Cal Poly students lined up Tuesday outside the Financial Aid office, awaiting funds that haven’t yet arrived. Staff have seen more students this quarter still without aid at this late date; a result of an increase in students utilizing financial aid during this tough economic year.

Additionally, students who procrastinate and continue to turn in forms late have burdened staff and a new direct lending program that launched late summer. Cal Poly’s Financial Aid office is using the William D. Ford Federal Direct Student Loan (DL) program as of Fall 2009 quarter, a switch from the former Federal Family Education Loan (FFEL) program. As a result, students and parents are now borrowing their loans directly through the U.S. Department of Education rather than a bank or other financial institution.

Lois Kelly, director of Financial Aid, said Wednesday the switch had administrators and staff carefully monitoring the first disbursement of funds, anticipating a smooth transition, but prepared for any bumps.

More students this year have applied for financial aid

“More students this year have applied for financial aid, most likely a result of economic difficulties, so it’s no surprise more students are expressing frustrations. Overall, the transition has helped provide additional students with more aid,” said Kelly.

Cameron Walters, a Junior mechanical engineer, has been without financial aid for four weeks. The response he received Tuesday from the Financial Aid office…’two more weeks.’

“They said a couple of weeks a couple of weeks ago. There isn’t much I can do but wait and try to get by,” Walters said.

Without the funds to pay for a parking permit, Walters commutes to school via bus instead of his car, but unlike many of his peers, he walks on crutches after a toe injury, causing him to move slowly and uncomfortably.

“I stopped driving my car because I have no money and can’t even buy the books I need,” Walters said.

But Cameron admits he didn’t submit all of his forms on time. Still, other students turned in forms early.

Sophomore bio-medical engineer, Joe Casillas, had his forms submitted last spring quarter. When he arrived on campus three weeks ago, he noticed his account was empty.

“The Financial Aid office said they had probably lost or misplaced my forms, that they weren’t in the system or even in a folder,” Casillas said. “I was told the easiest solution would be to fill out another form instead of looking for the original, so I did.”

Exactly a week later, Casillas called the office only to find out it would take four to six weeks longer than they had originally quoted.

Casillas’s parents would have a hard time affording the costs of books and tuition out of pocket, so rather than burdening his parents further, Joe decided not to tell them he was without funds. He also hasn’t informed teachers.

“Teachers assume I have my books. I’d feel a little weird if I told them I couldn’t buy them, embarrassed,” said Casillas. “They would say I read the syllabus and that I shouldn’t be unprepared. It’s not like if I don’t have my books, I’m excused from the test. It’s so frustrating to have to wait weeks when they say its such a simple process now.”

In March, a press release from Cal Poly’s Financial Aid office stated that the switch to DL from the Federal Family Education Loan (FFEL) program comes after a lengthy review of services provided by FFEL. The review found that recent changes in FFEL negatively impacted sources of loan funding, as well as a noticeable decline in overall customer service. Administrators are promoting the change saying the new DL program is simple, convenient, and flexible.

“Parents and students with family members attending schools that use the direct loan program asked us why we were not participating in DL – because the process was so simple,” said Kelly. “As a result, we evaluated both programs and decided to make the switch.”

The consequential issue: students continue to pay little attention to “to-do” lists and deadlines, cluttering the system at the eleventh hour. Although everyone agrees immediacy is ideal for processing paperwork, diligence and careful attention are required to ensure quality and accuracy; a price paid with time.

Until aid is disbursed “you feel like you have to work harder than everyone else,” said Casillas. Without the books, I might pass my first test this week, if I’m lucky. All I would tell people is to watch deadlines and get forms in early.”

Administrators are encouraging students, as they do each quarter, to carefully manage financial aid matters before the school quarter begins. The Financial Aid office is working to expedite requests and equip students with the funds they need to succeed.

Business as Usual by Marlize van Romburgh

“All the world’s a stage, And all the men and women merely players: They have their exits and their entrances; And one man in his time plays many parts…” – Shakespeare

Capitalism’s received quite a blow to its reputation in the past few years. We’ve been told that a strange breed of men, in lustful pursuit of profits, brought the entire world economy down. These men, so unlike ourselves, play the parts of the antagonists. Investment bankers, corporate CEOs, mortgage brokers, oil executives, whoever the hell they were –  these people, we’re told, are the villains in the great tragedy that is the financial crisis.

To that end, the government has taken unprecedented measures all aimed at taming the ‘unruly spirits’ of the free market. The argument goes that if we simply regulate enough, we can keep the harmful forces of greed and risk-taking from spiraling out of control. 

Now, it would be one thing for us to take such bold regulatory measures and to spend trillions of dollars if our reasons for doing so were based on conclusive factual evidence indicating that it was indeed a lack of government oversight that lead to financial collapse. 

After all, as Obama himself has said, “it is only by understanding how we arrived at this moment that we’ll be able to lift ourselves out of this predicament.”  Of course; how else do we learn if not from our mistakes? 

Yet much evidence points at the fact that it wasn’t a lack of regulation, but an excess thereof, that caused the financial crisis. And those facts – and facts they are – are being blatantly dismissed even as the United States moves through arguably the largest economic reform in its history. 

Despite the rhetoric, the Obama administration (and the Bush administration previously) seems to have little interest in encouraging a genuine understanding of the roots of the crisis. 

In a speech before Congress at the end of February, Obama again blamed deregulation of the financial system: “Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway.”

No one is denying that risky investment was one factor in the financial collapse. But to blame everything on something as unquantifiable as greed – the pursuit of “a quick profit” – while ignoring the much larger and more measurable influences is truly disingenuous. 

The facts are as follows. Former Fed Chairman Alan Greenspan created an excess of easy, “cheap money” when he lowered interest rates to record lows of 1 and 2 percent in the early 2000s. What followed was a speculative frenzy in the real estate market which sent home prices through the roof. Meanwhile, government-sponsored enterprises Fannie Mae and Freddie Mac ballooned larger and larger, buying more and more risky loans from other lending institutions and socializing those risks to taxpayers. The Community Reinvestment Act of 1977, in the interest of further encouraging homeownership, forced banks and other lending institutions to make loans to low-income individuals who they wouldn’t normally lend to. (Perhaps Obama should have explained that the banks who “pushed those bad loans” where doing so only because the government was pushing them to do so.) 

If the administration was truly interested in evaluating the root causes of the financial crisis, it would lay all the facts on the table, not just those that are politically viable. 

I’m no economist, but I do have a profound interest in studying the subject; there’s just something about economics and the logical, quantifiable way it looks at the world. And from what I’ve learned, I’ve come to the conclusion that capitalism is neither good nor bad, but merely the productive outlet of a free and prosperous nation.  

Because the truth is, the actors on Wall Street and Main Street can only play out their parts according to the stage they’re placed on. Leave them to perform their roles in peace — to create, to buy, to sell, to trade — with minimal interference and you’ll see the intricate scaffold of the free market system begin to take shape. On this stage, prices, acting as signals to both suppliers and demanders, always tend toward equilibrium. 

It’s when the stage changes that the story changes; distort the very markets that make up our economy and the tale takes a tragic turn. Bubbles balloon and pop, markets collapse, credit freezes.

If everything is considered – and if our leaders were truly open with us – they would admit that over-regulation, not deregulation, played a key role in creating the financial crisis. Federal Reserve policies led to interest rates that made loans seem like must-haves for people who could not afford them, while legislation forced bankers to make loans to those high-risk lenders. And that’s just the beginning of it.

But you don’t have to take my word for it. I only ask that if you take one moral from this story, it’s that you do your own homework: Find out for yourself what the facts are, precisely so that you can gain the very “understanding” our president speaks of. 

Marlize van Romburgh is a journalism senior with an economics minor and the Mustang Daily editor in chief.