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by Agnes Jasinski

Internet auction site eBay has removed a recent listing from a Purdue alum, citing a terms of use violation in his attempt to sell his bachelor’s degree in psychology.

Nick Enlow, a 2008 graduate from Indiana University-Purdue University at Indianapolis, set the starting bid for his diploma at $36,000, plus $3.50 for shipping. His justification for the listing was that the student loan debt he accrued to complete his bachelor’s wasn’t worth the degree. While he wasn’t confident that he’d get any bids—he thought perhaps a wealthy eccentric might take pity on him and his student loan burden—he was fairly confident that the move would strike up a dialogue on the value of a liberal arts degree. The listing was removed by eBay last week “due to the sensitivity and nature of the item,” according to a recent article in the Journal and Courier.

In that article, Enlow said he felt universities should be held more accountable, as they are “handing out too many degrees that have zero real-world application.” A main complaint was that he felt unprepared to face the $470 monthly payments to his loan provider Sallie Mae; the only job he’s been able to find is one substitute teaching, work that barely allows him to make ends meet. Enlow admits that he was somewhat naïve as a college student at Purdue, assuming that his degree would land him automatic employment in an area he loved. His college’s response has been sympathetic, but realistic. Irwin Weiser, interim dean of Purdue’s College of Liberal Arts said in the Journal and Courier that a liberal arts degree “is not an automatic ticket to a job, but then again, no degree is.”

This isn’t the first time a recent graduate has been unhappy about job prospects post-graduation. Last August, Monroe College graduate Trina Thompson tried suing her alma mater to recoup the $70,000 she spent on a degree that she says left her jobless and with few options for employment. In response to students’ worries that they would complete school only to be met with student loan debts and increased competition in the job market, Lansing Community College introduced a plan earlier this year where students would be guaranteed jobs if they completed training in high-demand fields.

If you find yourself struggling to cover student loan payments as a recent graduate, know your options. If you can’t find a job, you may defer your loans until you’re on better financial footing. And if you’re just starting your undergraduate degree, remember that the fewer student loans you take out, the better. Check out our tips for borrowing responsibly and making the most of your financial aid package.

by Alexis Mattera

There's been a lot of talk about Harvard lately – its reinstatement of early action, a graduate winning the Best Actress Oscar, another Winklevoss lawsuit against Facebook, etc. – but this next story doesn’t fall within the boundaries of its ivy-covered campus...and not that far away, either. An arm’s length, shall we say?

Desperate to pay off their children's $20,000 worth of student loans, a Boston-area parent recently posted on Craigslist that he or she was willing to sell their body parts to combat the mounting debt. The posting did not include a name, gender or exact location but listed the "live cadaver" was 5 feet 10 inches tall, 200 pounds and had all organs in working order. "If you eliminate my children's student loans, I will give you my life!" the poster wrote. "Take my blood, take my plasma. Drill into my brain, my leg, my arm. Tap my heart, my liver, my kidney," the poster wrote, adding, "I am very very serious."

There are a lot of options out there to limit exorbitant loans (scholarships, grants and fellowships, to name a few) and consolidation can simplify the loan repayment process by allowing the borrower to combine several types of federal student loans and repayment schedules into one...but selling off one’s body parts piece by piece? We’re all for finding interesting ways to pay for school but this is just plain crazy. Would you ever consider taking this route to keep loan collectors at bay?

by Emily

While it falls in the middle of summer on most academic calendars, July 1 marks an important date for financial aid each year.  On July 1, the Education Department switches from the 2008-2009 academic year to the 2009-2010 one, and new federal rules for financial aid go into effect. This means new loan consolidation and repayment options, lower interest rates on some federal student loans, among other changes for students receiving federal student financial aid.

One big change you likely already know about if you have applied for financial aid for fall is that Pell grants are going up from a maximum of $4,731 for 2008-2009 to a maximum of $5,350 for 2009-2010.  This change has already been widely publicized and is already reflected on your financial aid award letter.

Changes for current undergraduate students that you may not already know about include lower interest rates and lower loan fees on federal Stafford loans.  The interest rate on subsidized Stafford loans for undergraduate students will drop from 6.0 percent to 5.6 percent on July first.  Rates will not change for unsubsidized loans, graduate students, or federal PLUS loans.  The upfront loan fees on all Stafford loans will fall from 2 percent to 1.5 percent. Students who have older Stafford loans or PLUS loans with variable interest rates will also see lower interest rates as of July 1, provided they have not already consolidated their loans.

Those who are considering loan consolidation will see one of the biggest changes on July 1, with the unveiling of a new consolidation program through the federal Direct Loans program.  It will allow students to participate in an income-based repayment plan that will forgive any outstanding debt after 25 years.  Payments will be capped at 15 percent of whatever you earn above 150 percent of the federal poverty level and no payments will be required if your earnings fall below 150 percent of the federal poverty level.

Finally, since July 1 marks the start of the new academic year for financial aid, today is the last day to file a 2008-2009 FAFSA.  If you are planning to enroll in summer courses and have not yet applied for aid, you may want to check with your school to see whether summer is counted as part of 2008-2009 or 2009-2010 for financial aid purposes.  If your school counts summer as part of the previous academic year and you have not yet filed a FAFSA, you will want to do so right now.

by Agnes Jasinski

It’s rare for a college to tell a prospective student that their school may not be affordable enough for them to attend come fall. For a year, New York University did just that, calling admitted students and their parents and families to talk about the debt they could get themselves into if they chose to attend the pricey college. Citing little effect on enrollment rates, however, the school will not be pursuing a similar effort this summer, according to a recent article in The Chronicle of Higher Education.

The purpose of the calls was to make sure students and parents were aware how much an education at the school cost long-term. NYU doesn’t offer as much “free money” in scholarships and grants as many other schools, leaving students no choice but to take out student loans to cover the more than $50,000 annual tuition, fees, and room and board bill. According to previous articles on the school’s efforts in The Chronicle, the 58 percent of students who carry debt loads once graduating from NYU do so with an average of more than $33,000 in student loans. (The national average hovers around $20,000.)

NYU won’t be abandoning all efforts to inform students and parents about the costs of attending the college. Administrators say they’re now looking for ways to make sure those admitted know of ways to finance the “significant investment” that is NYU, according to The Chronicle, and that these efforts need to start sooner rather than later when students are still deciding where to enroll. The college also plans to give students a more “general financial education” rather than giving them advice based on their specific circumstances. However, Randall C. Deike, NYU’s vice president for enrollment management, said in the Chronicle article that he has already told some students it may be better for them to start out at a less expensive college and then transfer to NYU later on.

NYU has gotten quite a bit of criticism lately from students graduating with mountains of debt, degrees in the humanities, and limited job prospects. One article last month in The New York Times took a look at Cortney Munna, a 26-year-old graduate of NYU with nearly $100,000 in student loan debt. Munna is saying she wasn’t counseled properly about the true cost of college and what it would be like to repay a loan that high once she was done at NYU. According to The New York Times article, it was NYU that suggested she take out an additional $40,000 private loan when she and her mother found that the lower-interest student loans didn’t cover all of the costs of attendance. The college has since said it would have been inappropriate for them to counsel Munna out of NYU, or to counsel her out of taking on more debt to remain at the school. Who is to blame here? Were Munna and her mother naïve in assuming they could handle the loan? Should private lenders consider students’ existing loan totals when doling out funds? Should the college have been more forthright?

by Agnes Jasinski

July 1 marks the official date that colleges, if they haven’t already, must transition to the recently approved Federal Direct Loans Program. Schools will no longer offer students the option of having private banks or credit unions handle their federal loans; federal loans will now be coming directly from the U.S. Department of Education. Advocates of the student loan bill have said this will make the process more seamless and fair, with the government taking responsibility for keeping interest rates manageable. And private loans will still be available via the traditional channels, although those loans are typically offered at higher interest rates.

The student loan debate has been a constant in the world of higher education, as legislators and administrators look for ways to reduce the debt of graduates. This week, The Christian Science Monitor considered student loans in a different way. Is it ethical to send students out into the world with all this debt, especially when they may not be making enough in their chosen careers to pay back those loans in a timely fashion? Are student loans moral?

The Christian Science Monitor piece looks at the history of the student loan industry, questioning whether it was ever right for Congress to increase borrowing amounts to current levels, or to offer students described as “in need” much easier access to federal loans through the re-authorization of the Higher Education Act in the 1990s. According to the Project on Student Debt, student loan totals only continue to rise. The average national debt for graduating seniors with loans rose from about $18,650 in 2004 to $23,200 in 2008. Meanwhile, employment prospects have not increased at comparable levels; by 2009, the unemployment rate among new graduates hovered near 11 percent, the highest on record.

It isn’t just a case of telling college students not to borrow so much. Student loans are often a necessary evil, and while debt can be minimized some through scholarships and grants, most students will end up taking on some amount of debt. The Monitor questions whether there should be more strict limits on borrowers that exist in other scenarios where credit checks and expectations that borrowers will be able to pay back what they borrow are enforced. There is no guarantee of a job after college, after all, so why shouldn’t the fact that a student is unable to pay off more than the minimum on their credit cards be taken into account more when they take out loans? (On that note, the U.S. Senate has approved an amendment that would lower “swipe fees” that banks charge college bookstores when students use their credit cards for purchases.)

Student loans are a hot topic, and will continue to be. What do you think? What else can be done to reduce graduates' debt, especially among those graduates who are not entering high-paying fields?

by Agnes Jasinski

As a response to "operating in unsettled and ... unsettling times," Williams College has decided to stop offering its no-loan student-aid program and to reintroduce modest student loans to students' financial aid packages.

In an open letter to the Williams community released over the weekend, the school's Interim President Bill Wagner said the change would not affect current students, but beginning with the class that enters in the fall of 2011. Families below a certain income will still not be expected to borrow at all, and other students will be offered loans on a sliding scale up to a maximum size that the school says will still be among the lowest in the country.

Student loans were eliminated at Williams in the 2008-2009 academic year, joining more than 30 private colleges that had adopted similar policies, such as Amherst and Claremont McKenna colleges. (There have already been rumors that Amherst College may join Williams in amending its own policy.) The decision to cut loans out of students' financial aid packages came at a time when the school's endowment had grown so large that there were demands to spend more. But at the same time, more students were applying for and qualifying for financial aid.

Williams isn't the only college to renege on a promise to students, nor is it the first. Lafayette College raised the loan limit it pledged to students from $2,500 a year to $3,500 a year if they had family incomes of between $50,000 and $100,000. Dartmouth College has been requiring loans again for those at certain levels now exempt from borrowing. Endowments across the country have plummeted, suffering their worst losses since the Great Depression. According to an article in The Chronicle for Higher Education published last week, the value of college endowments declined by an average of 23 percent from 2008 to 2009. An endowment student sponsored by the National Association of College and University Business Officers found that of the 654 institutions that reported carrying long-term debt, the average debt load grew from $109.1 million to $167.8 million.

Are "no loans" policies feasible at all? Some critics explain that there are students currently exempt from taking out loans who could easily be able to pay them off once they graduate. Students with family incomes of more than $120,000 have the resources to borrow less than other students, critics say, and the focus instead should be on helping low-income students keep their loan debts at a minimum. Williams hasn't been clear as to what the family income cutoff would be for its new policy, but it will undoubtedly hit the middle class hard.

by Suada Kolovic

Here at Scholarships.com, we love the idea of students going to college debt-free but the reality is that student loans, for the most part, are a necessity in today’s educational world. And while private student loans should be a last resort when paying for college, it can help bridge the gap for families who have maxed out federal loan limits. The silver lining: Sallie Mae is lowering its interest rates on student loans.

The new cap on Sallie Mae’s rate will be 9.875 percent plus LIBOR, which is the interest rate that banks charge each other for loans. The new lowest available rate will be LIBOR plus 2 percent, which reflects a half percent rate reduction. But remember, the exact interest rate Sallie Mae assigns to a specific loan will vary depending on the borrower’s credit score and repayment option. They’re also offering students the option to make $25 monthly payments while they’re in school to counter interest costs or defer payments until graduation. Another added bonus: For loans disbursed between July 1 and Oct. 1, Sallie Mae is offering free tuition insurance for a year.

All these perks aside, Sallie Mae can’t compete with federal loans that come with a fixed rate of 6.8 percent but a cut in student loan interest rates is still a win in my book.

by Emily

Dreading student loan payments? While it may seem counterintuitive, you might want to think about law school. Two law schools are now offering to pick up the tab on student loan repayment for their graduates who go into public service. The University of California at Berkeley School of Law and Georgetown University Law Center are both unveiling new student loan forgiveness programs to complement the federal public service loan forgiveness program.

Attorneys in public service professions typically earn much less than their colleagues who pursue more lucrative legal careers. While the Bureau of Labor Statistics puts the median income of all lawyers at just over $100,000, public interest lawyers can expect to start out making around $41,000 and many law students can expect to graduate with at least double that amount in debt. This can make pursuing a career in public service while living independently and avoiding default on debts nearly impossible. This is where loan forgiveness comes in.

Under the federal loan forgiveness program, college graduates who work in public service (a category with a surprisingly expansive definition-most governmental, non-profit, and education careers are covered) for ten years while making payments on their student loans through the federal Income Based Repayment plan will see their remaining debt forgiven. Income Based Repayment requires borrowers to pay no more than 15 percent of their discretionary income on their loans each year.

The programs at Georgetown and Berkeley take care of graduates' monthly loan payments for the ten years it takes to have their loans forgiven, provided they pursue legal careers in public service areas and earn below particular income thresholds. Berkeley grads qualify for some amount of help if they earn less than $100,000 per year, with their total loan costs covered if they make less than $65,000. Georgetown currently covers graduates earning less than $75,000 but plans to expand its program as funding allows.  Until recently, Harvard University offered a plan that provided one free year of law school to students planning to work in public service, but that plan was rescinded due to economic hardships facing the university.  However, other schools still offer financial assistance to students pursuing law degrees, especially ones that lead to careers in public service.

These programs still may not cover private loan debt that students amass while pursuing law degrees. However, law students are able to borrow more in federal loans, such as Stafford Loans and PLUS Loans, than undergraduates typically can. There are also a variety of law scholarships available to students who are interested in pursuing legal careers. If you're interested in public service, but not in law, there are other forms of financial assistance available, as well.

by Suada Kolovic

If you’re a recent college graduate, chances are you’ll have to start paying off your student loans sooner than you think. And even with the economy in a slump, don’t expect a free pass on not paying your loans. Are you starting to panic? Well, don’t! There’s a ton of advice out there to help students stay on track and courtesy of the U.S. News and World Report, here are seven tips for repaying your student loans.

• Repay you student loans automatically. Make things easier on yourself by setting up automatic withdrawals from your bank account. This reduces the chance of late or missing payments.
• Aim for 10 years. The traditional repayment period for student loans is 10 years and ideally you'll be able to pay off all your debt within that time period. If you end up struggling with your monthly payments, however, you could stretch out your loans to 20 or even 30 years. Your monthly payments will become more manageable but you will end up paying a lot more in interest.
• Stay organized. Having multiple student loans can be a challenge to keep track of but with the government's National Student Loan Data System, you’ll be able to track all your federal student loans in one place.
• Pay off the loans with the highest interest rates first. A high interest rate costs you every month and compounds that amount you owe every month you aren’t paying off the entire balance.
• Consider IBR. The IBR is a federal Income-Based Repayment program that allows a borrower to repay his or her federal loans based on what is affordable and not what is owed.
• Keep abreast of student loan developments. Staying informed is just as important as making your payments. Familiarize yourself with websites that are devoted to college debt issues like Project on Student Debt and the National Consumer Law Center's Student Loan Borrower Assistance Project.
• Contact the Federal Student Aid Ombudsman. Sometimes your relationship with a lender can go belly-up. If you end up in a dispute, the Federal Student Aid Ombudsman may be able to help resolve the issue.

by Alexis Mattera

Attention recent college grads: You may be able to pay down those student loans a bit sooner than expected!

According to the annual Salary Survey by National Association of Colleges and Employers, graduates from the Class of 2011 shows a 4.8 percent starting salary bump over last year’s graduates. The increase was seen across most disciplines including engineering, liberal arts and social sciences, though 5 percent more 2010 graduates were able to find jobs than their 2011 counterparts. With approximately $2,357 more before taxes (this year’s grads will average $51,018 to last year’s average of $48,661), new grads will have enough for a few months of rent, some padding to a savings account or, yes, a way to make a dent in those loans.

Recent grads, are you happy about this news? Soon-to-be grads, are you hopeful the salary figures will continue to increase until you finish college?