Economic troubles mean fewer loans for UWRF students
November 6, 2008
The financial crisis is causing a significant reduction in loan programs at UW-River Falls as enrollment is on the rise and many talented new students come to campus.
What has always made UWRF attractive to potential students—affordable tuition, proximity in relation to the twin cities and books being included with tuition—is making the campus even more attractive in the midst of the economic downturn.
“River Falls will actually become an increasingly popular option with those students who thought they were going to go to a more expensive private college, or state school,” said Alan Tuchtenhagen, associate vice chancellor for enrollment services. “It sounds odd, but it works a bit in the institution’s favor in that very good students continue to come here.”
Northwestern College sophomore, Kate Drahosh, is one student who is going to make the private-to-public transfer after the fall semester.
“Northwestern has become too expensive for me. The tuition is very high and I know that, as a future teacher, I will not be able to pay off my debts as easily if I stay there,” Drahosh said. “I think that UWRF has a wonderful education program, and I think I will receive a very good education.”
The trend of choosing public over private is not specific to just transfer students. Statistics involving new freshman also solidifies the idea that UWRF is becoming a popular choice.
Tuchtenhagen said that UWRF actually enrolled more new freshman than expected this fall. According to 2007 versus 2008 percent yield data, the percentage of students who showed up after being accepted, UWRF actually increased from 49 to 51 percent. UWRF was the only school in the UW System, of the seven that responded, to increase yield and enroll more than 50 percent of those accepted.
The positive effects of the enrollment figures for UWRF during the current financial crisis can be broken down into three categories of students. The first are those who had originally planned to attend a private college but the recent credit crunch affected the availability of financial assistance.
The second group is students who were going to attend UWRF initially and have not been deterred by the current economic status. Tuchtenhagen said there is a third group of students contributing to the increased enrollment figures.
“There is another group of students that we become very appealing for because they didn’t think they were going to go to college; they were going to get a job right out of high school. But they realize the job market is not what they though it would be,” he said.
The most significant negative role the financial crisis has played at UWRF is the reduction of the Perkins loan program. UWRF has received 30 to 35 percent less money than in previous years.
“There are some former students who are not able to repay funds as quickly and, because it’s the sort of money that is recycled, we don’t have it to give out to new students,” former Director of Financial Assistance Sandra Oftedahl said. “We’ve seen a significant reduction in that repayment in the last 12 months.”
Many other institutions throughout the country, and the UW System, are feeling similar effects as UWRF. In most cases, UWRF’s 30 to 35 percent reduction in the Perkins loan program is less than other schools in the country.
“I’ve seen 40 to 45 percent for other schools,” Oftedahl said. “This is not something unique to River Falls, but it is certainly something we can observe here. This is nationwide, I’ve talked to the directors at Stout, Superior, Parkside and Eau Claire, all these schools are feeling the crunch.”
Eighty-five percent of respondents to a recent survey by the National Association of Independent Colleges and Universities reported that they had lost lenders who participated in the federal guaranteed loan programs. UWRF has also dealt with lending institutions that no longer participate in the Stafford loan program, including Twin Cities Federal (TCF).
“We know of at least six institutions that have previously dealt with students here at River Falls that are no longer participating,” Oftedahl said. “And it’s because they just don’t have the money to do it.”
Although there are fewer lenders, and a smaller pot in which to give federal money, Oftedahl says students still have access to funds if they are proactive.
“There is financial aid out there, the federal government has guaranteed that each student can have at least $5,500 as long as they apply through the FAFSA,” Oftedahl said.
The current financial crisis is taking a toll on families, students and businesses alike. Tuchtenhagen says education is one way people typically weather the storm of economic downturns.
“If students are going to weather downturns in the economy like this, they’re going to need an education,” Tuchtenhagen said. “For example, if you get a good job in construction or the service industry, but you get laid off, what are your options? The more education you have, the more options you have to find another job.”
Drahosh is one of many who are working toward that education for a strong future. But as students pursue higher education she urges them to keep all of their options open.
“My advice to other students in my position would be to not rule out public universities,” Drahosh said. “Private colleges are great, and they are able to offer some things that public institutions may not, but public schools also have tons to offer that private colleges may not be able to share.”