Tuesday, March 24, 2009
PUBLIC SCHOOL STANDOUTS
Among the public schools, none did more for students salary-wise than the University of North Carolina's Kenan-Flagler Business School, where students earned nearly $10 per tuition dollar. That was followed by SUNY Binghamton ($8.52) and James Madison University ($7.18). Kenan-Flagler, where starting salaries were a middle-of-the-pack $53,500, topped the list of publics in large part because of its low cost—$5,397 a year. Lawrence Murray, director of UNC's undergraduate business program, says recruiters are willing to visit the school, and to pay top-dollar for grads, because of the school's excellent academics. "I think our students are competitive with anyone," Murray says. "We do our best to tie academics and career services together."
TOP PRIVATE SCHOOLS
The best of the best was Brigham Young University's Marriott School of Management, a private school where business grads earned more than $12 for every annual tuition dollar spent—in no small part thanks to the cut-rate $4,110 annual tuition paid by students who are members of the Church of Jesus Christ of Latter-day Saints, which make up about 95% of BYU's undergraduate business enrollment. The remaining 5% who are not Mormons pay double the tuition.
Brent Wilson, director of the undergraduate business management programs at BYU, says Marriott students, in part because of their Mormon background, have an extra level of maturity at graduation that recruiters are willing to pay for. He added that BYU's ROI—like that of any school that places a large number of grads in the financial services industry—may take a hit this year, if students have a tough time finding high-paying jobs as a result of the industry's implosion. "The majority of our students would [typically] go someplace in finance or corporate finance or financial services," Wilson says. "I don't know whether that's going to be the case this year."
Cornell University came in a very distant second among the privates, with business grads earning $2.70 for every annual tuition dollar spent. Cornell is an anomaly in that the university is private but the business program is in a state-assisted portion of the school, which brings down the tuition to $20,364, which is somewhat more manageable when compared to annual costs well north of $35,000 for many private programs.
Brent Wilson, director of the undergraduate business management programs at BYU, says Marriott students, in part because of their Mormon background, have an extra level of maturity at graduation that recruiters are willing to pay for. He added that BYU's ROI—like that of any school that places a large number of grads in the financial services industry—may take a hit this year, if students have a tough time finding high-paying jobs as a result of the industry's implosion. "The majority of our students would [typically] go someplace in finance or corporate finance or financial services," Wilson says. "I don't know whether that's going to be the case this year."
Cornell University came in a very distant second among the privates, with business grads earning $2.70 for every annual tuition dollar spent. Cornell is an anomaly in that the university is private but the business program is in a state-assisted portion of the school, which brings down the tuition to $20,364, which is somewhat more manageable when compared to annual costs well north of $35,000 for many private programs.
Return on Investment: Public Business Schools Rock
Few measures of a b-school's performance hit home quite like return on investment, or ROI. In an era when salary freezes and layoffs are the order of the day, a school that can deliver the goods—decent-paying jobs for the vast majority of graduates—is golden. If it can do so without charging an arm and a leg, well, so much the better.
That's why BusinessWeek undertook an extensive analysis of ROI for the 50 top schools in its 2009 Best Undergraduate Business Schools ranking. The results were enlightening: While the top-ranked private schools such as No. 2 Notre Dame and No. 3 Wharton get all the attention, it's the big state schools (and their lower tuition costs) that fare the best on this measure.
To determine ROI, BusinessWeek gathered information from all 50 schools about their annual tuition and required fees as well as the median starting salaries for 2008 graduates, then divided the salary figure by the annual costs to calculate "salary per tuition dollar"—or bang for the buck. Overall, public universities did far better than elite private schools, averaging $5.98 in pay for every tuition dollar spent, compared to $1.87 for the privates.
That's why BusinessWeek undertook an extensive analysis of ROI for the 50 top schools in its 2009 Best Undergraduate Business Schools ranking. The results were enlightening: While the top-ranked private schools such as No. 2 Notre Dame and No. 3 Wharton get all the attention, it's the big state schools (and their lower tuition costs) that fare the best on this measure.
To determine ROI, BusinessWeek gathered information from all 50 schools about their annual tuition and required fees as well as the median starting salaries for 2008 graduates, then divided the salary figure by the annual costs to calculate "salary per tuition dollar"—or bang for the buck. Overall, public universities did far better than elite private schools, averaging $5.98 in pay for every tuition dollar spent, compared to $1.87 for the privates.
Student Loan, Private vs. Federal
At this time last year the prime rate, which is the benchmark widely used to determine the interest rate on a number of loans, was a respectable 6%. Today, that rate is a jaw dropping 3.25%, the lowest it’s been since 1955. To put that in perspective Dwight Eisenhower was our President, a first class postage stamp cost 3 cents, and Marty McFly was desperately trying to get back to the future. I guess the more things change the more they stay the same. But how can you benefit from a low prime rate?
Many private student loans are tied to the prime rate index, and since the prime is at historic lows the cost of borrowing is significantly lower than it has been in years. This fact has parents and students debating whether they should take out a private or federal student loan. Undoubtedly your qualifications and priorities will serve as your guide when making this important decision, but there are some key factors and benefits to consider during your deliberation process.
Private loan benefits
Federal loan benefits
- No origination fees- Interest rate ranging from ½ point below prime to 4.75 points above prime- 2% cash reward on your outstanding principle balance at graduation- Payments deferred until after school
-Fixed interest rate with predictable monthly payment- Three years worth of deferment potential- Loan Forgiveness for qualified borrowers-Payments deferred until after school
Information provided by the Student Loan Network for general information purposes only.
As you can see, variable interest rates for private student loans start at 2.75% (because the prime is 3.25% and rates start 1/2 point below prime). However, the catch-22 for many Americans is that while this favorable rate exists it is not attainable.
Low interest rates are reserved for those with strong FICO scores, an endangered group which dwindles by the day. Millions of Americans have been defaulting on loans over the past 18-months sending their credit score into a damning abyss. A compromised credit score essentially disqualifies you from the most salutary interest rate in the market. And it’s not just the borrowers with a scar on their credit history that are facing new hurdles; the pinch is being felt across the board. Those with stellar credit are adjusting to new requirements as well.
Most lenders, regardless of the individuals credit score, are requiring a co-signer on all applications to protect themselves. But finding two credit worthy applicants is a harrowing task in today’s market, which makes federal loans the only realistic option for many desperate students.
Federal loans serve as a dynamite need-based option for those seeking funds for school. You don’t need a co-signer, and eligible students can actually qualify for more funds if their parent or guardian has poor credit. To qualify for a federal loan you must complete a FAFSA, and must also attend a qualified Title IV school. That said, federal loans do have a few drawbacks.
First off, the maximum yearly allotment is relatively small in relation to the cost of tuition, and will most likely only cover a fraction of the tuition cost. Next, the interest rate is fixed and can not be decreased for the life of the loan. Third, some lenders charge a 1% origination fee off the topic. And lastly, many feel the current Stafford loan rates, which range from 6% to 6.8%, are outlandishly high in this market.
As you can see each loan type has its advantages and disadvantages. Just be sure to do your homework before you sign on the dotted line. If you do you’ll be sure to ace your tests inside and outside of the classroom.
Many private student loans are tied to the prime rate index, and since the prime is at historic lows the cost of borrowing is significantly lower than it has been in years. This fact has parents and students debating whether they should take out a private or federal student loan. Undoubtedly your qualifications and priorities will serve as your guide when making this important decision, but there are some key factors and benefits to consider during your deliberation process.
Private loan benefits
Federal loan benefits
- No origination fees- Interest rate ranging from ½ point below prime to 4.75 points above prime- 2% cash reward on your outstanding principle balance at graduation- Payments deferred until after school
-Fixed interest rate with predictable monthly payment- Three years worth of deferment potential- Loan Forgiveness for qualified borrowers-Payments deferred until after school
Information provided by the Student Loan Network for general information purposes only.
As you can see, variable interest rates for private student loans start at 2.75% (because the prime is 3.25% and rates start 1/2 point below prime). However, the catch-22 for many Americans is that while this favorable rate exists it is not attainable.
Low interest rates are reserved for those with strong FICO scores, an endangered group which dwindles by the day. Millions of Americans have been defaulting on loans over the past 18-months sending their credit score into a damning abyss. A compromised credit score essentially disqualifies you from the most salutary interest rate in the market. And it’s not just the borrowers with a scar on their credit history that are facing new hurdles; the pinch is being felt across the board. Those with stellar credit are adjusting to new requirements as well.
Most lenders, regardless of the individuals credit score, are requiring a co-signer on all applications to protect themselves. But finding two credit worthy applicants is a harrowing task in today’s market, which makes federal loans the only realistic option for many desperate students.
Federal loans serve as a dynamite need-based option for those seeking funds for school. You don’t need a co-signer, and eligible students can actually qualify for more funds if their parent or guardian has poor credit. To qualify for a federal loan you must complete a FAFSA, and must also attend a qualified Title IV school. That said, federal loans do have a few drawbacks.
First off, the maximum yearly allotment is relatively small in relation to the cost of tuition, and will most likely only cover a fraction of the tuition cost. Next, the interest rate is fixed and can not be decreased for the life of the loan. Third, some lenders charge a 1% origination fee off the topic. And lastly, many feel the current Stafford loan rates, which range from 6% to 6.8%, are outlandishly high in this market.
As you can see each loan type has its advantages and disadvantages. Just be sure to do your homework before you sign on the dotted line. If you do you’ll be sure to ace your tests inside and outside of the classroom.
Deferring Your Stafford Loan
Doesn’t it feel like you’ll be married to your student loans….forever? Student loans last longer than most marriages these days. Till Stafford do us part is a sad reality.
My friend Stephanie has some huge loan amounts to pay down. She jokes that the light at the end of the student loan tunnel has blown out on her. Poor Steph. She even has private loans to contend with. It’s just awful for her and I know she’s not alone.
For those of you who have both loan types I know you are struggling to survive. Pay the rent, buy food, make your utility bill payments, or pay down your student loan. I know which one on that list would be my last priority. Of course the problem with simply not paying your loans is that it damages your credit score, and that can impact the interest rate on other loans you are paying. Instead of burying your head in the sand in hopes of the problem just going away you should place your loans in a deferment state.
Most people don’t realize they have 3 years worth of deferment eligibility attached to their federal loans. There is an economic hardship deferment and a straight forbearance benefit attached. The economic hardship deferment is the better of the two options as any subsidized loans in your bundle will not accrue interest during the deferment period. Your lender will examine your debt to income ratio to see if you qualify.
A forbearance is also good, as it gets the job done, but interest accrues on the entire loan amount. Every student is eligible for a forbearance
So be responsible and utilize the benefits that come with your federal loan, that’s what they’re there for.
My friend Stephanie has some huge loan amounts to pay down. She jokes that the light at the end of the student loan tunnel has blown out on her. Poor Steph. She even has private loans to contend with. It’s just awful for her and I know she’s not alone.
For those of you who have both loan types I know you are struggling to survive. Pay the rent, buy food, make your utility bill payments, or pay down your student loan. I know which one on that list would be my last priority. Of course the problem with simply not paying your loans is that it damages your credit score, and that can impact the interest rate on other loans you are paying. Instead of burying your head in the sand in hopes of the problem just going away you should place your loans in a deferment state.
Most people don’t realize they have 3 years worth of deferment eligibility attached to their federal loans. There is an economic hardship deferment and a straight forbearance benefit attached. The economic hardship deferment is the better of the two options as any subsidized loans in your bundle will not accrue interest during the deferment period. Your lender will examine your debt to income ratio to see if you qualify.
A forbearance is also good, as it gets the job done, but interest accrues on the entire loan amount. Every student is eligible for a forbearance
So be responsible and utilize the benefits that come with your federal loan, that’s what they’re there for.
Cost Of Education Up 439%
Want to hear a frightening statistic? According to the National Center for Public Policy and Education the cost of attending college has risen 439 percent from 1982 to 2006. 439 percent!!!
Now I know I’m singing to the choir here, and that all of you are well aware how much education costs these days, but even I was shocked by this outrageous statistic and felt obliged to pass it on. It really makes you wonder, doesn’t it? I mean real estate, automobiles, the Dow, and all kinds of merchandise has dropped in price over the past several months, but not the price of education. In fact, it’s news worthy when an institution just freezes tuition rates.
I will say this though, in defense of the colleges, many are allocating more funds to financial aid during these difficult times, but how about a tuition break too? Not all students qualify for financial aid.
What do you think about this outrageous statistic? Let your voice be heard.
Now I know I’m singing to the choir here, and that all of you are well aware how much education costs these days, but even I was shocked by this outrageous statistic and felt obliged to pass it on. It really makes you wonder, doesn’t it? I mean real estate, automobiles, the Dow, and all kinds of merchandise has dropped in price over the past several months, but not the price of education. In fact, it’s news worthy when an institution just freezes tuition rates.
I will say this though, in defense of the colleges, many are allocating more funds to financial aid during these difficult times, but how about a tuition break too? Not all students qualify for financial aid.
What do you think about this outrageous statistic? Let your voice be heard.
Despite the Downturn, MBA Spring Break Lives
International Intrigue
This year, Dartmouth's Tuck School of Business decided to join the numerous schools that offer this spring break international experience. One trip, to China, will take students to eight different companies in 10 days, and participants will spend time at the China Europe International Business School, which participates in an exchange program with Tuck.
Given the world economic problems and poor hiring climate for MBAs, the associate director of Tuck's Center for International Business, Lisa Miller, initially worried about the interest level for the trip, which she is leading. She expected perhaps 10 students to sign up, but 17 did. She says these students will benefit not only from the opportunity to learn more about the global business climate and region, but they can also use the trip to look for potential job opportunities. And if they already have a job? Well, the experience could still be valuable to those interested in relocating to China at some point in their careers. "Let's say they have a job already and think, 'I'd love to do a foreign assignment.' Maybe they have a chance to meet with their employer while there," Miller says. "I think the common thread is they all believe China will be practical to their business lives."
For some students, spring break isn't an either/or proposition. One Chicago University Booth School of Business student polled a handful of second-year classmates on their spring break plans and found that many are forging a compromise. "The most common answer by far is: 'I'm still going somewhere for break, but I didn't plan a big trip like last year,'" says Sunil Suri. "They intend to use it as a break, but are doing smaller things on their own, like going home to see their families or hanging out with friends in this area."
This year, Dartmouth's Tuck School of Business decided to join the numerous schools that offer this spring break international experience. One trip, to China, will take students to eight different companies in 10 days, and participants will spend time at the China Europe International Business School, which participates in an exchange program with Tuck.
Given the world economic problems and poor hiring climate for MBAs, the associate director of Tuck's Center for International Business, Lisa Miller, initially worried about the interest level for the trip, which she is leading. She expected perhaps 10 students to sign up, but 17 did. She says these students will benefit not only from the opportunity to learn more about the global business climate and region, but they can also use the trip to look for potential job opportunities. And if they already have a job? Well, the experience could still be valuable to those interested in relocating to China at some point in their careers. "Let's say they have a job already and think, 'I'd love to do a foreign assignment.' Maybe they have a chance to meet with their employer while there," Miller says. "I think the common thread is they all believe China will be practical to their business lives."
For some students, spring break isn't an either/or proposition. One Chicago University Booth School of Business student polled a handful of second-year classmates on their spring break plans and found that many are forging a compromise. "The most common answer by far is: 'I'm still going somewhere for break, but I didn't plan a big trip like last year,'" says Sunil Suri. "They intend to use it as a break, but are doing smaller things on their own, like going home to see their families or hanging out with friends in this area."
Job-Hunting Time
Not everyone is choosing the international route. With more than half of all business schools reporting a significant drop in recruiting activity on campus this winter, according to a survey by the MBA Career Services Council, many students feel pressure to tend to their job searches instead of spending a week globe-trotting.
At Cornell University's Johnson Graduate School of Management, second-year MBA student Adam Treadwell, a 32-year-old husband and father of two, is sticking close to home. Treadwill, who already has a job lined up at health-care giant CIGNA (CI), says that even friends who have already landed jobs are opting to stick close to campus for vacation in order to pinch pennies. He notes this is particularly true of his international student friends, who are scrambling to finance their degrees since many big lenders have changed student loan policies. Says Treadwell: "Credit has dried up for a lot of international students, so getting even normal loans is pretty tough, let alone trying to [obtain additional funds] for international trips."
These stay-at-home students appear to be the exception to the rule, though. At schools such as Kellogg that have a required international component built into their programs, students are still coming out in full force and signing up for these trips. Roughly 40 students at Emory University's Goizueta Business School are currently in Brazil (cost: $2,650), while another 35 are in China (cost: $3,300). J.B. Kurish, the associate dean at Goizueta's full-time MBA program, hopes that students, who can also fulfill their international requirement by taking a mini-course on campus during the break, opt to spend spring break abroad instead. "I personally believe that international experience is vitally important to people," says Kurish. "Our students have been willing to spend money to go to places where they can have an enriching experience. It would be very disappointing if, because of economic forces, students felt they could not afford to go overseas."
At Cornell University's Johnson Graduate School of Management, second-year MBA student Adam Treadwell, a 32-year-old husband and father of two, is sticking close to home. Treadwill, who already has a job lined up at health-care giant CIGNA (CI), says that even friends who have already landed jobs are opting to stick close to campus for vacation in order to pinch pennies. He notes this is particularly true of his international student friends, who are scrambling to finance their degrees since many big lenders have changed student loan policies. Says Treadwell: "Credit has dried up for a lot of international students, so getting even normal loans is pretty tough, let alone trying to [obtain additional funds] for international trips."
These stay-at-home students appear to be the exception to the rule, though. At schools such as Kellogg that have a required international component built into their programs, students are still coming out in full force and signing up for these trips. Roughly 40 students at Emory University's Goizueta Business School are currently in Brazil (cost: $2,650), while another 35 are in China (cost: $3,300). J.B. Kurish, the associate dean at Goizueta's full-time MBA program, hopes that students, who can also fulfill their international requirement by taking a mini-course on campus during the break, opt to spend spring break abroad instead. "I personally believe that international experience is vitally important to people," says Kurish. "Our students have been willing to spend money to go to places where they can have an enriching experience. It would be very disappointing if, because of economic forces, students felt they could not afford to go overseas."
Despite the Downturn, MBA Spring Break Lives
The economy may be on life support, the job market for MBAs anemic, and debt for many business school students in six-figure territory, but one time-honored tradition has not fallen victim to hard times: spring break.
For many MBAs, spring break is more than a chance to share a fleabag motel room with five friends in Daytona—it's an educational investment, an opportunity to visit another country and learn something about the global economy that can't be taught in a classroom. That's why, despite the economy's demise, many are jetting off to far-flung destinations from Shanghai to Dubai and are willing to pay up to $5,000 for the privilege. Since many of the trips can be paid for using financial aid, the trips don't have to add to their already considerable debt.
Ben Wightman, 31, a student at Northwestern University's Kellogg School of Management is getting ready for a two-week trip to the Middle East with 34 classmates, visiting Jordan and Qatar as well as the United Arab Emirates. After spending tens of thousands of dollars to get his degree, he figures another $5,000 or so isn't going to bankrupt him. "You've already made the investment in getting a top MBA, so this [trip] is really an investment I've seen most of my classmates are willing to make," says Wightman. Some participants who racked up thousands of frequent flier miles during the pre-MBA consulting careers are using them to defray costs.
These student-organized ventures are part of Kellogg's Global Initiatives in Management (GIM) program, which also includes a classroom component that takes place during the quarter before the trip. GIM attracts roughly half of Kellogg's full-time B-school students each year, despite the trips' hefty price tag.
For many MBAs, spring break is more than a chance to share a fleabag motel room with five friends in Daytona—it's an educational investment, an opportunity to visit another country and learn something about the global economy that can't be taught in a classroom. That's why, despite the economy's demise, many are jetting off to far-flung destinations from Shanghai to Dubai and are willing to pay up to $5,000 for the privilege. Since many of the trips can be paid for using financial aid, the trips don't have to add to their already considerable debt.
Ben Wightman, 31, a student at Northwestern University's Kellogg School of Management is getting ready for a two-week trip to the Middle East with 34 classmates, visiting Jordan and Qatar as well as the United Arab Emirates. After spending tens of thousands of dollars to get his degree, he figures another $5,000 or so isn't going to bankrupt him. "You've already made the investment in getting a top MBA, so this [trip] is really an investment I've seen most of my classmates are willing to make," says Wightman. Some participants who racked up thousands of frequent flier miles during the pre-MBA consulting careers are using them to defray costs.
These student-organized ventures are part of Kellogg's Global Initiatives in Management (GIM) program, which also includes a classroom component that takes place during the quarter before the trip. GIM attracts roughly half of Kellogg's full-time B-school students each year, despite the trips' hefty price tag.
Consolidations Dirty Little Secret
One common illusion students have is that consolidation reduces student debt. Well, the truth of the matter is it does NOT reduce debt at all. In fact, it only makes matters worse by increasing your total loan volume in the end.
The primary purpose of consolidation is to extend out the loan term and reduce the monthly burden in that manner. It’s the same principle as having a 3yr / 36 month car loan vs. a 5yr / 60 month. The person with the 5 year loan term will have a lower monthly payment but will be paying back more money in interest over the life of the loan.
The reason a student should consider consolidation, however, is if they can either not afford their current monthly payment on their loan(s) or are aware that the variable interest rate on their federal loan(s) will be increasing. If the interest rate is going up it would then benefit you to lock in your current rate.
Keep in mind that variable Stafford loan rates change each July and are pegged at certain margins above the 91-day T-bill in late May. In the past Stafford loans were awarded at variable rates, but moving forward for the foreseeable future all federal loans will hold fixed rates.
The primary purpose of consolidation is to extend out the loan term and reduce the monthly burden in that manner. It’s the same principle as having a 3yr / 36 month car loan vs. a 5yr / 60 month. The person with the 5 year loan term will have a lower monthly payment but will be paying back more money in interest over the life of the loan.
The reason a student should consider consolidation, however, is if they can either not afford their current monthly payment on their loan(s) or are aware that the variable interest rate on their federal loan(s) will be increasing. If the interest rate is going up it would then benefit you to lock in your current rate.
Keep in mind that variable Stafford loan rates change each July and are pegged at certain margins above the 91-day T-bill in late May. In the past Stafford loans were awarded at variable rates, but moving forward for the foreseeable future all federal loans will hold fixed rates.
Consolidations Dirty Little Secret
One common illusion students have is that consolidation reduces student debt. Well, the truth of the matter is it does NOT reduce debt at all. In fact, it only makes matters worse by increasing your total loan volume in the end.
The primary purpose of consolidation is to extend out the loan term and reduce the monthly burden in that manner. It’s the same principle as having a 3yr / 36 month car loan vs. a 5yr / 60 month. The person with the 5 year loan term will have a lower monthly payment but will be paying back more money in interest over the life of the loan.
The reason a student should consider consolidation, however, is if they can either not afford their current monthly payment on their loan(s) or are aware that the variable interest rate on their federal loan(s) will be increasing. If the interest rate is going up it would then benefit you to lock in your current rate.
Keep in mind that variable Stafford loan rates change each July and are pegged at certain margins above the 91-day T-bill in late May. In the past Stafford loans were awarded at variable rates, but moving forward for the foreseeable future all federal loans will hold fixed rates.
The primary purpose of consolidation is to extend out the loan term and reduce the monthly burden in that manner. It’s the same principle as having a 3yr / 36 month car loan vs. a 5yr / 60 month. The person with the 5 year loan term will have a lower monthly payment but will be paying back more money in interest over the life of the loan.
The reason a student should consider consolidation, however, is if they can either not afford their current monthly payment on their loan(s) or are aware that the variable interest rate on their federal loan(s) will be increasing. If the interest rate is going up it would then benefit you to lock in your current rate.
Keep in mind that variable Stafford loan rates change each July and are pegged at certain margins above the 91-day T-bill in late May. In the past Stafford loans were awarded at variable rates, but moving forward for the foreseeable future all federal loans will hold fixed rates.
My School is Withholding My Transcript
The collateral damage which stems from not repaying money you owe to your school is worth far more than dollars. You can be certain the school will withhold your official transcript if you don’t pay up, which could pose major problems down the road.
Withholding your transcript would hamper your ability to transfer to another school, receive your diploma, and would most likely hurt your credit as it would be turned over to a collections agency. Also, if a potential employer calls to verify you graduated from that institution the school may not release/confirm the details with them, which certainly would not bode well for you. In this market employers can basically pick and choose their candidates, and that one strike against you could be your undoing regardless of how well your interviewed went.
It’s also good to know, however, that while the “official” transcript will be withheld you can still obtain a copy of your transcript. No institution can deny an individual access to his or her educational records.
Of course this can all be avoided if you pay your bill, but I know many are struggling right now. What I would suggest doing is consolidating your federal loans, if you haven’t already, and then deferring. You can defer federal loans for up to three years. This would at least serve as a temporary band-aid to your payment woes.
Withholding your transcript would hamper your ability to transfer to another school, receive your diploma, and would most likely hurt your credit as it would be turned over to a collections agency. Also, if a potential employer calls to verify you graduated from that institution the school may not release/confirm the details with them, which certainly would not bode well for you. In this market employers can basically pick and choose their candidates, and that one strike against you could be your undoing regardless of how well your interviewed went.
It’s also good to know, however, that while the “official” transcript will be withheld you can still obtain a copy of your transcript. No institution can deny an individual access to his or her educational records.
Of course this can all be avoided if you pay your bill, but I know many are struggling right now. What I would suggest doing is consolidating your federal loans, if you haven’t already, and then deferring. You can defer federal loans for up to three years. This would at least serve as a temporary band-aid to your payment woes.
Stafford Loan Forgiveness For Public Service
Loan forgiveness is available for any public service employee who is not in default and who makes 120 monthly payments on their loan after Oct. 1, 2007.
It is also important to note that your loans need to be held with the Direct Loan Center to be eligible for this benefit.
Public Service jobs fall into one of seventeen categories.
Emergency management
Public safety
Military service
Public health
Law enforcement
Government
Public education
Social work
Public child care
Public serivce for those with disabilities
Public service for the elderly
Public library sciences
School based library sciences
Certain tax exempt organizations
Faculty teaching in high need areas
Full-tim faculty at a Tribal College or University
Public interest law services
Also, keep in mind that in the case of the parent PLUS loan, the qualifying employee must be the parent, not the student whose behalf the loan was released.
It is also important to note that your loans need to be held with the Direct Loan Center to be eligible for this benefit.
Public Service jobs fall into one of seventeen categories.
Emergency management
Public safety
Military service
Public health
Law enforcement
Government
Public education
Social work
Public child care
Public serivce for those with disabilities
Public service for the elderly
Public library sciences
School based library sciences
Certain tax exempt organizations
Faculty teaching in high need areas
Full-tim faculty at a Tribal College or University
Public interest law services
Also, keep in mind that in the case of the parent PLUS loan, the qualifying employee must be the parent, not the student whose behalf the loan was released.
A memorable Ethics lesson?
"One of the most valuable things I have gotten out of the bailout course is the notion that Washington, D.C. is the new New York City," writes Sameer Khosla, a senior at Villanova, in an e-mail. "Many of the speakers we have had so far in our class have strong ties to D.C. and have provided us with a wealth of information about a rapidly growing number of opportunities that are being created at places like the Federal Reserve and the Securities and Exchange Commission in an effort to help revamp the banking industry and put new and improved regulations in place to help prevent another financial disaster from occurring."
For students about to graduate, taking personal responsibility for worldwide economic calamity may be the most difficult and important lesson. It's already causing a great deal of soul-searching. Professors hope it's a lesson that sticks, and that this unfortunate chapter in the nation's economic history isn't soon repeated. "I hope students' memories aren't short," says Villanova's Kozup. "I hope they remember what happens if they allow ethical lapses to happen again."
For students about to graduate, taking personal responsibility for worldwide economic calamity may be the most difficult and important lesson. It's already causing a great deal of soul-searching. Professors hope it's a lesson that sticks, and that this unfortunate chapter in the nation's economic history isn't soon repeated. "I hope students' memories aren't short," says Villanova's Kozup. "I hope they remember what happens if they allow ethical lapses to happen again."
Jobs are the biggest concern
At a recent town hall meeting at Darden, Dean Robert Bruner answered questions from students about how the crisis would affect them and their careers. His message, says Christine Bohle, a second-year student at Darden, was that students could continue to dream big about their careers but they might have to find more creative avenues for fulfilling their goals. Laura Pearson, a first-year MBA student at Darden, added that faculty are not sugar-coating the problems students will face. "It's been an honest discussion of what we're going through, how long it might last, the impact, and how to find solutions," she said.
Students, who may have invested more than $100,000 in their education, are most concerned about how long the crisis will last and how they will find jobs. With the economy shedding more than 650,000 positions in February, unemployment hitting a 25-year high of 8.1%, on-campus MBA recruiting taking a nosedive, and some of the biggest MBA employers on Wall Street having ceased to exist, they have good reason to worry.
Career services teams at business schools across the country geared up for this crisis in the fall. They sent S.O.S. messages to alumni asking them to provide leads for students currently seeking jobs, helped students retool their resumes, and shifted their strategies. Some schools are asking professors to help their finance students pursue careers outside of Wall Street. At the Villanova School of Business, John Kozup, associate professor of marketing and director of the Center for Marketing and Public Policy Research, created an undergraduate class that addressed the crisis in real time. Taught by 10 different professors and distinguished speakers from a variety of businesses, the course also has students learning about job opportunities in the public sector, one of the few areas where demand for MBAs is growing.
Students, who may have invested more than $100,000 in their education, are most concerned about how long the crisis will last and how they will find jobs. With the economy shedding more than 650,000 positions in February, unemployment hitting a 25-year high of 8.1%, on-campus MBA recruiting taking a nosedive, and some of the biggest MBA employers on Wall Street having ceased to exist, they have good reason to worry.
Career services teams at business schools across the country geared up for this crisis in the fall. They sent S.O.S. messages to alumni asking them to provide leads for students currently seeking jobs, helped students retool their resumes, and shifted their strategies. Some schools are asking professors to help their finance students pursue careers outside of Wall Street. At the Villanova School of Business, John Kozup, associate professor of marketing and director of the Center for Marketing and Public Policy Research, created an undergraduate class that addressed the crisis in real time. Taught by 10 different professors and distinguished speakers from a variety of businesses, the course also has students learning about job opportunities in the public sector, one of the few areas where demand for MBAs is growing.
Obama: a case study in change
The search for a solution is proceeding apace. At Northeastern College of Business in Boston, one student proposed a plan to have the government provide mortgage assistance to individuals for a period of two years, arguing that it would cost less than bailing out the banks while giving the markets time to recuperate. And at the University of Pennsylvania's Wharton School, research on the most effective way to stimulate the economy is finding that stimulus checks are less than ideal because families typically use the cash to pay off debt rather than make new purchases. Reducing payroll taxes paid by employers might better stimulate the economy by trimming payroll costs and making it easier for employers to create jobs, says Mauro Guillen, director of the Lauder Institute at Wharton.
As they struggle to make sense of the crisis, some professors are taking advantage of a teachable moment by using it to hammer home important management lessons. David Bowen, a professor of management at Thunderbird School of Global Management, is offering a course with Professor Caren Siehl on how to lead change, using President Barack Obama as a live case study. In the class, students learn an eight-step model of change by watching Obama—whose inauguration coincided with the semester's start—handle the economic crisis, from creating a shared sense of urgency to getting his stimulus package passed.
For business school students, the crisis exists in both the life of the mind and in real life. Many have been touched personally by the downturn, whether it's a stalled job search or troubles in the housing market. To calm their jittery nerves, business schools are pulling out all the stops.
As they struggle to make sense of the crisis, some professors are taking advantage of a teachable moment by using it to hammer home important management lessons. David Bowen, a professor of management at Thunderbird School of Global Management, is offering a course with Professor Caren Siehl on how to lead change, using President Barack Obama as a live case study. In the class, students learn an eight-step model of change by watching Obama—whose inauguration coincided with the semester's start—handle the economic crisis, from creating a shared sense of urgency to getting his stimulus package passed.
For business school students, the crisis exists in both the life of the mind and in real life. Many have been touched personally by the downturn, whether it's a stalled job search or troubles in the housing market. To calm their jittery nerves, business schools are pulling out all the stops.
Amid Economic Carnage, Business Schools Mull Fixes
Chicago's Guy Turner says he understands that CEOs need to be paid well to make them significant shareholders who will act in the interest of shareholders, but he wonders how much is too much: "CEOs acted in the interest of shareholders with risky loans, but the problem was when you added it up across the whole economy, it fell apart."
While finger-pointing is easy, solutions are not. There seems to be general agreement that getting the nation's banks back on their feet is the key to resolving the crisis, but there's no broad agreement among professors or students about whether companies like American International Group or the Big Three automakers deserve bailouts, whether the stimulus package will work, and whether the country needs more or less regulation to prevent a further financial apocalypse.
While finger-pointing is easy, solutions are not. There seems to be general agreement that getting the nation's banks back on their feet is the key to resolving the crisis, but there's no broad agreement among professors or students about whether companies like American International Group or the Big Three automakers deserve bailouts, whether the stimulus package will work, and whether the country needs more or less regulation to prevent a further financial apocalypse.
Pell Grants Are On The Rise
The Pell Grants are set to receive a much needed face lift in the coming years, but at what cost?
All undergraduate students first became eligible for the Pell Grant in 1976-77. The maximum allotment at that time was $1,400, which covered 70% of the cost of tuition. For the 2009-2010 academic year the maximum allotment has increased to $5,350, which covers about 30% of the cost of tuition.
President Obama’s current plan is to have the Pell Grant increase every year at inflation plus 1 percent, essentially putting the plan on autopilot, similar to Medicaid and Medicare.
My first thought was good! You’re giving all this money to Wall Street and Detroit, why not give some love to the students who are trying to pay for college. But then I began to think maybe it should be voted on each year. Lawmakers should have the flexibility to look at the needs in a given year and put it to a vote.
Don’t get me wrong, I want students to get all the money they can. In fact, we are giving away $100,000 in scholarship money this year over at scholarshippoint.com, I just want to make sure the process is the best one possible for all involved.
All undergraduate students first became eligible for the Pell Grant in 1976-77. The maximum allotment at that time was $1,400, which covered 70% of the cost of tuition. For the 2009-2010 academic year the maximum allotment has increased to $5,350, which covers about 30% of the cost of tuition.
President Obama’s current plan is to have the Pell Grant increase every year at inflation plus 1 percent, essentially putting the plan on autopilot, similar to Medicaid and Medicare.
My first thought was good! You’re giving all this money to Wall Street and Detroit, why not give some love to the students who are trying to pay for college. But then I began to think maybe it should be voted on each year. Lawmakers should have the flexibility to look at the needs in a given year and put it to a vote.
Don’t get me wrong, I want students to get all the money they can. In fact, we are giving away $100,000 in scholarship money this year over at scholarshippoint.com, I just want to make sure the process is the best one possible for all involved.
Spotlight on CEOs
For many professors and students taking part in business school debates, the causes of the crisis are both institutional and personal: absurd risk taking, irrational decision making, and CEO pay packages that encourage both. Lack of personal responsibility and ethical lapses on the part of top executives are two others that come up frequently.
In fact, if there is one positive to come out of this turmoil, it would be a healthy skepticism on the part of business students—MBAs and undergrads alike—concerning the motives and actions of CEOs, the people they aspire to be.
In fact, if there is one positive to come out of this turmoil, it would be a healthy skepticism on the part of business students—MBAs and undergrads alike—concerning the motives and actions of CEOs, the people they aspire to be.
A vibrant crisis blog at MIT
Although the official history of this crisis will be written by economists many years from now, what's happening on business school campuses today—in classrooms, faculty offices, and hurried campus walks—amounts to a rough first draft. For many business school professors the quest for causes is by far the most appealing aspect of the crisis. "The most interesting conversation is trying to sort out the reasons, the why of it," says Susan Chaplinsky, professor of Business Administration at University of Virginia Darden School of Business. "What safeguard wasn't tripped and why was there this 'group' thinking?"
Causes of the crisis were a topic students grappled with in a course offered last fall by Simon Johnson, professor of entrepreneurship and global economics at Massachusetts Institute of Technology's Sloan School of Management. About 180 students weighed in on the crisis by posting on Johnson's blog at various points in the semester, and the discussion has continued there.
Some from outside the course have joined the discussion. A roaring debate last fall as to whether automakers should be bailed out helped convince Johnson that a loan was a good idea, he says. His site gets about 20,000 to 25,000 page views per day. One of its most popular pages is the section Financial Crisis for Beginners, which explains mortgage-backed securities, credit default swaps, and other technical terms in the news. Johnson says students—and others—appreciate the ongoing nature of this inquiry. The class really never stops because people can always log on and find answers to questions or state opinions as the news unfolds. "I have a big responsibility to help with the discussion and thinking, not just to prevent the next crisis but to help us get out of this one," says Johnson.
Causes of the crisis were a topic students grappled with in a course offered last fall by Simon Johnson, professor of entrepreneurship and global economics at Massachusetts Institute of Technology's Sloan School of Management. About 180 students weighed in on the crisis by posting on Johnson's blog at various points in the semester, and the discussion has continued there.
Some from outside the course have joined the discussion. A roaring debate last fall as to whether automakers should be bailed out helped convince Johnson that a loan was a good idea, he says. His site gets about 20,000 to 25,000 page views per day. One of its most popular pages is the section Financial Crisis for Beginners, which explains mortgage-backed securities, credit default swaps, and other technical terms in the news. Johnson says students—and others—appreciate the ongoing nature of this inquiry. The class really never stops because people can always log on and find answers to questions or state opinions as the news unfolds. "I have a big responsibility to help with the discussion and thinking, not just to prevent the next crisis but to help us get out of this one," says Johnson.
Amid Economic Carnage, Business Schools Mull Fixes
Until recently, the world's business schools have been largely sheltered from the gale force winds that have buffeted the global economy, but that's starting to change.
In and out of the classroom, business school professors and their students are struggling to make intellectual sense of a crisis few of them anticipated. Workable solutions remain elusive, but ideas are plentiful, particularly about the causes of the crisis—a perfect storm that saw the simultaneous collapse of the banking system, the bursting of the housing bubble, and the rapid evaporation of trillions of dollars in shareholder wealth.
At the same time, students themselves are confronting a stark new economic reality of their own. Burdened with debt and entering a market for MBA talent that's getting grimmer by the day, many are questioning their reasons for getting an MBA. "There's no way the economic crisis doesn't make every single person rethink what he or she wants to do and whether it's a good time to do it," says Guy Turner, a first-year student at the University of Chicago Booth School of Business.
In and out of the classroom, business school professors and their students are struggling to make intellectual sense of a crisis few of them anticipated. Workable solutions remain elusive, but ideas are plentiful, particularly about the causes of the crisis—a perfect storm that saw the simultaneous collapse of the banking system, the bursting of the housing bubble, and the rapid evaporation of trillions of dollars in shareholder wealth.
At the same time, students themselves are confronting a stark new economic reality of their own. Burdened with debt and entering a market for MBA talent that's getting grimmer by the day, many are questioning their reasons for getting an MBA. "There's no way the economic crisis doesn't make every single person rethink what he or she wants to do and whether it's a good time to do it," says Guy Turner, a first-year student at the University of Chicago Booth School of Business.
B-School in a Recession, with Family
Students with partners and young children are finding that the economic downturn adds fresh stress to a complicated life transition
MBA candidate Smith, left, worries about the couple's job prospects Anne States
Libby Smith toured Emory University's Goizueta Business School when she was pregnant and arrived on the Atlanta campus this fall with her six-month-old baby, Jackson, in tow. In between changing diapers and playing with her son, she juggled schoolwork, an internship search, and a long-distance relationship with her husband, Rob, an army operations officer stationed two hours away at Fort Benning. Says Smith: "It's been harder than I thought it would be."
Now a new worry is surfacing. With her husband's stint in the military set to end in six months, the couple, who recently purchased a home in the Atlanta area, soon won't have a paycheck coming in unless Rob finds a job fast—no mean feat in a crumbling economy. With mortgage payments to meet and looming student loans, Smith has taken to "living a little cheaper," clipping coupons and buying supermarket-brand paper towels instead of Brawny. Though she has a summer internship at consulting firm Booz Allen Hamilton, Smith, 29, is wary of the future. "It's stressful to think that nothing is guaranteed anymore," she says.
Juggling school and family life has never been easy, but the economic downturn is adding a new wrinkle. In recent years, as B-schools have gotten better at helping families make the transition to academic life, more students with partners and young children have headed to campus. To accommodate the needs of these students and perhaps entice them away from rivals, B-schools have created organizations for spouses and partners, launched child playgroups, and offered job and relocation assistance. Some schools let spouses audit classes, invite them to school functions, and offer free counseling services and support groups—perks that will become more essential in lean economic times, particularly for partners of newly admitted students. "The networking and job assistance has been ramped up because people are a little more nervous," says Wendy Metter, associate director of student affairs at Northwestern's Kellogg School of Management. "They want help finding a job now, as opposed to June."
As the economy unravels, that's not all they'll need help with. Long-distance relationships may become more common as partners stay behind to keep jobs rather than risk losing the family's sole source of income. And relationships could grow more strained as students struggle to find jobs in an increasingly grim market. Nearly 56% of B-schools reported a significant drop in recruiting activity on campus this winter, according to a survey by the MBA Career Services Council, an association of business school career officers.
Schools are preparing for the worst. At Dartmouth's Tuck School of Business, where 40% of students have partners or young families, the therapist who runs the partner-support group will keep a closer eye on students this spring. And at the University of Virginia's Darden School of Business, which has 65 married students among this year's class of 333, the student affairs office is posting information about signs of depression and how to help friends struggling with it.
For students with young families, the pressure can be intense. Richard Core, 27, a second-year student at Darden, is in the midst of a wide-ranging job search that so far has produced no offers. As he nears graduation, his search has taken on an "added layer of stress" because he feels responsible not only for himself but for his three-month-old son, Trip, and wife, Mandy, on maternity leave from her finance job. The couple has contingency plans to move in with Richard's parents in New Jersey if the search drags on. "There's a bit more urgency to finding a job now," says Core, who worked at Merrill Lynch (MER) before business school. "I'm at the stage of life where making sure I have things like health insurance is more important than I ever realized."
Even students who land jobs feel insecure. Monte Searle, 39, at Indiana University's Kelley School of Business, moved 1,500 miles with his wife and three children, ages 10, 12, and 14, from their home near Salt Lake City to Bloomington. Searle's decision to go to B-school has strained family finances. His wife, Tanya, took on a 30-hour-a-week job as a teacher's aide to make ends meet. The couple has cut costly organized sports activities for the children, and their daughter pays for half of her piano lessons with babysitting money. Books come from the library, not Barnes & Noble. "We've cut back as much as we can without the kids feeling like they're really sacrificing a lot," Tanya says.
The family was relieved when Monte got a job offer in the corporate finance department at Dow Chemical (DOW), but they have lingering concerns, from the stability of the job market to whether they'll be able to get a mortgage. "I've seen worry and anxiety on my children's faces, and I'm definitely still worried to see how this plays out," Searle says. "It's something that's always in the back of my mind."
MBA candidate Smith, left, worries about the couple's job prospects Anne States
Libby Smith toured Emory University's Goizueta Business School when she was pregnant and arrived on the Atlanta campus this fall with her six-month-old baby, Jackson, in tow. In between changing diapers and playing with her son, she juggled schoolwork, an internship search, and a long-distance relationship with her husband, Rob, an army operations officer stationed two hours away at Fort Benning. Says Smith: "It's been harder than I thought it would be."
Now a new worry is surfacing. With her husband's stint in the military set to end in six months, the couple, who recently purchased a home in the Atlanta area, soon won't have a paycheck coming in unless Rob finds a job fast—no mean feat in a crumbling economy. With mortgage payments to meet and looming student loans, Smith has taken to "living a little cheaper," clipping coupons and buying supermarket-brand paper towels instead of Brawny. Though she has a summer internship at consulting firm Booz Allen Hamilton, Smith, 29, is wary of the future. "It's stressful to think that nothing is guaranteed anymore," she says.
Juggling school and family life has never been easy, but the economic downturn is adding a new wrinkle. In recent years, as B-schools have gotten better at helping families make the transition to academic life, more students with partners and young children have headed to campus. To accommodate the needs of these students and perhaps entice them away from rivals, B-schools have created organizations for spouses and partners, launched child playgroups, and offered job and relocation assistance. Some schools let spouses audit classes, invite them to school functions, and offer free counseling services and support groups—perks that will become more essential in lean economic times, particularly for partners of newly admitted students. "The networking and job assistance has been ramped up because people are a little more nervous," says Wendy Metter, associate director of student affairs at Northwestern's Kellogg School of Management. "They want help finding a job now, as opposed to June."
As the economy unravels, that's not all they'll need help with. Long-distance relationships may become more common as partners stay behind to keep jobs rather than risk losing the family's sole source of income. And relationships could grow more strained as students struggle to find jobs in an increasingly grim market. Nearly 56% of B-schools reported a significant drop in recruiting activity on campus this winter, according to a survey by the MBA Career Services Council, an association of business school career officers.
Schools are preparing for the worst. At Dartmouth's Tuck School of Business, where 40% of students have partners or young families, the therapist who runs the partner-support group will keep a closer eye on students this spring. And at the University of Virginia's Darden School of Business, which has 65 married students among this year's class of 333, the student affairs office is posting information about signs of depression and how to help friends struggling with it.
For students with young families, the pressure can be intense. Richard Core, 27, a second-year student at Darden, is in the midst of a wide-ranging job search that so far has produced no offers. As he nears graduation, his search has taken on an "added layer of stress" because he feels responsible not only for himself but for his three-month-old son, Trip, and wife, Mandy, on maternity leave from her finance job. The couple has contingency plans to move in with Richard's parents in New Jersey if the search drags on. "There's a bit more urgency to finding a job now," says Core, who worked at Merrill Lynch (MER) before business school. "I'm at the stage of life where making sure I have things like health insurance is more important than I ever realized."
Even students who land jobs feel insecure. Monte Searle, 39, at Indiana University's Kelley School of Business, moved 1,500 miles with his wife and three children, ages 10, 12, and 14, from their home near Salt Lake City to Bloomington. Searle's decision to go to B-school has strained family finances. His wife, Tanya, took on a 30-hour-a-week job as a teacher's aide to make ends meet. The couple has cut costly organized sports activities for the children, and their daughter pays for half of her piano lessons with babysitting money. Books come from the library, not Barnes & Noble. "We've cut back as much as we can without the kids feeling like they're really sacrificing a lot," Tanya says.
The family was relieved when Monte got a job offer in the corporate finance department at Dow Chemical (DOW), but they have lingering concerns, from the stability of the job market to whether they'll be able to get a mortgage. "I've seen worry and anxiety on my children's faces, and I'm definitely still worried to see how this plays out," Searle says. "It's something that's always in the back of my mind."
Why You Should Invest In Education
For those of you who think that college is a waste of time and that you can find a job without a college degree, I can not disagree.
The fact is most of you will find a job, but what kind is the real question. Odds are your job will hold limited compensation potential and little chance of advancement without that piece of paper. And before you start saying, well my father didn’t go to college and he did pretty well, my answer to that is, it’s a different era now! My Dad bought his first new car for $1,400, but that’s not happening in 2009.
If you want to get ahead a bachelors degree is the bare minimum you need these days (unless you are handed the keys to the family business or have a fat trust fund to live off). Not to mention the more education you have the more likely you are to keep or find employment.
The chart below, with 2007 numbers from the U.S. Bureau of Labor Statistics, shows a clear correlation between eduction,employment, and compensation.
Unemployment Rate in 2007
Level of Education completed
Median earnings in 2007
7.1%
Less than a High School diploma
$22,256
4.4%
High School graduate
$31,408
3.8%
Some college, no degree
$35,516
3.0%
Associate degree
$38,480
2.2%
Bachelor’s degree
$51,324
1.8%
Master’s degree
$60,580
1.4%
Doctoral degree
$77,844
1.3%
Professional degree
$74,204
You can debate the merits of going to school vs. not going to school if you’d like, but the unabashed truth is starring you right in the face. Don’t lie to yourself, you know the numbers don’t lie.
The fact is most of you will find a job, but what kind is the real question. Odds are your job will hold limited compensation potential and little chance of advancement without that piece of paper. And before you start saying, well my father didn’t go to college and he did pretty well, my answer to that is, it’s a different era now! My Dad bought his first new car for $1,400, but that’s not happening in 2009.
If you want to get ahead a bachelors degree is the bare minimum you need these days (unless you are handed the keys to the family business or have a fat trust fund to live off). Not to mention the more education you have the more likely you are to keep or find employment.
The chart below, with 2007 numbers from the U.S. Bureau of Labor Statistics, shows a clear correlation between eduction,employment, and compensation.
Unemployment Rate in 2007
Level of Education completed
Median earnings in 2007
7.1%
Less than a High School diploma
$22,256
4.4%
High School graduate
$31,408
3.8%
Some college, no degree
$35,516
3.0%
Associate degree
$38,480
2.2%
Bachelor’s degree
$51,324
1.8%
Master’s degree
$60,580
1.4%
Doctoral degree
$77,844
1.3%
Professional degree
$74,204
You can debate the merits of going to school vs. not going to school if you’d like, but the unabashed truth is starring you right in the face. Don’t lie to yourself, you know the numbers don’t lie.
Perkins Loans Are Better than Stafford’s
It’s true; if you can secure a Federal Perkins loan through your school it is a better option than a Stafford loan. The Perkins Loan Program provides low-interest loans to help needy students finance the costs of postsecondary education. Perkins loans hold a fixed interest rate of 5%, while subsidized Stafford loan are at 5.6% for the 2009-2010 academic year and 6.8% for the unsubsidized.
The problem with the Federal Perkins loan, however, is that there are more eligible students than there are loans to give. Perkins loans are awarded through the school, and are part of a revolving loan fund. A revolving loan fund just means the available funds in the pool are dependent on former students who are paying back money from their Perkins loans from previous years. As a result the number of students who receive a Perkins loan from a school can change from year to year. Additionally, the Perkins loans are awarded on a first come first serve basis, which is why completing your fafsa early is pivotal.
Students can receive Perkins loans at any one of approximately 1,800 participating postsecondary institutions. Institutional financial aid administrators at participating institutions have substantial flexibility in determining the amount of Perkins loans to award to students who are enrolled or accepted for enrollment.
Borrowers who undertake certain public, military, or teaching service employment are eligible to have all or part of their loans canceled. Below is a list of loan discharge conditions for the Perkins loan.
Cancellation Conditions
Amount Forgiven
Bankruptcy (in rare cases - cancellation is possible only if the bankruptcy court rules that repayment would case an undue hardship
100 percent
Closed school (before student could complete program of study) - applies to loans received on or after Jan.1, 1986
100 percent
Borrower’s total and permanent disability or death
100 percent
Full-time teacher in a designated elementary or secondary school serving students from low income families
Up to 100 percent
Full-time special education teacher (includes teaching children with disabilities
Up to 100 percent
Full-time qualified professional provider of early intervention services for the disabled
Up to 100 percent
Full-time teacher math, science, foreign languages, bilingual education, or other fields designated as teacher shortage areas
Up to 100 percent
Full-time employee of a public or nonprofit child or family services agency providing services to high-risk children and their families from low-income communities.
Up to 100 percent
Full-time nurse or medical technician
Up to 100 percent
Full-time law enforcement or corrections officer
Up to 100 percent
Full-time staff member in the education compnent of a Head Start Program
Up to 100 percent
VISTA or Peace Corps volunteer
Up to 70 percent
Service in the U.S. Armed Forces
Up to 50 percent
The problem with the Federal Perkins loan, however, is that there are more eligible students than there are loans to give. Perkins loans are awarded through the school, and are part of a revolving loan fund. A revolving loan fund just means the available funds in the pool are dependent on former students who are paying back money from their Perkins loans from previous years. As a result the number of students who receive a Perkins loan from a school can change from year to year. Additionally, the Perkins loans are awarded on a first come first serve basis, which is why completing your fafsa early is pivotal.
Students can receive Perkins loans at any one of approximately 1,800 participating postsecondary institutions. Institutional financial aid administrators at participating institutions have substantial flexibility in determining the amount of Perkins loans to award to students who are enrolled or accepted for enrollment.
Borrowers who undertake certain public, military, or teaching service employment are eligible to have all or part of their loans canceled. Below is a list of loan discharge conditions for the Perkins loan.
Cancellation Conditions
Amount Forgiven
Bankruptcy (in rare cases - cancellation is possible only if the bankruptcy court rules that repayment would case an undue hardship
100 percent
Closed school (before student could complete program of study) - applies to loans received on or after Jan.1, 1986
100 percent
Borrower’s total and permanent disability or death
100 percent
Full-time teacher in a designated elementary or secondary school serving students from low income families
Up to 100 percent
Full-time special education teacher (includes teaching children with disabilities
Up to 100 percent
Full-time qualified professional provider of early intervention services for the disabled
Up to 100 percent
Full-time teacher math, science, foreign languages, bilingual education, or other fields designated as teacher shortage areas
Up to 100 percent
Full-time employee of a public or nonprofit child or family services agency providing services to high-risk children and their families from low-income communities.
Up to 100 percent
Full-time nurse or medical technician
Up to 100 percent
Full-time law enforcement or corrections officer
Up to 100 percent
Full-time staff member in the education compnent of a Head Start Program
Up to 100 percent
VISTA or Peace Corps volunteer
Up to 70 percent
Service in the U.S. Armed Forces
Up to 50 percent
Stafford Loan “Fun Fact”
Did you know there are schools inside the U.S. you can not get a Stafford loan for, but schools outside of the U.S. that you can? I’m sure that seems a bit strange, but it’s true.
Not all schools participate in federal student aid programs. The school you are attending must be Title IV certified. Being Title IV certified is what makes you eligible for subsidized and unsubsidized Federal Stafford loans. Speak to your schools financial aid office to confirm if they are a certified Title IV school. If they say no it may be worth exploring other options.
Not all schools participate in federal student aid programs. The school you are attending must be Title IV certified. Being Title IV certified is what makes you eligible for subsidized and unsubsidized Federal Stafford loans. Speak to your schools financial aid office to confirm if they are a certified Title IV school. If they say no it may be worth exploring other options.
High School Students, Start Saving
The youth of today is far more in-tune with what’s going on in the world than my generation ever was (geesh, I sound like my Dad now). It’s all linked to technology. Cell phones, blackberries, Internet, and 24/7 programming are all contributing factors. When I was thirteen I was completely naive. The biggest conundrum in my life came on Friday evenings when I was forced to decide between a hostess apple pie or some Andy Cap hot fries to go along with my pepsi-cola. Yes, it was the best of times.
I worked seven days a week (if you want to call it work). I had a paper route on Indian Trail in my home town and made about $40 bucks per week. I spent my money on baseball cards, food, comic books, and even managed to save enough one time to buy a really nice digital watch with a built-in calculator. Nowadays, however, many kids don’t have the option of spending their money so frivolously. Money management is a skill many need to master at an early age if they want to get ahead.
And while I certainly endorse saving, I refuse to toss around outdated cliches like “a penny saved is a penny earned”. It’s not. Inflation, as you probably know, will far out pace any menial interest you accrue on your money in a savings account. What I will say is this however; if you save a portion of your money now, even if it’s just 20% of your earnings, you may wind up saving yourself thousands of dollars down the road.
If you read my blog Why You Should Invest In Education you will see the clear correlation between a college education and the amount of money you can earn. That said, a college education is costly and most students will need to take out a federal Stafford loan, a private student loan, or both to finance their education.
The interest rate on federal Stafford loans currently ranges from 6-6.8%, while private loans vary greatly depending on your FICO score. Obviously the more you owe, the more interest accrues, and the more you pay back, which is why I want you to minimize the amount of funds you need to borrower by beginning the savings process now. I’d much rather you collect 1% interest on your savings now than have 6% interest count against you later.
Start out by setting a modest goal for yourself. If you can mange to save just $39 bucks a week that adds up to $2K per year! The power of discipline the rewards of time.
Remember, it’s never too early to start saving. Perhaps if I saved a few dollars I would have reaped the secondary benefit of saving a few pounds too. But those sweet apple pies were a little slice of heaven.
I worked seven days a week (if you want to call it work). I had a paper route on Indian Trail in my home town and made about $40 bucks per week. I spent my money on baseball cards, food, comic books, and even managed to save enough one time to buy a really nice digital watch with a built-in calculator. Nowadays, however, many kids don’t have the option of spending their money so frivolously. Money management is a skill many need to master at an early age if they want to get ahead.
And while I certainly endorse saving, I refuse to toss around outdated cliches like “a penny saved is a penny earned”. It’s not. Inflation, as you probably know, will far out pace any menial interest you accrue on your money in a savings account. What I will say is this however; if you save a portion of your money now, even if it’s just 20% of your earnings, you may wind up saving yourself thousands of dollars down the road.
If you read my blog Why You Should Invest In Education you will see the clear correlation between a college education and the amount of money you can earn. That said, a college education is costly and most students will need to take out a federal Stafford loan, a private student loan, or both to finance their education.
The interest rate on federal Stafford loans currently ranges from 6-6.8%, while private loans vary greatly depending on your FICO score. Obviously the more you owe, the more interest accrues, and the more you pay back, which is why I want you to minimize the amount of funds you need to borrower by beginning the savings process now. I’d much rather you collect 1% interest on your savings now than have 6% interest count against you later.
Start out by setting a modest goal for yourself. If you can mange to save just $39 bucks a week that adds up to $2K per year! The power of discipline the rewards of time.
Remember, it’s never too early to start saving. Perhaps if I saved a few dollars I would have reaped the secondary benefit of saving a few pounds too. But those sweet apple pies were a little slice of heaven.
I Need More Deferral Time For My Student Loans
Consolidation may be your key to extended deferral time, after all, consolidation worked out pretty well for the Brady’s, ha-ha.
Of course I make that analogy tongue and cheek. Here in the real world things seldom go that smoothly, which is why the Brady’s serve as our “fictional” gold standard. Still, we can aspire to be Brady-like, right? We all want that “sunshine day.”
Well, get those sunglasses ready because I may be able to help your plight during these challenging times with a helpful tip that many of you are completely unaware of.
First off, what sparked this blog was the countless queries I’ve received on this topic. I have never fielded more calls and/or emails asking if there is anyway to defer a student loan beyond the standard three year eligibility period. The unemployment rate is now up to 8.1%, according to the latest U.S. Bureau of Labor Statistics report, which means more defaulted student loans are on the horizon unless borrowers are able to deferred them longer.
So how can you add another three years of deferment time? Well, if your loans have not yet been consolidated with the Department of Education’s Direct Loan center than you can transfer your loans to them (re-consolidate) and that will refresh your three year deferment benefit. That’s it. So if you are currently will Salle Mae, Suntech, Chase, etc just re-consolidate your loans with the Direct Loan Center.
Keep in mind that reconsolidating will not impact your interest rate, and if you have a borrower benefit through your current lender that will not be carried over to the Direct Loan Center. However, if your primary goal is to give yourself more time to pay back your loans until the economy recovers, this is probably your best bet and will serve the purpose.
Now everybody’s smilin - sunshine day.
Of course I make that analogy tongue and cheek. Here in the real world things seldom go that smoothly, which is why the Brady’s serve as our “fictional” gold standard. Still, we can aspire to be Brady-like, right? We all want that “sunshine day.”
Well, get those sunglasses ready because I may be able to help your plight during these challenging times with a helpful tip that many of you are completely unaware of.
First off, what sparked this blog was the countless queries I’ve received on this topic. I have never fielded more calls and/or emails asking if there is anyway to defer a student loan beyond the standard three year eligibility period. The unemployment rate is now up to 8.1%, according to the latest U.S. Bureau of Labor Statistics report, which means more defaulted student loans are on the horizon unless borrowers are able to deferred them longer.
So how can you add another three years of deferment time? Well, if your loans have not yet been consolidated with the Department of Education’s Direct Loan center than you can transfer your loans to them (re-consolidate) and that will refresh your three year deferment benefit. That’s it. So if you are currently will Salle Mae, Suntech, Chase, etc just re-consolidate your loans with the Direct Loan Center.
Keep in mind that reconsolidating will not impact your interest rate, and if you have a borrower benefit through your current lender that will not be carried over to the Direct Loan Center. However, if your primary goal is to give yourself more time to pay back your loans until the economy recovers, this is probably your best bet and will serve the purpose.
Now everybody’s smilin - sunshine day.
Students to Schools: “Thanks, but no thanks”
It is high school students, and not the schools, that are doing the rejecting these days. And not because they don’t want to go to school, but because they can not afford to. The economic downturn has student hopefuls putting the breaks on their education, at least at the pricey institutions.
The market volatility has forced many students to re-evaluate their situation. Senior Tess Rusin had her heart set on attending New York University, but now says it’s too expensive. “When the economy took a downturn, 66% percent of my college savings disappeared — and I’m not getting it back,” she said. Students are now forced to turn to Plan B.
State schools and community colleges are now on the top of many student wish lists, which isn’t necessarily a bad thing. I’ve actually been advising students to enroll in a community college for years, just as I did. It makes good economic sense, especially in bad economic times. Assuming the bulk of your classes will transfer over to the four year school you are interested in, you will save yourself thousands of dollars.
Of course you could also win a sweet $10,000 scholarship, which is being drawn 3/31, and use that money toward the cost of education at that pricey iunstitution, but I would still maximize my time and money at a community college. It may not have that sexy big school appeal, but thrifty is in these days.
The market volatility has forced many students to re-evaluate their situation. Senior Tess Rusin had her heart set on attending New York University, but now says it’s too expensive. “When the economy took a downturn, 66% percent of my college savings disappeared — and I’m not getting it back,” she said. Students are now forced to turn to Plan B.
State schools and community colleges are now on the top of many student wish lists, which isn’t necessarily a bad thing. I’ve actually been advising students to enroll in a community college for years, just as I did. It makes good economic sense, especially in bad economic times. Assuming the bulk of your classes will transfer over to the four year school you are interested in, you will save yourself thousands of dollars.
Of course you could also win a sweet $10,000 scholarship, which is being drawn 3/31, and use that money toward the cost of education at that pricey iunstitution, but I would still maximize my time and money at a community college. It may not have that sexy big school appeal, but thrifty is in these days.
FAFSA and Stafford Loan, Not The Same
I’ve spoke to many students who were under the belief that the fafsa and Stafford loan were the same thing; they are not. One does lead to the other however.
You can have a FAFSA without a Stafford loan, but you can not have a Stafford loan without a FAFSA. You need to first complete your FAFSA to see if you qualify for a Stafford loan. Did you follow that?
Then, assuming you qualify, you complete your Stafford loan Master Promissory Note (MPN) next.
So to re-cap…
1. complete your FAFSA
2. complete your Stafford loan MPN
These are two separate steps. Of course you can always speak to your financial aid office at your school for further guidance as well.
You can have a FAFSA without a Stafford loan, but you can not have a Stafford loan without a FAFSA. You need to first complete your FAFSA to see if you qualify for a Stafford loan. Did you follow that?
Then, assuming you qualify, you complete your Stafford loan Master Promissory Note (MPN) next.
So to re-cap…
1. complete your FAFSA
2. complete your Stafford loan MPN
These are two separate steps. Of course you can always speak to your financial aid office at your school for further guidance as well.
World to U.S. B-Schools: Thanks, but No Thanks
Nishant Banore got one step closer to his dream of attending a business school in the U.S. when he received an offer of admission this fall from UCLA's Anderson School of Management. Banore, founder of I-Alive, a nonprofit that educates Indian youth about healthy living, was even more excited when the school told him he'd landed a lucrative $30,000 fellowship, a coup in an especially competitive year for B-school admissions. The Indian applicant's enthusiasm quickly waned though as he considered his job prospects in the U.S. after graduation. With limited H-1B job visas available, a shaky economic climate, and new restrictions on hiring foreign workers in the financial services sector, attending an American B-school all seemed all of a sudden too big a risk to take.
"I don't think I can leave my family's future on luck and hope," says Banore, who lives in Mumbai. He turned down Anderson this week to attend one of the top B-schools in India, the Indian School of Business.
For years, American business schools have effortlessly attracted a diverse body of international students, eager to come for a top-rate business education and the chance to work in the U.S. after graduation. But diversity at top B-schools across the country may take a hit this year, as a growing number of international students put off plans to attend school or decide to attend schools in their home countries instead. Though it's still too early to tell what the impact will be on next year's class, a growing number of students from China, India, Europe, and the Middle East say they are considering, or have already decided, to decline their acceptance offers to prestigious U.S. business schools.
Job and Visa Worries
Meanwhile, a growing number of foreign students studying in the U.S. said they plan to return home after graduation, according to a study by the Ewing Marion Kauffman Foundation released onThursday. The students fear that they will not be able to find a job after graduation and a substantial majority—85% of Indians and Chinese, and 72% of Europeans—are worried about obtaining work visas, according to the study. The attitude of students, particularly the Chinese, towards employment opportunities has shifted, as well. Nearly 52% of Chinese students said they believed China had the best job opportunities, vs. 32% of Indians and 26% of Europeans. That's a sharp change from the 1980s and '90s, when most skilled immigrants believed the best job opportunities could be found in the U.S., the foundation says.
The shift comes at a time when the climate for international students in the U.S. has become increasingly chilly. New rules under the Troubled Assets Relief Program (TARP) have imposed strict hiring restrictions on any companies receiving the federal bailout funds that hire H-1B workers. Bank of America rescinded 61 offers to second-year international MBA students this March, heightening concerns that other banks may soon follow suit, or worse, that there will be a general halt on H-1B guest-worker visas.
Complicating matters, international students are facing difficulty obtaining funding for B-school. In the past, most students participated in loan programs that allowed applicants to obtain up to $150,000 without a co-signer to assume stewardship of the loan should the borrower default. The banks that used to offer these programs have withdrawn from the loan market, and some top schools have still not yet announced replacement programs.
At the University of Chicago Booth School of Business, applications from international students are down, and prospective admitted students are worried about their job prospects going forward, says Rosemarie Martinelli, Chicago's admissions director.
"I don't think I can leave my family's future on luck and hope," says Banore, who lives in Mumbai. He turned down Anderson this week to attend one of the top B-schools in India, the Indian School of Business.
For years, American business schools have effortlessly attracted a diverse body of international students, eager to come for a top-rate business education and the chance to work in the U.S. after graduation. But diversity at top B-schools across the country may take a hit this year, as a growing number of international students put off plans to attend school or decide to attend schools in their home countries instead. Though it's still too early to tell what the impact will be on next year's class, a growing number of students from China, India, Europe, and the Middle East say they are considering, or have already decided, to decline their acceptance offers to prestigious U.S. business schools.
Job and Visa Worries
Meanwhile, a growing number of foreign students studying in the U.S. said they plan to return home after graduation, according to a study by the Ewing Marion Kauffman Foundation released onThursday. The students fear that they will not be able to find a job after graduation and a substantial majority—85% of Indians and Chinese, and 72% of Europeans—are worried about obtaining work visas, according to the study. The attitude of students, particularly the Chinese, towards employment opportunities has shifted, as well. Nearly 52% of Chinese students said they believed China had the best job opportunities, vs. 32% of Indians and 26% of Europeans. That's a sharp change from the 1980s and '90s, when most skilled immigrants believed the best job opportunities could be found in the U.S., the foundation says.
The shift comes at a time when the climate for international students in the U.S. has become increasingly chilly. New rules under the Troubled Assets Relief Program (TARP) have imposed strict hiring restrictions on any companies receiving the federal bailout funds that hire H-1B workers. Bank of America rescinded 61 offers to second-year international MBA students this March, heightening concerns that other banks may soon follow suit, or worse, that there will be a general halt on H-1B guest-worker visas.
Complicating matters, international students are facing difficulty obtaining funding for B-school. In the past, most students participated in loan programs that allowed applicants to obtain up to $150,000 without a co-signer to assume stewardship of the loan should the borrower default. The banks that used to offer these programs have withdrawn from the loan market, and some top schools have still not yet announced replacement programs.
At the University of Chicago Booth School of Business, applications from international students are down, and prospective admitted students are worried about their job prospects going forward, says Rosemarie Martinelli, Chicago's admissions director.
OBAMA: Federal Aid, Tax Cuts, & Nurse Visits?
President Obama is pushing his budget proposal to overhaul the entire education system throughout the U.S. His plan would affect students of all ages with a goal of improving education levels all across the U.S. starting with preschool aged children. In a recent speech to the US Hispanic Chamber of Commerce, Obama began to divulge what exactly he has in mind for this giant overhaul. He spoke of a 5 tier reform plan that touches on what seems like every stage of the educational process. The President was quoted as saying, “We have let our grades slip, our schools crumble, our teacher quality fall short and other nations outpace us…The time for finger-pointing is over. The time for holding ourselves accountable is here.”
The 5 reform points that he spoke about are as follows:
1. Increase investments in early childhood programs such as Headstart etc.
2. Holding students accountable for higher/tougher testing standards
3. Increase teacher training and recruitment, and offer “merit pay” (teachers that produce more results will get paid more than others). Along with that, ineffective teachers would be let go if they fail to improve.
4. Renew his campaign for the support of charter schools. (definition of a charter school = Charter schools are elementary or secondary schools in the United States that receive public money but have been freed from some of the rules, regulations, and statutes that apply to other public schools in exchange for some type of accountability for producing certain results, which are set forth in each school’s charter). President Obama also proposed longer school days.
5. For Higher Education he wants to increase the annual Pell Grants maximum to $5550, and push for students from working families to receive a $2500 tax credit.
I can only imagine that the republicans must be reeling…especially about the money for Headstart. Also included in early investments was an idea to have registered nurses visit the homes of single moms regularly to make sure their children are healthy and ready for school life. Not a bad idea, but who will run this program? I will say that he has a point when it comes to holding students and teachers accountable for their performances. Have you ever had a bad teacher? I have, and it made me lose any interest I may have had in the subject at hand. Frankly our country collectively cannot really afford to have children caring less about school than some of them already do.
For those students that are fortunate enough to go on to college, Obama has some plans there as well. The Pell grant is a Federal grant given to students who exhibit more financial need than others; this “financial need” is determined when you fill out the FAFSA (Free Application for Federal Student Aid). Obama proposes to raise the annual maximum amounts on that grant from $4,731 for the 2008-2009 school year to $5350 for the 2009-2010 school year, and then increase it again to $5500 for the 2010-2011 school year. The unsubsidized loan amount for dependent students is currently $2,000, but Obama’s stimulus plan will add an additional $2000 to that, which will help a lot of students out whose parents cannot afford to help them through college. The President also proposes to eliminate the FFEL loan program (private lenders who lend Federal loans) and have all Federal loans run through Direct Loans (the U.S. Department of Education’s Loan program); but wait, there is more….the Perkins loan, which is another federal loan awarded based on need, is typically run through the college itself, but Obama is proposing to shift that loan program so it is run through the government. Now I have my loans from my undergraduate degree with Direct loans, and the customer service is definitely not top notch. I am wondering how the Department of Education is going to manage all the loans that are currently in the FFEL program AND all the Perkins loan and still make sure that those loan programs don’t fall at the waist side. I personally do not see it happening…and didn’t Clinton propose this at one point, but it failed?
A student tax credit is also part of this the Presidents budget proposal, which would put an extra $2500 in students’ pockets. This is definitely helpful to any student in school, and it can also serve as an incentive for someone to go back to school and finish their education.
This new budget proposal has a lot of big ideas, some of which already have the necessary platforms to execute the new plans. Others however do not. It seems like all the ideas would help to improve the education system in the US, but the road to get there might be a long and bumpy one.
The 5 reform points that he spoke about are as follows:
1. Increase investments in early childhood programs such as Headstart etc.
2. Holding students accountable for higher/tougher testing standards
3. Increase teacher training and recruitment, and offer “merit pay” (teachers that produce more results will get paid more than others). Along with that, ineffective teachers would be let go if they fail to improve.
4. Renew his campaign for the support of charter schools. (definition of a charter school = Charter schools are elementary or secondary schools in the United States that receive public money but have been freed from some of the rules, regulations, and statutes that apply to other public schools in exchange for some type of accountability for producing certain results, which are set forth in each school’s charter). President Obama also proposed longer school days.
5. For Higher Education he wants to increase the annual Pell Grants maximum to $5550, and push for students from working families to receive a $2500 tax credit.
I can only imagine that the republicans must be reeling…especially about the money for Headstart. Also included in early investments was an idea to have registered nurses visit the homes of single moms regularly to make sure their children are healthy and ready for school life. Not a bad idea, but who will run this program? I will say that he has a point when it comes to holding students and teachers accountable for their performances. Have you ever had a bad teacher? I have, and it made me lose any interest I may have had in the subject at hand. Frankly our country collectively cannot really afford to have children caring less about school than some of them already do.
For those students that are fortunate enough to go on to college, Obama has some plans there as well. The Pell grant is a Federal grant given to students who exhibit more financial need than others; this “financial need” is determined when you fill out the FAFSA (Free Application for Federal Student Aid). Obama proposes to raise the annual maximum amounts on that grant from $4,731 for the 2008-2009 school year to $5350 for the 2009-2010 school year, and then increase it again to $5500 for the 2010-2011 school year. The unsubsidized loan amount for dependent students is currently $2,000, but Obama’s stimulus plan will add an additional $2000 to that, which will help a lot of students out whose parents cannot afford to help them through college. The President also proposes to eliminate the FFEL loan program (private lenders who lend Federal loans) and have all Federal loans run through Direct Loans (the U.S. Department of Education’s Loan program); but wait, there is more….the Perkins loan, which is another federal loan awarded based on need, is typically run through the college itself, but Obama is proposing to shift that loan program so it is run through the government. Now I have my loans from my undergraduate degree with Direct loans, and the customer service is definitely not top notch. I am wondering how the Department of Education is going to manage all the loans that are currently in the FFEL program AND all the Perkins loan and still make sure that those loan programs don’t fall at the waist side. I personally do not see it happening…and didn’t Clinton propose this at one point, but it failed?
A student tax credit is also part of this the Presidents budget proposal, which would put an extra $2500 in students’ pockets. This is definitely helpful to any student in school, and it can also serve as an incentive for someone to go back to school and finish their education.
This new budget proposal has a lot of big ideas, some of which already have the necessary platforms to execute the new plans. Others however do not. It seems like all the ideas would help to improve the education system in the US, but the road to get there might be a long and bumpy one.
In School Deferment, No Longer An Option
I’ve been feeling like the bearer of bad news lately. It seems every time I sit down to write a blog it’s about something negative going on in the market. And although this blog is no different, it does have a silver lining.
It was just announced last week that Sallie Mae, who provides 6 billion dollars per year in student loans, is discontinuing their private Signature loan product in favor of a short-term version that requires students to make interest only payments while in school. This is both good and bad news.
The good news is that a student will save thousands of dollars over the life of their loan as they will avoid negative amortization and will have a shorter loan term. The bad is that the borrower is still required to make monthly payments while in school.
The loan example that SLM likes to use is if a student borrows $17,000 over two years. For the first semester the student would be responsible for $40 per month, but that figure would rise each semester, reaching $160 by the second semester of the students sophomore year. After graduation the student would have a $328 monthly payment for six years. Under this new plan the student would repay about $28,000 total, opposed to the Signature loan program, which held a longer repayment term and would have cost about $45,000.
Still, while students “appreciate” the cost savings on the back end, is is the money on the front end that is the real killer. Not all students can afford to make payments while in school. For those students I am happy to report there are still options.
Fortunately not all lenders are forcing students to make payments while in school. If you are interested in taking out a private loan that still has a loan deferment benefit while in school
It was just announced last week that Sallie Mae, who provides 6 billion dollars per year in student loans, is discontinuing their private Signature loan product in favor of a short-term version that requires students to make interest only payments while in school. This is both good and bad news.
The good news is that a student will save thousands of dollars over the life of their loan as they will avoid negative amortization and will have a shorter loan term. The bad is that the borrower is still required to make monthly payments while in school.
The loan example that SLM likes to use is if a student borrows $17,000 over two years. For the first semester the student would be responsible for $40 per month, but that figure would rise each semester, reaching $160 by the second semester of the students sophomore year. After graduation the student would have a $328 monthly payment for six years. Under this new plan the student would repay about $28,000 total, opposed to the Signature loan program, which held a longer repayment term and would have cost about $45,000.
Still, while students “appreciate” the cost savings on the back end, is is the money on the front end that is the real killer. Not all students can afford to make payments while in school. For those students I am happy to report there are still options.
Fortunately not all lenders are forcing students to make payments while in school. If you are interested in taking out a private loan that still has a loan deferment benefit while in school
TYPES OF LOAN
REPAYMENT
The maximum period of repayment of loan is 10-Years from the date of disbursement of first installment. The borrower shall repay the loan in monthly installment after six months from the date of first employment or one year from the date of completion of studies, which ever is earlier.
Under the Scheme, loans is available in the following subjects.APPROVED UNIVERSITIES/COLLEGES
i) Engineering
ii) Electronics
iii) Oil Gas & Petro-Chemical Technology
iv) Agriculture
v) Medicine
vi) Physics
vii) Chemistry
viii) Biology, Molecular Biology & Genetics
ix) Mathematics
x) Other Natural Sciences
xi) DAWA and Islamic Jurisprudence (LL.B/LL.M Sharia)
xii) Computer Science/Information System and Technology including hardware.
xiii) Economics, Statistics and Econometrics
xiv) Business Management Sciences
xv) Commerce
a
Top
OTHER INFORMATION
Application Forms are available from the designated branches mentioned above or may be downloaded from National Bank of Pakistan website www.nbp.com.pk/studentloan
The students desirous of availing loan under the Scheme may apply on prescribed form for financial assistance subject to he or she has got admission on merit through normal procedure in the Universities/ Colleges afore-mentioned.
Applicants are required to submit/send their applications on the prescribed form, duly completed in all respect, to the designated branches indicated against each University/College by the given date. Incomplete application shall not be entertained.
Students who have availed this facility in the last / previous year(s) need not to apply.
The maximum period of repayment of loan is 10-Years from the date of disbursement of first installment. The borrower shall repay the loan in monthly installment after six months from the date of first employment or one year from the date of completion of studies, which ever is earlier.
Under the Scheme, loans is available in the following subjects.APPROVED UNIVERSITIES/COLLEGES
i) Engineering
ii) Electronics
iii) Oil Gas & Petro-Chemical Technology
iv) Agriculture
v) Medicine
vi) Physics
vii) Chemistry
viii) Biology, Molecular Biology & Genetics
ix) Mathematics
x) Other Natural Sciences
xi) DAWA and Islamic Jurisprudence (LL.B/LL.M Sharia)
xii) Computer Science/Information System and Technology including hardware.
xiii) Economics, Statistics and Econometrics
xiv) Business Management Sciences
xv) Commerce
a
Top
OTHER INFORMATION
Application Forms are available from the designated branches mentioned above or may be downloaded from National Bank of Pakistan website www.nbp.com.pk/studentloan
The students desirous of availing loan under the Scheme may apply on prescribed form for financial assistance subject to he or she has got admission on merit through normal procedure in the Universities/ Colleges afore-mentioned.
Applicants are required to submit/send their applications on the prescribed form, duly completed in all respect, to the designated branches indicated against each University/College by the given date. Incomplete application shall not be entertained.
Students who have availed this facility in the last / previous year(s) need not to apply.
Students Loan Scheme
Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002 budget speech, a STUDENTS LOAN SCHEME (SLS) for Education was launched by the Government of Pakistan in collaboration with major commercial banks of Pakistan (NBP, HBL, UBL, MCB and ABL). Under the Scheme, financial assistance is provided by way of Interest Free Loans to the meritorious students who have financial constraints for pursuing their studies in Scientific, Technical and Professional education within Pakistan.
The Scheme is being administered by a high powered committee comprising Deputy Governor, State Bank of Pakistan, Presidents of the commercial banks and representative of Ministry of Finance, Government of Pakistan.
ADMINISTRATOR OF THE SCHEME National Bank of PakistanELIGIBILITYUnder the scheme the students are eligible to apply for loans provided:
He/She has obtained admission on merit through normal course/procedure in the approved Universities/Colleges of the public sector mentioned hereunder.
He/She falls at the time of admission within the age bracket of:-
For Graduation
Not exceeding 21 Years
For Post-Graduation
Not exceeding 31 Years
For Ph.D
Not exceeding 36 Years
He/She has secured 70% marks in the last public examination.He/She has undertaken the study of the subjects given below.He/She is unable to pursue studies due to financial constraints.
The Scheme is being administered by a high powered committee comprising Deputy Governor, State Bank of Pakistan, Presidents of the commercial banks and representative of Ministry of Finance, Government of Pakistan.
ADMINISTRATOR OF THE SCHEME National Bank of PakistanELIGIBILITYUnder the scheme the students are eligible to apply for loans provided:
He/She has obtained admission on merit through normal course/procedure in the approved Universities/Colleges of the public sector mentioned hereunder.
He/She falls at the time of admission within the age bracket of:-
For Graduation
Not exceeding 21 Years
For Post-Graduation
Not exceeding 31 Years
For Ph.D
Not exceeding 36 Years
He/She has secured 70% marks in the last public examination.He/She has undertaken the study of the subjects given below.He/She is unable to pursue studies due to financial constraints.
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CitiAssist® Health Professions Loans
CitiAssist Health Professions Loans feature low, credit-based, variable interest rates and generous annual borrowing limits.
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CitiAssist® Residency, Relocation and Review Loans
From review courses to relocation expenses, these credit-based loans feature low, variable interest rates.https://www.studentloan.com/findstudentloan/index.htm#top
Student Loan Glossary
short term loan backed by the U.S. government offered at a competitive weekly auction.
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ACS student loan consolidation
ACS (Allied Computer Services) handles a number of financial responsibilities for hundreds of thousands of people.
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Compare Student Loan Consolidation
Consolidating your loans is a way to combine all your outstanding loans of one type into a single large loan that makes repayment of your student loans easy.
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ACS student loan consolidation
ACS (Allied Computer Services) handles a number of financial responsibilities for hundreds of thousands of people.
More...
Compare Student Loan Consolidation
Consolidating your loans is a way to combine all your outstanding loans of one type into a single large loan that makes repayment of your student loans easy.
Student Loan Financial Aid
Once you have completed the FAFSA and find out how much federal aid you are eligible for you will also know just how much you will need each year in the form of student loan financial aid.http://www.aboutstudentloans.org/student_loan_consolidation.php
Loans for Health Professions Students
Federal Stafford Loans
These cost-effective loans feature generous loan limits, low, fixed interest rates and flexible repayment optionshttps://www.studentloan.com/findstudentloan/index.htm#top
These cost-effective loans feature generous loan limits, low, fixed interest rates and flexible repayment optionshttps://www.studentloan.com/findstudentloan/index.htm#top
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