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College Students Earn More, and Give More

September 13, 2007

by Scholarships.com Staff

In a press release published yesterday, CollegeBoard, a not-for-profit organization administering the AP and SAT tests, announced the results of their 2007 Education Pays study. According to the study, college graduates not only earn more, but also contribute more to society.It was found that 43% of individuals ages 25 and older who received their bachelor’s degree volunteered this year, compared with only 19% of those who had a high school diploma.  Of those who volunteered, those with a bachelor’s degree reported having volunteered an average of 55 hours wile those with a high school degree reported volunteering an average of 53 hours in the past year.

In addition to volunteer work, college graduates were more likely to donate blood and to vote. They also placed more importance on efforts to understand the opinions of others. The reported significance of mutual understanding increased gradually and in line with the level of education. Of inviduals polled, 59% of those without a high school education said that trying to understand the opinions of others was important compared with 67% of those with an associates degree and 79% of those with a master’s degree.

That college grads earned more came as no surprise. Based on reports of the mean earning of full-time year-round workers ages 25 and older, those with a high school degree earned $24,900 after taxes, those with an associate’s degree earned $31,500, those with a bachelor’s degree earned $39,000, and those with a master’s earned $46,000 after taxes.

The report also indicated that although progress had been made in increasing higher education opportunities, the education levels of those coming from high-income families were still much greater than those of low income families.

Students don’t have to let money be a deterrent in receiving a college education. By visiting Scholarships.com, students can find myriad scholarship and grant opportunities. Students who visit the site can also plan ahead by comparing colleges and by researching information about various sources of financial aid. All of this comes at the low cost of zero dollars. No shipping and no handling charges apply.

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President Bush to Sign College Cost Reduction and Access Act

September 17, 2007

by Scholarships.com Staff

After what seemed like a never-ending battle between the Senate and the House, a compromise was finally reached on the College Cost Reduction and Access Act. What’s more, based on White House reports, President Bush is even going to retract his earlier threat to veto the bill. The proposal was sent to the president on Friday, and a signature is expected shortly.

The main points of the bill include an increase in Pell Grant allocations to students and a decrease in government subsidies to student lenders. According to Bloomberg L.P., about $20 billion of the estimated subsidy savings will be redirected to student loan programs. Among these is the Pell Grant program which, for the 2007-2008 year, awards a maximum $4,300 per student per year. Over the next few years, the maximum sum is expected to rise to $5,400.

Lenders are obviously unpleased and warn that the new bill will harm students in the long run. Certain lender and Congress members predict the changes will push many smaller lenders out of business and will lead to cuts in fee reductions for students with good payment records. However, with many large lenders still competing for business, the bill is likely to help much more than it hurts.

Additional bill provisions include a forgiveness plan that will allow students to stop loan payments after ten years of work in public sector fields such as education. Only those who borrow under the Federal Direct Loan Program are eligible, but students who borrow under the Federal Family Education Loan Program (FFELP) can still apply by consolidating their loans under the direct plan.

The bill was initially proposed as a reply to the student loan investigation that uncovered numerous illegal actions within the student loan industry. Many student lenders were found to have offered financial aid officials money in exchange for spots on preferred-lender lists. As the investigation continued, incentives such as stock tips, vacation packages and tickets to entertainment venues were found to be offered regularly.

As always, students should look to free grants and scholarships before taking out loans. However low the rates are, loans still have to be repaid. By conducting a free scholarship search at Scholarships.com, students will be exposed to a world of financial aid opportunities that may enable them to bypass loans altogether.

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Study Abroad Advisors Defend Travel Perks

September 20, 2007

by Scholarships.com Staff

Attorney General Andrew Cuomo’s investigation into illegal incentives within the student lender industry has burgeoned into a full-out hunt for immoral use of student funds. The buzz has recently spread into college study abroad offices where administrators frequently receive money and free-of-charge trips in exchange for recruiting student travelers. As always, there are two sides to every story, and many college officials have been eager to tell theirs.

According to some study-abroad advisors, the trips were much more business than they were pleasure. College administrators have said that travel was a necessary tool for advisors who educated students on their locations of interest. According to The Chronicle of Higher Education, Ms. Gayly Opem, executive vice president of marketing at the Institute for the International Education of Students, held such an opinion stating, “I don’t know of any other way for them to do it than to visit the program.”

An accusation more difficult to justify was one that claimed students who chose to travel without school program assistance were sometimes denied approval for credit transfers. The New York Times article about Brendan Jones, a Columbia student denied credit transfer from Oxford told the story of one such case. Although Oxford is well known for its academic excellence, and ranked higher than some abroad institutions Brendan’s Columbia peers received credits from, the transfer was denied. Instead of returning, Brendan decided to finish school at Oxford. 

Studying abroad is generally regarded as an enriching experience, in a both intellectual and social sense, but brows are rising at the business side of college travel. After Cuomo’s investigation revealed questionable administrative tactics, the idea of colleges and travel agencies marketing travel as a full-out panacea just feels tainted.  A 2004 issue of Transitions Abroad magazine featured the results of a study by the Institute for the International Education of Students (IES) which claimed that 98% of students who spent a year abroad returned with increased sef-confidence and a higher level of maturity. It also reported that about 70% of the travelers returned with an ignited interest in a career direction they pursued after the experience. I have a feeling that plenty of students studying in the U.S. also developed career interests during college.

The overall theme of the investigation is that college costs are out of control, and college administrators who act like businessmen are in part to blame.  While hope for a major overhaul of the funding system is a bit premature, new legislation passed by Congress will increase Pell Grants and decrease some student loan interest rates. In the mean time, students can fill funding gaps by conducting a free scholarship search and applying for awards. Students can also use Scholarships.com’s resources to find much-needed information about taking control of their finances and planning ahead for college costs.

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College Culture , College News



Great Expectations: Bloated College Family Contribution Estimates

September 21, 2007

by Scholarships.com Staff

Filling out a Free Application for Federal Student Aid (FAFSA) is kind of like filling out a super complicated Christmas wish list. You write it, you hand it over and you cross your fingers when the time to open approaches. A lot of times you’re disappointed with the results.  Students should never dismiss the prospect of government aid. Even if they are not eligible to receive need-based grants, they will still have unsubsidized Stafford and PLUS Loans options. Receiving award letters with little or no aid options is frustrating, and it’s all because of that stupid Expected Family Contribution (EFC) formula.

How much government aid a student receives is largely dependent on how much the government thinks a family can contribute to the education of their child. This is what is known as the Expected Family Contribution. Based on the income and asset information students provide on their FAFSA, the government determines a student’s EFC number. The number is then sent to the student’s school of choice which subtracts it from their estimated Cost of Attendance (COA). What’s left over is used to determine if a student is eligible to receive federal or nonfederal aid.

The problem with the EFC is that it often overestimates how much a family is really able to contribute to a child’s education. Although factors such as a (dependent) student family size and the number of family members attending college are considered, the expectations can still seem high.  According to a 2004 Department of Education report, a family making between $45,000-49,000 per year was expected to contribute $6,000 to their child’s education. One making between $50,000-54,000 was expected to contribute $7,000 and one that made between $95,000-99,000 was expected to contribute $18,900. It is doubtful that the average family can afford to contribute that much after paying all bills. Those with particular need, families with an EFC lower than $4,110, are eligible for free Pell Grant money this year, but only up to $4,310. That is not the average grant aid a student receives.

Recently released government data shows that, based on the average cost of an education at a public college, a family who sends one student to school is expected to contribute about 25% of their median household income. Those families who send their child to a private school are expected to contribute about 57% of their median household income.  Even if students receive the maximum Pell Grant award, $4,310, the family may be nowhere near meeting the costs associated with a college education. If students are lucky, the new Congress-approved Pell Grant increase outlined in the College Cost Reduction and Access Act will be signed by President Bush. Based on White House reports, the president is expected to sign the legislation, but some doubts are still present.

Students who have been offered little or no financial assistance from the government can always look to scholarships and grants for financial assistance. Conducting a free scholarship search will allow students to find myriad awards they are eligible to receive. By using Scholarships.com’s resources, students can find the scholarship and financial aid information they need to fund their education.

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College Costs , College News , FAFSA



College Reps and National Associations Hold Ethics Meeting

September 24, 2007

by Scholarships.com Staff

On September 20, 2007, a meeting of more than 40 representatives and national associations was held to discuss college ethics matters.  The off-the-record discussion was organized by David Ward, the president of American Council on Education (ACE), in part as a response to recent investigations into unethical business practices between student lenders and colleges.

According to The Chronicle of Higher Education, the meeting dealt with problems within the student lending industry as well as with questionable credit card solicitations to alumni and sporting-event ticket distributions. Mr. Ward was quoted as saying, “"If, for example, a president is about to sign a contract, somebody should say, 'What's the story we're giving to the public on this?' And if the president pauses, then maybe they need to pause on the contract too."

Pressures on schools to come up with funds have led to questionable actions that include receiving kickbacks from lenders and study abroad organizations. The meeting was to address such actions and to come up with plausible solutions. During the conference, Mr. Ward was asked to create a committee that would address legal problems between colleges and businesses and to come up with a checklist to assist college administrators in recognizing potential ethical problems.

To avoid or minimize the use of student lender services, students can look to scholarships and grants that can assist them in funding a college education. Conducting a free scholarship search will allow students to find myriad awards they are eligible to receive. For additional information on financial aid and college-related issues, students can take advantage of Scholarships.com Resources.

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College Culture , College News



Rumsfeld to Receive, Give Fellowship

September 26, 2007

by Scholarships.com Staff

Former Defense Secretary Donald Rumsfeld is to receive a much contested Stanford University fellowship, and to offer one.

Much of Stanford University’s faculty as well as numerous students and alumni were outraged after it was announced that Donald Rumsfeld would be receiving a one-year fellowship from the school. The appointment would entail Rumsfeld examining and advising a university panel on issues of national security and the aftermath of September 11th.

Like most Ivy League schools, Stanford is known to be campus of liberal thinkers—the same can’t be said of its public policy research center that extended the invitation. It is unsurprising that a former high-ranking staff member of the Bush administration, one who resigned amidst accusations of Iraq war mishandling, was immediately deemed a campus misfit.

A petition with, as of now, 3,483 students, alumni and faculty signatures has been created in the hopes of withdrawing the offer.  As stated in the petition, “We view the appointment as fundamentally incompatible with the ethical values of truthfulness, tolerance, disinterested enquiry, respect for national and international laws, and care for the opinions, property and lives of others to which Stanford is inalienably committed.”

Donald Rumsfeld also had something to say on the topic of fellowships—that he will soon be awarding them.  There are plans in store for a new Rumsfeld foundation that will shortly be awarding fellowships to students who plan to enter the field of public policy after graduating from college. Rumsfeld hopes that the award will encourage students to work for the government.

In addition to assisting graduates, the foundation will offer loans to micro-enterprises in developing countries and support Central Asian republics. It will likewise fund lectures on various topics, the kind of work Rumsfeld may be doing for Stanford.

According to the Washington Post, Rumsfeld has recently criticized both the press and Congress for “creating an environment that is not particularly hospitable to public services.” It was a comment in response to an advertisement that blasted Army General David H. Petraeus as one to, “Betray Us”.  But that was the press. Who is left to blame for student and faculty criticism?

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College News , Fellowships



Student Loans: To Consolidate or not to Consolidate

September 26, 2007

by Scholarships.com Staff

President Bush is certainly keeping students waiting. Graduates debating loan consolidation and lenders pressuring them to go through with it are standing by to see if the Congress-approved College Cost Reduction Act will finally be signed by the president.

If the bill is passed, the government will cut lender subsidies by October 1st. The savings will then be used to increase Pell Grants to needy students. October is fast approaching, but the president has yet to make a move on the bill approved by Congress on September 7th. The potential law is not only important because of the grant factor; it is important because it may mean cuts in financial breaks offered by student lenders.

Lenders have warned that if the bill passes, students will not be granted many of the financial perks they were once eligible for. One of the perks in jeopardy is the Sallie Mae (the largest lender in the business) interest rate cut on consolidated loans to borrowers who pay on time for three years. Sallie Mae and other lenders are making the best of the situation by pressuring students to consolidate with them before things change.

Except that consolidating is not always in a student’s best interest. Students who have loans issued before July 2006, ones with interest rates that change each year, may lock in this year’s rates by consolidating. (loans borrowed after July 1, 2006 have fixed yearly rates.) If interest rates increase, students may be doing themselves a favor. They will be able to keep their discounts and maintain lower rates.

But there is a large chance that rates will go down. If students wait, they may be able to get lower rates that can offset lender discounts, ones that many students aren’t even eligible for. Students should also remember that by consolidating and increasing the lifespan of their loan, they will be paying more in the long run. They will be paying less each month, but additional payments mean more interest buildup.

Consolidation is a tough call. It’s hard to foretell the future. Numerous financial aid administrators suggest that students contact their lenders to find out exactly what discounts they can keep by consolidating. If they are big and the likelihood of eligibility is there, they can consider.

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College Cost Reduction and Access Act Officially an Act

September 28, 2007

by Scholarships.com Staff

After an anxious wait on the part of students and lenders, President Bush finally signed the College Cost Reduction and Access Act into law. And you know this is big if MTV reported on the bill even though partying at club Les Deux wasn’t involved.

According to the new law, the maximum Pell Grant offered to students will increase while the subsidies the government offers student lenders will decrease. This is the biggest boost in student aid since the GI Bill for veterans---and a fresh change from the 2005 $12 billion financial aid cut.

Among those who will benefit are needy students eligible for government grants and those who borrow from the government. Currently, students are eligible to receive a maximum $4,310 Pell Grant each year. This number will increase gradually, reaching a high of $5,400 by 2012.

Under the act, new subsidized Stafford loan interest rates will also be cut. A low point of 3.4 percent will be available to students who borrow between July 1, 2011 and July 1, 2012. Unfortunately, students will have to wait until 2008 to take advantage of this change. Until then, they are stuck with the current fixed 6.8 percent loan interest rate.

Students who plan to teach in low-income neighborhoods after graduating may also benefit. Future teachers may receive a $4,000 TEACH Grant for each year they attend school (up to $16,000 for undergraduates and $8,000 for graduates), but a pretty detailed list of additional eligibility criteria must also be met.

The bill was largely a result of New York Attorney General Andrew Cuomo’s investigation into illegal actions within the $85 billion student loan industry. The investigation revealed that numerous financial aid administrators, including one from the Department of Education, received financial incentives from lenders who hoped to improve their standing with schools.

Some of the financial aid changes outlined in the act were previously considered, but Cuomo’s investigation provided much-needed impetus. Although Bush had initially threatened to veto the bill, he agreed to sign once recommended changes were made. In a White House photo, the president is shown signing the bill with four smiling college students, three smiling congressmen and a smiling Secretary of Education Margaret Spellings looking over his shoulder. A sign that read, “Making College More Affordable” hung from his desk.

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New GRE Questions Coming in November

October 2, 2007

by Scholarships.com Staff

The Educational Testing Service (ETS), the GRE administrators, will be making small changes to the GRE next month. After dropping their plans to vastly alter the GRE, the ETS decided to go for something smaller.

Instead of creating a new grading scale, different formats and a new time limit (as was originally planned), ETS decided to begin by introducing two new question types, one for verbal reasoning and one for math. The remaining questions will remain the same, and the students’ answer to new questions will not count towards their score—at least not yet. David Payne, Associate Vice President of Higher Education at ETS, announced that, “We will begin counting these question types toward examinee scores as soon as we have an adequate sample of data from the operational testing environment."

But for now, students are safe.  Those who encounter the new math question will be asked to type their answer in a box rather than to select it from a set of provided choices. Those who see the new verbal reasoning question will be asked to choose two or three, rather than the standard one, answers to complete a phrase. Each test taker will only be shown one new question, if any.

Both changes, once officially employed, will make the test harder for most. Because many graduate schools heavily weigh GRE scores when making admissions decisions, it is best to prepare as early as possible.
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Sallie Mae Buyout in Abeyance

October 3, 2007

by Scholarships.com Staff

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.

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Posted Under:

College News , Student Loans



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