The stated mission of the State Student Assistance Commission of Indiana is to make college affordable for all Indiana students. Yet recently, the commission announced a 31 percent reduction in state financial aid for Indiana students. Something doesn’t match up here.
I’m a senior communication studies major at Manchester College, a private liberal arts college in northern Indiana. The financial aid I receive from the state is crucial to my ability to attend college.
I am the first person in my family to attend college. Because both of my parents have low-income jobs and poor credit histories, I’m left with paying the remainder of the tuition, housing and fees that my financial aid doesn’t cover. While I receive wonderful support from my family, they simply can’t afford to pay my college expenses.
For three consecutive summers, I have labored in construction, a factory and a steel mill to pay for my college expenses. Because I must pay my own way, I am making every dollar count: I am consistently on the dean’s list; I’ve already completed three internships; and I’ve been a member of the wrestling team and several organizations and clubs. And during the school year, I hold a campus job.
I am already borrowing the maximum amount allowed in government loans, which still doesn’t come close to covering all my expenses. This means I have to seek out alternative loans. Because both my parents earn a low income and have poor credit histories, they are unable to co-sign a private education loan for me.
Fortunately, I convinced a dear relative to co-sign the loan, putting tremendous pressure on that person, who is retired and on a fixed income. What about students who can’t find someone to co-sign a loan?
Other students I know face a similar dilemma. I don’t have any statistics, but I’m guessing a lot of people reading this can relate. Many students who qualify for SSACI funding have parents or guardians unable to co-sign a loan because of their own financial troubles.
And what happens when students do find someone to co-sign a private education loan (which has a sky-high variable interest rate)? The students will graduate from college buried knee-deep in debt and often must begin payments within six months of graduating. It’s difficult to begin payments while looking for a job at a time when almost 15 million people have lost their jobs.
As a 21st Century Scholar and recipient of need-based Frank O’Bannon Grants, I have been dealt a serious blow by the decision to reduce the caps on financial aid. The SSACI Commission has decided to reduce individual state aid because of a dramatic increase in applicants for state aid this year. This means less money per student coupled with higher tuition rates. In essence, the SSACI is making college less affordable to all Indiana students, contradicting its very mission.
I just received my fall tuition bill, and not surprisingly, the amount I owe after financial aid is more than last year – much more. I lost more than $3,400 in state aid this year as did thousands of other Indiana students. So now what do I do?
Hopefully, the money I earn from my summer job will pay my fall school bill, but what about my spring bill? It’s either drop out of school or take out another loan, thus tacking on more debt.
I often hear students talk about packing on the “Freshman Fifteen” extra pounds, but I think students should be more worried about packing on the “Four-Year Financial” pounds, which are far more depressing.
Source
Monday, September 28, 2009
Monday, September 14, 2009
The Role of Scholarship, Grant, And Loans to College Financial Aid
College Financial aid helps every student finish their college education. Understand the different functions of financial aid, loans, grants, and scholarship.
Some students are unable to attend college courses because of insufficient financial capability and economic limitation. Others are not informed about the types of programs available to help them become one of the eligible students. The College Financial Aid (CFA) has been continually improving its assistance coverage to help in educational development. They now offer full coverage of expenses to students with financial disability.
CFA is open to assisting students plan their financials for higher education. They give counseling to confused applicants, usually encouraging them to continue their studies despite monetary problems. They guide students in their endeavor to finish school and get a better job afterwards. Applying for financial aid in CFA is easy. Learn more about scholarships, loans and grants below.
Loans
The college education loan is borrowed money to temporarily cover students? expenses. It is paid back with interest.
1. Students Loan ? are loans with low interest rates and are varied in extended repayment terms. The federal government usually offers such loans. It doesn?t require any checks, credit cards, and collaterals.
2. Parents Loan ? are loans to parents with dependent children to supplement their needs in the form of financial aid packages. It is a parent?s responsibility loan, not the student?s. You can choose among lenders either in private or direct lending institute.
3. Private Education Loan ? loans that aid in acquiring alternative education loans. The amount borrowed from the government is relative to the actual cost of tuition fee. No federal forms need to bee completed. Private lenders usually offer this kind of loan.
4. Consolidation Loans ? loans with the combination of several students? loan and parents loan into one big loan from a sole lender. It is a financing program used to pay off balances on the other loans. All loans lending institute accepts these type of program. This loan provides consolidation loan discounts.
Scholarships
Scholarship is a type of financial aid that pays for a student?s tuition fee and other expenses without having to be paid back. There are hundreds of institutes who usually sponsor scholarships. These are reserved only for students with excellent intellect, exceptional athletic and/or artistic talents.
Sometimes, scholarships are the award available for students who are merely interested in the field of study. More often, the scholarship can be achieved through members of underrepresented groups in the area who needs financial aid. Alumni of colleges and sponsors of private scholarship occasionally establish their assistance in the places where there are eligible requirements for left-handed students. Many colleges offer full academic scholarship.
Grants
Grants are one of the programs established in every school. It is a once a year publication that gives organized information and facts on financial assistance. This is originally offered to states, local education agencies, higher education institutes, individuals, private and public nonprofit organizations and other institute of post-secondary. Any information such as eligibility to apply, guidelines and applications are ready to be addressed by financial aid officers. Most importantly, the federal registry is annually announcing the list of qualifications regarding grant programs competition.
Source
Some students are unable to attend college courses because of insufficient financial capability and economic limitation. Others are not informed about the types of programs available to help them become one of the eligible students. The College Financial Aid (CFA) has been continually improving its assistance coverage to help in educational development. They now offer full coverage of expenses to students with financial disability.
CFA is open to assisting students plan their financials for higher education. They give counseling to confused applicants, usually encouraging them to continue their studies despite monetary problems. They guide students in their endeavor to finish school and get a better job afterwards. Applying for financial aid in CFA is easy. Learn more about scholarships, loans and grants below.
Loans
The college education loan is borrowed money to temporarily cover students? expenses. It is paid back with interest.
1. Students Loan ? are loans with low interest rates and are varied in extended repayment terms. The federal government usually offers such loans. It doesn?t require any checks, credit cards, and collaterals.
2. Parents Loan ? are loans to parents with dependent children to supplement their needs in the form of financial aid packages. It is a parent?s responsibility loan, not the student?s. You can choose among lenders either in private or direct lending institute.
3. Private Education Loan ? loans that aid in acquiring alternative education loans. The amount borrowed from the government is relative to the actual cost of tuition fee. No federal forms need to bee completed. Private lenders usually offer this kind of loan.
4. Consolidation Loans ? loans with the combination of several students? loan and parents loan into one big loan from a sole lender. It is a financing program used to pay off balances on the other loans. All loans lending institute accepts these type of program. This loan provides consolidation loan discounts.
Scholarships
Scholarship is a type of financial aid that pays for a student?s tuition fee and other expenses without having to be paid back. There are hundreds of institutes who usually sponsor scholarships. These are reserved only for students with excellent intellect, exceptional athletic and/or artistic talents.
Sometimes, scholarships are the award available for students who are merely interested in the field of study. More often, the scholarship can be achieved through members of underrepresented groups in the area who needs financial aid. Alumni of colleges and sponsors of private scholarship occasionally establish their assistance in the places where there are eligible requirements for left-handed students. Many colleges offer full academic scholarship.
Grants
Grants are one of the programs established in every school. It is a once a year publication that gives organized information and facts on financial assistance. This is originally offered to states, local education agencies, higher education institutes, individuals, private and public nonprofit organizations and other institute of post-secondary. Any information such as eligibility to apply, guidelines and applications are ready to be addressed by financial aid officers. Most importantly, the federal registry is annually announcing the list of qualifications regarding grant programs competition.
Source
Tuesday, September 1, 2009
Congress may ease law on college aid for drug offenders
WASHINGTON -- College students convicted of illegal drug possession could get federal financial aid for the first time in more than a decade under legislation aimed at overhauling the student loan system.
The bill, which a House of Representatives committee approved recently and which the full House probably will consider after its August recess, says that those convicted of selling illegal drugs still would be barred from receiving federal financial aid.
However, students convicted of possession would be able to get loans, grants and work-study assistance.
"People who have been convicted of a drug crime are punished through our criminal justice system, which is entirely proper," said Melissa Salmanowitz, a spokeswoman for the Education and Labor Committee.
"Doubling a person's punishment - outside of our criminal justice system - by not allowing them needed financial aid to obtain a college degree is not only wrong, it's double jeopardy."
The provision, estimated to cost $24 million from 2011 to 2019, would overturn a 1998 law authored by Rep. Mark Souder, R-Ind.
"I believe that students who are dealing or abusing drugs probably aren't making the most of their educations," Souder has said. "It's one thing if they are going to do it with their own money" - or if their parents pay - "but it's something else to ask the American taxpayer to fund this kind of behavior."
Supporters of the change have another argument: They say the current law unfairly targets minorities and hurts a person's chances of rehabilitation.
"There's an overwhelming disparity towards convicting people of color," said Kris Krane, the former executive director of Students for a Sensible Drug Policy, an advocacy group. "Plus, students of color tend to rely on financial aid more than white students." The law doesn't do anything to prevent drug abuse, he added.
To Souder, however, the law is a deterrent.
"A student who knows that his financial aid could be suspended if he's convicted of a drug crime will be less likely to use or deal drugs in the first place," Souder said.
The new provision is part of the Student Aid and Fiscal Responsibility Act, which passed the House Education and Labor Committee on July 21. It would increase the maximum Pell Grant, the primary federal need-based scholarship, and end the private sector's role in student loans. Instead, the government would be the sole provider of student loans.
As of 2006, nearly 200,000 students who had been convicted of drug charges - about 1 percent of students across the country - had been denied student aid under the law.
It's unclear how many students the change could affect. The Department of Education doesn't have a foolproof way of checking to see whether someone lied about a drug conviction on a financial aid application, and many students with drug convictions don't apply for federal aid.
All but three of the committee's 30 Democrats voted for the bill. Rep. Jason Altmire of Pennsylvania joined the panel's 19 Republicans to vote no, and the two other Democrats didn't vote.
Under current law, students convicted of possessing illegal drugs are ineligible for federal aid for one year for first offenses, two years for second offenses and forever for third offenses. Those convicted of selling are barred for two years for first offenses and forever for second offenses.
In February 2006, Congress softened the law so that it would affect only those who were convicted of possessing or selling drugs while they were in college and receiving aid. Before, the law applied to prior convictions.
Source
The bill, which a House of Representatives committee approved recently and which the full House probably will consider after its August recess, says that those convicted of selling illegal drugs still would be barred from receiving federal financial aid.
However, students convicted of possession would be able to get loans, grants and work-study assistance.
"People who have been convicted of a drug crime are punished through our criminal justice system, which is entirely proper," said Melissa Salmanowitz, a spokeswoman for the Education and Labor Committee.
"Doubling a person's punishment - outside of our criminal justice system - by not allowing them needed financial aid to obtain a college degree is not only wrong, it's double jeopardy."
The provision, estimated to cost $24 million from 2011 to 2019, would overturn a 1998 law authored by Rep. Mark Souder, R-Ind.
"I believe that students who are dealing or abusing drugs probably aren't making the most of their educations," Souder has said. "It's one thing if they are going to do it with their own money" - or if their parents pay - "but it's something else to ask the American taxpayer to fund this kind of behavior."
Supporters of the change have another argument: They say the current law unfairly targets minorities and hurts a person's chances of rehabilitation.
"There's an overwhelming disparity towards convicting people of color," said Kris Krane, the former executive director of Students for a Sensible Drug Policy, an advocacy group. "Plus, students of color tend to rely on financial aid more than white students." The law doesn't do anything to prevent drug abuse, he added.
To Souder, however, the law is a deterrent.
"A student who knows that his financial aid could be suspended if he's convicted of a drug crime will be less likely to use or deal drugs in the first place," Souder said.
The new provision is part of the Student Aid and Fiscal Responsibility Act, which passed the House Education and Labor Committee on July 21. It would increase the maximum Pell Grant, the primary federal need-based scholarship, and end the private sector's role in student loans. Instead, the government would be the sole provider of student loans.
As of 2006, nearly 200,000 students who had been convicted of drug charges - about 1 percent of students across the country - had been denied student aid under the law.
It's unclear how many students the change could affect. The Department of Education doesn't have a foolproof way of checking to see whether someone lied about a drug conviction on a financial aid application, and many students with drug convictions don't apply for federal aid.
All but three of the committee's 30 Democrats voted for the bill. Rep. Jason Altmire of Pennsylvania joined the panel's 19 Republicans to vote no, and the two other Democrats didn't vote.
Under current law, students convicted of possessing illegal drugs are ineligible for federal aid for one year for first offenses, two years for second offenses and forever for third offenses. Those convicted of selling are barred for two years for first offenses and forever for second offenses.
In February 2006, Congress softened the law so that it would affect only those who were convicted of possessing or selling drugs while they were in college and receiving aid. Before, the law applied to prior convictions.
Source
Thursday, August 20, 2009
College Students Will Get Loan Counseling
WASHINGTON (CN) - The Department of Education has proposed major changes to notification and repayment requirements of student loans under the Higher Education Opportunity Act of 2008.
Educational institutions and loan originators would be required to provide extensive entrance and exit counseling to recipients, that would include information on repayment plans, including a description of the different features of each plan and samples showing average anticipated monthly payments with the difference in interest paid and total payments shown with each plan, information on the effect of secondary sales of loans to third parties, and information on repayment options and loan consolidation.
In addition, educational institutions are required to develop a code of conduct that must prohibit revenue-sharing arrangements with any lender, soliciting or accepting gifts, fees, payments, or other financial benefit as compensation for any type of consulting or any contractual relationship with a lender. The proposed rules include a massive expansion of cancellation benefits for Perkins Loan borrowers, including cancellation benefits for teachers and staff members in an educational service agency; attorneys employed in a Federal Public Defender Organization or community Defender Organization; fire fighters, and faculty members of a Tribal College or University.
Source
Educational institutions and loan originators would be required to provide extensive entrance and exit counseling to recipients, that would include information on repayment plans, including a description of the different features of each plan and samples showing average anticipated monthly payments with the difference in interest paid and total payments shown with each plan, information on the effect of secondary sales of loans to third parties, and information on repayment options and loan consolidation.
In addition, educational institutions are required to develop a code of conduct that must prohibit revenue-sharing arrangements with any lender, soliciting or accepting gifts, fees, payments, or other financial benefit as compensation for any type of consulting or any contractual relationship with a lender. The proposed rules include a massive expansion of cancellation benefits for Perkins Loan borrowers, including cancellation benefits for teachers and staff members in an educational service agency; attorneys employed in a Federal Public Defender Organization or community Defender Organization; fire fighters, and faculty members of a Tribal College or University.
Source
Monday, July 20, 2009
Drowning in student loan debt?
Starting July 1st, some college grads will be making lower loan payments thanks to the government's new Income Based Repayment Plan. This program calculates your monthly payments based on your income and your family size.
You may qualify if you have a Stafford, Graduate PLUS, or consolidation loans made under either the Direct Loan or Federal Family Education Loan programs. You don't qualify if you have a Parent PLUS loan. Your debt must be 1.5 times more than gross income.
You can calculate your eligibility at finaid.org/calculators/ibr.phtml. The loans can be new or old, and for any type of education, including undergraduate, graduate or professional job training.
2. How it works
If you qualify for Income Based Repayment, your monthly payments will be pegged to how much you can afford each month.
Typically your loan payments will be less than 10% of your monthly gross income. If you make 150% or less of the federal poverty line (which is about $16,245 for a single person) you won't pay anything until your salary increases.
So, the people who will really benefit from this program: grads with a lot of student loan debt who can't find jobs, college grads that have a lot of debt compared to income. And people who are going into public service. That's because if you're in this plan, you're eligible for the Public Service Loan Forgiveness Program that wipes out your debt if you've worked full time in the public sector for 10 years. Income Based Repayment also will forgive student-loan debt that remains after 25 years of payments.
But ... there are downsides to this program. You pay more in interest over the life of your loan. A reduced payment in Income Based Repayment usually extends how long you have to pay your loan back.
3. Get started now
Talk to your lender if you think you're a candidate. The lender may ask for a copy of last year's tax return. More likely they will have you complete IRS Form 4506-T to have the IRS send them a tax transcript of your federal income tax return as filed with the IRS says Mark Kantrowitz of finaid.org.
Source
You may qualify if you have a Stafford, Graduate PLUS, or consolidation loans made under either the Direct Loan or Federal Family Education Loan programs. You don't qualify if you have a Parent PLUS loan. Your debt must be 1.5 times more than gross income.
You can calculate your eligibility at finaid.org/calculators/ibr.phtml. The loans can be new or old, and for any type of education, including undergraduate, graduate or professional job training.
2. How it works
If you qualify for Income Based Repayment, your monthly payments will be pegged to how much you can afford each month.
Typically your loan payments will be less than 10% of your monthly gross income. If you make 150% or less of the federal poverty line (which is about $16,245 for a single person) you won't pay anything until your salary increases.
So, the people who will really benefit from this program: grads with a lot of student loan debt who can't find jobs, college grads that have a lot of debt compared to income. And people who are going into public service. That's because if you're in this plan, you're eligible for the Public Service Loan Forgiveness Program that wipes out your debt if you've worked full time in the public sector for 10 years. Income Based Repayment also will forgive student-loan debt that remains after 25 years of payments.
But ... there are downsides to this program. You pay more in interest over the life of your loan. A reduced payment in Income Based Repayment usually extends how long you have to pay your loan back.
3. Get started now
Talk to your lender if you think you're a candidate. The lender may ask for a copy of last year's tax return. More likely they will have you complete IRS Form 4506-T to have the IRS send them a tax transcript of your federal income tax return as filed with the IRS says Mark Kantrowitz of finaid.org.
Source
Monday, July 6, 2009
Student Loans Remind Of College Cost Reduction and Access Act
College Cost Reduction and Access Act was signed into law in 2007. it created a special income based repayment program for student loans to help the college graduates to make their loans manageable.
The Department of Education has gone one step further with a new law that will cap student loans, based on one's adjusted gross income. It is called Income Based Repayment Plan and will go into effect since July 1st of 2009. This new student loans repayment program is a new repayment plan for the major types of federal loans made to students. Under Income Based Repayment plan, "your required monthly payment is capped at an amount that is intended to be affordable based on your income and family size," reads the information on the website of the U.S. Department of Education.
Income Based Repayment plan eligibility requirement is very simple. Any student may enter into this student loan repayment program if his or her federal student loan debt is high relative to your income and family size.
Call it a student loans bailout program, but it is good and encourages education. Here are two more benefits among others. If you repay your student loans under Income Based Repayment Plan for 25 years and still have a balance, the rest of your student loan is canceled. If you work in public service and have reduced loan payments through IBR, your remaining balance after ten years in a public service job could be canceled if you made loan payments for each month of those ten years.
High student loans have saddled the gradutes. They face a very difficult job market in this economy. Therefore programs like College Cost Reduction and Access Act and Income Based Repayment plan are just in time to bailout the student loans. At least this is a better type of bailout as we invest in knowledge and education, not in bonuses.
Source
The Department of Education has gone one step further with a new law that will cap student loans, based on one's adjusted gross income. It is called Income Based Repayment Plan and will go into effect since July 1st of 2009. This new student loans repayment program is a new repayment plan for the major types of federal loans made to students. Under Income Based Repayment plan, "your required monthly payment is capped at an amount that is intended to be affordable based on your income and family size," reads the information on the website of the U.S. Department of Education.
Income Based Repayment plan eligibility requirement is very simple. Any student may enter into this student loan repayment program if his or her federal student loan debt is high relative to your income and family size.
Call it a student loans bailout program, but it is good and encourages education. Here are two more benefits among others. If you repay your student loans under Income Based Repayment Plan for 25 years and still have a balance, the rest of your student loan is canceled. If you work in public service and have reduced loan payments through IBR, your remaining balance after ten years in a public service job could be canceled if you made loan payments for each month of those ten years.
High student loans have saddled the gradutes. They face a very difficult job market in this economy. Therefore programs like College Cost Reduction and Access Act and Income Based Repayment plan are just in time to bailout the student loans. At least this is a better type of bailout as we invest in knowledge and education, not in bonuses.
Source
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