John Strossel of 20/20 fame wrote recently in his newspaper column about a college graduate named Rachele who had a $85,000 student loan while her job paid her $24,000 a year. She was told by her college just to take out the loans and get the degree because when you graduate you're going to be able to get that good job and pay the loans off with no problem. Students have heard a similar message all of their lives that it's college or nothing regardless if they attended a private or public school.
Unfortunately there are millions of Rachele's in this country struggling to make their monthly loan payments. Acknowledging this disaster a new federal program starting this coming fall promises relief and hope for graduates burdened with big federal education debts. Starting July 1, those with federal loans can ask the government to limit their monthly payments to less then 15 percent of their income.
Homer Sweeney
Thursday, February 19, 2009
Wednesday, February 18, 2009
The College Major That Is Always In Demand
Want to have a job when you graduate for college? Kathryn Van Ness, director of UC Irvine's career center offers the following suggestions.
Major in accounting. Accounting is the only industry in this very tight market in which recruitment has not fallen off from a year before. The biggest drops have been in consulting and financial services.
Get experience. Internships are currency for entry-level applicants. Van Ness said 80 percent of UC Irvine students who are interns with a company get full-time offers from that company upon graduation.
Orange Conty Register
Major in accounting. Accounting is the only industry in this very tight market in which recruitment has not fallen off from a year before. The biggest drops have been in consulting and financial services.
Get experience. Internships are currency for entry-level applicants. Van Ness said 80 percent of UC Irvine students who are interns with a company get full-time offers from that company upon graduation.
Orange Conty Register
College Parents and Students Shafted by Stimulus
The much publicized American Recovery and Reinvestment Act (Stimulus Bill) is a $790 billion package of spending and tax provisions designed to stimulate the economy and prevent the onset of a deep recession. The benefits for students and families can barely be found on the radar which indicates no support from Congress. This is especially surprising since these parents, students and their children and grandchildren will be paying for this bill over the coming decades. It also illustrates very clearly that families have no lobbyist or organization to grease the palms of the legislators. Colleges do lobby for additional grants, loans and aid that in turn however makes it much easier for them to raise tuition.
Pell Grants will increase to a maximum of $5,350 for the 2009-10 school year which is a $500. increase. Once you submit the FAFSA you will receive a Student Aid Report (SAR) which will indicate your Expected Family Contribution and eligibility status for a Pell Grant.
Work Study will be increased allowing for more campus based work opportunities for those students eligible for need based aid. The College Plan suggests that students should work no more then 10 hours per week. If a student makes $8. and hour do not accept an award that exceeds $2400. To illustrate $8. time 10 hours equals $80 a week times 15 weeks equals $1200. for the semester or $2400. for the year.
Tax Credit The American Opportunity tax credit replaces the Hope Credit and allows a tax credit of up to $2500.per student per year for tuition and related expenses for up to four years. It also expands the maximum eligible income range to $160,000 - 180,000 for married couples filing jointly. The new credit only applies to 2009-2010; after 2010 the law reverts to the Hope credit unless the new credit is extended. The Hope credit is limited to two years and maximum income of $120,000.
529 Plans now include computer technology as a qualified education expense for 2009 and 2010 adding to the current list of tuition, fees, books and room and board expenses.
Homer Sweeney
NACAC and WSJ
Pell Grants will increase to a maximum of $5,350 for the 2009-10 school year which is a $500. increase. Once you submit the FAFSA you will receive a Student Aid Report (SAR) which will indicate your Expected Family Contribution and eligibility status for a Pell Grant.
Work Study will be increased allowing for more campus based work opportunities for those students eligible for need based aid. The College Plan suggests that students should work no more then 10 hours per week. If a student makes $8. and hour do not accept an award that exceeds $2400. To illustrate $8. time 10 hours equals $80 a week times 15 weeks equals $1200. for the semester or $2400. for the year.
Tax Credit The American Opportunity tax credit replaces the Hope Credit and allows a tax credit of up to $2500.per student per year for tuition and related expenses for up to four years. It also expands the maximum eligible income range to $160,000 - 180,000 for married couples filing jointly. The new credit only applies to 2009-2010; after 2010 the law reverts to the Hope credit unless the new credit is extended. The Hope credit is limited to two years and maximum income of $120,000.
529 Plans now include computer technology as a qualified education expense for 2009 and 2010 adding to the current list of tuition, fees, books and room and board expenses.
Homer Sweeney
NACAC and WSJ
Friday, February 6, 2009
UC's to Adopt Sweeping Changes in Admissions Policy
The Board of Regents of the University of California approved changes to the University's admission policy that will affect current high school students graduating in 2012 and beyond.
The new policy requires the same number of "a-g" courses and the same GPA as current policy. The key differences are:Two SAT Subject Tests will no longer be required for admission. However, students could still choose to submit their scores for consideration as part of their application, just as they do now with AP scores. The Subject Test also could be recommended for certain majors.
All applicants will need to complete 11 of the 15 "a-g" courses by the end of their junior year. Currently, this is required only of students who are designated eligible by ranking in the top 4 percent of their high school class.
All California high school seniors who complete the requirements will be invited to apply and will be entitled to a comprehensive review of their applications at each UC campus to which they apply.
Within this "entitled to review" pool, two categories of applicants would be guaranteed admissions somewhere within the UC system:
1. those who fall in the top 9 percent of all high school graduates statewide, and
2. those who rank in the top 9 percent of their own high school graduating class.
Fundamentally, these changes will not change the way students prepare for the University: students will still need to complete the "a-g" requirements, earn the best grades possible, and take the ACT Assessment with Writing or the SAT Reasoning Test. They will also need content knowledge in case they choose to take an SAT Subject Test to demonstrate specific subject-matter proficiency.
Students who graduate from high school prior to 2012 will be held to existing admissions requirement. Most importantly, this means that these students will be required to submit scores from two SAT Subject Tests in order to be eligible for admission, as is the case now.
You are invited to submit questions you may have about the new policy at http://www.univsersityofcalifornia.edu/educators/counselors/ask. The University will respond to all inquiries and will post answers to the most frequently asked questions.
UC System Release
UC to Provide Minimum Gift Aid for Low-income Students
Under the Blue and Gold Opportunity Plan undergraduates in their first four years of attendance at UC --- or two for California Community College transfer students --- will receive enough scholarship and grant assistance to at least fully cover their system wide UC fees if they have income below the median for California households ($60,000) and meet other basic eligibility requirements for need based financial aid.
Last fall, all UC campuses launched interactive Web-based financial aid estimators that allows families and students to obtain information about UC's costs and ways to meet those costs specifically based on their unique financial circumstances, including their annual income, assets and family size. These estimators are available at www.universityofcalifornia.edu/admissions/paying.html.
UC System Release
Last fall, all UC campuses launched interactive Web-based financial aid estimators that allows families and students to obtain information about UC's costs and ways to meet those costs specifically based on their unique financial circumstances, including their annual income, assets and family size. These estimators are available at www.universityofcalifornia.edu/admissions/paying.html.
UC System Release
Parent College Loans Update (PLUS)
Last May Congress loosened the payback rules for PLUS loans in an effort to help more families juggle college costs and other expenses. The following is a brief review and update of PLUS loan facts.
The loan is the parent's responsibility. By contrast, the student is the borrower for a Stafford loan. The PLUS loan process is identical to the Stafford loan system. Your child's chosen school will tell you whether you can apply directly through the Federal Direct Loan program or if you will need to shop around for a lender that makes PLUS loans.
The interest rate is fixed. If the school participates in the federal program, the interest rate is fixed at 7.9%. You'll also be charged a one-time fee of as much as 4% of the loan amount. If you get a PLUS loan through a third-party lender, the maximum fixed rate is 8.5%.
There is no income eligibility limit or credit score check. Any parent, regardless of income can apply for a PLUS loan. And you can borrow up to the full cost of school after counting for any other aid or loans. If you are turned down for a PLUS loan (bankruptcy, foreclosure, 90 days behind on mortgage payments etc) your child will be eligible to borrow more from the Stafford loan program.
Repayment options are flexible. You can take advantage of the new law and delay payment. However, the interest owed on the loan continues to accrue and further increase the cost of college. Or you can opt to pay just the interest while you child is in school and then tackle the principal later on.
Plus loans are not discharged in bankruptcy. While other debts you owe, such as credit-card debt and mortgage debt, may be reduced or dismissed in a bankruptcy proceeding, a PLUS loan will remain your responsibility to pay, even after a bankruptcy. If you die the loan is forgiven.
The loan is the parent's responsibility. By contrast, the student is the borrower for a Stafford loan. The PLUS loan process is identical to the Stafford loan system. Your child's chosen school will tell you whether you can apply directly through the Federal Direct Loan program or if you will need to shop around for a lender that makes PLUS loans.
The interest rate is fixed. If the school participates in the federal program, the interest rate is fixed at 7.9%. You'll also be charged a one-time fee of as much as 4% of the loan amount. If you get a PLUS loan through a third-party lender, the maximum fixed rate is 8.5%.
There is no income eligibility limit or credit score check. Any parent, regardless of income can apply for a PLUS loan. And you can borrow up to the full cost of school after counting for any other aid or loans. If you are turned down for a PLUS loan (bankruptcy, foreclosure, 90 days behind on mortgage payments etc) your child will be eligible to borrow more from the Stafford loan program.
Repayment options are flexible. You can take advantage of the new law and delay payment. However, the interest owed on the loan continues to accrue and further increase the cost of college. Or you can opt to pay just the interest while you child is in school and then tackle the principal later on.
Plus loans are not discharged in bankruptcy. While other debts you owe, such as credit-card debt and mortgage debt, may be reduced or dismissed in a bankruptcy proceeding, a PLUS loan will remain your responsibility to pay, even after a bankruptcy. If you die the loan is forgiven.
Monday, February 2, 2009
Changes Made To College Endowments
Colleges like Harvard, MIT and Stanford had no problem spending down their endowments when the markets were booming. Money was spent mostly on faculty, buildings and scholarships. Now, with the economy and the markets down, these colleges understand the disadvantages of relying on one source. They are seeing how the economy is threatening them to make the biggest budget cuts in history.
The biggest challenge that colleges will face with endowment funds down is that financial aid demand is increasing. With more students in need of financial aid, schools have been increasing their budgets for financial aid. Dartmouth College in New Hampshire is one example of a college who spent $1 billion on new facilities and more than doubled its financial aid budget. $60 million will need to be cut from Dartmouth's $700 million budget for next year.
Stanford and Yale, two elite schools noted that their endowment spending is reduced due to the economy. The problem is that they were committed to increasing financial aid during the booming economy and will try to keep their aid programs where they are. Some schools who are less well-endowed will have to cut back on programs such as these.
At Stanford, forty-nine employees have been laid off and senior administrators have taken salary cuts. Stanford's faculty senate was recently briefed on projected endowment losses that could be as high as 30%.
NICCP
The biggest challenge that colleges will face with endowment funds down is that financial aid demand is increasing. With more students in need of financial aid, schools have been increasing their budgets for financial aid. Dartmouth College in New Hampshire is one example of a college who spent $1 billion on new facilities and more than doubled its financial aid budget. $60 million will need to be cut from Dartmouth's $700 million budget for next year.
Stanford and Yale, two elite schools noted that their endowment spending is reduced due to the economy. The problem is that they were committed to increasing financial aid during the booming economy and will try to keep their aid programs where they are. Some schools who are less well-endowed will have to cut back on programs such as these.
At Stanford, forty-nine employees have been laid off and senior administrators have taken salary cuts. Stanford's faculty senate was recently briefed on projected endowment losses that could be as high as 30%.
NICCP
Subscribe to:
Posts (Atom)