Student Loan Blog : economic downturn

2010 College Enrollment Numbers May Not Be So Bad, Survey Reveals

Student Loan Girl — Thu, 02 Apr 2009 21:51:00 GMT

Although school administrators across the nation are reporting an increase in applications, they’re worried about just how many college students will actually enroll in their institutions this fall as families continue to tighten their budgets amid this recession, reports Inside Higher Ed (“Parents’ View of the Economy,” March 30, 2009).

However, a new survey of parents of college students indicates that while administrators’ concerns are valid, the economy may not have affected parents’ finances as much as educators originally thought, particularly among parents whose children are entering their freshmen year. Eduventures, an organization that tracks higher education trends, surveyed 7,000 parents with college-age children at a mix of 19 public and private colleges and universities.

Eduventures found that a majority of parents with freshmen — about 66 percent — said the downturn won’t affect how they will finance their children’s education this upcoming fall.

Overall, relatively few parents told Eduventures that they would not enroll their children in college due to lack of funding, although some parents indicated that they might choose to enroll their children in less expensive institutions to cut costs.

Of those parents with students at private schools, less than 12 percent indicated that their children were considering transferring to a less expensive school, and nearly 7 percent said they would encourage their children to take some classes at a community college. Of these same private school parents, less than 3 percent indicated that their students wouldn’t be returning to college in the fall, and less than 0.5 percent said that their children were considering dropping out of college permanently.

The numbers were only slightly different for parents whose children attend public colleges, with almost 9 percent saying that their children may have to consider transferring schools and less than 3 percent who believed that their children would need to look at dropping out of college. Nearly 6 percent of these parents thought that their children would need to live at home instead of on campus this fall.

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Colleges Step Up, Help Students With Extra Financial Aid

Student Loan Girl — Thu, 08 Jan 2009 23:13:00 GMT

If recent data is any indication, families are struggling to come up with the cash they need to send their children to college, and schools across the country are doing something to help those who’ve come up short, reports The Chronicle of Higher Education (“Colleges Offer Extra Aid to Strapped Students,” Jan. 9, 2009).

During the first few days of the new financial aid season that began Jan. 1 — the first day college students could submit their FAFSA (Free Application for Federal Student Aid), the application required for students seeking federal aid — 40 percent more families over the previous year had already sought out financial assistance (“Families Face Fierce Competition for Student Aid: Season Starts With Sharp Increase in Demand,” Business Wire, Jan. 6, 2009).

“The demand for student aid has been climbing as the recession batters family budgets, parents’ jobs are eliminated, and self- employed parents experience business downturns,” said Craig Carroll, CEO of Student Financial Aid Services, a financial aid advisory company.

Schools Create New Aid Programs or Beef Up Existing Ones

In response to the growing number of families facing limited options to pay for college, some schools are offering families an extended grace period to pay tuition bills, and other schools are meeting the growing demand for aid by expanding existing financial aid programs or creating new ones.

At Northern Illinois University, for instance, school administrators recently introduced the Huskie Advantage, a new aid program that meets tuition costs not covered by state and federal aid. The program, which the school will subsidize by shifting financial funds away from upperclassmen to underclassmen, who usually don’t qualify for as much federal aid, is only available to freshmen who qualify for Pell Grants and need-based state grants, according to Brent Gage, the school’s assistant vice provost for enrollment services.

Agnes Scott College in Georgia also recently announced a new program, the Agnes Solution, targeted at students who are eligible for the state’s Hope Scholarship. The school hopes that by providing qualified students with a $13,500 Agnes Solution scholarship and a $3,000 grant each year, combined with the $3,000 Hope Scholarship, the program will be able to cut the cost of attendance almost in half.

As part of a Saint Mary’s University of Minnesota plan to lower the cost of attendance for low- and middle-income students to match the average cost of the nation’s Big Ten universities, the school is expanding its Brother James Miller Program for Access. The program originally only covered students who met certain academic qualifications and whose families made less than $75,000, but due to the economic downturn, the institution has raised the income qualification to $100,000, and is currently collecting private funds so that it may provide aid for the school’s most financially needy students.

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Enrollment Up at For-Profit Colleges Despite Economy

Student Loan Girl — Tue, 16 Dec 2008 17:30:00 GMT

While numerous nonprofit colleges have halted construction and are undergoing hiring freezes and other cutbacks due to the declining economy, for-profit colleges are seeing higher enrollment numbers and higher profit margins (“Economic Downturn Is a Boon for For- Profit Colleges,” The Chronicle of Higher Education, Dec. 10, 2008).

Enrollments at nine major publicly traded college companies grew faster than average for the past three years, The Chronicle of Higher Education reports, and profit margins for the current year are projected to be the highest they’ve been since 2005.

Many of the negative trends impacting the economy — state budget cuts, widespread layoffs, and a projected unemployment rate of 10 percent — may mean for-profit institutions will see even greater growth as laid-off workers return to school to gain new job skills.

Influx of Students Presents Opportunities for For-Profits

By contrast, many public and private schools have been negatively affected by state budget cuts and are struggling to accommodate new students. The California State University system, for example, recently announced that it plans to cap enrollment for the fall 2009 semester, and could turn away as many as 10,000 new students because it doesn’t have the financial resources to handle them.

For-profit institutions, on the other hand, are well positioned to benefit from the influx of new students, suggests The Chronicle. Recent changes to federal financial aid policies have made federal grants and subsidized student loans more widely available to students at for-profit schools.

And some for-profit institutions are doing so well financially they have created their own loan programs that enable them to lend directly to their students. Students who need additional funds to cover their college costs, including those with poor credit, can apply for unsubsidized private loans directly at their school, a new practice that many schools, including Corinthian Colleges, have recently initiated.

Although for-profit schools welcome the influx of new students, college administrators are concerned that the economy will not recover quickly enough for their job-seeking graduates.

To ensure that students land the positions they need, career experts like Rene Champagne, chairman of the Career College Association, say its best to begin the search process as early as possible, preferably prior to graduation.

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Note to College Donors: Make the Check Out to Students

Student Loan Girl — Fri, 21 Nov 2008 23:28:00 GMT

As the economic downturn continues to impact families’ ability to pay for college, schools are redirecting their fundraising efforts to focus on financial aid, reports The Wall Street Journal (“Colleges Shift Donor Appeals Toward Student Aid,” Nov. 19, 2008).

In order to help meet the increased demand for financial aid, some schools are urging donors to contribute money directly to a school’s general fund, which universities reserve for their most pressing needs, or to a school’s scholarship program, rather than to new building construction.

Bobbi Mark, vice president of institutional advancement at Barnard College in New York, said it makes more sense for colleges to delay the construction of a new building than to “say to the entire sophomore class: Why don’t you take a year off?

“Certain things have to be priorities,” Mark added, “and financial aid is one of them.”

What Some Schools Are Doing To Boost Financial Aid

To help students get the financial aid they need, some schools are giving their priorities a makeover:

Barnard College is asking donors to participate in its endowed scholarship giving program to make up for a reduction in family contributions and to meet an anticipated $1.2 million increase in demand for aid. The program’s donors agree to pledge $100,000 to help a particular student meet his or her tuition costs.

With its families taking a big hit from the mortgage crisis and unemployment, Stanford University has seen an “increase in demand for aid above and beyond our expanded aid commitment,” said Karen Cooper, director of financial aid. The school plans to delay certain building projects and cut its $800 million general funds budget — which pays for faculty and staff salaries, administrative costs, and non-research-related expenses — by 10 to 12 percent over the next few years.

The University of Texas at Austin, which has seen its state funding decrease, recently announced a new $3 billion fundraising campaign with a “primary focus” on making school affordable, said Carolyn Connerat, the school’s campaign director. Giving toward scholarships is up by $4 million this year compared to last year.

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Economy Takes Its Toll: Some Small Colleges to Shut Their Doors

Student Loan Girl — Wed, 19 Nov 2008 22:59:00 GMT

Americans could see more college closures, particularly among small schools with shrinking enrollment numbers as the slowing economy continues to claim more victims across every sector, The Associated Press reports (“College Closings Rare, but Could Rise in Downturn,” Nov, 17, 2008).

While the American Council on Education reported that only four out of 4,400 colleges closed in all of 2007, this year alone, four schools have announced they will either shut down certain branch campuses or close entirely by next school year.

Tuition costs that far exceed what state schools charge, diminishing enrollment numbers, and mounting debt loads have made it increasingly difficult for some small colleges, most notably those with religious affiliations, to stay afloat in recent years.

And now the same effects from the mishaps that took down the mortgage industry have bled into the higher education sector. Some schools may be discovering, much like many American consumers and homeowners, that the allure of low-interest loans caused them to take on more debt than they should have. The median debt of private colleges has increased 50 percent in the last five years, according to Moody’s Investors Service.

But now, like homeowners with variable-rate mortgages, some schools have seen their once low debt payments skyrocket to unmanageable proportions.

“Instead of holding long-term debt at lower interest rates, they have gotten stuck with short-term obligations at higher rates — a scenario [colleges] knew existed on paper but never expected to happen,” writes Justin Pope of The Associated Press.

Faith-Based Schools Hardest Hit by Economic Decline

Cascade College, a small Christian school in Portland, Ore. with just 280 students, announced it will be shutting down after the current academic year as it continues to struggle with a $4 million debt load. as will Pillsbury Baptist Bible College in Owatonna, Minn. and Vennard College in University Park, Iowa. Vennard, with just 80 students, will close its doors two years shy of its 100-year anniversary.

Taylor University in Indiana, another Christian institution, will shut down the undergraduate program at its Fort Wayne branch.

Paul Corts, president of the Council for Christian Colleges & Universities, said the financial crisis has become a “very serious” problem. “I think people are sensing that this is not short-term. It’s something that’s going to take a couple of years to play out.”

Enrollment at the council’s 102 member schools grew 71 percent between 1990 and 2004, and Corts said he doesn’t foresee that many of its schools will be closing.

He adds, however, that school closures may be difficult to predict because, “Nobody knows what the ultimate extent of this whole financial crisis is going to be.”

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Debt Collection Agency Adding Hundreds of Jobs

Student Loan Girl — Tue, 18 Nov 2008 17:21:00 GMT

Premiere Credit of North America, a debt collection agency based in Indianapolis, is a bit of an anomaly in today’s down economy — it is thriving at a time when many businesses are cutting back their workforces and many debt collection agencies are losing money to cash-strapped consumers who can’t pay up.

Premiere Credit, which specializes in collecting unpaid student loans and government debt, has been performing so well that it’s looking to add nearly 300 employees to its 250-person staff, reports Erika Smith of The Indianapolis Star (“Debt Collector Premiere Credit to Expand, Add 300 Jobs,” Nov. 13, 2008).

To accommodate its growing business, Premiere Credit is also preparing for a $4 million expansion of its headquarters and is planning to open a second operations center (“Indianapolis Debt Collection Firm to Expand,” Chicago Tribune, Nov. 12, 2008).

The company, which manages more than 700,000 accounts valued at more than $1 billion, is scheduled to receive about $2.5 million in performance-based tax credits from the state, as well as up to $200,000 in training grants.

Student Loans Make Up 40% of Company’s Debt-Collection Business

Premiere Credit CEO David Hoeft attributes the company’s growth to its four-year contract with the U.S. Department of Education, which currently accounts for 40 percent of its business. While the number of delinquent college loans isn’t growing — the student loan default rate has remained steady at 5 percent over the last few years — Premiere has snagged a greater proportion of collection work, Hoeft said, and, with the help of an expansion to its Education Department contract, Premiere’s student loan debt collection business is expected to grow even more.

Debt collectors have a much easier time collecting government-backed student loans than unsecured debts like credit cards, which are not tied to an asset. Federal student loans can forcibly be repaid in a number of different ways and debt collectors have more legal leeway to track down debtors.

“There’s no statute of limitations on collection efforts. [Federal student loans], more often than not, can’t be discharged in a bankruptcy,” Smith writes. “Collection agents can garnish wages, tax refunds and Social Security payments, and they can access a federal database of new hires that makes it easier to find employed people who can pay.”

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Colleges With Highest Tuition Wary of Economic Downturn

Student Loan Girl — Thu, 06 Nov 2008 00:57:00 GMT

After years of ranking among the nation’s top five most expensive schools, Sarah Lawrence College — a private, liberal arts school in Bronxville, New York with a tuition price tag of more than $53,000 a year — is now the priciest school in America, beating out George Washington University and New York University, according to a new College Board report.

With such a hefty cost of attendance, the former all girls school, like many private colleges and universities, is concerned about its financial outlook in today’s economy (“Even at Costliest College, Unease Over Downturn,” The New York Times, Nov. 1, 2008).

Unlike public schools, which receive state and federal funding, private institutions like Sarah Lawrence depend on their tuition and fees, their fundraising efforts, and their endowments to pay for the bulk of their operational expenses.

Sarah Lawrence’s endowment, which the school uses to supplement its $80 million operating budget, has shrunk 16 percent from $77 million since May 2007. Yet, Sarah Lawrence still manages to offer 53 percent of its students some sort of financial aid — an expense that makes up 21 percent of the school’s budget.

While Sarah Lawrence has yet to see an uptick in the number of requests for financial aid this year, school president, Karen Lawrence, is wary of the economic pressures bearing down on the middle-and-upper-class families who may soon be or are already putting their kids through college.

“It’s really hard to tell how much we are going to be impacted,” Lawrence said. “Some students are struggling more because family finances are changes. We are trying to help them out.”

But, Lawrence said, the school’s small $65 million endowment, which pales in comparison to the $34 billion endowment of fellow liberal arts school Harvard University, is making it more difficult to help families meet Sarah Lawrence’s rising tuition costs.

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College Tuition, Student Borrowing On the Rise In Down Economy

Student Loan Girl — Mon, 03 Nov 2008 08:50:00 GMT

A new report has found that last year’s increases in college tuition were more on pace with rises in the Consumer Price Index — the measure of the average price of consumer goods and services. But despite the relative steadiness of college affordability, students still received record amounts of financial aid and borrowed more in student loans, according to findings of the College Board’s 2008 Trends in Higher Education Series.

The 2008 Trends in College Pricing report, which covers this academic year’s college costs, found that while the CPI rose nearly 5.6 percent this year, the average in-state tuition and fees at public four-year institutions increased by 6.4 percent to $6,585. Average tuition and fees at two-year public colleges jumped 4.7 percent to $2,402, and increased 5.9 percent at private four-year colleges and universities to $25,143.

“College prices are doing what other prices are doing. They’re not going up more rapidly; they’re just keeping pace,” said Sandy Baum, a senior policy analyst for the College Board and a Skidmore College economics professor (“Downturn Expected to Drive Tuition Up,” The New York Times, Oct. 30, 2008).

Lagging Economy Could Spark Increased Demand for Financial Aid

The concern among education experts is that while tuition increases were milder and closer inline with the CPI this year, these numbers may already be out of date. Since the data was gathered before the economy began its downward spiral, students at both public and private institutions may be in for even larger tuition hikes and even more borrowing next year.

The current economic crunch has led many states to slash their higher education budgets. In order to compensate for the loss of state funds, public colleges and universities in more than 12 states have been forced to raise their tuition costs.

But the flagging economy hasn’t just affected state schools; private colleges and universities have had difficulties raising funds from private donors — their largest source of financing — and have had to push any increased costs onto students.

“Private colleges face a real quandary,” Baum said. “Everybody’s going to have more people applying for financial aid, and it could really be that they’re going to lose enrollment if they can’t meet the need.”

According to the 2008 Trends in Student Aid report, part of the College Board’s Trends in Higher Education Series, graduate and undergraduate students received more than $143 billion in federal financial aid last year, and borrowed $19 billion from state and private lending sources — figures that are expected to rise as the cost of college increases.

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Paying for College Gets More Challenging For Families

Student Loan Girl — Thu, 23 Oct 2008 00:42:00 GMT

Paying for college definitely isn’t getting any easier.

“It just seems like it’s really hard, because it is,” says Diana Jacobs, a mother of twin, college seniors, whose husband recently lost his job, forcing the family to go from borrowing modestly to maxing out their student loan amounts (“In Downturn Families Strain to Pay Tuition,” The New York Times, Oct. 16, 2008).

To meet her sons’ college expenses this year, Jacobs pressured the twins’ schools to increase their financial aid offers — each school offered $3,000 more in aid. And for the first time, Jacobs told her sons that she wouldn’t be able to assume their student loan debt, leaving the twins to take out their college loans in their own names.

“We all came to that consensus, but I hate it,” Jacobs said. “I hate for them to come out of school with $20,000 in student loans.”

The Jacobs family is not alone. The current economic conditions have made it even more difficult for families to afford the continually rising cost of college: unemployment is rampant, the cost of living is increasing, and home values are declining, making it more difficult for families to get home equity loans to help fund college expenses.

Slow Economy Causing Widespread Financial Challenges

Economic times have become so challenging that a recent survey of nearly 3,000 parents found that 62 percent of families plan to use student loans to help pay for college expenses this year, up from 53 percent just a year ago, according to Fidelity Investments’ College Savings Indicator.

The survey also revealed that parents may meet only 21 percent of the total cost of their children’s college education this year, down from 24 percent last year.

Families’ financial challenges have led to a 10-percent increase in financial aid applications this year. Aid administrators are concerned that this increased demand for federal financial aid — from 12.3 million applications last year to 13.5 million this year — may be too much for the government and schools to handle, now that more than 100 private, third-party lenders, citing reduced profit margins and increased difficulty finding investors, have left the federal student loan program.

Making the federal financial aid problem worse, states are facing widespread budget shortages and cutting back on the financial aid funding they give to colleges and universities, and schools’ own financial aid funds are dwindling due to disappointing returns on their endowments.

The economic downturn has also forced private student loan lenders who offer credit-based private student loans, which help families fill the gap between federal financial aid and the total cost of attendance, to rapidly adapt to changes in the credit markets. In recent months, these lenders, to avoid having borrowers default on their loans, have tightened their credit criteria, causing students who had previously borrowed on their own to need cosigners this year.

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Proposed Bailout for Massachusetts Student Loan Authority Uncertain

Student Loan Girl — Sat, 16 Aug 2008 01:42:00 GMT

A third attempt to generate liquidity for the Massachusetts Educational Financing Authority may be too little too late for some 40,000 Massachusetts college students, reports The Boston Globe (“Student Loan Authority May Not Get State Aid,” Aug. 14, 2008).

In late July, MEFA announced that it wouldn’t have enough money to fund any new private student loans this fall after it was unable to launch a bond offering in time.

With proposals from both the state’s governor and treasurer fizzling out, the student loan agency is attempting to raise about $400 million in funds from large investors through a new bond offering on the public market — a deal that, if completed, wouldn’t be finalized until September.

But bonds issued by student loan lenders are having a hard time finding buyers, as investors remain cautious in the wake of the collapse of the subprime mortgage market and the ongoing resulting credit crunch. According to The Boston Globe, the issue of $350 million in student loan revenue bonds just completed on August 7 by the Higher Education Student Assistance Authority of New Jersey was the first successful student loan bond issue since May.

Several Solutions, Few Viable Options

Soon after MEFA announced that it was suspending its private loan program, Gov. Deval Patrick asked that the Massachusetts state pension fund purchase $50 million of the planned upcoming MEFA bond offering, but the request has been rejected by State Treasurer Timothy Cahill. The pension fund’s executive director has said this direct purchase of MEFA bonds would violate the fund’s investment policies.

Cahill has suggested an alternative solution, in which the state would back the MEFA bond offering, using taxpayer funds as collateral. But this initiative would require approval by the state legislature, which isn’t scheduled to meet until October.

Of the ideas lobbied so far as possible ways to help MEFA regain its financial ability to offer student loans, the proposal with the most potential, put forth by some of the state’s colleges and universities, may not go into effect until next year.

This plan would reinstate a participation fund, phased out several years ago, in which schools set aside up to 6 percent of the loan amounts their students take out through MEFA. These stockpiled funds serve as a type of insurance for bondholders and may provide a draw for otherwise reluctant potential investors.

Though most Massachusetts students have already begun pursuing other financing options, Cyndi Roy, the governor’s deputy press secretary, says that the administration is continuing to work with the state’s loan authority.

“Governor Patrick put a serious, viable proposal on the table,” said Roy, “and he remains actively engaged with MEFA on that and any other solutions that will help 40,000 Massachusetts families send their children to college this year.”

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Number of Students Applying for Federal Financial Aid Goes Up Almost 20%

Student Loan Girl — Tue, 12 Aug 2008 23:21:00 GMT

While college enrollment is only expected to grow by 300,000 students this year, some 1.3 million additional college students have already applied for federal financial aid — an increase of 17 percent, according to an article in U.S. News World Report (“Financial Aid Applications Jump 17 Percent,” Aug. 11, 2008).

The U.S. Department of Education accepts the Free Application for Federal Student Aid (FAFSA) between January 1 and June 30 of every year. (Submitting the FAFSA is the only way undergraduates can apply for federal grants and student loans.) In the first six months of 2008, the Education Department received more than 9 million FAFSAs, up from 7.7 million in 2007.

Some financial aid experts are postulating that this increase is a sign that more students are unable to afford their school costs this year, as college tuition continues to rise, outpacing cost of living, and as high gas and food prices, along with the current credit crunch, leave families with tighter budgets and fewer financing options.

“What we are seeing is more people filling out requests for financial aid, and for those who do, more people are qualifying and the aggregate need is increasing,” says Richard Toomey, associate vice provost at Santa Clara University (“Student Aid Requests Soar as Economy Plummets,” San Francisco Chronicle, Aug. 11, 2008). “Students who haven’t needed assistance before are coming in. You had to expect that this was going to happen with all the news of companies laying off thousands of people.”

Donald Heller, director of the Center for the Study of Higher Education at Pennsylvania State University, has a different theory: He believes the surge in FAFSA submissions could simply mean that more eligible students are becoming aware of their federal financial aid options and are trying to take advantage of them.

Extensive press coverage of a potential student loan availability crisis and the news of elite institutions expanding their financial aid offerings to accommodate more low- and middle-income families may have helped encourage more students to apply this year, Heller says.

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Governor Launches Website to Help Massachusetts Families Find Student Loans

Student Loan Girl — Thu, 07 Aug 2008 11:32:00 GMT

Massachusetts Gov. Deval Patrick has set up a financial assistance website to help the 40,000 families who were previously served by the Massachusetts Educational Financing Authority to find a new student loan provider for the 2008–09 academic year, following MEFA’s announcement on July 28 that it was suspending its private student loan program.

The news that MEFA would no longer be offering private student loans came just weeks before fall tuition payments are due and a mere three months after the state agency suspended its federal student loan program, citing the troubled economy and continuing fallout from the collapse of the subprime mortgage market. MEFA’s announcement last week marks the first time in the lender’s nearly 30-year history that it won’t be able to provide any student loans, federal or private.

The governor’s new student loans website gives borrowers an overview of student loans and the different types of student loans still available, provides links for families to compare the interest rates being offered by certain private student loan lenders, and brings together information on scholarship resources.

“It is critical for our students to be able to pay for the colleges of their choosing,” said Gov. Patrick. “I have directed my team to make available a list of resources to help students and their families locate the information they need to finance education this fall and beyond.”

Late yesterday, Gov. Patrick also made a move aimed at restoring liquidity to MEFA, asking the Massachusetts pension fund to invest $50 million in the state student loan agency by buying MEFA bonds — MEFA would use the proceeds from the bond sale to finance new student loans. The governor intends to approach Boston College, Harvard, MIT, and the University of Massachusetts, among other schools in the state, about making similar investments.

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Feeling the Pinch of Rising Food and Gas Prices, Students Flock to Food Banks

Student Loan Girl — Tue, 29 Jul 2008 19:42:00 GMT

The rising cost of food and gas has become so taxing for some students that food banks in college towns are beginning to see an influx of students, according to an Associated Press article (“Struggling College Students Turn to Food Banks,” July 26, 2008).

The University District Food Bank located in a college neighborhood near the University of Washington campus has seen a 25-percent increase in demand and now serves about 150 students a week.

And the Community College of Denver, which runs its own food-assistance program for students, asked the school this year to double its annual budget to $3,000 to account for a 50-percent increase in demand.

With food prices rising 5 percent in the past year — the highest increase in nearly two decades — and gas prices topping four dollars a gallon across the country, “more and more, it’s just the typical traditional student, about 18 to 22, that’s feeling this crunch,” says Larry Brickner-Wood, director of the Cornucopia Food Pantry at the University of New Hampshire.

Doug McManaway, a University of Washington student, says that after paying for rent he only has $100 left to spend on food for the rest of the month. A food bank may be his best option, he says, although “it kind of grosses me out.”

“But if my parents say, ‘No, we’re not going to give you any more money,’ ” McManaway says, “[food banks] may be a last resort.”

While food stamps are another option for students, qualifying for the program is a more complicated and restrictive process than getting in to most community food banks, which most often just ask students to provide a student ID to prove they live in the area.

To be eligible for food stamps, college students generally must be on public assistance benefits, work at least 20 hours a week in a state or federal work-study job, and take care of a dependent household member under the age of 6. Students who are enrolled in employer-sponsored job training classes may also be eligible.

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