August 27, 2007
With an increasing number of students taking and passing AP tests during their senior, sometimes junior, years of high school, early college graduation is an option for many. At numerous schools, entering college with AP credits is the norm—and I’m not just referring to the Ivy Leagues. When students enter their freshman year with sophomore status, they may have to decide if early graduation is a good option for them. Here are some things to consider before deciding whether to leave or to hang around.
FinancingLet’s start with the practical. For some students, financing is not a problem. They can afford to stay the whole four years—or will choose to stay, regardless of financial need. For others, this is not the case. Students who are already burdened down by loans may want to seriously consider early graduation. Yes, the college experience is important, but so is the post-college experience. Travel issues may not be a big deal until you find that a college bus doesn’t circle your workplace every seven minutes. You will need a car and your may want a new place to stay. Students should also remember that additional expenses kick in after college. You may be unable to claim dependency on medical insurance and tax returns, you don’t get good-grade discount on car insurance, and your movie tickets will cost more than $8—at least in the city.
College is a great place to take classes that are odd and interesting, even if they require additional work. I wish I would have taken that class on Middle Eastern relations. It may sound odd to you, but it sounded cool to me. It would have made my hard life harder, but when am I going to get that chance again?
If you like college and want to explore options before leaving, you should do so. Just don’t stretch your reasoning for doing so. When I spoke to my counselor about leaving early, she was adamantly opposed to it. “Think of all those things you wanted to do,” she said. “You can take those ice skating classes you have always dreamt about.” Ice skating? I don’t want to skate, especially if it costs $13,000 per year.
Those who have their minds made upIf you’re reading this article because you know what you want but need help getting there, here are my suggestions. Know that to graduate early, you need to stay organized: you need to plan ahead.
August 23, 2007
Effective October 15, 2007, College Board will no longer accept student loan applications. College Board, best known for administering the SAT and AP tests, announced its decision to leave the lender industry on August 22nd. In a press release, College Board stated that legislation aimed at curbing unethical relations between lenders and colleges made it too difficult to cover costs associated with education professional meetings.
The legislation was created as a result of findings that numerous lenders made payments to colleges in exchange for spots on college preferred lender lists. Legislation included a more concrete definition of a lending institution—which categorized College Board as a lender—and restrictions on lender payments to financial aid officials. Although College Board does not itself lend money to students, it receives payments from lenders for allowing students to sign up. As it is now considered a lender, it can no longer offer funds to the financial aid officials it works with.
The meetings College Board convenes for education professionals are now subject to strict regulations. Under new rules, College Board would no longer be able to reimburse members for travel and lodging expenses. Edna Johnson, a College Board spokeswoman stated, “If we no longer reimburse the educators, then only those educators from schools, colleges and universities with the financial resources to pay for the travel and the accommodation would attend.” The meetings held by College Board include discussions of practices for assisting families in paying for an education and tactics for effective administration of financial aid programs.
The new decision is likely to affect lenders more than it does College Board and the students who search for financial aid. According to the Washington Post, College Board issued 74,000 loans valued at $400 million in 2007, and the year is not over. However, less than 1 percent of College Board’s revenue comes from the lending sector.
Students who signed up with College Board aren’t the losers in this decision either. Those who wish to take out loans with companies represented by College Board may still do so by contacting lenders directly. They may be forced to do some extra research, but that’s a good thing.
August 21, 2007
That I needed to fill out a FAFSA
was a given. All counselors advised students to search for aid, and it seemed wrong
to miss out on the opportunity—especially when other students came home with awards.
Admittedly, applying was a bit confusing (but worth it). After receiving my FAFSA
award letter, however, I was totally mystified. There were columns for college grants,
Stafford Loans, Perkins Loans and Federal Work Study. I didn’t know if I had to accept
all financial aid, if I could request more or if this was just my receipt. Out of
fear for signing away my future home, I was almost ready to not sign anything. Thankfully,
things became much easier after the first year (although the FAFSA part was still
confusing). Knowing the basics made the award letter much easier to read.
Using the information provided in your FAFSA, the amount your family can potentially
contribute to your schooling is weighed against the actual cost of attendance. The
award letter will reflect all federal, state and university offers of aid. This
includes scholarships, college grants, and student employment. Financial aid gifts
such as tuition waivers, assistantships, fellowships, resident hall advisor compensation
and scholarships from organizations may not be listed until a school is notified
about them. Your award letter is not a receipt. You will not take on a $5,000 loan
by not responding, but you may lose some award money if you don’t. You can take
advantage of as much or as little of this money as you wish.
If you see any college grants in your letter, that’s a good sign. Government grants
are basically free money, and you should take advantage of it. Student loans are
also common. Students may see awards for Stafford, PLUS, and Perkins Loans. While government loans are not free awards, they
are a good bet for students who need to take out additional funding. The government
provides students with interest rates that beat those offered by private loan companies.
Federal Work Study is another pseudo award. Many colleges and universities will
find work for students who would like to earn money. While such work is unlikely
to make a student rich—much of it close to or commensurate with minimum wage—it
is easy to find, and it is flexible. You are not required to accept any or all aid
offered.Students may choose to decline some or all of their financial aid. Those
who only wish to take advantage of free grant money may turn down the loans and
federal work study funds. If a student needs $3,000 but is only offered $1,000 in
grant money, they may use up their entire grant award as well as some or all of
their loan award.Students unsatisfied with awards still have options.
Students who feel they need more may speak to financial aid officials and request
additional funds. Sometimes, schools may offer additional aid to coveted students
or to those with new financial difficulties. Schools are not required to do this,
so going in with a temper is not the best approach. Those who find no luck may still
apply for additional scholarships, college grants and loans. Free grant and
scholarship money is best, but additional, government-subsidized or private
loans are available. Schools usually have a preferred-lender list for those who
need to borrow, but it is important for students to conduct personal research on
Depending on the hands it falls into, a credit card may serve as an ultra-convenient
money stack, or it can—if I may be overly dramatic—lead to financial suicide. For
those who can manage their expenses and pay their monthly balances in full, owning
a credit card is a great idea. Walking around with large amounts of cash is dangerous,
and buying online is quite a hassle a without a credit card. Emergencies that necessitate
fast funding also come up, and when they do, a bit of debt pales in importance. As
you probably know, building up a credit report is one of the biggest incentives
for taking advantage of credit cards. Credit card companies know that many parents
will take care of student debt, and they’re not shy about making application offers
to students. Booths with pizza and t-shirt giveaways fill up campus corners and
busy sidewalks on sunny days. According to CBS, the average student is offered eight
credit cards during their first college semester—no job required. Once
students graduate, they are less likely to receive financial backing from their
parents. With new expenses and student loans kicking in, graduate fledglings are
considered to be bigger liabilities to credit card companies. Ironically, just when
credit cards become most important, they become most difficult to come by. Renting
an apartment involves a credit check, as does taking out a car loan and a home mortgage.
People with bare credit reports are big question marks to sellers, landlords and
credit card companies. If there is little or no credit history on your report, you
may find yourself staring at bigger bills or doorknockers. I’m not saying
it’s impossible to make it without a credit card, but having one sure does help.
Good track records with a national credit card such as Master Card, Visa, and Discover
(lesser-known store cards may not contribute to credit ratings) give lenders some
evidence of dependability. Unfortunately, many students have a hard time creating
a positive track record, and therein lays the problem. Students frequently
look to credit cards for tempting pick-me-ups and tuition aid. Don’t get me wrong,
not all indebted students are shopoholics, but those who look to credit cards for
financial aid might want to look elsewhere.
Scholarships, grants, jobs and less expensive student loans are a student’s best
bet because late payments may hurt in more ways than one. They will show up on credit
reports, result in $20-$25 late bank fees, and lead to increases in credit card
penalty charges. If you handle your credit card wisely, you won’t need
to worry much about penalties and annual percentage fees, but you should definitely
shop around before applying. Search for a card with the lowest fixed annual
percentage rate (APR). Numerous cards will start you off with a low APR but raise
the rate after 6 months. Also, be on the lookout for standard annual fees. There
are cards that charge standard usage fees, regardless of payment history. Look for
those that don’t. Once you build a good payment history, you may receive
credit card offers galore. Little cards with your school logos may arrive in your
mailbox. Yes. That’s cute. Chase knows that you go to the University of Illinois,
but you already have a card. Refrain from getting another one. According to the
United Marketing Service (UCMS), the average Joe carries 2.8 credit cards in his
wallet: don’t be Joe. When you apply for a new card or loan, a credit inquiry will
be recorded on your report. The more inquiries are made, the lower your credit score.
I know, just because you want a discount on American Eagle jeans does not mean that
you will not pay your bill in full. Unfortunately, lenders may assume that credit
inquiries suggest financial need—even if they don’t. If you can stay
on top of your expenses and limit the number of credit cards you own, you should
take advantage of college application offers. As long as you can control the card
before it takes control of you, using a credit card can bring you one step closer
to a secure financial future.
August 10, 2007
Ever been told to finish what you started? That’s not bad advice. Students are being
taught the value of a good education, and the counsel is working. College entrance
rates have been going up for years. Classrooms are filling up, and dormitories are
busting at the seams. Whether or not students are graduating is a different story.
According to a study conducted by ACT, a not-for-profit organization providing research
services, only 74.5% of first-year students attending public four-year colleges
return the following year. Those attending private four-year colleges fared a bit
better, but barely. Graduation rates at private colleges were only .7% better than
those at public ones, down from 5.8% in 1988. Sending a student to a more expensive
private college is unlikely to solve the problem.
And arguing that these students are simply transferring doesn’t cut it either. According
to an article released by the Associated Press, only 54% of students who entered
a four-year university in 1997 had a degree six years later. Unless you’re Van Wilder,
you should have something to show after six years.
Despite a spike in the number of students who attend college and obtain degrees,
a high dropout percentage continues to be a problem. As a matter of fact, the rate
is the same as it was in 1988. So many more ambitious students are vying for each
college spot, but about one in four still quits after the first year. What’s the
According to the ACT survey, the top two factors contributing to student failure
were lack of motivation and inadequate financial resources. These two problems can
be solved, but students need to take matters into their own hands.
Lack of student motivation was ranked as the biggest determinant of college failure—even
more than a student’s academic fit for a particular school. This means that a student
who can get their act together need not be discouraged by campus nerds. Hard work
beats talent when talent doesn’t work hard.
Students should also keep their future in mind during stressful college times. Those
who have yet to pinpoint a career may have a hard time identifying goals, but obtaining
a degree is a great goal in itself. A degree gives students options. Those who change
their minds about future plans may always return to school. In the mean time, a
degree gives students something to fall back on.
As you surely know, more jobs than before require degrees. In fact, degrees are
just the beginning. It is not uncommon for an employer to look your resume up and
down and declare that your impressive background would make you a perfect fit for
the company: no one would match your paper-filing skills.
The second biggest obstacle standing between a student and their degree was financial
need. Students who spend a bundle on their education may suffer financially after
dropping out. No education and no money is not a good combo. There are plenty of
financial aid options, and students should take advantage of them.
The best money is, of course, free money. By filing a FASFA and searching Scholarships.com for grant and scholarship opportunities, students have
the chance to find free college funding, no strings attached. Those who can save
ahead of time should look into setting up a college savings account. Some good choices
may be the 529 and the Coverdell as they allow students to accumulate money, tax-free. For more savings account options, visit the Scholarships.com Resources Section. Loans, as a last resort, can generally be obtained at lower rates
when borrowed from the government. Take advantage of any aid offered. Don’t leave
your purchase at the door: get the degree and the education you paid for.
July 20, 2007
On Friday June 20, the Senate approved the Higher Education Access Act of 2007 by a vote of 78-18. The bill, if approved by the House, would increase Pell Grant eligibility and lower government subsidies to outside lenders. The House passed a similar proposal—the College Reduction Act of 2007—in June, making a compromise on both versions likely. The overarching theme of the bill was an increase in government aid to students and, at the same time, a decrease in aid provided to student lenders.
Lowered subsidies would likely result in increased interest rates for students who take out loans from lenders outside of the government. Government loans offer students the best interest rates, but such loans also have smaller borrowing limits. Many students end up looking to lenders subsidized by the government for additional aid. While interest rates on subsidized loans are not as favorable as those offered by the government, they are still more favorable than those offered by private, unsubsidized lenders.
According to MarketWatch, the new bill could save the government up to $15.4 billion by 2012. The bill’s sponsor, Senator Edward Kennedy, D-Mass, was enthusiastic about the approval stating, "The passage of the Higher Education Access Act tonight was a victory not only for students and their families, but for the American people. With this new congress we made education a national priority again, and we’ve given the next generation the tools they need to compete in the global economy."
Fortunately for student borrowers, the bill did address worries about lender rate increases. Cuts on outside lender subsidies were also accompanied by increased caps on government loans as well as by increased laxity on government loan eligibility requirements. These changes are likely to benefit students who don’t borrow much. For those that do, effects will depend on just how much more the government is willing to lend and on how much outside lenders will choose to charge after cuts.
Students still have a lot to cheer about. The biggest perk of the Higher Education Access Act is its proposal to increase government grant offers. Free money is the best kind. Like scholarships, grants provide students with aid that need not be repaid. If the bill is enacted, the government would increase the amounts of Pell Grants a student may receive to a maximum $5,100. It would also alter the formula used to determine grant eligibility in a way that would lessen restrictions on financial circumstances required for grant reception.
Additional bill provisions include loan forgiveness options for borrowers who work in areas of public service for ten years, a cap on monthly loan payments required of students, and the establishment of a program that would increase competition between lenders. If the bill passes, the enactment may be expected within the next few months.
Posted By Scholarships.com to Scholarships.com Blog at 7/20/2007 09:57:00 AM
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