California Using Student Loan Defaults to Limit College Grants

California is taking a page from the U.S. Department of Education's playbook. In an effort to equip nearly $ 27 billion budget deficit, lawmakers investigating the possibility of limiting payments to the state Cal Grant student financial aid programs based on school student loan default rates.

CAL are state funded scholarships that allow students with awards of $ 576 to $ 11,124 per year, depending on the degree program, in order to pay for college. Under the measure is currently considering the state legislature, the schools whose default rate on student loans fall beyond a certain threshold will be banned from CAL offers its students. Square at the intersection of the legislative move will be for-profit colleges and universities that operate in California, several of whose default rates currently exceed the proposed threshold.

Among the affected schools will be five for-profit behemoths:. University of Phoenix, Devry University, ITT Technical Institute, Kaplan Colleges, and Corinthian Colleges, which operates Everest College, Heald College and WyoTech

In combination, these five school network received more than $ 42 million in grants for the academic year 2009-10. All five institutions currently have a default rate that exceeds the State Student Default Rate Index, a new calculation, designed to identify institutions whose students chronically default on their school loans.

for-profit schools have the potential to hit in February when the California Student aid Commission unanimously voted to reduce the Cal Grant awards for non-profit institutions, Cal Grant program should be subjected to reduction according proračuna.Komisija nonprofit schools of high default rates, poor supervision, and high dropout rate as a justification for yanking state funding for CAL in these schools. As part of its proposal, the Commission recommended capping the maximum annual Cal Grant awards for students at for-profit institution.

Currently, students enrolled in a vocational program at the community college in California are entitled to annual Cal Grant award $ 576. Students enrolled in vocational programs in career training school or other non-community college institutions - such as for-profit school -. Are eligible to receive up to an additional $ 2,592 a year

Currently, students enrolled in a vocational program at the community college in California are entitled to annual Cal Grant award $ 576. Students enrolled in vocational programs in career training school or other non-community college institutions - such as for-profit school -. Are eligible to receive up to an additional $ 2,592 a year

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Currently, students enrolled in a vocational program at the community college in California are entitled to annual Cal Grant award $ 576. Students enrolled in vocational programs in career training school or other non-community college institutions - such as for-profit school -. Are eligible to receive up to an additional $ 2,592 a year

...

Currently, students enrolled in a vocational program at the community college in California are entitled to annual Cal Grant award $ 576. Students enrolled in vocational programs in career training school or other non-community college institutions - such as for-profit school -. Are eligible to receive up to an additional $ 2,592 a year

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Students pursuing a graduate of a for-profit institutions will be limited to a maximum award for Cal students spending two years or four-year degree at California State University system, currently $ 4,884.

In the meantime, however, if the law passes, the loss of state aid may force more California students for-profit colleges require additional federal college loans and non-federal private student loans to the costs that would previously have been covered by the Cal Grant.

Lawmakers say the rule change makes sense, because for-profit colleges and universities use the grants and other federal and state financial aid programs as an incentive to draw in students, especially low-income students, without losing what is often a high cost participation.

Although the CAL student aid awards that, unlike college loans, need not be repaid, the cost to attend the private for-profit schools often require students to take on additional federal, state and private student loans to complete their education.

In many cases, teaching the students complete the for-profit college can not transfer an accredited non-profit university. Furthermore, students often have a hard time finding meaningful employment after graduation, leading to high rates of default on the loan are often high school debts.

By prohibiting students from using the CAL to the high cost of for-profit schools that have students go to high levels of debt and ill prepared for the workplace, helping the California Student Commission says it will restrict the schools' capacity for employment of low-income students who are most vulnerable to promises of aid and other student aid.

Representatives of for-profit University of California, industry lobbying against the proposal. If enacted, the law will save the state about $ 24 million, less than 1 percent of the $ 27 billion lawmakers should lower the equilibrium state of the book.