CSU’s Emergency Loan Not for All Emergencies
An overview of CSU’s Emergency Student Loan
Scottie DeClue, Matthew Kraus
For students whose financial aid doesn’t come through on time, the Bursar’s office offers the Columbus State University Emergency Loan to defray college expenses. But a closer look reveals that students who need finances for food, rent, and books are out of luck, as this “emergency” loan covers only institutional charges like tuition and fees.
CSU News Team attempted to track down the benefactor of the loan to determine whether or not changes could be made to better assist student in the future, and discovered that the sponsors were not who the loan claimed to be.
The loan, according to its application on the CSU website, is sponsored by the Dora H. and Jac G. Rothschild Foundation as well as the CSU Foundation. Upon investigating the loan, the CSU News Team discovered inconsistencies with the university’s information. The CSU Foundation, whose name is on the loan, was unaware of the loans existence.
“What is the CSU Emergency loan?” Said Rocky Kettering, Vice President of University Advancement and Executive Director of the CSU Foundation. “I have never even heard about such a thing. Nor do I have any record of a Rothschild Foundation.”
Indeed, records online indicate that the Rothschild Foundation, which was a domestic nonprofit corporation in Columbus since 1971, was dissolved July 9, 2005. Kettering’s database showed no records of contribution from the organization, nor was he aware of any direct contribution made by the CSU Foundation for the express purpose of the emergency loan.
The CSU Foundation is responsible for managing the funds of many of the scholarships and grants available to CSU students, but according to Kettering, the Financial Aid department determines how the funds are divided. “Some of these accounts called endowments accrue interest, and those funds are given directly to Financial Aid,” he said. “We allocate the money, and [the Financial Aid] department takes care of the rest.”
Kettering later clarified by email that the CSU foundation will have its name removed from the 2017–2018 Emergency Loan Application, claiming that the connection between the Rothschild Fund and the CSU Foundation must have been a mistake.
“The loan is distributed by financial aid,” said Beverly Johnson, Financial Aid Counselor, “but the money comes from the Bursar’s Office.”
The Bursar’s Office, which sets the parameters and conditions of the loan, allows each applicable student up to $2,050 per semester, with a minimum amount set at $285. The school allows each student who receives the emergency loan three months to repay the full amount without interest or additional fees.
The loan, which is similar to a loan that one might take out from a bank, does have some major stipulations that students should take note of before committing. For example, a co-signer with acceptable credit must sign the application before the school loans a single penny.
The co-signer becomes responsible for the loan should the student be unable to pay, which means that the co-signer’s credit score is tied to the loan. A failure to repay the loan on time would be detrimental to the co-signer.
There is also an interest rate should the recipient default, which is extra money owed in addition to the loan. The CSU Emergency loan has a 12.67 percent interest rate, which is on par with most credit card’s interest rates. Should a student not repay the loan within the allotted grace period of three months, the interest rate begins to increase at a rate of one additional percent each month, and a late fee of 4% of the remaining balance is also charged.
Jonathan Giles, a computer science major and junior at CSU expressed concerns that college students might not make enough to pay back the full amount in the allotted time.“I wish I could have had a little more time to pay back the loan,” said Giles. “I work part time and only make about $400 dollars every two weeks.”
Students who receive financial aid from loans, grants, and scholarships are normally allowed to use the money in anyway they see fit, and some schools like the University of Georgia have an emergency loan that equivalates cash. With the CSU Emergency Loan, students spending options are very limited.
Jacob Kunze, a business major who has used the emergency loan, stated that he wished the loan covered more than just institutional charges. “I use my financial aid refund to pay for all sorts of things –like, things that I need to survive,” Kunze said. “If I take the responsibility of the repayment, what difference does it make how I spend the money.”
Kettering agreed with Kunze’s philosophy. “Students use their loan refunds for just about everything,” he said, “and to call that loan an ‘emergency loan’ is misleading to those students.”
According to the American Association of University Professors, full-time students enrolled in undergraduate programs should be working no more than ten to fifteen hours per week –on campus. Statistical evidence and research supports this claim, as there is a negative correlation between retention rates and high workload.
Unfortunately, research gathered by the National Center for Education Statistics shows in recent polls that nearly half (45 percent) of all undergraduate students have a job and work while enrolled. Nearly one tenth of those students are working full time.
The CSU Emergency Loan has proven to be useful for many students in a tight financial bind. However, future students who look to the bursar’s office for help should take caution when signing any official documents. Like other loans, misreading the fineprint may lead to future financial complications.