February 19, 2008
Despite investigations into shady business practices of study-abroad programs across the nation, Congress continues to support the idea of travel for college students. Last June, a bill to increase study-abroad funding was passed in the House, and a similar version was approved last week by the Senate Foreign Relations Committee.
The initial version of the Paul Simon Study Abroad Foundation bill was passed by the House in June, 2007 and introduced to the Senate by Senators Dick Durbin (D-IL) and Norm Coleman (R-MN). If passed, it would allow Congress to appropriate $80 million each year towards a foundation awarding financial aid to study-abroad students.
The bill would encourage one million students to study abroad, especially in non-traditional settings. According to Senator Durbin, the travel will, “allow students the opportunity to grow and gain skills to help our nation compete in the globalized world.”
Now that the bill has been approved by the Senate committee, it will move to the Senate floor for a full vote. Approval seems likely as positive feedback has been expressed by both parties.
The proposal is particularly aimed at assisting minority students with scholarships and grants. Senator Coleman stated that, “The goal of the Paul Simon Study Abroad Foundation Act is to make study abroad in high-quality programs in diverse locations around the world the routine, rather than the exception, for American college students.”
Over the past year, study abroad programs have received more publicity for their troubles than their benefits. Inquiries into the actions of program representatives who received free trips and money for meeting student traveler quotas have marred the image of numerous programs. If the appropriations are approved, increased financial accountability is likely.
Students interested in studying abroad need not wait until this bill clears both chambers. By completing a free college scholarship search, students can find information about numerous college scholarships and grants that can help them afford school. Both study-abroad scholarships and awards based on different criteria are available.
February 21, 2008
The idea that Ivy League schools are reserved for the rich and the richer may soon be a thing of the past. In fact, after unveiling its latest financial aid package, Stanford will become one of the most affordable schools in the country.
According to The Stanford Daily, undergraduate students whose parents make less than $60,000 will soon be spared the tuition, the room & board and other educational expenses. Those whose parents make less than $100,000 will have to pay for the living expenses, but tuition will still be taken care of. As far as the rest are concerned, tuition will soon increase.
The price for a year at Stanford will jump to $47,212 during the 2008-2009 school year—a ludicrous amount for the average family. Thankfully, the average family does not have to worry about it.
However, families whose liquid funds are much smaller than their paychecks and graduate students who do not reap the benefits of this news are less than thrilled. What seems like a large income on paper may not translate into spending money for a number of families affected by the tuition hike. Students whose parents have large mortgages or investments will have a difficult time setting aside money for the new cost of Stanford. The same is true for graduate students who don’t receive federal Pell Grants to begin with.
Still, Stanford is keeping those who need aid the most in mind, and that's the bottom line. Okay, okay, there is more to that bottom line. In recent months, a number of distinguished schools have announced large increases in financial aid, and Stanford must worry about keeping up with the Joneses. After Duke, the University of Pennsylvania, Tufts, Haverford, Swarthmore and Harvard each stated their intent to make schools more accessible to all, others colleges and universities have been struggling to keep up.
Of course, most students aren’t headed for the Ivy Leagues, and the above only constitute a small minority of all colleges and universities. For most students dealing with financial woes and fears of burdensome student loans, scholarships are still an option. By conducting a free college scholarship search at Scholarships.com, students can find the money they need to complete their education—regardless of the school they attend.
February 27, 2008
Another victim of the student loan crisis, the Pennsylvania Higher Education Assistance Agency (PHEAA) announced that it will suspend its student lending program. PHEAA, a federally-insured lender, has followed in the footsteps of the Michigan state loan program by pausing—indefinitely—its lending services.
On February 21, PHEAA hosted an emergency student loan funding summit to, “address a potentially devastating shortage of loan funds for students and families.” At the summit, State Representative and Chairman of the PHEAA Board of Directors William F. Adolph stated that like many homeowners, “millions of college students may now face foreclosure on their plans for a higher education.”
Days later, PHEAA announced that it had no choice but to pause its loan program. Loans to out-of-state students have already been suspended, and those to in-state students will be paused on March 7. Students who borrowed money prior to that date will not be affected.
The remaining Pennsylvania students will have to turn to banks to meet their student loan needs. Unlike lenders who participate in the federally-subsidized, price-regulated Federal Family Education Loan (FFEL) program, private lenders have more leeway in setting their prices and creating stipulations.
Though Chief Executive Officer and PHEAA Interim President James Preston stated that students can receive comparable rates by borrowing from banks, somewhat higher rates and additional restrictions are to be expected. Aside from loan suspensions, numerous lenders have had to add new eligibility criteria and to reduce lending benefits to stay in business. Lenders that could not compete have closed their doors entirely.
February 29, 2008
New York Attorney General Andrew Cuomo has an unparalleled resume. By attacking top companies and preaching justice to the people, he has made himself into something of a public superhero. Pursuing Facebook predators, Comcast, top banks, officials at elite universities, health insurance companies and even the infamous Gambino mafia crime family, each of his investigations is worthy of a motion picture.
After taking a short break from the student-loan investigation, Cuomo is back, and he comes bearing new subpoenas. This time, he is targeting--among others--credit card companies and the colleges and universities who conduct business with them. Of particular concern is the marketing of credit cards with college logos.
If you’re a college student who hasn’t received a ready-to-go credit card laminated with a picture of your alma mater, you haven’t paid sufficient attention to your junk mail. “So what’s wrong with logos?” you may ask. According to Cuomo and his entourage, it’s a mental thing. He believes that students who may not have otherwise signed up for multiple credit cards, or ones who used them sparingly, are swayed by their new and creative options. These students are at a greater risk of hurting their credit rating (which is adversely affected each time someone applies for a credit card) and spending extra money. The last thing the growing number of indebted students need is another credit card.
According to the Chronicle of Higher Education, Cuomo has also expressed concern about students who may be choosing their credit cards based on logos rather than optimal interest rates or good repayment options. Now I'm not saying that I haven't considered a logo card. It truly is "cute" and therefore bears great influence on college students. Still, I have faith that most students are too lazy to go through with the transaction.
For some, the credit card investigation may seem like a bit of a stretch. That may be a fair statement, but I'm all for Cuomo putting schools under the microscope. After discovering that many college and university officials agreed to place lenders on preferred-lender lists in exchange for money, they deserve a turn in the hot seat.
March 4, 2008
The Prosperity Scholarship Fund, a foundation providing Florida scholarships for low-income students residing in the Jacksonville area, received its biggest donation when AT&T announced its $100,000 contribution. According to an AT&T press release, the company was responsible for granting a total of $4 million to Florida philanthropy organizations in 2007 alone, and it was ranked among the top corporate philanthropy foundations by Forbes.
AT&T's contribution to the Prosperity Scholarships Fund matches that collected by all other contributors combined during the foundation’s inception in 2006. The new scholarship money will go towards an endowment to be supplemented by the state, individuals and additional corporations. During the 2008-2009 school year, more than 200 students who attend Florida Community College at Jacksonville, the University of North Florida, Jacksonville University and Edward Waters College will be able to use the endowment money to afford a college education. Students who win can receive up to $1,000 per year, to be renewed annually.
Those who graduate from Duval County high school and those who are customers of JEA--the Jacksonville energy, water and sewer system company responsible for administering the fund--may begin applying in May. For additional information about financial aid, scholarship funds and corporate scholarships, students may conduct a free college scholarship search.
March 7, 2008
With all this talk about colleges hoarding snowballing endowments, it may come as a surprise that sometimes, college funds do dry up. Such is the case at numerous universities receiving business scholarship money from the Roy F. and Joann Cole Mitte Foundation.
Indiana University at Bloomington, Ohio State University, Pennsylvania State University at University Park, St. Edward’s University, Texas A&M University at College Station and Texas State University at San Marcos (which even has a building named after the founders) each received annual financial support from the multi-million dollar fund.
According to The Chronicle of Higher Education, the foundation was worth $26 million in 2006. The loss was said to be caused by a stock market downturn, but there are suspicions that it may also have something to do with the founders’ son, Scott Mitte. A past article published by The Boston Globe stated that Mr. Mitte’s compensation had increased by $189,000 and his spending on travel and meetings grew by more than $180,000 in just one year. The article dated November 3, 2003 also mentions that a sexual harassment case against Mr. Mitt had cost the foundation $139,000 in legal fees.
Rather than leave their students without promised aid, most of the schools have decided to use their own funds to support them. Texas State University, the alma mater of the founders, will continue to receive scholarship money from the foundation, but other schools must dig into their own pockets to cover the expenses.
March 11, 2008
In February, attorney and father James Brady filed a lawsuit against Wheaton College for having charged the family a Wheaton-sized tuition bill during his daughter’s stay abroad. He estimated about $4,500 could have been saved had his daughter been billed for the cost of her South African university tuition. If European students heard the story, they too may have been upset—at the outrageous cost of a South African education.
It comes as no surprise that, even as the dollar weakens against its European counterparts, a college education is still most expensive in the United States. US students who study at four-year public colleges pay an average tuition of $6,185 per year; ones who study at private colleges pay $23,710. According to an article published by the Associated Press, book costs, room & board, living expenses and myriad university fees raise these numbers to $13,589 and $32,307 respectively.
While students abroad undoubtedly have problems of their own, paying for college is unlikely to top the charts. It’s still not uncommon for countries to provide a tuition-free education for all, with a reasonable length-of-study limit and minor fees. When you study in Brazil, Denmark, Finland, France, Greece, Norway or Sweden, you can breeze through school with bills that vary from small to nonexistent. In a number of more expensive areas, it may cost you a few thousand dollars. Even then, the government is likely to offer some sort of compensation grant.
US students don't leave their tuition problems behind after graduation. In fact, the problems often get worse. About two-thirds of students borrow to complete a college education. Those who borrow leave school with an average debt of about $19,000. Students who go to private schools and ones who stay for another degree are increasingly taking out student loans that exceed $100,000.
While it’s not unheard of for international students to borrow for an education, lower costs mean lower burdens. Oftentimes, income-contingent repayment plans and federal grants offered in exchange for good school performance are an option for struggling students. Comparable opportunities are few and far between for US students. Instead, many overwhelmed students return home again financially dependent on their parents.
That is not to say that tuition hasn't been growing elsewhere, with the United Kingdom being a prime example. In 1998, some college students in the UK were asked to pay for their education, a change that had students taking to the streets in protest. For the 2007-2008 school year, the UK tuition cap was controversially increased to £3,070 ($6,155), a price that would still make private universities blush, one that would make James Brady rethink his lawsuit.
Rising tuition may not be uncommon, but we have perfected the trend. Unfortunately, legislation cannot be willed into action. Until federal Pell Grants increase significantly and tuition costs drop dramatically, students can look to college scholarships and grants for assistance. By completing a free college scholarship search, students can find information about numerous awards they may be eligible to receive.
March 18, 2008
Speaking before the U.S. House Committee on Education and Labor, Secretary of Education Margaret Spellings told representatives what they wanted to believe, but didn’t: the college aid crisis was under control. After months of financial struggles, a number of student lenders have decided to discontinue their participation in the Federal Family Education Loan Program (FFEL), leaving students to look elsewhere for college funding.
A troublesome lending market and a new law limiting government subsidies to student lenders have many lenders rethinking their participation in the FFEL. With less government backing and greater default rates, some student lenders are finding it necessary to cut back on student benefits, increase borrowing criteria, and sometimes, leave the government program completely.
These changes have left families worried about finding sufficient student loan assistance from the government, concerns Spellings has tried to diminish. During her testimony, the education secretary stated that so far, “No institutions have notified us that any eligible student has been denied access to federal loans.”
If true, students and parents would be relieved to know that they can still take advantage of low interest government loan rates rather than relying on private, more expensive, student lenders. According to Spellings, the government would step in before students were forced to rely solely on private lenders.
One safeguard proposed by Spellings was the option for schools participating in the FFEL program to switch to the government's Direct Loan program, one in which students bypass government-subsidized lenders and borrow straight from the government.
Ms. Spellings also pointed out that Pell Grants, federal need-based awards that do not need to be repaid, have been increasing and will likely continue to do so. Students who receive free grant money will have fewer loan needs---to an extent. Currently, those eligible for Pell Grants may only receive $4,310 per year, and not all are eligible for this form of federal student aid.
Still, the Secretary of Education maintained a positive outlook and expressed confidence that most student lenders are not in critical positions stating, “More than 2,000 originating lenders participate in FFEL...a small number of these lenders have reduced their participation or stopped origination new loans.”
March 25, 2008
Joining the growing number of student lenders that have chosen to opt out of the Federal Family Education Loan (FFEL) program, the Brazos Higher Education Service Corp has announced that it too would discontinue their participation. The combination of a troublesome lending market and the passage of an act reducing federal subsidies to FFEL lenders have left students and parents worried about their college funding options.
Brazos is just one of the 26 lenders that have already stopped providing FFEL loans to students, reports The Wall Street Journal. Because Brazos is one of the largest student lenders, the news is particularly disconcerting to families already fearful of less-than-promising student loan options.
More than eighty percent of all federal student loans are provided by federally-subsidized lenders that participate in college FFEL programs. The remaining federal loans are disbursed through the less-popular Direct Loan program which allows students to borrow directly from the government.
Speaking to the US House Committee on Education and Labor, Secretary of Education Margaret Spellings recently proposed that more schools simply adopt the federal Direct Loan program. The suggestion sounds promising, but administrative setbacks and budget availability may prove to be a problem.
Though only a small percentage of the estimated 2,000 student lenders have pulled out of the FFEL program, the market is dominated by the top fifty lenders, a number of which have already left the FFEL program. Included in NASFAA's list of lenders that have either ended or suspended their FFEL services are the large originators NextStudent, Goal Financial, College Loan Corporation and College Board.
Before turning to loans for their financial aid needs, students should search for college scholarships and grants that may provide them with cost-free college funds. By conducting a free college scholarship search at Scholarships.com, student will receive access to more than 2.7 million scholarships and grants worth over $19 billion.
March 26, 2008
The recipe for the No Child Left Behind Act seems simple: identify ineffective schools, and improve their student performance. Sprinkle in a dash of funds, a threatening environment for underperforming teachers, and melt away problems at 365°.
Unfortunately, most successful plans call for more than a dash of funds. And as was demonstrated by a Government Accountability Office (GAO) report on the No Child Left Behind progress, funding problems have been leaving states struggling to comply with the program’s requirements. Of particular concern were two NCLB provisions responsible for regulating the allocation of federal education funds.
As mandated by the No Child Left Behind, states are required to set aside 4 percent of the federal assistance they receive to help low-income students and use that money to improve schools that have failed to meet state academic expectations. No problem there. Because most poorly-scoring schools are low income, the 4 percent used to improve schools would indirectly help the low-income students.
The problem arises when another provision comes into the picture. According to the “hold-harmless” rule, states are not allowed to set aside more money for a poorly-performing school if it means having to cut back on other school district grants, reports the Washington Post. Because of this stipulation, numerous states have been finding it difficult to come up with sufficient money to help poorly performing schools while maintaining previous assistance levels to other school districts.
According to the GAO report, the “hold-harmless” provision has prevented 22 states from setting aside the required NCLB funds. Some states have made up differences by taking advantage of other federal and state funds, but not all have been able to do so successfully.
Insufficient funding is just one of many concerns cited by NCLB critics. Others have included a diminished focus on untested material and a decrease in attention paid to advanced students. High school seniors interested in voicing their opinions on the NCLB, both positive and negative, may do so by applying for the Scholarships.com 2008 Resolve to Evolve Scholarship. Seven applicants who submit the most thought-out and well-crafted responses will be awarded with scholarships ranging between $1,000 and $3,000. For additional information about this and other college scholarship and grants, students may conduct a free scholarship search.
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