Articles: Financial Aid

04/2012

As new high school graduates anxiously await acceptance letters from their favorite colleges, many will start to plan for this new chapter in their lives by seeking student loans and financial aid to pay for it. After running the gauntlet of qualifying for loans and assistance, many will forget all about it.

The roughly 9 million students who rely on subsidized federal loans will see interest rates double from 3.4 percent to 6.8 percent on loans borrowed after July 1. It’s just the latest chapter in the nearly 50-year saga of the federal government trying to determine the appropriate rate for these loans.

A new analysis of U.S. Department of Education data by the National Association of Independent Colleges and Universities quantifies the reliance on federal student aid by students in every state and congressional district.

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Heartland Payment Systems Campus Solutions division has been awarded a contract by the Tennessee Board of Regents System to manage financial aid disbursement and refund management to six universities, 13 community colleges and 27 technology centers. The TBR System manages more than $600 million in annual financial aid refunds.

Stafford Loans

  • Subsidized Stafford loans are available based on financial need, and unsubsidized loans are available to everyone. 
  • For graduate students, the maximum annual loan limit is $20,500 (with up to $8,500 subsidized). The aggregate loan limit, including undergraduate debt, is $138,500, except for medical students, for whom the limit is $224,000. 

Student borrowing is going up. National Student Loan Data System data shows that cumulative borrowing per student participating in federal loan programs increased from about $3,943 in 1990 to $11,510 in 2000 and $13,856 in 2009.

A report by credit score analyst FICO shows growing concern for the stability of the student loan market, putting additional strain on the fragile economy. U.S. student loan debt now exceeds credit card debt, with an estimated $750 billion in outstanding student loans.More than two-thirds of bank risk professionals surveyed expected loan delinquencies to rise.

A student speaking with her advisor

Community colleges have always been a popular place for students to begin their higher education career. Often smaller, closer, and more affordable than their four-year counterparts, they can help students get accustomed to college-level work or simply save on tuition. The national goal of producing more college graduates has increased the focus on ensuring students actually transfer on.

The time of unprecedented growth for the federal Pell Grant program couldn’t have come at a worse time for Congress. As lawmakers were looking to cut federal spending to address the growing national deficit, record college enrollments, the economic downturn, and expanded Pell Grant awards and eligibility criteria combined to triple the cost of the program over five years.

Given federal and state regulations­, especially now, there are many policies and procedures related to applying for, awarding, and disbursing aid that can’t be avoided.

Student loan debt has been steadily rising for a number of years and has recently passed the $1 trillion mark, making it more than credit card debt. The issue has had attention all along, but there is more of a focus on it as recent graduates are having a hard time finding jobs that would enable them to repay those loans.

Many people probably only think about Napa when they’re thinking about wine. And while the Napa Valley of California does have world-class grapes, it’s also home to a huge population of Mexican immigrant laborers responsible for this wine behind the scenes—and their undocumented children looking for an education.

One of the more dubious notions to attach itself to higher education is the brash “right to fail.” While the intent to demand maturity and accountability from college students is understandable, the reality, and certainly the wisdom of such an axiom, is another story.

Are the financial aid award letters your institution sends to returning and prospective students clear, correct, complete, and comparable to other institutions’ award letters? The federal government thinks that too many are misleading and difficult to compare.

At one time, each of Connecticut’s 12 community colleges ran its own financial aid office by its own rules. Ten years later, the Connecticut Community College System has doubled the number of students. Now all 12 colleges use FAFSA alone to determine eligibility. All use the same “satisfactory academic progress” requirement for students who receive aid and those who don’t.

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