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Save the Perkins!

Proposed Amendment Will Keep This Loan Alive

September 23, 2010

by Alexis Mattera

The Perkins Loan Program has played a vital role in the quest for higher education (mine included) since 1958 but in two years, it could end up just as extinct as dinos and dodos. Can it (and the dreams of countless students) be saved?

The Perkins, or as one supporter affectionately calls it, “the David among the Goliaths of other aid,” is used by 1,800 colleges across the country yet Congress hasn’t provided any new money for the program since 2004. In 2009 alone, colleges awarded 495,000 new Perkins loans at an average of $2,231 per student and its demise would shut out college access to low-income students and eliminate the jobs of campus officials and loan servicers who help distribute the funds. Representative John Spratt clearly understands the importance of the Perkins and is sponsoring an amendment to delay the program’s cancellation – so much so that he held a hearing in Washington yesterday discussing the Perkins’ significance; though it probably won’t pass this year, Spratt is optimistic that with the support of the House Budget Committee and the schools relying on the loans, the amendment has a shot at approval next year.

“By its very nature, the Perkins Loan Program provides schools the flexibility to provide additional aid to needy students. The importance of this flexibility cannot be overstated,” said Sarah Bauder, assistant vice president of enrollment services and student financial aid at the University of Maryland at College Park, in her testimony during the hearing. “Financial aid administrators work where the rubber meets the road and have a unique perspective that allows them to assess students’ and families’ ability to pay for college in ways that aid applications will never be able to assess. When aid administrators see students and families struggling with unique circumstances, they need some flexibility to deliver funds to ensure the success of these students.” One such student, Joseph Hill, also testified. The Georgetown senior stated that though he received $26,000 in scholarships, the Perkins was what made it possible for him to attend the school of his dreams. “Last week, I was talking to my mother, and without hesitation, she said, ‘It still wouldn’t have worked without that Perkins Loan,’ ” Hill revealed.

There’s a lot more to the history of the Perkins and the fight to save it (get the details here) and as a former Perkins recipient, I can’t help but root for this little amendment that could. I'm definitely making a t-shirt.


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Student Loans Leave Student $200,000 in Debt

Northeastern Grad Starts Website to Help Make Payments

November 23, 2010

Student Loans Leave Student $200,000 in Debt

by Suada Kolovic

Figuring out how to pay for a college education can be complicated, but what happens once you’ve graduated and your loans become so overbearing that even with a full-time job, monthly payment are implausible? A few weeks ago, we blogged that the average college student leaves school with $24,000 in debt, but what about the student who’s debt is about eight times that amount? Northeastern alum Kelli Space, 23, found herself in that exact predicament: With $200,000 in debt, Space was unable to pay her stifling student loans – her monthly payments to Sallie Mae are $891 and by next November that figure will nearly double – so she started a website, Two Hundred Thou, in order to solicit donations from the public.

The site is devoted to sharing her story about the naivety of an 18- year-old, who was the first in her family to attend college and her reliance on readers to foot the bill. Space explains, “At the moment, I like to think I have great things going for me! A job, an accommodating family, loyal friends, etc... but these loans are crippling my ability to enjoy these things – or pay rent. Can I live?” She goes on to explain that by donating to her cause, you’ll also be helping the country as a whole.

Two Hundred Thou also tracks Space’s progress and so far she’s raised $1,726.50, leaving a mere $198,273.50 to go. Space ends with the notion that once her student loans are paid off she’ll spend her money elsewhere, “probably single-handedly spurring the economy.” To think you’re just a click away from cleaning up the mess of a recent college graduate, while fixing the economy and helping the country as a whole – and at $200,000, that’s a bargain.

However, we should point out – before you lend a helping hand – that we really don’t know who this person is or even whether this story is embellished or even entirely fabricated. The domain is registered privately, hiding the identity of the registrant, and the email address is just a gmail account anybody could have created. Sure, maybe this is on the up-and-up, but there’s really no way of knowing. It wouldn’t be shocking to see a bunch of these sites spring-up if this idea gains traction and exposure.


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Pew Reports Students Borrowing More than Ever

by Suada Kolovic

On the heels of our latest post – a story about a Northeastern grad who accumulated $200,000 in student loans – the Pew Research Center released a report that members of the class of 2008 borrowed 50 percent more than their counterparts who graduated 12 years earlier. According to the report, increased borrowing by college students has been driven by three trends: more college students are borrowing, college students are borrowing more, and more college students are attending private for-profit schools. The report reveals that the number of undergraduates borrowing rose from 52 percent in 1996 to 60 percent in 2008 and among those who borrowed, the average undergraduate loan increased from $17,000 in 1996 to $23,000 in 2008. The rise in attendance at private, for-profit colleges also resulted in the increase of student borrowing; the report states, “Students who attend for-profit colleges are more likely than other students to borrow, and they typically borrow larger amounts.”

This isn’t the shock of the century by any means. In August, the Wall Street Journal reported that for the first time in history, student-loan debt surpassed credit card debt. The figures are staggering: According to the Federal Reserve, Americans owe $826.5 billion in revolving credit, while students owe an estimated $829.785 billion in loans. In fact, so many college graduates are plagued by massive amounts of debt that the Huffington Post has provided an outlet for college graduates to share their stories - almost as a cautionary tale – through an ongoing project, Majoring in Debt.

What do you think? With recent college graduates facing debt in the hundreds of thousands, what are you doing to ensure you don’t end up in the same situation?


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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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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

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

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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Not Enough Financial Aid? You Still Have Options!

by Radha Jhatakia

There are many factors that affect where, when and if students attend college, the most important being financial aid. So what can a student do when he or she hasn’t received enough funding?

If you need financial aid to make college a reality, contact the financial aid offices at the schools you’re considering before applying. Find out the costs of tuition, room and board, and other college living expenses and defray these costs by applying for as many scholarships and grants as you can. The college will be more likely to help fill any financial gaps if you’ve shown initiative and determination.

Another method is writing formal letters to financial aid administrators. Describe your financial aid situation (including hard numbers), your home life, factors affecting your ability to pay for college and things that you could not put on the FAFSA such as a home mortgage or other payments that your parents need to make. Fax this letter, mail it by certified mail and email a copy to each school as well. If the school cannot offer you free money, they can sometimes offer an additional loan of some sort.

If all else fails, call the colleges and schedule appointments with the deans or heads of the financial aid offices. Some colleges have tuition waivers which allow students with special conditions to be exempt from paying tuition. If the school does not offer this option, you can still seek out non-school loans through banks or private companies. These loans often have higher interest rates, require co-signers or do not have grace period to pay off loans after graduating; in my opinion, however, the cost of not getting a college education is much higher than amount of these loans.

Radha Jhatakia is a communications major who will be transferring to San Jose State University this fall. She’s had some ups and downs in school and many obstacles to face; these challenges – plus support from family, friends and cat – have only made Radha stronger and have given her the experience to help others with the same issues. In her spare time, she enjoys writing, reading, cooking, sewing and designing. A social butterfly, Radha hopes to work in public relations and marketing upon graduation.


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Students Say "I Do" for Lower Tuition

Would You Marry to Keep College Costs Down?

June 7, 2011

Students Say "I Do" for Lower Tuition

by Alexis Mattera

In February, we read a New York Times article about students getting married to save on tuition and asked our Facebook friends and Twitter followers if they, too, would get hitched if it meant they’d pay less for school. The responses? Mixed, but the topic is still hot four months later.

State aid is down, tuition is up and students are stuck in a tough position these days. While some are continuing down the traditional paths of obtaining funding for college (filling out the FAFSA, applying for scholarships and grants, taking out loans, etc.), others are taking a different route – or should we say aisle – with a friend or another student in a similar monetary situation. Why? If a student is single and under the age of 22, their financial aid is determined by their parents’ income but if the student is married, aid is determined by the joint income of the student and their spouse – an enticing loophole for cash-strapped undergraduate and graduate students. Unlike marrying to obtain citizenship, marrying for financial aid or in-state residency benefits is legal according to WalletPop; there are even matchmaking services that help students find likeminded individuals to marry for tuition relief and divorce after graduation!

What are your thoughts on these “on-paper” marriages? Would you say “I do” if you could save thousands on tuition and fees or do you feel this practice – while legal – is too unethical to consider?


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Starting Salaries Increase for 2011 Grads

by Alexis Mattera

Attention recent college grads: You may be able to pay down those student loans a bit sooner than expected!

According to the annual Salary Survey by National Association of Colleges and Employers, graduates from the Class of 2011 shows a 4.8 percent starting salary bump over last year’s graduates. The increase was seen across most disciplines including engineering, liberal arts and social sciences, though 5 percent more 2010 graduates were able to find jobs than their 2011 counterparts. With approximately $2,357 more before taxes (this year’s grads will average $51,018 to last year’s average of $48,661), new grads will have enough for a few months of rent, some padding to a savings account or, yes, a way to make a dent in those loans.

Recent grads, are you happy about this news? Soon-to-be grads, are you hopeful the salary figures will continue to increase until you finish college?


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