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Student Loan Debate Heats Up

April 28, 2009

by Scholarships.com Staff

As Congress moves forward with a federal budget plan for 2010, rhetoric is ramping up on both sides of what is proving to be one of the most contentious budget debates so far:  whether or not to eliminate the Federal Family Education Loan Program.  President Obama initially proposed this move in his budget outline, saying that a move to Direct Loans would result in a savings of $48 billion, money that could be put towards expanding the Federal Pell Grant program.

After the Congressional Budget Office revised the estimated savings to $94 billion over 10 years, many members of Congress and several higher education professional organizations have been offering up tentative support for the plan.  Democrats on the joint budget committee have even begun paving the way for this portion of the budget to be eligible for reconciliation, a filibuster-proof process that will allow portions of the budget to pass with a simple majority vote in the Senate.

However, lenders and other groups have begun suggesting and campaigning for alternatives that would allow the bank-based student loan program to continue to exist while still cutting costs to some extent.  Concerns have been raised that Direct Loans will not be as efficient or as kind to borrowers in the long run, though the credit crisis has made the program especially appealing as FFELP has required repeated government interventions to avoid grinding completely to a halt.  With many schools voluntarily making the switch to direct lending based on the program's current stability, concerns have also been raised about a rapid expansion in Direct Loans overwhelming the program as it currently stands.  Others worry that eliminating FFELP may speed lenders' exodus from private loans, ultimately leaving many students in a worse place financially than they find themselves in now.

What's emerging is a war of words between banks and the President.  In a speech on Friday, Obama characterized lenders as, "gearing up for battle," to which he responded, "So am I. . . And for those who care about America's future, this is a battle we can't afford to lose."  Considering the President's popularity and lenders' tarnished reputations from crisis after scandal after crisis over the last two years, we may see big changes happening soon in student loans.

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Colleges Have Facebook and Know How To Find You

April 29, 2009

by Scholarships.com Staff

By now you've probably been told at least once to be careful what information you put online.  A survey conducted by the National Association for College Admission Counseling serves as a reminder of just how many people might be viewing your online presence, and just how high the stakes can be.

According to results published in Inside Higher Education, 26 percent of colleges admit to running students' names through search engines, while 21 percent use social networking sites, such as Facebook.  While this is far from everyone, it's still a significant portion of schools, and if you apply to even four or five, there's a chance that at least one of those schools has a policy of checking up on at least some prospective students.

This doesn't mean you need to agonize over the psychological implications of every single status update, though.  Schools that report viewing students' online profiles do so primarily in the context of reviewing candidates for prestigious scholarship awards or highly competitive degree programs, mostly to make sure nothing potentially embarrassing to the program surfaces when your name is announced.  Setting debates over privacy and potential discrimination aside for a moment, this information should give you an idea of what you should and should not post, and why.

If you're applying for scholarships or your college search is skewing towards the prestigious and highly competitive, you may want to have a chat with your friends about any incriminating photos they've tagged you in.  Similarly, you may want to avoid publishing any highly offensive or objectionable content on anything that appears high in a list of search results for your name.  All of this is good practice for life, since admission officers are hardly the only people who may think to look into your online life before offering you something you want.  Scholarship providers, internship programs, and future employers may all check out this information.

So before starting your scholarship search or writing your college application essays, do a search for your name and see what comes up.  If it's something that may embarrass you or hurt your chances of winning scholarships or gaining admission to your dream school, consider deleting it.  Maintaining a professional image online is going to benefit you in both the short and long term.

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Scholarships Are Still Available for Students Short on Aid

May 1, 2009

by Scholarships.com Staff

As prospective college students are making their final decisions and sending in deposits to their schools of choice, many are finding themselves unexpectedly short on financial aid.  The New York Times and Los Angeles Times each ran a story today on California high school seniors struggling to pay for school in the midst of their state's continuing economic woes.  State budget difficulties have caused schools to limit enrollment and stretch institutional aid even thinner, while high unemployment means more students need more aid than before.

Students in Florida are also struggling to make up for an unexpected gap in their financial aid.  According to the Miami Herald, recipients of the state's Bright Futures scholarships will not see an increase in their awards next year, despite projected tuition hikes of 8 to 15 percent across the state.

Other states and university systems are also facing difficulties meeting students' full financial need, so many other students are likely to be in this boat.  If you've completed a FAFSA and applied for institutional and state aid, but are still short of what you need to pay for school, there are still scholarship opportunities out there, even this late in the game.  For example, Scholarships.com is currently accepting applications for our Resolve to Evolve Scholarship, a $1,000 award that can be applied towards your tuition next fall. There are many other college scholarships available. You can find out more by doing a free scholarship search.

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Students Encouraged to Write to Congress about Student Loans

May 6, 2009

by Scholarships.com Staff

A little over a week after announcing his plans to gear up for battle with student lenders over the future of the Federal Family Education Loan Program, President Obama has begun calling in the troops.  An e-mail message sent to young Obama supporters by the Democratic National Committee is urging students to speak up in favor of the President's proposal to switch all federal lending to the Direct Loans program and to use the savings to expand Federal Pell Grants.

Students have been asked to call, write, or e-mail their Representatives and Senators to let them know what they think of the proposal to eliminate FFELP for Stafford Loans and PLUS Loans.  The text of the e-mail, as reported by The Chronicle of Higher Education, urges students to stand against "special interests" and to help "fix a broken system."  Rhetoric on the other side has focused primarily on preserving jobs and preserving choice (technically, the choice is primarily left to schools, not students, as students aren't able to choose freely between DL and FFELP until they graduate and consider consolidation loans).

Regardless of whether you favor or oppose this plan, now is a good time to let your people in Congress know how you feel, since changes in federal student financial aid are likely to affect you directly.  So, what do you think?  What changes, if any, should Congress make to student loans? Do you plan on writing to Congress about this issue?

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High School Seniors: Your Last Semester Still Matters

May 7, 2009

by Scholarships.com Staff

We're now a solid week into May, and for most high school seniors, that means a switch back from obsessively worrying about making it into college to concentrating on the more immediate task of trying to make it to graduation while finalizing those all-important summer plans.  Once AP exams are out of the way and college deposits are paid, it can be tempting to shift focus entirely away from schoolwork and towards enjoying your last days as a high school student.

However, an article in USA Today warns that the temptation to just coast through the last days, weeks, or even months of one's senior year of high school can carry dire consequences this year.  Colleges typically request a final transcript once you've officially graduated from high school, and often include language in their admission letter saying that their decision is contingent on receiving this information.  While colleges have always given this final semester at least a cursory glance, in previous years, they have tended to largely be forgiving.  But as with nearly everything else in college admissions, this year may be different.

Many schools are admitting more students and adding more names to their wait lists due to a larger group of applicants and greater uncertainty about where students will end up attending college.  As a result, it's more possible now than ever that some schools will overfill their freshman class, prompting them to need to rescind some admission invitations, while others may find themselves drawing extensively from the wait list, meaning students who may not have been reevaluated at all are having their transcripts scrutinized for possible acceptance into their dream school.

Students are encouraged to let colleges know if any problems have come up that might jeopardize their acceptance for fall.  Your college would rather hear from you than your high school, especially if you are able to explain extenuating circumstances and how the situation has been addressed.  This is generally good policy if you find yourself falling short of requirements after something's been awarded, whether it's acceptance into a program or a college scholarship.  On the same note, letting schools know if something fantastic has happened your final semester of school also couldn't hurt.  For example, if your GPA has jumped and you are now eligible for more financial aid at your college, contact the school and see if there is still funding.  I know people who have found themselves awarded university scholarships as late as July, and every time it was because they contacted the school, explained their situation, and asked about the award.

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Does Facebook Use Affect College Grades?

May 8, 2009

by Scholarships.com Staff

More material continues to be added to the debate over whether sites like Facebook help or hurt undergraduate students.  Last month, preliminary research by a graduate student at Ohio State University caused a stir by suggesting that the use of social networking websites was somehow connected to lower college grades. Now, a new study published by researchers at Northwestern University, Stanford University, and the University of Pennsylvania suggests that if anything, Facebook users have higher grades than students who do not use social networking sites.

While both studies are very preliminary, their findings have sparked a great deal of discussion and debate.  Many professors and some students regard sites like Facebook as distractions from coursework and assaults on students' attention spans.  Others see no harm and a great deal of benefit from being able to connect with peers and share ideas and information more easily online.  Some instructors have even incorporated social networking into their curricula and have encouraged students to friend them online.

Social networking sites are becoming an increasingly large part of the lifestyle associated with attending college, and are increasingly being used as tools in college admissions, as well.  Do you use any of these websites?  Have you seen any connection between your internet habits and your grades?

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Incentive for Unemployed to Attend College

May 12, 2009

by Scholarships.com Staff

The Obama administration recently announced steps that will be taken to make it easier for unemployed Americans to return to college and pay for school. Through a national effort to revise unemployment benefits and financial aid packaging, the administration hopes to make it possible for more displaced workers to return to school.

Currently, many states reduce or cancel unemployment benefits for students who are enrolled in college part-time or full-time, removing the possibility of a financial cushion that could enable more people to afford to enroll in school. In addition, financial aid is calculated based on previous year income, so lost wages are still included when estimating a student’s ability to pay. Even after financial aid is adjusted to reflect a job loss, income from earlier that year is still included and can disqualify a student from receiving a Pell Grant or other need-based aid their first year of school. In some cases, unemployment benefits also are currently counted as income, further compounding the problem.

To help alleviate these problems and encourage the unemployed to enroll in college, financial aid administrators are being given more leeway in using professional judgment to determine unemployed students’ ability to pay, and states are being encouraged to revise their policies to encourage college as an option. In addition, many community colleges nationwide are offering financial incentive to unemployed students who enroll, such as free or reduced tuition. If you’re unemployed and thinking of college, complete the FAFSA, talk to schools in your area, and finally, do a scholarship search to find additional money for college.

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Study Shows Standardized Test Prep Can Pay Off

May 20, 2009

by Scholarships.com Staff

Standardized tests area huge part of the college application process, and one of the biggest issues college-bound students and their families face is whether and how extensively to make use of ACT and SAT test preparation services. Standardized test prep can range from taking a practice test online to spending hours in intensive one-on-one tutoring sessions, with countless options in between.  Debate has raged for years over how much test preparation courses actually pay off, and a new study published by the National Association for College Admission Counseling represents perhaps the most ambitious effort to quantify these gains.

Through analysis of previous research, the NACAC study concludes that a consensus has emerged that score increases for students who use test prep services tend to be fairly small, often only 5 or 10 points on the critical reading section of the SAT and 10 or 20 points on the math section.  Evidence is still inconclusive as to ACT score gains, according to the study.  However, the study also surveyed college admissions offices to determine the impact of score gains and found that score increases on the upper end of this average range can have a significant affect on a student's chances of being admitted to a top college.  Inside Higher Ed has a more detailed breakdown of the study and its implications.

With many high school juniors already signing up to take, or in some cases already awaiting scores from, the SAT and ACT, the release of this study is timely.  It is not a ringing endorsement of extensive and expensive test preparation programs, but does provide an argument for at least taking some time to familiarize yourself with the standardized test you will be taking before you show up for the test day.  If you're competing for admission at your dream school or vying for an academic scholarship, those few extra points on your test score could make all the difference.

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Congress Holds Hearing on Lender Subsidies

May 22, 2009

by Scholarships.com Staff

Yesterday, Congress held a hearing to begin the process of determining the fate of the Federal Family Education Loan Program, the bank-based federal student loan program that President Obama has proposed eliminating in the 2010 federal budget. Voices from both sides of the debate chimed in, with one clear theme emerging: in 2010, student loans are definitely going to change. The questions at this point are to what extent federal student lending will change and whether the banks currently involved in FFEL will still have a place in the new system.

The Obama administration proposes switching all federal Stafford and PLUS loans to the federal Direct Loans program, then using the savings from eliminating lender subsidies to increase Federal Pell Grants and make funding mandatory, while also greatly expanding the federal Perkins Loan program and spending more on college completion. Opponents of this plan, primarily consisting of FFEL lenders and representatives of schools that participate in FFEL, have suggested alternatives that would restructure student lending, but still leave a place for lenders to service the loans. Not one witness at the hearing advocated keeping the system as it is, though, and it seems that a shakeup in student lending is inevitable. Hopefully, this will result in more available financial aid for students.  Inside Higher Ed has more information on the hearing.

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Loan Forgiveness Programs Among Budget Cuts

May 27, 2009

by Scholarships.com Staff

Loan forgiveness programs have been helping encourage students to enter careers in fields like education and nursing for years.  Such programs are typically offered by state student loan agencies or non-profit organizations, and are often well-publicized to prospective college students.  In many cases, students have borrowed liberally, banking on having a substantial portion of their student loans forgiven after five or ten years of work in their field.  But budget cuts and stock market woes have been forcing agencies to make cuts to their loan forgiveness programs, in some cases almost entirely eliminating them.

Kentucky, Iowa, California, and New Hampshire are some of the states that have made changes to loan forgiveness programs, according to The New York Times.  Even if you don't live in one of these states, if you're banking on having your student loan debt forgiven after you graduate college, you may want to see what guarantees there are that your state's program will still exist in its present form.  Make sure you know how much of what you borrow you can expect to repay, even in a worst case scenario.

Regardless of repayment and forgiveness options, it's still a good idea to minimize your borrowing by finding scholarships and practicing good money management.  Nursing scholarships and education scholarships are out there, as are numerous other scholarship opportunities.  There are also several federal loan forgiveness programs for teachers, nurses, and other public service employees.

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