Blog

Browse All Blog Topics

Margaret Spellings Stands Behind Federal Student Aid Program

Mar 18, 2008

by Scholarships.com Staff

Speaking before the U.S. House Committee on Education and Labor, Secretary of Education Margaret Spellings told representatives what they wanted to believe, but didn’t: the college aid crisis was under control. After months of financial struggles, a number of student lenders have decided to discontinue their participation in the Federal Family Education Loan Program (FFEL), leaving students to look elsewhere for college funding.

A troublesome lending market and a new law limiting government subsidies to student lenders have many lenders rethinking their participation in the FFEL.  With less government backing and greater default rates, some student lenders are finding it necessary to cut back on student benefits, increase borrowing criteria, and sometimes, leave the government program completely.

These changes have left families worried about finding sufficient student loan assistance from the government, concerns Spellings has tried to diminish. During her testimony, the education secretary stated that so far, “No institutions have notified us that any eligible student has been denied access to federal loans.”

If true, students and parents would be relieved to know that they can still take advantage of low interest government loan rates rather than relying on private, more expensive, student lenders. According to Spellings, the government would step in before students were forced to rely solely on private lenders.

One safeguard proposed by Spellings was the option for schools participating in the FFEL program to switch to the government's Direct Loan program, one in which students bypass government-subsidized lenders and borrow straight from the government.

Ms. Spellings also pointed out that Pell Grants, federal need-based awards that do not need to be repaid, have been increasing and will likely continue to do so. Students who receive free grant money will have fewer loan needs---to an extent. Currently, those eligible for Pell Grants may only receive $4,310 per year, and not all are eligible for this form of federal student aid.

Still, the Secretary of Education maintained a positive outlook and expressed confidence that most student lenders are not in critical positions stating, “More than 2,000 originating lenders participate in FFEL...a small number of these lenders have reduced their participation or stopped origination new loans.”

And don't forget, you should pay for your college education with as much free money as possible! Find as many scholarships and grants as you can before turning to student loans. Visit the Scholarships.com free college scholarship search today where you'll get matched with countless scholarships and grants for which you qualify, then apply and win! It’s that easy!

Discuss

Share your thoughts and perhaps thousands of students will benefit from your unique insight on the subject!



If you can read this, don't touch the following fields


 

Most Shared Articles

Prospective Rhode Island college students may score two years of free college with Governor Gina M. Raimondo's $30 million plan, Rhode Island's Promise. Beginning with the class of 2017, the plan would foot full tuition bills and mandatory fees, according to Inside Higher Ed.

In an effort to "knock down the financial barriers to obtaining a college degree," Gov. Raimondo's proposed [...]

0 months ago 0 comments Read More

College is supposed to be the best four years of your life. Or as one sociology professor claims: "a big four-year orgy." Was college always this fun? History may indicate otherwise, and Lisa Wade highlights a "demographic shift" 300 years ago that changed the college campus landscape and made colleges bastions of sex, booze, and entitlement.

U.S. colleges during the colonial era [...]

0 months ago 1 comments Read More

While you can always increase your chances at landing a scholarship - increasing your community service and extracurricular involvement, having good grades and writing strong essays - winning one isn't always guaranteed...or can it be? According to TIME Money, one way to secure a scholarship is to apply to, and attend a college that guarantees its incoming class free college money. Here [...]

0 months ago 5 comments Read More

A burglar who targeted college apartments in Cobb County is now in jail after Kayla Mesar, a freshman university wrestler threatened and scared him off campus property.

The identified suspect, Amir Williams had allegedly broken into several other college apartments near Life University before entering Mesar's unit through a back unit where her mother had stood. Mesar, who was around [...]

0 months ago 2 comments Read More

In hopes of boosting the local economy, Tennessee state education officials spent roughly $1 million this past year in advertising enticing college dropouts to finish what they started.

The state's partnership with Tennessee Reconnect is just one of several comeback programs established to combat the "nearly 37 million working adolescents nationwide [that] have some college credits [...]

1 months ago 1 comments Read More

College can be expensive, and while some may rely on scholarships, grants, loans or their parents to foot the bill, one Jacksonville woman got creative and sold her urine and positive pregnancy tests on Craigslist for a little extra cash.

Why would anyone ever purchase positive pregnancy tests or urine? The three-months pregnant woman, who chose to remain anonymous, didn't really [...]

1 months ago 3 comments Read More

Teenagers aren't using drugs, alcohol, and tobacco as much as they used to, according to a new national study. Substance use rates have declined significantly and are at their lowest since the 1990s. Despite this trend, researchers caution that there is still high use of marijuana for a certain age group.

The Monitoring the Future study, conducted by U-M's Institute for Social [...]

1 months ago 7 comments Read More

Rather than basically give you 23 birds for the first 7 of the 12 days of Christmas, we've compiled a holiday list of scholarships yule adore...with a head start too! Check out these scholarships that'll last a few days after you enjoy the holidays:

NATA Business Scholarship

[...]

1 months ago 3 comments Read More

The mantle of "College President" is one that includes a lot of responsibility and scrutiny, but for some in the higher ranks, the lucrative pay makes it worth it. According to data released by The Chronicle of Higher Education, some private-college presidents have made over $5.4 million in a single year.

The average annual salary for full-time college/university presidents in 2014 [...]

1 months ago 2 comments Read More