The credit crisis is hurting home buyers, car shoppers, and nearly every student at one nursing school in Philadelphia.
A nursing school in Philadelphia is struggling to keep its doors open in the face of the continuing credit crisis. Students at the school depend on a special state loan program to pay for tuition, but that money has dried up and the mostly low income students have few other options.
St. Joseph’s School of Nursing opened in Philadelphia in 2006. It’s part of an effort by the state to boost the number of nurses and nursing schools in the state. Each year it takes on between 50 and 80 students. Shiekhyla Abdul says she chose St. Joe’s because it’s a one-year program to become a registered nurse.
Abdul: I have been a CNA, a care nurse, for seven years and I just love helping people. So I just knew I wanted to further advance and become a registered nurse. And I also have four kids and I’m doing it for them.
Abdul trimmed her work hours to just a few a month to meet her school demands. She also applied for a loan through The Pennsylvania Higher Education Assistance Agency, called PHEAA. The loan was designed specifically for St. Joe’s and four other unaccredited nursing schools. St. Joe’s dean, Carole Baxter:
Baxter: In order to get federal financial aid, students must be attending an accredited program. But a program has to wait a couple years before they can get that national accreditation.
For students at non-accredited schools, sometimes the only option is to apply for a private loan. Those are harder to qualify for and lenders often charge higher rates and fees. To make it easier on students, PHEAA stepped in to provide loans that mirror federal loans until St. Joe’s could earn its accreditation. St. Joe’s graduated two classes, and had hoped to become accredited by next year. But in January, just two weeks into the school year, Shiekhyla Abdul and her classmates got an announcement. The loan program has been suspended. PHEAA’s spokesman Keith New says the program exhausted its funds, and hasn’t yet found a new lender to continue.
New: Because of the problems of the financial market and how PHEAA accesses its capital in the bond market, which is dysfunctional at this point, we weren’t able to continue to provide the lending dollars for that program.
PHEAA is not alone, says Peter Warren, the president of the Education Finance Council.
Warren: There are a number of nonprofits and state agencies who have suspended making private student loans, because they haven’t been able to finance them in the capital markets.
Warren doesn’t have an exact count. But according to FinAid, a group that consolidates student loan information, 29 state loan agencies have suspended lending. Shiekhyla Abdul says she hasn’t received any loan money and doesn’t have any other options to pay for school.
Abdul: I had applied for Sallie Mae, I got denied… They are talking with PHEAA and hopefully that comes through because that’s what I’m relying on. Without PHEAA I don’t know what I would do because I don’t have the money.
Abdul’s situation mirrors about 80% of St. Joe’s student body, which means the school could be forced to shut down altogether. Already half the faculty have been fired, others furloughed, and the director of admissions was dismissed. Some students, like Brenda Antwi, say if things don’t work out they will try to transfer to other schools.
Antwi: I know I’m going to become a nurse, regardless. If it’s not here, it’s going to be somewhere else.
St. Joe’s has been working with state legislators and PHEAA to pursue other options, such as siphoning stimulus money, before closing its doors. The school is continuing classes until the term ends in June. And Dean Carole Baxter says she has faith St. Joe’s can make it the nine months to graduation.