Posted by admin on July 6th, 2009
Years ago, when I graduated high school, I never thought twice about the debt I would rack up while attending college. I signed away on forms at the beginning of each semester not really grasping what was going to hit me once I took off that cap and gown. Six months into the real world, I started paying off the nearly $18,000 in debt I had accrued since my freshman year and I was one of the lucky ones! My parents helped pay for my tuition otherwise I would have been sitting on over $30,000 worth of debt. It puts a knot in my stomach to think of when my children are ready to go to college.
Are these loans really the best idea for our children? They’re starting their adult life in debt thousands upon thousands of dollars. Especially in these economic times where jobs are scarce, how can they even be assured a job once they graduate?
Is there a better way? There’s something to be said for schools where you cannot use Financial Aid. The costs are upfront and you know what you’re getting into, financially speaking. And, most of them offer payment options to make the cost a little easier to digest. I think even some 4-year colleges and universities have monthly payment options although I’m not sure how “affordable” they really are.
What are your thoughts/feelings? Would you still choose to defer the debt if you had an affordable option?
Posted by admin on July 6th, 2009
The University of Phoenix El Paso campus will present the inaugural Scott Palomino Scholarship to First Sergeant Moses Jackson at 8am on Friday, June 12th, at the Warrior Transition Battalion Building (2444 Cassidy Road, Fort Bliss, TX). The Scott Palomino Scholarship is directed toward new University of Phoenix El Paso students who have served in the United States armed forces and have regrettably suffered a critical injury while serving. Named for Scott Palomino, retired veteran of the US Air Force and Purple Heart Recipient, the scholarship will cover all tuition and fees for an entire Undergraduate or Graduate program and can be applied towards classes taken at the University of Phoenix El Paso campus or online.
Having joined the United States Army at the age of 20 in October 1985, First Sergeant Jackson will be applying the scholarship towards an undergraduate degree from the University of Phoenix. Jackson stated in his scholarship application essay, “Among my many blessings, after receiving so many injuries and related medical issues throughout my military career, is that I am still able to stand. But the real blessing is to have been afforded this opportunity to continue the educational path in which I have been on so many times, through my present military assignment.”
“As an institution dedicated to providing higher education opportunities to deserving individuals, we could not be prouder to welcome First Sergeant Jackson to the University of Phoenix. We look forward to assisting him on his educational path and to witnessing the many more accomplishments he no doubt will achieve as a result of this new chapter in his life,” remarked Barbara Janowski, Campus Director, University of Phoenix El Paso/Santa Teresa Learning Centers.
Posted by admin on July 2nd, 2009
College students are often forced to make a decision between two life paths: one that feeds the soul and one that feeds the bank account. Rarely do the two meet. As a result, the average college grad — who leaves school with about $23,000 in student-loan debt — either slogs along during those first few work years in satisfying (yet typically low-paying) jobs or makes a play for grinding corporate gigs that pay the bills and deaden the heart.
But all that stands to change on July 1 with the start of an income-based repayment (IBR) plan. The goal of the government initiative, which has been championed by Massachusetts Senator Ted Kennedy, is to prevent payments on federal student loans from exceeding 15% of a borrower’s disposable income above 150% of the poverty level. Borrowers who earn below that threshold (which in most states is about $16,000 for a single person with no dependents) wouldn’t have to make any monthly payments at all. (See how Americans are spending now.)
These changes, alongside a $619 increase in the maximum Pell Grant and a reduction in the interest rate on new federal loans, arrive at a moment of seemingly runaway college costs on one end and a dismal economic outlook on the other. The Obama Administration is trying to lessen the pressure on aspiring students in ways both big and small. Last week, Secretary of Education Arne Duncan announced a plan to simplify the Free Application for Student Aid (FAFSA) — the form to apply for federal dollars — cutting at least 20% of the questions and making it easier to fill out online. For months now, Duncan has discussed the possibility of making Pell Grants an entitlement or guaranteed benefit like Social Security that would be protected from annual budget cuts. Duncan is also trying to transition to a system in which students get all their college loans from the government, rather than going through banks and other private lenders. The new IBR program does not apply to private loans. (See pictures of the college dorm’s evolution.)
Add up these steps, and the Obama Administration appears to be attacking the staggering cost of higher ed from the back end — that is, if we can’t fix how much college costs, at least we can try to fix how you pay that cost back. “There’s clearly a lot of work to do in bringing down the cost of college,” says Edie Irons, spokesperson for the Project on Student Debt. “But even if you froze college tuition at every institution tomorrow, you’d still have this problem where people are borrowing incredible amounts of money to take important jobs that may not pay very well.”
In the past, federal-loan repayment was structured so that a graduate would have to pay a certain amount of money each month, regardless of his or her income at the time. Under the IBR program, if you lose your job or are forced to take a pay cut, the amount you have to pay back per month will drop. If, however, your salary subsequently increases, your payments will still be capped at 15% of your disposable income. That is, of course, if you are eligible to participate in the program; grads with private loans are exempted as well as those who owe less than they earn in a year (use this calculator to figure out if you qualify). It’s all based on a debt-to-income ratio and is fluid and flexible in a way that most government systems are not. And if the Education Department is serious about abolishing the two-track loan system (in which it provides direct loans as well as subsidizes private-lender loans), this is just one more way of convincing borrowers to throw their hat in with the feds.
One big upside is likely to be a reduction in the number of people who default on their student loans, a financial disaster that can destroy credit ratings and hike up interest rates on future loans. “In this economic recession, a lot of students are having a difficult time just paying for normal things like groceries or rent,” says Carmen Berkley, president of the U.S. Student Association, an advocacy group. “This is really going to make sure that students are able to keep up with their loans and don’t have to default. We want to be able to have good credit, to eventually be able to buy cars and houses too.” (See TIME’s special report on paying for college.)
Under the IBR program, if students are still paying back college loans after 25 years, they will be eligible to have all debt erased (though, if the law stands as is, much of that remaining balance will be taxed as income). And if students go into a public-service career, they are eligible for loan forgiveness after a mere 10 years. While participants in programs such as AmeriCorps, the Peace Corps, the military and other such institutions have long been eligible for loan reduction or forgiveness, this new program expands such mercy to potentially hundreds of thousands more students who won’t be forced to make that knee-jerk decision between ideals and salary. “We really need college graduates to go into fields like teaching and social work and public-interest law and rural medical services,” says Irons. “And because of the way people are forced to pay for education, they are less and less able to do those jobs. For society’s sake, we should make it easier for them to do so.”
Time.com
