For any student who borrows money from the Federal Subsidized Stafford Loan Program, the interest rate for this loan will be changing for loans that are to be used for any period of enrollment beginning July 1, 2009 or after. For the 2009-2010 academic year, the subsidized Stafford Loan rate will be 5.6%, which is a .4% decrease from loans borrowed for the 2008-2009 year. However, if the student borrows funds through the Unsubsidized Stafford Loan Program, the rate is fixed at 6.8%. This is the type of loan that is accruing interest while the student is enrolled in school, so 6.8% is a definite "ouch".
With October 15,2009 as a deadline for the House and Senate to pass student aid legislation, a mere 4 months away, the life and times of certain financial aid programs may be changed forever. In the next 6 months to a year we might see the largest changes to the federal student aid programs in many many years. Student loans are a primary area of discussion in the Obama administration's proposals. Time will tell whether his proposals can actually change the ways that students and families finance higher education.
I have recently agreed to co-chair the government relations committee for our state organization, NYSFAAA, with a well respected colleague. As new legislation comes about on both the state and federal level, I hope to keep you, my readers, well informed.
Monday, June 15, 2009
Sunday, June 7, 2009
Education benefits from the Stimulus Plan
Again, it has been a busy couple of weeks. While the President's economic stimulus package seems like a distant memory and old news, there were several education benefits built into the stimulus package which I felt was important for you to read about.
Title IV Programs: For Pell Grant, slightly more than $17 billion is provided to increase the maximum award to $5,350 in 2009-10 and $5,550 in 2010-11, and eliminate the Pell Grant shortfall. Work Study received an additional $200 million.
Health Resources and Services Administration: $300 million is budgeted for the National Health Service Corps, which provides scholarships, loans, and loan repayment programs for behavioral and mental health care providers, primary care physicians, and other health professionals. Another $200 million is divided between health professions training programs and HRSA Nursing Workforce Development programs such as the Nursing Loan Repayment Program.
American Opportunity Tax Credit: The law provides approximately $13.5 billion for a temporary, more generous replacement of the HOPE tax credit for 2009-2010 and 2010-11. The amount of the credit is up to $2,500, of which up to 40 percent ($1,000) of which is refundable. The modified AGI phase out starts at $80,000 ($160,000 for a joint return).
529 Plans: For 2009 and 2010. the law temporarily defines computer technology and equipment, including Internet access fees, as "qualified higher education expenses" for 529 plan purposes.
I hope this information has helped and as more becomes available, especially as we get closer to tax reporting, I will hgihlight the new American Opportunity Tax Credit.
Title IV Programs: For Pell Grant, slightly more than $17 billion is provided to increase the maximum award to $5,350 in 2009-10 and $5,550 in 2010-11, and eliminate the Pell Grant shortfall. Work Study received an additional $200 million.
Health Resources and Services Administration: $300 million is budgeted for the National Health Service Corps, which provides scholarships, loans, and loan repayment programs for behavioral and mental health care providers, primary care physicians, and other health professionals. Another $200 million is divided between health professions training programs and HRSA Nursing Workforce Development programs such as the Nursing Loan Repayment Program.
American Opportunity Tax Credit: The law provides approximately $13.5 billion for a temporary, more generous replacement of the HOPE tax credit for 2009-2010 and 2010-11. The amount of the credit is up to $2,500, of which up to 40 percent ($1,000) of which is refundable. The modified AGI phase out starts at $80,000 ($160,000 for a joint return).
529 Plans: For 2009 and 2010. the law temporarily defines computer technology and equipment, including Internet access fees, as "qualified higher education expenses" for 529 plan purposes.
I hope this information has helped and as more becomes available, especially as we get closer to tax reporting, I will hgihlight the new American Opportunity Tax Credit.
Saturday, May 23, 2009
Choices and Alternatives!!
This is probably the longest I have gone without posting to this blogsite and for that, I apologize!!! This month seems to have flown by with semester end activities and the preparation for summer 09 and fall 09 in the financial aid world.
In the regulatory world of financial aid, things are always a buzz. With President Obama's budget package on the table and the FFEL Program under governmental and public scrutiny, it should be a very exciting couple of months.
The job outlook for recent college graduates is grim. So the best time to be in school is right now, while the economy tries to regain momentum and strength. However, the cost of education is still rising and it is becoming more and more difficult for families to handle the costs.
In a recent article on MSNBC, some colleges may look to switch to a three-year bachelor's degree program, instead of the traditional 4 years. This is a model that is popular in Europe, especially in England. However, schools in the U.S. have been reluctant to push this type of program. However, in this economy, colleges will have to begin to think a bit outside the box in order to get and keep students at their institutions. Saving anywhere between $15,000 to $50,000 per year may be a good incentive for families to look at a particular school with this type of program. And for colleges, it might mean getting students whom may not have considered their institution in the past. Click here to see the MSNBC article.
In the regulatory world of financial aid, things are always a buzz. With President Obama's budget package on the table and the FFEL Program under governmental and public scrutiny, it should be a very exciting couple of months.
The job outlook for recent college graduates is grim. So the best time to be in school is right now, while the economy tries to regain momentum and strength. However, the cost of education is still rising and it is becoming more and more difficult for families to handle the costs.
In a recent article on MSNBC, some colleges may look to switch to a three-year bachelor's degree program, instead of the traditional 4 years. This is a model that is popular in Europe, especially in England. However, schools in the U.S. have been reluctant to push this type of program. However, in this economy, colleges will have to begin to think a bit outside the box in order to get and keep students at their institutions. Saving anywhere between $15,000 to $50,000 per year may be a good incentive for families to look at a particular school with this type of program. And for colleges, it might mean getting students whom may not have considered their institution in the past. Click here to see the MSNBC article.
Tuesday, May 5, 2009
Time flies and tuition bills will be coming
It amazes me when I see that so much time goes by between my entries, especially when I have so much to say. All of the excitement that has been mounting through the acceptance and aid package receipt period will all be coming close once the fall 2009 tution bills go out to students some time in June!!!
Now is the time to sit down and truly crunch those numbers to determine how all of the financial aid and savings will be used to pay those bills. Points to remember, subsidized loans awarded to students are best as interest is not accruing while the student is in school and for 6-9 months after the student has either graduated, withdrawn or dropped below six credits. Utilizing subsidized loans are using the government's money for free!!!
Free money is best, so keep applying for any and all scholarships available!!!
Now is the time to sit down and truly crunch those numbers to determine how all of the financial aid and savings will be used to pay those bills. Points to remember, subsidized loans awarded to students are best as interest is not accruing while the student is in school and for 6-9 months after the student has either graduated, withdrawn or dropped below six credits. Utilizing subsidized loans are using the government's money for free!!!
Free money is best, so keep applying for any and all scholarships available!!!
Thursday, April 23, 2009
Info regarding your credit score!!
I wanted to share some information regarding student loan applications and a student's or parents' FICO score!! See below
'IS APPLYING FOR STUDENT LOANS REDUCING YOUR FICO SCORE?'
In credit score calculations, applying for new credit makes up 10 percent of your FICO score. Anytime a creditor or lender pulls your FICO score to determine creditworthiness and interest your FICO score is reduced due to the inquiry. According to myfico.com, “looking for new credit can equate to higher risk.” Ten percent doesn’t seem like much and for the consumer with an average credit score one inquiry will lower their FICO score five points. However, it is the consumers with little credit history or a lower FICO score that experience a greater impact.
If a consumer wants to shop around for the best loan, why should he be penalized for looking for the best deal? Myfico agrees and states when shopping for mortgages, car loans, and student loans, inquiries made in the 30 days prior to scoring will be ignored. If you find a loan within the 30 days, the inquiries won't impact your credit score while you're rate shopping. According to Jill Richardson, Scoring Project Manager for FICO, consumers should not be worried that inquiries from private or alternative student loans will reduce FICO scores if the inquiries are made within the 30 day time period.'
This is good news for your students, so I thought I would share this at this time.
This came from a colleague of mine who works for NSLP (National Student Loan Program)
'IS APPLYING FOR STUDENT LOANS REDUCING YOUR FICO SCORE?'
In credit score calculations, applying for new credit makes up 10 percent of your FICO score. Anytime a creditor or lender pulls your FICO score to determine creditworthiness and interest your FICO score is reduced due to the inquiry. According to myfico.com, “looking for new credit can equate to higher risk.” Ten percent doesn’t seem like much and for the consumer with an average credit score one inquiry will lower their FICO score five points. However, it is the consumers with little credit history or a lower FICO score that experience a greater impact.
If a consumer wants to shop around for the best loan, why should he be penalized for looking for the best deal? Myfico agrees and states when shopping for mortgages, car loans, and student loans, inquiries made in the 30 days prior to scoring will be ignored. If you find a loan within the 30 days, the inquiries won't impact your credit score while you're rate shopping. According to Jill Richardson, Scoring Project Manager for FICO, consumers should not be worried that inquiries from private or alternative student loans will reduce FICO scores if the inquiries are made within the 30 day time period.'
This is good news for your students, so I thought I would share this at this time.
This came from a colleague of mine who works for NSLP (National Student Loan Program)
Sunday, April 12, 2009
Tax deadline looming!!!
Well, it is almost April 15th and we all know what that means!!! It is the deadline for filing both your federal, and if you live in my state, your New York State taxes. Since this is a critical part of the financial aid process, if you haven't done your taxes, make sure they are done as soon as possible. Schools can choose to verify the financial aid application that is filed for a student, or may have to file because the federal government has chosen to verify that particular student. In either case, if selected for verification, be prepared to provide the school with the 2008 SIGNED taxes of both the student and the parent as well as the supporting w-2 statements from the employers. The form 8453 from the federal government which states that your taxes were filed electronically is not sufficient documentation. Depending on the school, they may also request any corresponding schedules that go along with the tax return.
Believe me, the school only wants to collect what is necessary, but if the school is asking for it, comply as quickly as possible. The delay in submission of the income documentation could mean a delay in the final financial aid award package. That's right, some schools send out tentative notifications based on the figures from the FAFSA and the CSS Profile if required. However, they may have to change those awards if the information on the tax returns is significantly different than what appears on the forms. So, be prompt and be accurate with the information requested from the Financial Aid Office!!
Believe me, the school only wants to collect what is necessary, but if the school is asking for it, comply as quickly as possible. The delay in submission of the income documentation could mean a delay in the final financial aid award package. That's right, some schools send out tentative notifications based on the figures from the FAFSA and the CSS Profile if required. However, they may have to change those awards if the information on the tax returns is significantly different than what appears on the forms. So, be prompt and be accurate with the information requested from the Financial Aid Office!!
Saturday, March 28, 2009
May 1st will soon be here!!!
For those of you who will be attending college for the first time in Fall 2009, right about now is the time when you are receiving the financial aid award notifications. These award notifications will specify the types and amounts of awards that you could receive at that particular institution. But how do you make sense of all of that information? You want to make sure you are comparing "apples to apples".
NASFAA (National Association of Financial Aid Administrators) provides tools to help students and their families analyze the award notifications that they receive in order to make choices and financial decsions regarding college costs.
The first is a cost of attendance worksheet that allows families to look at the schools to which the student has applied and compare the costs based on various components. See that worksheet by clicking here.
The next tool is a sheet that allows the family to analyze each of the financial aid award packages according to they type of aid received and the conditions associated with that type of aid. It allows for the comparison of loan rates and renewability of scholarships. See that worksheet by clicking here.
Both of these are excellent for seeing the whole picture and allows the family to look at the numbers clearly in the hopes of making decisions that are good for everyone.
NASFAA (National Association of Financial Aid Administrators) provides tools to help students and their families analyze the award notifications that they receive in order to make choices and financial decsions regarding college costs.
The first is a cost of attendance worksheet that allows families to look at the schools to which the student has applied and compare the costs based on various components. See that worksheet by clicking here.
The next tool is a sheet that allows the family to analyze each of the financial aid award packages according to they type of aid received and the conditions associated with that type of aid. It allows for the comparison of loan rates and renewability of scholarships. See that worksheet by clicking here.
Both of these are excellent for seeing the whole picture and allows the family to look at the numbers clearly in the hopes of making decisions that are good for everyone.
Saturday, March 21, 2009
An interesting college attendance strategy!
The NY Times always has some interesting higher education articles. A recent article spoke about the "gap" year, which is identified as a year that a student takes off between high school and the beginning of their college career. The article says that it may be a good financial aid strategy to do so. I feel it should be based on the individual circumstances of the student and the family and it can't be said that this plan will work categorically for everyone. Check out the article by clicking here.
Thursday, March 12, 2009
Some scholarship info!!
I wanted to put out some of the recent scholarship information I have received. Below is a scholarship for students in the Computer Science field. Click on the link to see more!!!
http://education-portal.com/pages/Computer_Science_Academic_Scholarship.html
Also, there will be a random drawing for a $10,000 scholarship through the StudentLoan Network. See the link below to sign up!!! The drawing will be on 3/31/09!!!!
www.scholarshippoints.com
http://education-portal.com/pages/Computer_Science_Academic_Scholarship.html
Also, there will be a random drawing for a $10,000 scholarship through the StudentLoan Network. See the link below to sign up!!! The drawing will be on 3/31/09!!!!
www.scholarshippoints.com
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