud over loans

by Suzie Chu

The financial crunch has Rider students questioning whether or not they will be able to return to school in the coming semesters.

Freshman Rebecca Rourke, a journalism major, said she had great difficulty securing a loan for the fall semester and hopes she will still be able to attend Rider in the spring.

“I’m also worried about the spring semester, because [banks] are more strict about loans because of the recent economic problems,” Rourke said. “So I’m just hoping that I can get my loans in time so I can still go [to Rider].”

Freshman Toni Pernice, a communication major, worries about paying for her education as well but thinks she and her sister will be able to remain in school.

“If my dad loses his job, [my sister and I] have to find student loans,” Pernice said. “We have money saved up for four years of college, but maybe not as much as we thought we would, so we would have to get student loans. I believe I would be able to stay at Rider.”

Although students across the country are facing an uncertain financial future, Rider administrators offer reassurance that there are still scholarships and loans available for students to take advantage of.

Student loans have become an issue because the money students are borrowing comes from banks that are in trouble, such as Wachovia. Also, many lenders are tightening their credit standards, making it harder for students to qualify for private loans, which are not covered by the federal government.

Wachovia was recently bought by Wells Fargo, but students who have a private loan for next semester should not be concerned, as the loan will be disbursed for spring 2009. For the next year, Vice President of Enrollment Management Jamie O’Hara stated that even if there are problems with Wachovia and their private loans, there are other options for students.

“Wachovia has stopped issuing new private loans,” O’Hara said. “As a result of the merger between Wachovia and Wells Fargo, we are unsure of their future participation in private student loans. Since Rider has a diverse set of private lenders, there was minimal effect on Rider students related to Wachovia’s departure from private lending.”

However, financial aid administrators at various schools, including Rider, are telling students that it is too early to tell if the falling credit market will seriously affect student loans.

Lenders will look more closely at family credit history when approving loans, and with unemployment rising, there will be more students applying for loans than ever before, according to a New York Times article.

In an e-mail to faculty and staff on Oct. 21, Rozanski expressed his concerns about “enrollment challenges” Rider may face next fall because of current economic problems.

“I think we all recognize that the economic turbulence our nation and the world are experiencing … may well affect Rider in the coming 2009-10 academic year,” Rozanski said.

“I candidly believe that it is better for us to act in a measured and precautionary way now rather than be surprised in fall 2009 and forced to act precipitously,” he continued. “[We must] provide the university with the financial flexibility to respond to any … enrollment challenges that the economy may bring.”

Rozanski said that some hiring will be postponed and some capital projects will be deferred “until we have a chance to reassess our situation next fall.”

He added, “If we are successful in meeting our fall 2009 enrollment goals … we will be able to work collaboratively to restore our investments in personnel programs.”

In recent interviews, university officials spoke positively, saying students will still be able to participate in the Guaranteed Student Loan Program and the Parent PLUS Loan because they have been secured by the federal government.

“Based on the diversity of private lenders that our students borrow from, we don’t anticipate a problem in our students securing access,” O’Hara said. “Ultimately, this access will continue to be based on the students’ ability to show that they are creditworthy and have a co-signer.”

President Bush and his administration are also working to aid students. Bush recently renewed the Education Department’s temporary powers to use federal funds so students and families have access to loans, according to a recent article on

Rider is not yet facing any problems with loans or lenders, said Drew Aromando, executive director of OneStop Services. Rider’s preferred lenders for Stafford loans are Wachovia, Citibank, Chase, Key Bank and Wells Fargo.

“In reality, there is a lot of talk about the economy and student loans, but there has been very little impact to the university in terms of financial aid resources,” Aromando said. “There are problems with lenders but not at Rider. We are working very hard at maintaining relations with strong banks.”

Some students are also calm even after seeing the news of a possible recession in America.

“I’m not really concerned because nothing has been affected so far,” said freshman Anthony Dellefave. “It could be a concern in the future but I’m hoping that the bailout works out.”

Freshman Ashley Venables is not too concerned either.

“I was a little worried because my parents lost money in the stock market, but [they] have money left aside for me,” she said.

Aromando recognizes that families will be affected by the economy and said that Rider’s financial aid office is open to help those in crisis. He also recommends that families only borrow what they need.

“It’s even hard now, even though I’m here [at Rider] already,” Rourke said. “The fact that I don’t have any money is really stressing me out. It’s hard to focus when I’m worrying about other things.”

For students who have questions or need more information on applying for student loans and FAFSA, Rider is offering financial aid information sessions on Nov. 10 and Dec. 2 at 6 p.m. in Sweigart Auditorium.

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