Archive for the ‘Financial Aid’ category

The Great Pell Debate

March 22nd, 2011

What’s in store for the government-funded Pell Grant, as Congress deals with an escalating debt crisis? The Chronicle of Higher Education has posted six different views from education policy experts across the political spectrum.

David Evans, a former staff director to the late  Sen. Pell (who devised the Pell Grant), says that the Pell Grant has been an important aid for students during economic downturns, and that cuts to  the grant would be  “penny wise but pound foolish”. He calls instead for a reexamination of  current requirements, such as degree completion, and to cut back on the use of Pell Grants by students attending for-profit schools.

Meanwhile, Frederick Hess, scholar at the American Enterprise Institute, believes the Pell Grant should be  re-imagined for a new era and a new type of student.  He calls for four major changes to the program that would encourage quicker completion of degrees, more customization of course offerings,  and lower costs.

Other experts who discussed the future of the Pell Grant included Sandy Baum, an independent higher-education-policy analyst and professor emerita of economics at Skidmore College, Michael McPherson, president of the Spencer Foundation, former University of Phoenix president Jorge Klor de Alva, University of Pennsylvania registrar Michelle H. Brown-Nevers, and Michelle Asha Cooper, president of the Institute for Higher Education Policy.

Read the full article here.

Gainful Employment Discussed

January 26th, 2011

U.S. Rep. Virginia Foxx (R., NC)  has said that one of her priorities as the new chairwoman of the House Higher Education Subcommittee  will be to examine the scope and amount of regulation by the U.S. Department of Education, and to focus on spending cuts.

The Chronicle of Higher Education reports that in recent comments at  the Council for Higher Education Accreditation’s annual meeting,  Rep. Foxx  questioned the “gainful employment” rule that the U.S. Department of Education is considering, which would cut federal aid to schools whose graduates, often from lower-income backgrounds, have higher student loan debt to income ratios and low repayment rates.

According to the Chronicle’s report, Rep. Foxx said she supported oversight of colleges who received federal money, but she was uncertain the rule as currently described would be the best option.

Before her election to Congress in 2004, Foxx taught at and served as an administrator at several colleges, including Appalachian State University, Caldwell Community College and Mayland Community College.

Eduardo Ochoa, assistant secretary for postsecondary education at the U.S. Education Department, also spoke at the CHEA meeting. He said that the next draft of the rule, which has yet to be fully revealed, might answer concerns and would be “better” and more “nuanced”.

The rule will be go into effect in its final form in July.

The Obama Administration Plans to Increase Education Support for Military Families

January 25th, 2011

The Obama administration announced today the beginning of a series of efforts to help increase support for military families, including higher grants from the Department of Education.

The resultant plan is detailed in Strengthening Our Military Families: Meeting America’s Commitment, a policy report approved by Obama in December.

The report is the culmination of meetings by representatives from all federal government agencies and cabinet departments, said Robert L. Gordon III, deputy assistant secretary of defense for military community and family policy.

Secrets to Winning a Scholarship

January 25th, 2011

"Secrets to Winning a Scholarship"Mark Kantrowitz, the nationally recognized financial aid expert and publisher of Finaid.org and Fastweb.com, has written a new book, Secrets to Winning a Scholarship.

The book offers practical advice and tips to help students find and win scholarships.

What are the most common scholarship application mistakes? How can you watch out for scholarship scams? What are the top 10 scholarships that don’t require an ‘A’?

Learn how to avoid common errors, and develop strategies for everything from writing a great essay to keeping your online brand “clean”.

Secrets to Winning a Scholarship will be available exclusively on Amazon.com in paperbook and Kindle.  For more information, visit www.fastweb.com/content/scholarshipsecrets

Proposed Loan Rules Could Harm Students

January 24th, 2011

Students at private-sector colleges and universities may face changes to their eligibility for federal financial-aid programs if a proposal known as ‘gainful employment’ being considered by the U.S. Department of Education moves forward.

Read more here

Kantro’s Tips to Save You Money!

August 31st, 2010

Fastweb’s Financial Aid Guru Mark Kantrowitz has compiled his top tips on repaying student loans, saving money and alternatives to student loans. Any wise student will heed this advice!

Repaying Student Loans

• Sign up for auto-debit with electronic billing, where the monthly loan payments are automatically debited from your bank account. Many education lenders offer a 0.25% or 0.50% interest rate reduction for this.

• Accelerate repayment of high interest debt first. After you make the required payments on all your debts, make an extra payment on the loan with the highest after-tax interest rate. Usually this is credit card debt or private student loans.

Smart Borrowing

• Do not borrow more than your expected starting salary for your entire education. If you borrow more, you will have to use an alternate repayment plan like income-based repayment or extended repayment to afford the monthly loan payments. If you borrow more than twice your starting salary you will be at high risk of default.

• If you find yourself needing to borrow more than $10,000 per year of education, you are probably overborrowing and should consider switching to a less expensive college.

Financial Aid

• Apply for financial aid even if you think you won’t qualify or even if you didn’t qualify last year. The need analysis formulas are complicated enough that it is difficult to predict whether you will qualify. Moreover, the Free Application for Federal Student Aid (FAFSA) is a prerequisite for the unsubsidized Stafford and PLUS loans, which do not depend on financial need. An estimated 2.3 million students would have qualified for the Pell Grant in 2007-08 but did not submit the FAFSA, and 1.1 million of them would have qualified for a full Pell Grant. (Two-fifths of students do not submit the FAFSA and about a quarter of these would have qualified for the Pell Grant.)

• Submit the FAFSA as soon as possible after January 1. The FAFSA is used for state grants and college grants in addition to federal student aid, and some states and colleges have very early deadlines.

Making and Handling Money

• Work part-time while you are in school. Even if you don’t qualify for Federal Work-Study, there are plenty of part-time jobs on or near college campuses. Working 10-15 hours a week will help improve your grades by forcing you to learn time management skills. Working a full-time job will hurt your performance by taking away time from academics. Enroll full-time and work part-time, not vice versa.

• Try to minimize credit card debt. Do not charge more than you can afford to pay off in full each month. Beware that spending $500 with plastic feels the same as spending $5, so it is hard to exercise restraint.

For more tips like these and expert advice visit http://www.fastweb.com/financial-aid/articles/2613-kantros-tips-to-save-you-money.

Debt on Student Loans Rising

August 12th, 2010

More students owe money the government than they do to credit cardsMore students have debt on student loans than on credit cards, the Wall Street Journal reported this week — $829.8 billion. And since the government has been doing most of the lending, the majority of that money is owed directly to Uncle Sam.

The good news about federal loans is that the interest rates are lower. The bad news is that student loans are not included in bankruptcy  — if you need to default, the government will garnish your wages first, then your tax refunds, and so on.

The WSJ report also noted that college tuition is increasing during an economic recession, forcing more people into lending. Meanwhile, an increasing number of non-profit colleges are failing the U.S. Education Department’s “financial responsibility test”.

Finance Reform Bill’s Effect on Student Loans

June 28th, 2010

The U.S. Senate and the U.S. House of Representatives have come to agreement on terms of a Wall Street regulatory bill which would have major impacts on student lenders.

The Finance Reform Bill (H.R. 4173)  includes more regulation of private lenders, even when those private lenders are the schools themselves (for-profit and non-profit private schools often give loans to students).

The bill, if signed into law, would create a new Consumer Financial Protection Bureau which would have oversight of all private (non-Federal) education loans made to students.

Supporters say this law will provide better regulation of predatory lenders. Many private schools, however,  say that the law will interfere with a successful educational model, and could eventually lead to more costs and fewer courses.

Fastweb Turns Fifteen

May 21st, 2010

Fastweb.com The scholarship-matching site Fastweb.com turns 15 on May 22, making it one of the longest-lived web sites since the beginning of the commercial Internet. In fact, Fastweb was one of the first 100 commercial web sites in the U.S.

And it can almost drive!

To celebrate its birthday, Fastweb is launching a “Take a Shot at $15K!” contest (login required) where members can enter to win by submitting  a photo that incorporates the Fastweb logo  in a “crazy creative way”.

Fastweb started life as a simple scholarship-matching site, but soon it was getting the attention of high school guidance counselors, parents, students, and scholarship providers.  The site now offers access to over $3.4 billion in scholarships.

For more, see this article on Fastweb.com and learn how the site began, what the Fast in Fastweb really means, and what’s been added through the years.

Borrowing Cap: Good for Students, Bad for Students?

May 3rd, 2010

A proposed US Department of Education rule would place a limit on how much students can borrow for education when the education they’re getting is from for-profit schools. The limit would be 8% of  their expected starting salary. So, if you as a new medical assistant make $25,000, you would pay back no more than $165 a month in loans. Secretary of Education Arne Duncan believes the rule would force underperforming for-profit training programs to fold.

This sounds good for students, but could force many colleges to cancel their programs, which could be bad for students  in the long run, say school administrators.

According to an article from the Albany Business Review, Michael Gutierrez, campus director of Bryant & Stratton in Albany, said some of their most popular programs, such as medical assisting and criminal justice, are popular because they lead to career placement after graduation. But a borrowing cap could mean fewer students would be able to enroll, and fewer students leads sooner or later to fewer programs.

Secretary Duncan maintains that the rule will ensure that for-profit schools have high job placement rates, low loan default rates and high graduation rates.

The Career College Association is fighting the cap, saying placing limits on funds could at a minimum make it more difficult for 360,000 students across the United States who attend for-profit schools.

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