Last Updated Jul 27, 2011 9:12 PM EDT
If Congressmen who oppose raising the debt ceiling don't relent, you could probably also say goodbye to:
- Pell Grants
- Stafford Loans
- Perkins Loans
- PLUS Loans for Parents
- And all other types of federal student aid.
It's not just students who depend on federal aid, who are in jeopardy thanks to the insanity on display in Washington, DC. Also threatened are thousands of colleges and universities that depend on the revenue generated by federal college loans.
If Congress does not raise the debt ceiling, the federal budget will have to be slashed by 40% since the government would no longer be able to finance its spending. New federal college loans wouldn't be possible because they are funded by the US Treasury.
Shutting Down CollegesI asked Mark Kantrowitz, a student aid expert and the publisher of FinAid, a wildly popular financial aid site, for his take on what would happen if the Congressmen who oppose raising the debt ceiling don't back down. Here's what Mark said:
"If Congress doesn't raise the debt ceiling, the government will not be able to make new federal education loans and it is very likely that all other federal student aid programs, including the Pell Grant, will be eliminated. Most colleges would be forced to lay off some faculty and staff and many colleges would be forced to close. It would be nothing short of a national disaster, and one of man-made origin."
Does Congress really want to create such havoc for millions of college students and the schools that serve them?
Let's all hope not.
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Federal student loan image by VinothChandar. CC 2.0.