August 19, 2009
As the start of the fall semester approaches, students across the country are finding themselves in a precarious position when it comes to financial aid. As we've previously mentioned, several states have been forced to make deep budget cuts this year, canceling or reducing funding for scholarships and grants, in some cases after award notices have already been sent to students. This has left students scrambling for last-minute student loans, and in some cases facing the difficult decision of whether to take a semester off while trying to procure alternate funding.
The Wall Street Journal and U.S. News both feature articles this week that offer up alternatives for students who have come up short on funding for the fall. While scholarship opportunities are still available for the coming academic year and should be pursued, students who need immediate sources of funding may want to check out private loans, peer-to-peer lending, and emergency loans and other aid offered by some universities and state agencies. Reducing to part-time enrollment or transferring to a cheaper school are also last-resort options that may be better choices than taking an entire semester off or putting tuition on a credit card.
An appeal to your college's financial aid office can also produce more financial aid, especially if your financial situation has changed since you completed the FAFSA, or if your parents were turned down for a federal PLUS loan. Additional loans, and even some grant aid, may be available if you ask.
In addition to trying to find new sources of funding, some college students are also petitioning their state legislators to get grant and scholarship funding restored. Lawmakers in Utah have listened, promising to reinstate full funding to the state's New Century Scholarship program, whose awards they had previously planned to cut nearly in half. Students in Michigan also may yet get a reprieve from budget cuts, as the governor of Michigan and numerous state legislators are vowing to do what they can to keep the state's popular Promise Scholarship program intact.
Even if states manage to find funding for grants and scholarships this year, the next fiscal year could also prove challenging. Students in cash-strapped states who are planning to rely on state scholarships to pay for college may want to start looking into alternate funding now. One of the best ways to do this is to start with a free college scholarship search.
January 6, 2009
Full-tuition scholarships, half-tuition scholarships, and financial aid packages free of student loans continue to be unveiled at institutions across the country. While it may be too late for many students to alter their college application plans, if you are still looking for colleges for 2009, or if you happen to have applied to one of these schools, you may find the following information useful. This week, The Chronicle of Higher Education profiled several significant scholarship programs private, community, and state colleges are launching or expanding for incoming students in 2009.
Northern Illinois University recently announced the Huskie Advantage, a program that will ensure that all incoming freshmen eligible for Federal Pell Grants will receive enough financial aid to meet the full cost of tuition. Similarly, Montgomery County Community College in Pennsylvania is raising money to provide larger scholarships to students who receive a small Pell Grant or narrowly miss the cutoff for Pell eligibility.
The University of Pennsylvania will be eliminating student loans from the financial aid packages of all students this fall. It's the latest in a string of well-endowed private colleges to put forward generous institutional aid for its students. The Sage Colleges of New York are also following suit, promising to offer aid to meet new students' full financial need in the next academic year.
Two private colleges in Georgia and Minnesota aren't eliminating loans, but they are drastically reducing the cost of college for many applicants. Agnes Scott College in Georgia is offering scholarships and grants to nearly halve the cost of attendance for all recipients of the Georgia Hope Scholarship, as well as an additional $3,000 grant for first-year students. Saint Mary's University of Minnesota offers students with family incomes of under $100,000 financial aid packages that will reduce the cost of attendance to the average price of a Big Ten school. For the neediest 25 percent of students, St. Mary's will provide all of this aid institutionally, allowing students to use federal student financial aid to cover much of the rest of their college costs.
January 7, 2009
Barack Obama became known for his web presence during his Presidential campaign. He and his transition team have kept up this reputation through YouTube addresses and websites such as Change.gov, the official transitional website. Now the Obama transition team is asking for public comments--or at least blog comments--on issues related to paying for school. A post on the Change.gov blog is currently soliciting feedback about college affordability. While there's no guarantee that the President-elect himself will read your post, if you would like to weigh in on educational policy at least in a small way, you can view and comment on the January 5 Change.gov blog post "Keeping College Affordable."
The blog post, along with many other recent discussions of college costs, makes a nod to former Rhode Island senator Clairborne Pell, who passed away on January 1. Pell was instrumental in shaping the current federal student financial aid system by helping create the Federal Pell Grant, which was named after him. Pell Grants continue to make up an important part of the financial aid packages of many students, covering up to the full cost of tuition at some state and community colleges.
However, as tuition costs rise, Pell Grants and other sources of federal aid are not enough to make college affordable for an increasingly large number of students. During his campaign, Obama proposed a few substantial changes to the way college financial aid is structured, and hopefully his administration will do more to seek out and act upon feedback from those who are struggling with the costs associated with higher education. However, if you're skeptical, or just looking for more immediate ways to make college affordable, there are resources available. Start with a free college scholarship search on Scholarships.com. Many scholarship application deadlines are approaching in the coming months, but there is still abundant scholarship money for those who take the time to apply.
January 8, 2009
Fifth Third Bank could potentially lose its right to participate in the Federal Family Education Loan Program, the Department of Education's program that allows private banks to offer Stafford Loans and PLUS loans. An audit by the Department of Education's Office of the Inspector General suggests that Fifth Third may have offered illegal inducements to third-party lenders. Lenders that participate in FFELP, such as Fifth Third, are legally allowed to act as trustees for third-party non-FFELP lenders, allowing the non-FFELP lenders to make or purchase federal student loans. Fifth Third's actions in some of these "eligible lender trustee" agreements have come under scrutiny, resulting in the audit and harsh recommendations from the Office of the Inspector General.
Fifth Third and the now-defunct Student Loan XPress entered into eligible lender trustee agreements with three lenders: MSA Solution Inc., Pacific Loan Processing Inc., and Law School Financial. The two FFELP lenders then paid these three trustees premiums to generate higher volumes of student loans. According to the audit, this violates federal law and could cost Fifth Third its status as an FFELP lender. The Office of the Inspector General also recommended that the Department of Education further penalize Fifth Third through fines and the withholding of federal guarantees on the over $3 billion in loans generated through these agreements.
This is not the first time an FFELP lender has come under fire for lending practices. Over the past two years, numerous lenders have been investigated by the Department of Education or New York Attorney General Andrew Cuomo for questionable actions ranging from bribing schools for places on preferred lender lists to recycling loans through a loophole to claim millions of dollars in federal subsidies.
January 9, 2009
The Illinois State University Center for the Study of Education Policy released its annual report on state tax support for higher education today. According to the Grapevine report, the best case scenario is that for fiscal year 2008-2009 (July 1, 2008-June 30, 2009), state higher education spending grew by an average of 0.9 percent across the country. The report acknowledges this figure is likely rather optimistic, as many states are still in the process of trimming budgets for the current fiscal year, and some are requesting that colleges not spend appropriations they've already received.
While almost flat growth in state spending nationwide is bad enough, the picture looks even worse compared to last year's growth of 7.5 percent, the largest year-to-year increase in higher education spending since 1985. Some states have cut education spending significantly, such as South Carolina and Alabama, whose state education budgets have seen decreases of 17.7 percent and 10.5 percent respectively. Some states still are showing substantial increases in higher ed spending for the current year. The two biggest increases, in Wyoming and Hawaii, are 10.9 and 10.6 percent.
Coupled with shrinking endowments and more student requests for financial aid, this news isn't good for state colleges and universities. Tuition increases, including some substantial ones, are becoming increasingly likely for 2009-2010, despite families' increasing inability to pay for school out of pocket or access lines of credit such as private student loans. This is yet another reason to fill out a FAFSA and do a scholarship search today.
December 5, 2008
December 12, 2008
With bailouts, economic stimulus packages, and a number of other pieces of emergency legislation being passed to prop up seemingly every aspect of the economy this year, a group of organizations connected to student financial aid are asking for additional support for college students. In a letter to Congress, thirteen higher education advocacy groups, including the Project on Student Debt and the National Association of Student Financial Aid Administrators, asked that the next economic stimulus legislation include expansions to financial aid, namely Federal Pell Grants and Federal Work-Study.
While maximum Pell Grant awards have gone up slightly in recent years and legislation such as the Ensuring Continued Access to Student Loans Act has helped students continue paying their bills, these thirteen advocacy groups feel that more still needs to be done. Family 529 plans and other savings, as well as college endowments, have taken enormous hits, putting tuition costs potentially further out of reach of many. Meanwhile, private loans have become harder for students with poor credit or no cosigner to obtain, further jeopardizing some students' ability to continue attending college. Advocacy groups hope that stimulus legislation can help alleviate these college financing problems.
The letter called for four major changes. Two involve contributing more to existing federal aid programs, a third suggests making minor adjustments and clarifications, and a fourth involves establishing an emergency fund for students who have been hit hardest by the recession. Under the proposed plan, Congress would increase the maximum Pell Grant amount to $7,000 per year (it's currently $4731) and fully fund the program. Funding for campus-based work-study programs would also increase by 25%. The group also would like to see PLUS loans become easier for families to learn about and obtain. Finally, the group suggests that an emergency student loan pool be created for students who still are unable to meet their financial need through help from their schools, college scholarships, and federal student financial aid. This pool would only be available at institutions that show a strong commitment to helping students pay for school.
While there's no guarantee Congress will incorporate any of these suggestions, higher education groups are hopeful.
December 17, 2008
Amid all the bleak news about college affordability, family finances, and the economy in general, it's nice to hear something good every now and then. And there is good news out there. Despite financial hardships, many colleges are not only continuing to offer generous financial aid packages, but are actually expanding scholarships, grants, and tuition waivers for needy and deserving students. As a taste of what's out there for students across the country, we're presenting a roundup of campus-based aid programs announced this week. Conduct a college search on Scholarships.com to learn more about these and other schools committed to helping students enroll and stay enrolled. While you're at it, be sure to start a free college scholarship search to find more ways to fund your education.
A number of cities, states, and universities offer promises, guarantees, or other commitments to cover four years' full tuition for financially needy or academically gifted students. While a wave of these scholarship and grant programs were launched in financially better times, more are still being unveiled in the current economic climate.
Manchester College in Indiana has rolled out a "Triple Guarantee" that promises to make college more affordable and less stressful for its students. Qualifying students are guaranteed a combination of federal, state, and institutional aid up to the total cost of tuition and mandatory fees for four years. Students with a 3.3 GPA or higher who qualify for the Pell Grant are guaranteed full-tuition grant aid. On top of paying tuition for four years for needy students, the college also guarantees four-year graduation for everyone who meets progress requirements, and will allow qualified students who need a fifth year to attend for free until they graduate. Finally, the school also guarantees a year of free tuition for additional coursework or certifications for students who fail to find a job placement or a spot in graduate school within six months of graduation.
In a similar vein, St. John's University in New York is also offering a substantial tuition discount to unemployed alumni. Graduates of St. John's who were laid off in the economic downturn can return to college to pursue a graduate degree for half-price. Alumni will also receive free career counseling services and see their application fees waived for graduate programs.
Finally, Texans get multiple pieces of good news. More students at Rice University will be able to graduate debt-free, as the university has expanded its no loan program to families making up to $80,000 per year. Students with family incomes over the $80,000 threshhold who still qualify for need-based aid will not be asked to borrow more than $10,000 in student loans for four years. Lamar University is also making college more affordable for Texans by unveiling the Lamar Promise, which will cover tuition and fees for all freshmen and transfer students who qualify as "dependent" students for federal aid whose families make less than $25,000 a year. Students who make more are likely to also receive substantial financial aid packages. Tuition assistance will come in the form of state, federal, and institutional financial aid.
December 19, 2008
We've said it before and I'm sure we'll say it again. Despite the economy, money for college is still available. A scholarship search, a visit to your college's student financial aid office, and a quick perusal of recent college news should all confirm this. But if you're someone who needs additional empirical evidence, a survey conducted by the National Association of Independent Colleges and Universities, a group representing private colleges (whose students typically rely more on institutional aid than state college students) also supports this conclusion. The results, which were published Thursday, show that only 8.4 percent of institutions surveyed have frozen or cut student aid for either this academic year or the next.
While not fantastic news, when taken in context with the rest of the survey's results, it is encouraging. Nearly 68 percent of colleges reported a significant decline in their endowments and many colleges reported concerns over fundraising, tuition, and other sources of revenue. Despite this, though, colleges seem to be putting their students' interests first when dealing with budget concerns. For example, 31 percent of colleges surveyed don't yet have plans to increase tuition for 2009-2010, and at least two respondents specifically mentioned increasing student financial aid in their comments. The most popular cost-cutting measures have been freezing hiring, restricting travel, and slowing construction. Cutting student services, campus-based aid programs, and academic programs have been the least popular moves.
To find out more about how small private colleges are weathering the economic downturn, you can visit NAICU's news room. To scope out private colleges near you, conduct a free college search on Scholarships.com.
December 2, 2008
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