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Understanding President Obama’s Student Aid Bill of Rights Initiative

Mar 13, 2015

by Suada Kolovic

The financial aid process can be a daunting one but if you're planning on attending college any time soon, you should know that there are tons of federal student aid options available. From Pell Grants to Perkins Loans to the FAFSA, the funding is out there but your eligibility to receive aid depends on your level of need and, subsequently, how much aid you are eligible to receive. Translation: For the majority of students, loans are inevitable. But don't fret just yet because President Obama announced the Student Aid Bill of Rights initiative to help student borrowers with the challenging student loan process.

What it does:

  • Helps borrowers keep track of their student loans. For years, consumer groups and colleges have been warning that borrowers with more than one servicer are losing track of their loans — and winding up in default as a result. The Education Department acknowledged those concerns last fall, when it adjusted some institutions' "cohort default rates," or the share of borrowers who default on their loans within a certain time frame.
  • Make it easier for borrowers to file complaints involving their student aid. Right now, borrowers can file complaints with a variety of agencies, including the Consumer Financial Protection Bureau, the Department of Veterans Affairs, and the Defense Department. But there isn't a centralized website where all borrowers can lodge their grievances against lenders, servicers, debt collectors, and colleges.

What it doesn't do:

  • Prevents students from overborrowing in the first place. Many of the challenges that student-loan borrowers face in loan repayment are the result of unmanageable debt. After all, if borrowers could afford their loan payments, they wouldn't have to turn to income-based repayment or deal with debt collectors.
  • Overhaul student-loan debt collection. They want the government to handle debt collection itself. But the president's plan merely talks of "raising standards" for student-loan debt collectors, and it’s pretty vague about what those higher standards would look like.

For more on the president's Student Aid Bill of Rights, head over to The Chronicle of Higher Education. . What do you think of the president's attempt to ease the financial burden associated with student loans? Share your thoughts in the comments section. And don't forget, going to college doesn't have to break the bank! Check out our Financial Aid section for more info on federal funding and while you're there, conduct a free college scholarship search where you'll get match with countless scholarships, grants and other financial aid opportunities!

Going to college doesn't have to break the bank or saddle you with tens of thousands of dollars in student loan debt. Check out the Scholarships.com free college scholarship search where you’ll discover you qualify for hundreds of thousands of dollars in scholarships in just a few minutes, then apply and win! It’s that easy!

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Obama Hears Our Plea, Drops Proposal to Raise Taxes on 529 Savings Plans

Feb 3, 2015

by Suada Kolovic

After widespread criticism from both parties, the Obama administration decided to scrap its proposal to raise taxes on college savings accounts. Just last week, we blogged about President Obama's proposal to "roll back" tax benefits of 529 college savings plans and "repeal tax incentives going forward" for Coverdell Education Savings Accounts. Luckily, that's no longer the case.

According to The New York Times, the decision came just hours after Speaker John A. Boehner of Ohio demanded the proposal be withdrawn from the president's budget, "for the sake of middle-class families." Interestingly enough, top Democrats, including Representative Nancy Pelosi of California, the minority leader, pressed for the repeal. Administration officials initially defended the plan as an attempt to redirect tax benefits that they said largely benefit wealthy families toward tax credits that help poorer families. The administration will keep its plan to expand other higher education tax breaks, a White House official told The Times. (For more on this story, click here.)

What are your thoughts on the administration scrapping its proposal? Are you relieved? Share your thoughts in the comments section. And don’t forget to try and fund your education with as much free money as possible – a great place to start is by creating a free profile on Scholarships.com, where you’ll get matched with financial aid that is unique to you!

And don't forget, you should pay for your college education with as much free money as possible! Find as many scholarships and grants as you can before turning to student loans. Visit the Scholarships.com free college scholarship search today where you'll get matched with countless scholarships and grants for which you qualify, then apply and win! It’s that easy!

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What Colleges Can Expect from Congress in 2015

Jan 21, 2015

by Suada Kolovic

With a new year comes a new Congress under new-ish management. Republicans will control the Senate for the first time in eight years, while the House of Representative will have its largest Republican majority in since 1928. But what does any of that have to do with higher education? Here are five predictions, courtesy of The Chronicle of Higher Education:

  1. Gridlock will continue. The gridlock and partisan warfare that we've seen in recent years will continue...and is likely to worsen as the 2016 election approaches. By the fall, the prospects for compromise on major legislation – education or otherwise – will be dim.
  2. Funding will remain tight. Budgets won’t change much, especially once the latest round of across-the-board spending cuts (known as the sequester) is applied. In that context, the most colleges will be able to hope for are modest increases for research and student aid; most programs will have to fight just to keep level funding. The Perkins student loan program, which is set to expire in September, will be particularly vulnerable. If government accountants conclude that continuing the program would cost taxpayers, lawmakers may abolish it.
  3. Colleges will have to compete for attention. Republicans have laid out several priorities for 2015, including overhauling President Obama's new healthcare system and approving the long-stalled Keystone XL pipeline. Renewal of the Higher Education Act – the main law governing federal student aid – is not among those priorities.
  4. Simplification will rule the day. In the Senate, Lamar Alexander of Tennessee has drafted legislation to shrink the FAFSA to the size of a postcard and to reduce the number of grant and loan programs. Meanwhile, House Republicans have offered a road map for reauthorization that calls for "one grant, one loan, and one work-study program" and just two loan-repayment programs.
  5. For-profit colleges will breathe a little easier. Republicans aren’t likely to single out the sector in the way Democrats have. Rather, they will seek to apply any accountability regimes to all colleges.

For more on their predictions, click here. Any you'd like to add? Share your thoughts in the comments section. And don't forget to create a free Scholarships.com profile for a list of scholarships that are personalized to you!

And remember, there’s no need to rely on expensive student loan options to pay for your college education. For more information on finding free scholarship money for college, conduct a Scholarships.com free college scholarship search today, then apply and win! It’s that easy!

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Obamas Free College Proposal Raises Questions

Jan 20, 2015

by Ben Archer

Sure, anything Obama proposes is going to have detractors across the aisle politically. Perhaps due in part to his recent and seemingly more and more frequent use of executive action or just plain old typical partisanship, our president can scarcely do anything these days without intense scrutiny. Naturally, among the chief concerns of Obama’s opponents on the matter is the increase in taxes that would be necessitated by such action. But let’s discuss the other aspect of offering "free" college for all first.

Some people (perhaps none more than those who had to work before, during and/or after attending college to pay for the education and experience they received) may feel as though it would be beneficial for anybody who attends college, community or otherwise, to have some "skin in the game". Certainly, there is a certain psychological aspect to consider; the potential subconscious assignment of value to things that are "free" vs. the ones for which one has worked and saved to attain, isn’t there? Definitely a point worth discussing and possible consideration when discussing the cost of college. Naturally, not all prospective beneficiaries of the "free college" plan would respond in the same way. Certainly, there are many who would take full advantage of such a program and benefit greatly from the opportunity, but would they comprise a large enough portion of the qualifying applicants to the program for it to be viable and sustainable?

Of course, there is also the debate about funding of such a plan. We all know that there is no "free" college or anything else in this world, so who ends up paying for the college education that the students in question would receive through such a plan? Should the taxpayers at large, whether they have kids or not, have already paid for their children to attend college, etc. be required to pay for other people and their children to attend college? Is this the only or, more importantly, the best solution to the problem of the rising cost of post-secondary education? Does anybody have a better idea?

Of course, at first glance, the idea of providing everyone with the opportunity for a free post-secondary education is very appealing to those who can't afford college. This would be, at the very least, a "leg-up" for those who don't have the money to pay for college; a chance to prove to themselves and perhaps to a school to which they might later transfer, that they possess the dedication and aptitude to earn a degree. But with the country still in tremendous debt and many college grads being forced to take jobs that don't require a college degree at all, is this a practical solution? Would students who were not paying take the opportunity for granted due to the lack of having invested any of their own money in the endeavor? Is this a solution that will actually accomplish the goal of providing education to those who need but cannot afford it? There are still many questions yet to be answered and, as always, we would love to offer our comments section for you to annotate and contribute to this debate.

So, what do you think? Should community college be free? Do you think students will do as well in such a situation as they would if they were required to pay tuition? How would you propose supporting such a program? C'mon, speak up and tell us your thoughts!

Going to college doesn't have to break the bank or saddle you with tens of thousands of dollars in student loan debt. Check out the Scholarships.com free college scholarship search where you’ll discover you qualify for hundreds of thousands of dollars in scholarships in just a few minutes, then apply and win! It’s that easy!

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The FAFSA: New Year Means New Application

Jan 6, 2015

by Alexis Mattera

Though it's a day off from school and work, New Year's Day is also a day to get down to business. While you’re starting in on your New Year's resolutions, opening up a new calendar, and packing up the holiday decorations, there’s one more thing that college students and college-bound high school students should do each January. The Department of Education starts accepting the Free Application for Federal Student Aid (more commonly known as "FAFSA") on January 1 each year. State application deadlines fall soon after—as early as February in some cases. So while you might not start classes until August or September, you want to start applying for financial aid as soon as the FAFSA is available each year.

In order to complete a FAFSA, you will need the following:

  • your social security number
  • a driver’s license if you have one
  • bank statements and records of investments (if you have any)
  • records of untaxed income (again, if you have any)
  • your most recent tax return and W2s (2013 for the 2014-2015 FAFSA)
  • all of the above for your parents if you are considered a dependent
  • a PIN to sign electronically (go to pin.ed.gov to get one)

For more information on FAFSA and other daunting financial aid acronyms, head over to our Federal Aid section. And while you’re there, don’t forget to create a free Scholarships.com profile to help you fund your college education.

And don't forget, you should pay for your college education with as much free money as possible! Find as many scholarships and grants as you can before turning to student loans. Visit the Scholarships.com free college scholarship search today where you'll get matched with countless scholarships and grants for which you qualify, then apply and win! It’s that easy!

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Understanding Obama’s New Student Loan Plan

Aug 15, 2014

by Suada Kolovic

With the final month of summer rapidly slipping away, now is the time to buckle down and finalize how you're going to fund your college education. Whether that entails a full-ride scholarship (way to go!), an impressive financial aid package or even necessary loans, it's important to understand your options. Some of you might even be considering President Obama's Pay As You Earn Repayment Plan...if you can figure out what it involves or if it's even an option. If you're confused about this plan, you're in luck: U.S. News and World Report has broken down the big questions you need answered below:

  • Will these updates help me? If you have federal student loans, maybe. Starting in 2015, borrowers who took out loans before October 2007 or stopped borrowing by October 2011 will be eligible to take advantage of the Pay As You Earn Repayment Plan. Government officials estimate this includes an additional five million people.
  • How much could I save? Now, most federal loan borrowers are eligible for income-based repayment – a different repayment plan that has the same premise as Pay As You Earn. Unlike Pay As You Earn, however, IBR caps payments at 15 percent of one's disposable income and forgives the balance after 25 years of payments. Those differences could mean a lot, both in monthly payment amount and in the total amount paid over time.
  • Didn't the president mention loan refinancing too? He did, but in relation to a bill that Massachusetts Senator Elizabeth Warren introduced last month called the Bank on Students Emergency Loan Refinancing Act. This legislation would allow federal and private student loan borrowers with older, higher interest loans to consolidate them within the direct loan program at today's lower fixed interest rates. That bill still has to pass both the Senate and the House, something that may not happen because Republicans are opposed to paying for the bill with a gradual increase in tax rates for those in the higher income brackets.
  • What else should I know? There is still a long way to go before the president's executive action takes effect: December 2015 is the target implementation date. The overall plan includes quite a few other ideas that will make a difference to student loan borrowers, like improving financial incentives for federal student loan servicers to help borrowers stay out of default, making it easier for active-duty military to receive benefits and increasing communication partnerships with entities such as the IRS and tax companies to ensure consumers are aware of their higher education rights and benefits.

What do you think of the president's attempt to ease the financial burden associated with student loans? Let us know your thoughts in the comments section. And for more information on federal funding, visit our Financial Aid section.

And remember, there’s no need to rely on expensive student loan options to pay for your college education. For more information on finding free scholarship money for college, conduct a Scholarships.com free college scholarship search today, then apply and win! It’s that easy!

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Five Tips for Maximizing Merit Aid

Jul 11, 2014

by Suada Kolovic

Figuring out the bottom line when it comes to the cost of your college education is definitely stressful. With everything that goes into determining your financial aid package (your parents’ income, your earnings and your family’s net assets), it’s important to understand that merit aid (aid based on a student’s attributes like (academics, athletics, extracurriculars, etc.) is available to student regardless of their “need.” New federal rules are blurring the distinction between scholarships awarded on merit and grants awarded because of a student’s financial need – for instance, a growing number of colleges now award “need-based” aid to students from families earning six figures! – so we’ve compiled a few helpful tips to maximize your chances for merit aid and increase your overall financial aid package.

  1. Fill out the FAFSA. Federal rules have changed and college aid officials are now allowed to award need-based aid to students whose parents earned decent salaries last year but have recently been laid off; institutions can also make accommodations for a family’s unique circumstances, such as high medical bills.
  2. Apply to schools where you’d rank at the top. While your dream school might be an Ivy League, you should apply to at least a few colleges where your GPA would put you in the top 25 percent of the student body.
  3. Do the research. If you’re interested in a college, find out what it has to offer when it comes to merit aid. You might qualify for more awards than you think!
  4. Before making a final decision, compare net prices. Consider the cost of attendance in its entirety, including tuition and fees, room and board, books and transportation. The school that offers the most in merit aid might not be the best choice; sometimes the college offering the largest merit scholarship might have the highest net price because its tuition is higher.
  5. Don’t be afraid to negotiate. Believe it or not, you have leverage when it comes to negotiating your merit aid package. If you have received admission letters from two or more universities and your first choice has a higher net price than your second choice, contact your first choice institution (which one is “that institution”...first or second choice?)! Some schools might be willing to match the merit aid offered, which would provide you the opportunity to attend your first choice school for less money!

Can you think of any tips that we might have missed? If so, please add them to our comments section! For more information on finding money for college and how to properly fund your college education, check out Scholarships.com Financial Aid section.

And remember, there’s no need to rely on expensive student loan options to pay for your college education. For more information on finding free scholarship money for college, conduct a Scholarships.com free college scholarship search today, then apply and win! It’s that easy!

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What’s in a Decimal Point?

Online FAFSA Error Makes Low-Income Filers Look Like Millionaires

Jul 7, 2014

by Suada Kolovic

When it comes to the Free Application for Federal Student Aid (FAFSA), a decimal point could make a world of difference: An update to this year’s FAFSA has cost some low-income filers a chance at some serious federal student aid.

For the 2014-15 FAFSA, the government expanded several income and asset fields in the online form to accommodate higher incomes. Herein lies the problem: Some lower-income filers are missing the .00 outside the box and entering cents into the text field. And when the do that, an income of $28,532.79, for example, is converted into $2,853,279. Big mistake. Huge. If the error isn't caught or corrected on individual forms, the filers could lose out on Pell Grants or other need-based student aid. According to Jeff Baker, policy liaison at the Education Department’s Office of Federal Student Aid, the department has already identified 165,000 individuals who've made the mistake. He's estimated that a majority of colleges have at least one affected student, while some may have hundreds. "It's a serious problem," said Baker at the National Association of Student Financial Aid Administrators’ annual meeting. "We have to fix it." (For more on this story, click here.)

With all the headaches that typically go into applying for federal aid using the FAFSA, what are your thoughts on the current roadblocks? Why not just have filers round income to the nearest whole dollar amount? For more information on the FAFSA, the importance of applying and what you'll need before you get started, check out Scholarships.com’s Federal Aid section.

Going to college doesn't have to break the bank or saddle you with tens of thousands of dollars in student loan debt. Check out the Scholarships.com free college scholarship search where you’ll discover you qualify for hundreds of thousands of dollars in scholarships in just a few minutes, then apply and win! It’s that easy!

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Community College Students: Avoid These Student Loan Challenges!

Jun 27, 2014

by Suada Kolovic

Figuring out how you're going to pay for your college education can be intimidating. No one wants to pay off student loans for the rest of their lives, full-tuition scholarships are rare and federal student aid seldom covers all college costs, so considering a community college to curb the financial strains is smart! But attending a community college doesn't necessarily dismiss the likelihood of defaulting on your student loans: According to the most recent cumulative default rates, the percentage of two-year public school students who default is 18.7 percent and 13.2 percent for students at two-year private and nonprofit institutions – that's more than double their four-year counterparts! If you're a community college student, check out U.S. News and World Report's three tips you can follow to avoid defaulting on your student loans.

  • Think before you borrow. Just like your other obligations, a student loan is a commitment. You are responsible for repaying it whether you complete your education or not. By thinking before you borrow, you can help ensure the former comes true.
  • Maximize your federal financial aid. Contrary to popular belief, financial aid is available for community college students. And while you should think before you borrow, you can be less reluctant if you go with federal loans.
  • Stay in school. Maximizing federal financial aid can help community college students in an additional way: It can keep them in school if they run out money. Taking out student loans without going on to complete your program of study can lead to big repayment problems. So whether your goal is a formal credential from a community college or to eventually transfer to a four-year institution, it’s important to stay on target so you don’t end up with debt but no diploma.

Can you think of any tips to add to this list? If so, please share them in our comments section. For more information on the pros and cons of attending a community college, head over to Scholarships.com College Prep section.

Going to college doesn't have to break the bank or saddle you with tens of thousands of dollars in student loan debt. Check out the Scholarships.com free college scholarship search where you’ll discover you qualify for hundreds of thousands of dollars in scholarships in just a few minutes, then apply and win! It’s that easy!

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President Obama Uses Executive Action to Push Student Loan Forgiveness

Jun 20, 2014

by Scholarships.com Staff

President Barack Obama reportedly issued an executive action on Monday in an effort to alleviate student loan repayment problems for those with large post-college debt and salaries that make their loan payments unaffordable.

The executive order issued by the president, pushing through a program known as the Pay As You Earn Repayment Plan would cap loan payments at 10 percent of monthly income for the borrowers of federal direct loans. Federal law currently allows most students to do this already, but President Obama's order further extends this option to students who took out a federal direct student loan before October 2007 as well as those who haven’t borrowed since October of 2011. As many as 5 million more borrowers will reportedly be affected by this extension, which will begin in December of next year. You can determine eligibility by visiting the Federal Student Aid Repayment Estimator

Opponents of the executive order are concerned by the potential of students taking out enormous loans to attend expensive schools and majoring in subjects that are unlikely to prepare them for (or align them with) lucrative careers and the ability to repay the debt. This would result in taxpayers throughout the country bearing the burden of these loans, regardless of whether they or their children benefitted from a college education, let alone forgiveness of any of their debts.

For some, this is an opportunity to get out from under crushing debt, but at what cost? Where does the “forgiven” balance show up? Should the taxpayer at large shoulder this additional burden or should aspiring college students be seeking more affordable options for education and/or preparation for their professional lives?

And don't forget, you should pay for your college education with as much free money as possible! Find as many scholarships and grants as you can before turning to student loans. Visit the Scholarships.com free college scholarship search today where you'll get matched with countless scholarships and grants for which you qualify, then apply and win! It’s that easy!

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