Skip Navigation Links

Federal Student Aid

Strategic Plan, Fiscal Years 2011-15

September 30, 2010

Federal Student Aid

by Suada Kolovic

In a new strategic plan, the Education Department’s Office of Federal Student Aid (FSA) promises to take on additional responsibilities to improve its outreach to students and “intensify efforts” to reduce fraud and abuse in its programs. The plan is composed of five strategic goals and sets performance targets for each of them for the next five years. One goal calls for identifying students for whom financial assistance can make a difference and reaching out to these students more effectively, while another objective promises to ensure that funding for college will serve the interests of the students first and foremost by ensuring “program integrity.”

As the largest single source of funding for postsecondary education in the United States, FSA distributes almost $130-billion in aid a year and administers a loan portfolio valued at $700-billion. And with bank-based lending programs coming to an end, its portfolio of Direct Loans is expected to grow from four million loans in 2008 to 29 million by 2015. When asked how the transition to direct lending is going, William J. Taggart, the office's chief operating officer, said that 96 percent of colleges are now in the program. (The remaining 4 percent are mostly small vocational schools that typically award fewer than 250 loans a year.) The participation rate is impressive, however, Taggart reports that the organization needs to step up its game when it comes to making this information available to students.

"We have to do a better job of making sure students who are eligible for aid know we're here," Taggart said.

Note: The best indicator of your eligibility for all federal aid is the FAFSA, which is available online to speed up processing and is ready for you to fill out starting Jan. 1 of each year.

Comments

Obama Extends an "Opportunity" to College Students

The American Opportunity Tax Credit, That Is

October 13, 2010

Obama Extends an "Opportunity" to College Students

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 out there – from Pell Grants to Perkins Loans to FAFSA – but your eligibility to receive aid depends on your level of need and, subsequently, how much aid you are eligible to receive. So, to the folks right in the middle: How does a tax credit sound? The American Opportunity Tax Credit, created in the 2009 economic stimulus bill, expires in 2010, but President Obama has proposed making it permanent, with a price tag of $58 billion over 10 years.

Now what does this mean to you? Because the Opportunity Tax Credit is more generous than its predecessor, the Hope Tax Credit, it provides a credit of up to $2,500 rather than $1,800 and it phases out at a higher income level – $160,000 for married couples filing jointly instead of $100,000. According to a report by the Department of Treasury, it’s also partially refundable so students and families with little or no tax liability can receive up to $1,000 of it as a tax refund. The report comes as lawmakers are debating a bill to extend several expiring tax credits. Recent versions would not extend the American Opportunity Tax Credit, but President Obama hopes lawmakers will reconsider.

"The president obviously feels strongly that this is an important relief for middle-class families," said Gene Sperling, counselor to the Treasury Secretary.

Comments

Unemployed Boston College Law Student Wants a Refund

October 28, 2010

Unemployed Boston College Law Student Wants a Refund

by Suada Kolovic

Recent college graduates entered one of the worse job markets in history. And while some have opted to stick it out busing tables to pay the debt caused by their college education, a third-year Boston College Law School student decided he wasn’t willing to bear the cost of an education that did not guarantee a job upon completion. In an open letter posted on EagleiOnline — an online student-run newspaper at BC’s law school — the anonymous student made a proposition to the school’s dean: Refund his tuition and he’ll leave school without a degree.

The student explained that the lackluster job market, a massive student loan debt load and his wife's pregnancy were all causing him undue stress. And he went on to say, “This will benefit both of us: on the one hand, I will be free to return to the teaching career I left to come here. I'll be able to provide for my family without the crushing weight of my law school loans. On the other hand, this will help BC Law go up in the rankings, since you will not have to report my unemployment at graduation to US News.”

How did the school respond? Shockingly enough, BC did not meet the student’s request. According to the Boston Herald, the law school said in a statement that while it is "deeply concerned" about its students' job prospects no institution of higher education can guarantee a job after graduation. "What we can do is provide the best education possible, and work together to provide as many career opportunities as possible," the statement said.

What do you think? Should tuition be conditional?

Comments

Consider Consolidating Your Private Student Loan Debt

May 13, 2014

by Suada Kolovic

If you're a recent college graduate, chances are you'll have to start paying off your student loans sooner than you think. And even with the economy in a slump, don't expect a free pass on not paying them back. So while keeping track of the multiple loans you've accrued during your college career is tasking, it's important to understand your options. An often overlooked possibility is private loan consolidation. Aren't familiar? Allow me to explain.

A consolidation loan can simplify the loan repayment process by allowing the borrower to combine several types of loans into one. And often, the interest rate on a consolidation loan is lower than the rate on a typical student loan. Until recently though, few banks have offered consolidation loans for private student debt. Why? According to a report last year by the Consumer Financial Protection Bureau, part of the problem was the high cost of marketing to potential borrowers and finding adequate financing to provide the loans. But that may be changing: In January, Providence, R.I.-based Citizens Bank said it would begin offering private consolidation loans which could signal that change is afoot nationally. Wondering who should consider a consolidation loan? It's an ideal option for students who have finished school, are gainfully employed and have been making on-time payments on your private student loans for at least a year or two. The real advantage of refinancing is the chance to get a lower interest rate on your debt and to simplify their monthly payments into a single bill. (For more on this story, click here.)

For more information on student loan consolidation, borrowing responsibly and tips on repaying your student loans, head over to Scholarships.com financial aid section.

Comments

Pay It Forward Plan Draws Serious Criticism

July 21, 2014

by Suada Kolovic

When it comes to paying for a college education, it seems as though students have two options: deal with impossibly high payments while they're in school or crippling debt for years afterwards. Well, Oregon students were provided a third option last year when legislators approved the Pay it Forward plan that would allow students to attend state colleges without paying tuition or taking out student loans but would instead commit a small percentage of their future incomes to repaying the state. It turns out, however, that said plan isn't the saving grace for college students afterall.

First proposed by students at Portland State University, Pay It Forward has drawn serious criticism since Oregon passed a law to study the idea. According to a report by the American Association of State Colleges and Universities, analysis shows that the plan would leave most graduates deeper in debt than if they had taken out loans and would throw colleges’ balance sheets into uncertainty. Here are some of the more prevalent points in the association’s report but for a more detailed look, click here:

  • Pay It Forward does not account for non-tuition costs like room and board.
  • Students who generally rack up the most debt – those at for-profit and private nonprofit institutions — would not be eligible for the program.
  • The program would have “enormous” start-up costs.

Early estimates suggest that Oregon would have to take about 3 percent of a former student’s earnings for 20 years for it to work. With that being said, what are your thoughts on Pay It Forward? Do you think it’s too soon to tell if this is a viable option for other states to adapt?

Comments (1)

Understanding President Obama’s Student Aid Bill of Rights Initiative

March 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!

Comments (6)

For Some, "Pay it Forward" A Step Backward

3% Over 24 Years Not a Bargain for All

August 22, 2013

For Some, "Pay it Forward" A Step Backward

by Kevin Ladd

Dreamed-up in Portland Oregon and soon lauded in New Jersey, Washington, Ohio and elsewhere, the "Pay it Forward" plan could cost some folks more than simply taking out loans at 6.8%. With the plan calling for approximately $9B in start-up funds and requiring college grads to pay 3% of their income for the 24 years following graduation, only those making below a certain amount would benefit. Certainly, it would be great in the beginning and sounds easier than securing loans, but anybody looking at the big picture and planning to earn over $55K per year upon graduation should probably consider a more traditional path. As always, we recommend finding as many scholarships as possible to keep student loans to a minimum. Free money is better than either of the aforementioned options!
Comments

Merkley's "Pay it Forward" Guaranteed College Affordability Act

Dem. Senator Jeff Merkley Proposes Income-Based Loan Repayment

August 20, 2013

Merkley's "Pay it Forward" Guaranteed College Affordability Act

by Kevin Ladd

The new student loan bill Senator Merkley (D-Ore.) plans to introduce is a progressive idea intended to battle high loan repayment costs and hopefully restore the middle-class in the United States. The announcement of this proposal came after President Obama signed a student loan bill into law on August 9th. The new loan bill sets interest rates for undergraduate loans to the 10-year Treasury note plus 2.05% with a cap of 8.25%. While some Democrats oppose the bill as they feel Congress shouldn't "profit off the backs of students", it seems widely to be seen as an improvement over the default doubling of rates from 3.4% to a flat 6.8%. Merkley's goal is to make much bolder steps and pursue steps that more favor the middle-class and promote more affordable post-secondary education. As always, any ideas or comments you have are welcome and we will be sure to pass your ideas onto both the President and Senator Merkley!
Comments

Federal Student Loans

November 6, 2007

by Kevin Ladd

Loans don’t incite pleasant feelings in students, in anyone on the borrowing side. It doesn’t help that the media has made it a point to discuss, extensively, what appears to be the newest trend… mortgage loan defaulting. Student loans aren't as large as mortgages, but for a growing number, they are catching up.

Regardless of cost, there are a lot of dedicated students out there, and until the college-financing system undergoes a major overhaul (cross your fingers but don't hold your breath), loans may be inevitable. Before taking out loans, students should complete a FAFSA and conduct a free scholarship search. Those who still need money should apply for federal loans. Only after exhausting government loans should one consider private student loans

As a result of the recently passed College Cost Reduction and Access Act, there will be a decrease in interest rates on federal college student loans. That's great news for students with large financial aid needs, but loan rates have not yet been changed. Even before government rates become less expensive, it is in a student's best interest to see what the government has to offer before looking elsewhere. Below are the federal student loan options available to those in need.

Stafford Loans- Students who are interested in taking out a Stafford Loan (or other types of federal student loans) will need to fill out a FAFSA. The amount that a student can borrow will depend on a student’s year in school as well as on whether the Stafford Loan is subsidized or unsubsidized (only a portion of the amount may be subsidized). Stafford Loans disbursed after July 1, 2006 are fixed at a 6.8 % interest rate, but lower rates are in the works.

  • For the 2007-2008 school year, dependent undergraduate students attending college full time may borrow between $3,500 and $5,500 (borrowing limit increases after each completed year).
  • Independent undergraduates or dependents whose parents were denied a PLUS Loan may borrow between $7,500 and $10,500 (again, freshmen may take out less than seniors).
  • The maximum amount of a professional or graduate student loan is a bit larger—as is graduate tuition. This year, students may borrow up to $20,500, regardless of their year in graduate school.

PLUS Loans- The Parent Loan for Undergraduate Students or PLUS Loan is offered to, as the name suggests, parents of undergraduate students. Recently, the loan has also been made available to graduate school students. PLUS Loan amounts may not exceed the total cost of attendance minus any other financial aid received. If the student’s estimated cost of attendance (amount determined by each school) is $6,000 and the student receives $4,000 in aid, only $2,000 may be borrowed. To take advantage of this loan, students must max out their Stafford Loans, and doing so is in a student’s best interest anyway. PLUS Loans have higher interest rates than Stafford Loans; those disbursed on or after July 1, 2006 are fixed at 7.9% for Direct PLUS Loans and at 8.5% for FFEL PLUS Loans.

Perkins Loans- Although Perkins Loans are made with government money, they are normally classified as campus-based aid because they are administered by schools. Perkins Loans are offered to students with exceptional need, and only a limited amount is available. Once a school runs low on Perkins Loan funds, students will not receive as much (the same holds true for federal-work study opportunities). This is why students are generally advised to submit their FAFSA early. The earlier they apply, the greater their chance of receiving some forms of aid. The loan amount received through the Perkins Loan program depends on the amount a school has, on already-received aid and on the financial needs of the student. Students who qualify can borrow up to $4,000 each year and pay it off at a 5% student loan rate.

Comments

Posted Under:

FAFSA , Financial Aid , Student Loans



Scholarships.com Financial Aid Calculators

November 9, 2007

by Kevin Ladd

Worrying about the application process is hard enough. When you add tuition costs, necessary savings, and loan interest rates into the equation, the numbers equal a headache. Don’t worry; we’ll give you a hand. Take advantage of the free financial aid calculators provided by Scholarships.com, and take things one day at a time—we’ll crunch the numbers for you.

College Cost Worksheet Calculator

Before accepting college offers, you should know how much an education at your school of choice will cost you. Not everyone has unlimited funds, and assuming that loan payments will take care of themselves after graduation is not the greatest policy. To help you estimate the costs of a college education, we have created a college cost worksheet. Just type in some estimates and find out what you should expect. To search for a college and find the cost estimates by school, you can also use our free college search.

Savings Planner Calculator

To secure a sound financial future, students should search for scholarships and set money aside for college. By using our savings planner calculator, you can find out where you will stand by the time freshman year rolls around. If you are still far behind, you may want to scrooge up, get a head start on scholarship applications and consider a part-time job.

Future College Cost & Savings Calculator

College is expensive, and even those who save are likely to encounter big school costs. Most students will need to make large contributions while attending school. With the help of our Future Cost Savings Calculator, you can estimate just how large your yearly contributions will have to be. We have already taken into account the estimated yearly increases in tuition.

Monthly Loan Payment Calculator

Sometimes loans are unavoidable. If you plan to borrow for an education, you should at least know what to expect when your bill arrives. Having to give up your career of choice in favor (or disfavor) of one that’s less desirable but higher paid can be disappointing. To avoid any problems, figure out how much you can afford to pay each month, and use our calculator to help you do it.

Comments

Recent Posts

Tags

ACT (19)
Advanced Placement (24)
Alumni (17)
Applications (80)
Athletics (17)
Back To School (73)
Books (66)
Campus Life (454)
Career (115)
Choosing A College (51)
College (989)
College Admissions (238)
College And Society (296)
College And The Economy (371)
College Applications (144)
College Benefits (289)
College Budgets (214)
College Classes (444)
College Costs (488)
College Culture (588)
College Goals (386)
College Grants (53)
College In Congress (87)
College Life (554)
College Majors (220)
College News (576)
College Prep (166)
College Savings Accounts (19)
College Scholarships (157)
College Search (115)
College Students (441)
College Tips (113)
Community College (59)
Community Service (40)
Community Service Scholarships (26)
Course Enrollment (19)
Economy (119)
Education (26)
Education Study (29)
Employment (41)
Essay Scholarship (38)
FAFSA (55)
Federal Aid (99)
Finances (70)
Financial Aid (413)
Financial Aid Information (57)
Financial Aid News (56)
Financial Tips (40)
Food (44)
Food/Cooking (27)
GPA (80)
Grades (91)
Graduate School (56)
Graduate Student Scholarships (20)
Graduate Students (65)
Graduation Rates (38)
Grants (62)
Health (38)
High School (130)
High School News (71)
High School Student Scholarships (182)
High School Students (307)
Higher Education (110)
Internships (526)
Job Search (177)
Just For Fun (114)
Loan Repayment (39)
Loans (47)
Military (16)
Money Management (134)
Online College (20)
Pell Grant (28)
President Obama (24)
Private Colleges (34)
Private Loans (19)
Roommates (100)
SAT (22)
Scholarship Applications (162)
Scholarship Information (178)
Scholarship Of The Week (269)
Scholarship Search (217)
Scholarship Tips (86)
Scholarships (402)
Sports (62)
Sports Scholarships (21)
Stafford Loans (24)
Standardized Testing (45)
State Colleges (42)
State News (33)
Student Debt (83)
Student Life (510)
Student Loans (139)
Study Abroad (67)
Study Skills (215)
Teachers (94)
Technology (111)
Tips (505)
Transfer Scholarship (16)
Tuition (93)
Undergraduate Scholarships (35)
Undergraduate Students (154)
Volunteer (45)
Work And College (83)
Work Study (20)
Writing Scholarship (18)

Categories

529 Plan (2)
Back To School (357)
College And The Economy (510)
College Applications (249)
College Budgets (341)
College Classes (564)
College Costs (746)
College Culture (926)
College Grants (133)
College In Congress (131)
College Life (945)
College Majors (330)
College News (903)
College Savings Accounts (57)
College Search (389)
Coverdell (1)
FAFSA (116)
Federal Aid (132)
Fellowships (23)
Financial Aid (703)
Food/Cooking (76)
GPA (277)
Graduate School (107)
Grants (72)
High School (536)
High School News (256)
Housing (172)
Internships (565)
Just For Fun (222)
Press Releases (1)
Roommates (138)
Scholarship Applications (221)
Scholarship Of The Week (345)
Scholarships (594)
Sports (74)
Standardized Testing (58)
Student Loans (225)
Study Abroad (61)
Tips (828)
Uncategorized (7)
Virtual Intern (532)

Archives

< Feb March 2015 Apr >
SunMonTueWedThuFriSat
22232425262728
1234567
891011121314
15161718192021
22232425262728
2930311234

<< < 1 2 3 4 5 6 7 8 9 10  > >>
Page 6 of 23