- Introduction
- Featured Article: Spread the Butter Thin
- Interest Rate Updates
- Scholarship Notes
- A Word from our Sponsors
- Privacy and Subscription Information
- Back Issues
- Sponsor this newsletter!
Welcome to the February 2005 issue of FinancialAidNews.com. This issue is titled "Why, oh why?" and we hope to address some of the questions about why financial aid is so hard to get, and how you can get more for yourself.
Have you visited FinancialAidNews.com? The Student Financial Aid News web site provides you with the back issues of Student Financial Aid News, so that if you missed an issue or your email address unexpectedly changed, you'll still get to read the articles you need. Also, don't forget to check our Financial Aid Blog from time to time. As always, please share The Student Financial Aid News with your friends, family, and colleagues, by simply forwarding this message, or letting them know to subscribe by visiting www.FinancialAidNews.com today!
Enjoy this month's newsletter!
Christopher S. Penn
Editor in Chief, The Student Financial Aid News
The Student Financial Aid News
1250 Hancock Street, Suite 703N
Quincy, MA 02169
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Featured Article: Spread the butter thin
I wrote about this topic on the Student Financial Aid Blog, and thought I'd go into a little more depth here.
Financial aid is a lot like bread and butter. Let's say that you have a pile of bread slices and a tub of butter. The slices represent the college tuitions of all the students who want to go to college but can't afford to pay full price. The butter represents the federal student aid program - Pell Grants, Perkins Loans, Stafford Loans, student loan consolidation, PLUS loans, etc. Why is it so hard to get federal student aid? Because you and the Department of Education have contrary goals.
You, as a diner of the slice of bread, want as much butter as possible - i.e. you want as much of your education subsidized by the government as possible. This is not an unreasonable request since the government's funds are paid for by taxpayers, which you or your parents probably are.
The Department of Education, however, has a different goal. The US Department of Education has set aside $68.7 billion for student financial aid of every kind. Their goal - to get butter - any amount - on as many slices of bread as possible. So they will work very hard to make sure as many slices of bread get butter as possible, but that butter is going to be awfully thin - so thin that you may not even taste it. With more than 10 million students applying for federal financial aid every year, every dollar has to be spread more thinly.
That's not all - federal financial aid is changing, and the 2005 budget submitted by President Bush and approved by Congress has made the new budget a certainty. What decreases are there in the 2005 budget?
- $239,000 fewer dollars available for Pell Grants
- $126,000 fewer dollars available for Perkins Loans
- Elimination of the Loan Forgiveness for Child Care Providers Program
- Elimination of the Leveraging Educational Assistance Partnerships Program
- $3,513,000 fewer dollars available for student loan consolidation
(source: US Department of Education web site )
What does this mean for you? Less butter for more bread - especially if you are a graduate who wants to make your student loans more affordable by consolidating.
What's the solution to make everyone happy? Well, there really isn't one per se. You could reduce the number of slices of bread - disqualify more students and their families - or you could increase the supply of butter - via more taxes. Either way, the government would have to do something unpopular, and unpopular is something the government - particularly elected officials - strive very hard not to be.
In the meantime, what can you do to get more aid, more dollars for education? As fewer dollars become available from the government, students will need to seek more non-governmental assistance. Here's your options:
1. Get scholarships. Free money. The only cost is postage, time, and effort, and optionally a reputable search service like FinancialAidOfficer.com. Visit http://www.financialaidofficer.com/scholarship_search/ to see the service.
2. Get federal loans if you can. File a FAFSA and then, if eligible, apply for federal student loans. Federal student loans are a good bet for low interest loans. Visit http://www.StaffordLoan.com for more details.
3. If you've already graduated, consolidate your federal student loans. Visit http://www.StudentLoanConsolidator.com to do so - and soon. Rumblings from the government indicate less than positive signs for the federal consolidation program in the months to come. As noted above, there are already fewer dollars allocated for the program, and President Bush has indicated an interest in further reducing the availability of student loan consolidation.
4. Get private loans. Private student loans provide alternative sources of financing at competitive rates, and are not dependent on the government. No FAFSA, no worries about the Department of Education eliminating the program. Visit http://www.PrivateStudentLoans.com for more details.
5. Solicit help. There's nothing wrong with setting up your own web site and PayPal account and requesting assistance. Sure, it requires swallowing your pride, but if the cost of your pride is no education... well, it's your life.
6. Vote. Not just in the Presidential Election, but in every election you are eligible for. Federal, state, and local. Why? Because a lot of the very quiet little local and state elections put officials in office who contribute to the overall big picture. That House of Representatives mid-term election candidate might be the deciding vote in an education bill in two years, so vote early, vote often. Visit DeclareYourself.com and register to vote.
Currently, the 91-day Treasury Bill Rate (the rate on which federal student loan interest rates are computed) is %. What does this mean? If federal student loan rates were set for the most recent T-bill auction (), your rates would change as follows:
| Loan Type | Current Rate |
New Rate |
Current Pmt* |
New Pmt* |
| Stafford (in school) | 2.77% |
% |
||
| Stafford (in grace) | 2.77% |
% |
||
| Stafford (in repayment) | 3.37% |
% |
||
| PLUS | 4.17% |
% |
If you have graduated and want to lock in the current rates before they change, visit http://www.StudentLoanConsolidator.com and apply now.
Scholarship season is in full swing! That's right, the new year heralds the commencement of two very important seasons - FAFSA season and scholarship season. Many scholarships begin accepting applications in the new calendar year, so it's more important than ever to have the best tools available for your search. That includes free solutions like Google and premium solutions like Financial Aid Officer's Scholarship Search. For a nominal fee, you get access to an ever-increasing database of scholarship awards, more than 2.3 million worth $14 billion.
This month's scholarship offering: Coca-Cola Scholars. The program is open to all high school seniors in the United States from 26,000 high schools. Coca-Cola Scholars come from all 50 states and more than one-third are minorities. The Scholars represent a cross-section of outstanding young people, characterized by their educational excellence, leadership in their schools and commitment to their communities. National Scholars receive $20,000 each, and Regional Scholars $4,000, over a period of four years. Coca-Cola Scholarships are awarded based on character, personal merit and commitment. Merit is demonstrated through leadership in school, civic and extracurricular activities, academic achievement, and motivation to serve and succeed.
Visit: http://www.coca-colascholars.org
If you can't find the financial aid you're looking for online, try the FinancialAidOfficer.com Scholarship Search Service at http://www.financialaidofficer.com/scholarship_search/ today.
And now a word from our sponsors...
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