Webster’s defines stimulate as “to excite as if with a goad to action, as to stimulate one by the hope of reward.” Positive synonyms are - to animate, encourage, and urge. More negative synonyms are - incite, instigate, exasperate and to incense. So which is it? Will the $800 billion dollar stimulus encourage or incense?

A guest commentary in last week’s Chicago Sun-Times written by Rev. Jesse Jackson asks an interesting question - If banks can borrow at a 1% interest rate, why not students? Jackson’s proposal highlights the fact that nearly everyone has their own take on how best to spend the $800 billion stimulus. Most of us in higher education are pleased that the stimulus package will increase Federal Pell Grants spending. But, will this increase in Pell Grants alone provide the resources to eliminate our students’ financial needs?

Most of us employed in higher education believe that a significant investment in education is one way to meet the current and future demands placed on our economy and society. This may be considered self-serving. But, if I can get a 0% loan to buy a car in today’s market, does it make sense to continue to charge students (and parents) interest rates of 5% or more?

Now it’s your turn. Are 1% college loans a good way to make college more affordable? It this the best way to help students and families overcome the deepening recession and rising cost of higher education? Is it an efficient use of taxpayer money? What about students who have borrowed at higher interest rates? What about loan limits? Should limits be reconsidered? I look forward to reading your opinions.

A tsunami (from the Japanese word harbor wave) is a series of huge waves caused by an undersea disturbance, such as an earthquake or volcanic eruption. The waves travel in all directions from the area of disturbance, much like the concentric ripples caused by throwing a rock in a pond - except the magnitude of the disturbance and ripples are much, much greater.  Tsunami waves can travel in the open sea as fast as 450 miles per hour, but can be almost imperceptible until the waves hit shallow waters where they can rise to 100 feet and smash into the shore causing mass destruction. These are sometimes mistakenly called "tidal waves," but tsunamis have nothing to do with the tides. They are not cyclical or common and are more random.

With this in mind, it seems that we are in for a tsunami of sorts in our offices.  Think of the failure of the mortgage industry as the earthquake that has sent concentric ripples throughout the economy. These waves first affected the credit market and are now spreading to affect almost every aspect of the economy from banking to small businesses to families and their ability to pay for college. At my office, we are starting to see the beginning swells of potential tsunami waves reaching our shores.

There is growing anxiety - fueled by the national media - about the availability of financial aid funds. This is especially acute for alternative loans as more lenders seem unable to provide these funds. Fortunately, Congress has been quick to pass legislation to aid the lack of liquidity in FFELP and a $6 billion shortfall in the Pell Grant program, but anxiety about financial aid remains as the demand increases.

More students and parents are inquiring about financial aid and some parents are receiving pink slips.  As a result, we’re beginning to see increases in the number in professional judgment appeals. I am especially concerned that appeals for the 2009-10 school year will go through the roof compared to the slight increase we are seeing now.  I’m also concerned that funding for financial aid funding will be strained as institutions, states and the federal government struggle with dwindling resources at the same time that the demand for aid increases.

So put on your life jackets and leave a comment about what you are experiencing in your offices. Are you doing anything to prepare for the possible tsunami? NASFAA needs your input to represent the financial aid needs of students and develop solutions to ensure families get the financial aid they need.

Well, I am writing this on 8-8-08 (the start of the Olympics) and the craziness of this summer’s Dog Days continues. Consider the following:

• Brett Favre is now a Jet after a protracted soap opera with the Packers
• Manny Ramirez, formerly of the Red Sox, is now a Dodger;
• Paris Hilton puts out the best political ad of the season that sounds, in some degree, intelligent and reasonable
• The Governor of Massachusetts, Deval L. Patrick, brings Mr. Cuomo’s investigations full circle, as shown in a Chronicle of Higher Education article.

The Chronicle article indicates that the Governor has asked Massachusetts colleges to invest in the state-owned Massachusetts Educational Financing Authority (MEFA) so thousands of the state’s students can continue to receive student loans. MEFA recently suspended its federal and private student loan operations. The Governor’s request appears to be a clear violation of Mr. Cuomo’s conflict of interest guidelines established last year. Nevertheless, the Governor’s actions are considered commendable by many.

So what do you think? Should colleges and universities invest in what some would say is a noble action for Massachusetts’ students, or do conflict of interest concerns outweigh those sentiments? Is the pendulum swinging back to some uncomfortable arrangements between schools and lenders? Or, has public policy moved well beyond?

(And speaking of Mr. Cuomo, just what is he planning to do with the funds he collected last year? My suggestion? Work with NASFAA to target those funds to enhance access and financial literacy initiatives!)

Now I’m trying to figure out whom the next celebrity may be that will make the news. Enjoy what’s left of your summer!