Student Loan Blog : student

Colleges Step Up, Help Students With Extra Financial Aid

Student Loan Girl — Thu, 08 Jan 2009 23:13:00 GMT

If recent data is any indication, families are struggling to come up with the cash they need to send their children to college, and schools across the country are doing something to help those who’ve come up short, reports The Chronicle of Higher Education (“Colleges Offer Extra Aid to Strapped Students,” Jan. 9, 2009).

During the first few days of the new financial aid season that began Jan. 1 — the first day college students could submit their FAFSA (Free Application for Federal Student Aid), the application required for students seeking federal aid — 40 percent more families over the previous year had already sought out financial assistance (“Families Face Fierce Competition for Student Aid: Season Starts With Sharp Increase in Demand,” Business Wire, Jan. 6, 2009).

“The demand for student aid has been climbing as the recession batters family budgets, parents’ jobs are eliminated, and self- employed parents experience business downturns,” said Craig Carroll, CEO of Student Financial Aid Services, a financial aid advisory company.

Schools Create New Aid Programs or Beef Up Existing Ones

In response to the growing number of families facing limited options to pay for college, some schools are offering families an extended grace period to pay tuition bills, and other schools are meeting the growing demand for aid by expanding existing financial aid programs or creating new ones.

At Northern Illinois University, for instance, school administrators recently introduced the Huskie Advantage, a new aid program that meets tuition costs not covered by state and federal aid. The program, which the school will subsidize by shifting financial funds away from upperclassmen to underclassmen, who usually don’t qualify for as much federal aid, is only available to freshmen who qualify for Pell Grants and need-based state grants, according to Brent Gage, the school’s assistant vice provost for enrollment services.

Agnes Scott College in Georgia also recently announced a new program, the Agnes Solution, targeted at students who are eligible for the state’s Hope Scholarship. The school hopes that by providing qualified students with a $13,500 Agnes Solution scholarship and a $3,000 grant each year, combined with the $3,000 Hope Scholarship, the program will be able to cut the cost of attendance almost in half.

As part of a Saint Mary’s University of Minnesota plan to lower the cost of attendance for low- and middle-income students to match the average cost of the nation’s Big Ten universities, the school is expanding its Brother James Miller Program for Access. The program originally only covered students who met certain academic qualifications and whose families made less than $75,000, but due to the economic downturn, the institution has raised the income qualification to $100,000, and is currently collecting private funds so that it may provide aid for the school’s most financially needy students.

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Campuses Draw Vets as New GI Bill Benefits Kick In

Student Loan Girl — Tue, 30 Dec 2008 23:26:00 GMT

With the “21st Century GI Bill” set to take full effect in August 2009, colleges and universities throughout the country are preparing to receive the large numbers of veterans that will soon be transitioning from soldiers to students, reports The Detroit Free Press (“With New GI Bill, Campuses Prep for Influx of Veterans,” Dec. 29, 2008).

Campuses could see as much as a 25 percent increase in enrollment by military veterans in the next 2-3 years due to the new GI Bill, said Keith Wilson, education services director at the Veterans Benefits Administration.

The new bill will nearly double the college benefits offered under the old Montgomery GI Bill: anyone who has been on active duty for at least 36 months will get full tuition to the most expensive public university in their home state as well as monthly and yearly stipends to cover the costs of housing, books, and tutoring.

U of Michigan Students Push for Veteran Assistance Programs

Two veterans at the University of Michigan say that the state can leverage the new GI Bill and boost the state’s economy by catering to veterans at colleges.

Carl Ireland, president of the Student Veterans’ University of Michigan chapter, and Derek Blumke, co-founder of the Student Veterans of America, want Michigan to extend in-state tuition rates to all vets. They’re also lobbying colleges to establish on-campus veteran’s offices that assist students with any financial, housing, and mental health issues veterans may confront during their transition from active duty to academia.

School programs that assist veterans are a great marketing tool for universities, said Shaftone Bryne Dunklin, assistant director of Veterans Services at Eastern Michigan University. Dunklin believes that the new GI Bill will open classroom doors next fall to veterans who otherwise wouldn’t have been able to afford a college education.

Proposed Legislation May Soon Help Veterans

To ensure that veterans get the help they need statewide, both Ireland and Blumke have drafted a plan that they hope will become law sometime in 2009.

Besides requiring Michigan institutions to extend in-state tuition to veterans, their plan would require state universities to establish veterans’ offices that would assist vets in claiming their benefits, offer tutoring and other services, and act as a university liaison if a veteran is unexpectedly deployed. The proposal also seeks to waive the admissions fee for veterans and mandates that universities review a veteran’s military training to see if they can get college credit for their training.

Ireland’s and Blumke’s proposed legislation has the backing of two- time veteran and former U.S. Rep. Joe Schwarz, who said he will help the two veterans get their proposal before lawmakers. “The whole idea is make Michigan veteran-friendly, a place that is welcoming and a place where they’d want to pursue their education,” said Ireland.

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College Board Settles Inquiry into Its Student Loan Practices

Student Loan Girl — Thu, 11 Dec 2008 23:40:00 GMT

The College Board, which administers the SAT, ACT, and AP college admissions tests, has agreed to resolve an investigation by New York Attorney General Andrew Cuomo and Connecticut Attorney General Richard Blumenthal into its student loan practices.

As part of the settlement agreement, the College Board — which exited the student loan business last year — will allocate $675,000 to developing a set of tools, including calculators, that would help families and financial aid administrators across the country to compare student loan offers (“College Board Rapped for Student Loan Marketing,” North County Gazette, Dec. 8, 2008).

The tools will “help parents, students and educators with the college loan process” by identifying the lowest cost student loan options, said Jennifer Topiel, a spokeswoman for the College Board, in an emailed statement.

“Our investigation of the student lending industry revealed arrangements — concealed from students and families — between the College Board and financial-aid offices at several schools,” Blumenthal said in a statement December 8. “The College Board provided discounted equipment and services to the schools in exchange for a coveted spot on the schools’ preferred-lender lists.”

Cuomo characterized the College Board’s loan arrangement with colleges as deceitful, although he did say that the testing company, with “its national reach and extensive expertise in higher education,” was well-suited to help parents and students “borrow smartly” (“College Board Resolves Two State Student-Loan Probes,” Bloomberg.com, Dec. 8, 2008).

“Loans are hard enough to come by these days; the last thing we need are deceitful arrangements like this one that stand squarely in the way of students and parents getting the facts,” Cuomo said. “We should be doing absolutely everything we can to guide students to the least expensive, least complicated option for affording higher education.”

Code of Conduct Seeks to Protect Students

Should the College Board ever resume its college lending programs, it has said it will abide by the Attorney General’s Direct-to-Consumer Marketing Code of Conduct, which prohibits lenders and marketers of student loans from using deceptive marketing practices.

The code of conduct is the result of Cuomo’s investigations into the student loan industry that have uncovered widespread conflict of interest practices among colleges and student loan lenders. Colleges and financial aid officers received both payments and perks from lenders in exchange for placement on schools’ preferred lender lists.

Cuomo spokeswoman Emily Browne said that 22 lenders and 26 institutions have pledged to sever financial ties and abide by a code of conduct that prohibits accepting gifts or payments from lenders.

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