October 2, 2007
October 3, 2007
Buying Sallie Mae, the biggest lender in the business, may have seemed like a great idea at first, but doubts have been creeping up. A group of investors that includes J.C. Flowers & Company, Bank of America, JP Morgan Chase, and Friedman Fleischer & Lowe initially offered $25 billion for Sallie Mae, but has recently retracted the offer blaming new legislation for the decision. The College Cost Reduction and Access Act signed by President Bush last week entails, among other things, government cuts on subsidies given to student lenders. Over the next five years, about $21 billion would be cut from lender support and invested in student aid programs.
J.C. Flowers & Company stated that their decision abides by contract rules and that such legislation was considered when the contract was drawn up. A smaller purchase price was still proposed, and, if Sallie Mae performs well, the offer may increase.
The legislation will certainly not put the lender giant out of business, but Sallie Mae may feel some pressure. The lender has stated that the new law will force it to give up some student perks, and that won’t go over well with borrowers. Those who have financial needs will still be forced to borrow once government grants and loans are exhausted, but increased caps on both may decrease student needs.
December 12, 2007
Yesterday New York Attorney General Andrew Cuomo announced his settlement with student loan consolidation company Student Financial Services Inc. (SFS) over offers of kickbacks to athletic departments. The lender had given money to school athletic departments in exchange for the right to use their official symbols on forms and advertisements. The school contracts allowed for the use of school and team names, colors, mascots and logos, thereby creating the impression that SFS was the official lender of the school. According to the settlement, SFS agreed to break ties with these colleges and universities, most of which were Division 1 NCAA schools.
“Student loan companies incorporate school insignia and colors into advertisements because they know students are more likely to trust a lender if its loan appears to be approved by their college,” stated Cuomo. “We cannot allow lenders to exploit this trust with deceptive, co-branded marketing.”
Under the new code, SFS agreed to end its loan-related contracts with 63 schools, including Georgetown University, Florida State University and the University of Kansas, as well as with five sports marketers, including ESPN Regional Television, Inc. The lender also agreed to tout the importance of informed loan decision making by organizing campaigns to be featured in the schools’ leading newspapers. The lender would no longer be able to pay for student referrals nor could it organize contests with financial prizes for students.
Cuomo’s settlement is part of an ongoing investigation aimed at ridding financial aid offices of illegal and immoral lender marketing tactics. So far, the attorney general has settled with twelve student lenders for such relations and collected $13.7 million in lender money to go to the National Education Fund, a fund dedicated to educating students about their financial aid options.
December 14, 2007
In a move that’s both impressive and grossly irritating to poor students across the nation, Harvard University announced on Tuesday its intent to improve the financial aid packages of well-off students. Of course that’s not how they announced it. According to the Harvard Crimson (the university newspaper), the Dean of Admissions William Fitzsimmons proudly declared that the aid would allow students to pursue careers in public service without fear of outstanding debt--as if that's the ultimate goal of most Harvard graduates.
In 2006, Harvard eliminated contribution requirements for students whose families made less than $60,000 per year. It has taken things one step further this year by increasing the amount of financial aid offered to students whose household income was greater than that. Mr. Fitzsimmons stated that families making between $60,000 and $200,000 were in a state of “crisis” when it came to finding money for college.
Hmmm…Crisis eh? That’s quite a hyperbole, especially when one considers the rising number of students who leave school with debt that exceeds $100,000. I somehow don’t feel bad for people making $200,000 each year, and I definitely don’t subscribe to the fact that they are going through a crisis. According to the 2006 U.S. Census Bureau, the median (not average) income in the U.S. is $48,201 and only 19 percent of households make over $100,000. Double that and the word crisis does not apply.
Under Harvard's new plan, families with incomes between $60,000 and $120,000 per year will soon be expected to pay 0-10 percent of their income for an education. Those making between $120,000 and $180,000 will be expected to pay 10 percent of that amount. To put things in perspective, the sticker price for the Harvard package is $45,620, and a family making $180,000 will pay 39 percent of that.
After reading the article, Harvard graduate Andrew Kalloch offered his thoughts on the news in a letter to the editors, “I wear old T-shirts, and they suit me just fine. Others wear designer clothing and there is nothing wrong with that. What is wrong is asking alumni to contribute to the embarrassment of riches already bestowed upon the American upper class.”
I'm not saying we should begrudge any students their financial aid, popped collars or not. After all, low or nonexistent tuition would be a deserved dream come true for most hard working students. It's just a bit disconcerting that myriad students with incomes far below those acknowledged by Harvard are burdened by student loans, and no one is giving them a reasonable piece of the pie.
December 18, 2007
December 19, 2007
The whole “college graduates earn $1 million more than non graduates over their lifetime” stat is getting a bit trite. I’ll give you a few more if you’re not convinced that college is a worthwhile investment.
College graduates enjoy greater career security
College graduates can offer their children a more secure financial future
College graduates are healthier
College graduates are more likely to contribute to society
Anyway, you get the picture. The problem isn’t that the whole “follow your dreams” thing makes no sense. The problem is affording those dreams and affording the time and preparation it takes to follow them. Most of us don’t make enough money to loll around devoting our days to perfecting our sculpting skills and sharpening our 3 point shots. Even those with less risky dreams can’t always afford to test the waters, especially if the schooling required to get those jobs is too expensive and time consuming. That’s why so many students find themselves having to compromise their initial career goals after realizing their dream jobs won’t allow them to pay off student loans. Let’s just say that the need for qualified teachers isn’t caused by a disinterested public.
Sorry, I didn’t mean to be gloomy. I swear there’s a silver lining. Financial aid in the form of government grants and outside scholarships is readily available to students in difficult situations. Without a cloud of college debt hanging over your head, “The Road Not Taken” may suddenly become an option. The financial aid information found at Scholarships.com will help you familiarize yourself with the FAFSA, government grants, corporate scholarships, private scholarships, the ins and outs of student loans and myriad other financial aid opportunities. Whether you’re interested in preliminary information or ready to get down to business by finding scholarships, we can help you do it.
If you’re not convinced, you can take a tour of our site. Visit our homepage, and take a sort of “Tour de Scholarships.com” if you will. We can help you see how conducting a free college scholarship search will help you find scholarships and grants that, based on the information you provide, you're eligible to receive. Find New York scholarships, scholarships for graduate students, scholarships for minorities, poetry scholarships, music scholarships—you name it, we’ve got it. With information about more than 2.7 million scholarships and grants, Scholarships.com offers more than you’ll know what to do with. If you’re not convinced yet, just take the tour. Like the search, it’s free. You’ve got nothing to lose, and a world of financial aid opportunities to gain.
January 8, 2008
With the Iowa election safely behind us, U.S. citizens will soon come to realize that the rest of the country also gets to vote. Yes, it’s true. Citizens in the other forty-nine states can also voice their opinions on key issues. And if Bill Gates has it his way (and he’s been doing well so far), education will be one of those issues.
By donating $30 million to the bipartisan group Strong American Schools, the billionaire is hoping to make education a central matter in the 2008 election. With Bill’s $30 million and another $30 million to its name, the Strong American Schools “Ed in ‘08” effort is hoping to draw some attention, regardless of victorious party.
"Ed in ’08 " hopes that the future president will work to increase teacher salaries, extend school days (I probably lost some of you there) and decrease dropout rates. In addition to helping primary and secondary school students and educators, "Ed in '08 " will help students complete a college education. A total of $50,000 in college scholarships will be given away by Strong American Schools to help students in need of financial aid.
This is not the first donation Gates has made to educational efforts. His Bill & Melinda Gates Foundation has given away more than $3.6 billion in education grants. That doesn't take into account the billions it contributed to global development and health improvement efforts. Bill Gates scholarships have provided students across the nation with the money they needed to receive a postsecondary education.
For additional information about scholarships offered by Bill Gates and other providers, you can conduct a free college scholarship at Scholarships.com.
January 10, 2008
When word spread that Harvard would increase financial aid to both the middle and upper classes, tensions boiled at schools across the country. It was bad enough that Harvard attracted the best and the brightest from every nook and cranny—now they would be inexpensive too. Some guys have all the luck.
To be fair, Duke did beat Harvard in the financial aid race by being the first to announce their plan to pour an extra $13 million into the financial aid program, but their promise was simply not as impressive as the one offered by Harvard. When Duke capped their student loans to prevent debt, Harvard eliminated loans altogether—and replaced them with scholarships.
After Duke announced that parental contributions would no longer be expected from families who made less than $60,000, Harvard (which had already established that policy in 2006), announced that families making between $60,000 and $120,000 would only be required to contribute 0-10 percent of their income. Those making between $120,000 and $180,000 would only have to pay 10 percent of it.
Shortly thereafter, Stanford jumped on the bandwagon by saying that they too would do more to make their school affordable. According to The Stafford Daily, the school made plans to increase their need-based aid by 15.2 percent. The change would save the average parent $2,000 each year.
The trickle down effect also influenced other schools. Among those with New Year’s resolutions involving financial aid boosts are the University of Pennsylvania, Tufts, Haverford and Swarthmore.
Of course, not everyone gets to benefit. It’s easy to be a philanthropist when you have large endowments in the bank, which not all schools can boast. Students at colleges and universities with less money or larger student bodies were not as satisfied with their financial aid offices. According to The Michigan Daily, the University of Michigan at Ann Arbor would not only leave their policies as they are, they would continue—like many other colleges—to raise their prices. So much for that financial aid revolution we've all been waiting for.
January 11, 2008
This year has not been a good one for college financial aid officials. The problems began when New York’s Attorney General Andrew Cuomo spearheaded a seemingly endless number of investigations into whether student lenders and financial aid officials had been teaming up at the expense of students. Then there were the stories about study abroad advisors receiving trips by convincing students to travel, and then there were those of athletic departments allowing lenders to use their logos for profit. If the words “financial” and “college” were in the same sentence, the things in between weren’t good.
But a new year has arrived, and with it, hope for a better financial future in higher education-- which is exactly what’s expected. Based on new reports from Illinois State University’s Grapevine Project, state tax appropriations for higher education are expected to rise and give hope to students worried about high costs and low scruples.
North Dakota is expected to experience the greatest percentage change from last year, increasing their yearly state tax appropriations for higher education by 19.1 percent. Next on the list are Louisiana, Mississippi, Alabama and Arizona, each of which has raised their higher education appropriations by 14 to 15 percent. California, while not promising a particularly large percentage increase, is the one expected to appropriate most, over $11 million. With the exception of Rhode Island (which plans to lower appropriations), every state is creating this year's budgets with higher education in mind.
January 15, 2008
In the wake of a student loan scandal that has made families weary of financial aid officials, lenders and the National Association of Financial Aid Administrators (NASFAA), the financial aid industry is eager to demonstrate a willingness for change--especially NASFAA.
The massive financial aid organization representing students and financial aid officials at more than 3,000 schools across the nation has made it clear that they are reevaluating the way their organization is run. Like numerous colleges, NASFAA has adopted a new code of ethics that will govern the way they work with student lenders and students.
In addition to the code, NASFAA has announced the appointment of a new president and CEO to replace Dallas Martin, the president who, after 32 years of work, retired amidst scrutiny of ill relations with lenders. Newly appointed President Dr. Philip R. Day has previously served as the chancellor of City College of San Francisco. He has also been the president of Beach Community College, Cape Cod Community College and Dundalk Community College. In a NASFAA news report, Dr. Day stated that he was, “committed to advancing NASFAA’s mission.”
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