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Annamaria Andriotis, Smartmoney.com senior writer, on why sequestration may lead to an 8% cut in financial aid for students.
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-- is Anna Maria Andrea -- she's a senior writer at Smart money dot com and you're doing some research which show I was fat.
Young people students borrowers are real Pennington -- serious benefits here we do go over the fiscal -- explained that.
College students really are at risk here if these automatic spending cuts.
Do you go into a fact that would lead to about an 8% cut.
In federal financial aid so it's pretty big we're talking about anything from -- pell grants -- the free money the government gets out students.
As well as the federal loans that students get and then we even have those tax credits.
Many families rely on.
I wouldn't been doing it's it's been giving up to 2500 dollars a year for four years helped them to reimburse them -- politics and -- That expected to scale back to just about 19100 dollars for just two years.
So pretty big cut there and one that is directly tied to the fiscal cliff.
So what do you think would be the short term impact in bags in the long term it seems like it might actually bring the price of college down if there is less money out there.
-- -- -- I mean a lot of people think that's what drives prices up but in the short term it would certainly be difficult adjustment.
In the short term you're right but the fact is that we're not going to see tuition prices dropped at least drastically anytime soon no matter what the federal government -- And that means that for families they're going to have to look for other ways to make up the gap between the AD -- and the college costs they have to pay.
Longer time there is -- -- -- well -- debate out there that the more money the federal government gives out -- it's free money or loans.
All that's doing it's pushing up the price of college tuition increasing the debt burden of these young borrowers who are because it's an unforgivable -- bankruptcy he.
They're stuck with it for really no way to get out of it decades.
And it really prevents their quality of life and it's one of the big.
Down drags on the overall economy.
And it also points to the fact that families are really going to have to take.
A lot more initiative here in terms of figuring out OK how much are we willing to spend a college education and -- are -- looking -- If that's -- college -- -- -- birthday.
I'm for instance in state public college as.
Cost about 8500 dollars a year on average now -- one thing that's cheap but it's definitely cheaper than what -- going pretty -- -- college area we have breaking.
