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.
April 30, 2008
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.
April 3, 2008
The credit crunch and its negative impact on student borrowers is no longer news. Both FFEL and private lenders have been responsible for financial tensions, and now there’s more to gripe about. Numerous colleges have been complaining that they are not receiving sufficient funding to cover their students' Perkins Loan needs.
Perkins Loans are awarded to students by colleges and universities, but the government provides much of the funding. Because these loans are restricted to students who show particular financial need, shortages will affect students whose families have the lowest incomes most. Perkins Loans have the cheapest interest rates and the most lenient payment options as far as government loans go, as far as most student loans go. Students are asked to pay a 5 percent interest rate on Perkins Loans as opposed to 6.8-7.22 percent on federal Stafford Loans and 7.9-8.5 percent on federal PLUS Loans. Those who turn to private lenders can expect even higher rates.
Due to a poor loan market and a lack of government subsidies, many schools have been forced to cut back on both the number and the size of their Perkins Loans. According to U.S. News & World Report estimates, about 50,000 students who would have qualified for Perkins Loans last year will not qualify for them this year. Those who do qualify may still see their loan limits diminish. Technically, students can borrow up to $4,000 in Perkins Loans (though the number may be lower for those deemed less needy), but certain colleges will be decreasing the maximum funds available to students.
This has left families worried that they may be forced to rely on private student loans after reaching their federal loan limits. After dealing with increasing default rates, both Federal Family Education Loan (FFEL) lenders and private lenders have been forced to make loans more difficult to receive and less appealing to borrowers. Major lenders are becoming sticklers about eligibility criteria and have been cutting back on the benefits offered to students with good paying records.
Students who are no longer eligible for Perkins Loans still have financial aid opportunities. By applying for college scholarships and grants, students may find college funding they do not have to repay. Before considering loans, students should conduct a free college scholarship search to find awards they may be eligible to receive. It is also important to fill out a FAFSA each year. Just because an individual is not eligible for Perkins Loans does not mean they will not be awarded free money in the form of Pell, FSEOG, SMART or TEACH grants.
April 4, 2008
Deciphering the rewards one receives after filling out a FAFSA may be just as difficult as filling out the form itself. Students who plan to take advantage of government loans must pay particular attention to Award Letters detailing their financial aid options.
One of the difficulties associated with taking out government Stafford or PLUS Loans is understanding the differences between the two programs that administer them, the Direct Student Loan Program and the Federal Family Education Loan (FFEL) Program. Students should be aware that although federal Stafford and PLUS Loans may be taken out through either program, the interest rates and conditions may differ based on which is used.
If the college or university participates in the Direct Loan Program, students will borrow money directly from the government at rates that, if the loan is a PLUS Loan, may be slightly lower than those offered through the FFEL program. If the school participates in the FFEL Program, students will be borrowing from a lender they have chosen to work with.
While certain schools participate in both of these programs, about 80 percent of the time, a student will be borrowing through the FFEL program. If a student is taking out only Stafford Loans, the differences are slim. Because lenders participating in the FFEL Program are subsidized by the government, they have to abide by a rule that states all Stafford Loans taken out on or after July 1, 2006 will have interest rates fixed at 6.8 percent.
However, students who also take out a PLUS Loan (a loan offered to parents and graduate students), the interest rates and repayment plans may differ based on program and lender. Students whose parents have borrowed through the Direct Loan Program on or after July 1, 2006 will have their PLUS Loan interest rates fixed at 7.9 percent. If the PLUS Loan is borrowed through the FFEL program, the interest rate may be no greater than 8.5 percent. Individual lenders will choose whether they will set their interest rates at this or a lower number.
It is important that students who borrow through the FFEL Program take more than interest rates into consideration when choosing a lender. Details such as the length or repayment and the penalties for late payments should be considered. Some lenders also offer financial perks to students who have good payment histories, and these should also be taken into account. Usually, schools will provide students with a list of preferred lenders to help them sift through their options, but students should also take other lenders into consideration. While students can trust most financial aid offices to provide them with the most affordable and best-rated lender suggestions, incidences of financial relationships between schools and lenders suggest that students should also conduct some research of their own.
For more information about federal aid, students can take a look at the Scholarships.com Resources section. To find information about scholarships opportunities, students can complete a free college scholarship search.
April 8, 2008
The Free Application for Federal Student Aid (FAFSA) is an excellent opportunity for students in need of college funding. It may be tedious to fill out, but those who receive financial aid will be glad they did. Before submitting, students should review their applications for completeness, accuracy and, of course, deadlines. The June 30th federal cutoff may be months away, but often overlooked state and college deadlines are not.
In addition to federal aid such as Pell Grants, Federal Work Study and loans, students may receive state and college aid based on the information provided in their FAFSA. To be eligible for assistance from one's state and school, students must meet federal, state and college deadlines.
Many states set closing dates between the months of March and May, so students should act quickly. The FAFSA deadlines for individual states are listed below, and college ones can be found by contacting the financial aid office at one's college or university of choice.
Alabama Check with your financial aid administrator Alaska April 15, 2008 American Samoa Check with your financial aid administrator Arizona June 30, 2009 Arkansas For Academic Challenge - June 1, 2008; For Workforce Grant, check with your financial aid administrator;For Higher Education Opportunity Grant - June 1, 2008 (fall term); November 1, 2008 (spring term) California For initial awards - March 2, 2008; For additional community college awards - September 2, 2008 - date postmarked Colorado Check with your financial aid administrator Connecticut February 15, 2008 Delaware April 15, 2008 District of Columbia June 30, 2008 Federated States of Micronesia Check with your financial aid administrator Florida May 15, 2008 Georgia Check with your financial aid administrator Guam Check with your financial aid administrator Hawaii Check with you financial aid administrator Idaho March 1, 2008 Illinois First-time applicants - September 30, 2008 Continuing applicants - August 15, 2008 Indiana March 10, 2008 Iowa July 1, 2008 Kansas April 1, 2008 Kentucky March 15, 2008 Louisiana July 1, 2008 Maine May 1, 2008 Marshall Islands Check with your financial aid administrator Maryland March 1, 2008 Massachusetts May 1, 2008 Michigan March 1, 2008 Minnesota 30 days after term starts Mississippi MTAG and MESG Grants - September 15, 2008 HELP Scholarship - March 31, 2008 Missouri April 1, 2008 Montana March 1, 2008 Nebraska Check with your financial aid administrator Nevada Check with your financial aid administrator New Hampshire May 1, 2008 New Jersey June 1, 2008 if you received a Tuition Aid Grant in 2007-2008 All other applications - October 1, 2008, for fall and spring terms; March 1, 2009, for spring term only New Mexico Check with your financial aid administrator New York May 1, 2009 North Carolina March 15, 2008 North Dakota March 15, 2008 Northern Mariana Islands Check with your financial aid administrator Ohio October 1, 2008 Oklahoma April 15, 2008 for best consideration Oregon Check with your financial aid administrator Palau Check with your financial aid administrator Pennsylvania All 2007-2008 State Grant and non State Grant recipients in degree programs- May 1, 2008; All other applicants - August 1, 2008 Puerto Rico Check with your financial aid administrator Rhode Island March 1, 2008 South Carolina Tuition Grants - June 30, 2008 South Dakota Check with your financial aid administrator Tennessee For State Grant - March 1, 2008; For State Lottery - September 1, 2008 Texas Check with your financial aid administrator U.S. Virgin Islands Check with your financial aid administrator Utah Check with your financial aid administrator Vermont Check with your financial aid administrator Virginia Check with your financial aid administrator Washington Check with your financial aid administrator West Virginia March 1, 2008 Wisconsin Check with your financial aid administrator Wyoming Check with your financial aid administrator
(State deadlines provided by the Department of Education)
April 10, 2008
With a growing number of lenders leaving the FFEL Program, the Direct Loan Program has been receiving additional attention from schools and from the media. Unlike the Federal Family Education Loan (FFEL) Program, the William D. Ford Federal Direct Loan Program, more commonly known as the Direct Loan Program, allows students to borrow money directly from the government.
Each program has its advantages, but schools have more frequently opted for the FFEL. About eighty percent of colleges and universities process their loans through the FFEL Program, one which involves working with lenders who are subsidized by the government. With the student loan market quickly souring, numerous schools are rethinking their decisions and scrambling to find a new plan, the Direct Loan one.
Students whose schools process loans through the Direct Loan Program are less likely to receive financial perks often provided by FFEL lenders, but then again, FFEL lenders staying with the program are cutting back on these anyway. The lack of administrative assistance offered to schools participating in the Direct Loan Program may make it less appealing to financial aid officials, but to those taking out PLUS loans, the program is promising.
Although the government has capped Perkins and Stafford loans at 5 and 6.8 percent respectively, caps on PLUS loans are lower under the Direct Loan program than they are under the FFEL one. If they borrow from the government, graduate students and parents eligible for PLUS loans may pay no more than 7.9 percent in interest. If they borrow from FFEL lenders, they may pay as much as 8.5 percent. The actual interest paid will depend on the chosen FFEL lender, but don't hold your breath for a good deal.
To eliminate or lessen the burden felt by students who borrow from the government or from outside lenders, families should consider applying for scholarships and grants. For information about scholarship and grant opportunities you may be eligible to receive, try conducting a free college scholarship search.
April 11, 2008
Among the many complaints voiced by students in need of federal aid are those concerning insufficient Pell Grant awards and a lack of consideration for students who are smart, but not exactly the braniac kind of smart. These are valid worries, and while they have not been tended to fully, the SMART Grant is a start.
Approved by the Senate in late December of 2005, the relatively new SMART Grant allows students who have demonstrated financial need to receive over and above their annual Pell Grant limit. Eligible students may receive up to $4,000 in SMART Grant money just by filling out a FAFSA.
Because the SMART Grant has been largely overshadowed by the more common and better-known Pell Grant, many students are unfamiliar with the award. The SMART Grant can more than double a student's grant money, but there are a number of stipulations that considerably narrow the eligibility pool.
To be eligible for the SMART Grant, students must have already demonstrated sufficient financial need and must have been eligible for the Pell Grant. But that in itself is not enough. Students must also be majoring in the physical, life, or computer sciences, mathematics, technology, engineering or in a foreign language determined critical to national security. To show that they are dedicated to graduating with a degree in one of the aforementioned fields, students must have already completed the first two years of their undergraduate program—while maintaining at minimum 3.0 GPA. Additionally, students must be enrolled full time and must be taking at least one course required for the completion of their major during the term the grant is received.
Assuming the student meets all of the above criteria, the SMART Grant can make a big difference in an individual's ability to cover college costs. A Pell Grant award may not exceed $3,410 for the 2007-2008 schools year, an amount unlikely to cover annual college tuition, let alone fees and living expenses. An extra $4,000 would certainly make a difference.
April 17, 2008
Nervous about economic turmoil and the uncertainty associated with oversized college loans, students are increasingly turning to community colleges for a low-cost alternative to a postsecondary education. Though certainly lower in cost, some students still need assistance in affording local schools. According to a recent study conducted by the Project on Student Debt, federal loans are not always an option for these students.
Based on the report, 20 percent of community college students living in eight states do not have access to low-interest federal loans. In Georgia, the state which fared worst, about 60 percent of community colleges did not participate in the federal loan program. Throughout the nation, the problem was most severe in low-income areas where students were most likely to seek out federal student aid in the form of loans.
After interviewing administrators at nonparticipating schools, it was found that the most cited reason for not taking part in the program was a fear that high default rates would lead to sanctions on Pell Grant disbursements to students. According to federal regulations, colleges with student default rates that exceed 25 percent for three consecutive years lose the ability to disburse the Pell Grant, a form of need-based federal aid that does not need to be repaid.
Capped at $4,310 for the 2007-2008 school year, the Pell Grant frequently suffices in making community college an option for students, especially those who work while attending school. However, the size of the grant is based on a student’s Expect Family Contribution (EFC) as determined by information provided on one's FAFSA, and many complain that the form does not take into account special circumstances that could result in a student’s inability to contribute the full expected amount. Families who receive no federal assistance in the form of a Pell Grant and those who receive an insufficient amount may be forced to take out more expensive private loans to attend. If ineligible, they may have to work until college is an affordable option.
April 18, 2008
On Thursday, the US House of Representatives passed a bill aimed at halting the mass leave of student lenders from the federal loan program. According to The Chronicle of Higher Education, more than 50 lenders have left the Federal Family Education Loan (FFEL) Program to date. The growing departure has left families fearing that students will have no one to turn to for financial assistance once their Pell Grants and savings run dry.
To lessen the plight of FFEL lenders and students who depend on them for financial assistance, the bill would allow the Secretary of Education to purchase loans student lenders were not able to sell to investors. By pouring money into the loan market, the Department of Education would enable student lenders to use their capital for issuing new loans rather than paying out the original ones.
The new bill also addressed the lender of last resort, an emergency plan wherein guaranty agencies would be forced to lend money to students who were turned away by other lenders. Under the new plan, the Department of Education would have permission to advance funding to the agencies if need should arise.
To make the transition from the FFEL to the lender of last resort loan program easier on students, loans would be petitioned for on a college by college basis rather than a student by student one. Based on previous outlines of the untested program, students in need of a lender of last resort loan would have had to seek permission from the Department of Education and prove that at least two lenders had turned them down before receiving money.
A bill similar to the House version was introduced but not yet addressed by the Senate. Before the ideas are implemented, both the House and the Senate will have to iron out differences and send the final version to the president for approval.
April 22, 2008
To alleviate the affects of the intensifying credit crunch, Sallie Mae has been lobbying for government assistance. In past months, student lenders have been struggling to find buyers for both their loans and their loan securities. Sallie Mae, the largest student lender in the business, has turned to the government for assistance, asking that the US Treasury assuage loan market tensions by purchasing their securities.
In yesterday’s PBS Nightly Business Report, specialty finance analyst Sameer Gokhale and student loan expert Tom Stanton weighed in on the potential effects of such a move. According to Sameer Gokhale, a quick infusion of cash from the Treasury would, “help all of those lenders and ultimately result in a smoother flow of capital back into the student loan system.”
Tom Stanton took a different approach claiming that federal intervention was not yet necessary. “In its last year as a government sponsored enterprise, Sallie Mae made something like 73 percent return on equity, a very generous return. There’s no need at this point to go back to the government and get support,” he stated.
Even if student lenders continue to drop out of the government’s FFEL program and assistance such as that requested by Sallie Mae is not offered by the Treasury, students will have federal student aid resources to rely on. A Department of Education lender of last resort measure wherein the government would act as a lender to students denied loans by other lenders would prevent financial catastrophe, but according to the Nightly Business Report Correspondent Stephanie Dhue, resorting to such a plan would be more time consuming than enhancing funds for the one already in place.
The lender of last resort is yet untested, and, although details are being addressed by Congress, setting up the new program could be painstaking for schools. However, with the Chronicle of Higher Education citing more than fifty FFEL student lender departures, the program may be put into action regardless.
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