October 3, 2008
October 2, 2008
October 1, 2008
September 30, 2008
The U.S. Department of Education released a series of new statistical reports last week showing a dramatic increase in participation in the federal direct lending student loan program. Motivated largely by the economic downturn and the credit crunch of the last year, 400 new colleges joined the federal direct lending program. Overall, student borrowing through the program has increased by 50 percent in the last year.
The federal direct lending program provides students at participating schools with Stafford Loans directly, instead of going through the intermediary of a bank, as is done in the Federal Family Education Loan Program (FFELP). In previous years, borrowing through FFELP could land students with lower interest rates, as well as significant repayment incentives, but that has changed significantly since 2007 as a result of subsidy cuts and economic difficulties faced by FFELP lenders. Since direct loans are serviced directly by the Education Department, they are largely exempt from the fallout of the credit crunch and are currently more appealing to many colleges.
There is good news for students at schools that continue to participate in FFELP, though. Lenders are participating in the loan buyback program enacted as part of the Ensuring Continued Access to Student Loans Act passed earlier this year. About 40 percent of the student loans in the bank system have been sold to the Education Department, with paperwork being completed on much of the remaining balance. This move appears to have worked to allow lenders to fund loans for students, as the Education Department also reports that not a single student has had to participate in the federal "lender of last resort" program.
In other financial aid news, Congress recently approved $2.5 billion in Pell Grant funding, to help tide the program over through March 2009, at which point most spring semester grant awards should have been disbursed. All of this news suggests that students are highly likely to be able to continue to find federal student financial aid for college, at least for the forseeable future. Of course, finding scholarships and avoiding student loans is still a smart plan, but this news suggests that despite growing fears about the economy, federal financial aid will still be available to students who need it.
September 29, 2008
This week's Scholarship of the Week is an essay scholarship for all the opinionated female college students out there. The Independent Women's Forum is sponsoring an essay contest open to any woman currently enrolled in a four-year college or university. The essay prompt asks students to share their opinions on the cost-effectiveness of federal spending to combat the potential impact of global climate change. A 750-word response could earn you up to $5,000 in scholarship money!
Prize: One first prize winner will receive $5,000. Second and third prize winners will receive $2,000 and $1,000 respectively. Ten honorable mentions will each receive $250.
Eligibility: Female students of any age enrolled in a four-year college or university during the 2008-2009 school year.
Deadline: December 1, 2008.
Required Materials: Completed scholarship application, available on the Independent Women's Forum website, and an essay of no more than 750 words answering the question posted on the IWF Essay Contest website.
Further details about the application process can be found by conducting a free college scholarship search on Scholarships.com. Once the search is completed, students eligible for this scholarship award will find it in their search results.
September 26, 2008
Congress will be in session only a few more days before breaking for the November election. While a lot has already been accomplished this session in terms of educational spending, such as the passage and renewal of ECASLA and the reauthorization of the Higher Education Act, some education funding concerns still need to be addressed. Primary among these is the education and research spending bill that will fund research and federal student financial aid programs for fiscal year 2009, which remains on the Congressional to do list.
When Congress reconvenes either in November or January, one of the most pressing financial issues they will have to contend with is finding the money to cover a projected $6 billion shortfall in the budget for the Federal Pell Grant program. Lobbyists still worry that Congress may wind up having to cut the maximum grant award, as they did last year when the bill exceeded Bush's budgetary requests. However, given the popularity of the program, such cuts are unlikely, especially after all of the attention financial aid has been receiving this election season.
Another issue Congress may contend with is whether to combine higher education tax credit programs, such as the Hope and Lifetime Learning credits into a single, partially refundable credit. The idea has received widespread support and is expected to come up during the next Congressional session.
You can read more about the educational issues still on Congress's plate in today's Chronicle of Higher Education.
September 25, 2008
In the wake of the credit crisis of the past year, innumerable articles have been written about the impact on the student loan industry, as several student lending agencies have been forced to stop offering federal and private loans to students or at least scale back their operations considerably. Credit requirements have gotten more stringent for students whose lenders are still in business, and taking out a student loan is an even more time-consuming and uncertain process now than ever.
At the same time, the economic downturn that's accompanied the credit crisis is highlighting the difficulty students are facing repaying all of these student loans--loans they're being told now that they're lucky to get. Many students feel caught in a difficult position. Do they take out student loans, go horribly in debt, but get to ultimately pursue a fulfilling degree and a potentially more fulfilling career? Do they work full-time through school and take longer to get the degree and spend less time in their dream job? Or do they minimize debt by going to work sooner in a field that's easier to break into and requires less education?
According to the results of a survey published in the Boston Business Journal, that first option might not even be an option for many students. An online poll of 336 recent college grads revealed that 47 percent said that their career pursuits were influenced by their need to make student loan payments, while 25 percent reported putting future education plans on hold in order to minimize debt. While these numbers are the results of only one web survey, they still send a pretty clear message that avoiding student loans is a good idea when trying to pay your way through school.
Congress is advocating the wider adoption of college savings accounts, such as 529 plans, and more universities are retooling their financial aid packages to benefit more needy students and rely more heavily on scholarships than on student loans. Many of the nation's top colleges have made a commitment to helping all accepted students afford to attend, and other schools are offering larger scholarship awards to students who most need them, as well. For example, Spelman College in Atlanta, Georgia just launched the Starfish Initiative, where anonymous donations are used to cover the remaining tuition balances of deserving seniors who might otherwise need to take out a substantial private loan or leave college.
But institutional aid and college savings accounts aren't the only options available to students. A vast number of scholarship opportunities are out there, and despite the scholarship myths you may have heard, you can fund a substantial portion of your college education with such sources. So start your scholarship search early and be persistent. While soaring college costs and a weak economy may make it harder to pay for school, they don't mean you have to stay home or be overwhelmed by debt. Do your research and find out what resources are available to help fund your education.
September 24, 2008
The National Association of College Admission Counselors (NACAC) plans to address questions of early decision admission and the role of standardized testing in the admission process in panels during their annual conference this week. In preparation, they have released the results of a survey showing that early decision admissions had begun to fall, as well as commentary on the state of the Scholastic Aptitude Test (SAT) and American College Test (ACT) in college admissions.
A special panel convened by NACAC released a statement suggesting that standardized tests such as the SAT and ACT may play too prominent a role in college admissions. While the report emphasizes that standardized tests can play an important role in the admissions process, especially in helping students choose which schools may be a good fit for them, it also declared the importance of avoiding a one-size-fits-all approach to testing. This position represents a shift from previous NACAC commissions' stances on standardized testing.
Another survey released this week by NACAC highlighted other shifts in college admissions, namely a slowing of the increase in early decision admissions as compared to previous years. Many schools are giving students going through the college application process the option to make a binding committment to attend that college if accepted in a process known as early decision. Critics argue that this puts poorer students who are unwilling to commit to attending a college without receiving their financial aid package at a distinct disadvantage in being considered for admission. While many colleges still are embracing the idea, this shift in figures could show some hesitation on the part of admission offices or students regarding the still-controversial issue.
Additionally, the survey illustrated some doubt regarding a new practice of priority applications, which are sent to students based on a variety of criteria and are already partially completed. Priority admission applications are sent by the school, rather than requested by the student, and are typically sent out based on prior contact with the admissions office, test scores, or geographic location. Only 4% of these forms, which occasionally come with an application fee waiver, are sent to students based on economic status.
Other survey results showed that more students seem concerned with ensuring they make the right college choice, and that most students who apply to schools are given the opportunity to go to college. An increasing number of students are applying to more than seven colleges, and that about the same number of students as the previous year applied to more than three schools. Nationally, 68 percent of students who apply to colleges are admitted. Online applications also continue to gain popularity.
September 23, 2008
A study abroad experience can be an important part of attending college. Study abroad programs expose college students to other languages and cultures, giving them a valuable experience beyond mere tourism, and allowing them to gain a better sense of the wider world and their place in it. For many students, trips abroad help shape their identities and their college experiences, typically for the better. However, for many students, studying abroad is still seen as an option open only to white, well-traveled, and well-off students.
This stereotype has been highlighted both by popular media (the Chronicle of Higher Education points to a post in the popular blog Stuff White People Like, which humorously explains trends embraced by young, urban, middle-class, and predominately white people) and by academia. Unfortunately, unlike other stereotypes and scholarship myths, it has some truth to it, as more white students tend to travel abroad while in school. However, colleges and scholarship providers are struggling to change this and attract more minority and working-class students to study abroad programs.
Over the last few years, many schools have increased efforts to promote study abroad as something not only attainable but desirable for students who haven't yet traveled outside the US. These efforts include making minority students more visible in promotional materials, making shorter and more affordable study abroad options available, and highlighting financial aid opportunities available to lower income students.
One such scholarship award, mentioned in the Chronicle of Higher Education article, is the Benjamin A. Gilman International Scholarship Program, which helps fund semesters abroad for Pell Grant recipients. Numerous other study abroad scholarships exist, and low-income and minority students, as well as any students unsure of their ability to afford to study outside the country, are encouraged to apply. To find out more about study abroad programs, talk to the study abroad office at your college. To find more scholarship money for study abroad, conduct a free scholarship search on Scholarships.com, where we list several awards applicable to studying outside the country, as well as other opportunities for need-based financial aid and scholarships for minorities.
September 22, 2008
Lately, we've made a few blog posts about efforts to lower the amount students are forced to spend on college textbooks. Professors are starting to turn to more and more online and open-source course material, Congress has legislated changes in the way textbook sellers do business, and students at the University of Michigan can now print a bound copy of a non-copyrighted book for $10. However, cool stuff happening at other schools or scheduled to happen in the future doesn't necessarily help you afford that $150 biology textbook now. For those of you still struggling with coming up with an additional $500 or more to buy books, this week's Scholarship of the Week can help.
Beans for Books, a non-profit organization started by students working at coffee shops, raises money to help top students afford the textbooks they need to continue to succeed in college. Grants of $500-1000 are awarded each semester to be used solely for buying books. The application cycle for the spring semester is just beginning, so if you're anticipating a semester laden with science, math, and foreign language classes, now is the time to apply!
Prize: Winners will receive a grant of $500-1000 to be spent on textbooks for the next college term.
Eligibility: Students who will be enrolled in college in the following semester, and who demonstrate financial need and maintain a GPA of at least 3.7 on a 4.0 scale.
Deadline: Varies by semester.
Required Materials: Completed online scholarship application, available on the Beans for Books website.
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