Changes to loan system pending
By Helen Yim
April 24, 2007 10:27 p.m.
A panel of higher education officials and student representatives approved rules changes on Friday in a move to simplify the financial aid process for many colleges and students.
After three months of negotiating, the panel unanimously approved the proposed changes, which include the use of debit cards to distribute aid, extra notifications aimed at keeping students more informed about the exact amount of money they receive in loans, and other regulatory changes designed to make it easier for institutions to give aid to students.
The proposed new rules could take effect as early as 2008 if they receive final approval from the Department of Education, said Lauren Macheski, national affairs director of the external vice president’s office of the University of California Student Association and former Bruin News 29 executive producer.
Thompson said many students are currently unaware of the amount of money they receive in student loans, and the change is designed to help them better understand their loans and grants.
“(In) a lot of instances, students say they didn’t know they were taking out loans ““ they thought it was financial aid,” Thompson said,
Several students said they would welcome a change to clarify the financial aid process.
Argie Mina, an undeclared first-year student, said he would welcome modifications to the financial aid process, which he described as unclear and confusing.
“A lot of the details are left ambiguous, and if you want to know what you’re doing, you have to go out of your way to find out,” he said.
The major change, which would not affect UCLA’s method of allocating loans, would encourage institutions to use debit cards, rather than checks, to distribute aid to students.
Dee Phan, a representative from Student Loan Services, which is a part of the UCLA Financial Aid Office, said the current method, in which money is sent directly to students’ banks through the Bruin Direct system, is already efficient.
Rebecca Thompson, a member of the negotiating panel and the legislative director of the United States Student Association, emphasized the advantage of giving students loans directly to their debit cards.
“(The new rule) alleviates (students) from having to cash checks, stand in line to get their checks cashed,” she said.
The money sent to students is the amount left over after college tuition and fees have been deducted from federal grants and loans.
Students often use the money to cover room and board expenses, Thompson said.
The new debit card system would include protections for students, such as no withdrawal fees, Macheski said.
Several students expressed concern that giving students the money they receive from aid on debit cards would tempt students to spend financial aid on nonschool-related items.
“Financial aid is supposed to be used for books, tuition, academics. If you have it on your credit card, you’re just going to use it on whatever,” said Vanessa Reyes, a first-year biology student.
Michelle Zad, a first-year anthropology student, was also critical of the debit card system.
“I don’t think that’s a good idea because who knows what that money will go into,” Zad said.
Reyes said she likes the current system at UCLA, in which the aid money is automatically deducted from her housing costs rather than placed on a bank debit card.
