THE number of hardship payments made to struggling students has doubled because of a lengthy delay in handing out grants and loans.
Two months after the university term started, many students have still not received their loans and grants, with the result that many are struggling to buy food and pay their rent.
Bournemouth University handed out 119 emergency loans in the first two months of term – more than double the 48 granted in the same period last year.
And the students’ union has also been handing out £10 Asda vouchers to students who approach them for help.
Across the country, thousands of students are still waiting for part or all of their money.
The Student Loans Company took over the processing of applications from local authorities this year but is still working through a backlog.
James Ricci, president of the students’ union at Bournemouth University, said: “There have been a fair few complaints, we’ve had people coming to us saying they can’t even afford to buy food.
“First years are not too badly affected because they are in university accommodation and there isn’t the pressure for them to pay their rent immediately.
“But students who are living in rented accommodation are having to explain to their landlords that they can’t pay their rent just yet.
“I know of one student who actually got threatened with being kicked out of his house if he didn’t pay his rent in two days. He had to ring his dad who transferred £1,700 into his account. A lot of students really rely on that loan to sustain them through university. This just adds pressure on top of what university brings with it in the academic sense.”
Source
Thursday, January 28, 2010
Friday, January 15, 2010
Education bill will improve grants, loans
While health care reform and the economic stimulus have received a lot of media attention recently, one initiative that directly affects students nationwide is going through the U.S. legislature almost unnoticed.
The Student Aid and Fiscal Responsibility Act, House Resolution 3221 of 2009, is a reform bill primarily aimed at revamping federal Pell Grants, Stafford Loans and other federal student loan programs.
Angela Martinez, a senior micro & molecular biology major, said such reform is long overdue.
“The government doesn’t properly account for how much families spend. The current income caps for Pell Grant recipients are far too low,” she said.
The initiative was introduced to the U.S. House of Representatives by Rep. George Miller, D-Calif., on July 15 of this year and then passed on Sept. 17. The bill was received in the Senate four days later on Sept. 21 and subsequently referred to the Committee on Health, Education, Labor and Pensions, where it awaits further debate.
The version of the bill that passed the House proposes an increase in Pell Grants by close to $40 billion over the next 10 years, as well as an increased asset cap of $150,000 to qualify. Under the bill, year-to-year grant amounts would increase with inflation. Such increases would start in 2011, increasing the current Consumer Price Index inflation plus one percent.
“I think it’s really important to extend federal aid, especially Pell Grants, to students who are financially disadvantaged during eras of high unemployment such as the time we’re in now,” said Ian Bell, a sophomore political science major.
Federal student loan programs will also be reformed under the proposed bill. Under the current system, federal subsidies enable banks to guarantee loans to students. Because banks are profit-oriented businesses, their control over interest rates has led to skyrocketing costs to students.
The Student Aid and Fiscal Responsibility Act seeks to eliminate the guaranteed loan system and replace it with direct loans. Federal loan money would go directly to the student, with banks acting solely as administrative intermediaries.
The savings garnered from the new system, estimated at around 10 to 20 percent, according to the Congressional Budget Office, would allow the government to decrease interest rates on student loans initiated between the year 2000 and 2010 while new loans would have their interest rates tied to U.S. Treasury rates.
“I think anything that encourages people to go to school and makes it easier for them should be supported; in the long run it should benefit society as a whole,” said Sabrina Stein, a senior political science major.
In addition to the monetary advantages associated with the proposed changes, student soldiers facing deployment would see further benefits. Members of the armed forces who are forced to withdraw from classes due to deployment would have their loans forgiven under the new initiative.
The Congressional Budget Office estimates that the proposed changes will decrease federal costs by $74.8 billion over the next 10 years. Various initiatives are to be funded with the projected savings.
Among these projects are a public school modernization, renovation and repair fund and a “Quality Pathways” grant that would increase the number of early-learning programs specifically in low-income communities as well as overall.
Also among the initiatives is a university funding program that would allocate grant funds to engineering, technology, science and mathematics-related areas as well as schools with high completion rates. Any extra savings not allocated would be used to help pay down the federal deficit.
“I know a lot of my friends have to work 40 hours a week to survive and it’s still not enough to give them access to grant money,” Martinez said.
If the bill passes in the Senate in time, the proposed changes could take effect for the 2010-2011 academic aid year, giving many students quick relief from their financial burdens.
“The money feeds me,” Bell said.
Source
The Student Aid and Fiscal Responsibility Act, House Resolution 3221 of 2009, is a reform bill primarily aimed at revamping federal Pell Grants, Stafford Loans and other federal student loan programs.
Angela Martinez, a senior micro & molecular biology major, said such reform is long overdue.
“The government doesn’t properly account for how much families spend. The current income caps for Pell Grant recipients are far too low,” she said.
The initiative was introduced to the U.S. House of Representatives by Rep. George Miller, D-Calif., on July 15 of this year and then passed on Sept. 17. The bill was received in the Senate four days later on Sept. 21 and subsequently referred to the Committee on Health, Education, Labor and Pensions, where it awaits further debate.
The version of the bill that passed the House proposes an increase in Pell Grants by close to $40 billion over the next 10 years, as well as an increased asset cap of $150,000 to qualify. Under the bill, year-to-year grant amounts would increase with inflation. Such increases would start in 2011, increasing the current Consumer Price Index inflation plus one percent.
“I think it’s really important to extend federal aid, especially Pell Grants, to students who are financially disadvantaged during eras of high unemployment such as the time we’re in now,” said Ian Bell, a sophomore political science major.
Federal student loan programs will also be reformed under the proposed bill. Under the current system, federal subsidies enable banks to guarantee loans to students. Because banks are profit-oriented businesses, their control over interest rates has led to skyrocketing costs to students.
The Student Aid and Fiscal Responsibility Act seeks to eliminate the guaranteed loan system and replace it with direct loans. Federal loan money would go directly to the student, with banks acting solely as administrative intermediaries.
The savings garnered from the new system, estimated at around 10 to 20 percent, according to the Congressional Budget Office, would allow the government to decrease interest rates on student loans initiated between the year 2000 and 2010 while new loans would have their interest rates tied to U.S. Treasury rates.
“I think anything that encourages people to go to school and makes it easier for them should be supported; in the long run it should benefit society as a whole,” said Sabrina Stein, a senior political science major.
In addition to the monetary advantages associated with the proposed changes, student soldiers facing deployment would see further benefits. Members of the armed forces who are forced to withdraw from classes due to deployment would have their loans forgiven under the new initiative.
The Congressional Budget Office estimates that the proposed changes will decrease federal costs by $74.8 billion over the next 10 years. Various initiatives are to be funded with the projected savings.
Among these projects are a public school modernization, renovation and repair fund and a “Quality Pathways” grant that would increase the number of early-learning programs specifically in low-income communities as well as overall.
Also among the initiatives is a university funding program that would allocate grant funds to engineering, technology, science and mathematics-related areas as well as schools with high completion rates. Any extra savings not allocated would be used to help pay down the federal deficit.
“I know a lot of my friends have to work 40 hours a week to survive and it’s still not enough to give them access to grant money,” Martinez said.
If the bill passes in the Senate in time, the proposed changes could take effect for the 2010-2011 academic aid year, giving many students quick relief from their financial burdens.
“The money feeds me,” Bell said.
Source
Monday, December 28, 2009
Can College Graduates Bank Future On Private Student Loans?
With the ever rising college costs, students are turning to “the riskiest way for paying for schooling”, as dubbed by an education organization: private student loans. They have been termed as “risky” since they are likened to credit card debt.
The danger with private student loans is the fact that they have a variable interest rate. For instance, a report submitted by the group called The Project on Student Debt found that undergraduates who took out these loans in the academic year 2003-04 at 5% interest ended up securing the same loans at 14% in 2007-08. The group reported that the worst thing was that over two-thirds of the people who borrowed privately did not exhaust their options of applying for what is regarded cheaper and safer – the federal loans.
Most students graduate with the a degree in the subject of their choice but a very few percentage of them get into the job market all smiles. A good example is Kristin Schlaud (with a law degree from Wayne State University and a master’s degree in commercial real estate from John Marshall Law School) who wonders whether her degrees were worth what she is going through currently. Three years down the line she is broke and in debt, owing almost $250,000.
College students need more protection, said Lauren Asher, president of the Institute for College Access & Success, the mother organization for The Project on Student Debt. She said that the federal government ought to prevent students from taking unnecessary private student loans; especially after the federal loans have been made so affordable – effect from July 1.
Apart from the fact that it is difficult to discharge the private student loans on claims of bankruptcy, they are cumbered with more disadvantages: the students who take out private loans are not eligible for payment deferments, loan forgiveness programs or income-based repayment options that federal loans offer.
Source
The danger with private student loans is the fact that they have a variable interest rate. For instance, a report submitted by the group called The Project on Student Debt found that undergraduates who took out these loans in the academic year 2003-04 at 5% interest ended up securing the same loans at 14% in 2007-08. The group reported that the worst thing was that over two-thirds of the people who borrowed privately did not exhaust their options of applying for what is regarded cheaper and safer – the federal loans.
Most students graduate with the a degree in the subject of their choice but a very few percentage of them get into the job market all smiles. A good example is Kristin Schlaud (with a law degree from Wayne State University and a master’s degree in commercial real estate from John Marshall Law School) who wonders whether her degrees were worth what she is going through currently. Three years down the line she is broke and in debt, owing almost $250,000.
College students need more protection, said Lauren Asher, president of the Institute for College Access & Success, the mother organization for The Project on Student Debt. She said that the federal government ought to prevent students from taking unnecessary private student loans; especially after the federal loans have been made so affordable – effect from July 1.
Apart from the fact that it is difficult to discharge the private student loans on claims of bankruptcy, they are cumbered with more disadvantages: the students who take out private loans are not eligible for payment deferments, loan forgiveness programs or income-based repayment options that federal loans offer.
Source
Tuesday, December 15, 2009
An Education in Student Loans
Graduation day should have been a happy one for Tyrone Bailey. The first in his family of three children to earn anything beyond a high-school diploma, Bailey, 24, received a bachelor's in criminal studies from Westwood College in Torrance, Calif., two years ago. But even while the day's pomp and circumstance played out, his thoughts turned quickly to the tough job market and the $20,000 in loans he borrowed directly from his alma mater that were set to accrue a whopping 18 percent interest rate.
Not long ago, low-interest student loans were as easy to come by as a pass to get out of gym class. But the economic downturn and ensuing credit crunch put an end to that. As relatively cheap, private bank and federally backed loans became harder to come by, some colleges, vocational schools, and online institutions filled the void by lending directly to students like Bailey. Loans from traditional sources like Student Loan Marketing Corp., commonly known as Sallie Mae, fell by more than 50 percent from 2007–08 to 2008–09 after years of rapid growth, according to the College Board.
Source
Not long ago, low-interest student loans were as easy to come by as a pass to get out of gym class. But the economic downturn and ensuing credit crunch put an end to that. As relatively cheap, private bank and federally backed loans became harder to come by, some colleges, vocational schools, and online institutions filled the void by lending directly to students like Bailey. Loans from traditional sources like Student Loan Marketing Corp., commonly known as Sallie Mae, fell by more than 50 percent from 2007–08 to 2008–09 after years of rapid growth, according to the College Board.
Source
Sunday, November 15, 2009
Science and maths teachers 'should have student loans paid off'
Science and maths graduates should have their student loans paid off by the Government if they choose to become teachers, an influential scientific society recommends.
The Institute of Physics says that monthly student loan repayments could be scrapped as long as the graduate remains in teaching. And teenagers who take “hard” A levels should be awarded more points per qualification for their university applications, according to the institute’s chief executive. A lower grade in physics should be given the same points for university entry as a higher grade in some other subjects, Dr Robert Kirby-Harris said.
The institute wants to boost the quality of physics teaching in schools and the number of teenagers studying the subject in sixth form and university. About 24,000 students sit A-level physics each year — about half the number who chose to do so in the 1980s. A quarter of secondary schools in England do not have a dedicated physics teacher, according to a survey last year, meaning that lessons at A level are sometimes led by teachers without a proper grasp of the subject.
This crisis in recruitment could be improved with bold initiatives to attract physics, chemistry and maths graduates into teaching, the institute said.
RELATED LINKS
Get higher grades from teachers first
Double whammy for students on grants and fees
Funds withheld for 10,000 extra university places
Although many can receive “golden hello” payments from schools of up to £5,000, heads are often reluctant to differentiate between staff in this way.
The institute proposes that instead of, or as well as, such incentives, the Government could meet the cost of graduates’ monthly student-loan repayments.
Professor Peter Main, a director at the institute, said: “There’s a shortage of specialist physics teachers. Head teachers are reluctant to have differential pay in subjects because they can run into problems. They could pay off student loans, which are effectively a graduate tax, for graduates teaching in shortage subjects.
“They would continue to pay off the student loan while the graduate remained in teaching. This would be an incentive to graduates to go into teaching and to remain in teaching.”
Professor Main said that schools and colleges could also receive financial incentives to boost the number of students taking “strategically important” subjects such as science, technology, maths and languages. He said that other ideas that could be discussed included capping the number of students universities could take in subjects other than these. And he suggested that the choice of degree courses was being steered by the whim of teenagers, resulting in a growth in subjects such as drama, psychology and media studies, even though employers were crying out for science and maths graduates.
He added: “The market is led by people aged 15 and 16, which does not seem to be the right answer.”
Professor Main said that the Government was “in denial” about research that claims to prove some A levels are harder. He said: “If they came out of denial that would solve many problems — the first stage of making it better is the admission that the problem is there.”
Dr Kirby-Harris echoed his comments, saying it was an “open secret” that A levels differed in difficulty.
He said: “The best schools and teachers know this and the best universities select on this. Everyone’s admitted it, apart from the Government.”
A spokeswoman for the Department for Children, Schools and Families said that as a result of bursaries and golden hellos the number of trainee science teachers recruited last year reached more than 3,000, and applications were up so far this year by 42 per cent compared with last year.
Source
The Institute of Physics says that monthly student loan repayments could be scrapped as long as the graduate remains in teaching. And teenagers who take “hard” A levels should be awarded more points per qualification for their university applications, according to the institute’s chief executive. A lower grade in physics should be given the same points for university entry as a higher grade in some other subjects, Dr Robert Kirby-Harris said.
The institute wants to boost the quality of physics teaching in schools and the number of teenagers studying the subject in sixth form and university. About 24,000 students sit A-level physics each year — about half the number who chose to do so in the 1980s. A quarter of secondary schools in England do not have a dedicated physics teacher, according to a survey last year, meaning that lessons at A level are sometimes led by teachers without a proper grasp of the subject.
This crisis in recruitment could be improved with bold initiatives to attract physics, chemistry and maths graduates into teaching, the institute said.
RELATED LINKS
Get higher grades from teachers first
Double whammy for students on grants and fees
Funds withheld for 10,000 extra university places
Although many can receive “golden hello” payments from schools of up to £5,000, heads are often reluctant to differentiate between staff in this way.
The institute proposes that instead of, or as well as, such incentives, the Government could meet the cost of graduates’ monthly student-loan repayments.
Professor Peter Main, a director at the institute, said: “There’s a shortage of specialist physics teachers. Head teachers are reluctant to have differential pay in subjects because they can run into problems. They could pay off student loans, which are effectively a graduate tax, for graduates teaching in shortage subjects.
“They would continue to pay off the student loan while the graduate remained in teaching. This would be an incentive to graduates to go into teaching and to remain in teaching.”
Professor Main said that schools and colleges could also receive financial incentives to boost the number of students taking “strategically important” subjects such as science, technology, maths and languages. He said that other ideas that could be discussed included capping the number of students universities could take in subjects other than these. And he suggested that the choice of degree courses was being steered by the whim of teenagers, resulting in a growth in subjects such as drama, psychology and media studies, even though employers were crying out for science and maths graduates.
He added: “The market is led by people aged 15 and 16, which does not seem to be the right answer.”
Professor Main said that the Government was “in denial” about research that claims to prove some A levels are harder. He said: “If they came out of denial that would solve many problems — the first stage of making it better is the admission that the problem is there.”
Dr Kirby-Harris echoed his comments, saying it was an “open secret” that A levels differed in difficulty.
He said: “The best schools and teachers know this and the best universities select on this. Everyone’s admitted it, apart from the Government.”
A spokeswoman for the Department for Children, Schools and Families said that as a result of bursaries and golden hellos the number of trainee science teachers recruited last year reached more than 3,000, and applications were up so far this year by 42 per cent compared with last year.
Source
Wednesday, October 28, 2009
Beware of treating free student loans as a licence to spend
STUDENT loans will be free from September for students taking up places at university, which is good news given they could end up with typical debts of up to £16,000 to fund a four-year course, according to the National Union of Students Scotland.
Interest on student loans is normally charged at either the Retail Prices Index in March, or base rate plus 1 per cent. While RPI turned negative last March, dropping to minus 0.4 per cent, base rate remained at 0.5 per cent, indicating that interestADVERTISEMENT
should be charged at 1.5 per cent. However, with more students than ever heading off to college, the government decided zero interest would be charged on all student debts from September.
This will not be a licence for students to burn their way through a mountain of cash. Once inflation picks up again interest will rise, perhaps significantly. Students who use zero interest rates as a green light to borrow could come to regret it when repay day arrives. Repayments are deducted from wages once you earn £15,000, at the rate of 9 per cent of gross earnings.
Scottish students studying in Scotland can also celebrate the fact that they can attend university for free, as they do not face the fees charged by universities south of the Border. If you have lived in Scotland for three years, you should not have to pay tuition fees to your college or university, irrespective of how much you or your parents earn.
However, if you want to go to a college elsewhere in the UK you will have to pay fees. These are set by colleges individually, and will typically be around £3,225 for the coming year or £3,000 for Northern Ireland.
Similarly, non-Scottish students who wish to study north of the Border will face annual fees of £1,700, or £2,700 for medical students. Scottish students still have to fund their living costs, and those from families of modest means can apply for a Young Student's Bursary from the Students Awards Agency for Scotland, provided they are under 25, which can be worth £2,640 a year. However, this is means-tested and the full amount is only available to students whose families are on incomes below £19,310. It is clawed back as income rises, until it is phased out completely at £34,195. They can also apply for a small additional top-up loan.
If you don't qualify for a bursary, then you can try for a student loan of up to £4,625 a year for students living away from home. However, this again is means-tested and if a family's income is over approximately £55,550 a year, you will only receive the minimum loan of £915 a year. The Student Loans Company says the typical Scottish student owes it £5,487 when they enter the world of work.
Source
Interest on student loans is normally charged at either the Retail Prices Index in March, or base rate plus 1 per cent. While RPI turned negative last March, dropping to minus 0.4 per cent, base rate remained at 0.5 per cent, indicating that interestADVERTISEMENT
should be charged at 1.5 per cent. However, with more students than ever heading off to college, the government decided zero interest would be charged on all student debts from September.
This will not be a licence for students to burn their way through a mountain of cash. Once inflation picks up again interest will rise, perhaps significantly. Students who use zero interest rates as a green light to borrow could come to regret it when repay day arrives. Repayments are deducted from wages once you earn £15,000, at the rate of 9 per cent of gross earnings.
Scottish students studying in Scotland can also celebrate the fact that they can attend university for free, as they do not face the fees charged by universities south of the Border. If you have lived in Scotland for three years, you should not have to pay tuition fees to your college or university, irrespective of how much you or your parents earn.
However, if you want to go to a college elsewhere in the UK you will have to pay fees. These are set by colleges individually, and will typically be around £3,225 for the coming year or £3,000 for Northern Ireland.
Similarly, non-Scottish students who wish to study north of the Border will face annual fees of £1,700, or £2,700 for medical students. Scottish students still have to fund their living costs, and those from families of modest means can apply for a Young Student's Bursary from the Students Awards Agency for Scotland, provided they are under 25, which can be worth £2,640 a year. However, this is means-tested and the full amount is only available to students whose families are on incomes below £19,310. It is clawed back as income rises, until it is phased out completely at £34,195. They can also apply for a small additional top-up loan.
If you don't qualify for a bursary, then you can try for a student loan of up to £4,625 a year for students living away from home. However, this again is means-tested and if a family's income is over approximately £55,550 a year, you will only receive the minimum loan of £915 a year. The Student Loans Company says the typical Scottish student owes it £5,487 when they enter the world of work.
Source
Thursday, October 15, 2009
Case studies: Making ends meet is a struggle even with loans
STEVIE WISE, 23, is going into the fourth year of a religious studies degree at Edinburgh University and worries about how she is going to make ends meet this year.
She has struggled to get the level of overdraft she needs to sustain her living costs, and her credit card limit was reduced because she missed a payment by 30p.
Ms Wise depends on her two credit cards and bank overdraft to get by.
Over the sumADVERTISEMENT
mer she struggled to find a full-time job meaning she is now going to have to work part-time, which she had hoped to avoid in her final year.
As a last resort she has been forced to borrow money from friends and family.
"I've already had to drop out once for financial reasons, and it's a real worry for me.
"I broke my foot in October 2007 and I couldn't work, which meant my money troubles were horrendous, even worse than now, so I just had to cut my losses and go home."
And she says she is not alone in her money worries.
She said: "It's unbelievable what Scottish students are given to live off, I don't think people realise. We are just getting in more and more debt. Something really, really needs to be done."
She has struggled to get the level of overdraft she needs to sustain her living costs, and her credit card limit was reduced because she missed a payment by 30p.
Ms Wise depends on her two credit cards and bank overdraft to get by.
Over the sumADVERTISEMENT
mer she struggled to find a full-time job meaning she is now going to have to work part-time, which she had hoped to avoid in her final year.
As a last resort she has been forced to borrow money from friends and family.
"I've already had to drop out once for financial reasons, and it's a real worry for me.
"I broke my foot in October 2007 and I couldn't work, which meant my money troubles were horrendous, even worse than now, so I just had to cut my losses and go home."
And she says she is not alone in her money worries.
She said: "It's unbelievable what Scottish students are given to live off, I don't think people realise. We are just getting in more and more debt. Something really, really needs to be done."
Subscribe to:
Comments (Atom)