December 10, 2008
Last month, the Bill and Melinda Gates Foundation revealed plans for a new grant program that would focus on improving rates of college completion for low-income students. The first recipients of the grants were announced Tuesday, primarily consisting of organizations that either study or promote college preparedness and completion among the foundation's target groups. While few of the grants awarded will translate directly into college scholarships for first-generation, low-income, or minority students, many of the programs receiving funding are intended to help these students go to college and create success. Currently, only 25 percent of low-income students finish college, and each year high schools produce over 560,000 college-eligible graduates (most whose parents make less than $85,000 a year) who will fail to earn a college degree within 8 years, according to research cited by the New York Times. The Gates Foundation's stated goal for this grant program is to eventually double the percentage of low-income students completing a college degree or certificate program by the age of 26. The Chronicle of Higher Education explains that the grant initiative will have a three-pronged approach: "making the case to policy makers, educators, and business leaders about the need for increasing college-completion rates; accelerating success in remedial education; and ensuring that young people have the financial, social, and academic support to succeed in college." Coupled with the existing Gates Millenium Scholarship Program, which helps disadvantaged and minority students pay for school, these Gates Foundation grants have the potential to ultimately make not only attending college, but earning a degree and achieving college goals possible for the majority of American high school graduates.
December 9, 2008
Yesterday, New York Attorney General Andrew Cuomo and Connecticut Attorney General Richard Blumenthal announced that they had reached a settlement with the College Board regarding the preferred lender list controversy that has been unfolding since early 2007. The investigation revealed that the College Board had been offering discounts on its products to college financial aid offices that agreed to add their student loan service to a preferred lender list. Discounts of more than 20 percent off the College Board's proprietary software were given in exchange for placement on preferred lender lists. The College Board pulled out of private loans in 2007, but the investigations continued, culminating in yesterday's settlement, the latest of several with private student lenders.
The College Board has agreed to adhere to a code of conduct if it ever returns to the private lending market. The organization will be required to put $675,000 towards developing tools to help students and financial aid offices compare student loan offers. The College Board will also be required to distribute its new student loan calcualtors and "requests for proposals" (the forms that will allow for comparison among student loans) freely to schools for the next two financial aid cycles.
This news came as the Career College Assocation, an organization of private career-training institution administrators, released the results of a survey indicating the difficulty that students at two year, for-profit schools currently face finding money for college. More students are registering but not attending classes, and having trouble finding a private loan without a cosigner. The majority of schools report students needing to change lenders or facing higher interest rates. Some students are unable to procure a private loan at all, while others are contending with delayed loan disbursements. A number of these colleges have stepped in to offer institutional student loans, ranging from less than $1,000 to over $10,000, to students who are unable to meet the gap between their federal student financial aid and their cost of attendance.
December 8, 2008
December 5, 2008
December 4, 2008
Providing incentives for good grades is an increasingly common policy for parents of elementary and high school students. In my household, report card day meant personal pan pizzas and a reprieve from the topping battle among my sister who didn't eat cheese, my sister who only ate cheese, and my own vote for a supreme pizza with extra cheese. After pizza ceased to be a point of contention, my parents switched to the popular plan of offering financial incentives for good grades. I don't remember the pay scale exactly, but I do remember missing it once I hit college. Many undergraduate students are probably in the same boat, thinking about how even $10 or $20 per A could mean fewer trips to the plasma bank or even an extra textbook or two next semester.Two brothers, who also happen to hold economics degrees from Harvard and Princeton, had a similar idea. Michael and Matthew Kopko launched the website GradeFund last month to apply a model similar to fundraising for a marathon, where sponsors pledge to donate a certain amount per mile completed, to finding money for college. College students' friends and family members, as well as corporate sponsors and others interested in donating money to help deserving students fund their educations, sign up on the site to give a certain dollar amount per grade earned to a particular student.Students create profiles donors can search, and are matched up with people interested in helping them finance their educations. Rather than agreeing to provide student loans or cover tuition in exchange for work, like in other peer-to-peer financial aid programs we've mentioned on our blog, donors on GradeFund, like scholarship providers, don't require anything in return for their donations. While it's unlikely that a student will pay for their entire university education this way (according to The Chronicle of Higher Education, the current highest pledge per A is $400), they could easily pay for their books and possibly even a good part of other expenses that college scholarships or student financial aid might not cover. Plus, since these payments are linked to concrete achievements by students already attending college, donors may feel less apprehensive about the recipients of their philanthropy floundering once they face the academic challenges of their undergraduate studies.
December 3, 2008
December 2, 2008
December 1, 2008
November 26, 2008
Yesterday, the Federal Reserve and Treasury announced a new program to further shore up the banking industry in the face of a recession that appears to still be worsening. The program would devote $200 billion to shoring up consumer credit markets, including credit cards, car loans, and student loans. The hope is that this new program will make these forms of credit more widely available to people who need them, including students who depend on private loans to help pay for school.
The New York Times explains that this is the first time the federal government has intervened to finance consumer debt and describes the program as " com[ing] close to being a government bank." Coupled with recent efforts to expand and sustain federal student financial aid programs, namely the Federal Family Education Loan Program (FFELP), the federal government has expended a fairly vast amount of resources on student financial aid. However, some are questioning how the money is being spent.
The Project on Student Debt is one organization that has encouraged the federal government to exclude private student loans from rescue packages. While the lending industry has been hit hard in the last year, this organization is one of several voices urging that students be steered towards more affordable means of financing their educations. The National Association of Student Financial Aid Administrators, while supporting the Treasury's decision, also called for a reevaluation of the role of private loans in paying for college. Private student loans, which carry higher interest rates than federal loans, are intended to be used as a last resort after Federal Stafford Loans, campus-based aid programs, and scholarship money have been exhausted and students are still coming up short on their education expenses.
November 25, 2008
It's hard to believe, but next week it will be December. While it's tempting to train your eyes on the upcoming Thanksgiving holiday and the accompanying problem of consuming enough homecooked food to sustain you through finals, the next few months will be busy, especially if you're planning to apply for any sort of financial aid. Between your high school or college coursework and adjusting your schedule and budget to accommodate winter holidays, December and January tend to fly by. Since many scholarship application deadlines happen in December and January, now is the perfect time to do a quick scholarship search and double check that you don't miss out on applying for scholarships while you're in Thursday night's turkey-induced coma.
A Thanksgiving week scholarship application checklist:
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