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Veterans Face Financial Aid Delays

September 4, 2009

by Scholarships.com Staff

The new Post-9/11 GI Bill went into effect on August 1, bringing expanded educational benefits for students who have served in the military since 2001. These benefits are supposed to be available to students for the fall semester, but a mounting backlog of applications has the Department of Veterans Affairs saying recipients should expect processing delays of up to 8 weeks.

This means that many veterans attending college may not receive their first payments from the VA until potentially October or even November, despite classes starting in August and September. So not only will their tuition and fees go unpaid, but they also will have to find other sources of funding for housing, books, and living expenses, which many veterans expected to rely on VA stipends to pay. While most colleges are working with their veteran students to arrange stopgap financial aid, the delayed payments still represent a huge problem for students going back to school after military service.

The application process for VA benefits under the GI Bill is somewhat complex and involves multiple steps between a student's initial decision to enroll in college and his or her ultimate receipt of a check from the VA. Students, schools, and the VA all need to complete paperwork to set up benefits, and May 7 was the earliest students could begin applying. In addition, current VA employees and new hires needed to be trained to process applications under the new program, so processing is taking longer than normal.

Add in the popularity of the expanded GI Bill benefits, the recession bringing students back to college in droves (with fewer financial resources available to them), and colleges across the country dealing with massive budget crises and increased demand for emergency aid, and you get the potential for disaster. More students are applying for benefits, the VA is less able to process these applications in a timely manner, and schools have more students in difficult situations to assist. All parties have fewer resources at their disposal to deal with the situation, making it still more challenging.

Still, vets who have found their benefits delayed should talk to the financial aid and veteran's affairs contacts at their school if they need additional financial aid to cover their expenses in the short term. While money is scarce, it is still available in most cases.

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Despite Downturn, Two Towns Announce Substantial Scholarships

September 8, 2009

by Scholarships.com Staff

Even in the face of a continuing recession, new scholarship opportunities are being made available to students in a variety of situations. Recently, students in two communities in Michigan, a state hit especially hard by economic problems, have received news of scholarship programs that will give them significant help paying for school, even as the state considers cutting funding to one of its largest merit scholarship awards.

Baldwin, a community in rural northern Michigan, is the first to take advantage of the state's "Promise Zones" program, which allows areas with a high percentage of poor students to use state property tax funds to provide college scholarships for their students. Baldwin plans to offer scholarships of up to $5,000 for up to four years to current high school seniors. Up to nine other high-poverty communities in Michigan are eligible to participate in the program, provided they, like Baldwin, raise money to fund their scholarships for the first two years of awards. The Promise Zone funding, like the state's endangered Michigan Promise scholarship, were inspired by the Kalamazoo Promise scholarship, a full-tuition scholarship award created by an anonymous private donor that allows graduates of Kalamazoo public schools to attend any college in Michigan for four years.

Another Michigan community has also unveiled a substantial scholarship program for its high school students, this time a four-year full-tuition award to Finlandia University for all graduates of public schools in Hancock, a tiny mining town in the state's Upper Peninsula, who gain admission to the college. The scholarship program was created as Finlandia's way of paying the community for the use of a building that the school district no longer needed. Rather than working out a traditional payment plan for the purchase of the building, something complicated by tighter credit requirements, Finlandia proposed a deal that would provide more immediate and tangible benefits to the students of Hancock. The scholarships will be offered to members of Finlandia's current freshmen class and to subsequent graduates of Hancock's schools.

Local scholarships like these exist for communities nationwide, and are likely to seek out inventive ways to find funding, as community members are committed to helping their neighbors succeed. To find out more about scholarship opportunities for students in your area, conduct a free scholarship search.

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Parents of Scholarship Recipients Asked to Donate Awards to Others

September 9, 2009

by Scholarships.com Staff

Penn State University's Schreyer Honors College offers admitted students $3,500 per year merit scholarships, a common practice among state colleges that want to entice the best students to attend. Students at Penn State and their parents are doing something unique with these scholarship awards, though: they're giving them to other Schreyer students.

Parents of scholarship recipients who did not apply for need-based financial aid receive a letter asking them to consider making a donation in the amount of the scholarship their children received. The letter, penned by the parents of other Schreyer students, emphasizes the amount of unmet financial need some of their children's classmates face and asks them to consider whether they need the extra $3,500 in order to pay their tuition bill. If not, they are asked to give the money to students for whom the extra money could make the difference between attending college at Penn State and staying home.

The university stresses that students are not being asked to give up their academic scholarships in this campaign. Rather, they ask that parents who can spare the extra money because their child received a scholarship would consider donating to help other deserving students who last year had more than $1 million in unmet financial need.

Honors colleges, even at large state universities, tend to be relatively close-knit communities of top-performing students who are engaged in their studies and their campus communities. It's not surprising, then, that parents of Schreyer Honors College students hit upon an idea to help their children's struggling classmates last year when the economy first began to sink into recession. The campaign was initiated by parents and supported by the university, which sends the letters on the parents' behalf.

Last year's appeal raised around $228,000, with over $120,000 of that going directly to 34 students who needed help paying for school. The remaining $100,000 went towards establishing an endowed trust to ensure that this effort continues helping students in the future. So far this year, the campaign has raised $13,000 from 11 donors.

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Survive the Bad Economy, Part I: Land a Scholarship

September 14, 2009

by Scholarships.com Staff

As unemployment rates remain high and budgets stay tight, more people are looking to wait out the struggling economy by going back to college. Competition then has become more fierce not only on the admissions level, but for funding to pay for those educations. While many schools are doing whatever they can to continue offering scholarships and grants, the economy has affected some schools' available funding. Good news is, scholarships do exist, and there are things you can do to have a better chance of landing one.

  • Apply early, and apply often. Scholarships wait for no one, and a later deadline doesn't mean you should wait until the very last moment to apply. Generous scholarships like the Coca-Cola Scholars Program have deadlines in October, for example. It's not a bad move to look ahead and start applying for awards beyond this year, either, to get an idea of funding you'll need in the future. To see scholarships that have deadlines this fall, conduct a a free scholarship search and see the dozens you could be eligible for.
  • Don't rule out local scholarships. While funding packages from your intended college are often more generous than outside awards, it won't hurt to supplement any funding you're awarded or have a backup plan in case what your school offers covers less of your fees than you thought. Local scholarships from your dad's employer or your local bowling league are also less competitive than college-based awards or the more well-known contests, and often look at things beyond your GPA and test scores to factor in things like community service, your experience with that organization and financial need. New scholarships are being created all the time, so check on your search throughout the school year for the most up-to-date results.
  • Stand out on the application. It's not too late to make up for that less-than-stellar grade in your high school Algebra class, especially if you're looking ahead to scholarship opportunities beyond your freshman year in college. GPAs matter from your entire high school career, so don't slack off when the senioritis hits. Don't be afraid of AP classes unless it's a subject you know you'd get a low grade in, and get involved in your school and your community as it's also not always about academics. Work on that resume by applying for internships that fit your intended major, and put in more hours of practice if you're going for a sports or music scholarship. It's never too late to make yourself a more desirable scholarship candidate.
  • Appeal your award. If you've done everything you can - filled out your FAFSA early, put together impressive scholarship applications - and you feel the financial aid you've been offered from your school is unfair or if your circumstances have changed dramatically since applying for government aid, you still have options. Schools are more likely to reconsider packages in the current climate, and you could be eligible for more grant and scholarship funding, the best kind that you don't need to pay back.

For more information on upcoming scholarships and other helpful financial aid tips, visit our College Resources. Tomorrow, we'll explore your options on keeping college costs low and looking at a school's program versus its reputation.

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Survive the Bad Economy, Part II: Keep Your Options Open

September 15, 2009

by Scholarships.com Staff

Some students are college-bound before they even hit high school. They know they want to shoot for the Ivy Leagues, and map out plans to get there. But while there's a certain degree of pride that will come from landing a spot in the freshman class of that East Coast institution, the sticker shock that comes with attending a prestigious university is often inevitable.

This isn't meant to discourage you. Many private and expensive four-year schools offer generous financial aid packages to make up for the high cost of attendance there, and scholarship opportunities could offset some of those costs as well. But sometimes that isn't enough, especially in a struggling economy where parents are saving less for their children's educations and tuition costs continue to rise. If you're set on what you want to be when you grow up, consider looking at programs offered by schools rather than their reputations. Some smaller, less costly schools are known for certain fields, so do your research through a college search on schools that specialize in education, nursing or forensic science, for example, if you're sure about your future career.

Factor in your cost of living, as well. A college in a big city may seem like a grand adventure, but how much fun can you really have if you can't afford to leave your dorm room? A less expensive school in a college town may not seem very exciting, but most of those towns cater to young people, offering diversions outside of your academic calendar at a much lower cost to you than big cities. You'll also be competing against other students for part-time jobs rather than a few million city-dwellers. Look at your in-state options - you can still be far enough away from your parents' house that you'll get the privacy you're craving while enjoying home state tuition.

If you have your heart set on the big school that is perhaps just out of your reach financially consider doing your general education requirements at the local community college. Although you'll be sacrificing some of that typical college experience, two years in you could be ready to transfer to your dream school with fewer student loans and a better idea of what you want to study. Chances are you'd change your major several times your freshmen and sophomore years anyway, or go undecided until then. Just make sure your intended college will approve the courses you completed at the community college so that you aren't forced to retake any courses.

Tomorrow, we'll take a closer look at how low-cost options like community colleges can help you get the job skills and career opportunities that remain in demand in a tough economy.

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Student Loan Default Rates Continue to Rise

September 15, 2009

by Scholarships.com Staff

According to newly released data, default rates on federal student loans continued to climb in 2008, reaching a nine-year high of 6.7 percent, most likely as a result of the recession. The annual cohort default rate, released by the Department of Education on Monday, covers federal student loans that went into repayment between October 2006 and September 2007 and had gone into default by September 2008.

The 2007 cohort default rate was 1.5 percentage points higher than the rate for the previous year, as significant increases took place across the board. Defaults were higher in the bank-based Federal Family Education Loan (FFEL) Program than in the Federal Direct Loans Program, which is typically the case, but the discrepancy between the two grew this year. A total of 7.2 percent of loans in the bank-based system were in default, compared to 4.8 percent of the loans in the Direct Loans program.  he numbers for 2006 were 5.3 and 4.7 percent, respectively.

Much of this discrepancy can be attributed to a higher percentage of students at proprietary schools participating in the FFEL Program, as these schools carried a default rate of 11.1 percent, compared to rates of 6.0 percent and 3.8 percent at public and private colleges. Still, the lower default rate in the direct lending program is likely to be brought up as Congress debates moving all lending from FFEL into Direct Loans.

Default is defined as failure to make payments on a student loan according to the terms of the master promissory note the borrower signed, and federal student loans are considered in default only after several months of missed payments. This means that 6.7 percent of students in this cohort had stopped making payments for 270 days or more within 1-2 years of their first loan payment coming due. It's likely that the cohort default rate numbers released paint an optimistic picture of the number of borrowers currently having trouble making payments on student loans.

New repayment options may help troubled borrowers, though, and several have been introduced in recent months. One is the federal Income-Based Repayment Plan, which allows students to make payments they can afford and forgives all remaining debt after 25 years. Borrowers worried about repayment can also look into loan forgiveness programs offered in exchange for public service, which have been expanded under the Higher Education Act and national service legislation.

The best way for students to avoid the prospect of defaulting on loans is to limit borrowing as much as possible. Put some serious effort into a scholarship search, and consider affordability when doing your college search, as well. Practices such as keeping your options open and landing a scholarship can go a long way towards reducing your loan debt and your risk of being unable to pay once you graduate.

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Survive the Bad Economy, Part III: Choose Wisely

September 16, 2009

by Scholarships.com Staff

While it is important to make sure you choose a career in a field you would be happy and fulfilled in, it doesn't hurt to do a little investigating as part of your college search before you make your decision to see which jobs are in high demand and recession-proof. Positions with nationwide shortages in fields such as nursing and education, especially in low-income and rural communities, also often come with a wider net of scholarship and grant opportunities as incentives to attract new students. And the college-bound are taking notice.

Many students once set on careers in business or real estate have begun reconsidering those decisions for safer options in the health care, information technology and "green" industries. Others who have already been through college but have been laid off in their intended careers are using the layoffs as a reason to return to school for more training in their fields or to launch brand new careers. A recent Reuters article described the story of an out-of-work mortgage broker struggling with the effects of a weak housing market who was going back to school to become an accountant.

Lower-cost, flexible options like community colleges can also help you get the job skills and career opportunities that remain in demand in a tough economy, and make you a more viable candidate when the job market improves. Over the last year, enrollments at community colleges have increased by as much as 25 percent, according to the American Association of Community Colleges, with many of those new students adult learners. A recent article in the The Chronicle of Higher Education described the new role of the two-year institutions as launching pads to get into jobs in local industries still hiring in a struggling economy. Macomb Community College, for example, has shifted its focus from preparing workers for jobs in the local automotive industry - a very uncertain field - to positions as nursing home aides and graphic designers.

Some words of caution: No amount of job security will make up for pursuing a career you dislike, so make sure that if you are considering going into a field for economic reasons that it's balanced with what you see yourself doing once the job market improves. If you're undecided about majors, take a variety of general education requirements so you get a good idea of what you like about one field over another. Good writing, math and science skills translate into a number of job opportunities, so even if you don't stick to positions in your major once you're out of school, a background in those subjects would be helpful. If you really are passionate about a particular field and can't see yourself doing anything else, the economy won't be struggling forever, so chances are that even if you do go into a riskier field things may have turned around by the time you graduate.

In our last part of the series tomorrow, we'll look at reasons to think positive despite the economy, and offer tips for recent graduates.

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Survive the Bad Economy, Part IV: Keep Positive

September 17, 2009

by Scholarships.com Staff

Despite all the news you read about the economy on a daily basis, there are reasons to stay positive and believe the situation is and will continue improving. There are still dozens of scholarships out there that you're probably qualified for, and although the admissions process has become more competitive, the level of funding available to high school seniors and beyond has remained solid. The economy won't keep you from going to college, especially if you plan ahead and apply for your financial aid packages early via FAFSA. The longer you wait, the less funding there will be and the harder it'll make your decisions on which college to attend.

New scholarships are being posted all the time. A recent blog post described two such opportunities in two Michigan communities, a region that has been hit fairly hard with economic effects. Both awards are very generous, and could serve as a lesson not to rule out local scholarships when you're looking for ways to pay for college. Although some schools have had to scale back their budgets, local scholarships have remained in tact as private organizations only want to help you get to school even more in a struggling economy.

Even if the economy hasn't recovered by the time you graduate, chances are the positions you'll be applying for won't be as scarce as jobs affected by layoffs. Entry level jobs are more readily available because it's less expensive to hire a new graduate than someone with decades worth of experience. Internships are also plentiful, since they unfortunately often offer a less-than-generous stipend or no payment at all, so if you're able to abandon the summer job next year, consider finding an internship that fits your field and interests. Internships are a great way to pad your resume, as even entry level jobs want to see that you've had some experience in your chosen field in the real world.

Although there's no guarantee you'll land a great job right out of college, that guarantee has never existed, even in the best economy. The cost of attending college is worth that risk, and the pros outweigh the cons in a climate where more people are going to college than ever before. You'll make more money and have more diverse career opportunities than high school graduates entering the job world. There are many options to cut college costs, from attending school in-state or working through school. Consider community college, as many specialize in programs that are in high demand right now. Any excuse on why you should put off college can be dealt with, so file those applications and get yourself on a scholarship search to overcome the biggest hurdle: paying for your higher education.

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Colleges Reconsider Merit-Based Scholarships

September 22, 2009

by Scholarships.com Staff

Although need-based financial aid has remained steady at most colleges, some schools are looking at their merit-based scholarship programs as the next place to cut if budgets continue to shrink. Merit-based scholarships, which do not usually consider need, rely on GPA and standardized test scores as measures of students' academic achievement and potential for excellence on the college level.

A criticism has been that the awards go disproportionately to students of wealthy families who may have the resources to better prepare for tests and assistance outside of the classroom. However, cuts in merit-based scholarship programs may also affect the middle class, a group of students who may receive some funding, but due to their parents' combined incomes will receive far more in student loans than scholarships and grants compared to lower-income applicants. Perhaps that's how it should work, but middle-class families with steady incomes don't always have the resources left over to contribute much to college savings accounts like 529 Plans, especially in a tough economy.

Should merit-based scholarships then also consider some degree of need before disbursement? An article this week in The Chronicle of Higher Education described several schools looking to trim their merit-based scholarship programs, especially those that rely on state funding to exist. In Florida, the Bright Futures Scholarship Program will stop funding full public-college tuition in favor of a set amount based on credit hours. In West Virginia, Promise Scholarship awards will max out at $4,750 rather than the former full rides. In Michigan, a state that has been hit particularly hard in this economy, their own Promise Scholarship program may be cut entirely. The University of Texas recently announced it would no longer be sponsoring National Merit, a popular national scholarship program that students qualify for based on standardized test scores. Students there had been able to receive $13,000 over four years. The university promises an increase in need-based financial aid to assist those students who had been receiving National Merit aid but who also qualified for many of the federal need-based financial aid programs.

>With a limited amount of funding coming from both the state and federal level, schools have to decide how best to approach financial aid. The trend has been to place a higher importance on need, as the rationale is that many students who had been receiving merit-based scholarships would be able to afford college anyway, or be eligible for outside academic scholarships. And those who would have applied for need-based financial aid before the recession are only in need of more aid today.

One school is taking the Good Samaritan approach. At Pennsylvania State University's Schreyer Honors College, parents and the college bound who did not fill out financial aid forms but received the school's $3,500 merit-based scholarships for gaining admittance to the honors college are being asked to consider allocating that money instead to accepted students with a higher level financial need. In short, the money goes to students who really need it. Should it be more complicated than that?

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Financial Aid Offices Seeing More Aid Applications and Appeals

September 24, 2009

by Scholarships.com Staff

The global economic recession of 2008-2009 has had an impact on seemingly every aspect of life, especially large expenses like college tuition. There has been much speculation about the economy's effect on college financial aid, and as the fall semester gets underway at colleges across the nation, information is starting to emerge that helps paint a picture of paying for school in a recession. So far, the results are mixed.

While a poll by Gallup and Sallie Mae showed fewer students borrowing for college this year, a survey conducted by NASFAA, the National Association of Financial Aid Administrators, shows more students applying for and receiving federal student financial aid this year than last year. Additional data from the Department of Education also backs this up, showing 25 percent more borrowing in federal student loan programs this year.

The NASFAA survey of nearly 500 financial aid offices shows that in comparison to the same time last year, 61 percent of colleges and universities are seeing an increase of 10 percent or more in financial aid applications, with 63 percent of institutions also seeing a significant increase in Pell Grant awards this year. Only 8 percent of institutions saw no increase in aid applications, with only 5 percent reporting no increase in Pell awards. Also, despite 65 percent of schools seeing an increase in financial aid appeals by 10 percent or more, 51 percent saw an increase of 10 percent or more in the number of students with unmet financial need.

Additionally, the majority of colleges have increased institutional aid (such as scholarships and grants), with 74 percent of four-year colleges and universities offering some increase in aid. Community colleges were the majority of institutions not increasing aid, with many citing a lack of available funding as the reason for this decision.

Many of the changes found by NASFAA and the Department of Education can be attributed to the federal response to the economic downturn. The increased borrowing is most likely due to the increases in loan limits, with larger unsubsidized Stafford loans being made available to both undergraduate and graduate students in the last two years. Financial aid administrators speculate that the increased aid awards are likely due to a combination of the increasing unemployment rate, changes in rules for adjusting financial aid awards, and nationwide awareness campaigns to let those collecting unemployment benefits know they are eligible for increased financial aid for college.

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