August 8, 2008
Earlier this week, Massachusetts Governor Deval L. Patrick asked his state's wealthiest universities (such as Harvard University and the Massachusetts Institute of Technology) to help bail out the Massachusetts Education Financing Authority (MEFA), which announced last week that it would not be able to provide loans to over 40,000 students this fall. However, as an article published today in The Chronicle of Higher Education explains, many parties regard this request as well-intentioned but highly problematic, mainly due to recent lawsuits and legislation regarding potential conflicts of interest in relationships between colleges and student loan providers. The Massachusetts state treasurer, who vetoed the governor's request to invest money in MEFA, stated that bailing out MEFA was not a good investment and could set a dangerous precedent for use of state funds. While several colleges said they would consider investing in MEFA to help them provide enough loans to be able to receive assistance from the federal government, none have yet said yes, and many express concerns about what people will think of their relationship with the lending agency once the economy recovers. When viewed in light of last year's preferred lender list scandal, such hesitation is understandable.
However, while both sides of this issue have adopted positions based on sound principles and the belief in doing what will ultimately be best for students, thousands of students are still left in a lurch when it comes to finding money for college. With the new Higher Education Act still sitting on President Bush's desk, and the school year fast approaching, many families, and not just ones in Massachusetts, may be struggling to find ways to pay for school. It's never too late to start applying for financial aid, though! Students who haven't yet done so should complete a FAFSA on the Web, which could potentially qualify you for federal grant programs. Once you've received your financial aid award letter, be sure to talk to your school's financial aid office, especially if you plan on receiving loans. Finally, students of all ages should also check out our free scholarship search, as there are scholarships being awarded year-round, and scholarship awards can be one of the best means of funding your education.
August 12, 2008
Nearly 17% more students completed a Free Application for Federal Student Aid (FAFSA) between January and June 2008 compared to the same period in 2007 according to a report released last month by the Department of Education. Several states, including California and North Carolina, have seen an even more marked increase, with at least 20% more students applying for federal student financial aid for college this calendar year.
This increase in applications for financial aid is largely attributed to the rising cost of a college education, the recent loan crunch, and the general economic downturn, which are all making it more difficult for families to completely cover the cost of tuition. More people may also be applying for financial aid due to increased awareness of its existence, thanks to recent news coverage of financial aid issues.
Aside from longer lines at the financial aid office in the fall, this news is likely to have little impact on students attending college this year (although you may want to apply early for a work-study job lest you discover that the only available job is on the receiving end of that financial aid line). Aid programs with limited funds, such as state grants and campus-based programs like Perkins Loans and work-study jobs, could potentially be exhausted a bit earlier this year, but students still procrastinating on applying for financial aid should still fill out a FAFSA if they haven't missed their school's deadline. Federal aid, such as Stafford Loans and Pell Grants, is still available to late applicants, and as long as they haven't missed any deadlines, students could still manage to receive awards given on a first come, first serve basis.
For students considering financial aid for the 2009-2010 academic year, we recommend deciding early whether you intend to apply for federal aid (not sure? Use a college cost worksheet to estimate your actual cost of attendance), researching your school's financial aid and scholarship application deadlines (especially since some institutional scholarships are need-based), doing your taxes as soon as possible, and completing the FAFSA on the Web in January or February (or as far in advance of the deadline as possible) to ensure that you're considered for all the aid for which you're qualified (to get an idea, you can use the Department of Education's FAFSA4caster). Also, continue to conduct regular scholarship searches and to apply for scholarships, since scholarships continue to be the best way to make up the difference between what college costs and what you can afford to pay for school.
August 15, 2008
Yesterday, President Bush signed the Higher Education Opportunity Act, the official reauthorization of the Higher Education Act (HEA) which governs federal student financial aid for college, as well as other federal programs and regulations that pertain to higher education.
Under the new version of the HEA students can expect a number of benefits when it comes to finding money for college. Some of the changes include:
The National Association of Student Financial Aid Administrators also offers a point-by-point breakdown of the Higher Education Opportunity Act on their website.
August 19, 2008
Maybe it's just the release of Beloit College's "Mind-Set List," a list of news items, pop culture references, and technological advances that happened 18 years ago and thus have always existed for incoming college freshmen, but the generation gap between the big desk and the little desks in the college classroom seems to be on everyone's minds this week. As usual, social networking applications seem to be both a tool universities attempt to use to bridge the gap, and a reminder to students just how wide the gap is.
First off, Inside Higher Ed informs us that a new Facebook application called "Schools" is being marketed to universities as a way to allow their students to connect in a safe environment where their identity and school enrollment have been verified. Included in the application are tools that professors can use in the classroom, such as a name game that allows students to learn their classmates' names. Unlike other Facebook applications, the university has to purchase and implement "Schools," rather than allowing individual students to adopt it.
If this application takes off, and even if it doesn't, more undergraduate students (and probably some graduate students, too) are likely to experience Facebook and other social networking sites as a "creepy treehouse," a term the Chronicle of Higher Education shared with academia in its news blog yesterday. That crawly feeling you get when your professor friends you on a social networking site, even though you don't have any incriminating photos or information on your profile? That's the creepy treehouse, built to look like a place for kids to play, but really used by adults.
So, remember when you're attending college this fall that your professors come from a different world, a world where:
August 20, 2008
The results of a poll conducted by Sallie Mae and Gallup were released today, painting a picture of where Americans across income levels find money for college. The study found that sources of funding varied, with parent borrowing (16%), student borrowing (23%), and parent income and savings (32%) taking care of the majority of college costs. Scholarships and grants followed closely behind, making up 15 percent of college funding.
The average grant and scholarship awards and student loan amounts were roughly the same for low income families (families making below $50,000 a year), while middle income families relied most heavily on parent income and student loans, and high income families (families making above $100,000 a year) predominantly used parent income and savings to pay for school.
While more students than parents were likely to rule out a school at some point in their college search based on cost (63% vs. 54%), two in five families said that cost was not a consideration in choosing the right college for them, and 70 percent of students and parents said that future income was not a factor when determining how much to borrow.
Additionally, 20 percent of families reported using either a second mortgage or a credit card to pay some portion of tuition, while only 9 percent of families reported using a college savings plan, such as a 529 plan, to pay for part of tuition (though those who did were able to cover nearly $8,000 of the cost of college with one). The study also found that only 76 percent of students whose families made between $35,000 and $50,000 per year, many of whom may be eligible for state and federal grant programs, did not complete the FAFSA. Only 73 percent of familes making between $50,000 and $100,000 per year completed a FAFSA, despite many families' reliance on loans to pay for college.
The full text of the report is available on the Sallie Mae website.
August 21, 2008
The results of a poll conducted by Phi Delta Kappa International and Gallup were released today, revealing current American attitudes towards education, at both the high school and college levels. The majority of respondents were in favor of increasing funding for and access to education at all levels.
According to the poll,
August 22, 2008
If you're thinking about enrolling in a community college, it looks like you're not alone. Community colleges across the country are reporting increases in enrollment of up to 10% for the fall semester, with registration still ongoing at many schools. The present economic situation in the U.S. is prompting more and more people to consider attending college, while concerns about rising costs of living and potential difficulties finding money for college are causing more people to worry about how to pay for school. Additionally, community colleges continue to ramp up their efforts to attract students and provide high-quality education at an affordable price.
All of these factors combine to make community colleges an attractive educational option for many students. With new legislation in the recently reauthorized Higher Education Act requiring universities to make their transfer credit policies for undergraduate students more transparent, and a preliminary study being conducted by the Department of Education to identify some potential student concerns in the transfer process, it's also becoming easier for students to start at a community college, then later transfer to a four-year university.
There can be some drawbacks to community colleges, though. According to one study, community college students may be less likely to have concrete plans for just how long they will attend school and more likely to leave college without attaining a degree, but a large part of this could be due to community colleges attracting a more diverse group of students. Additionally, community college instructors are often not as experienced and credentialed as their peers at four-year schools, though students can still find themselves taking intro courses from adjuncts and graduate students at many state universities.
So if you're open-minded and willing to transfer, consider community colleges in your college search. Community college students enjoy lower tuition, take many of the same general education classes as their peers at public and private universities, are eligible for federal student financial aid, and in some cases even have the option to live on-campus. For many students they can be great ways to ease into college life without going too deep into student loan debt.
August 26, 2008
California's community colleges system plans to begin offering $1,000 scholarships to many of its students in 2009, according to an article in Diverse Issues in Higher Education. The schools received a $25 million endowment in May from a foundation that supports education and the arts, and will receive matching funds of up to another $25 million after fundraising efforts this fall. These scholarship opportunities will help make college more affordable for anywhere from 1,250 to over 5,000 students annually, depending on the amount of money California community colleges are able to raise to contribute to the fund.
This is just one of several efforts being undertaken by California's community colleges in order to start tapping into alumni donations and building endowment funds to help students pay for school. The San Mateo Community College foundation has increased its staff and started publishing an alumni newsletter to solicit donations, and the Foundation for California Community Colleges, which will administer the new scholarship fund, is helping other schools devise strategies for fundraising.
As community college enrollment continues to increase and states continue to cut funding to community colleges in order to balance their budgets, it makes sense for community colleges to increasingly turn to philanthropic gifts to meet their students' needs. If other states follow California's example, attending college at a two-year institute could become a more attractive option for many students who are strapped for cash or coming up short on financial aid at a more expensive institution. In addition to scholarships administered by the colleges, community college students are also eligible to compete for many private scholarship awards.
To research community college options in California or other states, check out our college search tool. To find out about additional sources of scholarship money, fill out a profile on Scholarships.com and conduct a free scholarship search.
August 27, 2008
The city of Akron, Ohio plans to introduce a scholarship fund to encourage its high school graduates to stay in the city for college. Akron's plan follows in the footsteps of other cities with similar programs, such as Kalamazoo, Michigan, which gained national attention with the launch of the Kalamazoo Promise scholarship in 2005. An anonymous donor contributes to the Kalamazoo Promise fund, which offers free tuition to graduates of Kalamazoo high school attending college at local schools, such as Western Michigan University. At least 19 cities have followed suit in the last three years, according to the Associated Press, with many relying on private donors to provide scholarship awards.
But no donors have come forth in Akron, so the city is trying something new: leasing its sewage system to a private company, then using the money to establish a scholarship fund. The measure, which has earned the somewhat derisive nickname "stools for schools," is up for a vote in November. While any additional scholarships for high school students are welcome, this measure does come with some drawbacks. Up to 100 city employees in Akron may find themselves without jobs in an already tough economic climate and many residents have issues with the city choosing to privatize public works.
Additionally, students may not be interested in the scholarship anyway. Presently, only 600 Akron high school graduates attend the University of Akron, and the proposed tuition plan will only subsidize what's left of tuition after students' other scholarships are taken out, leaving them with the guaranteed responsibility of room and board. The scholarship committee is also throwing around the idea of attaching a thirty-year residency requirement to the scholarship money, converting the scholarships to student loans for all students who choose to leave Akron before retirement.
While local scholarships are usually a great idea for students, they can stop being appealing if too many requirements are attached. My guess is that few students will want to have their entire lives planned out for them in high school, especially if a change in plans carries a financial penalty of tens of thousands of dollars. Whether or not this measure passes in November, many students from Akron will undoubtedly want to continue their scholarship search. And Scholarships.com is a great place to start, with our database of 2.7 million college scholarships and grants worth over $19 billion, without a 30-year residency requirement in sight.
September 3, 2008
Don't forget about spending money when planning for college costs. This advice comes from Alabama's Birmingham News, which spoke with some students, parents, and financial aid administrators in the state about dealing with expenses that fall outside of paying tuition and room and board. However, Alabama students and families are by no means the only ones not sure how to deal with how much living at college will cost.
Financial aid offices typically figure a few thousand dollars into a student's cost of attendance estimate to cover such expenses as gas, car maintenance, toiletries, clothes, entertainment, and food and drinks not from the dining center, but actual experiences vary widely among students. Some college students certainly choose the spartan lifestyle of staying in the dorm, using their meal plan, and biking around campus to attend free school-sponsored activities. Others fail to resist the urge to splurge, doing their studying at the all night diner just a short drive from campus or swinging by the mall for some retail therapy and a movie after a particularly grueling week of class. I was certainly in the latter category, despite my best intentions of being thrifty and only spending what I earned working at my work-study job (work-study, for those unfamiliar, is a campus-based aid program that is more easily used to cover living expenses than tuition).
But don't assume the worst and rush out to borrow an extra $10,000 to cover unforseen expenses. Instead, practice some basic money management. Take an honest look at your spending habits and how much you'll realistically want to scale them back to save money. Then look at how much you can earn while in school without getting off-track for graduation, and start figuring out how to make up any differences between the two. A summer job or an extra scholarship award or two could give you enough money to survive the next 9 months without having to resort to student loans to fix your car, get you home for Christmas, or feed you until you land a new job. As a recent grad who looked to borrowing as the easy way out of tight financial situations, believe me, those little loan amounts add up.
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