Know Before You Owe: How one government website is trying to clear up student loan confusion

October 28th, 2011 by rebeccac


We’ve discussed the student loan forgiveness petition, and the debate rages on, especially since Wednesday, when President Barrack Obama announced a new “Know Before You Owe” plan to provide student loan relief. Through an executive order, Obama introduced an initiative that his administration claims will affect millions of borrowers and changes current federal policy in the following ways:

  • Students with more than one federal student loan – or federally backed private loan – will be allowed to consolidate their debt.
  • The current payment ceiling of 15% of borrowers’ discretionary income will be lowered to 10%.
  • All remaining loan debt will be forgiven after 20 years instead of after the current 25 years.

Supporters are saying it could save debt-ridden graduates hundreds of dollars a month. Detractors claim it’s only going to help a tiny bit and is mainly just a campaign ploy to win the vital youth vote. As per the usual, it will probably end up somewhere in between – partially successful, partially a failure – but what we’re interested in are the new additions to the Consumer Financial Protection Bureau’s Know Before You Owe website.

Started several months ago with the idea of making mortgage forms easier to understand and compare, on Wednesday they officially announced a new project in conjunction with the Department of Education: Know Before You Owe for student loans.

Like the mortgage project, this one is also aiming to make things easier to understand and allow students to better compare offers from different schools. Right now, things are still in development – or, as they term it, a “thought-starter” – but they have a couple of elements on the site.

One is a sample form that they want to refine and push out to schools through the Department of Education that would more clearly break down all of the financial information a student needs. They also have a Student Debt Repayment Assistant that can give some guidance to students about their options.

Right now, it’s just a start – but it’s a good start. Many of the indebted graduates at the Occupy rallies claim that the student loan process is so confusing that many of them weren’t entirely sure the trouble they were getting into, and a simple solution to that is the continued development of the Know Before You Owe program.

So get the word out. And even more important? Make your feedback heard on Consumer Financial Protection Bureau website. They want to know what we, the people, think is important when it comes to student loans. Maybe we can help future generations of college graduates end up in better financial situations than the current ones.

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How saving might be hurting your financial aid chances

September 30th, 2011 by rebeccac

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Courtesy of o5com via Flickr

Going back to college can get pretty expensive, so it makes sense to start putting away money for it as soon as possible, right? Build up some savings to complement any financial aid that you qualify for?

An article in today’s The Atlantic claims that may not be the smartest move after all.

A lot of it comes down to the FAFSA – the Free Application for Federal Student Aid – which you have to fill out if you want financial assistance with college. When the government is calculating how much award money you get from programs like Pell Grants and Stafford Loans, it throws everything into the equation – your income, your investments and your savings. If you have the cash socked away, the government figures you ought to use it for tuition and related expenses.

To a certain degree, that makes sense. But on the other hand, there a couple of flaws in this idea of throwing savings into the mix. 1) The government has no idea what your savings are for – maybe it’s been for college, but maybe it’s for big medical expenses. Or maybe it’s for your kids’ education. And 2) FAFSA essentially punishes people for exhibiting financially responsible behavior.

In his Atlantic article, Daniel Indiviglio gives an example based off a hypothetical student coming from a 4-person household where the combined income is $40,000:

• Student A has zero savings in the bank and gets awarded $4,000 in Pell Grant money.
• Student B has $50,000 in the bank and gets awarded $3,800 in Pell Grant money.

Is that a startling difference? No, and Indiviglio acknowledges that. But the big problem comes when one considers that FAFSA’s policies create a trickle-down effect. In order to simplify their financial aid processes, most colleges utilize the FAFSA information and copy their priorities in order to determine who gets the extremely valuable school-based aid. These include scholarships that can go a lot further in covering your education than any federal award, but you may not be considered as eligible for them because you have money in a savings account.

It is important that financial assistance money go where it is most needed, but can’t that be assessed based on income? Is there any real reason to short-change someone who makes sacrifices and manages their budget in order to tuck a little money away for the future?

It wouldn’t hurt the federal government to take another look at the situation and see if there’s a way to rearrange the formula so that responsible people aren’t punished for it. If they pave the way, it’s likely schools’ financial aid offices will follow.

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Scholarship Feature: Midland Business and Professional Women’s Club

July 21st, 2011 by admin

A Texas organization is throwing their support behind women who are trying to get back on track with education.

The Midland Business and Professional Women’s Club is offering four $500 scholarships each semester for women 25 years old and older who enroll in an accredited Texas school.

“Sometimes women don’t go back to school because they can’t pay and that shouldn’t be the situation,” President Glenda Knox told The Midland Reporter-Telegram.

In addition to meeting the age, gender and state requirements, those interested also must:

  • Be a high school graduate or GED recipient
  • Take at least six credit hours each semester
  • Demonstrate financial need
  • Submit a completed application and two reference letters
  • Maintain a cumulative GPA of 2.5 or higher
  • Submit copies of expense receipts, their course schedule and (if applicable) their prior semester’s transcript

It’s preferred that the scholarship money is used directly for education expenses – books, tuition, etc. – but, unlike some other scholarships, they recognize that award winners may need the money for other related expenses, like childcare or transportation.

The Midland Business and Professional Women’s Club is a regional organization that focuses on representing women’s equality in the workplace. The application for their scholarship can be found on their official site.

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Tips for Winning Scholarships

April 20th, 2011 by admin

As the economy remains stagnant, more people are choosing to return to school. Many nontraditional adult students returning to college are under the false impression that all scholarships are for younger students entering school for the first time. This is simply not true. Many sources exist that offer scholarship aid for those students over the age of 25. Scholarships tend to be competitive. There are many things an applicant can do to increase his or her chances of being selected to receive these scholarships.
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First, the applicant should be prepared to apply early for scholarship offers. The providers tend to have strict deadlines and the offers open/close far in advance of their intended semesters. Starting far in advance also gives plenty of opportunity to take one’s time in making sure everything is complete, neat and free of errors. It also offers time to take care of any issues that may arise, such as lost documentation or the need for clarification.

When seeking a scholarship, an applicant must make sure that he or she meets the requirements. Some awards are very specific, and missing any of the parameters will knock an applicant out of consideration. Be sure to include all required samples, documents and other requested items. Forgetting anything could lead to delays or outright disqualification.

Scholarship applicants should be prepared to market themselves to the scholarship provider as a positive addition to the educational institution or profession. Excellent grades, high entry test scores and professional achievements are all important factors. Adults should have some sort of leadership or community service experience to showcase as well. This may be a good time to create a portfolio of projects for one’s profession and list any awards received. If there is anything that appears detrimental, such as a bad grade, be sure to offer an explanation. Leave nothing to the imagination of the application’s reviewer.

Part of marketing one’s self is preparation of an outstanding essay. The essay portion of the application is the equivalent of a face-to-face interview and should be taken just as seriously. This offers the chance to really explain one’s goals and why he or she is the best choice for the educational award. Keep in mind that the awarding institution wants to be certain it is making the best decision for giving away scarce resources.

It would be a good idea to seek the advice of people that have received scholarships. Better yet, applicants should use their network of mentors, past professors, supervisors and other professional acquaintances to guide them. Experience and another set of eyes goes a long way to polishing the application and revealing mistakes.

One of the newer tips to take to heart is checking personal Internet presence. Many people use social media sites such as Facebook and Twitter. Anyone that applies for scholarships should make sure that these sources of personal information show nothing detrimental. There have been cases in which decisions have been made or altered because of a person’s social information online.

Start your college search at US College Search or find us on Facebook and Twitter and check out all of our online degree options.

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Everything You Need to Know about Student Loans

August 26th, 2010 by admin

Student loans are an integral part of the education system, as many who look to gain education beyond high school must rely on them for financial aid. Student loans allow students to pay for various things in their college careers, such as tuition, room and board, and food.

It is important for all to completely understand everything that there is to know about student loans. Student loans have multiple aspects that both students and parents must consider before taking the plunge into thousands of dollars of debt. Parents and students alike must think about the process of getting a student loan, finding the best student loans available, how they can use their student loans, and the best way to pay back all of the loans that have been taken out. These tips will walk you through the entire loan process, from application to pay back.

Tip #1: Understand What Student Loans are

There are millions of students who apply for a student loan program each and every year. Many students fail to realize that there are different kinds of student undergraduate loans that they can apply for. Federal loan program loans are those that are loaned from the government, while bank loans are students loans provided by a general bank. Those seeking federal financial aid will need to fill out a FASFA form – the government decides how much money you will get based on the information on this form.

Tip #2: Consider all different Student Loan options

There are multiple loan options for those who are looking to get student loans for college. There are student federal loans that come from the government, low interest loans that work to provide necessary aid to college students. There are also basic college loans that come from banks or other third parties. These are the types of loans that often feature high interest rates, and are generally the loans that will not defer monthly payments until after graduation.

It is important for you to consider your different options before you actually decide on the loan that you are going to choose. You need to think about the pros and cons of each to understand what you will be getting yourself into before you finally decide on a student loan for your college career.

Tip #3: Use Your Student Loans with Caution

Student financial aid can be used for a myriad of things, depending on the actual loan that is handed out. Most student financial aid and student loan program monies can be used for anything connected to school, whether that be food, room and board, or tuition. College loans simply work to make college available to you, as most of the costs would be too high to pay out of pocket.

If you are thinking about the different ways for you to use your college loans and student financial aid, you need toe be cautious. You need to remember that these loans, whether they be a federal loan of a bank loan, are going to need to be paid back. Do not spend any of the student federal loan money that you do not need, as you will be able to kick that back into the loan to lower your overall total.

Tip #4: Student Loan Consolidation

Those who have multiple student loans, whether they have to pay them back within months or after they graduate, are going to want to consider consolidation. Loans consolidation simply takes all of your loans and lumps them into one student consolidation loan. Student consolidate loans make loan payments easier, as you will only be paying one monthly payment. Many will find that this helps to lower their student loan interest rate, as they are able to lock in a better rate with the student consolidation company.

Tip #5: Student Loan Repayment

Student loans can completely ruin your credit, as high amounts of debt and unpaid monthly payments are added to your credit score. The only way to slowly lower your student bad credit is to pay off your college loans promptly and on time. Simply set a reminder for yourself, as this reminder will keep you from dealing with late fees and credit score dings.

If you are looking to make a serious dent in your student bad credit you need to pay off more than the low monthly payment. Student interest rates for student loans are often high, simply adding to the amount that must be paid. The more that you can pay off, the less that you will be pay in interest over time.

Tip #6: Student Loan Budgets

There are plenty of different students that are somewhat taken aback by the incredibly large monthly payments that must be paid to keep up with student loans. They fail to realize that some intense budgeting is needed to make sure that no monetary mishaps occur.

Simply put, you must budget for your new expenses. Take the time to sit down and think about how much money you make, and how much money must go out to bills. You can then factor in basic needs, such as gas and food, to understand exactly how much money you need to save each month. It can be easy to get behind on student loan payments, making budgeting a crucial part of staying afloat. If you take the time to create a budget and stick to that budget, you will be able to pay your student loans.

The world of college loans and student loans can be difficult to understand. With different options and different consequences, students need to work to completely understand what type of loan they are getting, and how to pay that loan off. Taking the time to think about your loan, budget your expenses, and pay on time will help to make the overall college loan experience as painless as possible.

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Preparing for College Life

August 18th, 2010 by admin

Preparing for college can be quite the ordeal. Deciding on a school that presents quality education, a fun social setting and offers affordability can be an extremely difficult task. The following tips for college are geared to help for preparing for college in high school as to the best processes to take when preparing for college life.

College Courses for High School Students / Get College Credits in High School

If your high school offers college credit or AP classes, make sure you take advantage of them. Paying for college can easily break the piggy bank, so utilizing these college courses in high school usually allows you to take them at a discounted rate. Also, participating in advanced placement courses will not only stimulate you intellectually, but they will also greatly increase your appeal to colleges looking at student applications. Whatever you can do to put yourself ahead of the rest is always a good idea when preparing for college.

Applying to Multiple Colleges

So, you think you already know what college you want to attend. Good for you – that’s reasonable. Just make sure you don’t solely apply to one college. Why? What would happen if you didn’t get accepted? You could miss your college enrollment deadline if you only applied to one college, and let’s face it, that amounts to zero fun and a lot of unnecessary hassle. So when preparing for college in high school; apply to multiple colleges to help in finding the right college for you.

Finding a College that’s Right for You

These two tips for college may sound like common sense but you’d be surprised. Finding the right college for you is the most important part of deciding on a college. You don’t want to go to a college that you don’t like or wouldn’t see yourself fitting into. Make sure that when you’re researching the college for you, that you’re also meeting all their requirements. Being aggressive and contacting schools of interest plays an integral role in searching for schools. Ask questions, address concerns and be sure to utilize your high school’s counselor for extra tips for college.

Financial Aid – How to Save on College

If money is looking to be tight when applying for colleges, then fill out a FAFSA form. It’s a free application for Federal Student Aid and it’s an essential step in helping you pay for college without loans.

Even if you aren’t eligible the first time around, don’t let that stop you from applying again next year for your college scholarships.  Several factors are attributed to FAFSA eligibility and although you might not be eligible now, you could be next year. Besides, the form is free, easy to fill out and could save you a bundle on your college education.

College Scholarships – Apply and Reapply

There’s nothing better than getting free money to go to college, and the greatest part – you don’t have to be a star athlete or the valedictorian to be eligible for one. Granted, those instances might help your case, but everyone can apply for college scholarships. Searching free college scholarships and grants is a great start as there are various unusual scholarships for college that you may actually be eligible for.

Implement community Service and well-roundedness

Getting involved in your community is something that many colleges look fondly upon and can give you the chance to get a community service college scholarship. Having strong ties with your community and partaking in various acts of service is something that universities and colleges are looking for when deciding if a student would be a good fit for their school.

In addition, being a well-rounded student can place you in a great light when colleges are looking at your attributes. The level of academic and extracurricular involvement in activities like sports, clubs and other programs are more factors of what colleges look for when reviewing applications.

Taking on the task of preparing for college and finding the right school for you can be stressful. It’s an important milestone in your life and an unforgettable experience. Just remember to stay calm and keep ahead of the curve. Get involved around your community and in your school. Do your research in advance, apply to several colleges, file your FAFSA and be persistent. The rest will hopefully fall right into place for the best college experience!

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Mysterious Educational Superhero Donates Over $45M to College Campuses

May 1st, 2009 by admin

A mysterious superhero has descended upon several Universities throughout the United States.

College Superhero


Recently, at least nine college institutions have received gifts totaling over $45 million from a mystery donor. What’s unusual is no one, not even the universities, knows where the money came from.

Typically when an educational institution receives an anonymous donation – they are allowed to know the identity of the donor.  In the recent donation sweep, however – lawyers and middlemen have cornered academic institutions into signed agreements not only disallowing them to know the identity of the donor, but promising not to try and find out.

Some of the schools that received the donations are the University of Iowa colleges receiving 7 million, the University of Southern Mississippi college receiving 6 million, and Purdue’s Indiana college receiving 8 million. It’s not clear whether the gifts come from an individual, organization or group of people with similar interests.

All donations were given on March 1st. Each came with the stipulation that most of the money must go to student scholarships.
Donations have dwindled at several colleges, and many schools have been trying to make ends meet during this economic downturn. These gifts show that someone recognizes the importance of higher education and truly wants to make a difference in the lives of students.  Historically speaking, and only exempting some of the Ivy League institutions – a larger endowment is a typical prelude to enrollment increase.

I would certainly be on the lookout at these specific universities enrollment metrics over the next academic year – as opportunity might arise for those looking to attend one of their programs.

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College Student Loan Industry Put on Hold

April 16th, 2009 by admin

The Obama administration is proposing an overhaul in the way a majority of students finance their college education. This proposal may greatly affect the student loan industry causing them to fight against the proposed plan.

Currently, federal subsidies, known as the Federal Family Education Loan program, are provided to private loan companies. President Obama wants to eliminate these subsidies proposing that all loans given to students will be under the control of the federal government. The administration argues that the revamp would save $94 billion. That savings could be redirected to needy borrowers and give more potential students the opportunity to go to college.

There is opposition to the proposal by some. Lenders are worried about the business they could lose. “The Obama plan would mean that many lenders would lose 100 percent of their business,” said Mark Kantrowitz, an industry analyst and publisher of “It would be a dramatic shift for the way this industry works.”

Others worry about the inefficiency of the education department. “I don’t see the wisdom in creating a new half-trillion national bank for student loans,” he said. “I know how the bureaucracy at the education department works, and you probably are going to get long lines of dissatisfied customers. Those lines could be very long because there are 12 million students.”

Supporters believe the proposal is the most cost effective, dependable way to provide students with the necessary funding for college. They think that the current system needs to be fixed to provide every student with the opportunity to go to colleges.

Washington Post

Career College Central – anchor text contigent on kw research

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Good news for students, bad news for banks

March 27th, 2009 by admin

One of the major obstacles for prospective students when it comes to going back to school is money.  Fortunately, there’s a light at the end of the tunnel.  President Barack Obama’s budget proposal is about cutting the money given to banks – and instead giving it to students.

President Barack Obama’s budget calls for increased federal aid to students.  Not only would students who already qualify for federal aid potentially receive more funds, but more students would also become eligible!  An estimated $5 billion dollars will be shifted from bank subsidizes to students in 2010-2011 alone, according to The Congressional Budget Office.

And, best of all, these changes don’t just apply to fresh high school graduates – adults without a bachelor’s degree are also eligible.  This is about making college more affordable to everyone – and making America a stronger country.

This is great news for students who have been considering going back to school, but haven’t been sure where to find the money.

Get the education you’re looking for – and let the government help you find the money you need.  You can learn more about the budget changes could affect your state at Campaign for America’s Future.

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Find your purpose – and maybe a better job

December 18th, 2008 by admin

So, you’re looking for some direction in your life. Well, you’re definitely not alone there. Whether you’re getting ready to graduate, or if you’re just looking for a lifestyle or career change, the number of choices out there can be overwhelming.We’re all well-aware that the economy is not super hot right now. But here’s a piece of advice I’ve heard some career experts recommend to people who are having a tough time snagging a job right now:

They say that volunteering can be a great way to gain experience that employers will appreciate. But best of all, many volunteer opportunities can give you the chance to make a difference in someone else’s life.

Today, I was reading about an organization called City Year. It’s affiliated with AmeriCorps (the domestic version of the Peace Corps), and it gives young people between the ages of 17 and 24 the chance to spend one year volunteering with kids from urban areas all across the country.

Though helping others is a great incentive, City Year can also help its members prepare for life after their year of service has ended. They offer education awards and scholarships, in addition to a monthly stipend to cover living expenses. Plus, you could experience life in a new place, while meeting new people.

A friend of mine who lives in New York City told me about how she sees City Year volunteers all over the place. She said she always recognizes them by their trademark red uniforms and their cheerful attitudes. Apparently, these folks really love what they’re doing!

The benefits of volunteering seem almost endless. And it might even open career or education doors in ways you weren’t expecting.

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