Paying for College Blog

Financial Aid Directors: In Their Own Words

This week's quotes focus on the state of the economy and its implications for the financial aid office:

• "CSN [College of Southern Nevada] Financial Aid Director Peter Hurley says their applications are up 82-percent from this same time last year.  If this trend continues, they're expecting 35,000 students to apply for help for next year putting a strain on their work study programs and grants.  "It can only go to so many people and make a difference. I can't give everybody $5 and expect to have a positive impact on enrollment," said Hurley."

From the Trenches: Trends in Private Loans

I received the following update today from a financial aid administrator at a public university:
 

Our 3rd quarter private [loan] approval rates were down about 5% overall from this time last year, with overall private volume down about 35% from this time last year. Only one private lender partner approved over 50% of loan applications, and one lender only approved 15% of applications. These figures and trends certainly don't bode well for students relying on private funding for summer, and consequently then trying to register for fall while still scrounging to get approved for a private student loan to cover a prior year balance.

 

I think the increased undergraduate Stafford borrowing limits and increasing utilization and awareness of Grad PLUS account for a good share of the volume drop (which is great for the borrowers), but approval rates are worrisome since I think "students" are just now starting to truly "feel" the credit crunch in terms of private student lending.

Anyone else have experiences they wish to share? 

Financial Aid Directors: In Their Own Words

The focus of this week's column is how financial aid offices are assisting students who have seen their financial situation change during this recession: 

• Karen Rice, associate director of financial aid at the University of California at Berkeley, says you also should not hesitate to ask questions of the financial aid office of the college your child decides to attend if your financial situation worsens during the aid process.
  • The Department of Education recently provided guidance to aid officers regarding their use of professional judgment to account for such financial situations.  

FAFSA Filings Rise 20.8% To 6.6 Million In First Quarter of 2009

Here is a link to the data provided today by the Department of Education.  Here is a summary of the data as analyzed by Student Lending Analytics:

	1Q 2008		1Q 2009	Change
Dependent Students
Original	1,584,420		1,806,812	14.0%
Renewal	1,611,887		1,912,395	18.6%
Other	4,999		3,879	-22.4%
TOTAL Dep. Students	3,201,306		3,723,086	16.3%
Independent Students
Original	821,741		1,076,171	31.0%
Renewal	1,402,405		1,770,006	26.2%
Other	24,322		16,744	-31.2%
TOTAL Indep. Students	2,248,468		2,862,921	27.3%
All Students
Original	2,406,161		2,882,983	19.8%
Renewal	3,014,292		3,682,401	22.2%
Other	29,321		20,623	-29.7%
TOTAL All Students	5,449,774		6,586,007	20.8%

Note: 1Q08 data reflects period from 1/1/08 to 3/30/08 while 1Q09 data reflects data from 1/1/09 to 3/29/09. 
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New Research Shows College Seniors with Average Credit Card Debt of $4,100

I have listed the key findings of this report, which was last completed by Nellie Mae in 2004. 

Key findings: 

• In this time of credit crunch and economic downturn, college students are relying on credit cards more than ever before. Nearly every indicator measured in spring 2008 showed an increase in credit card usage since the last study was conducted in fall 2004.
  • Eighty-four percent of undergraduates had at least one credit card, up from 76 percent in 2004, the last time the study was conducted. The average number of cards has grown to 4.6, and half of college students had four or more cards.
  • Undergraduates are carrying record-high credit card balances. The average (mean) balance grew to $3,173, the highest in the years the study has been conducted. Median debt grew from 2004’s $946 to $1,645. Twenty-one percent of undergraduates had balances of between $3,000 and $7,000, also up from the last study.

Wharton Partners With Digital Federal Credit Union To Provide Loans To International MBA Students

The Wharton School of the University of Pennsylvania today announced the following details in a press release today: 

Returning Students At Virginia Tech To Receive Award Packages in April Starting in 2010

I came across this article in the Collegiate Times which mentioned that Virginia Tech would be awarding returning students in April next year rather than June which is their current practice.  The article highlighted some of the challenges faced in developing award packages that early:

"The trade-off is that packages are conditional on a number of factors.  Awards are based on estimations of tuition and fees.  If the estimate is off, the award must be revised.  If the student does not show "reasonable academic progress" when grades become available, their offer may be rescinded."

Are other schools considering similar moves to provide clarity on award packages to returning students sooner in the process?

Countdown To College Radio Offers Advice to College-Bound Seniors

Here is a description of the station's programming:

Countdown to College Radio is a weekly one-hour live show dedicated to helping college-bound high school students and their families understand the process of getting ready for - and getting into - college. Show host Beth Pickett interviews the experts on the college application process, high school coursework, summer opportunities, extracurricular activities, application essays, standardized testing, financial aid, and college options.

To access the station, go to CountdownToCollegeRadio.com to listen on the computer or to download to an MP3 player. The show also offers a free weekly newsletter to see what's new in the archives and what's coming up on the show. 

Tips from SmartMoney On Evaluating Award Letters

An article in personal finance magazine, SmartMoney, provides the following tips on evaluating award letters: 

Financial Aid Directors: In Their Own Words

• "We have seen such a huge increase in the number of eligible Pell Grant applicants that we actually went beyond what we thought we would," Tom Bilbruck, director of financial aid and scholarships for the College of the Canyons, a community college, said.
  • The school has seen a 52-percent increase in the amount of Pell Grant funds given to students.

• But the difficult economy remains on the minds of college admission officials.  “Will people be able to afford it?” Shorb [Robert Shorb, associate dean and director of student aid and family finance at Skidmore] said. “It’s a real different climate.”