January 31, 2007

Most Latinos spurn college loans

Posted in Parent PLUS Loans, Stafford Loans, The Financial Aid Process at 2:05 PM by Joe From Boston

Here is a really interesting article on cultural aversions to borrowing money, particularly within the Latino community.  I studied anthropology in college, so I find these articles fascinating.

“Luis Fernandez, who will graduate in May from Cal State Fullerton, put himself through college and has a stack of receipts to prove it. He paid for his education, all $12,800 of it, in cash.

“My parents have always said, ‘If you don’t have the money to pay for it, then work for it,’ ” Fernandez said.

So he did. Fernandez, 24, who came from Mexico with his parents when he was 8, worked at a Westminster drugstore and wrote personal checks to cover his college fees. He decided not to take out student loans.

Although the pay-as-you-go method worked for Fernandez, one of his teachers, Chicano studies professor Alexandro Gradilla, has seen many Latinos drop out or take extra years to graduate because they won’t finance their education the way most college students do: with a combination of work, grants and loans.

“I see this happen all the time in my classroom, students who are overworked and under-prepared for class,” said Gradilla. “When I ask them about taking out loans instead of working so much, their thinking is, ‘If you can’t pay it in cash, then it’s not a good idea.’ ”

Educators and financial aid experts said the cultural aversion to loans — considered a sign of a strong work ethic — is common among Latino immigrants and their children. And it creates an odd dilemma in academia.

Financial aid experts worry that students who rely heavily on loans are taking on too much personal debt to pay for college, but educators are trying to convince Latinos that school loans, if used wisely, can lead to high-paying jobs later.”

January 30, 2007

Tuition for illegal immigrants

Posted in Student Loan News at 4:35 PM by Joe From Boston

Whether or not illegal immigrants or their children should be allowed to pay in-state tuition is a hot-button issue right now.  Here are three articles about how three different states are handling the matter:

Georgia: Trying to deny in-state tuition to illegal immigrants, even while the definition of “state benefits” is being questioned.

Maryland: Trying to allow illegal immigrants to pay in-state tuition.  The bill would also require undocumented immigrants to seek permanent residency status

Virginia: Trying to prohibit illegal immigrants from paying in-state tuition.

January 29, 2007

Showdown looming in the Senate over loans

Posted in Legislation Affecting Students, Student Loan News at 1:36 PM by Joe From Boston

Anybody looking to take out a student loan in the coming years might find this article interesting. You can read the full article from Reuters at the Washington Post.

College-loan fight looms for banks in Congress

By Kevin Drawbaugh

Friday, January 26, 2007; 10:31 AM

WASHINGTON (Reuters) – Student loan giant Sallie Mae and some of the nation’s biggest banks are bracing for a fight in the Democratic-led Senate over a problem facing many middle-class voters — how to pay for college.

In hearings expected to start early next month, Sen. Edward Kennedy will seek support for legislation he introduced on Monday directly threatening Sallie Mae and big student lenders such as Citigroup, Wells Fargo, Wachovia, Bank of America, JPMorgan and Nelnet.

The Massachusetts Democrat — an old liberal lion brought back to committee leadership power in November’s elections — wants to reward colleges for steering more students to direct government loans instead of the government-guaranteed loans that furnish handsome profits for Sallie Mae and the banks.

The Kennedy proposal hits the lenders “in the pocketbook,” said Mark Kantrowitz, a consultant and author who runs a Web site, FinAid.org, devoted to student financial aid issues.

“Diverting loan volume into direct lending means the banks will have less income … and be forced to compete,” he said.

Direct loans are cheaper, Kennedy said in a statement, citing estimates from President George W. Bush’s 2007 budget.

The lending industry disputes such figures and defends the cost and efficiency of the loans that private-sector lenders make under the Federal Family Education Loan Program (FFEL).

“This is a very successful program. It’s in every congressional district. Students are getting better rates. It just doesn’t make sense to cut the FFEL program,” said Kevin Bruns, head of lender group America’s Student Loan Providers.

Sallie Mae Chief Executive Tim Fitzpatrick put it more bluntly on January 18 in a teleconference with market analysts in which he said direct loans have fallen short of expectations.

“Unfortunately, Sen. Kennedy has attempted to smear the integrity of Sallie Mae, the student loan industry, and the financial aid professionals. I’m certainly personally disappointed in his baseless and insulting attacks,” said the Sallie Mae CEO, according to a teleconference transcript.


The two sides have squared off before over this issue, but in some ways, things look different this time around.

You can read the rest of the article here.

January 26, 2007

Opinions needed

Posted in Misc at 3:43 PM by Joe From Boston

So, the company I work for is in the middle of re-branding itself and is looking for input both from past and present customers, and the simply curious.  Visit the Financial Aid Podcast blog to read more and leave your opinion!

January 25, 2007

Track the College Student Relief Act of 2007

Posted in Legislation Affecting Students, Student Loan News at 12:14 PM by Joe From Boston

Are you at all interested in tracking the College Student Relief Act of 2007, also known as H.R. 5, as it passes through the House and Senate?

Track in on the Library of Congress’s website! Most people don’t know that all the bills before Congress are available online, as are the voting records. Visit http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.+5: to see H.R. 5 text.

Curious about how your lawmakers voted? Visit http://clerk.house.gov/evs/2007/roll032.xml to see the roll call. On the roll call, please be aware that Democrats are in italics, Republicans are in plaintext.

January 24, 2007

Where to next?

Posted in Misc at 1:53 PM by Joe From Boston

Hi folks, sorry for not posting yesterday.  I got to rebuild my laptop  at work, which took most of the day.  I hate re-installing Windows, but sometimes you just have to bite the bullet.  It’s nearly back to normal now with my programs installed; i’ve even got my podcasts set back up (my boss is cool and lets us run iTunes at work!)

So, in honor of a crazy day here , I thought I’d post a bit differently.  I’ve been trying to post every day recently, particularly with the H. R. 5 bill in the House of Representatives, but I’m curious to see what you want.  More news?  More info on loan types?  More tidbits about financial aid in general?  Leave me a comment and let me know what you’d like to see more or less of!

January 22, 2007

White House Opposes Student Loan Rate Cut

Posted in Legislation Affecting Students, Student Loan News at 4:24 PM by Joe From Boston

An article from cnnmoney.com last week was brought to my attention today – I missed it last week. Please note that this was published before the measure was approved by the house last week, and also that the White House has not yet threatened to veto the measure, though they disapprove of it.

White House Opposes Dem Student Loan Rate Cut Plan

(Updates to add latest estimates of rate cut cost)
John Godfrey WASHINGTON -(Dow Jones)- Warning that it may be bad to encourage students to borrow more, the White House announced Tuesday that it is opposed to a student loan interest rate cut being pushed this week by House Democrats.

“Student debt loads have soared in recent years, and it is not clear that encouraging more loans is a wise course,” the White House’s Office of Management and Budget said in a statement of opposition. Encouraging more debt could “fuel today’s upward tuition spiral,” the OMB warned.

A statement of opposition is stronger than one expressing “concerns” but is several steps shy of the threat of a veto.

The House bill would raise fees on and cut profit margins for student lenders to offset a proposed cut in student-loan interest rates for lower-income families.

According to an estimate of the bill released Tuesday afternoon by the Congressional Budget Office, the rate cut would cost $8.1 billion over the next five years.

Increased loan fees would raise $2.7 billion and reducing guaranteed lender profit margins would raise another $2.5 billion over the same period, according to CBO. The remainder of the cost would be raised by reducing lender guarantees and retaining certain guaranty agency collections.

A Senate version of the interest rate cut plan would encourage students to use direct loan programs, in theory saving money by cutting out private sector middlemen.

Student-loan giant Sallie Mae (SLM) has begun lobbying against the proposals, taking out an advertisement in at least one Capitol Hill newspaper encouraging readers to “tell Congress to give students real help. Don’t cut the programs they need.”

While Democrats and student advocacy groups are pressing these and other proposals to make it easier for students to pay the ever-increasing cost of higher education, not on the table so far are proposals to bring tuition growth under control.

According to the OMB, spending on federal student aid has increased by 57% over the last six years.

Now, said the OMB, colleges must take joint responsibility for making college education affordable.

The House is expected to vote on their version of the bill Thursday. Despite promising during the 2006 campaign to allow more open debate of such measures, House Democrats plan to block Republicans from offering any amendments to the bill.

January 19, 2007

Emory University trades private loans for grants

Posted in Grants, Private Loans, Student Loan News at 1:28 PM by Joe From Boston

I found a very interesting article from The Atlanta Journal-Constitution about Emory University, one of Georgia’s top schools.  

Needy get cost break at Emory

The Atlanta Journal-Constitution
Published on: 01/12/07 It just got a lot cheaper for low- and middle-income students to attend Atlanta’s premier private college.

Emory University announced a plan Thursday to replace need-based loans with grants for students whose parents earn $50,000 or less — meaning those children can attend for a fraction of the normal cost.

Also under the program, which starts this fall, middle-income students — whose families earn between $50,001 and $100,000 — won’t have to take out more than $15,000 in loans over a four-year period, school officials said. Emory will pay the rest.

It normally costs about $44,800 — $32,100 of that tuition — to attend a year at Emory.

“These new programs will make it possible for any qualified student to obtain the advantages of an Emory education regardless of family background or circumstance,” Emory President James Wagner announced Thursday.

“We are especially concerned to address the particular needs of many middle-income families, who ironically make too much money to qualify for many types of financial aid, but who find themselves unable to afford four years of college education without incurring substantial levels of debt.”

You  can read the remainder of the article here.

January 18, 2007

Loan Cuts Bill now passes to Senate

Posted in Grants, Legislation Affecting Students, Stafford Loans, The Financial Aid Process at 3:09 PM by Joe From Boston

H.R. 5 was approved by the House of Representatives. Now, the Senate will vote on a sister bill. This is only step one in a long process, folks. If the sister bill passes in the Senate, chances are it will be different than the House Bill (that’s very normal). The two bills then go back to committees in both House of Congress who try to hammer out matching versions, and then both Houses must approve the matching versions, before it goes before the President who will either approve or veto it.

Yeah, it’s long and concoluted.

It looks like the Senate version will contain increase for the Pell Grant, which does not need to be repaid. Read more about it on this MSNBC article.

January 17, 2007

I love awarding scholarships

Posted in Misc, Scholarships at 4:39 PM by Joe From Boston

There are days when I absolutely love my job, and the days when I get to randomly pick the winners for Scholarship Points.com and the days I get to announce those winners are some of the best days of the year for me.

So a hearty congratulations to Sara, Gina and Jesymar who won our $1000, $500 and $250 scholarships (respectively) for January 2007.  I hope these awards really help.

For more info, visit www.scholarshippoints.com.  It’s a free program where you can do things like look for bonus codes or answer surveys for points.  Each point is another chance in our quarterly drawings.  Yes, I know, I sound like an advertisement, but I’m Program Manager and I’m quite proud of this site and of the good it does for students.  It’s simple and it’s free – why not sign yourself up or talk to your child about it?

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