September 6, 2007
Before Attorney General Andrew Cuomo’s investigation into the student lender business even began, talks of making student loans more affordable were in the works for Democrats. Now that slews of financial aid officials have been found guilty of accepting money and gifts in exchange for spots on preferred-lender lists, changes are on their way.
After similar bills for government cuts on student lender subsidies were passed by the House and Senate, a compromise was finally reached. If the College Cost Reduction and Access Act is passed, and few want to be known as the ones who oppose it, student lenders will receive less aid from the government. Eligible borrowers may surpass outside lenders altogether by taking out low-interest government loans, but the borrowing limits on such loans aren’t always sufficient —and not all students are eligible.
The money the government plans to save by limiting lender subsidies would go towards increasing Pell Grants for students and decreasing the national debt. The Pell Grant maximums, capped at $4,310 for 2007-2008, would be raised to $5,400 over the next few years. Also in the works is a decrease in need-based interest loan rates. The current 6.8 percent interest rate would be cut in half.
Provisions that would keep students from drowning in their debt were also included in the legislation. Borrowers would not be forced to pay more than 15 percent of their discretionary income, and their loans would be forgiven after 25 years. A vote on the compromise is forthcoming. Although it is possible that President George Bush will veto the bill—he has warned to do so last month— an overturn is also likely.
September 5, 2007
Many students are in desperate need of financial aid, and setting up a scholarship
is a wonderful way to help them. According to the National Center for Education
Statistics, the average cost of a college education in 2006-2007 was $10,454 at
public colleges and $26,889 at private ones. With Pell Grants capping at $4,310 this year, government money hardly cuts it.
Here are a few things providers should think about when creating a scholarship.
An easy way to create a one-time or annual scholarship is to submit award information
to a local scholarship foundation. It should be noted that annual scholarships (endowments)
may require the provider to come up with more than $20,000. Ongoing scholarships
are similar to bank accounts in that interest accrues on the initial deposit. The
earned money then becomes an award. If winners are to receive a significant amount
of money, a large initial donation may be required.
As long as scholarships are used for college expenses, they are usually tax-exempt.
However, there are some IRS regulations, and they are particularly strict when it
corporate scholarship providers.
Scholarships are a great source of support to students who face difficult circumstances
or enter underrepresented fields. Regardless of targeted recipients, providers should
be clear on who they are looking for. There is no point in reading applications
from students who won’t be considered. Criteria such as GPA, field of study, year
in school etc. should be specific, but lax enough to give students a shot.
With the help of Scholarships.com,
advertising can be a cinch. Once a provider submits scholarship information, it will be made available to students who visit our site. To prevent providers from being inundated with applications from
ineligible students, Scholarships.com will only show the scholarship to students
who meet its eligibility criteria.
September 4, 2007
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:
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.
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.
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.
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.
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
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.
August 31, 2007
College Board has been dealt another big blow. Just days after it was revealed they
had bought their way into spots on preferred-lender lists, College Board announced
a drop in SAT scores. College Board, a nonprofit organization that administers the
SAT and AP tests, announced on August 28th that the average combined scores for
2007 graduates dropped by 1 point in critical reading and by 3 points in math and
writing. Since 1967, average reading scores dropped by 41 points and math scores
by 1 point (writing scores were not reported). College Board stressed the positive
saying that more students, minorities in particular, were taking the test.
Earlier this year, the SAT was scrutinized after research released by the University
of California revealed that the correlation between high school grades and SAT scores
may not be as accurate as once thought. Although the test was a good indicator of
first-year grades, the following three did not match up. Eventually, ambitious students
adjusted to the University of California’s difficult curriculum, regardless of initial
The study was a continuation of a 2003 study which showed that SAT performance was
better than GPA in predicting first-year college performance. Apparently, after
catching up with the 80,000 students sampled, things had changed. In fact, findings
showed that the longer students attended college, the greater the value in using
high school grades as a means of predicting future performance. Such findings indicate
that the strong correlation between SAT scores and socioeconomic factors is eventually
watered down. The implications of this research are yet unclear. It is, however,
becoming clear that the SAT may not be as good of an indicator of college performance
as was once thought.
The question of whether the SAT & ACT tests should continue to be administered
was one of two issues addressed in Scholarships.com’s annual Resolve to Evolve essay
contest (the second dealt with the population’s effect on the environment.) To read
what students had to say, you can visit the Scholarships.com 2007 Resolve to Evolve Award Winners page. To find sample questions and advice on preparing
for standardized tests, you may visit the Resources section at Scholarships.com.
August 30, 2007
When it comes to loans, this is the real deal. The Perkins Loan program is a government
and school funded program with the smallest interest rates, only 5%. Compared to
other low-interest government loans and their high-interest private counterparts,
the Perkins Loans are ideal for students who need on-the-spot funds.
Of course, the best of loans are not available to all. Seeing as these loans have
the lowest rates, they are usually reserved for the neediest students. Luckily,
needy graduate students are also eligible. They may have gotten the cold shoulder
when it came to Pell Grants, but graduates still have options when it comes to low-rate
Even though the government puts forth a large amount of funding for Perkins Loans,
the loans are still considered campus-based. This is because schools match some
government contributions and are in charge of loan administration. They even have
to apply to participate. Not to worry, most schools do participate in the program.
Approximately 1,800 schools across the country provide students with financial aid
in the form of Perkins Loans.
Students who are interested in the Perkins Loan should submit their FAFSA. Whether a student qualifies and how
much aid they qualify for is based on their determined financial need and their
school of choice. Undergraduates with the greatest need may be eligible for up to
$4,000 in yearly aid; graduates may receive up to$6,000. Over the course of their
education, undergraduate may borrow up to $20,000 and graduates can borrow up to
$40,000 (this includes undergraduate loans.) Thankfully, if these loans add up,
students have up to 9 months after graduating, withdrawing or dropping below part-time
status to find repayment funds.
Perkins Loans are a good option for quick aid, but before applying, students should
take advantage of free funding options. Performing a free scholarship and grant
search at Scholarships.com
and browsing through school websites may eliminate the need for loans altogether.
August 29, 2007
Some of the best things in life are free, especially when it comes to financial
aid. Students who fill out a FAFSA will quickly realize that a world of financial assistance is at their fingertips.
Of all government aid, Pell Grants are definitely the sweetest. Providing aid to
millions of undergraduate students each year, the Pell Grant is the largest grant program in the U.S.
Used loosely, a grant is a monetary award that does not need to be repaid. Graduate
school grants tend to come with some research strings attached, but not the Pell
Grants. All students who submit a FAFSA will be automatically considered for Pell
Grants, and all they need to do is to fill out the admittedly pesky form. Information
about whether they qualify for aid and how much aid they qualify for will be sent
to students by their respective colleges. These school "award letters" will usually
arrive sometime between March and April, though dates do vary.
Students who got into college by the hairs of their chinny chin chin need not worry
about being ruled out for aid. Pell grant money has nothing to do with GPA, athletics,
involvement, talents, and all other things that make the average student shudder.
These awards are based mainly on financial need.
If you are raising your eyebrow suspiciously, you deserve a pat on the back: Pell
Grants are not perfect. The government can help you, but only to a point. Aside
from the financial aid eligibility issue, Pell Grants have fairly low caps. For
the 2007-2008 year, the maximum Pell Grant award is $4,310, and this is not the
award most students will receive. The amount of aid a student will receive depends
on financial need, the cost of school attendance and the length of stay. The hourly
status of a student is also considered. Students who can fit their schoolbooks into
a purse will receive less aid than those who attend full time. Graduate school students,
unfortunately, are not even eligible. Students who cannot attend with
under $5,000 in grants may need to look elsewhere for financial aid. Students who
show extreme need, graduate from a competitive school or plan to major in the math
& sciences may be eligible for additional government grants. Those who don’t
should consider applying for scholarships, non-government grants and fellowships.
A great place to perform a financial aid search is Scholarships.com. With 2.7 million
scholarships & grants worth over $19 billion, Scholarships.com has something
For more information on Pell Grants, visit Student Aid on the Web.
For additional information on financial aid, visit the Resources Section of Scholarships.com.
You will find that, as you go out in search of money to fund your post-secondary
education, a lot of questions are going to surface. Naturally, being that
we are the largest independent and dedicated resource to scholarships and financial
aid on the web, we have a lot of answers. Below, we have a list of some of the most
common questions, along with their answers. If you don't find an answer to your
question below, check out our Scholarship F.A.Q. page.
August 28, 2007
In the world of financial aid there are many different forms of assistance available
to students and each serves a slightly different purpose than the other. Many students
assume that words like scholarship, grant, fellowship, internship, and student loan
are interchangeable. They are not, however, and the consequences of misunderstanding
which form of financial aid you are looking for or receiving can be far reaching.
For each variety of assistance there are different tax stipulations, service requirements,
and repayment expectations attached. Any student on the hunt for financial aid should
know what he’s looking for, what he’s found, what the award requires and how it
will help him achieve his college goals.
are financial awards given to eligible students with no strings attached. Typically,
if you win a standard scholarship, unless it is renewable, your interaction with
the donor ends the day you receive your check. According to the IRS, if you are
not pursuing a degree, the entire scholarship is taxable. For those students using
the scholarship for college, any portion used for tuition, fees, books, and supplies
is not taxable. Any funds remaining after your expenses are paid for, however, are
subject to tax. There is not typically a service requirement or other stipulation
attached to the scholarship upon receipt of the award, however, you should check
to be certain. Scholarships are offered in many varieties—sweepstakes, essays, competitions—for
traditional and non-traditional students alike. Occasionally scholarships require
that you do a specified amount of community service after receiving the award.
Like scholarships grants are a cash award that does not need to be repaid. There are federal
grants, state grants, and grants issued by private businesses and organizations.
Many undergraduate students greatly depend on government grants to get them through
college. Why shouldn’t they? As long as students qualify financially, all they need
to do is fill out a FAFSA. Aside from the
government sponsored grant program, most grants are awarded to graduate students
who need help funding research or who intent to enter a specific field. Grant amounts
range greatly. They may be $100, $100,000, etc. Graduate school grants are not typically
used toward tuition, but rather, they are usually used for any expenses necessary
to complete your research.
Fellowships are typically awarded to pursuers of graduate or doctoral degrees. Although
providers don’t seek repayment, they will frequently ask that students perform research
work as a part of the deal. The work may be tedious, but it is usually worth the
effort; it is not uncommon for stipends, in addition to tuition coverage, to be
a part of the fellowship package. Fellowships tend to be lucrative, and they can
get pretty competitive. Students who demonstrate exceptional merit are usually the
Most students know the difference between a scholarship and an internship, however,
for those that need clarification an internship is an opportunity to work within
a business or organization that you would otherwise need a degree to hold a position
in. While some internships offer monthly stipends for students participating in
their programs, others are unpaid. There are many professions that require students
to have participated in an internship program before they can be hired as an employee.
It’s a good idea to find out how most professionals in your field of interest secured
a position in their field because you will likely discover that without the help
of an internship most would not be where they are today. When you are considering
an internship there are several things to think about before you accept a position.
Ask yourself: How will it help me? What is the time commitment? Is there a stipend?
And of course, is there a possibility for employment after the internship?
Believe it or not, student loans qualify as financial assistance; however, loans are a form of low-interest debt that must eventually be repaid. There is a limit to how much financial assistance
a student can receive from student loans which is usually determined by how great
the financial need of the student is. For the students who do not qualify for a
need-based grant but do not have enough cash to pay for tuition, student loans are
a good option. An added benefit is that most loans do not begin accumulating interest
until 6 to 12 months after you graduate and monthly payments are also delayed until
There are so many things to think about when entering college. Financial aid for
room & board and book expenses initially come to mind, but many forget
another important expense—medical insurance. Before students head off to college,
they need to seriously consider future medical aid options. Those with a history
of ailments are likely to explore their options, but so should the poster children
for health. Unfortunately, a large portion of health-related issues surface during
adolescence. The fact that college students are frequently stressed out and sleep-deprived
sure doesn’t make things better.
In more ways than one, students who enter college are better off than those who
finish school at 18. Those who are considered dependents under the health insurance
plans of parents are frequently given the boot on their eighteenth birthday - a not-so-nice
way to be welcomed into the adult world. Those who head off to college, however,
continue to be dependents under their parents’ plan for a few more years (usually
until they turn 23 or 25). This typically applies to full-time students only. Those
who are enrolled part-time may be ineligible or forced to hand over additional cash.
Schools typically offer their own college insurance plans for those who choose to
take advantage of them. Oftentimes, students are automatically charged for this
service unless they let schools know they are uninterested. Some states require
entering students to be medically ensured. If that is the case, students who choose
to reject school offers must show proof of alternative coverage. The costs of college
insurance vary greatly, but they are frequently less expensive than private options.
This tends to come at the expense of quality.
You may have noticed that full-time students can retain a parent plan until they
turn a certain age—a few states extended the eligibility age to 30. More often,
however, students may be cast aside during their low and mid twenties. According
to a Commonwealth Fund report, about 30 percent of the nation's estimated 44.4 million
people without health insurance are 19-29 years old. This makes them the largest
group of newly uninsured. Graduates students with no income and plenty of expenditures
are not pleased. Schools do take graduate school students into consideration, but
they do so at a cost. For example, the University of Illinois Champaign insurance
policy for the 2007-2008 year is $180 for undergraduates; graduates have to pay
$256. College students do have options, but they need to be prepared.
When putting aside college funds, expect the unexpected. Scrapping together additional
529 plan money and applying for a few more scholarships may be in order.
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