Financial Aid in the News RSS
Senate's Draft Student-Loan Bill Differs From House Version (The Chronicle of Higher Education)
"A week after the U.S. House of Representatives passed legislation to end bank-based lending and expand aid to students and colleges, Senate aides are putting the final touches on their chamber's version of the bill," The Chronicle of Higher Education reports. "While the bill will not be officially released until next week, a draft version circulating among lobbyists and student-aid experts would provide a larger minimum Pell Grant than the House version, while offering states and colleges more money ($4.25-billion vs. $3-billion) for access and completion programs."
Student Lenders, Fighting to Survive, Spend Millions to Lobby Congress (The Chronicle of Higher Education)
"A shrunken student-loan industry, faced with the legislative fight of its life, has spent millions of dollars on lobbying and campaign contributions over the last year and a half, even as subsidy cuts and a continuing credit crunch have squeezed its margins and driven dozens of banks from federal student lending," The Chronicle of Higher Education reports. "Between January 1, 2008, and the end of June 2009, the top 20 participants in the federal bank-based loan program spent nearly $14-million lobbying the federal government, some $3.1-million of it in the first half of this year alone, according to a Chronicle analysis of federal records available through the Center for Responsive Politics."
Aggressive Plan for State Data Systems (Inside Higher Ed)
"It has become an article of faith among many federal and especially state policy makers that the United States cannot possibly improve the performance of its higher education system without a significantly better way of collecting data about the performance of individual students and colleges," Inside Higher Ed reports. "Student aid legislation that the U.S. Senate could unveil as soon as this week would, like a comparable measure that the House of Representatives passed this month, give states significant financial incentives to develop such data systems."
Veterans Report G.I. Bill Fund Delays (The New York Times)
"Thousands of veterans attending college on the new G.I. Bill are having to take out loans, put off buying textbooks or dig into savings because of delays by the Department of Veterans Affairs in issuing benefit checks, veterans groups and college officials say," The New York Times reports. "The new benefit enticed more than 277,000 veterans and their eligible relatives to apply for assistance. Such a flood of claims had been expected, but the veterans department, with its antiquated technology, has struggled to keep up with it."
College Officials Brace for Hit From Economy (The New York Times)
"The talk this week at an annual gathering of college admissions officers and high school counselors included the usual topics, like how to deal with 'difficult' parents and the names of hot student prospects. But the conversations -- in panel discussions, in hallways and over crab cakes -- always seemed to circle around to one subject: the economy," The New York Times reports. "High school counselors said that some parents who in other years worried mostly about whether their children could get into a particular college were now concerned about whether they could afford the price tag. Admissions officers said they feared further price increases and cuts in university budgets, perhaps even in classes."
STATE NEWS
Ohio: Colleges to Protect Vets Affected by Benefits Backlog (Columbus Dispatch)
"Military veterans who have not paid for their classes because of a federal snafu with their benefits won't be penalized, Ohio Chancellor Eric D. Fingerhut vowed today," the Columbus Dispatch reports.
Michigan: Students, Families Pushing for Rescue of Promise Scholarship (Lansing State Journal)
"The Promise scholarships were expected to send as much as $140 million to 96,000 students across the state this year, and they have a broad constituency. Their possible demise has been the impetus for a protest on the Capitol lawn, for editorials in student newspapers, for no fewer than nine Facebook pages," the Lansing State Journal reports.
Illinois: Governor Vows to Restore Student Funding (Sauk Valley Newspapers)
"Gov. Pat Quinn said Friday that he intends to work with lawmakers during the next month to restore about $200 million to a state grant program that provides money to needy college students," Sauk Valley Newspapers reports.
California: Newsom Plans College 'Savings Bond' (San Francisco Chronicle)
"Mayor and new daddy Gavin Newsom will unveil a plan to provide every San Francisco kindergartener with a $50 'savings bond' for college - just as soon as he can figure out how to make sure illegal immigrants can qualify," the San Francisco Chronicle reports.
OPINIONS
Opinion: Making it Easier to Get Aid (The Chronicle of Higher Education)
"Efforts are underway to simplify the complex, byzantine system we've created to administer financial aid, and it's about time," writes Sara Goldrick-Rab, assistant professor of educational-policy studies and sociology at the University of Wisconsin at Madison, in The Chronicle of Higher Education.
Opinion: Don't Cut Aid to Private Colleges (The Baltimore Sun)
"In the current fiscal year, Maryland has appropriated about $1.3 billion for higher education, including about $45 million in aid to independent (private, nonprofit) colleges and universities through a program known as the Sellinger Program," writes Tina Bjarekull, president of the Maryland Independent College and University Association, in The Baltimore Sun. "The vast majority (83 percent) of the Sellinger funds are used to provide financial aid to Maryland residents who are enrolled at one of 16 state-aided independent colleges and universities."
In Credit Crunch, Students and Families Borrow More in Federal Loans (The Chronicle of Higher Education)
"Students and families borrowed 25 percent more through federal loan programs last year than during the same period the previous year, data from the U.S. Department of Education show," The Chronicle of Higher Education reports. "The growth comes at a time when more people are going to college, many families are needier than in the past, and more students are applying for federal aid. Congress also increased the amount that undergraduate students could borrow starting in the 2008-9 academic year."
VA Says It Has Processed Less Than Half of GI Bill Education Benefits (Nextgov)
"The Veterans Affairs Department said on Wednesday that it has processed less than half of the pending education benefits claims veterans are entitled to under the post 9/11 GI bill claims, and veteran groups expressed serious concerns students will not be able to pay their rent next month and colleges will need to wait for tuition payments," Nextgov reports. "The department has paid more than 61,000 benefits claims totaling $50 million since August, according to a statement. VA also said it processed 503,000 claims totaling $1 billion for other education benefit programs during the same period. But VA told Nextgov that it still must process another 72,329 claims for post-9/11 GI bill benefits, with 60,071 eligibility determinations and 12,258 enrollment certifications."
'Guaranteed' College Savings Plans May Soon Break Promises (U.S. News & World Report)
"In a blow to parents already panicked about their ability to save enough for their children's college costs, some of the safest-sounding college savings plans are foundering," U.S. News & World Report reports. "Several plans marketed by states as 'guaranteed' to keep up with skyrocketing tuition inflation lost hundreds of millions of dollars in the markets' 2008 meltdown. At least two state plans -- in Alabama and Texas -- could soon end up paying out less than parents and students had expected, revealing the surprising flimsiness of many of the 'guarantees.'"
12 Questions to Ask Before Investing in a Prepaid College Savings Plan (U.S. News & World Report)
"Despite all their faults, experts say some of the better 'guaranteed' college savings plans are still good options for anyone whose kids are likely to attend participating schools," U.S. News & World Report reports. "'Prepaids can play an important role in securing the cost of a future education,' says Andrea Feirstein, a longtime industry consultant who recently published a study analyzing guarantees behind the plans. ... But since the recession has threatened some prepaid 529s' ability to keep their promises, Feirstein and other experts say it is crucial for parents to carve out a little time in their frazzled lives to find a safe, well-managed plan. 'It's all about asking the right questions,' she says."
Unprecedented Demand, Dwindling Funding (Inside Higher Ed)
"Given the difficulties of the recession, the state of community college systems could be better, but it also could be a lot worse, an annual survey of state directors of community college systems finds," Inside Higher Ed reports. "The Education Policy Center at the University of Alabama released a report Thursday based on the responses from state community college officials in 48 states to an extensive set of questions about changes in state funding, the impact of federal stimulus dollars and plans for the future. ... Though many states have finally been giving community colleges their due, both in terms of public attention and -- sometimes -- funding, the report finds that this did not help many of them avoid cuts when times got tight last fiscal year."
University Funds Report Steep Investment Losses (The New York Times)
"Steep investment losses have caused painful cutbacks at some of the nation’s best-known universities over the most recent fiscal year and have prompted questions about whether their endowments are taking too much risk," The New York Times reports. "But as the schools, one by one, disclose their numbers, the managers of these endowments are indicating their continued support for a diversified portfolio chock full of alternative investments like hedge funds, private equity and real estate -- the very things that have caused so much trouble."
STATE NEWS
OPINIONS
Editorial: Proposal to Fund College Costs Should Focus on Low Income Students (The Detroit News)
"State Rep. Fred Durhal Jr. is proposing Michigan use lottery and casino money to send most Michigan students to college. While the idea may be politically popular, it needs to be more targeted and pragmatic," The Detroit News reports. "We like Durhal's idea for one reason: Research shows tuition prices greatly affect low-income students' college graduation rates."
FAFSA Experiment Boosts College Going (Inside Higher Ed)
"In a report on their study released today, ... researchers report that their experiment -- in which tax preparers at H&R Block helped some low- and moderate income clients fill out the Free Application for Federal Student Aid using existing financial data from the Internal Revenue Service -- significantly boosted the rate at which participants in the program applied for financial aid, the number who received aid and the amount they got, and the proportion of participants who enrolled in college," Inside Higher Ed reports. "The researchers found significant effects for students coming straight out of high school and for adults with no prior college experience."
Congress to Hold Hearings on Non-Profit Schools (Associated Press)
"Rep. George Miller, D-Calif., who heads the House Education Committee, said Monday that a Government Accountability Office report on proprietary schools is 'extremely troubling and warrant(s) further examination by Congress,'" the Associated Press reports. "The report found that many proprietary schools admitted unqualified students who had a greater tendency than other students to drop out, let students stay enrolled despite a lack of academic progress, and also misrepresented themselves to prospective students. ... His panel's Subcommittee on Higher Education, Lifelong Learning, and Competitiveness plans hearings on the GAO findings, according to the subcommittee's chairman, Rep. Ruben Hinojosa, D-Texas."
Mass. Senate Approves Filling Kennedy Seat (Reuters)
"The Massachusetts Senate voted on Tuesday to allow the governor to name an interim U.S. Senate replacement for the late Edward Kennedy and fill a key 60th seat for the Democrats," Reuters reports. "The bill now requires a final vote in both chambers and a signature from Governor Deval Patrick, a Democrat who backs the legislation. Patrick is expected to name a replacement for Kennedy within days, returning the Democrats to a crucial 60 seats in the U.S. Senate.
White House Seeks Advice on Getting Hispanics into College (Miami Herald)
"The question to Miami educators was straight forward: If we want more Hispanics students attending college, what do we need to do?" the Miami Herald reports. "'We want to hear from you directly and ask you what would you tell the president if you could,' Juan Sepulveda, director of the White House's Initiative on Educational Excellence for Hispanic Americans, asked during a visit to Miami Dade College's Wolfson Campus. 'And more importantly, we need you to sign up and join us to create a national network of folks with a common goal,' he added."
College Loan Program on the Ropes (Knoxville News Sentinel)
"A bill that would put the federal government in charge of college student loans and eliminate the role of private lenders has easily passed its first major test in Congress. The U.S. House voted 253 to 171 on Thursday to approve the legislation," the Knoxville News Sentinel reports. "Edamerica and other lenders are now turning their focus to the Senate in hope they can persuade senators to include private industry participation in their version of the bill."
STATE NEWS
Michigan: State House Leader Says He's Trying to Save Promise Scholarship (Associated Press)
"The Michigan Legislature's top Democrat says efforts continue to save at least a portion of funding for the state's main college scholarship program," Associated Press reports.
Obama Lashes Out at U.S. Banks Over Student Loans (Reuters)
"President Barack Obama criticized the largest U.S. banks on Monday for trying to thwart legislation that would overhaul federal student loan programs," Reuters reports. "He singled out in particular banks that have received bailout money from the federal government, saying they want to maintain the status quo on student loans because they get an 'unwarranted subsidy' from it."
Audio: In a Washington Minute -- Student-Loan Bill Heads to the Senate (The Chronicle of Higher Education)
"Now that the House of Representatives has passed legislation that would end the bank-based guaranteed-loan program, the action is moving to the Senate," The Chronicle of Higher Education reports. "Kelly Field and Sara Hebel handicap the bill's prospects there."
New Rules Require More Sunshine on Terms of Private Student Loans (The Chronicle of Higher Education)
"Beginning in February, new regulations from the Federal Reserve Board will require lenders to disclose more information about private student loans, including interest rates and estimated monthly payments," The Chronicle of Higher Education reports. "The new rules, which were put in place last week, stem from last year's legislation to renew the Higher Education Act. They have been hailed as good for student borrowers and were largely uncontroversial among lenders. But financial-aid officers and some higher-education experts say the changes do not go far enough."
Don't (Dis)count Them Out (Inside Higher Ed)
"Between the early 1990s and 2007, average tuition discounts for first-time freshmen grew from 27 percent to 39 percent, according to the National Association of College and University Business Officers," Inside Higher Ed reports. "While there's no survey data available for 2009, many college presidents say they offered even larger discounts this year -- convinced that it was necessary to double down at a time when affordability was such a concern for families. Increased discounting may have looked like an appealing strategy this year, but trustees at Marymount Manhattan College resisted."
STATE NEWS
Ohio: State Budget Cuts Hurt Early-College High Schools (Columbus Dispatch)
"The state money for Metro and the nine other Ohio high schools that give college access to low-income and first-generation college-goers has dried up, and some of those schools say the cuts could kill them," the Columbus Dispatch reports.
Vermont: Legislation Could Force VSAC to Scale Back (Vermont Public Radio)
"Since 1965, VSAC - the Vermont Student Assistance Corporation - has become the pathway to college for many Vermont families. But the agency's very existence is threatened by reforms that President Obama has insisted on in the wake of abuses in college financial aid that have emerged around the country," Vermont Public Radio reports.
Iowa: Fewer Poor Enrolled at Regent Schools (Des Moines Register)
"Fewer and fewer students from Iowa's low-income families are being educated by the state's public universities, despite their mission to educate Iowans of diverse socioeconomic status, U.S. Department of Education data show," the Des Moines Register reports.
Iowa: Finding Loans Difficult for Some Students (Iowa City Press Citizen)
"The private loan market has become tighter and more regulated; many in the industry acknowledge that. But there is disagreement over how much of a gap, if any, now exists between college costs and loan availability," the Iowa City Press Citizen reports.
Texas: Change Makes Cashing Out of Tuition Program Costly (Houston Chronicle)
"Somehow, until this year, state officials didn't realize it was too costly to continue the prepaid tuition plan's full-refund guarantee of cash-outs based on current averages of tuition and required fees. A parent who paid into the fund just over $8,000 in 1996 for an infant to attend a four-year public college would be due a full refund of more than $27,000 at today's state university prices," Houston Chronicle reports.
North Carolina: 'Hollow Victory' for Undocumented Students (Inside Higher Ed)
"After flip-flopping on its admissions policy for nearly a decade, the North Carolina State Community College Board voted Friday to admit undocumented immigrants with one major catch: They must pay out-of-state tuition," Inside Higher Ed reports.
OPINIONS
Opinion: Our Take On Student Loans & Lehman Brothers (Orlando Sentinel)
"In the bizarro world of Washington, D.C., conservatives decry government handouts one day (bank/auto bailouts) and the next day gnash their teeth over the possible end of another handout (student loan subsidies)," Orlando Sentinel reports. "Make no mistake, the student loan program is a sweet deal for banks. They get their capital from the federal government, which also gives them a subsidy to make the loans and then guarantees the loans ... Private lenders are squawking, but they have a problem if their business model relies on billions each year in public subsidies. The Senate should now pass this bill and do its part to end this form of corporate welfare."
Opinion: Finally, Some Real Action on Student Loans (The New Yorker)
"A couple of years ago, [I wrote] a column about the perverse economics of the student-loan business," write James Surowiecki in The New Yorker. "It's a quintessential example of the 'heads the corporation wins, tail the government loses' business model--a model that many Wall Street firms are now reaping the benefits of--and over the years it made student lending a very profitable business to be in. Now it looks like there's a chance, at least, that the entire system is about to be overhauled."
Opinion: After College, Student-Loan Sinkhole Awaits (Washington Post)
"Deep into this recession, we know that an increasing number of people can no longer pay their mortgages, their credit card balances or their car loans," writes Michelle Singletary in Washington Post. "Now throw into the mix the rising number of defaults on student loans ... Until there is a sustainable solution, there has to be a sea change in the view by many parents and students that college at any cost -- no matter how unaffordable -- is worth the years of financial burden and perhaps ruin."
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