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by Paulina Mis

It’s been a long year for colleges across the nation. Aside from the student lender and college study abroad fiascos, investigators are looking more closely at the handling of endowments by colleges.

According to The Chronicle of Higher Education, many schools have accumulated large endowment funds, some in excess of $1 billion. This is tax-free money, and if investments are well-planned, interest will lead to annual gains.

Despite this, college tuition rates have soared across the country, and students are increasingly left with debts that sometimes mirror mortgages. A proposal that could allay this problem involves forcing schools with large endowments to spend about 5 percent of their money each year, or be subject to taxes. After all, endowments are meant to aid, not hoard.

But some schools say that this is not as easy as it may seem. People who donate often leave specific instructions for endowment spending. Money may be set aside, for example, for students who are financially needy and epileptic, or for those who conduct research in the hearing sciences.

Based on the written testimony of four higher education associations, the American Council on Education, the Association of American Universities, the National Association of Independent Colleges and Universities and the National Association of State Universities and Land-Grant Colleges, proposed legislation is based on inaccurate college endowment information.

According to the testimony, an average of 80 percent of endowment assets were restricted at public institutions in 2006, and 55 percent were restricted at private ones. That, of course, still leaves plenty of unrestricted funds that could be used to greatly relieve student needs. This, by the way, is what higher education associations already claim to do.

The issue is a bit of a slippery slope. Endowments could diminish if expenditure choices were left up to college officials. Plus, available money doesn’t necessarily translate into swimming pools of cash for directors to dive into. 

Then again, tuition is getting out of hand, and storing large amounts of money when students have little choice but to take out excessive loans seems a bit immoral. Perhaps additional information is needed on unrestricted money expenditures and on how much is needed to maintain interest that would keep funds afloat.


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by Paulina Mis

Students who applied for financial aid in Louisiana may be worried to find that the company in charge of storing their personal information recently lost a large amount of financial aid data. Actually, a loss is the best-case scenario, the worst being embezzlement. The Louisiana Office of Student Financial Assistance (LOSFA) tried to assuage student fears by stating that the missing information was compressed and that special software was needed to access it—hopefully they’re not exaggerating the advanced technology of zip files.

Thousands of current students and college graduates (going as far back as 1998) could be affected by the loss. Among those at risk are any students who submitted a FAFSA in the state of Louisiana and out-of-state students who sent the form to a college within the state. Those who have a Louisiana College Savings account (START Saving Program) and those who have applied for or received a Tuition Opportunity Program for Students (TOPS) scholarship—a Louisiana-based scholarship—may also be affected.

The information was lost on September 19, 2007, and although search efforts were initiated from the onset, the data has not yet been recovered. Colleges are now informing the public of the incident, and LOSFA has posted additional information on its site. According to LOSFA, the public was not notified earlier to avoid misinformation about data that was misplaced rather than lost. The non-misplacement occurred when the media storage company was loading the backup data into a truck. Social Security numbers and student names were among the missing data.


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by Paulina Mis

In recently published (previously-known) financial aid news, student lenders were found to have made millions by accepting excess subsidies from the government. By finding loopholes in government regulations, the student lender Nelnet, one of the biggest offenders, was able to collect $278 million in excess payments between 2003 and 2005. Based on calculations released by the Washington Post, other lenders accepted an estimated $300 million in excess subsidies between 2003 and 2006—paid for by taxpayers.

Because students applying for government aid are restricted in how much they can borrow, the government offers subsidies to lenders who borrow to students. In exchange for the money, lenders offer students loans at rates that, although usually higher than those offered by the government, tend to be lower than those offered by unsubsidized lenders.

When average student loan interest rates were higher, the government guaranteed lenders a 9.5 percent interest rate for loans. Once average loan rates fell, many lenders continued to take in large subsidies.

And although the government lowered some subsidy sums after rates fell, they continued to guarantee a 9.5 percent rate on loans previously funded with tax-exempt bonds. To extend the pool of loans still eligible for larger subsidies, Nelnet divided tax-free bonds among various pools. They would then claim that pools of loans at least partially composed of tax-free bonds were eligible for 9.5 percent subsidies.

The government did little to stop them in the past, and it is doing little to punish them now. According to the Washington Post, the Department of Education Secretary Margaret Spellings did admit that the government shouldered some of the responsibility for the “confusion”. However, she indicated no intent to pursue full accounting, nor did she suggest that reimbursement from lenders would be sought.


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by Paulina Mis

Based on a new report released by the College Board, government aid has increased in the past few years—but college costs have as well. And they’ve done so more quickly.

According to the report, a public four-year institution charges in-state students 6.6 percent more in tuition and fees than they did last year. The increase for out-of-state students is 5.9 percent.

Students who attend private four-year colleges haven’t fared any better. They may not have to worry about the whole in-state out-of-state thing, but their tuition rates are still higher than those at public colleges, and they are likewise increasing. Since last year, tuition and fees have increased by 6.3 percent at private four-year colleges.

Community colleges are pretty good when it comes to keeping the prices down, but their costs, as well as those of for-profit schools, have been rising as well.

Before you say it, yes, stated cost and actual cost are two different things. You don’t go into a car lot expecting to pay the ticket price, and you probably won’t pay the full price when it comes to college tuition. But that doesn’t mean that you’re being cut a deal. Even though government aid has been increasing—and will continue to do so due to the recent passage of the College Cost Reduction and Access Act—students are still paying more for college.

As my chemistry teacher used to repeat, “All things being equal, things aren’t going well.” (Maybe the second half was mine; it’s just what comes to mind when I think of chemistry.)

Thankfully, students don’t have to depend on the government to completely cover the cost of a college education. There are plenty of financial aid options out there, and they don’t all require interest payments.  Students searching for tuition money can always look to college scholarships and grants for help. Plenty are available, and they won’t cost you a penny (don’t be scammed into believing that you should pay for scholarship consideration). Conduct a free scholarship search, and check out the numerous opportunities available to you.


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by Paulina Mis

A recent evaluation released by NASFAA, an organization representing the interests of financial aid professionals, brings into question the effectiveness of a new student lender auction system. The recently-passed College Cost Reduction and Access Act created, among other things, a new auction system wherein student lenders would bid on exclusive market rights in each state. While the law concentrated on cuts in student lender subsidies and increases in free student grants, the auction system aimed at lowering taxpayer burdens was also enacted.

When the system goes into effect in 2009, lenders interested in participating in the government's subsidized FFEL Plan would have to compete for the lowest subsidies. Those who won the bid would get exclusive state lender rights. Only lenders who would choose to take part in the government’s FFEL program would be effected, and only rights to PLUS loans would be auctioned.

However, the NASFAA report questions whether an auction would really be as effective as it initially seems.The statement suggested that the auction program was based on the rash assumption that lenders who bid for loan rights would be willing to greatly lower subsidy expectations, and that taxpayers would really benefit from lower subsidies. This assumption, based on the report, may prove to be faulty. State competition could be lower than expected, and some states could problematically benefit more than others. After a few years, the competition is likely to decrease altogether, and lenders may simply choose to opt out of the program.

Doubt was also cast upon the assumption that student borrowers would not be affected by the auction system. Based on the report, it is more likely that lenders will get rid of certain student benefits once they have exclusive rights to a state. Borrower services that could be affected include default prevention, financial literacy and electronic processing. The report disputes the claim that very few students are eligible for benefits. Instead, it suggests that most students qualify for at least some helpful services or benefits.

How an auction would in effect change the financial aid system and affect taxpayers remains to be seen. However, a "Bill Gates is about to take over the world" scenario is unlikely. First of all, a total overhaul is not going to occur; PLUS loans will be used to test out the system. Based on the results, a general idea of what could happen in such situations should be obtained. Secondly, the auction would repeat after two years, and it’s unlikely that lenders will get comfy enough to cause a ruckus. Because two lenders will be chosen per state, some competition is likely to keep them in line. Let us also remember that PLUS loans are not the only loans on the planet. If FFEL PLUS loans become too pricy, students could look to competing loans and lenders. FFEL program winners will still have a reputation to upkeep.

Ultimately, the government has the last word on this one. We'll see if that’s a good thing.


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Athletic Scholarships

November 7, 2007

by Paulina Mis

Whether you’re serious about sports or just having a good time (or both), your interest may help you find scholarships. Inhuman ability is not even required—most of the time. A bit of talent and a lot of fun may be all it takes. So flex your fingers, and dust off that keyboard; you may be a scholarship essay away from landing a lucrative college scholarship.  For more information on the scholarships below, including contact details, conduct a free college scholarship search at Scholarships.com

Scholar Athlete Milk Mustache of the Year (SAMMY)

Now in its 10th year, the scholarship program responsible for producing Santa’s drink of choice is affording students an education. And the SAMMY award will probably give student athletes more than Santa ever did.  Each year, the National Milk Mustache’s “Got Milk?” campaign gives away $7,500 scholarships to 25 high school seniors. Winning athletes will also be commemorated with a spot in the SAMMY Hall of Fame at the Disney World Milk House and will have the chance to appear in a Milk Mustache USA Today ad.  Scholarship applications for the 2008 award will be accepted between November 5, 2007 and March 7, 2008. Interested students will be required to write an essay of no more than 250 words about “How Milk Has Helped In My Academics and/or Athletics”.

Women’s Western Golf Foundation Scholarship

Evans Scholars won't be the only ones receiving golf scholarships this year. So far, the Women’s Western Golf Foundation has awarded more than $3.1 million in college golf scholarships, and they’re ready to award more.  This scholarship is available to, of course, women who play golf. Thankfully, applicants don’t need to be pros to win; excellence in the sport is not even a criterion. Winners will be awarded $2,000 grants renewable for four years under the condition that they continue to demonstrate financial need and maintain a 3.0 GPA.  If you are a female, a high school senior and you play golf, you can get this application thing down to a tee.

NCAA Scholarships

Are you looking for baseball scholarships? Basketball scholarships? College sport scholarships in general? The NCAA is the place to search. Of course, to receive a lucrative scholarship from the National Collegiate Athletic Association you have to be good. The NCAA and its cosponsors award over 126,000 scholarships worth more than $1 billion each year to exceptional athletes. Interested student athletes should contact their colleges of choice for more information.

The Lou and Carole Prato Sports Reporting Scholarship

So maybe your baseball swings would be better categorized as swats. So what? If you can rattle off sports stats like a champ, you may still have a shot at winning sports scholarships. Each year, the Lou and Carole Prato Sports Reporting Scholarship program awards a $1,000 grant to an undergraduate (sophomore or older) pursuing a career in TV or radio sports reporting.  If you have good writing skills, a breathtaking voice and killer teeth (the last two are not required but won’t hurt) you may be one step closer to winning a scholarship.


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by Paulina Mis

President Bush is certainly keeping students waiting. Graduates debating loan consolidation and lenders pressuring them to go through with it are standing by to see if the Congress-approved College Cost Reduction Act will finally be signed by the president.

If the bill is passed, the government will cut lender subsidies by October 1st. The savings will then be used to increase Pell Grants to needy students. October is fast approaching, but the president has yet to make a move on the bill approved by Congress on September 7th. The potential law is not only important because of the grant factor; it is important because it may mean cuts in financial breaks offered by student lenders.

Lenders have warned that if the bill passes, students will not be granted many of the financial perks they were once eligible for. One of the perks in jeopardy is the Sallie Mae (the largest lender in the business) interest rate cut on consolidated loans to borrowers who pay on time for three years. Sallie Mae and other lenders are making the best of the situation by pressuring students to consolidate with them before things change.

Except that consolidating is not always in a student’s best interest. Students who have loans issued before July 2006, ones with interest rates that change each year, may lock in this year’s rates by consolidating. (loans borrowed after July 1, 2006 have fixed yearly rates.) If interest rates increase, students may be doing themselves a favor. They will be able to keep their discounts and maintain lower rates.

But there is a large chance that rates will go down. If students wait, they may be able to get lower rates that can offset lender discounts, ones that many students aren’t even eligible for. Students should also remember that by consolidating and increasing the lifespan of their loan, they will be paying more in the long run. They will be paying less each month, but additional payments mean more interest buildup.

Consolidation is a tough call. It’s hard to foretell the future. Numerous financial aid administrators suggest that students contact their lenders to find out exactly what discounts they can keep by consolidating. If they are big and the likelihood of eligibility is there, they can consider.


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Pell Grants

August 29, 2007

by Paulina Mis

Some of the best things in life are free, especially when it comes to financial aid. Students who fill out a FAFSA will quickly realize that a world of financial assistance is at their fingertips. Of all government aid, Pell Grants are definitely the sweetest. Providing aid to millions of undergraduate students each year, the Pell Grant is the largest grant program in the U.S.

Used loosely, a grant is a monetary award that does not need to be repaid. Graduate school grants tend to come with some research strings attached, but not the Pell Grants. All students who submit a FAFSA will be automatically considered for Pell Grants, and all they need to do is to fill out the admittedly pesky form. Information about whether they qualify for aid and how much aid they qualify for will be sent to students by their respective colleges. These school "award letters" will usually arrive sometime between March and April, though dates do vary.

Students who got into college by the hairs of their chinny chin chin need not worry about being ruled out for aid. Pell grant money has nothing to do with GPA, athletics, involvement, talents, and all other things that make the average student shudder. These awards are based mainly on financial need.

If you are raising your eyebrow suspiciously, you deserve a pat on the back: Pell Grants are not perfect. The government can help you, but only to a point. Aside from the financial aid eligibility issue, Pell Grants have fairly low caps. For the 2007-2008 year, the maximum Pell Grant award is $4,310, and this is not the award most students will receive. The amount of aid a student will receive depends on financial need, the cost of school attendance and the length of stay. The hourly status of a student is also considered. Students who can fit their schoolbooks into a purse will receive less aid than those who attend full time. Graduate school students, unfortunately, are not even eligible. Students who cannot attend with under $5,000 in grants may need to look elsewhere for financial aid. Students who show extreme need, graduate from a competitive school or plan to major in the math & sciences may be eligible for additional government grants. Those who don’t should consider applying for scholarships, non-government grants and fellowships. A great place to perform a financial aid search is Scholarships.com. With 2.7 million scholarships & grants worth over $19 billion, Scholarships.com has something for everyone.

For more information on Pell Grants, visit Student Aid on the Web.

For additional information on financial aid, visit the Resources Section of Scholarships.com.


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by Paulina Mis

You will find that, as you go out in search of money to fund your post-secondary education, a lot of questions are going to surface. Naturally, being that we are the largest independent and dedicated resource to scholarships and financial aid on the web, we have a lot of answers. Below, we have a list of some of the most common questions, along with their answers. If you don't find an answer to your question below, check out our Scholarship F.A.Q. page.

  • How can the average student find financial aid for college?

    Students searching for financial aid should begin by filling out a FAFSA and by applying for scholarships. FAFSA submissions can earn students thousands in aid. Many students are worried that their parents’ average income will impede their search for financial aid. That’s not true. Restrictions on availability are not as strict as students think. Even if students are ineligible for free grants, they may receive aid in the form of government loans: these carry much lower interest rates than private loans. Scholarships are another great funding option. There are countless scholarships out there, and many are not merit based. There are the normal, everyday student scholarships, and then there are the downright kooky scholarships. To find both , students can perform a free search at Scholarships.com. With over 2.7 million scholarships, they are bound to find something.
  • Are scholarship searches reliable?

    Some of them are. Naturally, Scholarships.com is not only legit, but also the best way to find the most current information about scholarships. Not only are we on the up-and-up, but we make sure all the awards listed on our site are as well. If they so much as charge an application fee, we don't list them. Students should definitely be wary of services that ask for money. There is no need to pay to for a scholarships search. Scholarship providers are giving money away, not hiding it. Students should also stay away from websites that claim to do all of the work. Most scholarships require students to submit personal information, information that only students will know. Any site that suggests otherwise may be attempting to scam you.
  • Will scholarships affect my eligibility for financial aid?

    They may. The government takes student awards into consideration when offering aid. However, students should not be deterred by this. The effects are not likely to be great. Many schools use student money to offset loan eligibility, not to offset free grant awards. Students who believe they may not be eligible for much aid can benefit greatly by applying for scholarships. Contrary to beliefs of certain celebutantes, more money equals fewer problems.
  • Are graduate students eligible for financial aid?

    Yes and No. Graduate students are eligible to receive money in the form of scholarships, grants, fellowships and assistantships, but they are not eligible for the government Pell Grant. However, graduate students need not worry; there is plenty of non-loan aid out there. Myriad scholarship and outside grant opportunities may be found at Scholarships.com. Many graduates may also receive school grants, fellowships and assistantships; these are usually merit-based. Loans should be used as a last-case resort.
  • My parents have saved for my education; will this affect my eligibility for aid?

    Yes. However, this should not discourage parents and students from saving. Free school grants are capped at $4,300 for the 2007-2008 year. Assuming that students will receive the full amount—many don’t—they may still be lacking. Those who save should set up an account in a guardian’s name. Less than 6% of parents’ assets are considered to be potential college contributions. The percentage increases significantly if students own the money. Parents might want to consider using student money to buy college necessities such as laptops and living extras before submitting their FAFSA.
  • I didn’t receive enough government aid. What can I do?

    You have options. Students who did not receive sufficient aid can try to speak with financial aid administrators. They may be willing to help—especially if a students’ financial situation has recently changed (e.g. job loss or new medical bills). Students may also apply for scholarships and grants, year round. As a last resort, students may apply for loans.
  • How do I know which lender to choose?

    Students who choose to seek out additional aid through loans are likely to find preferred-lender lists at their college. Lists are generally generated based on low interest rates and service quality. However, students should always perform personal research. There have been issues with colleges receiving incentives for placing lenders on preferred-lender lists. When researching, students should compare interest rates, on-time payment benefits, penalty charges and additional fees.
  • What is the difference between loans, grants and scholarships?

    Grants and scholarships are both free monetary awards: they do not need to be repaid. Grants may be offered without service requirements (Pell Grants) or with research requirements (usually the case with graduate students). Scholarships are awards that may be awarded based on merit, talent, major, ethnicity etc. They are not restricted to top students. Plenty of average-student scholarships are out there. Loans need to be repaid, with interest. The government offers the best interest rates on loans. Government guaranteed loans and completely private loans tend to be more expensive.
  • What’s this I hear about 529 Plans and Roth IRAs?

    Students and parents who can put college money aside should take advantage of student savings account tax incentives. Certain accounts are especially created with students in mind. Oftentimes, the deposited money can grow tax-free. Some accounts, though not created for students, offer tax breaks if funds are used for college. The most popular savings account options are the 529 Plan and the Roth IRA. Additional options include the Coverdell and the UTMA.
  • Are there any other things I can do to lower college costs?

    Aside from scholarships, FAFSA, fellowships, and tax breaks, students may consider working. Students who are eligible for Federal Work Study may look into part-time job options. Federal student jobs are usually flexible when it comes to scheduling. Non-federal jobs are usually plentiful on campuses as well. Because there are so many potential workers, the 10 fast-food joints on each block may be willing to accept odd hours if someone is around at all times.
  • Are there any tax incentives for attending college?

    There best known tax incentives are those for 529 savings plans. Many parents don’t realize that there are more breaks out there. The Hope Credit and the Lifetime Learning Credit will allow parents to reap some benefits from this college piggybank drain.
  • How can I increase my chance of landing scholarships?

    There are plenty of ways to increase the chances of winning. One of the best is applying for very specific scholarships. Students are more likely to win if the award is restricted to those within a certain city or major. Scholarships.com helps students find these types of scholarships. Based on profile answers, Scholarships.com can show students a listing of scholarships they are eligible to win.

    To increase the chances of winning, students should also apply early. Some scholarship programs receive submissions from many applicants. Students who apply early are less likely to have applications lost in a pile of submissions. Last but not least, students should remember to pay attention to all regulations. They should only apply for scholarships they are eligible for and should always remember to proofread their work.

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Perkins Loans

August 30, 2007

by Paulina Mis

When it comes to loans, this is the real deal. The Perkins Loan program is a government and school funded program with the smallest interest rates, only 5%. Compared to other low-interest government loans and their high-interest private counterparts, the Perkins Loans are ideal for students who need on-the-spot funds.

Of course, the best of loans are not available to all. Seeing as these loans have the lowest rates, they are usually reserved for the neediest students. Luckily, needy graduate students are also eligible. They may have gotten the cold shoulder when it came to Pell Grants, but graduates still have options when it comes to low-rate government loans.

Even though the government puts forth a large amount of funding for Perkins Loans, the loans are still considered campus-based. This is because schools match some government contributions and are in charge of loan administration. They even have to apply to participate. Not to worry, most schools do participate in the program. Approximately 1,800 schools across the country provide students with financial aid in the form of Perkins Loans.

Students who are interested in the Perkins Loan should submit their FAFSA. Whether a student qualifies and how much aid they qualify for is based on their determined financial need and their school of choice. Undergraduates with the greatest need may be eligible for up to $4,000 in yearly aid; graduates may receive up to$6,000. Over the course of their education, undergraduate may borrow up to $20,000 and graduates can borrow up to $40,000 (this includes undergraduate loans.) Thankfully, if these loans add up, students have up to 9 months after graduating, withdrawing or dropping below part-time status to find repayment funds.

Perkins Loans are a good option for quick aid, but before applying, students should take advantage of free funding options. Performing a free scholarship and grant search at Scholarships.com and browsing through school websites may eliminate the need for loans altogether.


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