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Archive | March, 2012

What to Expect for Student Loans in 2012 and Beyond

What to Expect for Student Loans in 2012 and Beyond

With the economy making a slow trudge back from the brink, many are considering going back to school. Student loans are the only viable option for many potential college students, but that means incurring extra long-term debt at the worst possible time. A lot of language about reform has been batted around at all levels of government this past year. What has changed, what are politicians promising, and what policies are on the way?

Pay as You Earn

President Barack Obama announced in October 2011 that he would be making some major changes to the federal student loan program. Introducing the “Pay As You Earn” proposal, he promised smaller monthly payments for over 1.6 million students.

It won’t take effect until 2014, but you will then be able to ensure your student loan payments are no more than 10% of your income. If you make payments for 20 years, your balance may then be forgiven. The current Income-Based Repayment Plan (IBR) only allows your payments to be reduced to 15% of your income, with balance forgiveness after 25 years. Visit this link to find out if you are eligible.

President Obama announced recently that he intends to spur this to 2012 for students who are already struggling with payments. If you are employed in public services, such as nursing or teaching, you may get balance forgiveness in as soon as 10 years.

Bear in mind that none of this affects students who got loans for school from private lenders.

Loan Consolidation

Because of multiple payments for different loans, there has historically been a high default rate, as juggling multiple loans gets tricky. Beginning January 2012, 6 million more students were able to consolidate all their loans so that interest rates are more affordable.

It is not advised to do a loan consolidation with a credit card. If you can pay off a short term loan, check out financial tips from Plain Green Loans. Taking advantage of the consolidation earns you a 0.5% reduction of your interest rate.

Better Informed

As part of these reforms, the Consumer Financial Protection Bureau and the Department of Education have partnered up to offer the “Know Before You Owe” project. This is a form that endeavors to help potential students better understand what type of aid they qualify for, how much they may receive, and how to compare the different financial aid and work study options offered by various colleges. They believe that a lot of students sign for loans each year or each quarter without really understanding the repercussions for default or even how much they may end up owing, much less what other options exist.

If you are interested in seeing what a form looks like and helping the organizations with the project by providing feedback, please visit: http://www.consumerfinance.gov/students/knowbeforeyouowe/

Interest

One thing that isn’t very clear in any of President Obama’s speeches is that subsidized loans are slowly disappearing. The government (beginning July 1st, 2012) will no longer subsidize the interest for graduate student loans and interest will also start accruing for undergraduate subsidized loans during the 6 month grace period after graduation.

In addition, it is probably important to mention that the interest rate on subsidized student loans is doubling from 3.4% to 6.8% this coming academic year.

Startup Encouragement

The Small Business Administration (SBA) hopes to help young entrepreneurs by offering the Student Startup Plan. While the current administration says it wants to support and grow new startups, the SBA is backing it up by promoting the IBR as part of their startup planning for recent graduates. The ideology is that student loan payments should not stand in the way of anyone starting a business.

Graduate and Professional Students

Meanwhile, the Budget Control Act (BCA) became law in August 2011. This law makes it so that graduate and professional students can no longer get Stafford Loans. While the total annual loan amount allowed ($20,500) has not changed, the cap has traditionally been only for unsubsidized loans. Now that there are not subsidized loans, this means you may borrow the same amount, but now you pay much more in interest.

Other things that changed with the BCA include disallowing the Department of Education from offering repayment incentives such as interest reductions or rebates to encourage on-time payments, though they are still allowed to offer rate reductions if you are a Direct Loan borrower who has opted to have your payments automatically withdrawn from your bank account.

Private Borrowers

If you were a private borrower, Tennessee Rep. Steve Cohen and other Democrat Congress members are working for some relief for you, too. Since 2005, thanks to the Bankruptcy Reform Bill, you could not declare your privately held student loans in a bankruptcy. He is looking to reverse that, likening it to credit card debt. He is facing major opposition from his Republican counterparts, however.

Demand for Bigger Reform

Tuition will continue to climb as long as enrollment is up – and it is. The Occupy Wall Street movement has spawned Occupy Student Debt – asking for 0% interest on student loans, total and immediate debt forgiveness for prior students, and a future of free public college. While the solvency of these demands is debatable, politicians are listening. They have to. These future students are current voters.

Today’s guest article was provided by Christina Jones who is a Blogger Outreach Specialist with Blue Glass Interactive

Sources:

[1] http://www.whitehouse.gov/the-press-office/2011/10/25/we-cant-wait-obama-administration-lower-student-loan-payments-millions-b

[2] http://www.finaid.org/loans/forgiveness.phtml

[3] http://www.secureloanconsolidation.com/blog/changes-in-2012-for-holders-of-student-loan-debt/

[4] http://www.whitehouse.gov/economy/business/startup-america

[5] http://www.sba.gov/startupamerica/student-startup-plan

[6] http://www.loyno.edu/financialaid/federal-student-loan-changes-2012-2013

[7] http://www.cbsnews.com/8301-503544_162-20126172-503544/who-will-benefit-from-obamas-student-loan-plan/

[8] http://www.occupystudentdebtcampaign.org/our-principles/

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The FAFSA In 7 Easy Steps (video)

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U.S. Bank Quickly Exits The Private Student Loan Market

U.S. Bank Quickly Exits The Private Student Loan Market

The ebb and flow of lending institutions participating in the private education loan market has been somewhat difficult to track over the years. Back in 2008 we witnessed a large number of organizations dropping out of the industry. However, over the course of the past few years, a good number of lenders have gotten back into the student loan market.

This week (yesterday), U.S. Bank sent a notice stating that as of March 29th, 2012 (tomorrow), they will no longer be accepting loan applications. You can find the notification letter below.

In addition, a source from the financial aid industry recently shared with CheapScholar.org that all of the education loan reps from Chase Bank were let go. This is probably a good indication that Chase Bank will be following suit with U.S. Bank’s exodus from the student loan market.

What does all this mean for students and families? Hopefully these large lenders discontinuing education loans is not a sign of what’s to come with the student loan industry as a whole. While loans are not the preferred method to pay for college, they do provide students accessibility to an education that they may not be able to afford otherwise. If you are a student that has utilized an education loan from U.S. Bank or Chase Bank in the past and need to start the search for another lender, please feel free to utilize CheapScholar’s Private Loan Comparison Tool or visit our Education Loan Resource Center to view all your different options and get helpful tips.

Letter From U.S. Bank To Participating Institutions:

Over the years, U.S. Bank has deeply appreciated the student lending relationship we have shared with your school and its students and families.

We regret to inform you that U.S. Bank is exiting the private student lending business and will no longer accept applications for student loans after March 29, 2012. Please know that this announcement applies to all schools and is not specific to your institution.

Any applications received by U.S. Bank up to and including March 29, 2012 will be processed normally. Loans received by that date that are approved and certified by your institution will be disbursed according to your normal disbursement schedules.

As a school partner, we are asking you to do the following:

Remove U.S. Bank from any lender lists published by you either hard copy or electronic versions located on your Web site or through e-mail correspondence.
Do not forward any “requests for information” on our program as it will not be acted upon.
Please continue to certify requests from U.S. Bank as these represent loan requests made on or before the 3/29/2012 date. U.S. Bank will continue to request certifications and send all disbursements through existing channels until all disbursements have been completed.
Direct students with questions about existing student loans or applications in process with U.S. Bank to call our customer service line at 800-242-1200.

U.S. Bank continues to be a proud partner with colleges and universities across the country. Through our on-campus branch networks, our program sponsorships and our lending and financing, we look forward to continuing to serve schools, students and families across the country with their banking needs.

If you have additional questions, please contact us at 800-242-1200, select option 2 and then 2 on your phone.

We apologize for any inconvenience this may cause, and we thank you for the business you have done with U.S. Bank.

U.S. Bank Student Lending

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An Infographic Look At Education Tax Credits

An Infographic Look At Education Tax Credits

Education tax credits play a big role when it comes to college accessibility. The funding available through the government in the form of education tax credits can sometimes make the difference on whether a college student will be continuing their education from one year to the next or be required to enter the work force prematurely.

The following infographic shares some great statistical information related to education tax credits. Enjoy!

Infographic courtesy of CaxtonFx.com

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Many Wild & Some Not-So-Wild Ideas for Saving Money in College

Many Wild & Some Not-So-Wild Ideas for Saving Money in College

WILD: Big-Time Bottle Collection

Taking the time to return your bottles and cans to get your deposit is a no-brainer. I’m talking much bigger here. Think about it—college students almost always have a drink in their hand (not just on Saturday night!). I guarantee every building at your school has one or more receptacles for bottles and cans. You just need to beat the custodian to ’em.

The best time is usually in the evening. You’ll need a truck or a van, so you might need to get a friend in on this. Most of the time all that’s required is to remove the top of the bin and lift out the bag. Fill up the truck and drive straight to a store where you can return them. Apply that to your grocery bill and you’ll start saving the big bucks. Repeat as often as you’d like.

NOT-SO-WILD: Budget Your Money

I’m sure you’ve heard advice about budgeting before. But it really does help! The problem is that in college your income and expenses tend to vary widely from month-to-month. That’s OK! Even if you’re not staying within your budgets all the time the benefits are still there. Budgeting forces you to keep track of your money. You’ll also be able to reflect on where you spent a little too much money last month. This will help you avoid that frustrating moment when you think, “what the heck happened to all my money?” If you don’t know where to begin, I highly recommend Mint.com.

WILD: Dumpster Divin’

The key to this is finding the right dumpster. Most of them are just what you’re picturing in your head—smelly, filthy, downright awful contraptions. However, there are some opportunities. Think small convenience stores. Places without prepared food and produce. These establishments tend to trash whatever inventory passes the sell by date, which, as we all know, does not necessarily mean it’s gone bad.

For us it was the Wonder/Hostess Bakery Outlet near campus. We would drive over there at night, hop into the perfectly clean dumpster filled with packaged bread and tasty treats, and fill up the trunk. I didn’t pay for a single dessert all of Freshman year.

NOT-SO-WILD: Cut the Cable

This is getting more and more common these days. As much as you might think you’re addicted to ESPN, The Walking Dead, and trash TV, you really don’t need cable television. There is so much perfectly good entertainment available to you on the internet and with a much cheaper Netflix subscription. It will seem sad and terrifying at first, but give it a try for at least a month. I promise you will feel liberated. You can always head to a sports bar for the big game or to a friends to watch that one show you just can’t miss. This will easily save you several hundred dollars a year.

WILD: Lucky Host

Ready to open up your college home? Host a regular pot-luck dinner (once a month works well). This can be a lot of work, especially at first, but it’s college so nobody’s expecting much. And everyone’s always up for a social event. The key to this is the pot-luck aspect. Make it clear that everyone MUST bring something. People tend to over-do-it with this because they get excited and want to make sure there’s enough for everyone. This means leftovers! Now, there might be some people that are stingy and make sure they take their leftovers with them. But most of the time the host will end up with the extra. Be sure to be the one to clean up! If you’re lucky, you could have free food for days.

NOT-SO-WILD: Shack Up!

It can be tempting, especially in your senior year, to try living on your own. Resist this urge! You can do this once you graduate and have a regular income. While you’re in college, however, it’s always worth it to put up with a roommate. You’ll save money all over the place—rent, utility bills, food, furniture and housewares. If you can stand it, you can save even more by moving in with several friends. Lots of students rent out off-campus homes or multi-bedroom apartments. This could be a huge money saver for you so make sure you consider it!

WILD: Closing Time Customer

This one may help you hone your charm and negotiation skills. Most bakeries, coffee shops, delis, and similar corner bistros rely on having fresh food and baked goods everyday. This means that at the end of the day they often end up throwing out the stuff that didn’t sell. This is practically free food! To make it worth your while, make a list of 5-10 of these places around town. Pick a quiet weekday and figure out each of their closing times. Make a route so you’ll hit each just before they close up.

Usually the people working these shifts will be relatively easygoing and ready to head home. Use this to your advantage. Turn on your charm and ask them for the goods for free. If they say no, begin negotiating a very low price. You might find it more effective to buy a small coffee first. If you’re good, you should be saving plenty of money on some delicious baked goods.

NOT-SO-WILD: Brew-It-Yourself

Being a regular coffee drinker can really burn a hole in your pocket if you’re not careful. Put in the effort to brew it yourself. A $3 cup of coffee from Starbucks may not seem like much, but it certainly adds up over time. Even with the expenses of buying coffee, filters, and your own creamer, you’re shaving at least half of the cost off by making your own. More than likely it’s a lot more than that. If you’re saving $2 a day on coffee, that will add up to hundreds of dollars a year. Don’t believe me? Check out the math from The Simple Dollar.

Today’s guest article comes from Carl Phelps, an entrepreneur from Rochester, NY with expertise in digital marketing. He is a co-founder of Confidently, an online community that helps college students and recent grads start their job search, meet employers, and land top opportunities.


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4 Easy and Quick Ways to Make Money in College

4 Easy and Quick Ways to Make Money in College

The following is a guest article provided by Angelita Williams

Many personal finance sites targeted to college students will purvey endless, though no less sound, advice on saving money. At some point, however, there’s only so much money you can save. Sometimes you need to actually make money. Now you may be thinking, I hardly have enough time to study, much less to go out there and make money. Well, think again. With a little ingenuity, you can make a few extra bucks here and there to make ends meet. Here are a few ideas that helped me when I was in college.

1. Be a test subject in on- or off-campus medical/psychological studies.

This is one of the easiest ways, bar none, to make substantial amounts of money quickly. If you are attending a university with a medical school, then it’s highly likely that you’ll have plenty of opportunities to participate as a test subject. I know it sounds sort of scary to be a guinea pig, but most of the time these studies involve surveys, taking games, or spending some time in an fMRI machine. And almost all of these studies compensate handsomely. Check your local or college newspaper—they’re usually listed in the back along with the classifieds.

2. Tutor high school or fellow college students.

Tutoring local students, whether in college or in high school, is another fantastic way of making money while not exerting a ton of effort. The best part about tutoring is that, when you tutor a subject, you’ll in turn learn that much more about the subject you are teaching yourself. Another great aspect of tutoring is that it commands top dollar, especially among high school students for subjects like SAT test prep. You can often ask for $20 an hour or more, depending on where you live.

3. Sell all that extra stuff you don’t need lying around in your dorm room on Craigslist.

Most college students are pack rats in one way or another, and it’s highly likely that you brought or bought a lot of stuff from home that you’ve found does not have any use in your tiny dorm room. Try decluttering and simplifying by selling items on sites like eBay and Craigslist. If you aren’t that attached to textbooks from last year or last semester, consider getting rid of them on Amazon and other similar sites. You can also offer items for sale to others living in your dorm or school, which avoids the hassle of shipping. This idea won’t necessarily make you a ton of money, but it’ll bring a bit of extra cash when it’s most needed.

4. Look into on-campus, part-time jobs.

If all else fails, getting an actual job may just do the trick. Of course, getting a part-time job off-campus can be tricky and time consuming, especially if it’s in the service industry. On the other hand, most universities offer plenty of job opportunities for students who are eager to work. The best part about on-campus jobs is that they are incredibly flexible. You often can get away with working twelve hours or less a week—just enough time to not interfere with your studying or social schedule, but enough time to make some extra cash.

Of course, the main object of attending a university is to learn and to develop personally, not to make money. But college students the world over know that it can be difficult to make do with what our loans or our families have provided us. Sometimes we just need a bit more to make it through the month. Hopefully these ideas will help others as much as they helped me. Good luck!

Today’s guest article is contributed by Angelita Williams, who writes on topics associated with online courses. You can reach Angelita with comments via email at angelita.williams7@gmail.com

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“Brain Gain” $5000 Scholarship For Ohio Students

“Brain Gain” $5000 Scholarship For Ohio Students

Two common terms that appear quite often at the state and local level is “Brain Gain” and “Brain Drain”. Out of those two options, “Brain Gain” is the one that is sought after most. Basically, it refers to attracting/retaining your most talented and educated students from within your community after college graduation so that they can contribute to positive initiatives and provide momentum on forward thinking projects. “Brain Drain” on the hand , which is not ideal, reflects when your best and brightest find opportunities elsewhere and leave your community and take their talent with them.

In an effort to help maintain the “Brain Gain” momentum in the great state of Ohio, Mike Chapman’s college consulting firm Chapman College Admission Consulting LLC is sponsoring the Ohio Here To Stay Scholarship opportunity. CheapScholar.org is proud to be a partner in this great initiative.

The Ohio Here To Stay Scholarship is a $5,000 scholarship that will be awarded to a current Ohio high school junior who commits to enrolling at one of Ohio’s four-year colleges beginning in Fall 2013 and pledges to work or attend graduate school in Ohio upon graduating from college.  The scholarship is meant to recognize and reward a student who is truly passionate about being an Ohioan and will contribute their talents and abilities to Ohio while in college and beyond.

To be considered for the scholarship, students need to create and submit a two minute or less video showcasing why and how they are passionate about Ohio. The top five videos will be posted online on this webpage from June 1, 2012 through August 1, 2012 and the video that receives the most votes during the voting time period will be declared the winner. The top five videos will be selected according to the following criteria:

  • Exhibition of a genuine passion for being an Ohioan.
  • How well the video displays applicant’s potential to make a significant contribution to the state of Ohio in college and beyond.
  • Creativity and ability to think “outside the box.”
  • Usage of online social networks to encourage people to view the video.
  • Adherence to contest rules including but not limited to video content and length.

Deadline for entry is May 1st and additional details can be found here. If you know any Ohio high school students that are planning to go to a 4 year college (in Ohio), please feel free to utilize the share tab below to pass this information onto them.

Proud Partners of Ohio Here To Stay Scholarship

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Tylenol $250,000 Future Cares Scholarship Opportunity

Tylenol $250,000 Future Cares Scholarship Opportunity

If you ever had a headache, muscle ache, or fever, then you probably have heard of Tylenol. If you have been fortunate enough to never encounter any of those illnesses, Tylenol may be new to your vocabulary.

Tylenol takes great strides in helping to foster and nurture future health care professionals through their educational career. In the past 20 years, they have provided scholarships in excess of $8.7 million dollars to over 6700 students. This alone speaks volumes in regard to their commitment to the education of future scholars.

Tylenol is giving away $250,000 in scholarships this year to college students that are pursuing a health care related degree. Here are the details for the scholarship:

  • The Tylenol Future Care Scholarship is awarded based on leadership qualities, academic excellence and community involvement.
  • Eligible students must be pursuing healthcare-related degrees
  • 40 students will receive $5,000 or $10,000 in scholarship funds
  • Applications must be received by June 15th
  • Winners will be selected in July and scholarships will be delivered by August 31st
  • Eligible students must have completed at least one year of undergraduate or graduate course study by the Spring of this year at an accredited two or four year college, university or vocational-technical school

If you would like to apply for this scholarship, you can find more information here. In addition, below is a video that provides some scholarship application tips.

If you know of anyone that could benefit from these extra scholarship dollars, please feel free to utilize the share tab below to pass this information along to them.

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