Student Loan News, Updates and Blog Posts

Friday Rant!

Did you hear the good news about the 2009-2010 academic year? In addition to the increase in Pell Grant money (which is great for students), Federal Stafford loan funds have been increased by $2,000! Terrific, let’s poor more student loan debt on the children of tomorrow.

Do you know what happens when the federal reserve puts more money into circulation? Inflation spikes which devalues the dollar; although that also has a positive subsequent effect on our nations trade deficit. Still, the point I’m making is that more isn’t always better. Giving students more money doesn’t get to the root of the problem, which is that tuition is so overpriced it’s ridiculous!

I really feel for the students of today who are getting out of school with mini-mortgage payments and no job prospects. The trail of tears is long. You may want to inquire about free debt consultation if you are struggling with your monthly bills like so many Americans these days. For those students who are still in school there is some hope in the form of scholarships.

At ScholarshipPoints.com, our sister site, we know how tough it is on today’s students, which is why we are committed to helping as many as we can with $100,000 in free scholarship money. Take a look at all the year-to-date winners.

Taking that one extra step may save you thousands of dollars. So I guess more money is a good thing after all, provided it’s in the form of a scholarship.

In sports it seems the focus on talent has been getting younger and younger. In my lifetime I’ve witnessed the focus on student athletes shift from college to high school and now to (gulp) middle school. I’ve actually been joking with friends recently that my 18-month son has some powerful thighs and would make a great fullback with his low 28-inch center of gravity. Maybe he could even get a free ride to a choice nursery school! But all joking aside, middle school is an important time in a students life, athletics aside.

Middle school ushers in a new set of challenges for parents as kids become more interested in social life. It’s these impressionable years that can set the stage for future success or failure in the world of academia. Making your presence felt is key.

Parent/teacher conferences are good, but are not nearly enough. Volunteering for field trips and school dances are a way to make yourself known within the school community. When teachers know the parent they tend to form a better relationship with the student. It’s also important for the teacher to know they have your support, and that you all stand together on a united front as to what is best for your child.

Serve as your childs scout, even if they don’t have a killer jump shot. Assess their strengths and weaknesses and help them be the best they can be.

When you hear the term “federal student aid” that can be classified into one of three categories.

Grants: Free money that doesn’t have to be repaid, except in some cases when you withdraw from school.

Work-study: You earn money to pay for your education.

Loans: You borrow money for school, which you must repay with interest.

“The 35 guarantee agencies that work with lenders, borrowers, and the U.S. Education Department to administer bank-based student loans have evolved into inefficient middlemen that waste taxpayer money, the New America Foundation said today in a policy report released just as Congress prepares to debate a student-lending plan that could eliminate the need for guarantee agencies,” The Chronicle of Higher Education reports. “The agencies, intended to insure banks against default losses and thereby encourage them to offer better rates on student loans, have become largely administrative bodies, according to the nonprofit group’s report.”

“Student Loan Corp. (STU) is feeling a little lonely these days – and that could devastate its business,” The Wall Street Journal reports. “The company, a subsidiary of Citigroup Inc.’s Citibank N.A., was the only publicly traded dedicated student lender not chosen last month for the government loan-servicing contracts analysts say could help save the industry. Student Loan wasn’t even picked as a finalist. A source familiar with the contracts said servicing capacity was a major consideration in choosing the final four recipients.”

This newsletter addresses multiple topics related to the National Student Loan Data System (NSLDS) Enrollment Reporting process.

“The chairman of the House Education Committee has dismissed a last-ditch plea from the private student loan industry and is throwing his support behind President Obama’s plan to end the role of private banks in the federal education lending systems,” The New York Times reports. “Mr. Obama’s plan remains deeply contentious in Congress, and still faces strong opposition from private banks that for decades have earned big profits for handling federal student loans. But after mulling the issue for months, Representative George Miller, the California Democrat who is chairman of the Education Committee, now plans to introduce legislation next week that would rely on direct government lending to replace the federally subsidized loans made by private banks. Administration officials who have reviewed drafts of the legislation said that it substantially adopts Mr. Obama’s proposal.”

“Republicans haven’t given up on the guaranteed-loan program, Rep. John Kline of Minnesota said today. They have just been preoccupied with health care and other pressing issues,” The Chronicle of Higher Education reports. “‘I remain hopeful we can keep some private capital in this and keep the private sector involved,’ the new top Republican on the House education committee told three higher-education reporters in an interview. ‘We’re not rolling over.’”

SAN ANTONIO — Most of the attention surrounding the Obama administration’s plan to restructure the federal financial aid programs focuses on the fate of the guaranteed student loan program, but equally interesting — and perhaps more significant in the long term — is the Education Department’s vision of an altered Perkins Loan Program, about which administration officials offered a few more details during sessions at the National Association of Student Financial Aid Administrators here Monday. The Perkins proposal is noteworthy because department officials say they would use the billions of dollars they plan to allocate to colleges in “loan authority” to encourage them to pursue policies the administration favors, like graduating low-income students, limiting tuition increases, and providing need-based aid to students. Dan Madzelan, who is acting as assistant secretary of postsecondary education, said that the department was still developing the exact measures it would use to achieve those goals. But he said that after making whole the colleges that now receive about $1.5 billion in Perkins loan funds, the department could distribute the remaining $4.5 billion in lending authority to institutions based on the extent to which they (1) graduate Pell Grant recipients, (2) keep their published tuition below the average or median for their sector (public two-year, private four-year, etc.), and (3) award non-federal need-based aid to their students. “When we’re thinking about the kinds of incentives we can provide, money’s a pretty good one,” Madzelan said.

An agreement under which a student receiving a TEACH Grant commits to the specific obligation to teach for four complete years in a designated high need field at a low-income elementary or secondary school within eight years of completing or ceasing enrollment in a TEACH Grant-eligible program.

Note: If the agreement is broken those TEACH grant funds will then convert to an unsubsidized loan and require repayment.