Student Loan Help

Forget a big league contract.  Sign your John Hancock to the bottom of a learning contract.

Did you know that many schools negotiate learning contracts with their students?  The next thing you may be thinking is great, what the heck is a learning contract?

A learning contract is a formal, negotiated agreement between the student and the school , stating that if the student successfully completes certain tasks the school will award an agreed-upon number of credits.  Ok, now you are wondering what I mean by “tasks?”

Tasks are very much the same as what you would be expected to do in a traditional classroom setting.  You may have certain required reading, essays to write, labs or seminars to attend, or even a timed exam.

Learning contracts can be written for a few units, or an entire degree program.  Often times a school or university will appoint a faculty member to guide the course of study.

For those with a hectic, unpredictable schedule this may work for you.  I know years ago when I was working a rotating schedule this would have been ideal, though nowadays you also have online classes.

One, Two, Three O’clock, Four O’clock rock,

Five, Six, Seven O’clock, Eight O’clock rock

Nine, Ten, Eleven O’clock, Twelve O’clock rock

We’re gonna rock around the community college tonight!

The expression ‘burning the midnight oil’ is one the staffers at Bunker Hill Community College have taken quite literally.

According to the Boston Business Journal administrators at the college, straining to fit the influx of students entering Bunker Hill, are implementing a late-shift this fall where the start of class will be at 11:30pm with an end time of around 2am. I hope they allow students to bring their Starbucks and Pepsi’s into the classroom. That is a long night indeed.

You may want to inquire with your school to see if “midnight courses” are on the agenda for the future. Midnight classes are perfect for those working a second shift, or those like my brother who go to bed at 3:30am normally.

Between flexibile class times and online education options school is more accessible than ever before. Where will you be when the clock strikes twelve?

In the wake of the changes in the economy and the increase in students going to college, the face of college campuses has changed along with the times.  Student’s have more options and flexibility for classes such as hybrid classes and getting their degree online. There have been changes that range from different majors offered to increased tuition, to a change in administration at many colleges across the U.S. Outlined below are the 5 top changes that are being seen at colleges and universities throughout the states:

1. Demographics: There are more students over the age of 25 than ever before; recent surveys suggest 40% of the student population is over the age of 25. Also the female to male ratio is said to be 60-40.
2. Community College & Proud of It: gone are the days when you do whatever it takes to get into that prestigious school. People don’t want to burden themselves with debt anymore, especially in an uncertain economy. There is also less judgment on where a person has a degree from when searching for a job. It’s the degree that matters, not really where the degree is from. (no including if you went to an IVY league school..that tends to make a difference).
3. Internet in the Classroom: Many professors have moved away from note writing on the blackboard and turned to planned out PowerPoint presentations, online videos and displays, and even using an online plagiarism tool to scan student’s work for plagiarism (watch out kids!).
4. Online Classroom Influx: The number of students getting their degree in the comfort of their own home has increased dramatically over the past 5 years…so to has the legitimacy of these degrees. This change has allowed  many people to continue to work full time and still earn a degree.
5. Purchase a college: These days parents and adult students are looking at college as a personal purchase…something they buy. If they aren’t fully satisfied with any aspect of it (grades, professor, administrative issues), the consumer speaks up and fights to change it. If a school is disorganized and run poorly, a student will transfer out instead of pushing through it. Hey…your paying for it, so you might as well be satisfied. This also has forced colleges to do everything possible to make the consumer/student content.

What about you? Share your experiences by leaving a comment…or add  ones I didn’t write about. If you are a returning student I would love to hear your comparison of college now as opposed to 5 or 10 years ago.

Points code: CHANGE4ME

Monday Rant!

Has anyone noticed that the classes you need to complete your major, once you hit your senior year, are nearly impossible to get into sometimes? With budget cuts (less classes) and increased student volume it can be maddening to get a seat.

To secure a bachelors degree you need to earn 120 credit hours with a certain number of those credits allocated to your major, but I know students who are going to fly right past 120 credits and still not have their degree. It’s really a product of poor class management.

What many do is leave classes under their major until their senior year. Then they end up scrambling to get a seat into those classes so they can graduate on time. Sometimes they are even relegated to a random night class, which is more expensive at most schools, just to get it done.

My advice to all of you is to not wait until your junior and senior years to take the classes which fall under your major. Pick them off as you go. It will make your life less stressful and may actually cost you less time and money in the long run.

The third semester, better known as summer school, has seen an increase in student attendance in recent years. That’s really not surprising when you consider each graduating class has been bigger than the last. The U.S. population is now over 304 million, up from 273 million just a decade ago.

With enrollment on the upswing and the same amount of seats available in the classroom students have been turning toward summer school more and more to fill the gap when classes have been filled to capacity during the fall and spring semesters.

Of course because the academic period for most schools begins in the fall and ends the following summer many have exhausted their federal Stafford loan funds already. The loan periods determine the timing and amount of disbursements. In this case the fall and spring semesters would have disbursements, assuming the student was enrolled both semesters, which most are.

The next best option, after you’ve exhausted your federal loan funds, is a private student loan. Private student loans are popular these days because of the low interest rates that many enjoy. Banks use two main indexes to determine a borrowers interest rate, LIBOR and Prime. Regardless of the index used the interest rate is low across the board at this time to encourage consumers to borrow. That means you and I are the winners.

Additional note: Private student loans are in a students name and do require a credit worthy co-signer.

To enter for a chance to win a monthly scholarship ranging from $500 to $10,000 (click here).

After reading the Top 5 Reasons Online Classes Rock Collette asked a great question. In fact, I thought so much of it I decided to write this blog figuring some others may have similar concerns about the type of help available to you when taking an online class.

Collette’s Question: I would love to take an online course but was wondering:, can you still get help in these type of courses? In most of my classes I work with other students to help learn the material. Without an actual “classroom” is there another way to still get that type of help?

Answer: YES. There are a few notable ways to get the help you need when taking Online classes.

Professor’s: Online classes have an actual professor who is available to students. Some professor’s set a day during the week aside to answer student queries, like say each Monday night from 6-8pm. Other professors instruct students to post questions on the message board with a guaranteed response time of 24-48 hours. Procedures may vary, but a professor is always available. You’ll want to check your course syllabus for further details.

Forum’s: Online classes have forums and/or virtual classrooms where students can bounce thoughts, ideas, and questions off each other. This was a great place for me to go when I took an online class. I read some of the Q&A’s from my peers. I found that extremely helpful.

On Campus: One reader, Sarah, left a post saying she had a teacher tell her she could attend the class on campus if she wasn’t understanding the material.

As you can see help is definitely available to you should the video and audio lesson plans not be enough. Thanks again to Collette for asking that question.

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At this point the cat isn’t only out of the bag, as it pertains to online degrees, it’s a full grown lioness on the prowl. Online degrees were once viewed as a gimmicky soiree into the world of higher education, but oh how things have changed.

I must admit, even I was cynical in the late 90’s when the Online degree rage was taking flight. It felt like a scam. Would my degree be worth anything? Would my resume be passed over time and time again because of how I earned my degree? Never did I believe it would be more revered by many hiring managers who believe online recipients are more versatile. These students are viewed as self motivated independent thinkers who are driven to succeed; all traits which transfer nicely in the workplace.

Yes, Online degrees hold value in the marketplace, but it’s the value outside the virtual classroom that attracts many students to an Online degree. Lets take a look at the Top 5 reasons Online classes have become so popular.

1. Comfort: Having the luxury of taking notes with one hand while shoveling in Doritos with the other is pretty sweet indeed. A comfortable environment produces better results.

2. Convenience: No need to worry if your tank is on “E” or traffic is backed up on the interstate to get to school. When you’re at home, you are at school.

3. Flexibility: Lesson plans are available for you to review anytime throughout the week and tests are usually available over a three day period to fit with your busy schedule.

4. Availability: While campuses are restricted to the number of classes they can offer students based on staffing and capital resources, Online degree programs have no such restrictions. The number of classes you can take is practically endless.

5. Time: Most Online classes do not have specific start-up dates and times. You can jump in whenever you like. In addition, if you have the desire, you may complete your class early in most cases. Many eight week classes are completed in 4-6 weeks by ambitious students.

Request information about Online classes or programs here.

Scholarshippoints.com members can enter the code ONLINEROCK for 15 juicy points to apply toward monthly scholarships ranging from $500 to $10,000!!!

Have you taken an online class or degree program? If so we want to hear about your experience. Would you do it again? Leave a comment below.

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It is no surprise that the default rate on Federal student loans is the highest it has been since 1998. It can be kind of tough to make your monthly loan payments when you don’t have a job. With unemployment rising, so to is people’s inability to keep up with their student loan payments. The good news? You do have options if you can’t pay. To find out what your options are you first need to determine whether you have Federal loans or private loans or both.

If you are unsure what type of loans you have, be it Federal or private student loans, then you will need to do 2 things. First, you should check the national student loan database, which will pull up every Federal student loan you have ever borrowed. To access this database you will need your four digit FAFSA pin and your social security number. If you do not know your PIN number you will have to visit the Department of Education’s PIN site first. Once you have figured out what loans are federal, you may want to check your credit report to see if you have any private student loans. If you only got loans by filling out the FAFSA each year then most likely you do not have any private loans. To access a free credit report the best site is annual credit report.com. If you find that you have both federal and private loans, you need to deal with each type of loan separately. Federal loans are entirely separate from private loans, even if they are serviced by the same company.

So what are your options? For your Stafford loans, grad plus loans, and even parent plus loans, you have 2 main deferment choices: unemployment deferment and economic hardship deferment. You also have in school deferment options if you decide to go back to school. In order to apply for one of these options, you will need to either apply online at your loan servicer’s website, or you will need to download a form from their website and mail it in (you can get your loan servicer name directly from the nslds website). In school deferment forms typically need to be mailed in because they must be stamped by your school.

If you apply for a deferment and you are not approved, then you still have options. Forbearance is your next best bet, and you have up to three years of forbearance time with federal loans. Forbearance consists of putting your loan payments on hold. Interest will accrue on the loan and if you do not pay the interest during this period it will be capitalized no more than four times a year. This means that the interest accrued will be added to the principal balance and you will essentially be paying interest on interest. You can typically put your loans on forbearance simply by requesting one through your loan servicer. Remember that you have up to three years of forbearance time.

For private loans, deferment and forbearance options vary by each loan company, and typically provide less time than with federal loans.  You should contact your private loan company to see what your options are.

If you currently have a federal loan or loans in default, and you can’t afford the monthly payments that the debt collection agency is demanding, you should call the US Dept of Education’s default center at 1800-621-3115. They can buy your defaulted loan from the agency and work out a rehabilitation program with you. If you just ignore your defaulted loan then eventually the government will garnish your paycheck and take your tax returns and part of your social security benefits.

I found this article from the Washington Post and found it to be interesting because it gives insight from the financial aid administers view. It also backs up my theory that students should (and probably need) to start considering schools because of their cost, and not focusing all on the school’s reputation. While you may not realize it now, student loans can be seriously affect your financial future, and borrowing excessive amount of student loans to attend a private university may not always make sense for you and the career path you have chosen.

College: How to Pay for It

By Stacey Garfinkle

The college decisions are mostly in and there’s lots of good news for the high school class of ‘09: Many private colleges accepted more applicants than usual this year. The bad news is the reason why: the recession.

Colleges this year are expecting the economy to affect the numbers of teens who choose to attend their schools. Surveys point to families looking much closer at financial aid packages. “Students are shopping around — no doubt about it,” Phil Day, president of a financial aid administrators association, told The Post.

And that’s exactly what they should do, according to Seth Allen, the dean of admission and financial aid at Grinnell College. Allen is also a member of the Board of Directors of The Common Application. Here’s some of a Q&A with him on financial aid:

Q: How should families approach financial aid? What can they expect?

Allen: The first thing I think, there are families out there who make a reasonable income. They feel comfortably well-off. They might be inclined not to apply for financial aid. That’s a mistake. A two-income household with one child that makes over several hundred thousand dollars is not likely to qualify for aid. But somewhere south of that, even families who earn $150,000 to $180,000, they really should sit down and fill out the Free Application for Federal Student Aid (FAFSA) — that’s the base instrument almost universally used by colleges/universities for need qualifications.

Step Two: While I’m sure financial aid offices don’t want to be inundated, there seems to be a hesitancy to engage financial aid offices about what might be available and if a family might qualify. Without FAFSA data, the aid office can’t give a specific recommendation, but they can talk to a family in general and give very good guidance to the family about what they might expect. A typical aid package is composed of three components: Grants from the college or university are typically the largest. The money is given to the student and family to fill part of the gap between what the college expects the student to pay and total cost of attendance. The second component is loans. Students, especially very needy students, are packaged with favorable loans and low interest rates [Sallie Mae recently changed the payback policies for its student loans so that students make interest-only payments while they are in school rather than fully deferring payments]. The third component is a job on campus, which is typically packaged as a federal work study job. The government earmarks money to colleges and universities to subsidize college jobs.

On their Web sites, colleges will often report out the average need-based package. That can give families a sense. They shouldn’t read it as “if I apply, that’s what I’ll get.” But it is a proxy about the kind of package they might expect to see.

So, what should a family do if their 529 accounts have plummeted?

Allen: Colleges would take the 529 as an asset specifically earmarked into college and factor that into family contribution. Most financial aid is not done on a real-time basis. It looks back at the previous year and what was available at that time goes into the calculation for the next year. Could a family make an argument if their savings and 529 have gone down dramatically? They probably could. And if the college has the resources to meet that need, it would be likely to do that.

Families now are going to feel far needier than they’ve felt in years, collectively. Colleges recognize that. At the same time, some of the income that colleges have relied on from endowments has gone down as well. I’ve heard from many institutions that they are going to put more funds to financial aid. At the same time, those are not limitless funds. Families need to be aware that colleges don’t have the same strong income that they’ve had in prior years [donations and endowments are down]. There’s potential this year more than in the past that they won’t be able to fund that gap.

What else should families consider?

Allen: Financial aid officers have the ability to make professional judgment calls. Families fill out an FAFSA and a CSS profile, send that in, and that helps the financial aid office make a calculation. Oftentimes, family situations aren’t that neat and tidy. Families have expenses that put pressure on finances that make the federal calculation of need not workable. If they have other kinds of qualified expenses, they can submit documentation to the financial aid office that establishes those expenses as legitimate and they can take that into consideration to recalculate. That’s one way families can find ways to afford college this year.

For example, a student might have a sibling at a private school. That’s not automatically taken into consideration and isn’t asked for on an FAFSA form. Many colleges consider that a legitimate expense and can take that off of the family’s income. That will make the family more eligible for a larger aid package.

Another example is the cost of living differentials in different parts of the country. The basic costs of living in D.C. are far higher than if you lived in the Harrisburg, Penn., area. Not every aid office will have a policy to do something with that information. But families could make a case for the allowances given housing and cost of living costs in your area. Where they may not help is something that’s clearly a voluntary choice — for instance, I live in New York and I want a break because I live in the West side in a very expensive apartment. You could live in less expensive place in New York.

What about other government aid?

There’s not a lot at the moment that we really know for sure with the new administration and secretary of education. But there are some nice things in the stimulus package that would be good for families to understand.

• Pell Grants: For very low-income families, the federal government grant is increasing by roughly $600 dollars from this year to next year. That will help make college a little more affordable.
• American Opportunity Tax Credit: This is up to $2,500 for families and is partially refundable. Very low-income families can get up to $1,000 back. So, it doesn’t help on the front end. However, the income levels on this have been raised dramatically. Under old tax credits, income levels were under $100,000. Under the new plan, the adjusted gross income is up to $160,000 for married couples. It should hit a broader swath of the middle class who, I think, is acutely feeling the pinch of these college costs. For full article click here.
  

If you haven’t heard, one of President Obama’s proposed changes for the Stafford loan program is to eliminate the FFEL program, which stands for the Federal Family Education Loan Program. This basically consists of private lenders who lend out Federal loans. Currently there are 2 types of programs that lend Federal loans, FFELP and Direct loans. Direct Loans are loans lent directly from the government. The President has proposed to eliminate the FFEL program and run all Stafford loans out of the Direct program. About $76 billion in loans has been lent out for this current school year, of which only $26 billion was lent by Direct Loans. Here is a recent article posted by the Wall Street Journal that details how politics are already playing a role in this fight between companies from the FFELP and the Direct Loan Program:

Private lenders Brace for Fight Over Student Loan Role

By ROBERT TOMSHO

With the Obama administration proposing to cut private lenders out of the federal student-loan business, financial companies are intensifying efforts preserve their role.

Private lenders in the so-called Federal Family Education Loan Program, or FFELP, have lent more than $56 billion in the current school year. The federal government has lent about $20 billion directly. In his budget, President Obama says the government, which pays billions of dollars of subsidies to FFELP lenders, would save money by eliminating the program using private companies.

The latest skirmish in the contentious political battle erupted Thursday when the U.S. Department of Education released preliminary data comparing FFELP loan-default rates with those in the federal direct loan program.

The data indicated a 5.3% default rate in the direct lending program for the fiscal year ended Sept. 30, 2007, compared with a 7.3% default rate for FFELP, which has been the primary source of college financial aid since it was launched in the Johnson administration during the 1960s.

Industry analysts attributed the difference to the mix of schools in the two programs, with the FFELP program lending more to students from for-profit schools. They tend to have higher default rates than other student borrowers.

Private lenders and their trade groups were caught off guard by the data’s release and portrayed it as a strategic maneuver designed to advance President Obama’s plan to eliminate FFELP.

Brett Lief, president of the National Council of Higher Education Loan Programs, a trade group representing FFELP lenders and loan guarantee agencies, said he could not recall the department ever releasing preliminary default rates or separate numbers for the two programs.

“We have never seen the rates broken down,” Mr. Lief said. “It’s unfortunate that the rates are being released before there is an analysis of them,” he added. “This is very serious stuff and I’m saddened that it has come out like this.”

Some outside observers agreed that politics played a roll. Default rates “become a critical issue as folks are talking about a new model for student lending,” said Tim Ranzetta, president of Student Lending Analytics, a research concern based in Palo Alto, Calif. “I’m sure that’s probably why the department put these numbers out.”

Department of Education officials said they released the loan-default data in response to a U.S. Freedom of Information Act request from The Wall Street Journal as well as inquiries from members of Congress.

In response to the release, SLM Corp., the mammoth student lender better known as Sallie Mae, issued a study of its own Thursday. It indicates that borrowers who took out FFELP loans through Sallie Mae were 30% less likely to default on them than borrowers who used the federal direct loan program. Sallie Mae attributed the difference to default prevention programs it uses in conjunction with state loan-guarantee agencies.

Robert Shireman, a senior advisor to Secretary of Education Arne Duncan, said he had not read the Sallie Mae study and could not comment on whether it is accurate.

On Thursday, the Consumer Banking Association, a trade group that represents many FFELP lenders, sent members of Congress a petition signed by 2,500 college financial aid administrators, parents, students and others. The petition urges Congress to reject the president’s proposal to eliminate FFELP.

The president himself is being lobbied by elected officials such as James B. Lewis, New Mexico’s state treasurer. In a letter Thursday to the president, Mr. Lewis, a Democrat, praised the personal service and debt counseling offered by FFELP providers in his state and said the program’s end “would be detrimental to the success of our college-bound students and to the health of the economy, with our state experiencing the loss of over 170 jobs.”

Industry observers say the debate over FFELP’s future is likely to be long and complex. The Congressional Budget Office recently estimated that ending the program will save the government nearly $100 billion over the next decade. President Obama — whose own estimate of the savings is about half that — has said he will use the savings to increase funding for federal Pell grants for low-income students.

The potential boost for Pell will make it difficult for members of Congress on both sides of the aisle to oppose the elimination of FFELP, said Terry Hartle, a senior vice president of the American Council of Education, a trade group representing colleges.

He added, however, that many of the state guarantee agencies that help service FFELP loans have strong political support in their home states and noted that, in a recent letter to colleges, Sallie Mae suggested that additional money for Pell might be found within the federal loan system while still maintaining elements of FFELP.

“It’s certainly possible Congress would eliminate the program,” Mr. Hartle said. “But it’s equally possible – and perhaps more so – to wring more savings out of the program and put the savings into Pell.”

So what do you guys think? An important note to make is that even though the Stafford loan has two different programs right now, the loan terms do not vary. Your interest rate with Direct loans is the same as your interest rate for a Stafford loan from a private lender.  So sound off on this guys/girls…it is sure to be in the news more and more as this fight wages on.