California Student Loan Defaults to college with scholarships Limit

The state of California is under a page from the U.S. Department of Education’s textbook. In an effort to trim a nearly $ 27000000000 budget deficit, lawmakers have the option of limiting the payout from the state’s Cal Grant college student financial aid program at a school-based student loan default rate.

Cal Grants are state funded scholarships that provide students with prices ranging from $ 576 to pay $ 11,124 per year, depending on the courses, to helpCollege. Under the measure currently used by the parliament as if schools whose default rate on student loans will fall from a certain threshold of Cal Grants offer closed to their students. Moving square in the crosshairs of the legislative process would become for-profit colleges and universities, working in California, many of which are currently loss rates more than the proposed limit.

Five would be for-profit companies will be affected schoolsGiants: The University of Phoenix, DeVry University, ITT Technical Institute, Kaplan College, and Corinthian Colleges, the Everest College Heald College, and WyoTech operates.

Together, these five schools received more than $ 42 million networks in the form of grants in 2009-10 school year. All five facilities currently have a default rate that exceeds the state student default rate index, designed a new calculation, institutions, their identificationStudent loan default chronically at their school.

For-profit schools already found a potential hit in February when the California Student Aid Commission Cal Grant awards unanimously to reduce to for-profit colleges, the Cal Grant program should be subjected to budget cuts. The Commission cites for-profit schools, high failure rates, high dropout rates and poor control as a justification for the temporary government funding for Cal Grants to these schools. As part of itsProposal, the Commission recommends capping maximum annual Cal Grant awards for students at non-profit institutions.

Students currently enrolled in a vocational program at a California Community College Cal Grant awards are entitled to an annual of $ 576. Students in a vocational program at a vocational training school or other non-community college institution – as a for-profit school – are entitled to receive, in addition to $ 2,592 per year.

Studentsenrolled in a two-year or four-year degree at a private university – are eligible to receive up to $ 9,708 per year – which includes for-profit schools.

The Commission’s recommendation would Cal Grants for students, professional certificates or two-year degree at a for-profit college, enrolled at the maximum award for students in studies of at least one year, the current $ 1,551 limit.

Students, a bachelor’s degree from a for-profitInstitution to pursue the maximum Cal Grant award for students with a two-year or four-year degree within the California State University system, which limits currently $ 4,884.

In its recommendations last month, the Commission also proposed cutting Cal Grant awards at institutions with high student loan default rates – a version of the measure currently being considered by the California legislature. Under the law as proposed could be a disqualified School again its entitlement to Cal Grants offer, if its failure rate has been reduced to an acceptable level.

In the meantime, however, when the bill goes, the loss of state aid force more California students-for-profit universities to seek additional Federal College Loans and non-federal private student loan to cover the costs that would have been previously recorded by a Cal Grant.

The lawmakers say that the rule change makes sense because for-profit> Colleges and universities use to attract grants and other federal and state level financial incentive programs for students, especially low-income students, without compromising, often with high costs of participation.

Although Cal Grant student aid programs that, unlike college loans are paid back not to the cost of a private for-profit schools often have more students on federal, state and take a private student loantheir education.

In many cases, completing the course, students will work in a for-profit college is not a recognized non-profit university transfer. Further, graduates often have a difficult time finding meaningful employment after graduation, leading to a high failure rate on their often huge school loan debt.

With students with Cal Grants at these high costs-profit schools, the students left with large debt and ill-preparedthe workplace, says the California Student Aid Commission, these schools the ability of students with low incomes, the most susceptible to limit recruit for promises of grants and other student aid will be.

Representatives of the for-profit college industry lobbying against the California proposal. If adopted, the legislation would save the state about $ 24 million, less than 1 percent of the legislators must cut $ 27 billion to the state of the books balance.

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