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House Votes to Postpone PLUS Auction

Apr 1, 2009

by Scholarships.com Staff

Earlier this week, the House of Representatives passed a "technical corrections" bill that would make several changes to the Higher Education Opportunity Act passed last year.  Most of the changes are minor corrections, such as fixing typos or clarifying language, but the bill also includes two major fixes that would help borrowers if signed into law.

One of the corrections taken up in the bill was a move to postpone the controversial PLUS loan auction program by a year.  Under the auction plan, lenders would bid to service PLUS loans in each state, a move that made much more sense when proposed in 2007 than when enacted in 2009.  Bids for the auction were due this week, but so far it has generated little interest from most lenders and a statement from major lender Sallie Mae saying they had no plans to participate.  Congress hasn't scrapped the plan entirely, but tabling it for a year will hopefully allow it to be revisited under more favorable, or at least different, conditions, and in the meantime will allow parents and graduate students to continue borrowing as normal.

The other much talked about provision would provide relief to people currently repaying their student loans who have defaulted in the past.  The credit crunch has made it difficult for borrowers who are now making payments on time to move out of default and have their credit rehabbed and federal aid eligibility reinstated.  Guarantee agencies have had trouble finding borrowers willing to buy up the rehabbed student loans and allow the default status to be removed from the borrowers' credit.  A provision in the correction bill will allow the federal government to buy up rehabbed loans under the same authorization they're currently using to buy up other loans from student lenders.

Going to college doesn't have to break the bank or saddle you with tens of thousands of dollars in student loan debt. Check out the Scholarships.com free college scholarship search where you’ll discover you qualify for hundreds of thousands of dollars in scholarships in just a few minutes, then apply and win! It’s that easy!

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PhD Admissions Tumbling in Tough Times

Mar 31, 2009

by Scholarships.com Staff

In a bad economy, many recent college grads and laid off workers decide to make the move to go back to school.  A number of current undergraduate students are also hoping to delay entry into the working world until the economy improves.  Many of these prospective students will apply to graduate programs, hoping to land financial aid like a fellowship or assistantship on their way to a master's or doctorate degree.  However, many programs that traditionally come with stipends attached are cutting enrollment, as their cash-strapped institutions try to find ways to reduce their operating costs.

A recent piece in Inside Higher Ed explains that while terminal master's degrees and other programs in which students commonly pay full tuition are still admitting large numbers of students, and in some cases even increasing enrollment, programs that typically give out more money than they receive, such as doctoral programs, are reducing admissions due to reduced budgets.  While some master's programs and professional degrees come with fellowships, assistantships, or scholarship awards, the bulk of graduate financial aid goes to PhD students.  These students typically serve as teaching or research assistants, receiving free tuition and a stipend in exchange.  With university-wide cost cutting measures and rapidly shrinking departmental budgets, many institutions simply can't afford to offer as many of these generous aid packages as they have in the past.  And rather than admitting and not funding doctoral students, these schools are choosing to admit fewer students in order to maintain their funding commitments to current and future students.

If you applied this year and didn't get in, at least you can console yourself with the knowledge that it was a particularly bad year for PhD applications.  Whether it's your first time through the process or your second, if you're thinking of applying next year, start your college search early and consider sending out extra applications, especially if you're hoping for university funding.  Competition may be fierce, and if the schools you want to attend decide to admit fewer students, applying to more schools will boost your odds of being admitted and winning scholarships, fellowships, or assistantships.  If you're seeking a degree that may or may not have funding attached, such as a master's degree or professional degree, be sure to look into outside aid, such as scholarships for graduate students.

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!

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Student Loan Default Rate Rose in 2008

Mar 27, 2009

by Scholarships.com Staff

Student loan default rates increased in 2008, according to a preliminary report released by the Department of Education.  The numbers, which still aren't finalized, indicate an increase from 5.2 percent last year to 6.9 percent this year in the two-year default rate on federal student loans. The increase in default rates is likely due to continued economic difficulties facing new graduates.

The report also shows a difference in default rates between the Federal Family Educational Loan Program and the Federal Direct Loans Program, though FFELP advocates are arguing that the differences are largely due to different makeups of the schools participating in each program (For example, students at for-profit schools are more likely to default, and are also more likely to participate in FFELP).  However, even among similar groups, FFELP still had a slightly higher default rate.

Typically, reports on default rates are released around September and don't compare FFELP and Direct Loans, but Congress had requested data earlier to aid with the federal budget decision-making process.  This is only the latest bit of bad news for FFELP, which President Obama urged Congress to eliminate in the 2010 federal budget.  The Congressional Budget Office has said that eliminating FFELP could save more money--$94 billion, double the previous estimate.  Additionally, a report by two interest groups states that the proposed increases in Pell Grants, some of whose funding is tied to cutting FFELP, would increase the average grant award by $121 and would make 260,000 more students eligible for the program.

If you're a college student looking to minimize student loan debt and reduce your risk of default, it's still not too late to start your scholarship search and find free money you won't need to pay back.

Going to college doesn't have to break the bank or saddle you with tens of thousands of dollars in student loan debt. Check out the Scholarships.com free college scholarship search where you’ll discover you qualify for hundreds of thousands of dollars in scholarships in just a few minutes, then apply and win! It’s that easy!

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Student Loan Scam Uncovered in Florida

Mar 24, 2009

by Scholarships.com Staff

Student loans are becoming increasingly difficult for the average college student to obtain.  However, it appears at least one group is able to borrow private loans with relative ease: 80-something hospice patients in Florida.  A student loan scam recently uncovered in St. Petersburg, Florida involved two stolen identities and between $15,000 and $18,000 in loans.

An 80-year-old woman and an 83-year-old man had their identities used to take out private student loans from Sallie Mae.  A news story in The St. Petersburg Times describes the fraud as "poorly executed," involving blatant and inconsistent forgeries, including a fake ID with nothing changed but the picture--not even the 80-year-old's birth date. Private student lenders have previously come under fire when student loan scams were revealed, as private loans are by far the easiest type of student loan to fraudulently receive.

While many student loan scams don't even involve the pursuit of a real college degree, this one appears to have been perpetrated by a nursing student who had previously cared for the two victims of identity theft.  The woman accused of identity theft successfully completed coursework at Keiser Career College and received her Licensed Practical Nurse certification in the fall. Bail is currently set at $40,000--already more money than she would have owed had she taken out the loans herself.

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!

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Sallie Mae Sets New Terms for Private Loans

Mar 20, 2009

by Scholarships.com Staff

On the heels of last week's announcement that Sallie Mae would not participate in the upcoming PLUS loan auction, the student lending giant once again comes bearing news that may ruffle some feathers and potentially hurt its customers' ability to pay for school.

In a move to reduce default rates, Sallie Mae has announced changes to their popular private loan program.  As of next week, borrowers will be expected to make interest payments on their loans while they're still in school.  Additionally, the repayment period will be kicked down to under 15 years, as opposed to the current norm of 15 to 25, and the bank will also grant forbearances only in the case of serious financial hardship.  Other student lenders have expressed interest in this plan and may soon follow suit, according to an article in The Chronicle of Higher Education.

This is actually good news for student borrowers with the means to repay their student loans quickly and make interest payments while still in school--the total amount they repay will be much smaller under this plan.  Additionally, if Sallie Mae's loans become more appealing to buyers, it may help the bank stay around to make more loans and could potentially increase loan availability.  This move will also cause borrowers to think twice before applying for a private loan from Sallie Mae, which could encourage more responsible borrowing.

However, not everyone is taking out tens of thousands in private loans to drive a sports car to the campus climbing wall at an elite private college.  Many borrowers may already be at a community college or state university and may be using their private loans to buy ramen.  These students could potentially be edged out of college unless they find alternative sources of funding.  If they do stick with private loans, they may need to borrow more to be able to cover their interest payments on their current private loans.  This will in turn drive their interest payments and loan balances even higher, while allowing them fewer opportunities to receive a forbearance if they struggle to make payments.

Students who are currently relying on private loans from Sallie Mae to remain enrolled in college should be aware of these changes and search for other funding options if paying interest while in school is not an option.  Make your first move a scholarship search before reviewing other private loans or alternatives to alternative loans.

Going to college doesn't have to break the bank or saddle you with tens of thousands of dollars in student loan debt. Check out the Scholarships.com free college scholarship search where you’ll discover you qualify for hundreds of thousands of dollars in scholarships in just a few minutes, then apply and win! It’s that easy!

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House Passes National Service Bill

Mar 19, 2009

by Scholarships.com Staff

A bill to expand AmeriCorps and create new community service opportunities has passed the House of Representatives.  The Generations Invigorating Volunteerism and Education, or GIVE, Act passed today with bipartisan support in the House, and a similar bill, named the Serve America Act, has also been approved by the Senate education committee.  It will move to the Senate floor early next week, where it is expected to be met with a similar level of enthusiasm.  National service has been a priority of the Obama administration, so expect to see opportunities for community service expand shortly.

Over the course of five years, the bill will appropriate $6 billion to AmeriCorps, increasing positions from 75,000 to 250,000 and also increasing education stipends to $5,350--the same dollar amount as Federal Pell Grants.  The GIVE Act also includes provisions to encourage middle school students to volunteer, as well as funding to increase volunteerism on college campuses.  The GIVE Act will create volunteer programs focused on issues that have become major priorities in recent years, such as education and healthcare.

This legislation is heralded as the largest expansion in national service since the Kennedy administration.  While AmeriCorps and other volunteer programs pay far less than a full-time job, many students have been showing increased interest in them due to the education stipends and living allowances they provide, as well as the opportunities for service and unique experiences volunteers gain.  People serving full-time in positions affiliated with AmeriCorps or other programs also qualify for a new federal loan forgiveness program, which forgives Stafford loan debt for public service employees after ten years.

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!

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Alternatives to Employment for College Grads

Mar 18, 2009

by Scholarships.com Staff

New college grads may face an especially tough time due to the recession.  The growth in anticipated new hires, which is measured twice a year by The National Association of Colleges and Employers, has been slowing since it reached a high in spring 2007, falling almost flat in the fall.  The numbers for spring 2009 show that for the first time in years, businesses actually anticipate hiring fewer college graduates this year than last--22 percent fewer, in fact.  According to The Boston Globe, the business and finance sectors have an even bleaker outlook, as does the northeastern region of the United States.

With this dim hiring picture in mind, soon-to-be college graduates are looking at alternatives to the traditional workforce. Additional education, teaching fellowship programs, and volunteer work are all proving popular. If you're a college student staring graduation in the face, keep in mind the increased competition and start researching and applying sooner, rather than later.

Graduate programs, including ones offered by business schools, are seeing increased enrollment as many students choose to either delay their entry into the workforce or push up their long-term plans to attend graduate school.  Graduate students can potentially land full-tuition fellowships or assistantships, as well as generous scholarship awards.  Many graduate degrees can help recipients become more competitive when they do enter the workforce, even if the economy does not recover substantially.

Similarly, teacher certification programs, such as the popular Teach for America, are seeing an increase in applicants.  These programs offer a stipend, as well as teacher certification, and in some cases a master's degree in education, in exchange for a commitment of one or two years teaching in a low-income school or a high-need subject.  Other programs exist with similar benefits, including teaching fellowships in several major cities such as New York and Chicago.  College students or recent grads who want to teach but don't want to pay for more school may want to consider these options.

Other volunteer programs, like AmeriCorps and the Peace Corps, also are seeing more applicants.  Such programs often come with a stipend or living allowance, as well as student loan deferments or even loan cancelation or repayment benefits.  Students can also participate in many of these programs while still in college or while pursuing graduate degrees.  If you're interested in an alternative to the post-collegiate rat race, there's no time like the present to start considering your options.

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!

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Sallie Mae Not Interested in PLUS Loans

Mar 13, 2009

by Administrator

It seems Sallie Mae wants nothing to do with PLUS Loans and it's possible many other lenders will be reticent to bid on the graduate student and parent targeted loans at the upcoming "auction". Supposedly, the government is not allowing lenders to make enough money on these loans for it to be sufficiently profitable so they are opting to invest their capital elsewhere.

Some are claiming this is a ploy to get a larger cut than what the government currently allows. This certainly isn't out of the question, and it seems likely that Sallie Mae would participate if the "price were right", but this is likely beside the point to those seeking financial aid for college. They just want to know how they are going to pay for school if nobody wants to underwrite their PLUS Loan.

There is no question it's difficult to get a loan for education these days and getting more so by the day. Naturally, it would be ideal if every student attending college next year could find sufficient scholarships, grants and other "free" money to pay for their entire education but we are all well aware that is fairly unlikely for most. But that doesn't mean you shouldn't try. It is rare that those who do, somehow, find a way to get through college without taking out loans are not quite surprised themselves. The key is to search for scholarships and to do so with the belief you can win. Because you can. You probably won't win them all, but you might win some of them, right? Improve your odds by applying to as many as you can from now until every deadline has passed! You may not get all of your tuition paid for (some of you will, though!) but that's no reason not to try, right? Some of you will be able to pay about half, or even more than half and that's huge. Even if you were able to get $3,000 a year? Or even $2,000? Maybe go to state school instead of that pricey private college you were going to attend. Now that $3,000 is much more substantial, isn't it? Consider all of these things and conduct a free scholarship search today and see what's available out there before you start looking at loans.

Back to PLUS Loans and Sallie Mae's absence from the upcoming auction. The idea is that lenders actually have to "bid" on the loans by stating their lowest acceptable federal subsidy rate they are willing to accept to make the loan. They have to give their absolute best offer in competition with other lenders, which should, in theory, benefit those taking out the loans. This "auction" format began just a couple of years ago and may already be on its way out, as President Obama has called for the elimination of the entire guaranteed-loan program. Naturally, this puts further strain on those still trying to move forward with the auction, which will now be without Sallie Mae, who makes 40% of PLUS Loans in the guaranteed-loan program. It is difficult to know how big an impact this will have on the event, but you can rest assured it does not bode well for students counting on PLUS Loans to fund their education.

And remember, there’s no need to rely on expensive student loan options to pay for your college education. For more information on finding free scholarship money for college, conduct a Scholarships.com free college scholarship search today, then apply and win! It’s that easy!

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More Early Filers for 2009-2010 FAFSA

Mar 12, 2009

by Scholarships.com Staff

More students are completing the FAFSA early for 2009-2010 according to data collected by the Department of Education.  By the end of February, more than 3 million students had filed their FAFSA for the next academic year, an increase of over 20 percent from the first two months of 2008.  As application deadlines approach, this flood of applications could slow, but right now it looks like there will be more demand for financial aid in the coming school year.

Federal student financial aid is becoming an increasingly attractive means of paying for college.  For starters, federal aid is up for 2009-2010--in the case of Federal Pell Grants, way up.  A combination of factors has boosted maximum grants to $5,350 in 2009-2010, while simultaneously raising the minimum award to $976 and the maximum qualifying Expected Family Contribution to $4,671.  Low interest rates and expanded federal loan cancellation and consolidation options are also making federal student loans more appealing.

Meanwhile, several other payment options aren't doing so well.  Private loans became harder to obtain in 2008, and also saw fairly substantial interest rate increases.  College savings plans, such as 529 plans, took big hits in the stock market, and even some prepaid tuition plans are struggling to guarantee payouts for upcoming years.  College endowments have also been affected by financial troubles, and some endowed scholarships may be reduced or unavailable for the coming academic year.

However, this doesn't mean the FAFSA is the only option for student financial aid.  Most states are maintaining funding for their scholarship programs, many colleges are increasing aid where possible, and scholarship opportunities are still out there--though many deadlines are approaching--for students who are willing and able to take the time to do a scholarship search and complete some scholarship applications.

Going to college doesn't have to break the bank or saddle you with tens of thousands of dollars in student loan debt. Check out the Scholarships.com free college scholarship search where you’ll discover you qualify for hundreds of thousands of dollars in scholarships in just a few minutes, then apply and win! It’s that easy!

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Direct Lending Continues to Gain Popularity

Mar 10, 2009

by Scholarships.com Staff

According to US Department of Education data, over the last year colleges and universities have continued to leave the Federal Family Education Loan Program in droves, switching to the federally run Direct Loans Program.  Between February 2008 and February 2009, the number of schools issuing federal Direct Loans increased from 1,072 to 1,620, an increase of nearly 34 percent.

Direct Loans and FFEL are two competing programs schools choose between for the two most common varieties of federally funded student loans.  Both Stafford Loans and PLUS Loans can be issued and consolidated through either program (Perkins Loans are issued through separate loan programs).  Previously, FFEL was more popular, due in part to generous government subsidies that allowed participating banks to offer breaks on origination fees and loan repayment, as well as comprehensive programs to prevent borrowers from defaulting.

However, subsidy cuts and the collapse of credit markets in 2008 both took their toll on FFEL, as well as private loans, which are often issued by the same banks that participate in FFEL.  Many lenders left the program, and those still participating in FFEL could no longer afford to offer incentives to borrowers, and when the government stepped in to keep the system afloat last year, part of the deal involved taking other incentives and inducements (primarily ones involved in the conflict of interest scandals of 2007) off the table.  This ongoing string of troubles prompted more college financial aid offices to decide to make the switch to Direct Loans for Stafford and PLUS.

Direct lending has also received an endorsement from the executive branch of the federal government.  President Obama has called for an end to the lender subsidies that comprise the FFEL program, and urged Congress to consolidate funding into one federal student loan program: Direct Loans.

And remember, there’s no need to rely on expensive student loan options to pay for your college education. For more information on finding free scholarship money for college, conduct a Scholarships.com free college scholarship search today, then apply and win! It’s that easy!

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Colleges in Three States Tackle Affordability

Mar 4, 2009

by Scholarships.com Staff

As college affordability continues to be a major issue for many Americans, more states and colleges are implementing policies to save students money.  Three recently unveiled programs tackle different aspects of the college cost dilemma confronting different groups of students, parents, and graduates.

A partnership between the University System of New Hampshire and businesses in the state could pay up to $8,000 of New Hampshire residents' student loan debt.  The program is set to take effect this fall and the University System of New Hampshire hopes to recruit at least 30-40 businesses to participate in its first year.  Students will be eligible to receive payments of $1,600 per year for the first two years of employment and $2,400 per year for the next two if they graduate from a New Hampshire college and remain in the state to work for four years.

Meanwhile, in New York, one college is formalizing a program to save students one year of loan debt by offering a clear three-year path to graduation.  Hartwick College has long offered students the option of taking more classes per semester and graduating in 3 years, but now the practice has been turned into an official academic program for high-performing students.  Students must have a strong high school GPA to qualify, and will be expected to take 18 credits in the fall and spring, plus four credits during a J-term each year, finishing with 120 credits in three years.

Three Nebraska state colleges are also trying to minimize student loan debt, but are targeting a group of low-income students to receive more university grant funding.  Wayne State College, Peru State College, and Chadron State College have announced plans to pay freshman year tuition and fees for all students eligible to receive Pell Grants.  Students would still be responsible for room, board, and books, but removing the worry of paying tuition and fees may encourage more low-income students to attend college in Nebraska, as well as enable them to stay enrolled past the first year.

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!

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