The New York Higher Education Loan Program (NYHELPs) touts itself, on ads seen on buses and heard on radio, as "bridging the gap" in college financing.

After exhausting federal grants and loans, scholarships from colleges, and State programs, such as the Tuition Assistance Program (TAP) [itself an extremely limited resource, particularly for the financially hard-squeezed middle class, being quietly phased out in NY (TAP, that is. Not the middle class. Then again, with property taxes what they are, the middle class may also be headed toward extinction)], NYHELPs offers students what it calls "low cost" student loans.

The low down on the "low cost?" Interest rates start at 7.55% for an "immediate repayment" loan, and go up to 8.75% for "full deferment."

Not exactly the "low cost" most students have in mind, considering that home mortgage rates are hovering near 4.25%, undergraduate Stafford (subsidized) loans for 2010-11 are a fixed 4.5%, going down to 3.4% in 2011-12 [unsubsidized Stafford loans hold the rate at 6.80%], and the PLUS loan rate is 7.9%. Private loans vary, but interest rates can be considerably less than what NYHELP offers.

Granted, the 2% and 3% student loans of yesteryear are long gone, but geez, if New York's Higher Education Services Corporation (HESC), a public agency utilizing public tax dollars, wants to offer students a hand up to "bridge the gap," then beat the rates offered by Stafford and the private lenders, with truly low cost gap loans.

As it stands, NYHELPs' version of "low cost" loans to "bridge the gap" is the financial equivalent of the the MTA's efforts to close the gap between station and platform. Too many students, with already insurmountable debt, falling through the cracks. HESC's idea of "bridging the gap" with relatively high interest loans to pay for that college dream is no better than the MTA's exorbitant tolls on New York's bridges as a means of paying for the MTA's mismanagement of taxpayers' money.

Here's a thought, New York. ZERO interest loans conditioned upon attending a college (public or private) in New York, provided that the student continues to reside in New York for at least five consecutive years post graduation, with loan forgiveness for students who commit to a minimum of five years of post-college public service (or enter into a public service career, such as teaching).

We can do better to help our children on the education front, and making college truly affordable, in an economy that is stagnant and an environment where colleges still believe they can charge whatever they like (and they do), must be our top priority.
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Don't let college dreams turn into financial nightmares! Start you search for grants and scholarships at Fastweb.com. Already registered at Fastweb and committed to the search? Search on! Register at scholarshipexperts.com and meritaid.com. [Tip of the scholarship search iceberg, but you have to start somewhere!] Looking for low-cost student loans beyond those offered by the feds or state? Check out SimpleTuition.com.

Be sure to consult with your independent college planning counselor for creative ways to fund your college education. College Connection can help you mine those hidden scholarships and unlock the secrets of paying for college.

E-mail The College Whisperer at info@TheCollegeWhisperer.com.

The views and opinions expressed in this blog are solely those of The College Whisperer.
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