studentaid

Students tend to overspend on college, report finds, often by choice

Most students pay more for college than an affordability benchmark recommends, according to a new report, and some of the overspending is by choice.

DeVos withdraws consumer protections from servicing contract process

New federal memorandum rescinds previous guidance governing selection of loan servicers, removing some consumer protections.

DeVos to Meet With Higher Ed Groups Wednesday

Education Secretary Betsy DeVos will meet Wednesday with the presidents of four higher ed associations, according to her public schedule. Only one, Molly Corbett Broad of the American Council on Education, represents both public and private institutions.

The others are Shirley Hoogstra, president of the Council for Christian Colleges & Universities; David Warren, president of the National Association of Independent Colleges and Universities; and Michael Galligan-Stierle, president of the Association of Catholic Colleges and Universities.

DeVos in February met with Peter McPherson, president of the Association of Public and Land-grant Universities, along with 11 presidents of four-year, public universities. She also met with leaders of historically black colleges and universities that month.

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Study Examines Loan Aversion by Population

A new study out of Vanderbilt University seeks to quantify loan aversion among different populations.

The study, “Understanding Loan Aversion in Education: Evidence From High School Seniors, Community College Students and Adults,” is based on survey data from 6,000 people.

Among high school seniors, students at community college and adults without a college degree, the majority of each group believe it’s a good idea to save up enough money before making a purchase (as opposed to borrowing money to buy). More specifically, 21 percent of high school students and 20 percent of non-college-educated adults did not think it was acceptable to borrow money for education, while only 9 percent of community college students felt that way. Over half of the community college students surveyed had borrowed money to attend their current school.

The authors -- Angela Boatman, Brent J. Evans and Adela Saliz, all three of whom are assistant professors of public policy and higher education at Vanderbilt -- also found that women are less loan averse than men and that Hispanic students tend to be more loan averse than white students.

 

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Senators Want Pell Eligibility for Dual Enrollment

A bipartisan proposal in the U.S. Senate would open up Pell Grants to low-income students who earn college credits while still enrolled in high school.

The bill introduced last week by Senator Rob Portman, an Ohio Republican, and Senator Mark Warner, a Virginia Democrat, would allow Pell Grant funding for transferable college credits, including general-education requirements, that students complete in an early-college program offered by an accredited institution. The proposed legislation comes as Republicans increasingly have voiced support for dual-enrollment and early-college programs.

“While wages have been largely flat over the past 10 years, the average cost of college tuition and fees at national universities has more than doubled,” Portman said in a written statement. “A lot of families are feeling squeezed, and for kids from low-income households, college can feel out of reach. Our legislation would let them get a head start on college, make it more affordable for them and help them get on track to live out their dreams.”

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Lack of IRS data tool may harm FAFSA application rates and already is hurting students

Researchers say removal of an IRS tool for financial aid applicants may have slowed FAFSA submissions, while college aid groups warn that affected students could already be losing out on aid.

Groups Urge Congress to Protect Student Aid

Congress should maintain the federal student loan program and strengthen Pell Grants, a coalition of 576 universities, education groups and other advocacy organizations told lawmakers in a letter Wednesday.

"Recent troubling proposals to significantly cut or eliminate funding for Pell Grants, Supplemental Educational Opportunity Grants (SEOG), Federal Work-Study (FWS), TRIO, GEAR UP and other programs threaten the stability of our nation’s higher education and work force systems," the letter said. "Federal student aid serves a critical role in preserving access to higher education and enabling student success at a time when postsecondary education has never been more necessary to support the American economy."

The White House "skinny budget" document released last month proposed eliminating SEOG as well as significant cuts to Work-Study, TRIO and GEAR UP. The budget blueprint also proposed taking $3.9 billion from the Pell Grant surplus without language expanding the grant.

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Mississippi Eliminates 'Stacking' of Financial Aid

Students in Mississippi will no longer be able to receive multiple types of state grants under new rules approved by lawmakers seeking to close a budget gap.

Mississippi has five grant programs that range from covering full tuition to as little as $250 per semester. Students eligible for more than one grant had been able to receive aid though multiple programs, a practice known as stacking. But such students will now only receive aid from the program awarding the largest amount for which they are eligible, according to The Clarion-Ledger of Jackson, Miss.

The elimination of stacking will affect an estimated 3,400 students. Without changes, officials said, they would have had to cut grant amounts by 3 percent. They also said they would not have had money to award forgivable loans for students in high-need areas like teaching and nursing -- an issue that arose in the 2016-17 academic year, when the state was faced with a $10.4 million gap between demand for financial aid and funding that was available.

Appropriations for the Office of Student Financial Aid were cut by about 3 percent to $37.6 million for the 2018 fiscal year. Officials also said more students in the state are attending college.

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Pell Eligibility Restored for Some Whose Colleges Shut

The Department of Education has begun to notify students who attended closed institutions -- including Corinthian Colleges and ITT Technical Institute -- that their lifetime Pell Grant eligibility will be restored.

Democratic senators, led by Washington Senator Patty Murray, have pushed the department since last fall to grant students who attended those institutions the ability to get additional Pell funding so they could attend another university. After previously insisting that federal law did not give the department authority to restore Pell eligibility, the department in October said it would do so after all, citing a provision of the Higher Education Act identified by Murray.

In an update posted to the website of the Office of Federal Student Aid Monday, the department said it will begin to identify students who received a Pell Grant to attend a closed school and who were not reported in the National Student Loan Data System as having graduated. The department will adjust those students' lifetime Pell eligibility to remove the portion awarded to attend a closed school, the update said.

"This is an important step to provide relief to students, but it can’t be the last one -- and I am going to keep pushing this administration to put students and borrowers ahead of for-profit colleges and Wall Street investors," Murray said in a statement.

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U.S. stance raises doubt about eligibility for federal loan forgiveness programs

Recent court filing by Department of Education fuels uncertainty about whether borrowers can count on contractors’ assertions that they qualify for federal debt relief program.

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