Surviving college or university without incurring debt may seem impossible to many students, but it can be done. Just ask Murray Baker, who graduated from the University of Western Ontario without a cent of debt. The author of The Debt-Free Graduate: How to Survive College or University Without Going Broke (HarperCollins, $16.95), a comprehensive and refreshingly amusing guide to minimizing postsecondary debt, says that the best strategies for surviving postsecondary without an avalanche of debt are preparation and knowing your resources.
“There are a lot of scholarships and bursaries available,” Baker told the Georgia Straight in a phone interview. However, because students don’t go looking for them, often the money sits untouched. “Part of it, too, is that there are scholarships out there that are really well advertised…so everybody knows about them so there’s a lot more competition.” Baker pointed out that the previous federal limit of $3,000 for scholarship tax exemptions was lifted in 2006, so “if you can rack up six, seven thousand dollars in scholarships, that’s tax-free money towards your education.”
Bursaries, often offered through community groups, service clubs, religious organizations, and trade unions, are also a lucrative source of educational funding. Although the amount offered through bursaries is often much lower than scholarships (most bursaries are $500 or less), Baker said, “If you accumulate two or three of those, that’s a nice chunk into your pocket.”
Baker recommended Studentawards.com, a free database of scholarships and bursaries available for Canadian high-school, undergraduate, and graduate students, and ScholarshipsCanada, another comprehensive resource for obscure Canadian bursaries. Sites like these make it easy to determine whether or not being a full- or part-time second-year parks, recreation, and leisure-facilities management student at Georgian College in Barrie, Ontario, qualifies a person for free money (it does; there are three $500 bursaries available).
Another key component to avoiding debt is budgeting. Baker said that students should make a detailed budget for themselves at the beginning of the school year. “Figure out what money you have and when it’s available…rather than come February [when] you realize you’re out of money and then you have to scramble to go out and get a job and work 20 hours [a week] to make ends meet at the very time you’re getting your final exams coming up and midterm essays.” As well, working between six and 10 hours a week “really doesn’t have a negative impact” on students scholastically, he said. “What it tends to do is force you to be more organized.”
Credit cards are one of the easiest methods of accumulating unnecessary debt, and Baker cautioned students to consider easy credit wisely, especially new students who are unfamiliar with the credit system.
“I think there’s a lack of awareness [especially] when you’re in first year, and that’s why I’m big on avoiding credit cards,” he said. “If you do take out one, wait until second year, till you’ve had a year of balancing your budget for the first time.” If a student must take out a credit card, Baker recommended no-fee cards with a $500 limit.
If a student must take out a loan to fund their education, Baker noted that Canadian student loans have distinct benefits over bank loans, including interest payments by the government for as long as one remains a student and the repayment-assistance program, which provides some relief for underemployed and unemployed individuals.
“If you have a regular bank loan or line of credit and you’re struggling, the bank tends not to be as sympathetic as the student-loan program,” Baker said.
Although Baker said it’s not always possible to graduate without incurring some debt, even a reduction in the amount of potential debt should be considered a success. “If you come out [of postsecondary] with $8,000 worth of debt instead of $25,000, you’re going to be in much better shape to do the things you want to do.”
Source
Saturday, November 28, 2009
Sunday, November 15, 2009
Latest Cost Analyses Fuel Fight Over Student-Loan Bill
With the U.S. House of Representatives scheduled to vote next week on legislation to end the guaranteed-student-loan program and expand aid to students and colleges, opponents and supporters of the bill continue to bicker over its potential cost and savings.
On Thursday, Congressional Republicans released an analysis that found that the Democratic bill (HR 3221), which would tie the maximum Pell Grant to the Consumer Price Index and broaden eligibility for the awards, would cost
Source
On Thursday, Congressional Republicans released an analysis that found that the Democratic bill (HR 3221), which would tie the maximum Pell Grant to the Consumer Price Index and broaden eligibility for the awards, would cost
Source
Wednesday, October 28, 2009
Liberals offer minimal disclosure while cutting student programs
The B.C. Liberals laid out a strategy of cutting by stealth in a confidential memo that went out from central government to colleges and universities over the summer.
The mid-July memo detailed $16 million worth of cuts to a half-dozen student aid programs, including bursaries for nurses in training, loan forgiveness for the disabled and loan reductions for those pursuing high-demand occupations.
The changes would affect hundreds of students, many of them among the neediest, some dedicating themselves to careers that the government had identified as critical to making up the significant skills shortages in B.C.
Even as the Liberals reversed direction, they were also bent on keeping the public in the dark about their changing priorities.
"There will be no announcements coming from government on these changes," the memo advised the college and university officials who received it in confidence.
This government can be counted on to flood the media's electronic in-boxes with press releases at the slightest bit of good news. But there'd be no official announcement on this exercise in retrenchment.
Instead, the government simply noted the changes on the website for the ministry of advanced education. It was left to staff in the information centres to pass the word should anyone make inquiries in person.
The memo itself was sent after the fact. Payments on the affected programs had been frozen since early June, weeks before the college and universities got their official notification.
As for those unsuspecting students who had already filed applications, believing those student aid funds were still active, they received letters saying "program no longer available."
Notices buried on the website. Oral communication only for those who thought to ask. News put in writing only for those unfortunates who went to the trouble of applying for a program that was already on its deathbed.
That was the full extent of the intended disclosure, as laid out in the government memo. But happily a copy was leaked to The Vancouver Sun, which published a full account of the cuts to student aid July 23.
Among other things, the story noted the elimination of the Premier's Excellence Award, which had offered $15,000 scholarships to top high-school students around the province.
The $240,000-a-year program was part of the premier's goal of making this the best-educated jurisdiction on the continent. But the Gord giveth and the Gord taketh away, as they say in government circles.
As for the government decision to make the cuts without announcing them, the story recorded a reaction from New Democratic Party MLA Spencer Herbert: "Pretty sneaky."
Agreed. And that sneaky way of doing things wasn't confined to the changes in student aid.
The government has been cutting here, there and everywhere since the election. Time and again, the public learned the news only after the affected group complained, or the information was leaked to the news media or the opposition.
Minimal disclosure was all but confirmed as official policy during the recent budget lock-up when reporters were rebuffed when requesting the kind of information that had been available in the past.
Most notably there was the answer from Finance Minister Colin Hansen when he was asked for a breakdown on the purported $354 million worth of cuts to discretionary grants.
"Is there a comprehensive list organization by organization?" he said. "No."
Note that he did not imply a refusal to release the list, but rather that no such list existed. Which seems to be the case, judging from the government's struggle over the past week to specify the full extent of cuts to government gambling grants. As of Wednesday, the Liberals still hadn't sorted out the numbers.
Meanwhile, every day brings new disclosures, new controversies. Last week it was cuts in grants to charities and arts groups. This week, school sports and parent advisory councils.
As news emerges piecemeal, the Liberals' own agenda is derailed repeatedly. For instance, whose brilliant idea was it to roll out the latest instalment in the $500,000 Spirit School program on a day (Tuesday) when the education system was in a furore over the elimination of a $130,000 grant to support high school athletics?
The Liberals want to "own the podium" at the Olympics. But they are cutting off BC School Sports, which serves 100,000 young athletes at 425 schools via 47 provincial championships in 18 sports.
In a feeble effort to minimize the impact, Education Minister Margaret MacDiarmid suggested that maybe the teenage athletes can occupy themselves "walking, dancing or playing in parks." Is there no hopscotch? Are there no teeter-totters?
So the Liberals stumble onwards and mostly downwards. On the days when they aren't struggling to explain the botched deficit projection, they scramble to justify the nickel-and-diming of programs they once touted.
Hard to think these guys pride themselves on their news management skills. These days they have trouble even keeping the excuses straight.
Source
The mid-July memo detailed $16 million worth of cuts to a half-dozen student aid programs, including bursaries for nurses in training, loan forgiveness for the disabled and loan reductions for those pursuing high-demand occupations.
The changes would affect hundreds of students, many of them among the neediest, some dedicating themselves to careers that the government had identified as critical to making up the significant skills shortages in B.C.
Even as the Liberals reversed direction, they were also bent on keeping the public in the dark about their changing priorities.
"There will be no announcements coming from government on these changes," the memo advised the college and university officials who received it in confidence.
This government can be counted on to flood the media's electronic in-boxes with press releases at the slightest bit of good news. But there'd be no official announcement on this exercise in retrenchment.
Instead, the government simply noted the changes on the website for the ministry of advanced education. It was left to staff in the information centres to pass the word should anyone make inquiries in person.
The memo itself was sent after the fact. Payments on the affected programs had been frozen since early June, weeks before the college and universities got their official notification.
As for those unsuspecting students who had already filed applications, believing those student aid funds were still active, they received letters saying "program no longer available."
Notices buried on the website. Oral communication only for those who thought to ask. News put in writing only for those unfortunates who went to the trouble of applying for a program that was already on its deathbed.
That was the full extent of the intended disclosure, as laid out in the government memo. But happily a copy was leaked to The Vancouver Sun, which published a full account of the cuts to student aid July 23.
Among other things, the story noted the elimination of the Premier's Excellence Award, which had offered $15,000 scholarships to top high-school students around the province.
The $240,000-a-year program was part of the premier's goal of making this the best-educated jurisdiction on the continent. But the Gord giveth and the Gord taketh away, as they say in government circles.
As for the government decision to make the cuts without announcing them, the story recorded a reaction from New Democratic Party MLA Spencer Herbert: "Pretty sneaky."
Agreed. And that sneaky way of doing things wasn't confined to the changes in student aid.
The government has been cutting here, there and everywhere since the election. Time and again, the public learned the news only after the affected group complained, or the information was leaked to the news media or the opposition.
Minimal disclosure was all but confirmed as official policy during the recent budget lock-up when reporters were rebuffed when requesting the kind of information that had been available in the past.
Most notably there was the answer from Finance Minister Colin Hansen when he was asked for a breakdown on the purported $354 million worth of cuts to discretionary grants.
"Is there a comprehensive list organization by organization?" he said. "No."
Note that he did not imply a refusal to release the list, but rather that no such list existed. Which seems to be the case, judging from the government's struggle over the past week to specify the full extent of cuts to government gambling grants. As of Wednesday, the Liberals still hadn't sorted out the numbers.
Meanwhile, every day brings new disclosures, new controversies. Last week it was cuts in grants to charities and arts groups. This week, school sports and parent advisory councils.
As news emerges piecemeal, the Liberals' own agenda is derailed repeatedly. For instance, whose brilliant idea was it to roll out the latest instalment in the $500,000 Spirit School program on a day (Tuesday) when the education system was in a furore over the elimination of a $130,000 grant to support high school athletics?
The Liberals want to "own the podium" at the Olympics. But they are cutting off BC School Sports, which serves 100,000 young athletes at 425 schools via 47 provincial championships in 18 sports.
In a feeble effort to minimize the impact, Education Minister Margaret MacDiarmid suggested that maybe the teenage athletes can occupy themselves "walking, dancing or playing in parks." Is there no hopscotch? Are there no teeter-totters?
So the Liberals stumble onwards and mostly downwards. On the days when they aren't struggling to explain the botched deficit projection, they scramble to justify the nickel-and-diming of programs they once touted.
Hard to think these guys pride themselves on their news management skills. These days they have trouble even keeping the excuses straight.
Source
Thursday, October 15, 2009
Boost seen for Dems' student loan plan, House vote near
Democratic lawmakers seeking a thorough overhaul of the $92 billion U.S. student loan market were expected to score a win in the days ahead from a favorable finding by the Congressional Budget Office.
With a House of Representatives floor vote anticipated next week, the CBO was expected to say the Democrats' bill would save taxpayers more money than a rival plan being put forward by student loan companies, a congressional aide told Reuters.
The CBO statement will likely mark a turning point in a long-running struggle over the biggest shift in U.S. higher education finance in 35 years.
Sallie Mae, Student Loan Corp, SunTrust Banks, Nelnet Inc and other lenders have been seeking support for their own reform plan. It would preserve a greater role for them in the lending business.
But the CBO finding will show that the industry plan would generate about $70 billion in savings, or $17 billion less than the Democrats' bill, the aide said.
That could make it difficult for lawmakers to support the industry plan over the Democrats' bill, the passage of which would mean a step forward for President Barack Obama's broad effort to tighten banking and capital market regulations in response to the 2008-2009 financial crisis.
Secretary of Education Arne Duncan and Democratic lawmakers will hold a news conference on Tuesday to urge passage of the bill, the U.S. Education Department said on Thursday.
The bill "will generate almost $100 billion in savings over the next ten years that will be used to increase ... scholarships, keep interest rates on federal loans affordable and create a more reliable and effective financial aid system for families -- all at no cost to taxpayers," it said.
Sallie Mae spokeswoman Martha Holler said lenders are "waiting for an official score from CBO. It is premature and unproductive to speculate about it before it is even released."
BILL APPROVED IN COMMITTEE
The House Education Committee in July approved the Democrats' bill, which would shut down the $55 billion Federal Family Education Loan Program (FFELP) and shift most student lending into a program run by the Education Department.
The bill is expected to be approved by the House, where Democrats hold a substantial majority, analysts said. That would send it on to the more closely-divided Senate.
"Nothing is final in Washington until it happens ... Yet in our view the odds favor Congress eliminating FFELP," said Jaret Seiberg, a policy analyst at research group Concept Capital.
For 35 years, FFELP formed the core of U.S. higher education finance and a lucrative business model used by private-sector lenders of government-guaranteed student loans.
The profitability of the FFELP model fell sharply, however, when the Bush administration cut subsidies to lenders.
Source
With a House of Representatives floor vote anticipated next week, the CBO was expected to say the Democrats' bill would save taxpayers more money than a rival plan being put forward by student loan companies, a congressional aide told Reuters.
The CBO statement will likely mark a turning point in a long-running struggle over the biggest shift in U.S. higher education finance in 35 years.
Sallie Mae, Student Loan Corp, SunTrust Banks, Nelnet Inc and other lenders have been seeking support for their own reform plan. It would preserve a greater role for them in the lending business.
But the CBO finding will show that the industry plan would generate about $70 billion in savings, or $17 billion less than the Democrats' bill, the aide said.
That could make it difficult for lawmakers to support the industry plan over the Democrats' bill, the passage of which would mean a step forward for President Barack Obama's broad effort to tighten banking and capital market regulations in response to the 2008-2009 financial crisis.
Secretary of Education Arne Duncan and Democratic lawmakers will hold a news conference on Tuesday to urge passage of the bill, the U.S. Education Department said on Thursday.
The bill "will generate almost $100 billion in savings over the next ten years that will be used to increase ... scholarships, keep interest rates on federal loans affordable and create a more reliable and effective financial aid system for families -- all at no cost to taxpayers," it said.
Sallie Mae spokeswoman Martha Holler said lenders are "waiting for an official score from CBO. It is premature and unproductive to speculate about it before it is even released."
BILL APPROVED IN COMMITTEE
The House Education Committee in July approved the Democrats' bill, which would shut down the $55 billion Federal Family Education Loan Program (FFELP) and shift most student lending into a program run by the Education Department.
The bill is expected to be approved by the House, where Democrats hold a substantial majority, analysts said. That would send it on to the more closely-divided Senate.
"Nothing is final in Washington until it happens ... Yet in our view the odds favor Congress eliminating FFELP," said Jaret Seiberg, a policy analyst at research group Concept Capital.
For 35 years, FFELP formed the core of U.S. higher education finance and a lucrative business model used by private-sector lenders of government-guaranteed student loans.
The profitability of the FFELP model fell sharply, however, when the Bush administration cut subsidies to lenders.
Source
Monday, September 28, 2009
Kiss Those Student Loans Goodbye
Shawn Agyeman was down on his luck last fall, having just lost his job as a research assistant at the University of Pittsburgh, his alma mater. With looming monthly student loan payments of around $200 a month hanging over his head, the recent college graduate was starting to worry about how he'd meet his debt obligations, fearful that creditors would harass his parents—who co-signed his loans—if he couldn't come up with the money. Then he got a phone call from the director of a new grass-roots nonprofit that he says changed his life. Raymar Hampshire, co-founder of a volunteer group called "When I heard about it, I said: 'I'd almost be a fool not to do this,'" says Agyeman, 25, who signed up for the pilot program in the spring of 2009 and will be doing it again this fall, with plans to earn $1,000 for his efforts. "I jumped all over it."
Agyeman is one of thousands of people saddled with student loan debt looking for innovative ways to meet their monthly payments. Their plight has become even more severe as unemployed recent college graduates lose their jobs or continue to have trouble landing one, running the risk of not being able to pay back their student loans or, in the worst-case scenario, defaulting. Fortunately, there is a raft of programs that have emerged in the past year or two that can either help students and recent graduates make their student loan debt more manageable or, in some cases, get the loans either partially or completely forgiven. Some of these programs are oriented towards specific careers—such as teaching or nursing—while others are open to recent graduates who meet certain income and eligibility requirements. Still others are open to just about anyone. Some programs, such as SponsorChange, help graduates repay a portion of their student debt. Other programs help students, graduate or undergraduate, avoid student loan debt entirely,
Raising Awareness
Learning about these options and mapping out a plan to take advantage of them is not always as easy as one might think. Many students simply aren't even aware that some of these programs exist, and, as a result, may take out hefty private loans that they could have avoided with a little strategic planning, says Edie Irons, a spokeswoman for the Project on Student Debt, a nonprofit that raises awareness about financial aid. She recommends that students mapping out their education paths learn as much as they can about the different type of loan forgiveness programs available to students before taking out any new loans or additional ones. One point to keep in mind: Most of these loan programs apply only to federal student loans, with very few private loans qualifying.
"People should definitely plan ahead and learn about the loan-forgiveness programs that are out there," she says. "Be sure that you are in a position yourself to qualify for them and then, if you can make it work, go for it."
Source
Agyeman is one of thousands of people saddled with student loan debt looking for innovative ways to meet their monthly payments. Their plight has become even more severe as unemployed recent college graduates lose their jobs or continue to have trouble landing one, running the risk of not being able to pay back their student loans or, in the worst-case scenario, defaulting. Fortunately, there is a raft of programs that have emerged in the past year or two that can either help students and recent graduates make their student loan debt more manageable or, in some cases, get the loans either partially or completely forgiven. Some of these programs are oriented towards specific careers—such as teaching or nursing—while others are open to recent graduates who meet certain income and eligibility requirements. Still others are open to just about anyone. Some programs, such as SponsorChange, help graduates repay a portion of their student debt. Other programs help students, graduate or undergraduate, avoid student loan debt entirely,
Raising Awareness
Learning about these options and mapping out a plan to take advantage of them is not always as easy as one might think. Many students simply aren't even aware that some of these programs exist, and, as a result, may take out hefty private loans that they could have avoided with a little strategic planning, says Edie Irons, a spokeswoman for the Project on Student Debt, a nonprofit that raises awareness about financial aid. She recommends that students mapping out their education paths learn as much as they can about the different type of loan forgiveness programs available to students before taking out any new loans or additional ones. One point to keep in mind: Most of these loan programs apply only to federal student loans, with very few private loans qualifying.
"People should definitely plan ahead and learn about the loan-forgiveness programs that are out there," she says. "Be sure that you are in a position yourself to qualify for them and then, if you can make it work, go for it."
Source
Monday, September 7, 2009
New student loan program offers relief
Kelly Ohlert has a job at a Center City law firm, but she can't afford to buy a home to accommodate her growing family.
The reason: She racked up around $150,000 in student loans while earning a master's degree at the University of Pennsylvania and a law degree at Temple University.
Ohlert, 29, might be on the high side, but she is hardly alone. Pennsylvania residents' student debt averages ranged from $27,877 to $30,389 in the 2007-2008 academic year, according to estimates by FinAid, a financial-aid Web site.
That was well above the national average of $23,186 for the same year, which is the most recent available.
A federal law went into effect this month that allows people to adjust student-loan payments based on their income. The program limits monthly payments to 15 percent of the difference between the debtor's income and 150 percent of the federal poverty guideline.
After 25 years of qualifying payments, any remaining debt could be forgiven.
For example, Lori Fabrizi, a 30-year-old resident of Erie, expects to find a teaching job that will pay her around $40,000 this year. She thinks her debt payments under the program will amount to $152 a month instead of $350, and that she also qualifies for public-service loan forgiveness after 10 years of eligible payments and employment.
Why do Pennsylvanians have more debt to repay?
"It's the history," said Donald Heller, director of the Center for the Study of Higher Education at Penn State.
He said Pennsylvania is home to some of the country's oldest colleges, many of which are private schools with high tuition. And even some public universities, such as Penn State, are less like government agencies than their public university counterparts elsewhere. For example, Penn State, among big public institutions, is comparatively less funded by the state and not subject to as many state rules regarding things such as purchasing and hiring.
Fabrizi had considered doing graduate work at Edinboro University in western Pennsylvania. But she thought that if she went to Mercyhurst College, a private Catholic school that was closer to home in Erie, she'd only have to pay for one year instead of two. After she'd begun attending Mercyhurst, she learned that she'd need to take more classes than expected.
"It's unfortunate if there was a misunderstanding," said Michael Lyden, director of adult and graduate programs at Mercyhurst. He explained that Fabrizi needed to take more classes because she didn't enter the program with certification.
Now, Fabrizi has more than $55,000 in student loans. "I worked so hard to get to this place where I can afford things, but then I still can't," she said. "I should have gone to Edinboro."
Fabrizi has already had two job interviews and can make around $80 a day as a teaching substitute.
Pennsylvanians are managing their education costs better than others. Only 12.56 percent of student loans owed by state residents were 30 days past due or worse during the first three months of this year, compared with 12 percent during the same period of 2008. Nationwide, the comparable numbers rose to 15.79 percent from 14.4 percent, according to Experian Oliver Wyman Market Intelligence Reports.
Bobbie Britting, consumer-lending research director at TowerGroup, pointed out that Pennsylvania didn't get hit as hard by the mortgage crisis as other states.
Coping with debt still isn't easy. Monroeville resident Michael Colarusso and his wife owe around $65,935 in student loans combined. To manage the burden, he puts in about 60 hours a week doing side jobs such as coaching high school football in addition to his staff job at the Pittsburgh branch of the nonprofit Fayette Resources, Inc. Unable to afford child care, he works at night and she in the day so that someone is always home with their 4-year-old son. "We've had some hard patches," he said.
People struggling with loan payments can get help from the Student Loan Borrower Assistance Project, a program of the consumer-advocacy group National Consumer Law Center. The financial aid organization American Education Services, a division of the Pennsylvania Higher Education Assistance Agency, also provides information on YouCanDealWithIt.com.
To calculate your eligibility under the new federal law, see IBRinfo.org, a site created by the nonprofit Project on Student Debt.
Ohlert now wishes she had looked harder at other alternatives before taking on so much debt for her graduate work.
She might have taken more time to earn money before starting, for example, or completed a fully funded Ph.D. program instead.
"I'm proud of my accomplishments and I like my job," Ohlert said. "But if I had to do it over, I wouldn't have done it this way."
Source
The reason: She racked up around $150,000 in student loans while earning a master's degree at the University of Pennsylvania and a law degree at Temple University.
Ohlert, 29, might be on the high side, but she is hardly alone. Pennsylvania residents' student debt averages ranged from $27,877 to $30,389 in the 2007-2008 academic year, according to estimates by FinAid, a financial-aid Web site.
That was well above the national average of $23,186 for the same year, which is the most recent available.
A federal law went into effect this month that allows people to adjust student-loan payments based on their income. The program limits monthly payments to 15 percent of the difference between the debtor's income and 150 percent of the federal poverty guideline.
After 25 years of qualifying payments, any remaining debt could be forgiven.
For example, Lori Fabrizi, a 30-year-old resident of Erie, expects to find a teaching job that will pay her around $40,000 this year. She thinks her debt payments under the program will amount to $152 a month instead of $350, and that she also qualifies for public-service loan forgiveness after 10 years of eligible payments and employment.
Why do Pennsylvanians have more debt to repay?
"It's the history," said Donald Heller, director of the Center for the Study of Higher Education at Penn State.
He said Pennsylvania is home to some of the country's oldest colleges, many of which are private schools with high tuition. And even some public universities, such as Penn State, are less like government agencies than their public university counterparts elsewhere. For example, Penn State, among big public institutions, is comparatively less funded by the state and not subject to as many state rules regarding things such as purchasing and hiring.
Fabrizi had considered doing graduate work at Edinboro University in western Pennsylvania. But she thought that if she went to Mercyhurst College, a private Catholic school that was closer to home in Erie, she'd only have to pay for one year instead of two. After she'd begun attending Mercyhurst, she learned that she'd need to take more classes than expected.
"It's unfortunate if there was a misunderstanding," said Michael Lyden, director of adult and graduate programs at Mercyhurst. He explained that Fabrizi needed to take more classes because she didn't enter the program with certification.
Now, Fabrizi has more than $55,000 in student loans. "I worked so hard to get to this place where I can afford things, but then I still can't," she said. "I should have gone to Edinboro."
Fabrizi has already had two job interviews and can make around $80 a day as a teaching substitute.
Pennsylvanians are managing their education costs better than others. Only 12.56 percent of student loans owed by state residents were 30 days past due or worse during the first three months of this year, compared with 12 percent during the same period of 2008. Nationwide, the comparable numbers rose to 15.79 percent from 14.4 percent, according to Experian Oliver Wyman Market Intelligence Reports.
Bobbie Britting, consumer-lending research director at TowerGroup, pointed out that Pennsylvania didn't get hit as hard by the mortgage crisis as other states.
Coping with debt still isn't easy. Monroeville resident Michael Colarusso and his wife owe around $65,935 in student loans combined. To manage the burden, he puts in about 60 hours a week doing side jobs such as coaching high school football in addition to his staff job at the Pittsburgh branch of the nonprofit Fayette Resources, Inc. Unable to afford child care, he works at night and she in the day so that someone is always home with their 4-year-old son. "We've had some hard patches," he said.
People struggling with loan payments can get help from the Student Loan Borrower Assistance Project, a program of the consumer-advocacy group National Consumer Law Center. The financial aid organization American Education Services, a division of the Pennsylvania Higher Education Assistance Agency, also provides information on YouCanDealWithIt.com.
To calculate your eligibility under the new federal law, see IBRinfo.org, a site created by the nonprofit Project on Student Debt.
Ohlert now wishes she had looked harder at other alternatives before taking on so much debt for her graduate work.
She might have taken more time to earn money before starting, for example, or completed a fully funded Ph.D. program instead.
"I'm proud of my accomplishments and I like my job," Ohlert said. "But if I had to do it over, I wouldn't have done it this way."
Source
Monday, August 24, 2009
Kennedy touts student loan program
Senator Edward M. Kennedy sent a letter today to Massachusetts college leaders, urging them to make sure students know about a new program that makes it less expensive to repay student loans.
Under the program that starts Wednesday, monthly payments are capped based on a graduate's income and remaining balances are wiped clean after 25 years. Those who take public service jobs can get their loans forgiven after 10 years.
"A college degree has never been more important. Yet it’s increasingly difficult for students to afford. In particular, the prospect of heavy loan burdens is discouraging more and more students from attending the college of their choice, or pursuing jobs in the public interest. More than two-thirds of college students graduate with federal loan debt averaging $20,000 after graduation," wrote Kennedy, chairman of the Health, Education, Labor, and Pensions Committee .
"College affordability has long been a major concern of mine in the Senate and I’m writing now to draw your attention to a new option – Income Based Repayment – that will make loan repayment easier for students, no matter what job they take after graduation. If you haven’t done so already, I urge you to inform your students about it."
Source
Under the program that starts Wednesday, monthly payments are capped based on a graduate's income and remaining balances are wiped clean after 25 years. Those who take public service jobs can get their loans forgiven after 10 years.
"A college degree has never been more important. Yet it’s increasingly difficult for students to afford. In particular, the prospect of heavy loan burdens is discouraging more and more students from attending the college of their choice, or pursuing jobs in the public interest. More than two-thirds of college students graduate with federal loan debt averaging $20,000 after graduation," wrote Kennedy, chairman of the Health, Education, Labor, and Pensions Committee .
"College affordability has long been a major concern of mine in the Senate and I’m writing now to draw your attention to a new option – Income Based Repayment – that will make loan repayment easier for students, no matter what job they take after graduation. If you haven’t done so already, I urge you to inform your students about it."
Source
Monday, August 10, 2009
New federal student loan program may ease burden on college students
LA CROSSE, WI (WXOW)---In this economy, college students are going to school to get a job, then getting a job to pay for school. But now a new program called Income Based Re-Payment may help students lighten the load.
WTC Financial Aid Assistant Shirley Heffner says, "The intent of the program is to reduce student loan payments for those who are suffering some sort of financial hardship."
Income-based repayment or IBR is a new way to make your federal student loan payments more manageable, and if you're a teacher or work in government or at a nonprofit organization, you might qualify for a new type of public service loan forgiveness after 10 years of eligible payments and employment.
Here's how it works: If you owe more in financial aid loans than you currently bring in annually, you may qualify for the IBR program. Other factors are considered in the application process, like your marital status, how you file your taxes, and the number of children in your household. For those who qualify, their monthly student loan payments may be cut in half, and your payment may be forgiven over time.
Heffner says, "The benefit for students is not only fo they free up some disposible income, they may also in the future be eligible for loan forgiveness after 25 years of payments made under income based re-payment."
This program is still very new, it was just introduced July first, so it's best to talk to your lenders to see if you qualify for the IBR program.
Source
WTC Financial Aid Assistant Shirley Heffner says, "The intent of the program is to reduce student loan payments for those who are suffering some sort of financial hardship."
Income-based repayment or IBR is a new way to make your federal student loan payments more manageable, and if you're a teacher or work in government or at a nonprofit organization, you might qualify for a new type of public service loan forgiveness after 10 years of eligible payments and employment.
Here's how it works: If you owe more in financial aid loans than you currently bring in annually, you may qualify for the IBR program. Other factors are considered in the application process, like your marital status, how you file your taxes, and the number of children in your household. For those who qualify, their monthly student loan payments may be cut in half, and your payment may be forgiven over time.
Heffner says, "The benefit for students is not only fo they free up some disposible income, they may also in the future be eligible for loan forgiveness after 25 years of payments made under income based re-payment."
This program is still very new, it was just introduced July first, so it's best to talk to your lenders to see if you qualify for the IBR program.
Source
Monday, July 20, 2009
Obama’s Student Loan Plan Wins Support in House
WASHINGTON — The chairman of the House Education Committee has dismissed a last-ditch plea from the private student loan industry and is throwing his support behind President Obama’s plan to end the role of private banks in the federal education lending systems.
Mr. Obama’s plan remains deeply contentious in Congress, and still faces strong opposition from private banks that for decades have earned big profits for handling federal student loans.
But after mulling the issue for months, Representative George Miller, the California Democrat who is chairman of the Education Committee, now plans to introduce legislation next week that would rely on direct government lending to replace the federally subsidized loans made by private banks. Administration officials who have reviewed drafts of the legislation said that it substantially adopts Mr. Obama’s proposal.
In a conference call with reporters this week, a number of private-loan industry officials, as well as leaders of some private nonprofit lenders, warned that Mr. Obama’s plan would eliminate competition and create chaos for colleges and students that now use private lenders as they are forced to switch to a fully government-run system.
The industry had urged Congress and the White House to consider its own alternative.
But Congressional Democrats, the White House and officials at the federal Education Department have now rejected that plan, contending that it was based on accounting tricks and would pour $15 billion into the banks’ coffers that Mr. Obama would direct to the Pell grant program for low-income students.
“It’s unfortunate that a small number of lenders are using legislative gimmicks to mask the fact that their proposal would divert $15 billion into their own pockets at the expense of students,” Mr. Miller said in a statement. “This cynical stunt is another reminder that our federal student loan programs need major reforms to ensure they operate in the best interests of students and taxpayers.”
The president’s proposal, first outlined in his initial budget in February, would save the government roughly $87 billion over 10 years, according to the Congressional Budget Office — money that the White House says should be used to aid impoverished students.
The federal government already makes some loans directly to students, but most federal student loans are handled by private firms even though there is virtually no private capital available for financing the loans. The industry argues that it provides competition and better marketing and servicing of loans.
The administration’s view, shared by a number of Democratic lawmakers, is that the private lenders should no longer be paid by taxpayers to operate a virtually risk-free business in which they essentially use taxpayer dollars to originate loans, with repayment guaranteed, and then resell those loans to the Treasury.
Robert Shireman, deputy under secretary of education, said officials had reviewed many proposals from the private student lenders and their supporters and had not been persuaded by any.
“The latest proposal appears to be an effort to grab a billion dollars a year or more that they would be paid for originating loans, which is something that we are able to do in a much more efficient way,” Mr. Shireman said. “So the proposal is not a good use of taxpayer dollars, especially when that money could be used to help students.”
John Dean, special counsel to the Consumer Bankers Association, who advises private lenders, said administration and Congressional officials seemed to be rejecting the industry plan without full consideration.
“Certain people in the administration are very anxious to push back on any proposal that modifies what the president set out,” Mr. Dean said, adding that the lenders wanted to improve Mr. Obama’s plan, not supplant it. “If you take a look at it, it is very much an enhancement as opposed to an alternative.”
To win support from state and local nonprofit lenders and guaranty agencies, the industry’s proposal also set aside $5.5 billion for “borrower assistance and advocacy services.” Mr. Obama’s proposal had similarly set aside $5 billion for financial literacy and other services that the agencies now provide.
Representative Timothy H. Bishop, Democrat of New York, and a former college financial aid administrator, said the president and Mr. Miller were on the right track.
“We are absolutely moving in the right direction,” Mr. Bishop said, “and I think students are going to benefit.”
Administration officials have argued that the private student loan companies will continue to be able to compete for lucrative servicing contracts, which will pay them to do much of the back-office work they do now. But the lenders have said that if Mr. Obama’s plan is adopted, they will be forced to cut jobs.
Some Republicans have said that in curtailing the role of private lenders, Democrats are trying to expand government.
Senator Lamar Alexander, Republican of Tennessee and a former federal education secretary, said direct government loans were never meant to monopolize student lending.
“This effort by the Obama administration for a Washington takeover of student loans is just one more example of a long line of Washington takeovers of banks, insurance companies, car companies, health care, that I totally object to,” he said.
Source
Mr. Obama’s plan remains deeply contentious in Congress, and still faces strong opposition from private banks that for decades have earned big profits for handling federal student loans.
But after mulling the issue for months, Representative George Miller, the California Democrat who is chairman of the Education Committee, now plans to introduce legislation next week that would rely on direct government lending to replace the federally subsidized loans made by private banks. Administration officials who have reviewed drafts of the legislation said that it substantially adopts Mr. Obama’s proposal.
In a conference call with reporters this week, a number of private-loan industry officials, as well as leaders of some private nonprofit lenders, warned that Mr. Obama’s plan would eliminate competition and create chaos for colleges and students that now use private lenders as they are forced to switch to a fully government-run system.
The industry had urged Congress and the White House to consider its own alternative.
But Congressional Democrats, the White House and officials at the federal Education Department have now rejected that plan, contending that it was based on accounting tricks and would pour $15 billion into the banks’ coffers that Mr. Obama would direct to the Pell grant program for low-income students.
“It’s unfortunate that a small number of lenders are using legislative gimmicks to mask the fact that their proposal would divert $15 billion into their own pockets at the expense of students,” Mr. Miller said in a statement. “This cynical stunt is another reminder that our federal student loan programs need major reforms to ensure they operate in the best interests of students and taxpayers.”
The president’s proposal, first outlined in his initial budget in February, would save the government roughly $87 billion over 10 years, according to the Congressional Budget Office — money that the White House says should be used to aid impoverished students.
The federal government already makes some loans directly to students, but most federal student loans are handled by private firms even though there is virtually no private capital available for financing the loans. The industry argues that it provides competition and better marketing and servicing of loans.
The administration’s view, shared by a number of Democratic lawmakers, is that the private lenders should no longer be paid by taxpayers to operate a virtually risk-free business in which they essentially use taxpayer dollars to originate loans, with repayment guaranteed, and then resell those loans to the Treasury.
Robert Shireman, deputy under secretary of education, said officials had reviewed many proposals from the private student lenders and their supporters and had not been persuaded by any.
“The latest proposal appears to be an effort to grab a billion dollars a year or more that they would be paid for originating loans, which is something that we are able to do in a much more efficient way,” Mr. Shireman said. “So the proposal is not a good use of taxpayer dollars, especially when that money could be used to help students.”
John Dean, special counsel to the Consumer Bankers Association, who advises private lenders, said administration and Congressional officials seemed to be rejecting the industry plan without full consideration.
“Certain people in the administration are very anxious to push back on any proposal that modifies what the president set out,” Mr. Dean said, adding that the lenders wanted to improve Mr. Obama’s plan, not supplant it. “If you take a look at it, it is very much an enhancement as opposed to an alternative.”
To win support from state and local nonprofit lenders and guaranty agencies, the industry’s proposal also set aside $5.5 billion for “borrower assistance and advocacy services.” Mr. Obama’s proposal had similarly set aside $5 billion for financial literacy and other services that the agencies now provide.
Representative Timothy H. Bishop, Democrat of New York, and a former college financial aid administrator, said the president and Mr. Miller were on the right track.
“We are absolutely moving in the right direction,” Mr. Bishop said, “and I think students are going to benefit.”
Administration officials have argued that the private student loan companies will continue to be able to compete for lucrative servicing contracts, which will pay them to do much of the back-office work they do now. But the lenders have said that if Mr. Obama’s plan is adopted, they will be forced to cut jobs.
Some Republicans have said that in curtailing the role of private lenders, Democrats are trying to expand government.
Senator Lamar Alexander, Republican of Tennessee and a former federal education secretary, said direct government loans were never meant to monopolize student lending.
“This effort by the Obama administration for a Washington takeover of student loans is just one more example of a long line of Washington takeovers of banks, insurance companies, car companies, health care, that I totally object to,” he said.
Source
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