Obtaining a loan during the credit crisis poses new challenges to students nationwide. Before they can consider how they will pay off their debt after graduation students must first determine whether they will receive student loans.
Next year’s tuition cost is uncertain but since the 2003-2004 school year tuition has risen 33.6 percent and it has increased at an annual rate of approximately 5.97 percent according to Pepperdine’s chief Financial Officer Paul Lasiter.
Today Pepperdine’s tuition ranks 60th on Campus Grotto’s Web site for the “Most Expensive Colleges for 2008-2009.” President Andrew. K. Benton referenced Campus Grotto’s list in his president’s address Nov. 5 as he discussed the university’s financial future.
“The list that bothers me the most is the one that shows how much debt our students are undertaking Benton said. On the one hand I admire the willingness to borrow to afford our brand of education. On the other I am troubled by the impact that debt has on career choices and alumni support.”
The alumni support Pepperdine receives through monetary donations which is a portion of the endowment has been on the decline according to Vice President for Advancement and Public Affairs Keith Hinkle.
Every year Pepperdine distributes 5 percent of a five-year moving average of endowment value to support scholarships and other operations as designated by donors and the university administration. During the period of July 31 2007 to July 312008 the endowment decreased in value from $716 million to $673.7 according to Lasiter.
This fiscal year the payout from the endowment to help fund scholarships and the university operating budget will total $30 million up from $26 million in 2007 according to Treasurer of Pepperdine University Clariza Mullins. This increase of approximately 13 percent will all be directed to the scholarship fund.
However it is still uncertain if this payout will change significantly for the upcoming school year said Hinkle.
“If the market stays where it is at we likely won’t see an increase in our endowment payout for the next few years which will put significant pressure on costs Hinkle said. Donations are holding up so far but they will eventually be impacted negatively as everyone is hurting right now. We are committed to keeping Pepperdine affordable however even in this difficult environment we now face.”
The $4 million added to the scholarship fund will hopefully help ease tensions for struggling students according to Hinkle.
“It’s just been a really frustrating year so far said senior Hillary Warfield. It’s been seriously one thing after the other and now next semester is looming and I’m trying to figure out how I’m going to pay for that.”
In response to the cash crunch students are experiencing one college Benedictine University in Illinois has planned a tuition freeze. While this is still a possibility for Pepperdine Dean of Seaver College Rick Marrs said all options are still on the table. Marrs is also a member of the University Planning Commission which is responsible for deciding tuition costs.
“At this point we are still in the very early stages of discussion Marrs said. To my knowledge every scenario we can think of will be considered with the strengths and weaknesses of the various options provided.”
However some financially needy students are already feeling the economic blow as their loans come back declined and their past due tuition notices increase. Along with the stock market crash in October many lenders enacted credit freezes making it much harder for students to acquire loans. After exhausting their options students turned to the financial aid office for help and were directed to fill out an appeal for financial aid form according to the financial aid office.
“The number of appeals has gone up quite a bit this year said Director of Financial Assistance Janet Lockhart. This is because a lot of these private lenders have made adjustments just recently to their credit terms which is going to make it a lot more difficult for students to qualify for loans. I expect we will see a lot more credit denials in the future.”
So the question arises for students regarding how they are going to pay for a Pepperdine education.
Lockhart encourages the financially desolate to apply for outside grants scholarships and any part time jobs they may be able to find. Meanwhile Hinkle encourages everyone to simply keep both eyes on America’s economic future.
“Stay tuned Hinkle said. The October fallout just happened and the entire world is still adjusting. It’s just too soon to appreciate how bad the economy will get and how it will impact Pepperdine and our students. At this time we are just trying to be prudent and proactive in controlling costs and maintaining cash. Again just stay tuned.”