Daily Aid 94: Scholarship scam warning, student loan programs future

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Daily Aid 94: Scholarship scam warning, student loan programs future

11 March 2009 1 views No Comment

Daily Aid 94: Scholarship scam warning, student loan programs future

Student Financial Aid News

On a day that President Obama reinforced his call to increase the number of Americans in college, the federal government released data showing that higher education’s capacity is growing, albeit too slowly to meet the goal set by the president and others. The data also continue to show that a disproportionate share of the growth can be attributed to for-profit colleges, which are expanding at a rapid clip.

Commentary

What will be interesting is to see how private, for-profit colleges’ growth will be impacted by the ever ongoing economic crisis, as this data is from 2007, before the major retrenchment in all forms of student loans. Private student loans are a major force behind for-profit schools’ funding, and the pullback in private student loan lending will surely have an impact. A quick peek at the stock charts of the major for-profit colleges hasn’t shown the impact yet, though:

From The Hill:

President Obama’s budget proposal to eliminate government subsidies for the student loan industry has run into stiff bipartisan resistance from lawmakers who have received thousands in campaign contributions from private lenders. If lawmakers and the administration kill the program, Sallie Mae and other companies are likely to go down with it, said Matthew Snowling, managing director of FBR Capital Markets. The unanswered question, he said, would be how the government could handle the processing of loans for approximately 6 million students.

Commentary

I still maintain the best possible outcome for both taxpayers and the government is to merge FFEL and DL – the two federal loan programs – together into one. This ensures that federal student loans are always available, and also ensures that in boom times, private lenders like the Student Loan Network can offer more benefits to students than the government.

Full disclosure: the Student Loan Network makes no contributions to any political party or candidate.

Scholarship Update

The Texas Retired Teachers Foundation (TRTF) will award ten $500 scholarships for the 2009-2010 school year to ten students who are relatives of a member of the Texas Retired Teachers Association (TRTA), and who are pursuing an undergraduate or masters degree in Education at a Texas university or college.

Details at our free college scholarship search site.

Mail Bag

Jeff writes in:

Hope you are in good spirits and doing well. I received a letter from USA Scholarship Services concratulating my son for being selected by the USA Scholarship services to apply fro an award for Scholarship Program for Engineering Students. They require $27.00 for a preocessing fee to file for this scholarship. Is this legit or bogus? Appreciate as always any information you can give me.

Scam! Scam! Scam! Scam! Scam! Scam! Scam!

Money ALWAYS flows to the student, never the other way around. Any scholarship that asks you to pay ANYTHING is a scam. Run. Run away. Run away quickly.

Be careful, folks – as the economy gets tougher, more scam artists will come out of the woodwork hoping you’ll be desperate enough to believe anything and fall for things you’d normally laugh at. Remember the golden rule of scholarships:

Money ALWAYS flows to the student, never the other way around

Be careful!

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