Student Loan Blog : College Funding

Students Left Holding the Bag as Loan Forgiveness Programs Vanish

Student Loan Girl — Wed, 03 Jun 2009 22:30:00 GMT

College graduates who were lured into high-need fields, including teaching, nursing, and public service, by programs that would forgive a portion or all of their student loans are receiving this sobering news: The cavalry isn’t coming after all.

These graduates, who in some cases were enticed by the loan forgiveness programs to take out student loans that exceeded their earning potential, are now discovering they’re on the hook for their large debts — and are struggling to pay them — because the state agencies originally offering the loan forgiveness can no longer afford to do so.

“We’d gotten married in June and bought a house, pretty much planned our whole life,” said Travis Gay, a special education teacher in Kentucky (“Recession Imperils Loan Forgiveness Programs ,” The New York Times, May 27, 2009).

Gay and his wife, Stephanie, also a teacher, thought they had a handle on repaying the $100,000 they owed in combined student loans. They were under the impression that a portion of their college loans would be forgiven each year over the next five years under a state program offering loan forgiveness for schoolteachers.

Then the Gays received a letter from the Kentucky Higher Education Student Loan Corporation, the lending agency that offered the program, “saying that our forgiveness this year was next to nothing.”

The student loan agency contends that it never promised the thousands of indebted public school teachers and nurses who have been affected by cuts to the program that their loans would definitely be forgiven. Financing for the loan forgiveness program was never actually guaranteed, says Ted Franzeim, vice president of customer relations for the student loan agency.

And it’s not just Kentucky borrowers who are being hurt by program cuts. Student loan forgiveness programs are on the chopping block throughout the country as the state agencies and nonprofit student loan organizations that sponsor these programs reel from dwindling government aid and strained market conditions.

The New Hampshire Higher Education Loan Corporation, for example, suspended its loan forgiveness program for teachers, and the Pennsylvania Higher Education Assistance Authority has put the brakes on its loan forgiveness program for nurses and people called to active duty in the military.

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Colleges Receive $70 Million in Anonymous Donations

Student Loan Girl — Wed, 29 Apr 2009 22:21:00 GMT

An anonymous donor is playing secret Santa with at least a dozen colleges and universities nationwide, but instead of giving $5 trinkets this Santa has left schools with $1 million to $10 million gifts, The New York Times reports (“Anonymous Donor Gives Millions to Colleges,” April 24, 2009).

Over the past two months the donor has given away $70 million to select schools. To remain anonymous, the donor employs a bank to contact the schools either with a call or letter that relays sentiments similar to what was written in one letter: “It is hoped that this will make a substantial difference to your students during these challenging times… enabling a more confident, sharper focus on their studies with improve career and life prospects.”

None of the school officials at the selected schools know whether the donations are coming from a man, woman, or organization, and no one seems to want to jeopardize their gift by speculating too much about the reasoning behind the donor’s selections. There’s a pretty clear consensus, however, that the schools share one common trait: they’re all led by women.

Lois DeFleur, president of Binghamton University in New York, is more than fine with this reasoning, if it is indeed the case, “The actions say, ‘I’m investing in an institution because it has achievements and I believe that with women leaders it will have future accomplishments.’ That’s pretty powerful in my view.”

The donations, which at some schools have been the single largest donation in the school’s history, have ranged from the $10 million given to Michigan State University, to the $1.5 million given to the University of North Carolina in Asheville. In return the donor has asked for complete anonymity and for the majority of the donation — 50 percent to 80 percent of the total donation in each case — to be used for financial aid.

The schools say they are extremely grateful for being chosen, particularly since higher education institutions across the country have seen an increasing demand for financial aid at the same time that state funding and endowments are drying up.

“In the best of times we never have enough scholarship money for students who have financial need,” said Susan Cole, president of Montclair State University in New Jersey. “In these difficult times, that is multiplied. The gift is incredibly important to us. I cannot adequately express the depth of our gratitude.”

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Top-Performing Students Denied State Scholarship Funds

Student Loan Girl — Mon, 27 Apr 2009 23:02:00 GMT

Some 1,500 Georgia high school students will not receive the state scholarship funds they were promised for becoming valedictorians or for graduating in the top of their class, The Associated Press reports (“Georgia Scholarships to End for 1,500 Students,” April 26, 2009).

In a last-minute decision, state legislators cut the Governor’s Scholarship Program out of Georgia’s 2009 state budget, leaving the state’s Student Finance Commission to notify students they won’t be receiving the financial aid they were promised for the coming academic year.

The scholarship program was created in the mid-1980s to encourage the state’s top high school graduates to choose in-state schools for their college education. Over the past few years the state has significantly reduced funding for the scholarship, cutting the program’s funds from more than $4.5 million in the mid-1990s to $1.3 million in recent years.

Governor’s Scholarship recipients also receive Georgia’s HOPE scholarships, which give students up to $3,500 to cover tuition, fees, and books at the state’s public institutions. The Governor’s Scholarship is intended to help students pay for room and board and other miscellaneous college expenses.

Some state officials have argued that the funding cuts to the program may have made it difficult for the program to meet its intended goal of retaining the state’s top students.

“[$900 is] not enough to say, ‘Instead of going to Harvard or going to Vanderbilt or going to Duke, I am going to the University of Georgia,” said president of the Georgia Student Finance Commission, Tim Connell. “It’s probably became more of an ‘attaboy’ for valedictorians.”

State Representative Kathy Ashe, a former teacher and a member of the House Education Committee, said she wasn’t made aware of the program’s elimination until she received a copy of the Student Finance Commission’s letter to students but she believes that these incentive programs are needed.

“We need to make it a priority to reward these deserving students and keep them in the state,” Ashe said. “I think it’s one of those places where priorities become very clear.”

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Rejected: San Jose State U Says ‘No’ to 4,400 Qualified Students

Student Loan Girl — Tue, 31 Mar 2009 22:43:00 GMT

For the first time, San Jose State University has turned away qualified students from its freshmen class — 4,400 students who live outside the county, to be exact — saying that budget cutbacks have forced the university to scale back enrollment, reports the San Jose Mercury News (“San Jose State University Rejects 4,400 Prospective Freshmen,” March 25, 2009).

Transfer students who had just completed their first year at a community college or applicants who were seeking their second bachelor’s degree were among those denied admission.

“The situation is unprecedented,” said Veril Phillips, vice president for student affairs at San Jose State. “We’ve never had a situation where there were so many applicants and we were not able to accommodate them.”

School administrators were told on Nov. 20 by California State University system chancellor Charles Reed to cap enrollment since funding hadn’t kept pace with the growing number of applications. The CSU system received approximately 10 percent less funding than it needed to meet current demand, the Mercury News reported.

As a result, San Jose State was forced to accept only 29,750 students for the upcoming 2009-10 school year — a 9 percent dip from the 32,750 students the school enrolled last school year. Qualified students who applied prior to Nov. 20 were accepted, regardless of where they lived. After that date, however, only qualified Santa Clara County residents were admitted.

“Some students didn’t get in that applied. But most of them made other plans, to Cal State University-Monterey Bay or Cabrillo Community College,” said Julie Edwards Levy, manager of career services at Scotts Valley High School.

“They’re working with what they have to work with,” she added. “They’re not happy but they’re figuring it out.”

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Harvard Inks Custom Loan Deal to Help International Graduate Students

Student Loan Girl — Tue, 03 Mar 2009 23:47:00 GMT

At a time when large numbers of lenders exiting the student loan marketplace has made it more difficult for international students to find college and graduate school funding, Harvard has announced an exclusive agreement with JPMorgan Chase that will allow the school’s international graduate students to borrow up to the full cost of attendance without a co-signer, reports The Harvard Crimson (“Harvard Strikes Loan Deal,” March 2, 2009).

Considered the first deal of its kind for the banking giant, the new private loan agreement may make it easier for international students — who are ineligible for U.S. federal financial aid — to get the money they need for school.

The JPMorgan deal was arranged after Citibank announced it would no longer offer loans to Harvard’s international graduate students in October of last year, citing the frozen credit markets and higher loan default rates among international students compared to their American counterparts.

Citibank also cancelled similar arrangements with MIT and the University of Michigan, The Harvard Crimson reports.

Harvard’s arrangement with JPMorgan is part of the school’s pledge to maintain its current levels of graduate student aid for the next school year even at the expense of other programs, says Harvard President Drew Faust — a commitment she deems one of the university’s top priorities.

The university has also unveiled several expanded financial aid programs, including those for Harvard Law School and Harvard Medical School, as part of its renewed commitment to meeting student need.

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Bill Gates To Give Low-Income Students $70 Million In Grants

Student Loan Girl — Thu, 11 Dec 2008 00:16:00 GMT

To help ensure that low-income students can afford a college education in the midst of a recession, the Bill & Melinda Gates Foundation is committing nearly $70 million in grants toward its goal of doubling the number of low-income students who earn a college degree or vocational credential by age 26, The New York Times reports (“Gates Grants Aim to Help Low-Income Students Finish College,” Dec. 5, 2008).

Anthony Carnevale, director of the Center on Education and the Workforce at Georgetown University, says the foundation’s latest efforts to assist low-income students couldn’t come at a more opportune time since college-educated employees are more likely to get jobs during a recession. The unemployment rate for people without a college education is generally four times as high as for those with a two- or four-year degree, he says.

Low-income students are already at a disadvantage, graduating from college at only a 25-percent rate. And a majority of the 560,000 high school students in the U.S. who graduate in the top of their class, Carnevale adds, don’t earn a degree within eight years of their high school graduation and come from families that earn less than $85,000 a year.

“We console ourselves that we’re going to be fine in the world because we have this great higher education system and all our kids are going to college,” said Hillary Pennington, who will direct the Gates Foundation’s postsecondary effort. “But [low-income students are] not finishing. That is enormously debilitating for young people.”

Foundation Proposes Far-Reaching Initiative

While the Gates Foundation — the world’s largest philanthropy — has given almost $2 billion to help U.S. high schools make needed improvements over the last eight years and dedicated another $2 billion for minority college scholarships, this is the foundation’s first endeavor into postsecondary education reform and it hopes to gain the support of other groups and organizations.

“The Gates Foundation can’t address the financial burdens by itself, but its focus on what types of programs work best may help spur action by the federal government,” said Richard Kahlenberg, a senior fellow with the Century Foundation.

If the foundation meets its goal, the number of U.S. college graduates each year would increase by 250,000.

The foundation will dedicate $33.2 million of its $70-million grant initiative to help prepare postsecondary education students to better succeed in college and $13 million in grants to assist the MDRC, a nonprofit education research organization, in expanding its performance-based scholarships for low-income college students.

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Feeling the Pinch of Rising Food and Gas Prices, Students Flock to Food Banks

Student Loan Girl — Tue, 29 Jul 2008 19:42:00 GMT

The rising cost of food and gas has become so taxing for some students that food banks in college towns are beginning to see an influx of students, according to an Associated Press article (“Struggling College Students Turn to Food Banks,” July 26, 2008).

The University District Food Bank located in a college neighborhood near the University of Washington campus has seen a 25-percent increase in demand and now serves about 150 students a week.

And the Community College of Denver, which runs its own food-assistance program for students, asked the school this year to double its annual budget to $3,000 to account for a 50-percent increase in demand.

With food prices rising 5 percent in the past year — the highest increase in nearly two decades — and gas prices topping four dollars a gallon across the country, “more and more, it’s just the typical traditional student, about 18 to 22, that’s feeling this crunch,” says Larry Brickner-Wood, director of the Cornucopia Food Pantry at the University of New Hampshire.

Doug McManaway, a University of Washington student, says that after paying for rent he only has $100 left to spend on food for the rest of the month. A food bank may be his best option, he says, although “it kind of grosses me out.”

“But if my parents say, ‘No, we’re not going to give you any more money,’ ” McManaway says, “[food banks] may be a last resort.”

While food stamps are another option for students, qualifying for the program is a more complicated and restrictive process than getting in to most community food banks, which most often just ask students to provide a student ID to prove they live in the area.

To be eligible for food stamps, college students generally must be on public assistance benefits, work at least 20 hours a week in a state or federal work-study job, and take care of a dependent household member under the age of 6. Students who are enrolled in employer-sponsored job training classes may also be eligible.

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Colorado Colleges and Universities Receive $200 Million in Construction Funding

Student Loan Girl — Tue, 27 May 2008 23:56:00 GMT

Colorado Governor Bill Ritter recently signed into law the Higher-Education Construction Act, allocating more than $200 million for construction projects at colleges and universities across the state, according to an article in The Cherry Creek News (“Gov. Ritter Signs Higher-Ed Construction Bill Into Law Today ,” May 12, 2008).

Gov. Ritter signed the bill in front of a huge hole in the ground at the Auraria Higher Education Center, where construction was halted in March after the state legislature pulled $37.5 million in funding.

“Higher education is about hope and promise and opportunity,” Ritter said at the site. “That’s why we are here today. This hole in the ground is going to be filled with a world class building that will provide opportunities for thousands of students so they can achieve their full potential.”

Including the new Auraria science building, the $200 million will be distributed to 12 Colorado colleges and universities for specific building and renovation projects:

$63.6 million, Auraria Higher Education Center: To construct the Auraria’s science building project.
$22 million, Colorado State University-Pueblo: For remodeling the school’s Academic Resources Center.
$21.3 million, Colorado Northwestern Community College-Craig Campus: To construct the Academic Building.
$21 million, Western State College: To complete the renovation and addition to Taylor Hall.
$17.1 million, University of Colorado at Colorado Springs: To renovate the school’s existing science building.
$14.8 million, Mesa State College: For the Wubben Hall expansion and renovation.
$14.2 million, Front Range Community College-Larimer Campus: For the completion of the Science Classroom Project.
$12.6 million, Adams State College: To complete the renovation of and addition to Richardson Hall.
$11.6 million, University of Northern Colorado: For renovating the Butler-Hancock building.
$6.7 million, Colorado School of Mines: To complete the Brown Hall addition.
$4.7 million, Morgan Community College: To construct the Nursing, Technology and Science Building.
$2 million, Colorado State University-Fort Collins: For the revitalization of the Clark building.

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The Spread of Urban “Dropout Factories”: Lack of Funding Threatens Cities’ Public Universities

Student Loan Girl — Mon, 23 Jul 2007 05:57:00 GMT

The nation’s urban public colleges and universities, faced with a decline in state funding along with mounting pressure to keep tuition low and to produce measurable results of academic success, are confronting the same challenges that have already defined so many of the country’s urban high schools and elementary schools and that have turned them into what U.S. Secretary of Education Margaret Spellings has called “dropout factories.” Because public colleges and universities tend to serve a larger percentage of lower income, minority and immigrant students than suburban private universities, their financial struggles will affect already disadvantaged students the most, argues Stephen Jordan in a recent opinion piece for Inside Higher Ed (“Stop Starving Our Urban Public Universities,” July 17, 2007).

“Conflicting pressures have put urban public institutions of higher education that serve large numbers of low-income and students of color in a straitjacket,” writes Jordan, president of the Metropolitan State College of Denver. “Urban institutions are being asked to do more and more with less and less.” The fiscal threat to public urban colleges and universities is one with long-term and inveterate consequences, Jordan maintains—consequences that, like the academic and economic problems at urban K–12 schools, could become “deep and entrenched.” Like their troubled K–12 feeder schools, “public urban baccalaureate colleges are headed down the same path, thanks to the lack of funding, an increasing number of students needing remedial coursework and the shrinking pipeline to good education available to low-income and students of color in this country.”

The Urban Education Chain Reaction

“The problems facing higher education in cities,” writes Jordan, which are typically home to higher rates of poverty than suburbs, “dovetail with other urban problems such as the quality of urban K–12 schools and the socioeconomic status of their students.” Urban K–12 distress has become contagious. With K–12 and postsecondary public schools both at the mercy of state funding, “urban institutions of higher education have begun to endure challenges and inequities that mirror those faced by our feeder schools and districts.”

The state of many urban high schools is, in Jordan’s characterization, “abysmal.” Urban school districts, “filled with lower-income and students of color, are deteriorating,” he writes. The discrepancy in the state of urban and suburban high school education makes itself felt at the college level: Not only is the rate of college enrollment “in the college-age population in cities … about half of what it is in the suburbs,” but the urban low-income students who do matriculate “are coming to college with severe academic deficiencies, particularly in the areas of writing, mathematics and science.” These students, according to Jordan, tend to be “place-bound, often of limited economic status” and their preparation for college less rigorous. “Furthermore, many students from economically challenged backgrounds lack college-going family precedent or role models.”

The upshot, Jordan presses, is that “state-supported urban institutions are being asked … to provide more academic and student support services to students coming through pre-collegiate educational pipelines that have not prepared them for college than is true for many other kinds of colleges.”

To address the academic deficiencies and lack of peer and mentor networks faced by their low-income students, colleges and universities serving large numbers of these students are striving to carry out a range of support services and programs, such as peer counselors and mentors, enhanced orientation programs and increased collaboration with urban high school districts. But with increasing limitations in state funding, Jordan points out, “many of these programs are in jeopardy.”

Facing More Demands With Fewer Resources

“The ’90s was a decade of dramatic growth in state revenues,” writes Jordan, “yet there was a simultaneous shrinking of their colleges’ share of state budgets, as more programs and services began to compete with higher education for funding.”

From 1970 to 2000, government appropriations per student for public higher education institutions increased 3 percent in constant dollars. During the same period, tuition and fees per student increased 99 percent, according to the National Center for Education Statistics.

While funding for public postsecondary education has been on the decline, “performance and accountability mandates” are on the rise. “State legislatures are expressing more interest in investing in the explicit results that come from public higher-education institutions, rather than investing in higher education itself,” Jordan argues, all the while pressuring their schools to keep tuition affordable. Although many colleges have compensated for slashes in state funding by raising student tuition and fees, some public institutions, like Jordan’s own Metro State, “have a statutory obligation to be accessible and keep tuition low with no corollary mandate for adequate funding to provide necessary wrap-around services for students from underserved backgrounds.”

These contradictory precepts are leading to shrinking options for the students who have the fewest alternatives and can afford it the least. “In urban institutions that serve larger populations of low-income and students of color, the combination of decreased state funding and the continued imperative for lower tuition means a smaller pool of financial resources from which to draw to educate some of our neediest populations.”

Separate and Increasingly Less Equal

“If they go to college at all,” Jordan contends, “students from traditionally underserved backgrounds often attend institutions with less stringent admission standards and lower retention and graduation rates, including community colleges and urban colleges and universities.” What this means is that “options for low-income and students of color, in high school and college, are becoming separate but not equal” to those for suburban and more affluent students. By disproportionately affecting needier students, the funding crunch at public colleges and universities only threatens to widen the income gap between these students and their private school counterparts.

On average, college graduates earn almost twice as much as high school graduates ($51,206 versus $27,915 a year in 2004, according to the Census Bureau). And a higher salary, says Jordan, means “greater purchasing power and … higher tax revenue.” A college diploma benefits not only the individuals, but their communities. Jordan cites Colorado as an example: “If low-income and students of color graduated and were employed at the same rate as other students, it would annually generate an estimated $967 million in additional tax revenue, according to the National Center for Public Policy and Higher education.”

In Jordan’s view, if we hope to break the chain of poverty that claims so many low-income urban communities, we must find a way to put the funding of our public postsecondary institutions on par with that of the private institutions. In the words of Secretary Spellings, whom Jordan quotes, “We must ensure the same opportunities available to kids in the suburbs are available to kids in the city. If we don’t, we will most certainly become a poorer, more divided nation of haves and have-nots.”

Talk to the education finance advisors at NextStudent. They have all the information and advice you need on student loans. Check out www.nextstudent.com.

Be sure to tune in next Tuesday for my next blog about this week in student loans.

Student Loan Girl

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Pell Grant Increase: Where Is It All Coming From?

Student Loan Girl — Tue, 13 Feb 2007 22:13:00 GMT

Last week I speculated on how President Bush intended to pay for the increase in awards for Pell Grants. Now it is official, with the details recently being released. The president’s proposal is summarized in an article by Kelly Field titled “How President Would Pay for Increase in Pell Grants” that appears in the Feb. 16, 2007 issue of The Chronicle of Higher Education: “The good news for colleges and loan companies turned bad last week as President Bush revealed that he would pay for a much-heralded increase in the maximum Pell Grant by cutting lender subsidies and eliminating the Supplemental Educational Opportunity Grant program.”

Unfortunately, as I also mentioned last week, if the president’s proposal is passed by Congress, low-income students likely will be negatively affected. “But the increases would come at a cost to some low-income students and to lenders in the federal government’s guaranteed-loan program. Many SEOG recipients would receive less need-based aid in 2008 than in 2007. And lenders would see their federal subsidies slashed for a third time in a year, this time by $18.8-billion,” the article stated.

Deep Cuts Cover Increase

According to the article, “Additional dollars for the increases in the Pell Grant program and the competitiveness grants would come from the elimination of the $880-million Supplemental Educational Opportunity Grants Program.”

Cuts would not be limited to the SEOG Program. As the article reported, “The cuts would not stop with SEOG, however. To achieve additional savings, the budget would also abolish the $64.5-million Leveraging Educational Assistance Partnership program, which matches each dollar that states commit to need-based aid, and the $40.6-million Robert C. Byrd Honors Scholarship Program.

“It would also end the Perkins Loan Program and require colleges to return the federal share of the money they use to make new Perkins Loans.”

After carefully considering the facts, it appears that the increases may be a mixed blessing, one that has both its proponents and opponents. Our Pell Grants will be increased more than ever, but at what cost? Does it make sense to entirely eliminate the Perkins Loan Program to receive the much-needed Pell increases?

There are a few other points from the article highlighting what President Bush’s proposed budget would accomplish that are of interest to college students and their parents as outlined below.

Notable Provisions of Proposed Budget

“Among other things, the president’s budget also would:

· Increase annual subsidized-loan limits for juniors and seniors by $2,000, to $7,500, while raising the aggregate undergraduate borrowing limit by $7,500, to $30,500. Congress raised the loan limits for freshmen, sophomores, and graduate students last year, but did not increase them for juniors and seniors.

· Provide $24-million in grants of $1-million each to colleges and school districts that work together to educate students in languages critical to national security, such as Arabic, Chinese, Japanese, Korean, and Russian.

· Raise the interest rate on PLUS loans from 7.9 percent to 8.3 percent for borrowers in the Direct Loan program, while reducing it by 0.2 percent, to 8.3 percent, for borrowers in the guaranteed loan program. Congress raised the rate on PLUS loans to 8.5 percent for borrowers in the guaranteed-loan program last year, but because of a drafting error in the bill, direct-loan borrowers were spared the increase.

· Make Pell Grants available year-round, while limiting Pell eligibility to the equivalent of 16 semesters.

· Eliminate a rule that enables students at costlier institutions to receive larger Pell Grants.

· Allow students and parents to exclude money held in Section 529 college-savings accounts when calculating their financial need. Contributions to such savings accounts are taxed, but the interest that accumulates is tax free.”

Talk to the education financial advisors at NextStudent. They have all the information and advice you need on student loans. Check out www.nextstudent.com.

Be sure to tune in next Tuesday for my next blog about this week in student loans.

Student Loan Girl

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American Council on Education Meeting

Student Loan Girl — Tue, 13 Feb 2007 17:02:00 GMT

The American Council on Education opened its 89th annual meeting this past Sunday, Feb. 11, 2007. According to a Feb. 12, 2007 article by Richard Byrne titled “At Annual Meeting, Council Focuses on Issues of Access and Accountability,” that appeared in The Chronicle of Higher Education, “The theme of the council’s 2007 meeting, which continues through Tuesday, is ‘The Access Imperative.’”

Access to higher education for lower-income families seems to be the prominent theme lately among higher education legislators, advocates and watchdogs. Byrne reported that within the American Council on Education circles, “Much of the discussion of the access issue has focused on a lack of preparedness for higher education among low-income and minority students, and the social and cultural barriers to their entry to universities in greater numbers.”

Questions on Accountability

As well as access to higher education, members at the meeting discussed the ever-looming issue of quality control when it comes to higher education and the pursuit by some institutions to rank on consumer guides to college such as that of U.S. News & World Report.

The article reports, “The members of a panel titled ‘Who Is Defining Quality in Higher Ed? At What Cost?’ agreed that a number of factors have created something of a mania for assessment and accountability in higher education. Those factors include recommendations made by the federal Commission on the Future of Higher Education and a scrum by universities to rise in popular institutional rankings, such as U.S. News & World Report’s annual college guide.

‘One of the great things about the blossoming of rankings is that there are a lot of different ways of looking at institutions from the outside,’ said Ben Wildavsky, a senior fellow in research and policy at the Ewing Marion Kauffman Foundation. (Before joining the foundation, Mr. Wildavsky served as editor of the U.S. News & World Report’s annual college rankings.)”

Low-Income Kids Given the Boot

Apparently, some members of the council see a correlation between a college’s desire to rank on consumer lists and limited access to higher education for low-income students. Byrne reported, “Some of the practical fallout of the pursuit of prestige has been reflected in a lessening of flagship universities’ commitment to low-income and minority students, said Kati Haycock, director of the Education Trust. Her group, an independent research and advocacy organization, released a report in late 2006 that ranked top state universities’ commitment to such access issues and found many of them wanting (The Chronicle, November 21, 2006). Those rankings suggest that ‘most flagship universities have walked away from low-income kids and kids of color,’ Ms. Haycock said on Sunday.”

It is important to keep up to date on all the news regarding student loans and education.

Talk to the education financial advisors at NextStudent. They have all the information and advice you need on student loans. Check out www.nextstudent.com.

Be sure to tune in next Monday for my next blog on student loan issues in the news.

Student Loan Girl

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College Valentine’s Day: ‘Here, Near But Nothing to Fear’

Student Loan Girl — Sat, 10 Feb 2007 04:54:00 GMT

Forget the boxes of expensive candy and the overdone roses—ever hear of the freshman 15 (pounds that is)? And for those of you who think you are clever, lingerie may look good at first glance, but where is that going to get you, seriously? I am talking long-term, quality relationships based on mutual respect.

Me? I am shooting for original and creative this Valentine’s Day. Here is a great idea guaranteed to score you major bonus points. It works best for those of you still clinging to long-distance relationships, however remote.

Seriously Sentimental Gift Idea:

1) Write out a really heartfelt poem, letter, or whatever you think is APPROPRIATE to the one you “love.”

2) When your masterpiece is perfected, buy a white or other colored puzzle.

3) Carefully write your message on the puzzle, making sure it actually is readable.

4) When you are done, break the puzzle into pieces, put it in a can, and then box it for shipping.

5) Include a short note wishing the person a Happy Valentine’s Day that also asks the person to check inside the can.

6) Wait for that juicy phone call of appreciation that enhances your value and self-esteem.

Gifts that Really Are a Bad Idea (courtesy of the Amazon.com Web site):

The book, “You on a Diet.”
“Do I look like a people person?” T-shirt.
The book, “Fart Proudly: Writings of Benjamin Franklin You Never Read in School.”
A giant ant farm.
“Why You’re Dumb, Sick & Broke ... And How to Get Smart, Healthy & Rich!” a book by Randy Gage.

For those of you who have absolutely no inkling to try the above cheesy tactic, and now have a clue of what NOT to do, take heart. Here are some great flicks that you and yours could watch that may increase the romance factor right away.

Movies to Get You and Your Date ‘In the Mood’ (along with memorable quotes):

“Body Heat” – “You aren’t too smart. I like that in a man.”
“The Big Easy” – “If I can’t have you, can I at least have my gator?”
“Flirting” – “Football. It’s a form of mating ritual.”
“Jerry Maguire” – “You had me at ‘hello.’”
“Secretary” – “Who’s to say that love needs to be soft and gentle?”
“Say Anything” – “I gave her my heart, she gave me a pen.”

And finally, for those with absolutely no creative bone in your body but an insatiable desire to please, go to this Web site to hire someone to write that romantic poem for you: http://www.poemstogo.tv/happyvalentinesday.html. Second thought, do it yourself and save the $65 bucks.

The Education Finance Advisors at NextStudent can help you figure in all your college expenses so that you get the student loan that best suits your needs. Don’t get caught short. Go to www.nextstudent.com for all your student loan needs.

Check back here next Friday for my next blog on Campus Life.

Student Loan Girl

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Perkins Program Cuts: Hint of More to Come?

Student Loan Girl — Thu, 08 Feb 2007 20:46:00 GMT

This past week I have reported on what is happening with the FY08 budget, a big part of which is the increase in the Pell Grant from $4,600 this year up to $5,400 by 2012. The question on everyone’s mind is: Where is all that extra money going to come from? Many have speculated that the $2 billion-plus required to cover the increase would come from cutting other federal programs or grants that favor low-income students and their families.

According to a Feb. 6, 2007 article by Karin Fischer titled, “Perkins Career and Technical Education Program Survives but Would Be Cut in Half” that appeared in The Chronicle of Higher Education, there may be a partial answer. Apparently, President Bush is slashing funding for the Carl D. Perkins Career and Technical Education program that serves low-income families. My guess is that this action is the beginning of several cuts yet to come that likely will cover the $2 billion Pell Grant shortfall.

Funds Slashed, But Program Retained

Fischer wrote, “Under the president’s budget plan for 2008, which was released on Monday, the vocational-education program would receive $617.4-million, down 52.6 percent from the 2006 fiscal year, the most recent year in which a federal budget was signed into law.”

Earlier, Bush commented that the program was “ineffective,” the article said, intending to eliminate it altogether. In fact, according to the article, “In his 2007 budget proposal, President Bush had called for the elimination of all federal technical-educational spending, saying that the Perkins program had ‘produced little or no evidence of improved outcomes for students despite decades of federal investment.’ ”

The article continued, “But administration officials were persuaded not to press again to scrap Perkins after changes were made during the program’s reauthorization last summer (The Chronicle, August 4, 2006).”

Either way you look at it, the money has to come from somewhere, and that means cuts to valuable programs of debatable value, depending upon with whom you talk. This implies growing pains for those who see their funding disappear, pains that likely will be isolated to the low-income college student camp.

Low-Income Students, Community Colleges Most Affected

The intended cut has received much criticism. The article quoted David S. Baime, vice president for government relations at the American Association of Community Colleges, who said, “Our colleges cannot comprehend that an administration that is so laudatory of their work would slash a program that is so essential to their quality. It is just totally bewildering to us.”

This community college segment of the student population is the one that may be hardest hit. “About 40 percent of Perkins funds go annually to community colleges to prepare students from low-income families for the workplace,” the article stated.

Here is the rundown from the article on the specifics of the cuts: “The budget plan would cut the amount of money awarded in state grants through the Perkins program by nearly 50 percent from the 2006 fiscal year allocation, to $600-million. And it would eliminate federal support for the Tech-Prep program, which gives students a technical education spread across two years of high school and two years of community college. About $104.8-million in Tech-Prep grants were awarded in 2006.”

We Got Our Wish—Or Did We?

So, as college students, we got what we asked for: increased Pell Grants. For that I am encouraged and thankful. However, I wonder the real long-term effects and how they will “shake out.” Will we really be reaping the benefits, as the government says, or are we simply witnessing a shifting of funds from one program to another, due to popular demand? Only time will tell.

The student loan advisors at NextStudent are helpful and knowledgeable about student loans. They are a trusted source in getting you the appropriate information about your student loan consolidation, student loan options, and helping students get the college financing they need. Go to www.nextstudent.com for more information.

Be sure to tune in next Thursday for my next blog on student loan advice.

Student Loan Girl

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Budget Picture FY08

Student Loan Girl — Wed, 07 Feb 2007 20:43:00 GMT

As I reported earlier this week, President Bush released his FY08 Budget on Monday, Feb. 5, 2007. And although it promises to increase the maximum Pell Grant to $4,600 this year up to $5,400 by 2012, he will use funds from other grants for low-income students to support the increase. However, how much value do presidential budget requests really hold, and what do lenders thing about Bush’s budget?

According to a Feb. 6, 2007 article by Doug Lederman titled “The Bush Budget, 2008” that appeared in Inside Higher Ed, “Even in the best years, presidential budget requests are of uncertain value, because they mark only the starting point for a long and often tortured process of deliberation, negotiation and, sometimes, outright war. The value of the White House’s 2008 budget is diminished further because Congress has yet to finish its work on the final budget for the 2007 fiscal year. That reality renders the numbers in the Bush budget for 2008, if not meaningless, at least hazier and fuzzier than usual.”

Changing the Budget Could Mean Complications for Legislators

By earmarking funds that would go to other low-income grants to help solve the Pell Grant initiative, Bush seems to complicate the college funding crisis even further. Lederman reported, “The budget picture is complicated even further by the fact that the administration would seek to pay for some of its new initiatives with changes in mandatory spending programs that would require the kinds of major alterations in federal student aid law that legislators are loathe to make in the budget-setting process.

“The more than $2 billion that the department would try to squeeze from lender profits to pay for the 2008 Pell Grant increase, for instance, would be possible only if Congress were to include such changes in legislation to renew the Higher Education Act, or pass a complicated budget reconciliation measure, in conjunction with the annual appropriations bills. Those prospects are dicey, casting further doubt on the likelihood that the Bush budget numbers will come to pass.”

What the Lenders Say

The new budget also proposes to “cut the interest rate subsidiary” that private lenders receive for funding federal student loans “by 0.5 percentage points” in a bid to raise the additional 12.4 billion needed to increase the Pell Grant to $5,400 by 2012, the article said.

In the article, Lederman quoted Joe Belew, president of the Consumer Bankers Association, as saying “Student lenders cannot sustain cuts of this magnitude, which would cut margins by about 20 percent. Driving away banks from this program will leave students with either a government monopoly or an oligopoly of loan providers and few if any of the benefits currently provided by competition. These include lender-paid origination fees, financial literacy and default prevention counseling, rate reductions for timely repayments, and quality customer service. Without banks in the student loan program, graduates can look forward to IRS-style quality of service.”

It is important to keep up to date on the effects of legislation and news on student loans and education. What goes on in government and in your state can have a great impact on your student loans and your college education.

For all the information you need about student loans, go to www.nextstudent.com.

Be sure to tune in next Wednesday for my next blog on student loan legislation in the news.

Student Loan Girl

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Pell Grant Gets Welcome Boost in 2007-2008 Budget Plans

Student Loan Girl — Tue, 06 Feb 2007 22:14:00 GMT

In previous blogs, I addressed that college education is becoming more and more unobtainable for low-income students. Many are opting out of the system, choosing to attend community colleges or not to attend at all, since the debt load required for attendance is overwhelming. Many financial aid advocates have been lobbying the federal government to increase the Pell Grant, as it has remained at its present level for years, and is a key consideration for those lower income students when financing their education.

Now it appears that the many voices of students, parents and advocates have been heard and is being acted upon. “Momentum to increase the Pell Grant has been accumulating in recent months, amid a blizzard of reports about insufficient access to higher education for students from low and moderate income families and, especially, in the wake of the clarion call by Spellings’s own Commission on the Future of Higher Education to raise the purchasing power of the maximum Pell Grant to 70 percent of the average in-state annual tuition at a four-year public college (it now rests somewhere in the mid-40s),” according to a Feb. 2, 2007 article by Doug Lederman titled “Upping the Ante on Pell Grants” that appeared in Inside Higher Ed.

Spellings Unveils Long-Term Solution

In a recent speech at a conference at North Carolina State University, the article reported that Secretary of Education Margaret Spellings reiterated the very thing I mentioned above. She said, “For low-income, mostly minority students, college is becoming virtually unattainable. States, institutions and the federal government — we all must increase need-based aid. The president plans to do just that. When he unveils his budget next week, the president will call for the biggest increase to the Pell Grant Program in over 30 years.” Spellings added that there will be provisions for “real money that will help more low-income kids realize the dream of a college education.”

As I mentioned in my blog yesterday, Feb. 5, 2007, the proposed Pell increase now has come one step closer to reality, as Spellings “announced that President Bush’s 2008 budget would call for increasing the maximum grant by another $290, to $4,600, next year and to $5,400 over five years,” the article reported. This is on the heels of the 2007 budget plan raising “the maximum Pell Grant by $260, to $4,310,” according to Lederman.

Concerns Regarding Cost of Increase Voiced

Although many leaders are quite thrilled with the planned increase, there are some significant concerns as to how the cost of the raise will be covered over the years, including fears that the money will be siphoned from other programs, soon to be cut.

Lederman reported, “For many of them, though, the elation was muted by the fact that administration officials declined to provide details about how they would pay for what they called the ‘largest Pell Grant increase in three decades.’ (The maximum grant rose from $452 to $1,050 in 1974-5, the program’s second year.) In advance of Thursday’s announcement, speculation had been building among college lobbyists that the White House would propose a Pell Grant increase, but would pay for it largely with money snagged by ending other student-aid programs, including the Supplemental Educational Opportunity Grant Program, which provides about $770 million a year to low-income students.”

My thinking is that while these proposed budget increases for the Pell certainly are something in favor of the average college student, a lot remains to be seen. If the government is looking to up the “ante” for the much-publicized and well-known Pell Grant, while cutting or eliminating other less common programs, I wonder what the real long-term benefit will be, if anything.

Talk to the education financial advisors at NextStudent. They have all the information and advice you need on student loans. Check out www.nextstudent.com.

Be sure to tune in next Tuesday for my next blog about this week in student loans.

Student Loan Girl

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