Cutting College Costs

I've talked before about saving money by either going to a public college for your first couple of years, then transferring into a private school. Here is an example of another way of saving money.

The University of Massachusetts at Amherst guarantees admission to students graduating from an approved Joint Admissions associate degree program through a Mass Community College with at least a 2.5 GPA.

Additionally, if you were able to maintain at least a 3.0 GPA, Massachusetts has a program called Tuition Advantage Program which will give you a 33% tuition waiver.

UMass Amherst will go even further by waiving the other 67% of your tuition. This waiver doesn't include fees, but it's still a pretty good deal. Make it through with at least a 3.7 GPA and they will throw in a $500 book scholarship.

There are further scholarships and financial aid available. You can check it out at http://www.umass.edu/umccc/financial-matters.

More Massachusetts College News

At a meeting on March 22, 2011, the Massachusetts Board of Higher Education voted to require students entering Mass four year schools starting in the fall of 2016 to take four years of high school mathematics. The actual wording from the committee reads:
Mathematics, 4 courses (Algebra I & II and Geometry or Trigonometry, or comparable coursework) including mathematics during the final year of high school.

This new policy will affect students entering ninth grade in the fall of 2012 and later.

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Student Loan Grace Periods End

The grace period on student loans to those who graduated last May has ended and it's time to start paying them back. That's ok if you have landed a job that actually pays you enough money to live on, but what about those who either haven't found a job or your pay isn't adequate to subsist on?

You do have a few choices, but one of them is NOT burying your head in the sand and ignoring the situation. That will only put you into default, hurt your credit rating (not a good idea for anyone, but especially someone just starting out) and possibly lead to legal action. Get in touch with your lender and explain your situation.

One possibility is student loan deferment. This is a temporary suspension of loan payments for various reasons including reenrollment in school, unemployment, or economic hardship. For your subsidized loans, you won't need to pay interest while the deferment is in place. For non-subsidized loans, you are responsible for the interest added during your deferment. If you are unable to pay it, your loan will be recapitalized and the interest added into the total you owe.

Even if you aren't eligible for deferment, you may be able to use forbearance which is a temporary postponement or reduction of payments for a period of time because you are experiencing financial difficulty. Forbearance may be granted by your lender for 12 months at a time up to a maximum of three years.

Student loan forgiveness may be possible in exchange for service in various organizations such as Peace Corps, VISTA, Military Service and also by agreeing to teach in certain underprivileged or low income areas as defined by the Department of Education.

Bankruptcy is probably not a very good option. Not only will it hinder you going forward since it remains on your credit reports for years, but the student loans are not usually discharged in a bankruptcy and you will still end up owing the loans.

Bottom line...if you are having trouble paying your student loans, talk to your lender as soon as possible. Don't wait until you are already months in arrears.

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KFC Colonel's Scholars Program Scholarships

You will have to hurry for this one. The KFC Colonel's Scholarship application deadline is February 10, 2010. This scholarship awards up to $5,000 per year towards tuition, fees, books, room and board. You may be eligible if you are graduating high school between 12/1/09 and 8/31/10 and are carrying at least a 2.75 GPA. For more information on this scholarship, check out KFC Colonel's Scholars

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FAFSA - The time to prepare is now.

We're almost through January and you should be preparing your FAFSA now. Though the Department of Education allows you to submit through June 30, 2011, for the 2010-11 academic year, many states and colleges have a deadline in February or March. The sooner you get it in, the better your chances of receiving college funding. The reason for this is many colleges have a limited amount of funding and they will begin doling it out to qualifying students early. Once the money is gone, you're out of luck.

A couple of things to remember...

The Federal FAFSA website is at http://www.fafsa.gov. If you come across sites with a .com or other ending, you are at a commercial site and they will probably charge you to do your FAFSA. Go to the site above and you can submit for FREE.

If you don't have your W2's or 1099's yet, you can still do your taxes with estimated numbers and file. Should the numbers change significantly, you can go back and submit an amended FAFSA when you get the final numbers.

Here is a listing of states with early deadlines for FAFSA:

February - Connecticut, Tennessee.
March - California, Idaho, Indiana, Kentucky, Maryland, Michigan, Mississippi, Montana, North Dakota, Oregon, Rhode Island.

Some of these are the 1st of the month, so check it out and start filling out now. There are other states who haven't posted definite deadlines, make sure you check with your financial aid administrator.

For more information, you can check www.college-loans.us/fafsa.html.

The American Recovery and Reinvestment Act of 2009

As President Obama pushes his economic spending package, what will it mean for college students and their families? Though the bill could still see amendments, here are a few of the possibilities:

Hope Scholarship

For 2009 and 2010, the Hope Scholarship Credit shall be an amount equal to the sum of (A) 100 percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year (for education furnished to the eligible student during any academic period beginning in such taxable year) as does not exceed $2,000, plus
(B) 25 percent of such expenses so paid as exceeds $2,000 but does not exceed $4,000.
So, the Hope may increase temporarily to a maximum of $2,500 per year.

Pell Grant

The maximum Pell Grant for the 2009-10 school year will be $4,860, an increase of $500 over the 2008-09 Pell. But, the College Cost Reduction & Access Act (CCRAA) added $490 to that top award so the maximum award should be $5,350. The program will be fully funded, so there will be no award reductions to applicants meeting the requirements.

Stafford Loans

Unsubsidized Stafford Loan limits could increase by $2,000. This will allow students to have a lesser need for private loans which might be at a significantly higher cost.

Federal Work-Study Program

Federal Work-Study will be funded with $490 million to be distributed to colleges. These must be 25% matched with non-Federal funds.

Special Allowance Payment (SAP)

Lenders who participate in the Federal Family Education Loan (FFEL) program, receive a subsudy known as a Special Allowance Payment (SAP) to ensure lender participation. During the current economic crisis, the SAP decreased to the point where lenders dropped out of the program. In the American Recovery and Reinvestment Act of 2009, the SAP calculation will be tied to the London Interbank Offered Rate (LIBOR), which should boost it back to levels that will provide stability in the student loan market.


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Connecticut Announces New Student Loan Program

Governor Rell announced a new partnership between Connecticut and it's credit unions that will provide student loans at a low rate of interest. As much as $17.5 million could be devoted to the program which will offer interest rates as low as 6% and 5.75%.

Those institutions offering loans at 6% per year will also be able to defer payment for one year, those offering at 5.75% will not have deferred payments.

Drink Milk? Get a Scholarship

This one is called a contest, but the winners (25 of them) will receive scholarships of $7,500 and a trip to the awards weekend in Orlando or another place to be named by the sponsors. The contest is called the SAMMY's (SCHOLAR ATHLETE MILK MUSTACHE OF THE YEAR) and one of the requirements is to write an essay of up to 250 words about "How Milk Has Helped In My Academics and/or Athletics".

Get more information on the SAMMY's at SAMMY's Rules Page.

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Department of Education Announces College Loan Plan

Secretary of Education Margaret Spellings, along with Secretary of the Treasury, Henry Paulson, announced that the Administration has approved a plan that will ensure that any qualified student will have access to student loans during the upcoming school year.

Building upon the recently passed Ensuring Continued Access to Student Loans Act of 2008, the plan will insure short term liquidity for those lenders unable to procure lending capital through their regular means, as well as a loan purchase commitment, where the Department of Education will purchase new federal loans originated for the 2008-09 year. Lenders will have until September 30, 2009, to decide if they will sell the loans to the Department of Education. So, if economic conditions improve, the lenders may still decide to hold the loans themselves.

The DOE will also utilize, if necessary, the Lender of Last Resort program, which would provide federal advances to guaranty agencies if theere are students unable to get FFELP loans to students otherwise unable to get them.

The Department has also committed to doubling Direct Loan origination volume from $15 billion to $30 billion, if necessary.

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Pennsylvania Students Scramble for School Money

Pennsylvania college students will be scrambling to fund their educations this year. The Pennsylvania Higher Education Assistance Agency (PHEAA) announced earlier that they would not be participating in the Federal FFEL program during the upcoming year. This means that they will no longer be making Stafford, Parent PLUS, Graduate PLUS, and Consolidation loans. While PHEAA says this is temporary, there is no date set for a return to the program.

There are still many lenders taking part in the KeystoneBEST loan program and PHEAA will pay the 1% federal default fee for lenders taking part in the program. This includes the Stafford Loan, the Parents Loan and the Graduates Loan.

PHEAA also announced recently that student grants for the 2008-09 school year may be reduced by up to $750 and fewer students may receive the grants. While there is talk about the legislature coming up with some money to make up the difference, don't hold your breath. Many there don't seem happy with PHEAA.


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May 1, 2008 - House and Senate Pass Ensuring Continued Access to Student Loans Act of 2008

The House of Representatives and the Senate this week passed the Ensuring Continued Access to Student Loans Act of 2008 and cleared it to the White House where President Bush is expected to sign it into law. Some of the highlights of the legislation are:

There will be an increase of $2,000 to the maximum annual unsubsidized Stafford loan amounts that may be provided to undergraduate students under the Federal Family Education Loan (FFEL) program. Dependent undergraduates will be allowed to borrow up to $31,000 in total and independent undergraduates up to $57,500 through their college years.

Parents who borrow through the Federal PLUS Loan program will be able to defer loan principal repayment for up to six months after their student has graduated or stops carrying at least one-half the normal full-time academic workload.

More news for PLUS borrowers. Those who are no more than 180 days delinquent on their home mortgages, and no more than 89 days delinquent on the repayment of any other debt, who normally would be ineligible for the loans due to their adverse credit history will be able to meet a specified extenuating circumstances requirement making them eligible for the loans. This section will cover loans made between July 2008 and June 2009.

The Department of Education may designate certain guaranty agencies to be lenders-of-last-resort and appropriate the necessary funding to them.

The bill passed the Senate by unanimous consent on April 30 and the House by a vote of 388-21 on May 1.

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Kentucky Higher Education Student Loan Corp may stop Student Loans

The Kentucky Higher Education Student Loan Corp, also known as the "Student Loan People", is a non-profit organization offering student loans to Kentucky students. According to www.courier-journal.com, they announced Friday that as of May 1, the KHESLC would no longer be making loans to first time borrowers. Those with applications in by May 1 would still be able to get their loans, though no word on what would happen to these borrowers next year if the KHESLC remains out of the market.

With more and more student lenders dropping out of the college loan arena, students are going to have to be going to private loans that may run at much higher interest rates, thus raising the overall cost of a college education at a time when many students are already finding it difficult to pay.

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New Hampshire Higher Education Loan Corporation Suspends Alternative Loans

In a press release dated March 4, the New Hampshire Higher Education Loan Corporation (NHHELCO) announced that they would suspend their alternative student loan program as of March 11, 2008.

NHHELCO stated that they would be focusing on the Federal Student Loan Programs. Previously, in January, NHHELCO suspended the Federal Consolidation Loan program. Many agencies have had to cut back on programs due to difficulty in securitizing their student loan debt.

Last year there were 4769 New Hampshire students who took advantage of NHHELCO private student loans. All those students will have to find alternative funding this year, most likely at a higher cost.

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Stanford University Announces Plan to Pay Tuition For Lower Income Students

If you've been putting off applying to Stanford because of the $47,000 price tag, take another look. Stanford recently announced a new plan that will pay the tuition ($36,000) for students with family incomes below $100,000. Students with a family income below $60,000 will not be expected to pay anything for tuition, room or board. The program will also eliminate the need for student loans.

As the latest entry to the number of colleges and universities dipping into the endowment to try and bring the cost of education back to the realm of possibility for most, Stanford has upped the ante with this far-reaching plan. Hopefully many other institutions with huge endowments will follow suit.

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College Loan Market Tightens

As the 2008-09 school year approaches, many students may end up paying more for their college loans, if they are available. There will be fewer lenders in the student loan market and the ones that remain won't be prone to giving discounts for autopay or ontime payments as in previous years.

The MI-LOAN alternative loan program of the Michigan Higher Education Student Loan Authority was temporarily suspended this week as sufficient funding for the program was not available.

The Montana Higher Education Student Assistance Corp failed to sell about $390 million in bonds for student loan financing. Though the failure to sell should not impact Montana student loan financing for the 2008-09 school year, it certainly will raise costs for the MHESAC.

According to the Des Moines Register, the Iowa Student Loan Liquidity Corp. will be unable to fund student loans properly in 2008-09.

Several other state student loan programs have reported difficulty in funding their programs in the usual way and several major school loan lenders like College Loan Corp and Sallie Mae will be either curtailing student loan programs or tightening loan qualification requirements. All of this points to lower availability and higher costs for student loans.

Be sure to get your financial aid applications in as early as possible this year. You don't want to be at the end of this line.

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Wellesley College Announces Plan to Reduce or Eliminate Loans

Wellesley College announced on February 7 a new financial aid plan that would eliminate loans for students with family incomes below $60,000. The plan would also reduce by one third the loans for those students with a family income between $60,000 and $100,000, which would in effect limit student loans to these students to a totla of $8,600 over four years.


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Cornell University and Northwestern University to Eliminate Student Loans for Needy Students.

This past week found both Cornell and Northwestern announcing plans to eliminate student loans from some financial aid packages starting next year.

Cornell will be eliminating student loans this year to students with a family income below $60,000 and next year will extend it to those incomes below $75,000. Students with family incomes up to $120,000 will find their student loans capped at $3,000 per year.

Northwestern will be eliminating student loans to the neediest students. This program will not be tied to a specific family income. Even ungrads who still need to take out subsidized Stafford Loans or Perkins Loans will find those loans capped at $20,000 over four years.

Holy Cross to Offer Free Tuition to Worcester Residents
Qualified Worcester, Mass, residents wil receive free tuition to the College of the Holy Cross. Beginning in the 2008-09 school year, Worcester students with a family income under $50,000 who are accepted as students at Holy Cross, will qualify for the free tuition program.

Cal Grants Available

California students should be applying now for the Cal Grants. March 2nd is the deadline for the FAFSA and the Cal Grant GPA Verification Form. This is free money and it belongs to you, so don't wait until the last minute. More info at CalGrants.org


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Dartmouth College Announces Tuition and Loan Elimination Plan

Dartmouth College President James Wright announced today several major additions to the school's financial aid program. Beginning with the 2008-09 school year:

All students with a family income below $75,000 will go tuition-free. They may also be eligible for scholarships to help cover other expenses such as room, board, books and miscellaneous expenses.

Scholarships will be replacing grants for incoming scholarship students beginning with the Class of 2012. Current students will see their loans cut by 50%.

Starting with the Class of 2012, Dartmouth will extend it's need-blind admission policy to all international students. Currently students from the US, Canada and Mexico are covered by the policy.

Financial aid recipients will be eligible for a $2,950 scholarship in their junior year to assist them in taking advantage of possible research or internship opportunities.

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Bowdoin College to Eliminate Student Loans

Bowdoin College of Brunswick, Maine, announced Friday that beginning with the 2008-09 school year, they will replace student loans for all new and current students receiving financial aid.

Bowdoin's program is among the most ambitious of the schools that have anounced similiar no loan plans. Many others have reduced loans for current students, without eliminating them altogether. Still others have capped the family incomes that would be eligible.

Bowdoin's plan may allow gradsuates to make a job choice based on desire, rather than making enough money to repay the student loans.

Florida May Eliminate College Grants for Thousands

With budget issues reaching crisis levels, the governor's budget proposal seeks to eliminate grants for Florida students attending private colleges and universities under the Florida Resident Access Grant Program (FRAG).

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The University of Oregon announce that beginning in September, all incoming Oregonian freshmen who qualify for Pell Grants will receive aid packages that will cover the total cost of their tuition and fees. The program, called PathwayOregon, will pick up whatever costs aren't covered by federal and state aid.

Students qualifying for PathwayOregon will also be provided with academic support. Some students may also qualify for room and board.

To qualify, Oregon students must be eligible for the Pell Grants, have their admissions applications in by January 15, have the FAFSA into the University by March 1, apply for one of two University scholarships, as well as other requirements. You can read more about PathwayOregon at http://www.uoregon.edu/~pathway/

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2008-09 Free Application for Federal Student Aid (FAFSA)

OK, it's time to start thinking about the FAFSA again. If you (or your child) are planning on going to college in the fall, and you will be looking for financial aid, the FAFSA is your first stop. All of the following programs require a FAFSA, as well as many state run programs and privately funded grants and scholarships.

• Federal Pell Grants
• Federal Stafford Loans
• Federal PLUS Loans
• Campus-Based Programs
• Federal Supplemental Educational Opportunity Grants
• Federal Work Study
• Perkins Loans

You can either fill out a paper FAFSA or do it online. For the 2008-2009 school year, you can submit it any time after Jan 1, 2008 up until June 30, 2009. You will want to fill it out and submit as soon as possible. Many programs have limited funding and the earlier you apply, the better chance of getting your share.

Before you can fill out the FAFSA online, you will need a PIN (Personal Identification Number). If you have one from last year, it should still be good. If you don't remember or this will be your first year in college, you can get one at http://www.pin.ed.gov/. After you get your PIN, you will also need your income tax forms as soon as you have them done. If you are still your parent's dependent, you will need their tax forms as well. Employers are supposed to get your W-2 forms out by January 31, but you can get a head start by checking your final paystub of the year. It will usually have your unofficial yearly totals of income and taxes.

Once submitted, as long as everything is in order, you will receive an Student Aid Report (SAR) which shows all the answers that you submitted on the FAFSA. Make any corrections necessary, or if ok you may submit either electronically or sign the SAR and mail back. Your SAR will also include your EFC (Expected Family Contribution) which is used to determine your eligibility for federal financial aid.

Now is a good time to start preparing for next year. Get your PIN now if you haven't already.

Good luck

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Tufts University to Replace Some Loans With Grants

Tufts University in Medford, MA, announced today that they would begin replacing loans with grants for all undergraduates whose family income is below $40,000. Members of the Class of 2011 will be the first to benefit from the new program.

University of Pennsylvania to Replace Loans with Grants

On December 17, the University of Pennsylvania announced that they would be replacing all student loans in financial aid packages with grants. There are about 4000 undergraduates and about 50% of them currently have student loans included in their aid packages.

Beginning in September, 2008, students with a family income below $100,000 will receive grants in place of loans. Those with family incomes above $100,000 will receive a 10% reduction in their loan amount.

By the fall of 2009, all students will be receiving loan-free financial aid packages.

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Ben Carson Scholarships
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