09.17.13 | Take a Deep Breath and Beware of the Annual U.S. News College Rankings

Posted in News by David Levy

Now that the college rankings season has resumed, it’s a good idea to take a deep breath and consider the timely advice offered by Dr. John Tierney in The Atlantic. Despite its title, “Your Annual Reminder to Ignore the U.S. News and World Report College Rankings,” the article provides both a summary of the criticism leveled each year at the U.S. News rankings as well as other resources students and families should consider when looking at prospective colleges or even one’s alma mater. Before experiencing increased anxiety about the college admission process and deciding to which colleges to apply, keep in mind Dr. Tierney’s assessment about college rankings: “(they are) about as good for you as eating potato chips and Gummy Bears for dinner. With maple syrup.”

David-Levy-EdvisorsDavid Levy is Associate Editor of the Edvisors Network. David brings 30 years of experience as Director of Financial Aid at some of the nation’s leading colleges, including the Scripps College, California Institute of Technology and Occidental College. He is respected by students, parents and financial aid professionals nationwide because of his extensive outreach and volunteer activities, his extensive knowledge of financial aid and his leadership in helping to simplify the aid application process.

09.11.13 | Converse College Slashes Tuition

Posted in News by David Levy
Converse College

Image source: Converse.edu

Converse College, a small independent women’s liberal arts college in Spartanburg, South Carolina, announced that it is cutting its tuition by 43% for the 2014–15 academic year. The one-time tuition reduction or “reset” from $29,124 in the 2013–14 academic to $16,500 in the coming academic year affects both continuing and incoming full-time undergraduate students.

While ten other colleges have made similar tuition reductions since 2012, most have done so to increase enrollments. Citing increased enrollments over the past three academic years (including a 30% increase from last year), Converse College President Elizabeth Fleming declared that the College was making this move from “a position of strength.”

The college reported hearing from families about the flattening of their incomes over the past decade, intensifying concerns about the issue of college affordability. By resetting tuition amounts to back to levels not seen in more than a decade, Converse says it is working to reassure students and their families of the value of a Converse education.

In its announcement, the college indicates that it hopes this new pricing strategy — which will not reduce existing student services or its commitment to need-based financial aid — will reduce the “sticker shock” many families encounter as they plan for the cost of a Converse education.

David-Levy-EdvisorsDavid Levy is Associate Editor of the Edvisors Network. David brings 30 years of experience as Director of Financial Aid at some of the nation’s leading colleges, including the Scripps College, California Institute of Technology and Occidental College. He is respected by students, parents and financial aid professionals nationwide because of his extensive outreach and volunteer activities, his extensive knowledge of financial aid and his leadership in helping to simplify the aid application process.

08.23.13 | Obama Proposes to Shake-up Higher Education

Posted in News by David Levy

Citing “higher education as the single most important investment students can make in their own futures,” the Obama administration offered a plan to make college more affordable for American families.

Among several proposals, the initiative would create a new ratings system for judging colleges based on the value they provide to students and taxpayers. The new ratings system would become available before the 2015 academic year and would use a combination of factors to determine value:

  • student outcomes (i.e., graduation rates and graduation earnings),
  • affordability (average tuition, scholarships, and manageable loan debt) and
  • access (the percentage of students receiving Federal Pell Grants).

Institutional eligibility for student aid funding would be linked to these ratings starting in 2018. Students who enroll at high-performing colleges would receive larger Federal Pell Grants and better interest rates on loans.
(more…)

08.14.13 | On vs. Off-Campus Housing

Posted in College Life by Student Loan Network Staff

Girl Pondering College Housing Options

With the fall semester of college starting up in a few weeks, college students are working towards finalizing their housing situation for the upcoming year. Unfortunately, you’re running out of time to answer the looming question: “Do I want to live on campus or off campus?” To help you to answer this question, we’ve weighed some of the crucial factors to consider while making this decision.

RAs, Rules, and Security

One of the first things that comes to mind about off-campus housing is the absence of resident assistants (RAs) and other members of residential life, and thus, the absence of rules. However, there is more to the story. While RAs serve as a form of law enforcement, they can also be a friend, mentor, and organizer of community events. In addition, the absence of RAs and desk assistants can result in lower levels of security. While many colleges are located in safe areas, this could be a relevant factor if your school isn’t located in the best area. On the other hand, living in an off-campus apartment will give you your first full experience of freedom, and with that, a strong sense of responsibility. Also, the absence of RAs means that your apartment could easily become the choice hangout spot for you and your friends.

Cooking and Cleaning

Living in a college dorm is kind of like living with really bad maid service. The communal bathrooms and hallways will probably be cleaned a few times a week, and you can call a custodian if, let’s say, your toilet explodes – and yes, this did actually happen to a friend of mine, but that’s a story for another day. In addition, you will probably choose to sign up for a meal plan, thus choosing to avoid cooking at the expense of sub-par food. On the flipside, living off campus will mean doing most of your own cooking and cleaning, but chances are that your cooking will be much better than the food in your cafeteria. (more…)

08.07.13 | Student Loan Servicer Transfer

Posted in Financial Aid, News, Repayment, Student Loans by Student Loan Network Staff

Federal Student Loan Servicer Transfer

Last week, the United States Department of Education released a newsletter informing students and their schools that federal student loans handled by four nonprofit servicers would soon be transferred to new servicers. Over the next two months, the majority of loans that are currently serviced by COSTEP, EDGEucation, and EdManage will be transferred to MOHELA, while those serviced by KSA Servicing will be transferred to Aspire Resources Inc.

What is a Loan Servicer?

To provide a little background, your loan servicer is assigned to you by the Department of Education after your loan has been fully disbursed. This company processes your payments and works as your customer service representative while you repay your student loans. For additional information on loan servicers, try visiting StudentAid.ed.gov.

Transfer Process

You will receive either an email or a letter in the mail prior to the transfer to inform you if your servicer will change, as well as an additional notification once the transfer is complete. These notifications will provide information on your new servicer, along with a statement that they will be servicing the loan on behalf of the the Department of Education.

You will need to contact the new servicer to activate features such as electronic billing and automatic loan payments. In addition, both MOHELA and Aspire Resources claim that students will not need to reapply for deferment or forbearance if their previous servicer already reviewed their application, but you should contact your new servicer just to make sure that this information carries over. (more…)

08.05.13 | Measure Twice: The Impact on Graduation Rates of Serving Pell Grant Recipients

Posted in Financial Aid, News by David Levy

The Advisory Committee on Student Financial Assistance, an independent committee providing expertise on student aid to Congress and the Secretary of Education, has recently released a policy bulletin, “Measure Twice: The Impact on Graduation Rates of Serving Pell Grant Recipients.”

The analysis raises concerns about tying federal student aid to measures of college performance such as 6-year graduation rates and academic progress. By examining correlations between a college’s six-year graduation rate and three other factors—the percentage of first-time students who are Pell Grant recipients, average student test scores, and the amount of endowment per student, the committee found that colleges with more Federal Pell recipients and fewer financial resources tend to have lower graduation rates. “The [ACSFA] analysis finds that these three inputs are powerful determinants of 6-year graduation rates at nonprofit 4-year public and private colleges.”

As Mark Kantrowitz, Publisher of Edvisors, has noted, “College graduation rates correlate with academic performance and other risk factors, so refocusing the Pell Grant program on completion will shift eligibility from financial need to academic merit. High-risk students – such as first-generation college students, low-income students, students who are single parents, students who lack a high school diploma, students who work full-time while enrolled and students who enroll part-time – are less likely to graduate. This represents an abandonment of the basic principle of college access that every student should have an equal opportunity to pursue a college education without regard to ability to pay. Refocusing the Pell Grant program on completion will introduce a bias in favor of Bachelor’s degree programs at more selective colleges.”
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08.02.13 | The Usual Mistrust or a Preview of More Bipartisanship?

Posted in Financial Aid, News, Stafford Loan, Student Loans by David Levy

Federal Student Loan Compromise

This content was updated on 7/9 to reflect the passage of the Smarter Solutions for Students Act

With bipartisan support, on July 31, 2013, the House of Representatives passed H.R. 1911, the Smarter Solutions for Students Act (also known as the Bipartisan Student Loan Certainty Act, as amended by the Senate), by a vote of 392 to 31.

President Obama  signed the legislation into law on August 9, 2013.

Under the new law, interest rates on new loans each July 1 will be based on the last 10-year Treasury auction in the previous May. The specific interest rates will be as follows:

  • Undergraduate Students (Subsidized and Unsubsidized Federal Stafford Loans): 10-year Treasury + 2.05% with an 8.25% cap
  • Graduate and Professional School Students ( Federal Stafford Loans): 10-year Treasury + 3.6% with a 9.5% cap
  • Parents and Graduate/Professional School Students (Federal Parent and Federal Grad PLUS Loans): 10-year Treasury + 4.6% with a 10.5% cap

Based on the current 10-year Treasury rate, this will yield interest rates of 3.86%, 5.41% and 6.41%, respectively, for new loans this year, made after July 1, 2013. (more…)

07.25.13 | Doubling Interest Rates: The Devil is in the Details

Last night, the Senate passed a bill to address the doubling of the interest rate on new subsidized Federal Stafford loans.

The Congressional Budget Office (CBO) estimated that the legislation will save the federal government $715 million over ten years, which would be applied to deficit reduction. Many feared that the multi-partisan Senate deal would fall apart because the CBO found that an earlier version would cost $22 billion over ten years.

Under the Senate-approved legislation, interest rates on new loans each July 1 would be based on the last 10-year Treasury auction in the previous May. The specific interest rates would be as follows:

  • Undergraduate Students (Subsidized and Unsubsidized Federal Stafford Loans): 10-year Treasury + 2.05% with an 8.25% cap
  • Graduate and Professional School Students ( Federal Stafford Loans and Federal Grad PLUS Loans): 10-year Treasury + 3.6% with a 9.5% cap
  • Parents (Federal Parent PLUS Loan): 10-year Treasury + 4.6% with a 10.5% cap

Based on the current 10-year Treasury rate, this would yield interest rates of 3.9%, 5.4% and 6.4%, respectively, for new loans this year, made after July 1, 2013.

According to Mark Kantrowitz, publisher of Edvisors, “This is still an interest rate increase masquerading as a decrease. Interest rates are at historically low levels and have nowhere to go but up. We can expect interest rates to start increasing by about 1.5% per year in 2015.” These federal educational loan rates are expected to climb as the economy improves and it becomes more expensive for the government to borrow money. Thus, interest rates on new loans will probably exceed the current 6.8% rate in 2017 and certainly by 2020. “So, while students enrolling in college now will save money on their student loans, their younger siblings will pay a lot more. A few years from now students and parents will be demanding a return to fixed 6.8% interest rates.”
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07.24.13 | 5 Ways to Cover College Costs

Posted in College Life, FAFSA, financial aid tips, Scholarships, Student Loans by Student Loan Network Staff

Paying for CollegeWhether you’re a soon-to-be freshman or second semester senior, it is never easy to figure out how to cover the costs of college. With tuition and hidden fees of private colleges averaging out to about $40,000 per year, many of you are still wondering how your family is expected to pay for $35,000 of your education, even after having received your Student Aid Report (SAR) three months ago. To help you out in your pursuit of a college degree, here are 5 ideas for paying for college when Federal aid comes up short.

Befriend the Financial Aid Office

If you are disappointed by the amount of financial aid that you receive, try talking to your financial aid office. Many colleges have an appeal process for financial aid, so get on a first-name basis with someone in the financial aid office and see what else can be done.

Search for Scholarships

There are millions of dollars in scholarships that go unclaimed every year, so why not spend a few days this summer searching and applying for as many scholarships as you can find? On average, you will win 1 out of every 10 scholarships that you apply for, so don’t get discouraged. For starters, try visiting our recommended scholarship search website, or try winning scholarships through the ScholarshipPoints program. (more…)

07.23.13 | How America Pays for College — 2013 Report

Posted in Financial Aid by David Levy

Sallie Mae has issued its sixth annual report, How America Pays for College. David Levy breaks down the key findings:

  • Most families still see a college education as an important investment in their child’s future.
  • More than 90% of families believe their students will earn the degree they are seeking.
  • Despite reports of increased reliance on educational loans, families view grants and scholarships as the top resource to pay for college.

Because of the post-recession economy, families have reduced the share they contribute to college expenses and have looked for ways to make college more affordable. These cost-cutting strategies include: choosing less expensive post-secondary institutions; increasing work hours; having the student live at home; and utilizing education tax credits.

As the economy continues to improve, parents’ attitudes about the value of college and their ability to finance this second largest family expenditure are slightly more optimistic.

Parents remain worried about how to finance college, but with the economic recovery underway, this concern seems to have decreased over the past three years. As consumer confidence increases (as it has over the past few months), it will be interesting to see if consumer expenditures for college and its related costs also increase, too.

To read the report, find the summary and PDF download links here.

Mark-Kantrowitz-EdvisorsDavid Levy is Associate Editor of the Edvisors Network. David brings 30 years of experience as Director of Financial Aid at some of the nation’s leading colleges, including the Scripps College, California Institute of Technology and Occidental College. He is respected by students, parents and financial aid professionals nationwide because of his extensive outreach and volunteer activities, his extensive knowledge of financial aid and his leadership in helping to simplify the aid application process.