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Several States Contemplate Cuts to Scholarships and Grants

June 16, 2009

by Scholarships.com Staff

Student financial aid programs in several states may soon fall victim to sweeping budget cuts necessitated by the recession.  Ohio, Florida, Michigan, and California are all considering proposals to reduce or eliminate some state student aid programs, including popular grants and scholarships.

Ohio and Florida are both making slight changes to rules in existing aid programs, resulting in less aid for some students, but mostly leaving financial aid intact.  Florida is capping their Bright Futures scholarship so it no longer covers all of students' tuition or tuition increases, while Ohio is changing rules in their Ohio College Opportunity Grant to focus aid towards tuition and fees at public schools.

California and Michigan, however, are making far more sweeping cuts.  California has proposed eliminating CalGrants, a popular state grant program, for incoming college freshmen and cutting CalGrants for current college students.  Michigan may eliminate the Michigan Promise scholarship and make sweeping cuts to several other state financial aid programs, including work-study.  Students in both these states could find themselves suddenly thousands of dollars short on college financial aid.

While federal stimulus money has mitigated some of the damage in many states, in Michigan it has also played a large role in the proposed cuts to financial aid, according to The Detroit News.  Since a provision in the stimulus legislation prevents states from drastically reducing funding to higher education institutions, Michigan may be forced to turn to cutting state grant and scholarship programs to make up some of their budget deficit.

While some state aid and loan forgiveness programs are being reduced or eliminated, financial aid is still available.  Many college are actually increasing their budgets for university scholarships, and private foundations are still offering scholarship aid, as well.  Federal student financial aid has also seen some increases in the last two years.  Money is still out there if you know where to look, and a great place to start is doing a free college scholarship search.

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Three Universities Subpoenaed in Admissions Investigation

June 19, 2009

by Scholarships.com Staff

Want to get into college but don't have the best grades?  Consider making friends with some prominent politicians, then apply in Illinois.

Earlier this month, The Chicago Tribune revealed the existence of a special admissions list at the University of Illinois main campus that consisted of politically connected applicants.  Now, records from University of Illinois, Northern Illinois University and Southern Illinois University have been subpoenaed in the ongoing federal investigation of corruption charges against former Illinois Governor Rod Blagojevich.  Investigators want to determine whether Blagojevich recommended candidates for admission into state colleges in exchange for money or favors.

While going for the wow factor of a big name is an understandable strategy when it comes to letters of recommendation, it looks like more may have been going on with some applications in Illinois. There are concerns that some well-connected applicants received extreme advantages in admissions, in some cases getting in seemingly solely based on who they knew, even over the objections of the admissions officials reviewing their college applications.  The University of Illinois has suspended its special admission list and claimed to have not followed practices out of line with what other colleges do in considering applications.

The practice of relying on political connections in the college application process is not unique to Illinois, but in light of recent scandals in the state, it is garnering a lot of attention.  Using clout to get into college is still a  highly contentious practice in any case, whether the applicant is connected to university officials or state government figures.  Hopefully, this scandal will influence colleges to think twice before overlooking merit in favor of connections in future admissions decisions.

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Gates Foundation Launches Community College Grant Program

June 23, 2009

by Scholarships.com Staff

The Bill and Melinda Gates Foundation has announced new grants to help states and community colleges improve remedial education and college completion.  The grants, totaling $16.5 million, were awarded to five states and fifteen community colleges and represent the second wave in an effort the foundation began in 2004.

As college costs continue to rise, an increasing amount of attention is being paid to community colleges as a cost-effective alternative to the traditional four-year university.  Greater emphasis on higher education, such as President Obama's earlier urging for every American to receive some amount of post-secondary education, have also brought community colleges into focus.  In addition to being affordable and local, community colleges often focus on career-oriented education, which can help the unemployed or those who are looking for better job security quickly and effectively pick up skills and certification to achieve career goals.

Despite the benefits of a community college education, many students who enroll struggle to finish.  As many as 60 percent of community college students may need remedial courses, including up to 90 percent of low-income and minority students at these institutions, and students requiring remediation are currently at a disadvantage when it comes to successfully completing requirements to earn a degree. Grants from the Gates Foundation aim to help colleges continue to address this problem, building on the success of previous Gates-funded programs that saw the number of students successfully moving to college-level coursework rise by 16 to 20 percent.

Students will benefit from this grant money through increased access to support services, such as tutoring and academic advising, that can help them meet their college goals.  Improved remedial education, a federal focus on community colleges as vital educational institutions, and new state efforts to smooth the process of transferring from two-year to four-year state colleges all have the potential to help a greater number of Americans attain a higher education, and to do so at a lower cost.

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Financial Aid Changes Happening July 1

June 30, 2009

by Scholarships.com Staff

While it falls in the middle of summer on most academic calendars, July 1 marks an important date for financial aid each year.  On July 1, the Education Department switches from the 2008-2009 academic year to the 2009-2010 one, and new federal rules for financial aid go into effect. This means new loan consolidation and repayment options, lower interest rates on some federal student loans, among other changes for students receiving federal student financial aid.

One big change you likely already know about if you have applied for financial aid for fall is that Pell grants are going up from a maximum of $4,731 for 2008-2009 to a maximum of $5,350 for 2009-2010.  This change has already been widely publicized and is already reflected on your financial aid award letter.

Changes for current undergraduate students that you may not already know about include lower interest rates and lower loan fees on federal Stafford loans.  The interest rate on subsidized Stafford loans for undergraduate students will drop from 6.0 percent to 5.6 percent on July first.  Rates will not change for unsubsidized loans, graduate students, or federal PLUS loans.  The upfront loan fees on all Stafford loans will fall from 2 percent to 1.5 percent. Students who have older Stafford loans or PLUS loans with variable interest rates will also see lower interest rates as of July 1, provided they have not already consolidated their loans.

Those who are considering loan consolidation will see one of the biggest changes on July 1, with the unveiling of a new consolidation program through the federal Direct Loans program.  It will allow students to participate in an income-based repayment plan that will forgive any outstanding debt after 25 years.  Payments will be capped at 15 percent of whatever you earn above 150 percent of the federal poverty level and no payments will be required if your earnings fall below 150 percent of the federal poverty level.

Finally, since July 1 marks the start of the new academic year for financial aid, today is the last day to file a 2008-2009 FAFSA.  If you are planning to enroll in summer courses and have not yet applied for aid, you may want to check with your school to see whether summer is counted as part of 2008-2009 or 2009-2010 for financial aid purposes.  If your school counts summer as part of the previous academic year and you have not yet filed a FAFSA, you will want to do so right now.

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Education Secretary Duncan Proposes Changes to FAFSA

June 24, 2009

by Scholarships.com Staff

As part of his campaign's focus on education, President Obama pledged his administration would address issues of the financial aid application process, such as the length and complexity of the Free Application for Federal Student Aid, or FAFSA. Education Secretary Arne Duncan has previewed some of the administration's proposed changes, with a formal announcement expected today. While not as sweeping as the two-page FAFSA EZ Congress already mandated when renewing the Higher Education Act last year, these changes are still a step towards simpler financial aid applications.

Changes will be rolled out in phases, with the first phase being a smarter FAFSA on the Web.  Rather than forcing students to read fine print to determine whether they need to provide information requested by each question, as of next January, the application will use the information students have provided to determine which questions they need to answer.  Students with independent status will not be shown the questions about parental income and low-income students will not be shown certain questions about assets that they don't need to complete.  This is a fairly simple step to save time and hassle, and eliminate some of the barriers that keep students most likely to be eligible for federal grant programs from applying.

A pilot program has also been initaited to test the feasibility of allowing students to access their tax information online to complete the FAFSA.  If successful, it could be expanded to all users, saving headaches involved in finding their 1040s, W2s and related forms, then scouring each for the correct lines to copy into the FAFSA.

Duncan also stated that the administration will seek permission from Congress to begin taking steps that could eventually result in eliminating the FAFSA entirely and relying solely on tax information to apply for federal student financial aid.  While not explicitly stated by Duncan, it could be an end result of his request to Congress to remove questions from the FAFSA that do not pertain to information reported to the IRS on a student's (or their parents') 1040.  Once the complicated need analysis formula of the FAFSA has been set aside in favor of this simplified process, the idea of allowing students to apply for aid by checking a box on their tax return seems almost within reach.

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Bush Calls on Congress to Cut Earmarks

January 29, 2008

by Scholarships.com Staff

In last night’s State of the Union address, President Bush called on Congress to cut down on bill earmarking. Earmarks, often attached to spending bills at the last minute, have been used to designate money to benefit legislators' personal interests. Local and state projects that may not have otherwise been funded are often successfully snuck into an earmark and financed.

Sometimes used as “paybacks” for organizations that donate money to a legislator’s campaign, earmarks have received negative attention in the press. However, numerous colleges and universities have also been able to profit from them. According to the Chronicle of Higher Education, $2 billion for research, construction and school projects was earmarked for colleges and universities in 2003. Criticizing the practice, President Bush stated that most earmarks don’t even make it to the floor of the House or Senate saying, “You didn’t vote them into law. I didn’t sign them into law.”

If earmarking is curbed, some schools may see a decline in their budgets, and will have to look elsewhere for additional funding. But because Mr. Bush was referring to the 2009 budget, legislators still have the option of bypassing a veto by delaying approval of the spending bill.

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Sallie Mae Rethinks Lending to Students with Low Credit Scores

January 23, 2008

by Scholarships.com Staff

Faced with government subsidy cuts and a major slump in the mortgage loan market, Sallie Mae has decided to get picky about who they lend their money to.  For students, this may be either a scary setback or a much-needed lesson in wise financing. Most likely, it will be both.

Students who don’t receive sufficient financial aid from the government will soon find it more difficult to secure the funding they need to cover college expenses. This may force more students to opt for cheaper but not necessarily most desirable colleges and universities. If the problem becomes severe, a drop in the number of students who pursue a college education may be seen.

However, the rising number of student borrowers with overwhelming debt may make the news a benefit in disguise. Many students don’t realize the impact debt can have on their post-graduate lifestyles. Students who cannot quickly find high-salary jobs often find themselves either struggling to get by or sacrificing career goals for better-paid, less appealing jobs.

Because of Sallie Mae’s high standing in the business, their decision may be an early indication of what’s to come. Students who decide to take out loans frequently turn to Sallie Mae for help. The company manages almost $164 billion in student loans for 10 million borrowers and tops the list of most popular lenders. Troubles for Sallie Mae may portend ones for lesser-known student lenders.

This is not the first setback Sallie Mae has faced in the recent months. Over the past year, details of New York Attorney General Andrew Cuomo’s investigation into illegal actions within the lending industry have placed Sallie Mae in hot waters.  Along with a number of other lenders, Sallie Mae has been accused of paying college financial aid officials to place the lender’s name on preferred lender lists, lists students heavily rely on when making important and difficult borrowing decisions.

Luckily, loans are not a student’s only option. Those who cannot afford a postsecondary education and have not received enough government aid should take advantage of the numerous scholarship opportunities available to them. By conducting a free college scholarship search at Scholarships.com, students can gain access to information about more than 2.7 million college scholarships and grants worth over $19 billion. Just about everyone can find awards they will be eligible to receive.

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Posted Under:

College News , Student Loans



Court Rejects Protests of Federal Aid Witholdings for Drug Offenders

April 30, 2008

by Scholarships.com Staff

After an appeal by the Students for Sensible Drug Policy (SSDP), an international grassroots network of students concerned about the impact drug abuse has had on communities, the court has once again rejected the claim that withholding federal student aid from drug offenders is unconstitutional.

According to the 1998 Higher Education Act, students who have been convicted for having, for the first time, used drugs are to be denied federal college funding, including free aid in the form of Pell Grants, from the government for one year. The length increases to two years for a second conviction and becomes permanent after the third. For those convicted of selling drugs, the punishment is a two-year federal aid loss or, for two offenses, the permanent withholding of federal aid.

The SSDPF has complained that the double jeopardy law, one which prevents an individual from being tried twice for the same offense, makes such procedures illegal. According to The Chronicle of Higher Education, Judge Kornmann disagreed with the claim stating that the law served legitimate federal interests by minimizing college drug use and preventing taxpayers from having to fund the education of drug users or sellers.

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Posted Under:

College News , FAFSA , Financial Aid



Community Colleges Face Funding Problems

February 1, 2008

by Scholarships.com Staff

Complaints about skyrocketing tuitions at four-year colleges and universities have been reverberated around the nation for quite some time—especially within the past year. Less attention has been paid to the financial difficulties at community colleges.

Even though four-year schools offer less expensive classes, they also possess fewer funds to offer students additional help in affording an education. Many universities have alumni who donate thousands, sometimes millions to their beloved alma maters. Some have accumulated endowments in excess of $1 billion. Such is rarely the case for community colleges.

According to an article published by the Associated Press, the financing problem is further compounded by the fact that community colleges are in dire need of funding for graduation rate improvement. While few four-year colleges and universities can brag about the high number of students who receive diplomas after enrolling, especially as far as undergraduate programs are concerned, rates are particularly poor at community colleges. These schools enroll 6.6 million students who seek credits or degrees (and a few more million who don’t), but many students don't accomplish their graduation or transfer goals before leaving.

The results of a Cal State Sacramento Institute for Higher Education Leadership & Policy study that tracked 520,407 community college students over a six-year period showed that only 24 percent of those seeking to graduate or earn a degree were able to do so in six years.

Community colleges find themselves in a difficult situation because they need funds to get students in and ones to get them out, with a degree. These schools receive financial aid based on the student population, so they go out of their way to make enrollment easy. Once students are in, including ones with outside jobs and those who registered late, they have trouble completing their education.

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Posted Under:

College Costs , College News



Mixed Reviews for Presidential Budget

February 5, 2008

by Scholarships.com Staff

On February 4th, President Bush unveiled his much criticized national budget to a frustrated Congress. Members of both parties found fault with the president for his proposal to increase funding for the military at the expense of Medicare. According to the Los Angeles Times, President Bush’s proposal could slow the growth of Medicare programs by nearly $208 billion over the next five years.

The budget for the Department of Education, on the other hand, was received with mixed reviews.  A firm advocate of scientific research, the president proposed that funds for physical-science research, much of which would go to colleges and universities, increase in the upcoming year.

While physical scientists cheered in one corner, medical researchers jeered in the other. Once again, The National Institute of Health (NIH), the primary government agency responsible for health-related research, was upset with the president's funding proposal.

After his decision to veto a bill that would increase NIH funding in November, the president's budget did not come as much of a surprise. Upon hearing last year's proposal, Bush claimed that Congress was, "acting like a teenager with a new credit card." Ironically, if Bush's budget is approved, skyrocketing national debt is expected. The current U.S. debt could more than double over the next two years if Congress chooses to accept the budget. More likely, the proposal will be stalled until President Bush leaves office.

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