July 29, 2008
If you live in Massachusetts, you’ve probably heard by now that MEFA will not be lendings at all this year. A few months back they announced that they would not be able to lend Federal loans, but expected to sell Private loans. Unfortunately, that has fallen through as well.
My co-worker Chris appeared last night on the local Boston PBS affiliate, WGBH, to explain why this is happening.
July 25, 2008
Some schools are switching to the Direct Loan program in order to ensure their students get loans. But can the government cope with the additional volume? For those of you who aren’t sure what the Direct Loan program is, here’s a brief explanation:
Students who borrow a Federal student loan borrow either through the FFELP program or the Direct Loan program. The FFELP program handles loans through private companies and banks, whereas with the Direct Loan program which means student borrow directly from the government.
With the credit crisis affecting student loans last fall, some schools switched to direct loans to make sure their students got loans. But now with the increasing volume, some people , including Congressmen, are concerned that the Direct Loan program won’t be able to cope.
Congressmen Pete Hoekstra (R-MI) and Mark Souder (R-IN) sent a letter to the Government Accountability Office asking it to review the Direct Loan programs capabilities. The Congressmen are very concerned.
July 22, 2008
In short, most likely. In most cases, you will pay less each month when you consolidate all your federal loans together. In some cases, for example if all your interest rates are identical and you have a low balance, you might not save much.
Consolidation loans take the weighted average of your loan balances times your interest rates to calculate your new rate. Then, depending on the balance, they extend the loan repayment time normally to 10 to 30 years.
You will likely pay more in the long run if you have a longer repayment period, but it’ll help you pay your bills right after college graduation.
Also, for federal loan consolidations, there are no early repayment penalties, so you can get all the low-payment benefits now then later when you have a higher salary put a bit more money towards the loan and pay it off early!
Here’s a calculator you can use to determine if consolidation can help you.
July 17, 2008
…And Congress wants to make sure you’re more educated about college costs and what your options are. The Boston Herald is reporting that Congress is “trying to take the mystery out of the forever-rising costs of higher education by mandating that colleges provide students and their parents more information about how much the average student pays for school, what kind of tuition help they might be able to secure and which universities offer the best bang for the buck. Congress is also calling for an annual “blacklist” of schools with the steepest cost increases.”
But will this help or just create more paperwork for college staff?
Well the jury’s out on that one. Read the whole article here and let me know what you think!
July 7, 2008
The Wall Street Journal has a really interesting article on the increase in altruistic work among recent graduates. Click here to read the whole article or read the excerpt below:
Together, the weak economy and increasing civic mindedness are driving grads to work for social causes. Teach for America, the nonprofit organization that sends college graduates to work in low-income public schools, saw applications jump 36% to 24,718 from 18,172 a year ago. Of those, about 3,700 are selected to teach in more than 100 school districts next fall, up more than one-fourth over the year before.
Founded by a young Princeton University alumna in 1990, the organization recruits and trains top college graduates, who commit to two years of teaching in high-poverty urban and rural schools.
Teachers are paid by the districts in which they work, with annual salaries typically ranging from $25,000 to $44,000. Making a difference in the classroom is what prompted 21-year-old Ms. Atwill to sign up. In the fall of her senior year at New York’s Columbia University, she braved the campus job-fair circuit, interviewing mostly with consulting firms. A double major in East Asian studies and creative writing, Ms. Atwill decided it was finally her turn to ask some questions on the last round of interviews. One
was: What do you really do every day?
“The response would be something like, ‘I worked on a report,’ ” she says. “It didn’t seem like they were actually accomplishing things.”
At an information session with Teach for America, schoolchildren approached the dais, talking about how they came close to leaving school before their teacher came along. “I thought, ‘I can do something I care about and also be effective,’ ” she says. The Peace Corps is expecting a 16% increase in applications for the fiscal year ending Oct. 1. Established in 1961 by President John F. Kennedy, the Peace Corps sends volunteers to developing countries to work on education, agriculture and other projects. Enthusiasm for the program reached a peak of more than 15,000 volunteers in 1967 before spiraling downward, bottoming out at 5,219 in 1987. But participation has been climbing again in recent years: Fiscal 2007 saw more than 8,000 volunteers — a level not seen since the 1970s. Ms. Graziano, who will likely be teaching English to students in Africa, says she eventually wants to go to graduate school, though hasn’t yet decided her field of study. In the interim, “I want to do something that makes me more competitive” as an applicant, she says. Volunteering in Africa, she says, “is a more-valuable experience than working at some job, like a bank, for a few years.”
July 5, 2008
At a speech yesterday at the University of Colorado, Sen. Obama talked about a plan he would like to implement to get students volunteering, by linking $4,000 in tax credits to 100 hours of community service.
I have no further information on this program at the moment, but I’ll update as I find more.
July 1, 2008
To get Federal student loans, you need to fill out the FAFSA. But if your parents are divorced, who fills it out?
Kiplinger has a great article that answers just that question:
Read the whole article here or read the excerpt below:
My parents are divorced, and I am wondering who should file the FAFSA financial-aid forms. My primary address is with my mother, but she only makes $15,000 a year and receives $20,000 a year in child support. My father and stepmom make $170,000 per year. Should my mom file the FAFSA, even though my dad says he is paying for my college? If my dad and stepmom file, won’t this hurt my chances of receiving financial aid because of their income? How does this work with divorced parents who are remarried?
It looks like you’re in luck: The federal aid formula considers only the finances of the custodial parent (the parent you lived with the most in the past 12 months). If the custodial parent is remarried, the stepparent’s income and assets are considered, too.
But the federal formula doesn’t include the financial resources of the noncustodial parent — regardless of any agreements the parents have made about who will pay for college. State aid formulas are generally the same.
Some private colleges, however, do ask about the noncustodial parent’s income and assets on their own aid forms and consider the resources of both parents — as well as the custodial parent’s spouse. But they generally don’t consider the income and assets of the noncustodial parent’s spouse.
A few colleges use the income and assets of both natural parents without asking for any information from the stepparents when calculating financial aid. It’s a good idea to ask up front about the school’s financial-aid formula, which could make a big difference in the amount of aid you could receive.
And here’s another article for your perusal.