Archive for the ‘Student loans’ Category

FAFSA Error Affects Thousands of Students’ Financial Aid

If your financial aid package for the upcoming school year seems off, you may want to have it checked. An error on the online Free Application for Federal Student Aid, better known as FAFSA, made some applicants appear far better off financially than they actually are.

financial aid

The error on the online form causes some low-income filers appear to be millionaires, which can have a dramatic impact on what, if any, federal financial aid they can receive.

Jeff Baker, policy liaison at the Education Department’s Office of Federal Student Aid told student-aid administrators at the Chronicle of Higher Education that the error has already impacted thousands of borrowers, and is likely to impact even more.

“It’s a serious problem,” Baker said at the National Association of Student Financial Aid Administrators’ annual meeting. “We have to fix it.”

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For-Profit Colleges Under Fire

Earlier this year, President Obama and his administration made waves when they announced new steps to address concerns about student loan debt. They announced new regulations that would require career colleges to do a better job of preparing students for gainful employment. If the schools do not meet the new regulations, they could lose access to federal student aid.

books and money

In a release about the new regulations, U.S. Education Secretary Arne Duncan said, “Higher education should open up doors of opportunity, but students in these low-performing programs often end up worse off than before they enrolled: saddled by debt and with few – if any – options for a career.”

“The proposed regulations address growing concerns about unaffordable levels of loan debt for students enrolled in these programs by targeting the lowest-performing programs, while shining a light on best practices and giving all programs an opportunity to improve.”

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The U.S. Department of Education Should Think Before It Tweets

This week the U.S. Department of Education gave us an excellent example of what NOT to tweet out to the many college students who will be hoping for student aid this school year. It also showed it’s about as good at social media as the average “cool” parent.

bad tweet (600x360)

In what can only be described as an attempt to be hip gone awry, Federal Student Aid, @FAFSA, tweeted to its followers a still from the movie “Bridesmaids” accompanied with the quote, “Help me. I’m poor.” While a funny quote that I’ve often used myself when feeling particularly broke, it’s probably not appropriate when coming from the Education Department. Especially when sent out with the caption, “If this is you, then you better fill out your FAFSA: fafsa.gov.”

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“Hacking Your Education” Smartly Challenges the Benefits of a College Degree

“You wasted $150,000 on an education for $1.50 in late fees at the public library?”

In Dale J. Stephens’ book Hacking your Education, he makes a case for an alternative post-high school route. The book is his love letter to other free thinking people who have ever questioned their college education. It begins with a disclaimer: This is not a book about dropping out but rather about becoming empowered to make your own decisions. For a college dropout who bucked educational convention, he sure did his homework.

Stephens, a 20 year old wunderkind, has taken the time to productively analyze the quandaries frustrated college students have, but are too lazy to take to task.

The author has taken the principles of the unschooling movement, a philosophy started in the 1970s that encourages learning through real life experiences, and ushered them into the Internet and social media age. He has oodles of thorough advice on how to connect with like minded individuals in an attempt to foster your passions. Stephens accurately points out the loads of free, open to the public presentations on a wide variety of topics at university campuses everywhere. “Hacking Your Education” is all about identifying resources and sapping them dry. Read the rest of this entry »



Obama Administration to Reduce Student Loan Payments

President Barack ObamaThis afternoon, President Obama addressed a crowd in downtown Denver at the University of Colorado. Central to the President’s speech was the new “Pay As You Earn” proposal that the White House announced yesterday. The proposal aims to reduce monthly payments for student loans, by consolidating loans and capping payments. Starting next year, students will be able to cap their loan payments at ten percent of discretionary income, and after 20 years the debt will be forgiven. Current laws cap student loan payments at 15 percent of discretionary income with loan forgiveness after 25 years. According to a White House press statement, the proposal will benefit 1.6 million students at no cost to taxpayers.

“It can put more money in your pocket once you graduate,” Obama said in today’s speech, emphasizing that’s important for all Americans to have an equal opportunity to have access to higher education. “It’s important for our country’s future.”

In conjunction with the “Pay As You Earn” proposal, the Consumer Financial Protection Bureau will release a Financial Aid Shopping Sheet that will help students better understand the types of loans and finical aid that’s available to them before they go into debt.  “College graduates are entering one of the toughest job markets in recent memory, and we have a way to help them save money by consolidating their debt and capping their loan payments. And we can do it at no cost to the taxpayer,” said U.S. Secretary of Education Arne Duncan in the White House statement.

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Government Sues for Student Loan Repayment

Rising college tuition costs force an abundance of students to rely on Federal student loans. When it comes to repaying those loans, American borrowers are defaulting at an increasing rate. The United States Department of Education is taking action to get their money by suing persons who owe large loan repayments to the government.

“Defaulting” on a loan occurs when a borrower fails to make payments as determined by the loan agreement. This is different from “deferring” a loan; an option used by many students to postpone the repaying of a loan. It is not uncommon for student loans to come with a deferment option for a certain period of time. When deferment time is up and the borrower does not pay, the loan becomes “delinquent”. After a period of delinquency, the loan goes into “default”. When a loan defaults the lender has legal power to obtain their money. In the case of federal student loans the lender is the United States Government.

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Pell Grants May Receive Less Funding

There have been some budget cuts proposed for the 2012 Department of Education by President Obama. Under these budget cuts, $100 billion would be taken from the Federal Pell Grant program along with other programs for higher education.

Currently, over nine million students classified as low income receive grant benefits from the Pell Grant Program. With the budget cuts, students will still be able to receive the current maximum of $5,550 per academic year. All students that qualify for Federal Pell Grants do so through the Free Application for Federal Student Aid or the FAFSA. If a student’s family income information indicates, they may qualify for a Federal Pell Grant. With the new budget there is a possibility of the criteria being changed to be more stringent. This would mean that some students who previously received grants may no longer be eligible.

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Record Stress Levels in College Freshmen

In a survey conducted of over 200,000 students entering four year colleges, it has been found that the emotional health level of freshmen is at its lowest level in 25 years.

Students are depressed and under stress with some of them using psychiatric medication. More students arrive on campus with problems and are in need of support. Students worry about the debt they are accruing while in college and if they will be able to find a job after graduating and it is causing a lot of additional stress for them.

During this survey students were asked to rate their own emotional health and the emotional health of others. While many students rated their own emotional health below average, it was more difficult for them to gauge the emotional health of others.

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Wells Fargo Forgives Student Debt in Death

Wells Fargo will pardon any student loan debt where the beneficiary dies or becomes permanently disabled, according to their new student loan agreement, released on Friday.

“When a death or permanent disability occurs, their future ability to repay is compromised,” said Kirk Bare , the head of Wells Fargo Education Financial Services. “We believe it is important to be responsive to events that affect these unique customers, and their ability to obtain financial independence and repay their loan.”

Before this new agreement, the co-signer had to pay back the loan under the circumstances. The student loan forgiveness program will be an addition to both existing and future Wells Fargo student loans.

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Highest Student Debt by State

washington-DCBecause loans are the primary means of paying for education in the U.S., the Project on Student Debt has set out to increase public understanding of student loans.

While the average student debt load in America is $24,000, in some states this amount in much higher. Below is the list of the ten states with the highest student debt. These figures were calculated from voluntarily reported data, submitted from nearly 1,000 public and private non-profit colleges. For-profit and two-year schools are not factored into the data. The highest average student dept is based on data from 2009 graduates.

1. Washington, D.C.
Average debt: $30,033
School with the highest average student debt: Corcoran College of Art and Design

2. New Hampshire
Average debt: $29,443
School with the highest average student debt: Saint Anselm College

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