August 31, 2007

Congressional options for Student Loans

Posted in Student Loan News at 12:08 PM by Joe From Boston


MSNBC has an article about the various items Congress is considering about students loans. Read the entire article here.

Will student loan reforms cut borrowers’ costs?

By John W. Schoen,Senior Producer

When the fall semester starts and Congress returns to work next month, students and their families may get a break on the cost of borrowing to pay tuition. But the details of how those breaks will be apportioned are very much up for grabs. And it remains to be seen just how much money these reforms will save student borrowers and their families.

Congress has been hashing out student loan reforms for months, following revelations of conflicts of interest and other student lending abuses by New York Attorney General Andrew Cuomo. That investigation is ongoing, but settlements with several dozen schools and lenders have yielded refunds to student borrowers and stricter guidelines on business dealings between lenders and school financial aid offices.

A recent report by the Government Accountability Office criticized the Dept. of Education for not being vigilant enough with policing conflicts of interest among schools and student lenders and called for increased oversight.

Both the House and Senate have weighed in on the issue, proposing regulations barring lenders from paying financial incentives to schools and requiring fuller disclosure of joint marketing efforts.

With the Cuomo’s office continuing its investigation, proposed tighter federal oversight of student lending practices have drawn little opposition — in part because Congress wants to head off state-by-state regulation of the industry.

“The danger is that you’ll have a disparate set of rules and no centralized way to monitor them,” said John Walda, president of the National Association of College and University Business Officers.

Congress is also proposing significant changes in the way the $85 billion market for student loans is subsidized and guaranteed. The House and Senate have enacted separate bills with some common ground, but it remains to be seen just how the final law will impact the cost of a student loan.

Both bills would ease the burden on student by placing limits monthly payments based on income; once out of school, graduates would have to pay no more than 15 percent of their income each month. All debt would be canceled after 25 years. And more loans would be “forgiven” for graduates who take public-service jobs like teachers, nurses, police and firefighters.

The bills also both call for cutbacks in subsidies for lenders that participate in government-backed loan programs. By shaving roughly a half-percentage point from those subsidies, Congress is hoping save as much as $19 billion a year. The government would also require lenders to cover more of the losses from defaulted loans — the House and Senate bills differ on just how much more.

At issue is how and where those savings are diverted. The House bill would slash the rate on need-based loans in half — from the current 6.8 percent to 3.4 percent — and provide additional money for so-called Pell grants, a program that currently pays up to $4,010 a year in direct aid to low-income students. The Senate bill doesn’t include a rate cut, but is more generous with increases in Pell grants.

Read the remainder of the article here.

August 30, 2007

10 tips to make it through a year at college, financially

Posted in Saving for College at 8:45 AM by Joe From Boston


Here’s a great article for parents interested in discussing finance with their children. Read the whole article at AZCentral.com:

10 financial tips to make it through the college year

Anne Ryman
The Arizona Republic
Aug. 25, 2007 10:40 PM

You’ve figured out a way to pay for college tuition.

Now the real test begins. You still need to deal with all the expenses that crop up during the college year. Textbooks, food, transportation and going out can add up quickly. Parents need to decide what they will, and won’t, pay for and make this clear.

We asked three experts to give their best tips to make it through the year with minimal financial stress.

1. Give students responsibility. Parents may be tempted to pay the bills, but they should take a collaborative approach and involve the student, Elley said. She is a big advocate of having students contribute some money toward their expenses, although it’s a fine line with freshmen who need time to adjust to college life.

2. To work or not to work? The answer to this depends on the family’s financial situation and the student’s level of responsibility, Elley said. Some students may have no choice. If at all possible, students should not work their freshman year, she said, so they can get used to college life and balancing responsibilities.

The first year is so important, she said. If they mess up, they can spend the next three years trying to dig their way out of poor grade point averages.

3. Cost of expenses. Most colleges and universities have budgeting Web sites that can help predict what the expenses will be during a typical year. Use this as a starting point, Elley said. The Web site estimates are often conservative.

4. Level of responsibility. How responsible the student is determines how much leeway you can give with spending money. If you are giving them spending money, Elley recommends a monthly allotment in the form of a pre-paid credit card.

5. Who pays? Discuss who will pay for what expenses. Some parents, for instance, pay for tuition, room and board, but not for incidentals like entertainment, gas and car payments. Have the discussion early to eliminate any unpleasant surprises.

6. Expect the unexpected. If your child has a car, determine early on who will be responsible if there is an unexpected repair bill. Elley recommends parents have the equivalent of one month’s expenses easily accessible in a savings account. They also should have four to six months expenses in an accessible form, such as a home-equity line of credit.

7. Create a budget. As boring as this may sound, a budget is essential for college students. Create a spreadsheet showing expenses, and the money flowing in from all sources: parents, work, financial aid. Students who get credit cards should use them with caution. “Just because you have a credit card, doesn’t mean you can buy everything you see,” said Baer, the 2004 college graduate.

8. Get organized. Track your expenses. Don’t randomly buy things. Keep track of bills and statements, Baer said. If you’re going to an out-of-state college, set up an account at the local bank. Keep track of deadline dates for when a bill is due or when you need to apply for financial aid, said Edwards, NAU’s director of student financial aid. The Free Application for Federal Student Aid, or FAFSA, has to be filled out every year. “It is critical to remember to do that,” he said.

9. Be prepared to underestimate. Students are often shocked to find out how much textbooks cost or how quickly basic expenses such toilet paper, shampoo and soap add up.

“When you’re at home, these are all under the sink,” Baer said. He recommends making a list of household items you need then stock up at a wholesale club and split the cost with roommates.

10. Check out financial workshops. An increasing number of colleges and universities offer free workshops designed to make students more financially savvy. The University of Arizona has the Credit-Wise Cats Program, a team of students trained in personal finance who give workshops on everything from banking to home buying and retirement. For more information, see the Web site at: http://www.ag.arizona. edu/fcs/clubs/cwc/.

NAU plans to start financial workshops in the spring.

“If they just come in and listen and get one little thing out of the workshop, I think it’s served it’s purpose,” Edwards said.

August 29, 2007

Plan how you will pay off your debt

Posted in The Financial Aid Process at 10:13 AM by Joe From Boston


Here’s a great article from Kiplinger’s, about a girl with a game plan – something all students should emulate! Read the whole article online at Kiplinger.com.

A Student Loan Game Plan

When the kids head to college, they’ll soon discover it’s easier to take on debt than pay it off. Learn how one money-smart grad plans to pay off her loans and start off on the right foot.

I also met with a number of Auburn students who had taken Sid’s seminar in personal finance, using my book, Money Smart Women, as a text. One of those students was Brandy Howell, who endeared herself to me by bringing along a copy of the book marked with copious Post-its.

Even more impressive, Brandy is now a money-smart young woman who has laid out a plan for managing her money after college — in particular, paying off $90,000 in student loans.

A native of Marietta, Ga., Brandy wouldn’t trade her Auburn education for all the peaches in Georgia. But attending school in Alabama instead of paying in-state tuition in Georgia cost her dearly. “At 18, you think you can borrow the money and pay it back,” she says. “You don’t really know what it means.”

Now older and wiser about finances, Brandy, who graduated this year with a degree in apparel merchandising, has a game plan for paying off those loans (see How Much College Debt is Too Much?). And she is tracking her spending down to the penny.

To save money while fulfilling an internship requirement before graduating, she moved back home instead of renting an apartment. Her internship at South of Market, an antique-furniture store in Atlanta, led to an offer of a full-time job as assistant manager.

Brandy consolidated her Stafford student loans a couple of years ago at rock-bottom rates, but she’s still paying double-digit interest on some of her private loans. She plans to consolidate them and to qualify for an interest-rate discount by setting up automatic payments from her checking account.

Over the past couple of years, her grandfather has been giving her $500 a month toward her college costs. She used the money to pay for living expenses, and now she plans to funnel it toward paying off her high-cost student loans. She doesn’t have any credit-card debt. And she’s crossing her fingers that her paid-off 2000 Mitsubishi Eclipse continues to chug along.

Brandy also has some thought-provoking advice for families trying to decide between in-state and out-of-state schools. “It would have been a setback for me to go to college where all my friends were going,” she says. “I wanted a chance to grow, and Auburn offered lots of opportunities.”

Still, “it was a shock to see how fast my family’s college savings disappeared.” If you’re going to take on debt, says Brandy, “challenge yourself and get an education. Don’t go out of state if you’re just going to play.”

August 28, 2007

Iowa Student Loan settles suit where it tried to block public access to data

Posted in Student Loan News at 11:30 AM by Joe From Boston


I don’t know about you, but whenever I hear about instances like this, it immediately makes me suspicious.  No one in their right mind would try to block access to documents via the court system unless they had something to hide.  Read the whole article at the Des Moines Register.

Iowa Student Loan settles suit over document access

Lender agrees to drop bid to block release of e-mails

varUsername = “jejacobs@dmreg.com”;document.write(“By JENNIFER JACOBSBy JENNIFER JACOBSIowa Student Loan Liquidity Corp. has settled a lawsuit it had filed in an attempt to stop The Des Moines Register from obtaining documents the lender considered confidential.

The West Des Moines-based nonprofit corporation agreed Friday to the release of the documents with a few redactions.

A small number of banking documents it considers proprietary will also be withheld.

The newspaper sought the documents as part of its examination of Iowa Student Loan, which was created by the state three decades ago.

The company is now the dominant student loan provider located in Iowa.

Staff from the state attorney general’s office had said all along that they believed most of the information was public and should be turned over.

On April 24, the Register filed a request under Iowa’s open-records law with the Iowa Board of Regents, asking for certain e-mails belonging to state employee Greg Nichols.

Nichols was a member of Iowa Student Loan’s board of directors at the same time he was the executive director of the Board of Regents.

On May 24, Iowa Student Loan filed a request for an injunction to block the release of some of the documents in the state’s possession.

When the Register filed another open-records request for certain e-mails belonging to Tom Gronstal, who is superintendent of the Iowa Division of Banking and also an Iowa Student Loan board member, Iowa Student Loan moved to block the release of some of those documents as well.

A court hearing on the matter had been scheduled for Friday, but the hearing was canceled when the parties reached a settlement.

Scrutiny of Iowa Student Loan began with the nonpartisan Iowa Legislative Services Agency, which concluded in a February report that lawmakers should question whether Iowa Student Loan’s nonprofit mission is being achieved.

State lawmakers called for a review of Iowa Student Loan by David Vaudt, the state auditor.

That audit should wrap up in a few weeks, staff from the auditor’s office said Monday.

Iowa Gov. Chet Culver had raised concerns about a lack of openness surrounding Iowa Student Loan and about possible conflicts of interest, and asked the attorney general’s office to look into the matter.

Read the rest of the article at the Des Moines Register.

August 27, 2007

Is it too late to get Financial Aid?

Posted in Stafford Loans, The Financial Aid Process at 2:06 PM by Joe From Boston


It’s crunch time – classes start in a few days and you’re desparate for cash to pay for your (or your child’s) education.

Is it too late to get Federal financial aid?  Technically, no.  Funds can be dispersed even after classes begin.

BUT

Here’s what you want to do next year to save yourself the headache.

  1. Fill in the FAFSA as soon as you can.  Financial aid is awarded on a first come-first served basis, so you want to get yours in EARLY.  I would recommend doing it in January or early February.  DO NOT wait till tax day in April!
  2. When you get your aid package, if you’ve been awarded a Stafford Loan, then start planning.  School award letter are sent out in the spring, and you’ll want to act on it sooner rather than later.  Don’t forget, now is crunch time, when the schools are struggling to certify all the people at the last minute.  By applying earlier, you’re much more likely to get a timely certification from your school.
  3. For those of you not sure what I’m talking about in item #2, Stafford Loans have to be certified by the school, no matter what lender you use.  All lenders must submit a school certification request to your school.  The school then certifies that you have been awarded the Stafford Loan by them, and they specify the dollar amount to your lender.
  4. Remember, Stafford Loan is a type of loan, not a company!  If your school does not participate in the Direct Loan program (about 30% of schools do), then you can apply with any lender that offers a Stafford MPN (Master Promissory Note).

August 24, 2007

Studying Abroad

Posted in Graduate Students, Misc tagged , , , , , at 1:15 PM by Joe From Boston


I’ve got Study Abroad on the mind today. We ordered Indian food for the office today for lunch, and I was put in charge of ordering because I’ve spent time in India and Nepal, and I know what almost everything on the menu actually is.

I studied abroad in Nepal Jan-June 2001, doing a study-abroad during my junior year of college through the School for International Training. I also did my master’s degree directly enrolled at King’s College, London, England.

I wouldn’t trade either experience for the world.

This is a difficult article for me to write, because even 6 and 3 years later, respectively, it’s hard to explain to someone how incredible an experience studying in a foreign country can be.

Studying abroad changes you in the best ways you can be changed. You begin to realize how truly lucky you are, and you learn a lot about yourself. You are exposed to multiple different points of view, many which you’ve probably never encountered, but all make you think very hard about your own beliefs.

I find that people who study abroad are better prepared to stand on their own to feet afterwards than their college counterparts who did not go. They’ve been “on their own” in a foreign country and had to think for themselves.

You also have some of the most incredible experiences of your entire life. I’ve flown past the Himalayas – at 30,000 feet when you look out the airplane window, they are at eye level – and hiked through them. I’ve rode elephants through the jungle looking for rhinos. I’ve taken the train to Paris for the day. I’ve been to Stonehenge 5 times (everyone who visited me wanted to go).

I wouldn’t trade those experiences for anything.  However, traveling can come with risk so consider travel insurance or specific student insurance plans.

I guess you could say that studying abroad has made me appreciate life a lot more than I would have otherwise.

Wow, writing this has really made me want to book a trip somewhere! Kathmandu, anyone?

Congratulations, Chris and the Financial Aid Podcast!

Posted in Misc at 12:49 PM by Joe From Boston


I just want to congratulate my colleague, Chris Penn, for being featured in a Business Week article!  You can read the entire article on line, but here’s the excerpt about Chris:

RADIO DAYS
Christopher Penn belts out the news with the smooth delivery of a professional radio broadcaster. But he is actually chief technology officer of Edvisors Network, a 20-person, $6 million company in Quincy, Mass., that works with banks to market student loans. Nearly every weekday since 2005, Penn has recorded a 10-minute podcast about financial aid and scholarships for college students and their parents.

Each episode attracts about 3,500 listeners in the 90-day period Penn tracks responses. Edvisors earns fees by referring people seeking loans to banks, and Penn credits the podcasts with boosting revenues by about 5% last year.

Penn spends an hour a day on the podcasts. To record, he uses a MacBook Pro equipped with GarageBand podcasting software, broadband Internet access, and a $99 microphone from a music store. He has built an audience by e-mailing people who receive the company newsletter, and by setting up a blog, FinancialAidPodcast.com, on which he posts notes about each episode. The blog also helps people searching on Google to find the podcast, as most searches are built around text, not audio. Penn registered the podcast on Apple.com, so people can find it via iTunes. And in 2006, Edvisors started an affiliate program to syndicate the program to other Web sites. Penn also plays music from new artists at the end of each show. “When you promote someone else, they are likely to promote you, too,” he says, adding that 5% to 10% of traffic comes through links from those musicians’ sites. After about 550 episodes, Penn is going strong: “I still look forward to it, and I still have lots to talk about.”

August 23, 2007

Chess, Scrabble and Crosswords result in $190,000 in Scholarships This Summer

Posted in Misc at 8:03 AM by Joe From Boston


Here’s an unusual story that I had to share with you all.  You can read the full article at the Courier Post Online.  I’ll leave it to the author to explain.  🙂

Mind games program pays off with financial aid for college

By BARBARA S. ROTHSCHILD
Courier-Post Staff

STRATFORDPlaying games has paid off for 25 South Jersey students beginning their freshman or sophomore year at college, courtesy of the Fifth Annual Penn Jersey Youth Mind Games program.

The Stratford-based program paid out nearly $190,000 in scholarships to students who competed in chess and Scrabble tournaments and also filled out crossword puzzles.

The more the students played, the more they earned — with the top award of $13,200 distributed to six students who played at least five days a week, several hours a day, from the program’s start on Memorial Day weekend to its final weekend in early August.

The commitment of students who were new to the unique scholarship program impressed Donald Rentschler. The 66-year-old Stratford resident founded Penn Jersey Youth in 1982 as a way of giving college scholarship money to students who might not qualify for athletic awards.

“We’re going to be awarding more this year than originally planned,” said Rentschler, who had anticipated awarding a total of about $150,000 — at least 10 percent of Penn Jersey Youth’s nearly $1.5 million portfolio.

Everyone wins something for each hour of play, with an average of $200 per hour. The program is held at Stratford Borough Hall and the nearby senior center.

“This year’s student crop was above the average. The first-timers did much better than our returnees, who tended to get impatient and didn’t all finish the program,” Rentschler said.

Returnees from last summer could add to their earlier winnings, provided they recruited a high school senior and both played in all three games.

Among them were Mark Stratton of Stratford, who accumulated $4,650 toward his sophomore year at Drew University in Chatham after winning more than $5,000 last summer, and Vince Baldino of Somerdale, who earned $6,400 this year to help with Temple University expenses, just under the $7,000 he won last summer.

Naomi Kaplan of Voorhees earned $13,200 to help defray the costs at the University of Pennsylvania — just under $50,000 per year.

“I’m not an athlete and not artistic, so this was a good opportunity for me,” said the Eastern High School June graduate who played games three hours a day, five or six days a week.

“At first I was skeptical. I didn’t understand how it could possibly work. But I really improved in chess. And although I’ve played Scrabble with my family regularly, it was an opportunity to play with kids my own age,” Kaplan said.

Henry Chao, a June graduate of Cherry Hill High School East, said his $13,200 will pay a large chunk of the tuition, room and board at Rutgers-New Brunswick, with its annual $21,000 price tag.

“In the beginning, I went only about once a week. But eventually, I would go three or four times each week. I played all three games and met a lot of interesting people,” Chao said.

“It definitely was a very unusual way of earning $200 an hour,” he added.

Kaplan and Chao said they might return next summer.

The scholarship program has undergone several transformations since Rentschler, a computer industry retiree, began investing Penn Jersey’s money in mutual funds and stocks.

Some years, the scholarships were based on chess play entirely, other years community service was emphasized, and at times financial need and academic merit were essential. The Mind Games Scholarships were born in 2003 when chess, Scrabble and crosswords became the only basis for the awards.

Games are timed — 40 minutes for crosswords, 50 minutes for Scrabble, and an 80-minute maximum for chess — and students must play at least two of the games offered. Experience isn’t necessary; Rentschler offers free chess and crossword clinics.

Rentschler has evolved a complex handicapping system whereby points are awarded based on a history of winning or losing at chess or Scrabble. Points scored in chess and Scrabble, as well as how many squares are left blank in crosswords, also figure into the calculations.

The program is open to students from the tri-county area and beyond. Besides being paid for the hours they play, students are paid travel expenses of $40 per hour based on driving time — even if they take the Hi-Speedline, which stops within walking distance of the game sites.

This summer, the scholarship fund is paying out approximately $75,000 for chess, $60,000 for Scrabble, and $48,000 for crosswords, plus $6,000 for mileage.

Rentschler is already looking ahead to next year.

“We expect to award an average of $7,500 to high school Class of 2008 students. We’ll start up again next Memorial Day weekend,” he said of the program.

August 22, 2007

Advice on Paying for College – With Less Pain

Posted in Parent PLUS Loans, The Financial Aid Process at 7:53 AM by Joe From Boston


CBS has a good article from last Friday that talks about good advice on paying for college. Read the whole article here.

Paying with Less Pain

(CBS) Of course, you should buy Christmas presents in July, when they’re on sale. And, yes, you should have started raising money for college years ago. But if you’ve waited until the student is well into high school, don’t panic. Even at that late date, students can improve chances of earning an affordable degree if they flout a little conventional wisdom and some government instructions. (Don’t worry; it’s legal.)

Be cost conscious. Nowadays, students should include a few affordable schools – schools that are low cost or likely to give big scholarships – on their list. That means applying to at least one in-state public university or community college. To further increase chances for aid, students should also apply to schools that need whatever unique diversity, talents, or grades they offer. One common strategy: Apply to one or two schools in which the student’s grades and test scores are in the top 25 percent of the student body. Students of either gender can also apply to one or two schools that are short on their gender – boys to liberal arts schools, for example, or girls to tech colleges. Most colleges post grade, score, and demographic information on their websites. Students who want to look for several schools that might serve as safety options can use the selection tool at the U.S News Web site

Be wary of early. In late fall of their senior year, students should consider bucking the trend toward applying “early decision,” to increase chances of admission. Too often, those fat letters arrive in December with a price-less aid. Linda Taylor, a private financial aid counselor in Agoura Hills, Calif., advises students concerned about affordability to use standard or nonbinding “early action” applications instead.

That %$#& form! In early January, it’s time to throw out some government advice. Don’t believe the Department of Education’s claim that it takes only about an hour to fill out the 124-question Free Application for Federal Student Aid. Set aside several hours to round up tax forms, pay stubs, and other documentation. And expect to spend at least a couple of hours making entries on the FAFSA and its work sheets.

The FAFSA is supposed to determine who really can’t afford tuition and thus should receive need-based grants. Typically, students from families with incomes of less than $40,000 receive federal Pell grants. Students from families earning two or three times that amount may be able to show enough expenses to receive state or college grants.

But even wealthy students must fill out the form to qualify for some college merit scholarships as well as the federal government’s Stafford program, which offers reasonably priced loans to students regardless of need.

Don’t wait for the taxman. Parents should also ignore the form’s recommendation that they file their taxes before tackling the FAFSA. Since many schools hand out most of their aid money in late winter and early spring, it is wiser to fill out the FAFSA in early January using estimates based on the previous year’s taxes. Parents can do their taxes and update the FAFSA later.

Don’t count the ex-hubby. Unfortunately, there aren’t many last-minute legitimate financial maneuvers to get the FAFSA to spit out a lower Expected Family Contribution-the amount the government estimates the family should pay for college.

But families can at least avoid mistakes that make them look richer than they really are. Divorced families, for example, need only report the income of the parent with whom the child lives at least 51 percent of the time, which isn’t necessarily the parent taking the child’s income tax deduction.

Also, for all its questions, the FAFSA misses many legitimate expenses that can reduce a family’s ability to pay tuition, such as medical emergencies or care for a relative. Parents who feel the FAFSA doesn’t fairly describe their financial situation, or who have suffered a job loss or pay cut, should immediately send letters explaining their circumstances to the financial aid offices considering the student’s application.

Spring forward. The feeling of financial frustration ratchets up in spring, when offer letters arrive. The reason: It’s difficult to compare offers from competing schools because schools use different words to make their awards sound more appealing than those of their competitors.

Worse, some offer letters are misleading. Some schools give big merit scholarships with hidden strings (like unrealistically high grade-point minimums) that make it unlikely the student will receive the same award in the future. Before popping the champagne and sending a deposit, students should ask the terms for renewing each scholarship and what percentage of others have kept similar scholarships.

Many schools also include five-figure PLUS loans in their awards. Independent counselors like Taylor call this misleading. At about 8 percent, the loans-available to any parent with at least average credit-aren’t much of a deal, she argues. And, of course, they must be paid back.

Do the college math. To decode each offer, students should come up with a realistic total cost of attendance for each school: adding tuition, fees, room, board, and about $3,500 for extras like textbooks, travel, cellphone, clothes, and Saturday-night pizzas. Then subtract the annual grants and scholarships likely to be renewed. Finally, multiply that number by five, since only a minority of students manage to earn a degree in four years these days.

Read the rest of article here.

August 21, 2007

CA Budget Stalemate Threatening Financial Aid

Posted in Student Loan News, The Financial Aid Process at 8:18 AM by Joe From Boston


Here’s a very interesting article from the Sacramento Bee on how the budget crisis in California is affecting students waiting for grants.

As college classes start, students wait for state payments

Budget standoff: Day 50

By Judy Lin – Bee Capitol Bureau

In many ways, 18-year-old Monique Straws has already overcome the odds.

A foster child since birth, Straws recently graduated from high school and was accepted at a performing-arts academy in Los Angeles, where she hopes to pursue a singing and acting career.

Despite lacking the family financial support many of her peers enjoy, Straws succeeded in lining up $30,000 worth of scholarships, grants and loans — just enough to cover a year’s worth of tuition and living expenses.

But with orientation set for Thursday, something beyond her control is threatening to derail her dream.

The eight-week-old state budget stalemate is preventing the California Student Aid Commission from releasing $6,551 in state and federal grants for Straws to attend the American Musical and Dramatic Academy. Without it, she says, she cannot start class.

“Legally, I’m all by myself. I don’t have parents to give me a check,” Straws said Wednesday while sitting on a couch in her friend’s living room with only a duffel bag of clothes and a box of her belongings. “I’m scrambling.”

Straws is far from alone. The Student Aid Commission administers financial aid to hundreds of thousands of California’s college students. This year, the commission is projected to release $809 million to more than 266,000 Cal Grant recipients and another $6 million to more than 1,600 former foster youths under a program known as the Chafee Grant. The commission also administers other grants.

“We are bound by the budget so we cannot issue any money,” said commission spokesman Tom Mays. “Once the budget is passed, we will make every effort to expedite that cycle of the award money.”

Paul Browning, a spokesman for the California State University system, said campuses are being urged to figure out ways to help students expecting grants. At least one, California State University, Chico, has decided to float the grant money to recipients until the money is reimbursed by the state.

“This is going to be an accounting nightmare for the campuses as they work to figure out which students need the funds the most, and how to direct funds to them,” Browning said. “It will take months to clean it all up.”

Read the rest of the article here.

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