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…)

07.24.13 | 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…)

06.11.13 | Impacts of the Potential Stafford Loan Rate Increase

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

Student Loans in the MediaWith the recent legislation involving the subsidized student loan interest rate, many have begun to express concern towards the fact that if Congress is not able to reach an agreement by July 1, subsidized Stafford loan interest rates will automatically increase from 3.4% to 6.8%.  In the process, many news sources have erroneously been reporting that this increased interest rate would yield an additional $1,000 in annual debt for the average borrower. However, this figure is much lower in reality.

Using the loan repayment calculator from Finaid.org, we can begin to calculate more-accurate rates (though still estimates). Assuming a student borrows $23,000 over the course of four years—the maximum amount that can be taken out for undergraduate studies—the annual increase will be less than half of what has been reported.
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03.28.13 | How Repealing DOMA Could Affect Financial Aid

Posted in College Life, FAFSA, Financial Aid, News by Student Loan Network Staff

This week has brought a flood of news on gay rights as Supreme Court justices review the Defense Of Marriage Act (DOMA). The repeal of DOMA would bring many benefits to same-sex families, such as death benefits, tax incentives, and health insurance coverage.

What does this have to do with financial aid? A lot, actually.

An increasingly common issue in the financial aid application process is how LGBT families file the FAFSA.

Because of DOMA, financial aid for same-sex families is determined differently and can lead to non-uniform aid awards. When filing the FAFSA, both parents (if married) are required to provide their financial information. In the case where marriage is not federally recognized, only one parent would be able to file for the student, leading to increased financial aid for the family. What’s more, any financial support from the other parent would be reported as untaxed income and subject to different treatment in the aid calculations. The same logic applies to married students.

If DOMA is repealed, the application process would be streamlined for all married couples. Financial aid would take all financial support for the student into account, and the question of “which parent should file the FAFSA” would be eliminated for these families.

This also means that same-sex families might get less financial aid, because financial awards would be based on both parents’ income and assets, not just one.

Clearly DOMA has far-reaching impacts for college students and their families, as repealing DOMA would mean uniformity in the financial aid process for all married couples.

03.26.13 | 10 Things You Didn’t Know About Financial Aid

Posted in Financial Aid, financial aid tips, Repayment, Student Loans by Student Loan Network Staff

Piggy Bank With Graduation CapThe financial aid process can be tough to navigate, and like many students out there, you may not know all of the ins-and-outs. To help you make the most of your financial aid, we compiled a list of some noteworthy facts.

1. You must maintain Satisfactory Academic Progress (SAP)

To stay eligible for financial aid, there are certain criteria you have to maintain. Many students know about the qualitative measures such as minimum GPA, but there are also quantitative criteria students must meet. For example, a student must not exceed 150% of the credits required for their program of study, and this includes attempted credits. This means that too many withdrawals, failed, or incomplete courses can impede your eligibility for financial aid. Make sure you know your school’s SAP policy to keep your financial aid on track or check out this example from the University of Minnesota.

2. Males must register with the Selective Service

Some students don’t realize this until it’s too late, but in order to receive financial aid, male students 18 and older must register for selective service. If you don’t register by the time you’re 26, you will be unable to receive federal financial aid funds. After that, it’s incredibly difficult to regain eligibility, if at all.
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03.06.13 | Sequester Impacts on Financial Aid

Posted in Federal Work-Study, Financial Aid, News, PLUS Loans, Stafford Loan by Student Loan Network Staff

As you may have heard by now, the recent sequestration has huge implications for education across the board, and Higher Ed. is no exception. The budget cuts that took effect on March 1, 2013 will affect most types of federal student aid, including Federal Work Study (FWS), Federal Supplemental Education Opportunity Grants (FSEOG), Service Grants, TEACH Grants, and the Direct Student Loan Program. Fortunately for many students, Pell Grants were specifically exempt from the budget cuts.

Here’s a brief overview of what to expect from student aid programs going forward:

Federal Work Study and FSEOG Programs

Budget cuts of $86 million do not only mean a reduction in the FSEOG program, it could also mean a loss of on-campus employment for as many as 33,000 students if colleges do not step in with funding. While these campus-based programs are funded through the remainder of this year, program cuts will take affect for the 2013-2014 academic year.

Iraq – Afghanistan Service and TEACH Grants

For both of these federal grants, funding has been reduced for any award first disbursed during the sequester. It should have no impact on grants first disbursed before the cuts took effect.
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10.03.12 | What color is the FAFSA form this year

Every year we get the same question, so here is your answer:

For the 2013–2014 year, the FAFSA will be green, with a purple section for parents.

For the current year, 2012–2013 the FAFSA is orange.

In previous years:

  • 2011–2012 FAFSA was Yellow
  • 2010–2011 FAFSA was Blue

For detailed information on completing the FAFSA, visit FAFSAonline.

09.19.12 | Beware of Debit Fees This Semester

Posted in College Life, Financial Aid, financial aid tips, News, Student Credit, Student Loans by Student Loan Network Staff

Piggy bank or debit cardStudents who have received financial aid in the past know the drill – the financial aid office receives the funds, applies them to the student’s account for tuition, room and board, and other expenses, then returns the remainder to the student. In the past, students have been given the option of receiving the refund by check or direct deposit, but this year, there’s a new option across many campuses – a pre-loaded debit card.

The problem

These debit cards (often endorsed by the school) may seem like a great idea up front (easy, right?) but students are warned to be cautious if selecting this method. These cards can come with high fees that can eat into your federal aid funds! Not ideal for cash-strapped students. Fees include things like “$0.50 to swipe the debit card using a PIN number, inactivity fees of $10 a month starting as soon as six months and overdraft fees as high as $38 per transaction” according to the Huffington Post.
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07.24.12 | This Week in Financial Aid

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

This week has seen some interesting news in the financial aid community. From a new private loans report to a college shopping sheet unveiling, here are some of the hot topics in financial aid right now:

CFPB’s “Private Student Loans” Report Released

Last week, the Consumer Financial Protection bureau released a 131 page report on the state of private student loans. This is the first time a report like this has been issued and it has produced some interesting findings. Read the full report or check out some highlights of the report below:

Stats:

  • 90% of all student loans in 2011 were cosigned and required school certification
  • In 2008, 42% of undergrads at for-profit schools received private loans, compared to 14% of all undergrads – Less than 15% of all outstanding loans are from private student loans
  • More than 40% of students don’t exhaust their federal aid before seeking private loans
  • The mean interest rate for private loans in 2011 was about 8.5% (down from about 10% in previous years)

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