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Obama (Sorta Kinda) Keeps His Promise

Changes in Higher Ed Funding Afoot

February 15, 2011

Obama (Sorta Kinda) Keeps His Promise

by Alexis Mattera

While "Honest Barack" doesn't have quite the same ring as our 16th President’s nickname, we have to give him credit for keeping his promise to privilege spending on education and research...for the most part: Some potentially painful cuts could slice through the higher education pie relatively soon.

First, the good news. The 2012 budget blueprint reveals the maximum Pell Grant (currently set at $5,550 per year) would not be slashed by $845 as originally expected and funding will continue for financial aid programs including AmeriCorps, the Perkins Loan and Supplemental Educational Opportunity Grant Programs and academic research agencies. The Education Department's overall budget would grow by 4.3 percent in 2012 under the President's budget but despite this positive information, it won’t be all unicorns and butterflies for college students. Education Secretary Arne Duncan said the administration had to make some "tough choices" to maintain the current level of funding and compensate for future spending. For example, the department's 2012 budget calls for ending a three-year experiment allowing students to qualify for two Pell Grants in a calendar year and use this funding to attend college year-round, as well as eliminating the subsidy in which the government pays interest on graduate student loans while the students are in school; the Leveraging Educational Assistance Partnership Program, the Byrd Honors Scholarships and the TEACH Grant program would also be eliminated.

Obama said, "Education is an investment that we need to win the future...and to make sure that we can afford these investments, we’re going to have to get serious about cutting back on those things that would be nice to have but we can do without," but student advocates, like Justin Draeger, president of the National Association of Student Financial Aid Administrators, were quick to show their displeasure. "It is regrettable that the administration is proposing to maintain Pell by making cuts to other student aid programs that provide much needed funds to students," he said.

The information above merely scratches the surface (check out Inside Higher Ed’s article for all details) but it’s enough to get the conversation started. What do you think of the proposed budget? Will the changes impact your ability to pay for school? Would you propose a different course of action?

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Scholarship Scam Spotting 101

February 16, 2011

Scholarship Scam Spotting 101

by Alexis Mattera

Applying for scholarships requires hard work, creativity and time...not boatloads of cash, frustration and empty promises. Each year, however, students are duped into ponying up exorbitant application fees for scholarships they aren’t even guaranteed to win. This is just plain WRONG, people – scholarships are supposed to be free money for college! – and while we’re betting you’ve already checked out our pages on scholarship scam prevention, the Washington Post recently published some refresher info:

  • Filling out the FAFSA is 100-percent free and you can do it either online or on paper. If you would like to fill it out online, be sure your search terms are correct: A seemingly small typo like "FASFA" can direct you to sites that ask you to pay to file...and the forms they have are sometimes the wrong ones.
  • It's legal for for-profit companies to charge for providing scholarship information but it's illegal for them to collect fees but never provide the information, misrepresent themselves as government officials or guarantee they'll get the student full funding for college.
  • Voice any concerns about an organization to a high school or college counselor; they've been there and done that and can point you to the truth.
  • If you are alerted that you're a finalist for a contest you've never entered or if credit card/banking information is requested online, go no further unless you are positive the organization is legit.
  • Don't give in to anything branded as a "limited time offer" or "exclusive opportunity." They're just high-pressure sales tactics.
  • Investigate the success stories presented at seminars. These so-called "satisfied customers" could have been paid to give glowing recommendations so ask for a list of at least three local families who used the service and contact them directly to make sure the organization delivered on its promises.
  • If you do find a legitimate organization that requires payment, get in writing how much the service costs, what exactly the company will do and the refund policy.

College is expensive enough so save those application fees for books and other college expenses: All Scholarships.com’s services – from the scholarship search and college matchmaker to financial aid information and college preparation tips – are available completely free of charge. You’re welcome!

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College Costs (Literally) an Arm and a Leg

Parent Offers to Become Live Cadaver to Pay Off Children's Student Loans

February 28, 2011

College Costs (Literally) an Arm and a Leg

by Alexis Mattera

There's been a lot of talk about Harvard lately – its reinstatement of early action, a graduate winning the Best Actress Oscar, another Winklevoss lawsuit against Facebook, etc. – but this next story doesn’t fall within the boundaries of its ivy-covered campus...and not that far away, either. An arm’s length, shall we say?

Desperate to pay off their children's $20,000 worth of student loans, a Boston-area parent recently posted on Craigslist that he or she was willing to sell their body parts to combat the mounting debt. The posting did not include a name, gender or exact location but listed the "live cadaver" was 5 feet 10 inches tall, 200 pounds and had all organs in working order. "If you eliminate my children's student loans, I will give you my life!" the poster wrote. "Take my blood, take my plasma. Drill into my brain, my leg, my arm. Tap my heart, my liver, my kidney," the poster wrote, adding, "I am very very serious."

There are a lot of options out there to limit exorbitant loans (scholarships, grants and fellowships, to name a few) and consolidation can simplify the loan repayment process by allowing the borrower to combine several types of federal student loans and repayment schedules into one...but selling off one’s body parts piece by piece? We’re all for finding interesting ways to pay for school but this is just plain crazy. Would you ever consider taking this route to keep loan collectors at bay?

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GOP Congressman: Pell Grants are Becoming ‘The Welfare of the 21st Century’

April 4, 2011

GOP Congressman: Pell Grants are Becoming ‘The Welfare of the 21st Century’

by Suada Kolovic

The GOP is no stranger to controversy and Friday’s interview with Rep. Denny Rehberg (R-Mont.) was no exception. In a radio interview with Blog Talk Radio, Rehberg went on a rant in which he compared the Pell Grant Program – the nation’s largest financial aid program – to the likes of welfare and denounced the fact that students who receive them don’t have a graduation requirement. "You can go to school, collect your Pell Grants, get food stamps, low-income energy assistance, section 8 housing, and all of a sudden we find ourselves subsidizing people that don’t have to graduate from college.” Rehberg added under the federal program, a student could "go to school for nine years on Pell Grants and you don’t even have to get a degree."

Jason Delisle, director of the Federal Education Budget Project at the New America Foundation, took issue with Rehberg's comments. "I don't know if it's a fair characterization that someone has decided to go through the hoops of applying to college, getting enrolled and showing up every day because it's the welfare lifestyle," he said. "If the issue is people are being lazy and living off the dole, so to speak, I don't think their first step is to enroll in college."

For the 2012 fiscal year, the Pell Grant program is set to exceed $40 billion. Some lawmakers have been exploring ways to reduce the cost of the programs by lowering the maximum grant size – which is currently $5,550 – or restricting eligibility. In Montana, Rehberg recently voted for the House GOP budget resolution, which would reduce the maximum Pell Grant to $4,705 and narrow the eligibility of applicants. If you’re eligible for Pell Grants, what do you think? Are Rehberg’s assumptions out of line?

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What Ever Happened to No Takesy Backsies?

Possible Pell Cuts Could Mean Revised Financial Aid Offers

April 6, 2011

What Ever Happened to No Takesy Backsies?

by Suada Kolovic

If you’re a high school senior and have received your financial aid package from your dream school, listen up: Congress may cut the Pell Grant program’s budget this year and colleges may have to roll back a portion of the financial-aid offers they made to students for the coming academic year. Translation: You may receive a smaller financial-aid package than was originally offered.

According to the Chronicle, both parties acknowledge that some type of restructuring will be necessary to put the program on sound financial footing, but lawmakers disagree on the size and scope of the cuts. Some proposals suggest lowering the maximum award, ending the year-round program and changing the income requirements in order to reduce the number of people eligible for the grants.

At a news conference held by the U.S. Public Interest Research Group, a college administrator and student advocates agree that cuts in award levels this late in the admissions process would be particularly hurtful to the low-income families the program serves. "Families with the most unsteady income, or who don't have much financial flexibility ... need the most time to thoroughly plan out their expenses," said Misty Whelan, a Pennsylvania high school counselor. With most decision deadlines around the corner – May 1 at many colleges – how do you feel knowing these cuts could potentially dictate where you go? Do you think it’s fair for colleges to backtrack on their offers? What ever happened to no takesy backsies?

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UCs Out-of-State Solution

UCs Accept Highest-Ever Rate of Non-Residents

April 20, 2011

UCs Out-of-State Solution

by Suada Kolovic

With California universities facing massive budget cuts in the upcoming year, the state has turned to a creative way to fill the void: According to data released by the University of California, out-of-state and international student admissions are at an all-time high and these students are paying pay about $23,000 more a year than their in-state counterparts.

The LA Times reports that applicants from other states or countries made up 18.1% of the 72,432 students admitted to at least one of the nine undergraduate UC campuses, up from 14% last year. At UC Berkley and UCLA – two of the most selective colleges in the UC System – the trend of accepting out-of-state and international students was most dramatic at 31.2% and 29.9% respectively. Why? The UC system is dealing with a crippling decline of investments from the state of California. Bloomberg reports that the state's current UC funding is back at 1998 levels, despite an additional university campus and 70,000 more students.

So where does this leave Californians who were looking forward to the affordability and convenience of a state school? With a slim chance that there’s a fat envelope headed their way. The fact is that higher acceptance rates for non-Californians means that more state residents were denied admissions at their first- and second- choice state campuses. Do you think it’s reasonable for schools in such serious financial strains to accept students based on their home addresses?

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Financial Aid Applications Increase for 2011-2012

National Need Mirrored in the Buckeye State

April 26, 2011

Financial Aid Applications Increase for 2011-2012

by Alexis Mattera

If you are attending college, you probably need some form of financial aid to pay for tuition, room and board, books and other living expenses. Next year, it’s likely you’ll need a little bit more.

The Columbus Dispatch recently reported the number of students in the U.S. who have filed forms for federal financial aid for the 2011-2012 academic year has increased by about 1 million from last year. At Ohio State alone, requests are up about 10,600 from two years ago - a 22-percent jump, says financial aid director Diane Stemper. Ohio University’s Sondra Williams reports a similar trend with a 12-percent increase in federal financial aid applications. The reasons for the increased need aren’t surprising. "Many people who used to have the resources to send their children to college have lost their jobs or been downsized," Stemper said, adding lower home and stock values and rising food and gas prices are also culprits.

Though more students are getting the aid they require – OSU has seen an increase in Pell Grant recipients enrolled and OU has more students receiving subsidized loans – the financial relief may be short-lived: Governor John Kasich’s state budget proposal has public universities in Ohio could increasing tuition by up to 3.5 percent. Current undergraduate and graduate students, do you need more financial aid now than you did when you first enrolled? High schoolers and incoming freshman, how do you plan to pay for school?

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Sallie Mae to Cut Student Loan Interest Rates

May 17, 2011

Sallie Mae to Cut Student Loan Interest Rates

by Suada Kolovic

Here at Scholarships.com, we love the idea of students going to college debt-free but the reality is that student loans, for the most part, are a necessity in today’s educational world. And while private student loans should be a last resort when paying for college, it can help bridge the gap for families who have maxed out federal loan limits. The silver lining: Sallie Mae is lowering its interest rates on student loans.

The new cap on Sallie Mae’s rate will be 9.875 percent plus LIBOR, which is the interest rate that banks charge each other for loans. The new lowest available rate will be LIBOR plus 2 percent, which reflects a half percent rate reduction. But remember, the exact interest rate Sallie Mae assigns to a specific loan will vary depending on the borrower’s credit score and repayment option. They’re also offering students the option to make $25 monthly payments while they’re in school to counter interest costs or defer payments until graduation. Another added bonus: For loans disbursed between July 1 and Oct. 1, Sallie Mae is offering free tuition insurance for a year.

All these perks aside, Sallie Mae can’t compete with federal loans that come with a fixed rate of 6.8 percent but a cut in student loan interest rates is still a win in my book.

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Seven Tips for Repaying Your Student Loans

May 19, 2011

Seven Tips for Repaying Your Student Loans

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 your loans. Are you starting to panic? Well, don’t! There’s a ton of advice out there to help students stay on track and courtesy of the U.S. News and World Report, here are seven tips for repaying your student loans.

  • Repay you student loans automatically. Make things easier on yourself by setting up automatic withdrawals from your bank account. This reduces the chance of late or missing payments.
  • Aim for 10 years. The traditional repayment period for student loans is 10 years and ideally you'll be able to pay off all your debt within that time period. If you end up struggling with your monthly payments, however, you could stretch out your loans to 20 or even 30 years. Your monthly payments will become more manageable but you will end up paying a lot more in interest.
  • Stay organized. Having multiple student loans can be a challenge to keep track of but with the government's National Student Loan Data System, you’ll be able to track all your federal student loans in one place.
  • Pay off the loans with the highest interest rates first. A high interest rate costs you every month and compounds that amount you owe every month you aren’t paying off the entire balance.
  • Consider IBR. The IBR is a federal Income-Based Repayment program that allows a borrower to repay his or her federal loans based on what is affordable and not what is owed.
  • Keep abreast of student loan developments. Staying informed is just as important as making your payments. Familiarize yourself with websites that are devoted to college debt issues like Project on Student Debt and the National Consumer Law Center's Student Loan Borrower Assistance Project.
  • Contact the Federal Student Aid Ombudsman. Sometimes your relationship with a lender can go belly-up. If you end up in a dispute, the Federal Student Aid Ombudsman may be able to help resolve the issue.
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N.J. Bill Proposes Banning Public Colleges from Paying Commencement Speakers

May 31, 2011

N.J. Bill Proposes Banning Public Colleges from Paying Commencement Speakers

by Suada Kolovic

Ah, college graduation. It’s a time filled with incredible hope, fear and potentially – depending on your college’s tradition and its willingness to pony up the cash – a famous celebrity commencement speaker. But paying for commencement speakers won’t be happening in Jersey for long: Last week, New Jersey lawmakers proposed a bill that would bar the payment for commencement speakers at public colleges.

The bill comes weeks after Kean University paid John Legend $25,000 to speak and sing two songs at their commencement ceremony on May 12, while Rutgers University paid Nobel Prize-winning author Toni Morrison $30,000 for her speech on May 15. John DiMaio (R-Warren), one of the bill’s sponsors, said he objects to public institutions paying celebrities at a time when student costs are rising and state funding is shrinking. "We’re in very, very difficult times," DiMaio said. "Tuitions are up. The amount of aid we have to offer is down."

The legislation proposes that if a state-funded college or university pays for their commencement speakers, the amount paid will be deducted from the school’s state aid. How did the schools react? Rutgers and Kean officials insist they paid speakers to give their students the best graduation possible and Rutgers officials added they planned on having their attorneys review the proposed bill. To those of you who just graduated, do you think it’s appropriate to pay commencement speakers? Should institutions charge a cover or increase ticket prices for graduation ceremonies in order to offer big-name celebrities without the risk of losing state aid? Let us know what you think.

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