April 12, 2007
Preferred Lender List FAQ
The newspaper USA Today has a great FAQ article about preferred lender lists:
By Sandra Block,, USA TODAY
Sallie Mae, the nation’s largest student lender, agreed Wednesday to pay $2 million and to alter its business practices as part of a broadening probe of the student loan industry by New York Attorney General Andrew Cuomo. Much of Cuomo’s focus is on “preferred lender” lists offered by college financial aid offices. Here are answers to some questions about those lists:
Q: What is a preferred lender list?
A: Many colleges that take part in the Federal Family Education Loan Program recommend specific lenders to students who need loans to pay for college.
Students aren’t required to use a lender on their school’s list. But 90% of them do.
Many schools also offer preferred lender lists for private, or “alternative,” loans. These loans aren’t guaranteed by the federal government, and they typically carry higher rates than federal Stafford loans.
Q: How do colleges and universities decide which “preferred” lenders to recommend?
A: Financial aid officials say they weigh a variety of factors, including customer service and the lender’s record of handling complaints, says Mark Kantrowitz, a financial aid consultant and founder of the website FinAid.
The aid officials also consider so-called borrower benefits. For example, even though the top interest rate that student lenders can charge is set by the federal government — it’s now 6.8% — many lenders offer discounts to students who make a certain number of on-time payments.
Q: So why are preferred lender lists being investigated?
A: Cuomo says some lenders have provided inducements to schools and financial aid administrators to get on those lists, such as all-expense-paid trips to exotic locations.
Financial aid administrators at several schools have resigned after revelations that they received stock options from a lender that was on their school’s preferred list.
Among the most egregious financial inducements, according to Cuomo, are agreements that base the amount of a payout to a college on the number of borrowers who are referred to a particular lender.
Q: Given these revelations, what should students consider in choosing a lender?
A: The preferred lender list is a good starting point, but do your own research, too, Kantrowitz suggests. Your school can’t require you to borrow from a lender on its preferred list.
When comparing borrower benefits, “make a realistic decision of what is your likelihood of qualifying for that discount,” Kantrowitz says.
Some lenders, for instance, require you to make 48 consecutive on-time monthly payments to qualify for an interest-rate reduction. If you’re the type of person who has trouble balancing a checkbook, “chances are you’re not going to qualify for that discount,” Kantrowitz says.
In addition, don’t be afraid to ask potential lenders and your school about any potential conflicts they face.
In its settlement with the New York attorney general’s office, Sallie Mae agreed to a code of conduct that bars it from giving a college any financial benefits in exchange for a spot on the school’s preferred lender list.
Cuomo suggests that students check to see whether their colleges have adopted such a code of conduct before considering a lender on a school’s preferred list.
April 4, 2007
Private Student Loans Vs. Plus Loans
Can’t get a Stafford Loan or you just need more money than what has been awarded to you? Well, you still have options!
Both the Plus Loans and the <a Private Student Loans are your next best option when you are in this situation. The big question that most people have is which one is better. That is a tricky questions because it really depends on the borrowers specific needs and preferences. These loans are very similar but have there differences so they work differently for different people.
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Disbursed directly to the school |
Disbursed directly to the borrower |
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Fixed Interest Rate (currently 8.5%) |
Variable Interest Rate (Credit Based) |
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Available to Parents and Grad Students |
Available to all credit-worthy students |
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Based on Credit |
Based on Credit |
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Borrow Cost of Attendance |
Borrow Cost of Attendance |
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School Certified |
Not School Certified |
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Fafsa Required |
No Fafsa Required |
Above are just a few of the differences and similarities of the Plus Loans and Private Student Loans. They both certainly have there good points and are worth taking a look into. For additional information on these loans visit <a www.ParentPlusLoan.com.
The Student Loan Network: Stafford Federal Student
Loans, Parent PLUS Loans, Student Loan
Consolidation, Private Student Loans
April 3, 2007
NASFAA Refutes NY Attorney General
NASFAA, a trade group representing financial aid professionals has issued a statement regarding the recent settlement announced by the New York attorney general.
“NASFAA understands the motivations of those schools that have decided to accede to the Attorney General’s settlement and we respect their decisions. But, we will stand by any postsecondary institution that decides otherwise and goes to court to adjudicate this matter. Schools that do not agree to this settlement care just as much about their student and parent borrowers and have as much integrity as the schools that agreed to the settlement. We believe the schools who challenge the Attorney General’s actions will prevail in any court case.”
This might get interesting, folks!
April 2, 2007
NY Attorney General Announces Landmark Student Loan Agreements
Wow- the NY Attorney General reached a huge settlement agreement with many big-name New York state schools. Read the whole article here.
Attorney General Announces Landmark Student Loan Agreements – Schools To Adopt New College Code Of Conduct And Repay Students
NEW YORK, NY (April 2, 2007) – Attorney General Andrew M. Cuomo today announced that his office has signed settlements with major universities concerning student-loan arrangements between the schools and lenders. The settlements require schools to reimburse students money that the colleges were paid by lenders for loan business and to adopt a new landmark College Code of Conduct.
The schools include the State University of New York’s 29 four-year campuses (SUNY), Fordham University, Long Island University (LIU), New York University (NYU), St. Lawrence University, Syracuse University and the University of Pennsylvania.
At the same time, Citibank, the nation’s largest bank with student-loan business at about 3,000 schools, agreed to voluntarily adopt practices in the Attorney General’s College Code of Conduct, which will now govern Citibank’s student loan business practices with all schools.
Citibank also agreed to commit $2 million to a newly created national fund administered by the state Office of the Attorney General to educate college-bound students and their parents about the student-loan industry.
Under the settlements, schools will make the following aggregate reimbursements to students:
- NYU – $1,394,563.75 covering students who received loans issued over a five-year period.
- St. John’s University – $80,553.00 for loans issued over a one-year period.
- Syracuse University – $164,084.74 for loans issued over a two-year period.
- Fordham University – $13,840.00 for loans issued over a one-year period.
- University of Pennsylvania – $1,617,580.00 for loans issued over a two-year period.
- Long Island University – $2,435.41 for loans issued over a one-year period.
Cuomo applauded the cooperation received from Citibank and the schools that agreed to the settlements announced today.
“These schools and Citibank have made the responsible choice and are showing themselves to be industry leaders by being the first to take a major step in cleaning up a system laden with conflicts of interest,” Cuomo said. “We are beginning the process of restoring trust between universities and students and now is the time for other schools and lenders to step up and end the conflicts, perks and revenue sharing that have been costing students in New York and across the country dearly. These schools and Citibank are setting the example the entire industry should live by.”
The Attorney General’s College Code of Conduct, included in all of the settlements announced today, prohibits revenue sharing from lenders to schools, includes disclosure standards and restrictions on how lenders are chosen for school “preferred lender” lists, and bans gifts or trips to the university employees from lenders. The Code of Conduct also prohibits lenders from staffing or paying for the staffing of any component of the university financial aid offices and outlines guidelines for other aspects of the lender-university relationship.
The Code of Conduct includes:
- Colleges are prohibited from receiving anything of value from any lending institution in exchange for any advantage sought by the lending institution. This severs any inappropriate financial arrangements between lenders and schools and specifically prohibits “revenue sharing” arrangements. Lenders can no longer pay to get on a school’s preferred lender list.
- College employees are prohibited from taking anything of more than nominal value from any lending institution. This includes a prohibition on trips for financial aid officers and other college officials paid for by lenders.
- College employees are prohibited from receiving anything of value for serving on the advisory board of any lending institution.
- College preferred lender lists must be based solely on the best interests of the students or parents who may use the list without regard to financial interests of the College. This ensures that preferred lenders will be those the school has determined should be preferred by students as opposed to preferred by the school.
- On all preferred lender lists the College must clearly and fully disclose the criteria and process used to select preferred lenders. Students must also be told that they have the right and ability to select the lender of their choice regardless of the preferred lender list.
- No lender may appear on a preferred lender list if the lender has an agreement to sell its loans to another lender without disclosing this fact. In addition, no lender may bargain to be a preferred lender with respect to a certain type of loan by providing benefits to a College as to another type of loan.
- Colleges must ensure that employees of lenders never identify themselves to students as employees of the colleges. No employee of a lender may ever work in or provide staffing assistance a college financial aid office.
March 30, 2007
Georgetown teaches financial basics
Here’s a great article for for young people still in school – parents will probably want to share this with them. You can read the entire Washington Post article online here.
Money’s On the Line During These Classes – Colleges Teach Financial Basics
By Susan Kinzie
Heather O’Brien graduates from Georgetown University this spring with an education in biology, in English, in history. She leaves with a newfound conviction that she should work in the ministry. And with about $63,000 in debt.
“When I got here,” she said, “finances were the last thing on my mind. I was on my own for the first time, in a new place. It was very exciting — and it seemed like college would last forever.”
Now, she’s taking one last set of classes. It’s a sort of Real World 101, a crash course in money: Georgetown is offering a series of financial literacy workshops for seniors, covering such topics as loan repayment and consolidation, spending, credit cards, taxes and benefits.
The professors and other financial experts leading the classes all say the same thing: If only I’d known this when I was your age.
“These are lessons best learned young,” said adjunct business professor Michael Ryan, “when there’s not a lot on the line.”
…
Now some schools are adding courses on financial basics. Beginning this academic year in Virginia, for example, public universities are required to offer some financial literacy training, said Barry Simmons, Virginia Tech’s director of scholarships and financial aid. The school designed an optional online class, covering budgeting, credit cards and other basics for freshmen. The University of Virginia has a pilot program, too.
Financial companies offer occasional courses on campus, and some have pitched in on the Georgetown classes. The added focus comes as scrutiny on universities’ relationships with lenders increases and as Congress moves to ease the burden on students
…
“We get the sense that students don’t really understand how money works,” said Greg Pasqua, a senior at Georgetown who heads the student-run credit union and helped organize the seminars. “People do things that aren’t very intelligent with their money. Overdraw accounts six times on $2 purchases, and get hit with six fees for buying bubble gum. Or get reported to Equifax because you didn’t pay your loan on time, and you’re like, ‘I’ll get it next time.’ ”
Ryan said, “It’s amazing what some students don’t know — that 30 to 40 percent of their proceeds will be taxed away . . . Even basic things like 401(k)s,” or whether they should put money into the pretax retirement savings accounts.
At two recent workshops at Georgetown, students interrupted to ask, “What is a 401(k), anyway?”
So professors and other experts sorted through the unfamiliar names and the jargon, explained the types of benefit choices they’ll be expected to make, how to figure out what their monthly loan payments and take-home pay will be, how to invest in their 20s.
It’s not difficult stuff. It’s just — who has time to think about credit scores and interest rates when there’s so much else going on?
Until a car loan or a lease is turned down because of a bad credit score, or late fees pile up.
When O’Brien was a high school senior in Texas, she was offered a full scholarship to another school. But she loved Georgetown; when she visited, someone told her that everyone there has been given many gifts and that they should think about how to give back.
So she didn’t pay too much attention to the details of the loans she was taking out. “When I was a freshman, I was like, ‘Loans, great! I don’t have to pay them back ’til I stop going to school — cool.’ ”
…”It wasn’t until senior year, when I had to pay my own rent and pay utilities, that I really understood what $60,000 was,” she said, referring to her tuition debt.
This year, too, she started setting rules for herself. “I eat lunch on campus once a week and pack my lunch the other days.” And she limits her online purchases to $20 a month. She opened a separate account for her rent money so she’s not tempted to dip into it.
The classes have already changed her mind-set, she said. She learned about interest rates and credit scores. “I have had a couple of late payments that dinged me. I just thought, ‘Oh, one day late, not a big deal.’ ” But in the class she learned that could cost major benefits. “If you go three years [paying] on time, you could have a 3 percent decrease in the interest rate — which is amazing.”
…
March 29, 2007
Details on the lawsuit against the Dept. of Education
Here’s an article you all should read from the Forest Lake Times regarding the lawsuit against the Dept. of Education that began last week:
Frustration fuels local woman’s role in lawsuit
Cliff Buchan
News Editor
Dr. Brenda Pfeiffer wonders how many former students are in the same boat as she is when it comes to student-loan payments.
For 10 years she has wondered, but now the owner of Pfeiffer Chiropractic in Wyoming is hoping a legal challenge against the U.S. Department of Education will shed light on a federal system that she says is not right.
Pfeiffer, 41, made national news last week when she became the lead plaintiff in a class action suit filed against the DOE in federal court in Washington, D.C. The suit accuses the DOE of illegally charging late fees and interest payments against loan holders even though loan payments were made on time.
Pfeiffer sparked the lawsuit after several years of trying to talk to DOE officials about her situation with little satisfaction.
Now, as the suit enters its first phase, Pfeiffer wonders how many former students may be in the dark and unaware of the DOE’s billing system.
Pfeiffer’s story
A native of South Dakota, Pfeiffer went back to college to earn her doctorate of chiropractic after teaching mathematics. By the time she earned her chiropractic degree in 1994, she was faced with a $90,000 debt load.
She financed her post-graduate degree through the DOE’s Direct Loan Program and received funds for her education from the income contingent repayment plan, or ICR, she said this week.
Three years after graduation, she did what many college students do — she consolidated several college loans to ease the repayment schedule. There began the trouble, but it took Pfeiffer several years to figure it out.
Under the loan payment plan, Pfeiffer’s monthly payment date was on the 21st. According to the suit, she made payments on time and sometimes early.
However, the DOE attached a penalty to Pfeiffer for not making a separate payment for the time between June 21 and June 30, even though her next payment was not due until July 21. In her case, that meant a penalty attached from June 21. And in fact, she said, the penalty was capitalized and added to the principal of the loan.
It was the ever-growing year-end balances that triggered Pfeiffer’s alarm.
“I started investigating it in 2002,” she said. “I didn’t discover it at first.”
But after hours of review, second reviews and mathematical calculations, she finally understood what was happening.
“This thing took me a while to pull out,” Pfeiffer said. “I spent a lot of hours trying to determine where that money was coming from.”
Over months and months, she wrote and called DOE officials to point out the problem and argue that she was being unfairly penalized by the system.
During the course of her talks with the DOE, Pfeiffer says she was told that it was a computer misstep and that it shouldn’t happen. But yet the problem continued.
After numerous conversations with the DOE, Pfeiffer said she was left with the frustration that the federal agency would take no action because “‘That’s the way the system is.’”
The frustration swelled, she said, because she had acted in good faith to point out the problem. “Why they wouldn’t change it, I don’t know,” she said.
When Pfeiffer finally sought legal help in 2005, she was convinced that the DOE was “going to do it again and again.”
Pfeiffer says in the suit that over the past five years more than $1000 was incorrectly billed to her. She will be required to pay interest on that sum over the life of the loan if the issue is not resolved, she says.
Pfeiffer says students should be able to place trust in federal loan programs, but when situations like this arise, the trust is breached.
The case
According to the suit, the DOE computer billing system may have caused more than 3 million student loan holders to be charged hundreds of millions of dollars more than they owed. The suit contends the DOE is breaking the law in doing so.
The suit contends that the complex billing system used by DOE has impacted students and former students with consolidated loans that total more than $72 billion.
Mara Thompson, an attorney with Sprenger & Lang, which has offices in Washington and Minneapolis, said Monday there has been no response yet from the DOE.
If the education department wants to litigate the issue, Thompson said it could take more than two years to resolve the case. “If that is the case it will take that long,” she said.
The suit calls on the DOE to end the billing practice and return the money it incorrectly billed to student loan holders.
March 27, 2007
Financial aid – is it affected by child support or 2nd homes?
Here’s an informative article from the OC Register about financial aid:
Child support must be declared when seeking financial aid
By Tom Bottorf
Q. I’m a single mom and my son will be a college freshman this fall at a private California university. The income I claimed on our FAFSA included child support, but this ended last month when he turned 18. The financial aid award we received was weak in university grant money and heavy in loans. Did I make a mistake by including the child support?
A. You were absolutely correct in declaring your son’s child support. Your EFC (Expected Family Contribution) is inflated because of the child support declaration.
I recommend initiating an appeal with the college. Call the financial aid office and arrange for a face-to-face meeting (if possible geographically). Ask in advance if there’s a special form required for an appeal. Prepare any relevant documentation to support your situation.
Your situation falls into the category of “special circumstances”, and while there’s never a guarantee in an appeal situation, many schools will rule favorably and adjust the financial award to your favor when circumstances such as yours are revealed to them.
Q. I read that real estate does not have to be included on the FAFSA form, but I attended a seminar where the speaker said otherwise. What are the rules for property?
A. Your primary residence should never be declared on the FAFSA form. However, the equity you have in additional properties – such as rental properties or vacation homes – must be declared.
By the way, the CSS/PROFILE form does require you to declare your home value and debt and the resulting equity is assessed in your EFC calculation.
Q. We’re trying to find the best education loans. Our daughter received a subsidized Stafford loan offer for her upcoming freshman year. Is this a good loan?
A. You should ALWAYS accept a subsidized Stafford loan.
Whenever a federal loan is “subsidized”, this means the government is paying the interest while the student is in school (at least half time) and for six months after graduation. Only then does the first payment become due, and there’s been not a penny of interest accrual up to that point. So consider this to be an interest-free loan for at least the next 4 1/2 years.
By the way, the Stafford loan provides up to $19,000 total for a four-year undergraduate college term and up to an additional $4,000 if another year (or more) is required.
‘Preferred’ lenders – what does that mean to you?
Here’s an interesting article from the Baltimore Sun on preferred lenders, with steps you can take to protect youself and your children.
N.Y. probe casts doubt on ‘preferred’ college lenders
Eileen Ambrose — Personal Finance
Colleges soon will send out financial aid packages that will include billions of dollars in loans. Before borrowing, many parents and students will check the school’s “preferred lender” list.
But the office of New York Attorney General Andrew M. Cuomo is investigating how these lists are compiled and whether undisclosed financial arrangements are undermining what’s best for families.
Cuomo earlier this month released preliminary findings of an investigation into the $85 billion college-loan industry. And late last week, he announced his intention to sue a California loan provider over accusations of making illegal kickbacks to schools. The company says it plans to defend its business practices.
According to Cuomo, schools don’t disclose how they come up with the preferred lender list, so families are not aware of potential conflicts of interest. Some lenders, for instance, pay kickbacks based on how much business the schools steer to the lender, Cuomo said.
Lenders also have picked up the tab to send college aid officers to ritzy resorts or provided other freebies, he said. And families, he added, are sometimes misled to believe that they must choose a lender from the college’s preferred list.
Financial aid administrators agree that any abuse must be stopped, but they add such problems are rare. Schools develop “preferred lender” lists to help parents and students through the maze of borrowing, they say.
“The marketplace is saturated with options. … It’s hard to sort them all out,” said Ellen Frishberg, director of student financial services at the Johns Hopkins University. “We’ve done a scanning of the marketplace, who’s good at service and who gives good benefits. And now we’re getting in trouble for this.”
Hopkins is in the direct lending program, so students borrow directly from the federal government. The Baltimore university, though, compiled a list of lenders that offer the best rates and service for families seeking parent PLUS loans and private loans, Frishberg said. She said she hasn’t heard from Cuomo’s office.
Hopkins students borrow $50 million from the government each year, and lenders have noticed. Frishberg said lenders have dangled incentives for the school to drop out of direct lending or to put a lender on the preferred list. The university ignores the enticements, she said.
“We have ethics here,” Frishberg said.
Cuomo said he released the early findings so that schools can correct any problems before aid packages go out this spring. His office also published a brochure to help families understand the loan process. It’s available at http://www.oag.state.ny.us.
Apart from a house, a college education is the biggest purchase that most students and parents will make. Families owe it to themselves to know their rights and make sure they get the best deal.
“Remember not to forget your consumerism. Higher education is a business,” said Kalman A. Chany, author of Paying for College Without Going Broke. Listen to what the colleges say, but do your homework, too, he said.
If the school is in the government’s direct lending program, there’s no choice. Uncle Sam is your lender.
But if you’re attending a school outside the program, your options are numerous.
First, understand that a preferred lender list is only a guide.
“You are not obligated to borrow from a lender that’s on the preferred lender list,” said Mark Kantrowitz, publisher of FinAid, an online provider of student aid information.
Still, a college’s preferred list can be a good place to start your research. Look at all the lenders on the list because discounts and benefits can differ widely among them, Kantrowitz said.
Ask the school how it came up with its preferred list, advised Sarah J. Bauder, director of financial aid at the University of Maryland, College Park.
Selection criteria
The university chose its lenders for their technology, pricing and customer service, Bauder said. For example, lenders waive upfront origination and guarantor fees that can cost a student 2.5 percent of the amount borrowed, she said. The school also selected lenders that have been in the industry for at least 10 years and that keep their loans rather than selling them to another lender. That eliminates confusion and protects loan discounts from being lost, which can happen when loans are sold, she said. (The university adheres to state ethics rules that prohibit the kind of activities noted by Cuomo and hasn’t heard from the attorney general, Bauder said.)
Next, look at what lenders not on the school list offer.
Kantrowitz recommends creating a spreadsheet with the names of the lenders, the discounts and what it takes to earn those benefits. “Focus on the [benefits] you can’t lose and don’t require you to jump through hoops,” he said.
Upfront benefits are more valuable than those on the back end that borrowers might never see, experts agree.
Lenders, for instance, often promise a reduction in the loan’s interest rate after the borrower makes three or four years of on-time payments. Few borrowers can go that long without a tardy payment so most never get the discount.
Upfront discounts vary. Many lenders will lop a quarter-point or half-point off the interest rate upfront if borrowers repay with automatic withdrawals from a bank account.
The Missouri Higher Education Loan Authority, a loan servicer, reduces the rate by 2 percentage points for borrowers making automatic payments on PLUS and Stafford loans. You don’t have to be from Missouri or go to school there to qualify. For a list of lenders the nonprofit works with, go to http://www.mohela.com.
To check record
To check a lender’s service record, ask your college if it has heard of any complaints. Or, see how lenders treat you when you call. “Are they responsive? Do they answer the phone? How long are you on hold? Ask how many people actually achieve benefits,” Frishberg said.
Your first choice should be federal loans, which are always cheaper than private loans, Kantrowitz said. But if you are going to take out a private loan, check with your school first, he said. “Some schools negotiate with lenders to get a better rate for students,” he said.
And never borrow more than you really need, he said.
March 22, 2007
Subsidized Loans Vs. Unsubsidized Loans
As you now already now, Stafford Loans are Federal Aid awarded to students based on financial need. These are loans and not grants so they do need to be repayed to your lender, which of course means they accrue interest. What most students dont know is that there are two types of Stafford Loans, Unsubsidized Loans and Subsidized Loans. Subsidized Loans are awarded to the students with a greater financial need for the loan. The government pays interest on these loans while the student is in school. This means that the student does not begin accruing any interest on the loans until 6 months after graduation.
Unsubsidized Stafford Loans begin accruing interest from the date the loan is disbursed to the school. Although repayment of Stafford Loans is deferred until the student graduates from school you do still have an option of making interest only payments while in school. This arrangement can be made directly with your lender in order to save on interest paid over the long run. If you chose to defer your interest until you graduate the interest will be capitalized. This means that the interest will be added to the principal balance of the loan and you will then continue to accrue interest on the total balance.
The Student Loan Network: Stafford Federal Student
Loans, Parent PLUS Loans, Student Loan
Consolidation, Private Student Loans
March 12, 2007
Financial aid for grownups not the same as for teenagers
Here’s an interesting article about the plight of older students – those who enter higher education as an adult as opposed to fresh out of high school. You can access the entire article from the Greenfield News online.
Grown-ups grapple with financial aid — for themselves
Older college students not eligible for many loans younger students get
Published: Sunday, March 11, 2007 – 2:00 am
By Anna Simon
CLEMSON BUREAU
asimon@greenvillenews.com
wealth of financial aid opportunities await students entering college right out of high school, but the pickings are slimmer for those pursuing college degrees later in life.
“There are more obstacles. It’s much more complicated for those students,” said Marvin Carmichael, director of financial aid at Clemson University.
Midlife students graduate with more debt and fewer earning years ahead, said Janie Reid, dean of financial aid at Greenville Technical College.
“It is alarming when you look at the debt mature adults take on to get their college degree, even their two-year college degree,” Reid said.
Clemson senior Mark Landess, 37, will owe about $30,000 when he graduates in August.
Landess, an Anderson Police Department detective, also works a second job, and his wife is a county deputy. He earns too much to qualify for federal grants or loans, and said he was ineligible for state lottery-funded assistance because he attended high school in another state.
He receives $2,000 a year toward tuition from his employer, and otherwise is on his own.
Of 1,512 students at Greenville’s University Center who work, 38 percent receive some form of assistance from their employers, said administrative specialist Mary Jo Hoover.
Personal savings and employer assistance are mainstays for older students, said Sean R. Gallagher, a program director and senior policy analyst at Eduventures Inc., an education research company.
Students who work full time and are financially independent are typically disqualified from federal financial aid programs, Gallagher said.
“The need analysis is going to show they are able to contribute,” said Ed Miller, director of financial aid at the University of South Carolina.
And the “vast majority” of private scholarships are for students coming directly from high school, Miller said.
There are limitations on state scholarship dollars as well.
South Carolina’s elite Palmetto Fellows scholarships, which pay $7,500 a year, are only for students straight out of high school. That’s because the purpose of the program is to keep top high school graduates here, said Karen Woodfaulk, director of student services at the state Commission on Higher Education.
People who lived in other states during high school are disqualified from LIFE scholarships until after their first year of college, even if they now are South Carolina residents and had the required B average in high school.
Only 22 percent of respondents in a recent Eduventures survey of 25,000 current and prospective older students cited scholarships as a revenue source.
“You have to hunt and hunt,” but there are scholarship dollars out there for older students, Reid said.
Charmaine Shucker, 27, a Greenville Tech radiology science student, has two scholarships and state-lottery funded assistance that completely cover her college costs.
Shucker got a list of scholarships offered at Greenville Tech from the financial aid office and applied. A prior 4.0 grade point average helped, but the important thing is to “put your name out there and see what happens,” she said.
Midlife career changer Joye Booher, 47, started saving money and taking prerequisite classes four years before she quit a corporate day job to attend nursing classes full time at Greenville Tech.
The mother of three unsuccessfully applied for every scholarship the school offered.
Then Booher contacted everyone she knew, and discovered a local doctor’s $1,000 scholarship. She went back to the school and asked about scholarships that had been awarded but not used. She found another $1,000. The combination paid most of her college expense this year.
Dialogue has begun in federal policy-making circles to make higher education more affordable and accessible to a growing number of older students, Gallagher said. Tax-exempt savings accounts are one idea being discussed.
Adults going back to school make up 40 percent of enrollment at the nation’s colleges and universities, according to a recent Blue Ribbon Commission on Higher Education report by the National Conference of State Legislatures.
Adult learners have different needs than traditional students and shouldn’t be neglected, the report said.
U.S. Sen. Lindsey Graham, R-Seneca, first person in his family to graduate from college, “has been a strong advocate of adult education and vocational training, and he looks forward to improving opportunities for non-traditional students,” said Graham spokesman Kevin Bishop.
In South Carolina, the most economical route to a bachelor’s degree is to attend a two-year institution and then transfer, said Woodfaulk of the state Commission on Higher Education.
“If the student wants to pursue a two-year degree, certificate or diploma program, South Carolina probably has one of the best programs in the nation,” Woodfaulk said. “A student can access funds.”
But for those who want a four-year degree, “it really depends,” Woodfaulk said.
People who have been out of school for a number of years “need to recognize what their costs will be and the limitations” and plan ahead, Miller said.
They don’t have the “support system” that many traditional students enjoy, Miller said.
They can’t “fall back on Mom and Dad.”
Student Loan Info for Parents 