October 26, 2007
A recent evaluation released by NASFAA, an organization representing the interests of financial aid professionals, brings into question the effectiveness of a new student lender auction system. The recently-passed College Cost Reduction and Access Act created, among other things, a new auction system wherein student lenders would bid on exclusive market rights in each state. While the law concentrated on cuts in student lender subsidies and increases in free student grants, the auction system aimed at lowering taxpayer burdens was also enacted.
When the system goes into effect in 2009, lenders interested in participating in the government's subsidized FFEL Plan would have to compete for the lowest subsidies. Those who won the bid would get exclusive state lender rights. Only lenders who would choose to take part in the government’s FFEL program would be effected, and only rights to PLUS loans would be auctioned.
However, the NASFAA report questions whether an auction would really be as effective as it initially seems.The statement suggested that the auction program was based on the rash assumption that lenders who bid for loan rights would be willing to greatly lower subsidy expectations, and that taxpayers would really benefit from lower subsidies. This assumption, based on the report, may prove to be faulty. State competition could be lower than expected, and some states could problematically benefit more than others. After a few years, the competition is likely to decrease altogether, and lenders may simply choose to opt out of the program.
Doubt was also cast upon the assumption that student borrowers would not be affected by the auction system. Based on the report, it is more likely that lenders will get rid of certain student benefits once they have exclusive rights to a state. Borrower services that could be affected include default prevention, financial literacy and electronic processing. The report disputes the claim that very few students are eligible for benefits. Instead, it suggests that most students qualify for at least some helpful services or benefits.
How an auction would in effect change the financial aid system and affect taxpayers remains to be seen. However, a "Bill Gates is about to take over the world" scenario is unlikely. First of all, a total overhaul is not going to occur; PLUS loans will be used to test out the system. Based on the results, a general idea of what could happen in such situations should be obtained. Secondly, the auction would repeat after two years, and it’s unlikely that lenders will get comfy enough to cause a ruckus. Because two lenders will be chosen per state, some competition is likely to keep them in line. Let us also remember that PLUS loans are not the only loans on the planet. If FFEL PLUS loans become too pricy, students could look to competing loans and lenders. FFEL program winners will still have a reputation to upkeep.
Ultimately, the government has the last word on this one. We'll see if that’s a good thing.
October 25, 2007
Based on a new report released by the College Board, government aid has increased in the past few years—but college costs have as well. And they’ve done so more quickly.
According to the report, a public four-year institution charges in-state students 6.6 percent more in tuition and fees than they did last year. The increase for out-of-state students is 5.9 percent.
Students who attend private four-year colleges haven’t fared any better. They may not have to worry about the whole in-state out-of-state thing, but their tuition rates are still higher than those at public colleges, and they are likewise increasing. Since last year, tuition and fees have increased by 6.3 percent at private four-year colleges.
Community colleges are pretty good when it comes to keeping the prices down, but their costs, as well as those of for-profit schools, have been rising as well.
Before you say it, yes, stated cost and actual cost are two different things. You don’t go into a car lot expecting to pay the ticket price, and you probably won’t pay the full price when it comes to college tuition. But that doesn’t mean that you’re being cut a deal. Even though government aid has been increasing—and will continue to do so due to the recent passage of the College Cost Reduction and Access Act—students are still paying more for college.
As my chemistry teacher used to repeat, “All things being equal, things aren’t going well.” (Maybe the second half was mine; it’s just what comes to mind when I think of chemistry.)
Thankfully, students don’t have to depend on the government to completely cover the cost of a college education. There are plenty of financial aid options out there, and they don’t all require interest payments. Students searching for tuition money can always look to college scholarships and grants for help. Plenty are available, and they won’t cost you a penny (don’t be scammed into believing that you should pay for scholarship consideration). Conduct a free scholarship search, and check out the numerous opportunities available to you.
October 24, 2007
It’s tough being a senior. You have to do homework (at least during the first semester), study for standardized tests, apply to colleges and, oh yes, select them. Counselors do counsel, but let’s get serious; you’re the one stuck with the heavy-duty work. Plus, consulting with them is just one more thing to add to your to-do list.
College information is not that hard to come by if you browse the web like a maniac, but having a source that allows you to compare all data sure makes things easier. The Scholarships.com College Search allows you to do just that. Students searching for college information can visit the site and compare myriad stats on one 17” computer screen. (Adjust size for people who think they're too cool for standard screens---you know who you are.) Whether you’re interested in a community college, a state university or a private school, we have the information you’re looking for. Start out by searching for a school by area of study, state, name, college type (two or four year) or any combination of the four.
From there, your will be directed to a list of schools that match your criteria. You can sort them by whatever information you’re most interested in: name, location, tuition or school type—from top up or top down. Pick out the ones that are still of interest to you, and find the information you need.
Check out the school’s tuition and fees, its incoming freshman profile, the financial aid offered, graduation rates, contact information and more. After you’ve narrowed things down a bit, you can conduct a free scholarship search to find financial aid information that can help you pay for your college of choice.
Your senior-year workload can't be eliminated completely, but we can do plenty to ease the pain. You could really use the extra time for more important business---like doing nothing at all. Just call us your free personal college finder; we’ll smugly accept the title.
October 23, 2007
Do you like to write? Do you care about world problems? Then this competition is for you! The Hear Me Project is a writing scholarship about the effects that HIV and AIDS have on the population. Entrants will have to submit a short (up to five pages) fiction or nonfiction story about the vulnerability that accompanies HIV or AIDS. By applying for this award, students will have the chance to win money for college, and, as a bonus, spread awareness about a universal problem. So let your creative juices flow, and apply today!
1. One $2,500 cash prize
1. Applicants must be between 14 and 22 years of age as of September 1, 2007. 2. Only one entry per person is permitted. 3. Employees of Select Media, Inc. are not eligible to apply.
December 1, 2007
1. Completed entry release form. 2. A neat, double-spaced story about vulnerability to HIV or AIDS. The story may be fiction or nonfiction, and it cannot exceed five pages. If submitted by mail, three copies are required.
For more information on this and other scholarship opportunities, visit Scholarships.com, and conduct a free scholarship search.
October 22, 2007
In recently published (previously-known) financial aid news, student lenders were found to have made millions by accepting excess subsidies from the government. By finding loopholes in government regulations, the student lender Nelnet, one of the biggest offenders, was able to collect $278 million in excess payments between 2003 and 2005. Based on calculations released by the Washington Post, other lenders accepted an estimated $300 million in excess subsidies between 2003 and 2006—paid for by taxpayers.
Because students applying for government aid are restricted in how much they can borrow, the government offers subsidies to lenders who borrow to students. In exchange for the money, lenders offer students loans at rates that, although usually higher than those offered by the government, tend to be lower than those offered by unsubsidized lenders.
When average student loan interest rates were higher, the government guaranteed lenders a 9.5 percent interest rate for loans. Once average loan rates fell, many lenders continued to take in large subsidies.
And although the government lowered some subsidy sums after rates fell, they continued to guarantee a 9.5 percent rate on loans previously funded with tax-exempt bonds. To extend the pool of loans still eligible for larger subsidies, Nelnet divided tax-free bonds among various pools. They would then claim that pools of loans at least partially composed of tax-free bonds were eligible for 9.5 percent subsidies.
The government did little to stop them in the past, and it is doing little to punish them now. According to the Washington Post, the Department of Education Secretary Margaret Spellings did admit that the government shouldered some of the responsibility for the “confusion”. However, she indicated no intent to pursue full accounting, nor did she suggest that reimbursement from lenders would be sought.
October 19, 2007
Students who applied for financial aid in Louisiana may be worried to find that the company in charge of storing their personal information recently lost a large amount of financial aid data. Actually, a loss is the best-case scenario, the worst being embezzlement. The Louisiana Office of Student Financial Assistance (LOSFA) tried to assuage student fears by stating that the missing information was compressed and that special software was needed to access it—hopefully they’re not exaggerating the advanced technology of zip files.
Thousands of current students and college graduates (going as far back as 1998) could be affected by the loss. Among those at risk are any students who submitted a FAFSA in the state of Louisiana and out-of-state students who sent the form to a college within the state. Those who have a Louisiana College Savings account (START Saving Program) and those who have applied for or received a Tuition Opportunity Program for Students (TOPS) scholarship—a Louisiana-based scholarship—may also be affected.
The information was lost on September 19, 2007, and although search efforts were initiated from the onset, the data has not yet been recovered. Colleges are now informing the public of the incident, and LOSFA has posted additional information on its site. According to LOSFA, the public was not notified earlier to avoid misinformation about data that was misplaced rather than lost. The non-misplacement occurred when the media storage company was loading the backup data into a truck. Social Security numbers and student names were among the missing data.
October 18, 2007
For some individuals, a large state university is the best college choice. For others, a smaller school or private college might be the best selection. Before making a final decision to attend the largest university in your state, it is a good idea to consider the pros and cons of state universities.
State University Cons
For more information on choosing the right college, major, or even roommate, visit our resources section.
It’s difficult to read a national newspaper–your choice–for longer than a week without coming across at least one article dealing with the environment. Why should a blog be any different? Jokes and polar bears aside, the environment is in need of some true student TLC, and students have plenty of it to give. Here are some things each of us can do to help.
1. Get educated Change starts with education. When searching for potential colleges, take into consideration the variety of classes offered. The more options schools have, the more you can dabble in various interests, especially the environment. By educating yourself about environmental issues, you can learn about ways to improve the situation, and what’s more, inspire others with your newfound knowledge. When you let people see how the environment affects them personally, you are more likely to convince them that their efforts and time are worth the investment.
2. Turn off the lights Saving money and energy is a click away, or a clap clap. Remember to turn off lights and appliances when you are through with them. Pay extra attention to air conditioners—open windows and running air conditioners make mother earth cry.
3. Live by the triple R’s Many of us already reduce, reuse and recycle to some extent, but most of us don’t really crack down on bad habits. By making the three R’s your mantra, you can reduce emissions, save some tree lives and fatten your piggybank.
4. Write to Congress This one is for the ambitious. Begin a petition in support of the Kyoto Protocol to be sent to Congress; or at least sign the one you make your friend create. So far, 172 countries and governmental entities have signed the pact limiting emissions. Somehow the U.S. is not one of them.
5. Take public transportation A great benefit to most on-campus travel is the abundance of public transportation. Taking the bus or train to school can reduce carbon dioxide emissions, and it can also free up some time to chat or study. It may not be the most convenient way of getting around, but improvement isn’t always convenient. For those who live close by, riding a bike, rollerblading or walking is also a good option.
6. Bring your own bags and mugs Try stuffing your groceries into a backpack, and bring mugs to coffee shops. (Or visit ones that offer in-house cups.) Some stores and coffee shops will even give you discounts for doing so.
7. Be laptop savvy in class You won’t look like you’re too cool for school by bringing your laptop to lectures—really. Students can save much paper by appending and saving posted online notes on laptops. By bringing a laptop to class, you can save trees and increase the likelihood of future legibility. Plus, editing is easier on a computer, and most students can type more quickly than they can write. If you’re not one of them, it’s about time you practiced.
There are plenty of things students can do to make a difference, and many are already hard at work. This year, Scholarship.com’s annual Resolve to Evolve scholarship prizes were awarded to students who wrote the best essays on problems dealing with standardized testing and the environment. See what the winners had to say on the topic, and check out Scholarships.com's new Resolve to Evolve $10,000 essay scholarship. You can also search our database for college scholarships and grants; begin finding money for college today!
October 17, 2007
There are many factors to consider when choosing a college. Part of a successful college search process involves thinking about your school preferences and career plans, and identifying colleges that meet your needs.
Questions to ask yourself that can help with choosing the right college include:
The Scholarships.com free college search can help you locate colleges that meet your needs. The answers to these questions can help you narrow down your list of potential colleges. For example, if you find the idea of attending a very large university overwhelming, you can narrow your college search to smaller schools. If you want to live with your parents while attending college, you can narrow the list to include only schools within an easy commuting distance of your home.
Students aren’t getting enough sleep—nothing new here. According to the National Sleep Foundation, 60 percent of high school students reported extreme daytime sleepiness. And how can you blame them? Anyone with high ambitions knows what it takes to get into a good college. Balancing extracurriculars with school and a social life can seem like a juggling act, but many feel that it’s the only way to reach goals.
Regardless of what teachers say, many students are certain that staying up to study will get them better test scores than extra zzzs would—myself included. Students are just too busy to study earlier. Okay, okay, maybe putting things off and surfing the net has something to do with it as well. But procrastination makes today’s students no different from those of generations past. Unfortunately, current generations feel that not studying must be followed by intense late-night sessions. According to an article in New York magazine, kids today sleep one hour less than they did 30 years ago.
As you may imagine, nothing good can come of that. Lack of sleep has been linked to depression, weight gain, an increase in cases of ADHD and, of course, poor school performance—even if we beg to differ. According to the article, studies of sleep-deprived students have consistently shown they don't perform as well as do student who get sufficient sleep. In a recent trial, a group of sixth-graders intentionally deprived of sleep performed as well on exams as average fourth-graders. That’s a two year decrease in cognitive ability. By one estimate, sleeping problems can hurt a child’s IQ as much as lead exposure! If that doesn't send us back to bed... well, let's just hope it does.
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