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A Little Loan Goes a Long Way

November 29, 2011

A Little Loan Goes a Long Way

by Alexis Mattera

In recent years, college students have become more cautious about taking out loans to pay for school. There are multiple reasons for this – horror stories from friends or siblings, limited job prospects after graduation and high interest rates have all been cited – and while it’s an admirable goal to graduatefrom college debt-free, educators think this approach could actually hinder students from getting degrees.

According to a recent Associated Press article, students are attempting to limit borrowing by working longer hours, taking fewer credits (and often not enrolling full-time), living at home and attending less selective institutions. While educators are impressed with this level of fiscal responsibility, they are quick to point out that each action above is a risk factor that makes college students less likely to graduate. Borrowing could prevent this, said Deborah Santiago, co-founder and vice president of Excelencia in Education. "If you can take out a little bit of loan you're more likely to complete. If you can go to a more selective institution that gives you more resources and support, you're more likely to complete." How much more likely? Federal data analyzed by Excelencia and the Institute for Higher Education Policy (IHEP) in 2008 shows roughly 86 percent of students who borrow for college are able to attend full-time compared to 70 percent of students who don't borrow and roughly 60 percent of full-time students receive a bachelor's degree within eight years compared to 25 percent of part-time students.

What can be done to facilitate this message? Educators believe students need to better understand financial aid, the difference between types of loans, debt management and the returns on various degrees and majors. In addition to searching for scholarships and grants, is borrowing part of your financial aid plan and does this information make you more or less likely to take out a loan?


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Federal Mandate Will Standardize High School Graduation Rates

by Alexis Mattera

High school graduation rates have been on the rise across the nation but are the numbers of mortarboard-tossing students truly accurate? Experts say a new approach to data calculation will reveal the truth.

A new federal mandate scheduled to take effect next year will standardize graduation rates by calculating the number of students who graduate high school in four years divided by the number of students who entered the school four years prior. This means states will no longer be able to count students who complete special education programs, night school, the GED and virtual high school programs along with those who earn a traditional high school diploma; when these students are removed from the equation, Chris West of Johns Hopkins University's Everyone Graduates Center estimates official national graduation rates will likely decrease between 5 percent and 10 percent.

Parents may be alarmed when they see the numbers fall but the standardization will do far more good than harm: West says it will level the playing field for high schools vying for federal money through the Race to the Top program – funds that will allow these schools to better prepare their students and further increase graduation rates. Do you think the graduation rate standardization will have a positive or negative impact? Is this a change that should have happened a long time ago or was the old way of reporting just fine?


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Pell Maximum Maintained, Eligibility Tightened

by Alexis Mattera

The Federal Pell Grant program as we know it has been in jeopardy in recent years but an agreement reached last night will keep its funding intact. While college students will still receive the maximum award amount per year, the number of eligible recipients is a quite different (and unfortunate) story.

The Chronicle reported congressional leaders agreed on a spending bill for the remainder of the current fiscal year that would increase funds for the National Institutes of Health by 1 percent, thereby maintaining the maximum Pell Grant amount of $5,550. To make this $300 million increase possible, however, eligibility for the award has been restricted. Under the bill, Pell Grant funding will only be available to each student for six years instead of nine, high school diplomas or GEDs will be required (no more ability-to-benefit tests) and the income cap for receiving an "automatic zero" expected family contribution will be lowered from $30,000 to $23,000. The interest subsidy on undergraduate student loans during the six-month grace period after a student graduates would also temporarily end.

Yes, the changes are significant but they are far less severe than an earlier bill which would have lowered the income cap to $15,000 and reduced the amount of income working students could exclude when applying for financial aid – changes that would have negatively impacted thousands of college students, especially those attending community colleges. We want to know what you think about the news. Is there a way to maintain federal funding without decreasing eligibility or do you think this bill is the best option?


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And the Least Indebted Graduates Are...

U.S. News Lists Schools with Lowest Average Debt for 2010 Grads

December 28, 2011

And the Least Indebted Graduates Are...

by Alexis Mattera

If you are a recent college graduate, those student loans you haven’t thought about in four or more years are about to come calling...and collecting. While some students’ debt tallies are quite large, the amounts owed by others are much more manageable.

U.S. News & World Report has reported that the average amount of student loan debt (defined as money loaned to students from colleges, financial institutions and the government, not including parent loans) for a 2010 college graduate was about $25,000 but this number truly varies depending on what school a student calls his or her alma mater: For example, 2010 graduates of Alice Lloyd College have an average total indebtedness of only $3,108 and those from Princeton owe just $4,385, due in large part to more grants, scholarships and work study that do not require repayment. Here are all of the schools that made the top 10 and the average amount of student loan debt 2010 graduates incurred:

Does this information have you reevaluating your college plans or financial aid choices?


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Ohio to Eliminate Remedial Funding in Higher Ed by 2020

by Alexis Mattera

Many colleges across the country offer remedial courses for students in subjects like math, English and science to better prepare them for the curriculum ahead but as budgets continue to tighten, administrators in Ohio are looking to cut funding for these classes completely.

According to the Alliance for Excellent Education, the annual cost for remedial classes in American higher education hovers around $3.6 billion. Though states like Florida, Missouri and South Carolina are making strides to restrict remedial funding to more reasonable levels, Ohio has vowed to eliminate the approximately $130 million it spends annually by 2020. How is this going to happen? Schools appear to be approaching the issue in different ways: University System of Ohio Chancellor Jim Petro is calling for better assessments in grade 10 to ensure enough time for extra help before attending college, the University of Toledo is changing its recruitment tactics by improving outreach to private schools and even guaranteeing scholarships as early as eighth grade to secure better prepared students, and Wright State University is working with nearby community colleges to standardize a remedial education curriculum – a move associate provost Thomas Sudkamp says will best serve students when remediation funding is phased out.

Do you think Ohio’s plan is a step in the right direction or is remedial education funding an integral part of success in college?


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Is College Still Worthwhile?

December 30, 2011

Is College Still Worthwhile?

by Alexis Mattera

There’s been much debate about the true value of a college degree. This isn’t surprising given rising tuition costs and lower employment rates but a new study by a 2011 Trinity College graduate reveals spending the time and money to obtain a college degree is still very much worthwhile.

That graduate – Sarah Millar – came to this conclusion by examining data from government and private sources as well as her own personal experience as a college student. She found that although college costs have climbed an average of 6.4 percent each year since 1981 and annual income has only risen 0.4 percent in that time, the average take-home pay of college graduates is $38,950 versus $21,500 of students who only graduated high school. Unemployment rates of the two groups are also in favor or college degree holders – as of last month, 4.4 percent to 9.6 percent – and earnings of college grads exceed high school grads by more than $1 million over 40 years. Millar does note that all colleges and majors are not created equal, though, as average starting salaries of recent grads in specific fields of study from well-known or prestigious schools are more than those from state universities or smaller private colleges.

Check out more information from the study here then tell us: What do you think of Millar’s findings?


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Good Samaritan Pays Student’s Tuition

by Alexis Mattera

It’s Friday the 13th and instead of posting some bad, unlucky or just plain weird news, we thought we’d share a story that’s downright feel-good.

Like many college students today, John Jay College criminology major Angy Rivera was having a difficult time making her tuition payments. While she was eligible for in-state tuition rates as an undocumented student, Rivera could not qualify for state and federal aid so she began selling what she called handmade education bracelets on Chipin.com to bridge the financial gap. When her tale was recently featured in the New York Daily News, retired MTA conductor Luis Hernandez took note – and action: He donated $2,500 to cover the remainder of Rivera’s tuition, even though she was a complete stranger. “I’m retired and I’ve got a little money to spend,” said Hernandez. “I like helping out kids...especially if it’s somebody trying to get an education.” Naturally, Rivera shed tears of joy and told Hernandez, “This just made my next six months – you don’t know how big this is!” She also said she will use the money generated from her bracelets sales to pay for books and fees.

Times may be tough but if you’re willing to work hard and aren’t too proud to ask for help, good things can happen.


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The President on Education

Obama Talks Higher Ed in State of the Union Address

January 25, 2012

The President on Education

by Alexis Mattera

In addition to talk of the economy and spilled milk, President Obama shared his thoughts on higher education during his third State of the Union address last night. On his to-do list: reduce student loan interest rates, extend a tax credit and continue supporting community colleges.

Ideally, the president would prevent the interest rate increase on federal student loans currently set for July, double the amount of federal work-study jobs in the next five years (moves that would cost $5 billion and $1 billion per year, respectively) and make the American Opportunity Tax Credit permanent. Obama praised community colleges as he has in the past for their links to job training and their contributions to keeping college affordable but had some harsher words for other institutions: Colleges that continued to hike tuition were put "on notice" and a document accompanying the speech said the president would propose to shift some federal aid away from colleges that don’t provide good value. "It’s not enough for us to increase student aid," Obama said. "We can’t just keep subsidizing skyrocketing tuition; we’ll run out of money. States also need to do their part, by making higher education a higher priority in their budgets. And colleges and universities have to do their part by working to keep costs down."

Did you watch the State of the Union? What did you think of what President Obama had to say?


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Obama Grants NCLB Waivers to 10 States

by Alexis Mattera

When the No Child Left Behind Act went into effect 10 years ago, public schools across the country were tasked with developing assessments for students in certain grades in order to receive federal funding. A decade later, President Obama has waived these requirements for 10 states in exchange for new programs that will benefit both students and educators.

Though public schools in the states of Colorado, Florida, Georgia, Indiana, Kentucky, Massachusetts, Minnesota, New Jersey, Oklahoma and Tennessee will no longer have to meet the NCLB achievement standards, they will now be required to adhere to three specific reform criteria: standardizing curricula for specific classes, holding individual schools accountable for improving student performance (particularly for minority and disabled students) and establishing a system to evaluate teachers. The plans will vary from state to state based on individual needs – New Jersey, for example, must improve high schools with low graduation rates or face state action while Oklahoma will be monitoring school culture and attendance rates – something both Obama and Secretary of Education Arne Duncan view as vital to future success; less than enthusiastic, however is Republican chairman of the House Committee on Education John Kline, who would have rather continued working within Congress until bipartisan support was achieved.

What do you think of the NCLB waivers? Was change necessary now or do you feel the administration could have taken more time to formulate a decision?


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Sixty-Two Schools Meet Students’ Full Financial Need

by Alexis Mattera

Wouldn't it be amazing if that super expensive college you were just accepted into said, "Hey there, new friend – thanks for all your hard work saving, scrimping and scholarship searching but we’ll take it from here, financially"? It can happen...kind of.

When a student fills out the FAFSA, a figure known as the expected family contribution (EFC) – the amount a student or family can reasonably spend on one year of college – is calculated using family income, number of children, amount of assets and other factors. There is sometimes a gap between the EFC and the final cost of college but 62 schools have reported to U.S. News that, on average, 100 percent of their admitted full-time undergraduate students' financial need was met for fall 2010 by some combination of aid (work-study, merit scholarships, grants, subsidized loans, etc.).

Now, we're not going to list every single college and university that reported these claims (you can check out U.S. News' site for that) but we will say that some well-known schools like Yale, Vanderbilt and Grinnell – the latter of which has never failed to meet full need for a student in 20 years, according to financial aid director Arnold Woods – have made the cut. Way to go and keep up the good work!


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