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by Paulina Mis

When students unfold their FAFSA award letters, they may find that in addition to loans and grants, they were granted Federal Work Study (FWS) awards. What does work have to do with government assistance? Good point.

Aid in the form of work may not be the ideal award, but students who need significant financial assistance may want to consider working part time. Undergraduate and graduate students may be able to eliminate, or at least decrease, their borrowing needs by conducting a free scholarship search and by accepting Federal Work Study (FWS) positions.

These jobs are administered by colleges and often require cafeteria work, administrative assistance and research help. The work is not always glamorous, and it is often low in pay—think minimum wage. Don’t worry; there are some benefits.

Although FWS income is taxed, students are usually refunded a good chunk of it, and their financial aid eligibility is not hurt in the process. Students who work outside of school may find their future financial aid to be in jeopardy because of earnings. Students who accept FWS positions won’t have to worry about this. Their earnings will not be considered when government aid is determined. This is a great benefit as personal income is counted against students at a much larger rate than is that of parents. 

Students who are interested and eligible for Federal Work Study are bound to find a job, and a flexible one at that. And because the jobs are created with students in mind, they tend to offer convenient schedules. The same can’t always be said for stores and restaurants which offer the finest of hours—late nights and weekends. When finals and class schedules changes come into play, flexibility will matter.

Like other FAFSA awards, Federal Work Study money is limited. If an award letter states that a student is eligible for $2,000, they can only work until they reach that point. This may or may not be enough. Eligible students looking for work will have to decide whether FWS jobs or outside positions are right for them. Depending on schedule flexibility, pay rate and interest, one, the other or neither may be the best option.

by Paulina Mis

The Free Application for Federal Student Aid (FAFSA) is an excellent opportunity for students in need of college funding. It may be tedious to fill out, but those who receive financial aid will be glad they did. Before submitting, students should review their applications for completeness, accuracy and, of course, deadlines. The June 30th federal cutoff may be months away, but often overlooked state and college deadlines are not.

In addition to federal aid such as Pell Grants, Federal Work Study and loans, students may receive state and college aid based on the information provided in their FAFSA. To be eligible for assistance from one's state and school, students must meet federal, state and college deadlines.

Many states set closing dates between the months of March and May, so students should act quickly. The FAFSA deadlines for individual states are listed below, and college ones can be found by contacting the financial aid office at one's college or university of choice.

State Deadlines

Alabama  Check with your financial aid administrator Alaska  April 15, 2008 American Samoa  Check with your financial aid administrator Arizona  June 30, 2009 Arkansas For Academic Challenge - June 1, 2008; For Workforce Grant, check with your financial aid  administrator;For Higher Education Opportunity Grant - June 1, 2008 (fall term); November 1, 2008 (spring term) California For initial awards - March 2, 2008; For additional community college awards - September 2, 2008 - date postmarked Colorado  Check with your financial aid administrator Connecticut  February 15, 2008 Delaware  April 15, 2008 District of Columbia  June 30, 2008 Federated States of Micronesia  Check with your financial aid administrator Florida  May 15, 2008 Georgia  Check with your financial aid administrator Guam  Check with your financial aid administrator Hawaii  Check with you financial aid administrator Idaho  March 1, 2008  Illinois  First-time applicants - September 30, 2008 Continuing applicants - August 15, 2008 Indiana  March 10, 2008 Iowa  July 1, 2008 Kansas  April 1, 2008 Kentucky  March 15, 2008 Louisiana  July 1, 2008 Maine  May 1, 2008 Marshall Islands  Check with your financial aid administrator Maryland  March 1, 2008 Massachusetts  May 1, 2008 Michigan  March 1, 2008 Minnesota  30 days after term starts Mississippi  MTAG and MESG Grants - September 15, 2008 HELP Scholarship - March 31, 2008 Missouri  April 1, 2008 Montana  March 1, 2008 Nebraska  Check with your financial aid administrator Nevada  Check with your financial aid administrator New Hampshire  May 1, 2008 New Jersey  June 1, 2008 if you received a Tuition Aid Grant in 2007-2008 All other applications - October 1, 2008, for fall and spring terms; March 1, 2009, for spring term only New Mexico  Check with your financial aid administrator New York  May 1, 2009 North Carolina  March 15, 2008  North Dakota  March 15, 2008 Northern Mariana Islands  Check with your financial aid administrator Ohio  October 1, 2008 Oklahoma  April 15, 2008 for best consideration Oregon  Check with your financial aid administrator Palau  Check with your financial aid administrator Pennsylvania  All 2007-2008 State Grant and non State Grant recipients in degree programs- May 1, 2008; All other applicants - August 1, 2008 Puerto Rico  Check with your financial aid administrator Rhode Island  March 1, 2008 South Carolina  Tuition Grants - June 30, 2008 South Dakota  Check with your financial aid administrator Tennessee  For State Grant - March 1, 2008; For State Lottery - September 1, 2008 Texas  Check with your financial aid administrator U.S. Virgin Islands  Check with your financial aid administrator Utah  Check with your financial aid administrator Vermont  Check with your financial aid administrator Virginia  Check with your financial aid administrator Washington  Check with your financial aid administrator West Virginia  March 1, 2008 Wisconsin  Check with your financial aid administrator Wyoming  Check with your financial aid administrator

(State deadlines provided by the Department of Education)

Following talks of purchasing FFEL loans and using a lender of last resort program to ensure student access to federal college funds, the Department of Education officially agreed on a temporary bail-out plan. For the next year, the Department has agreed to purchase loans federally subsidized student lenders have trouble selling at a profitable rate.

The credit crunch, caused in part by rising default rates and a decrease in federal student aid offered to student lenders, has caused about 80 lenders to leave the student market, reported the Los Angeles Times. Even the most important name in the market, student lender giant Sallie Mae, has threatened to pull out of the FFEL business. Attempting to ease fears that students loans would be difficult to secure, the Department of Education has been working with Congress on a regular basis to establish a quick and effective alternative.

The most recent announcement lays out an number of methods for ameliorating family and lender fears—at least temporarily. In a letter sent to Chief Executive Officers of student loan companies, Margaret Spellings promised that by July 1, 2009, the Department would purchase FFEL loans originated for the 2008-2009 school year. “Many lenders today do not have access to funds at a cost that justifies originating new loans. Our plan is designed to provide viability in the marketplace for lenders who step up and make loans in this difficult environment,” she stated.

To further assure that all students will have access to loans, the Department has agreed to put into play the Lender of Last Resort Program (LLR) which will be used to lend money to students who have trouble securing finances from weary lenders. Schools that choose to opt for the Direct Loan Program, a lesser used school loan program wherein students borrow directly from the government rather than from federally subsidized lenders, will also receive aid through a $15 billion boost in available funds. “This program should ensure that the market works for students needing loans this school year,” said Secretary Paulson of the Treasury.

by Alexis Mattera

Ladies and gentlemen, prospective and current college students, I (or the federal government, rather) give you the 2011-2012 Free Application for Federal Student Aid (FAFSA). Hooray!

Vacuum up the confetti because it’s time to get down to business. January 1st marks the first day college-bound seniors, continuing undergraduate and graduate students, and their parents can begin filling out the FAFSA online. Completing the FAFSA is a vital part of the college process: The Department of Education uses it 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 college aid programs, such as state grants. Colleges also use the FAFSA to determine eligibility for the need-based aid programs they administer and, finally, many scholarship opportunities request FAFSA information as part of their application processes. 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 and paying for school.

Submission deadlines vary by state (verify yours sooner than later here) so, as with any sort of college funding, we recommend you complete the FAFSA as early as possible because funds do run out. For more information, visit the official FAFSA website or review our federal aid pages. Happy filing (and New Year)!

by Emily

The new version of the Higher Education Act (HEA) is at last moving to the floors of the House and Senate for a vote. After seven years of waiting and debating, Congressional reauthorization of the HEA could finally happen in the next week, setting the stage for a number of changes in federal student financial aid for college students.

Among other things, the reauthorized HEA would:

1. Set a ceiling on the maximum Federal Pell Grant of $9,000, and allow for students to receive Pell Grant funds year-round, instead of just during the traditional academic year. (The current maximum Pell Grant is $4,731.)
2. Implement changes to make it easier for students to get information about their financial aid awards and to generally simplify the process by which students - particularly those from low-income families - can find money for college.
3. Expand the Academic Competitiveness Grant program to part-time students as well as those seeking certificates and puts states in charge determining whether a high school program qualifies as a rigorous course of study.
4. Make several changes in private student loans, such as: requiring lenders to provide up-front disclosures of loan rates and terms, require private loans to be certified by higher education institutions, and requiring colleges to establish Codes of Conduct to prohibit financial aid employees from receiving anything of value in exchange for advantages sought by lenders, such as placement on colleges' preferred lender lists.
5. Require more disclosure of costs from both colleges and textbook publishers.

Many other changes appear in the 1,158 pages of the bill, which has been a long time coming.  The Higher Education Act is supposed to be reauthorized every 5 years, but it has been 10 years since the previous version passed.  The new HEA should help financial aid programs adapt to the present situation students face, and should help students better assess and plan for the costs of a college education.

by Paulina Mis

Among the many complaints voiced by students in need of federal aid are those concerning insufficient Pell Grant awards and a lack of consideration for students who are smart, but not exactly the braniac kind of smart. These are valid worries, and while they have not been tended to fully, the SMART Grant is a start.

Approved by the Senate in late December of 2005, the relatively new SMART Grant allows students who have demonstrated financial need to receive over and above their annual Pell Grant limit.  Eligible students may receive up to $4,000 in SMART Grant money just by filling out a FAFSA.

Because the SMART Grant has been largely overshadowed by the more common and better-known Pell Grant, many students are unfamiliar with the  award. The SMART Grant can more than double a student's grant money, but there are a number of stipulations that considerably narrow the eligibility pool.

To be eligible for the SMART Grant, students must have already demonstrated sufficient financial need and must have been eligible for the Pell Grant. But that in itself is not enough. Students must also be majoring in the physical, life, or computer sciences, mathematics, technology, engineering or in a foreign language determined critical to national security. To show that they are dedicated to graduating with a degree in one of the aforementioned fields, students must have already completed the first two years of their undergraduate program—while maintaining at minimum 3.0 GPA. Additionally, students must be enrolled full time and must be taking at least one course required for the completion of their major during the term the grant is received.

Assuming the student meets all of the above criteria, the SMART Grant can make a big difference in an individual's ability to cover college costs. A Pell Grant award may not exceed $3,410 for the 2007-2008 schools year, an amount unlikely to cover annual college tuition, let alone fees and living expenses. An extra $4,000 would certainly make a difference.

by Emily

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.

by Emily

Colleges are continuing to face financial hardships due to the current global economic crisis.  Endowments have shrunken by an average of 30 percent this year, primarily in the last two months.  Numerous colleges and universities, both public and private, are cutting or freezing spending, and several institutions have been forced to implement hiring freezes, offer early retirement to employees, or lay off employees.  Even Harvard University has announced a more conservative approach to future spending.  An article appearing in the New York Times earlier this week shows some schools considering a move away from entirely need-blind admissions policies (which ignore students' ability to pay when determining who to admit) in order to ensure they receive enough tuition revenue to maintain their financial aid programs.

Meanwhile, families are in similarly rough shape.  Investments are in trouble, unemployment is up, and families are having trouble getting home equity loans or other lines of credit that they may have previously used to cover tuition.  529 plans have taken a hit, as well, and student loans have also tightened credit requirements.  All this means that students might face greater difficulty getting into and paying for school.

So that's the bad news.  Now for some good news: 

 
• Congress has expanded the Ensuring Continued Access to Student Loans Act (ECASLA) to make it easier for banks to access enough funds to make loans.  The increases in unsubsidized Stafford Loan limits have also been renewed into the next academic year.  This could further shore up the Federal Family Education Loan Program (FFELP) and make it easier for students to borrow what they need to pay for school.  A new economic stimulus package is in the works, as well, and part of the money involved may go to Federal Pell Grants.
 
• Despite financial difficulties, colleges are pledging to maintain or increase their spending on campus-based aid for their students.
 
• The Department of Education is planning to present its vision for simplifying and improving the federal student financial aid program.  One of the most notable aspects of the new plan is the proposal to shorten the FAFSA on the Web application.  Greater efforts to standardize federal aid among colleges are also being proposed.
 
• A new study indicates that what you get out of a college experience might be less dependent on where you go to college than on how you choose to approach your education.  Researchers found more variance among learning outcomes and student satisfaction within institutions than among them.  In fact, 90% of the difference in quality reported by students occurs among individual students attending college on the same campus.  So if you do find yourself having to take a pass on your dream college, a positive attitude can make your experience at your safety school just as rewarding.
 

by Emily

During his confirmation hearing Tuesday, Arne Duncan, Obama's appointee for Education Secretary, disclosed broad ideas but few specific plans for education in America.  Much of the hearing before the U.S. Senate focused on elementary and secondary education, though questions related to paying for college did surface.  Duncan's primary focuses appear to be on college access and college affordability, moving away from the emphasis on accountability the nation has seen under Margaret Spellings, the current Secretary of Education.

According to coverage by The Chronicle of Higher Education and Inside Higher Ed, Duncan's primary goal related to college aid is to guarantee access to student loans for everyone attending college.  Taking up one aspect of Spellings' policy, he also expressed an interest in simplifying the FAFSA to make applying for federal student financial aid more enticing for college students.  Additionally, Duncan pledged to work towards the goals of increasing Federal Pell Grants and instituting the $4,000 education tax credit that made up a major part of Obama's campaign platform.

Congress may already be taking steps towards some of these goals in drafting the next economic stimulus package.  Reports have abounded this week that plans are in the works to increase the maximum available Pell Grant by $500 and to consolidate two existing federal higher education tax options into one $3,000 tax credit for higher education expenses.

by Emily

The omnibus spending bill passed by the House of Representatives in February was approved by the Senate last night, and is expected to be signed by President Obama this week.  The bill includes more funding for Federal Pell Grants, fixing the maximum award at $5,350 for 2009-2010, a number that's already been widely publicized.

Other student financial aid programs also receive a funding boost for the current fiscal year, including the Federal Perkins Loan cancellation program and several federal scholarship and fellowship programs.  These increases aren't necessarily tied to larger award amounts, however.  Federal Work-Study, which received a boost in the stimulus bill, will see the increase put into effect in the 2009-2010 fiscal year under the omnibus legislation.

Funding was held steady for SEOG, another federal grant program, as well as new Federal Perkins Loans.  ACG and SMART grants actually saw a decrease in funding--now these programs have funding equal to the amounts they award, but no longer have large, unawarded funding surpluses.  The surplus money from these programs has been redirected towards Pell Grants.

The passage of this bill, which should represent pretty much the final word on education spending for the current fiscal year, comes just in time for colleges to begin sending out financial aid award notices to students who have completed the FAFSA.  If you still have your fingers crossed for a magic bullet for college costs, it's still not too late to kick your scholarship search into high gear and begin looking at ways to pay for school beyond federal aid.