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Emerson College Agrees to Settlement in Student Loan Scandal


Jul 22, 2009

After New York Attorney General Andrew Cuomo brought to light questionable practices some college financial aid offices engaged in when creating preferred lender lists for private loans, the fallout was felt nationwide. While colleges and lenders have reformed their practices in the face of new regulations, lawsuits against colleges and lenders are still being addressed. [...]

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91 months ago 0 comments

Yesterday, the House of Representatives formally introduced legislation to reshape federal student loans, federal Pell Grants, and other aspects of student financial aid. The Student Aid and Fiscal Responsibility Act of 2009 builds on presidential budget recommendations and features several substantial changes to student aid. [...]

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We've previously blogged about the increase in student borrowing shown by the latest data from the National Center for Education Statistics. As more think tanks and other groups begin to analyze this information, additional reports are emerging to provide more details on who is borrowing the most. The latest report comes from Education Sector and bears the title, "Drowning in Debt: The Emerging Student Loan Crisis." While the report has been criticized by some as alarmist in tone, it does provide insight into students' growing reliance on student loans. [...]

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Congress has passed and President Obama has signed a bill that provides "technical corrections" to the Higher Education Act, which Congress renewed last year. In addition to offering clarification on several points and correcting minor errors, the Technical Corrections bill also makes some useful changes to federal student financial aid. [...]

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While it falls in the middle of summer on most academic calendars, July 1 marks an important date for financial aid each year.  On July 1, the Education Department switches from the 2008-2009 academic year to the 2009-2010 one, and new federal rules for financial aid go into effect. This means new loan consolidation and repayment options, lower interest rates on some federal student loans, among other changes for students receiving federal student financial aid. [...]

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As part of his campaign's focus on education, President Obama pledged his administration would address issues of the financial aid application process, such as the length and complexity of the Free Application for Federal Student Aid, or FAFSA. Education Secretary Arne Duncan has previewed some of the administration's proposed changes, with a formal announcement expected today. While not as sweeping as the two-page FAFSA EZ Congress already mandated when renewing the Higher Education Act last year, these changes are still a step towards simpler financial aid applications. [...]

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With unemployment continuing to rise, college savings funds still performing poorly, and some states being forced to make cuts to grant and scholarship programs, many students are likely to be facing a very different financial situation when it comes to paying for college in 2009, as opposed to 2008.  Students who have experienced a significant change in their financial circumstances since completing the FAFSA, such as a loss of income and savings, can appeal to their college's financial aid office for a chance at more need-based college scholarships and grants. [...]

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Early reports suggest that summer enrollment is up at colleges across the country, likely due at least in part to the recession.  Since summer jobs are harder to find and some summer internships have also been taken off the table, more students are looking to summer classes as a way to stay productive between spring and fall semesters.  Dwindling college funds and other economic difficulties may also be pushing students to try to finish college as quickly and cheaply as possible.  Most state colleges and community colleges offer summer classes, as well as many private schools. [...]

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Roosevelt University in Chicago has just awarded its first batch of full-tuition scholarships to students graduating from Social Justice High School, a school on the city's southwest side.  Eight graduates from Social Justice High School earned four-year scholarships, each worth more than $80,000, for earning good grades and doing well on the ACT. [...]

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As we mentioned yesterday, the 2008-2009 school year is winding down, and people are preparing to flip over to a new academic calendar and a new college application cycle.  However, that doesn't mean that students still seeking admission or financial aid for 2009-2010 are completely out of luck.  There are still colleges and scholarships accepting applications right now.  In fact, there are some substantial scholarship awards that you can still win this summer, and to prove it, we're listing a few of them below.  To learn more about these awards and others with upcoming deadlines, you can do a free college scholarship search on Scholarships.com. [...]

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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. [...]

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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. [...]

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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. [...]

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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. [...]

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Student loan default rates are rising for both federal and private loans as more recent grads struggle to find work.  The Wall Street Journal reports that the federal default rate is nearing 6.9 percent, the highest it's been since 1998.  Similarly, some private lenders are experiencing default rates that have already nearly doubled in just a year or two. [...]

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There was an interesting article in The New York Times today offering a rare behind-the-scenes look at a university financial aid office.  If you're still baffled by your financial aid award letter, or you just are curious to find out how it was created, this article is a good read.  While it focuses on Boston University, an elite and expensive private college, many of the processes discussed carry over to other schools, both public and private. [...]

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While an increasing number of college students received financial aid in the 2007-2008 academic year, that calendar year students also ran up more credit card debt.  The average college student owed $3,173 on credit cards in March 2008, compared to $2,169 in 2004.  This information comes from the student lender Sallie Mae, which has been tracking students' credit card debt since 1998. [...]

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As college costs continue to rise, the percentage of students receiving financial aid also continues to grow.  As of the 2007-2008 academic year, a full two-thirds of undergraduate students received some form of student financial aid, with 47 percent receiving federal aid. This is according to the "First Look" report on the National Postsecondary Student Aid Study published by the National Center for Education Statistics yesterday. [...]

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Today we move on to the final part of our Understanding Your Financial Aid Award Letter series.  If you were lucky enough to have your entire tuition paid through free money for college, then you can stop reading now.  But the vast majority of students who apply for aid will be awarded at least one less ideal form of financial aid.  Sorting through the rest of your award letter is the tough part--this is where difficult choices may need to be made, including whether and how much to borrow. [...]

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So you've figured out your cost of attendance, your expected family contribution, and the total amount of aid you're being offered at each college.  However, not all aid is created equal, and a package that appears to meet your full need could actually get you into more debt than a package that leaves a substantial gap.  A useful move both in choosing a college and budgeting out what you need for the year is to separate the grant and scholarship aid you've been offered from all of the other financial aid.  This is going to involve some more math and record-keeping on your part. We'll delve into the best kinds of aid in the second part in our series on understanding your financial aid award letter. [...]

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Along with acceptance and rejection letters, colleges are sending out another nerve-wracking piece of mail this month: the financial aid award letter.  For many families who have only recently discovered the "joys" of completing the FAFSA, the financial aid letter can bring about a whole new kind of terror and confusion.  Even for people who are somewhat familiar with aid, deconstructing the naming conventions and occasionally less-than-detailed explanations on various colleges' award letters can be frustrating, as can mounting an effective comparison among differing aid packages.  Below is the first part in a series on understanding your financial aid award letter. [...]

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Yesterday, the House and Senate both passed outlines for the 2010 federal budget.  Both propose about $3.5 trillion in spending and preserve many of the priorities of President Obama's budget, including more spending on federal student financial aid. A conference committee will hammer out the differences between the two packages and create a compromise budget. [...]

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Earlier this week, we blogged about the recession making getting into a PhD program more difficult for prospective graduate students.  Prospective undergraduates are also facing a changing admissions landscape, but the picture for them is more complicated. Articles about colleges' admission conundrums have abounded this week as acceptance letters and financial aid notices make their way to anxious high school seniors. [...]

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