Financial Aid: Cultivating Students’ Minds or Drowning Them in Debt?


Due to the ever-increasing cost of living expenses and tuition, many Kennesaw State University students seeking to better their lives through higher education must take out loans every year. For the vast majority of the student body, however, a college education would not be possible without the help of financial aid.

Financial aid is vital to the institution of higher learning. Scholarships, grants and loans allow students to fund the high cost of attending a university. Unfortunately, many of these students will spend decades of their lives paying back the debt they have accrued as undergraduate students. Without it, though, far fewer people would have the opportunity to get a college education.

According to research conducted by the Federal Reserve Bank of New York, approximately 37 million Americans have outstanding student loan debt.

Sarah Baumhoff, the associate director for Kennesaw State’s Office of Student Financial Aid, said that 80 percent of KSU students receive some type of financial aid. Financial aid consists of student loans, the HOPE Scholarship and Pell grants.

“The average Kennesaw State student graduates with somewhere between $18,000 and $19,000 in debt,” Baumhoff said.

This is slightly lower than the national average, which, according to The Project on Student Debt was about $26,500 for the graduating class of 2011.

High Tuition Increases Over Past Five Years

According to, a website that helps students estimate the cost of going to college, a four-year undergraduate degree at KSU costs more than $72,000. Many students are eligible for the Pell Grant and the HOPE Scholarship, but those who do not qualify must come out of pocket to pay for tuition, fees and books. According to the site, the cost of in-state tuition at KSU has increased nearly $2,000 over the past five years.

Pell Grants are federal grants that do not have to be repaid. The money is awarded based on a student’s academic status, cost of attendance and his or her financial need as assessed by the Free Application for Federal Student Aid, or FAFSA.

The HOPE Scholarship, funded entirely by the Georgia Lottery, is a program to help students who have demonstrated academic achievement by paying for the majority of their tuition costs. To remain eligible for HOPE, students must maintain a grade point average of at least 3.0 in college. According to the Georgia Student Finance Commission, HOPE has awarded more than $6.8 billion to students over the course of its 20-year history.

Baumhoff says that the majority of financial aid, however, comes in the form of student loans.

“Loans have higher limits that are available so that’s where the majority of it comes from,” Baumhoff said. “After that, it is the Federal Pell Grant and then after that, it’s HOPE.”

According to the Federal Reserve Bank of New York, the outstanding student loan balance for Americans is about $870 billion, surpassing the amount owed to credit card companies and the auto finance industry.

Sarah Ruiz, a senior majoring in human services owes more than $18,000 in student loans.

“I probably wouldn’t be here without it,” Ruiz said. “The loans cover tuition that my Pell Grant doesn’t fund and living expenses—things like books, fees and gas.”

The interest on her student loans is deferred until six months after she graduates, but she says she sometimes worries about being in debt.

“I assume that most people are in my boat. I’m not as bad off as some people I know.”

Decrease in Federal Education Spending Means Higher Student Debt

Another major issue students and universities across the nation are facing is a decrease in education spending at the federal level in an attempt to balance the federal budget and decrease the national debt.

“The Pell Grant hasn’t gone up for three years and part of that is because of the spending cuts,” Baumhoff said. “Some of the other proposals that are already being talked about are doing away with subsidized loans altogether. They’ve already removed them from graduate students, who can only get unsubsidized loans now.”

With subsidized loans, the government pays the interest until after the student has graduated. This is known as deferment. The current interest for subsidized loans is 3.4 percent.

An unsubsidized loan means that the interest is compounded immediately at a rate of 6.8 percent.

Fewer subsidized loans mean an increase in the amount of debt students will have to pay back after graduation.

“It’s hard to see what’s going to happen, but we do know that it looks like sequestration will happen in March,” Baumhoff said. “That means there will probably be some sort of cuts—probably to everything across the board so we’ll just wait and see.”

Despite all of the loans available, many students are doing their best to graduate debt-free. Steve Wilson, a senior studying information systems, receives the Pell Grant every semester, but has never taken out a loan. Wilson said he received a $2,750 grant this semester and that this grant is a major factor in his ability to make ends meet.

In addition to being a full-time student, Wilson also works as a server at P.F. Chang’s.

“I’d probably be able to go to school [without the grant] but it would be hard to fund everything else,” Wilson said.

In last month’s State of the State Address, Gov. Nathan Deal proposed a 3 percent increase in funding for the HOPE Scholarship. The proposed budget will be decided by the General Assembly in weeks to come.


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