Blog

by Alexis Mattera

The road to college – once thought to be straight and narrow – is detouring into uncharted territory. It was once expected for all high school seniors to matriculate to an institute of higher education the semester after they graduate but today, many students (and their parents) are considering the notion of taking a year off from formal schooling first.

But what do students do during this time, often called a gap year? Not catching up on “Extreme Couponing” or trying out online dating: Students use this time to volunteer abroad or build their resumes and schools are adopting formal programs allowing incoming freshmen to defer admission for a year to do so. According to the Wall Street Journal, "gap fairs" are becoming just as common as campus job expos. The results? Mixed. While most students end their gap years better prepared to attend college, some get so waylaid that they abandon a collegiate education all together.

It may sound tempting to take a year off to explore the unknown but there are a few confounding variables. First, the price tag is far from alluring – unless you feel $35,000 is a reasonable figure. (The upside is that costs can be defrayed by stipends, grants, research fellowships and scholarships or the agreement to work in a very remote area.) Next, the hazy direction of your future. I won't deny that your late teens and early 20s are the best times to gain life experience but if said experience is going to leave you in debt or questioning once-important educational goals, is taking the time off worth it?

by Emily

Earlier this summer, it came to light that for some students in Illinois, being accepted by state colleges was less about what they knew than who they knew, as an investigation into admission practices revealed the existence of a special clout list of well-connected applicants to the University of Illinois. Now, the Associated Press is reporting that some college scholarships in the state may be governed by a similar principle.

Each Illinois state representative is given the equivalent of two four-year full-tuition scholarships to award to his or her constituents each year. Some representatives choose to break up their scholarship awards into eight one-year full-tuition awards, while others choose to hand out two-year or four-year scholarships. At least 83 of these scholarships went to students with some form of political connections between 2008 and 2009. Of these scholarships, 41 went directly to the children of donors to the politician making the award.

Representatives deny impropriety, but it seems that families in Illinois who have seen their 529 plans shrink in the recession may want to consider taking their college savings and investing them in their representative's next reelection campaign.

by Emily

Though it's a day off from school and work, New Year's Day is often seen as a day to get down to business.  While you're starting in on your New Year's resolutions, opening up a new calendar, and packing up the holiday decorations, there's one more thing that college students and college-bound high school students should consider doing.  The Department of Education starts accepting the 2009-2010 Free Application for Federal Student Aid (more commonly known as "FAFSA") on January 1.  State application deadlines start happening soon after, beginning with Connecticut's February 15 priority deadline.  So while you might not be starting school until August or September, you want to be applying for financial aid right now.

What You Need

In order to complete a FAFSA, you will need the following documents: 

 
• your social security card
 
• a driver's license if you have one
 
• bank statements and records of investments (if you have any)
 
• records of untaxed income (again, if you have any)
 
• your 2008 tax return and W2s
 
• all of the above for your parents if you are considered a dependent (to determine dependency status, check here)
 
• a PIN number to sign electronically (go to pin.ed.gov to get one)
 

If you do not have your tax information yet, and most likely you don't, you can use your 2007 tax information to estimate 2008.  That way, you have a FAFSA on file and once you've done your taxes for the new year, you'll be able to submit a correction online.  While that might seem like more work, it's the best recipe for maximizing your state and campus-based aid packages.  If things changed drastically for your family in 2008, apply for student financial aid with the information you have, then talk to your school's financial aid office to adjust your information accordingly.

Why You Should Apply

Completing a FAFSA is an important step in funding your education if you don't plan on paying for everything out-of-pocket.  The FAFSA is used by the Department of Education to determine eligibility for federal student financial aid for college.  This aid includes federal grant programs (such as the Pell Grant), federal work-study, and federal student loans.  It is also used by states to determine eligibility for their financial aid programs, such as state grants.  Colleges also use the FAFSA to determine eligibility for the need-based aid programs they administer.  Finally, many scholarship opportunities request FAFSA information as part of their application process.  Even if you think that you won't qualify for free money in the form of need-based college scholarships and grants, you should still apply.  At the minimum, the vast majority of students qualify for Stafford Loans, low-interest federal student loans that represent one of the best deals in borrowing for school.

Where To Get More Information

Start on the FAFSA homepage and go through the links under "Before Beginning a FAFSA" to get started, especially if this is your first time filing.  You'll find information about application deadlines, required documents, applying for a PIN, and other things you need to know about to begin.  If you don't want to wait until tomorrow, 2009-2010 worksheets are already available on fafsa.ed.gov.  The ambitious among us can even fill out a worksheet now, then copy the information into their FAFSA on the Web beginning tomorrow.

We also offer a wealth of resources on financial aid at Scholarships.com.  Check out the financial aid section on our Resources page for further reading.

by Paulina Mis

When combined with free scholarship and grant opportunities found at Scholarships.com, government grants can significantly decrease, if not completely cover, a student’s financial needs. Unlike loans, grants do not need to be repaid; unlike federal work study and assistantships, there is no labor involved. When students submit a FAFSA, they are automatically in the running to receive government need-based grants. The most well-known of these is the Pell Grant, but lesser-known government grants are also available. Here is a breakdown of grants students may find on their FAFSA award letters:

Pell Grants

The Pell Grant is the largest grant program in the United States, awarding undergraduates with millions each year. The Pell Grant is the foundation of all government aid. Seeing as Pell Grant money is free, awesome GPA or not, students should take advantage of all offers before moving on to Federal Work Study and government loans. Unfortunately, students don’t always get their fill with Pell Grants. During the 2007-2008 school year, students may only receive up to $4,310 in aid from Pell Grants, and not all eligible students receive this much. This may seem like a drop in the bucket for those who need $12,000 or more each year, but every penny counts.

FSEOG

Students with extreme need may be eligible for the Federal Supplemental Educational Opportunity Grant (FSEOG). Like the Pell Grant, this is a grant for undergraduates. It is intended to provide additional assistance to the neediest of students, those with the lowest expected family contributions. Students may receive up to $4,000 each year in FSEOG funding, but awards may be as little as $100 per year. The award received will depend on the time of application, the level of need, and the rules at each school’s financial aid office.

Academic Competitiveness Grant

This is a new grant introduced during the 2006-2007 school year. Students who felt their merit-based aid opportunities were thwarted by grades that did not sufficiently reflect their abilities may receive some compensation. Up to $750 will be awarded to first-year undergraduates and up to $1,300 for second-year full-time undergraduates who have completed a difficult high school program. The state or local education agency is responsible for deciding which schools are deemed rigorous. For information on high school eligibility based on state, visit the Department of Education. As this is still a need-based grant program at heart, only students who were deemed needy enough for Pell Grants can receive Academic Competitiveness Grant money.

National SMART Grant

The National Science & Mathematics Access to Retain Talent Grant (National SMART Grant) is awarded to third and fourth-year college students. Students who major in the physical, life or computer sciences, math, technology, engineering or a foreign language determined to be essential to national security may be able to supplement Pell Grants with SMART Grants. Up to $4,000 per year may be awarded to each recipient. A more detailed list of eligible fields of study may be found here.

Institutional Grants

In addition to government grants, students may find school grants on their award letters. These, unlike the government grants, usually take academic achievement into account. Some may also consider a student’s financial need. To find out more about institutional grants offered at each college, students should visit their school website and conduct a scholarship and grant search at Scholarships.com.

Additional Grants

Above is a list of grants students can receive by submitting their FAFSA, but students don’t need to stop there. Myriad scholarship and grant opportunities are available to them at Scholarships.com, and they aren’t restricted to undergraduates and those determined to be needy by government standards. To conduct a free scholarship and grant search, visit Scholarships.com, and find money for college.

Yesterday, the House of Representatives formally introduced legislation to reshape federal student loans, federal Pell Grants, and other aspects of student financial aid. The Student Aid and Fiscal Responsibility Act of 2009 builds on presidential budget recommendations and features several substantial changes to student aid.

A preliminary breakdown of the bill provided by the National Association of Student Financial Aid Administrators lays out the following proposed changes:

• Dividing the Federal Pell Grant into mandatory and appropriated funding, then fixing the mandatory portion to the consumer price index plus 1 percent. Currently, the mandatory portion of the grant is $490 and the appropriated portion is $4860, so if these proportions remain the same, increases in the Pell Grant would still largely be at the whim of Congress each year.
• Eliminating several questions on the FAFSA related to assets, but preventing anyone with assets of over $150,000 from qualifying for federal student aid.
• Ending the Federal Family Education Loan Program and moving all federal Stafford Loans to Direct Loans.
• Ending subsidized Stafford Loans for graduate and professional students in 2015.
• Reverting to a variable interest rate that would be capped at 6.8 percent for subsidized Stafford Loans.
• Expanding the Federal Perkins Loan program, with part of the new funding going specifically to schools that keep tuition low and graduate a high proportion of Pell-eligible students.
• Changing the rules for drug offenses to make students ineligible for aid only if they've been arrested for selling a controlled substance.

The Democratic majority in the House has indicated a strong intention to pass this bill quickly, with the Committee on Education and Labor planning to vote on it as early as next week.

While it may be grabbing most of the headlines, the federal "Cash for Clunkers" program is not the only government grant program to run out of money well ahead of schedule this year.  The state funding allocated to Illinois Monetary Awards Program (MAP) grants, college financial aid awards for needy students, was slashed during state budget cuts this year. As a result, awards have been cut in half for all students and have been denied outright to over 130,000 students who applied after May 15, a significantly earlier cutoff date than previous years.

Typically, community colleges, who typically apply for financial aid later in the year and often have access to fewer financial resources, are likely to be the hardest hit.

Illinois isn't the only state forced to make cuts to its college grant programs. California and Ohio are among others that have recently gained attention for cutting aid to college students. If you live in a state that's been forced to reduce student financial aid, you still have options to pay for college. Before looking into student loans or considering a semester off, conduct a free college scholarship search. Scholarships, including state and local scholarships, are still out there despite the recession.

by Alexis Mattera

$24,000. To a recent graduate, that five-figure number could be 1. their starting salary at their first entry-level job or 2. the amount of student loan debt they have accrued while in school.

We’re going to talk about the second choice this morning, as a study by Peterson’s and the Project on Student Debt just revealed it was the average amount owed by graduates of the class of 2009. The study broke down debt levels by state and school (D.C. graduates had the highest while Utah students had the lowest) but did not include debt levels for graduates of for-profit schools because of a lack of data.

Arriving at these tallies didn’t come easy for the Project on Student Debt, which adjusted the averages initially recorded by Peterson’s ($22,500 and 58 percent of students who borrowed) because it felt they were too low when compared to the statistics recorded last year by the National Post Secondary Student Aid Study ($22,750 and 65 percent).

You may be one of the lucky students who scored enough scholarships and grants to have a degree in hand and no debt in sight or you may be flipping couch cushions in search of change to put toward your next payment but what do you think of these findings? A college degree certainly doesn’t come cheap these days!

While many colleges are finding the funds to expand their financial aid offerings in response to economic woes, state higher education systems have not all been so fortunate.  Michigan and New Jersey are both considering cuts to their state scholarship awards, the Michigan Promise and New Jersey STARS programs.

In the face of a $1 billion budget shortfall, Michigan may have to do away with the state's promise scholarship, in addition to making several other tough financial decisions.  The Michigan Promise offers residents up to $4,000 per year towards tuition and fees at state colleges and universities.  If the proposed budget cut goes through, the class of 2009 will be the last group of high school students to have this award available for college.

When faced with budgetary woes, the state of New Jersey also turned to its state academic scholarship programs, New Jersey STARS and New Jersey STARS II.  However, rather than scrap the programs entirely, the legislature has voted to make them more selective.  STARS, which pays for tuition and fees at community colleges will now be available to only the top fifteen percent of New Jersey high school graduates, while STARS II, which helps STARS scholars go on to complete a four-year degree at a state college, will only be available to students who maintain a GPA of 3.25 or higher.  The amount of funding for STARS II, previously the total cost of tuition and fees, will now be capped at $7,000 per year.

In addition to the expansion of health coverage for Americans, another significant change has been made and another major economic issue addressed with the termination of the bank-based system of federally subsidized student loans.

With a vote of 220 to 211, the controversial bill, HR 4872, was passed by the House on Sunday and is expected to gain Senate approval within a few days. The bill, known best for the health-care provisions it contained, also addressed and closed the twenty year debate over whether to include private lenders in the federal student loan system.

Most of the savings expected to be derived from this major change (estimated at approximately $61 billion over the next decade) will be used for increasing the value of the Pell Grant for low-income students. Historically black colleges and community colleges are also expected to benefit from the savings this program offers. The House passed a similar bill in September of 2009, but didn't garner enough votes to pass the Senate. This time around, it was packaged with the health-care measure, and the amount dedicated to education has been reduced.