Posts Tagged ‘Financial aid’
Effective today, college graduates who have to pay back student loans have a new option for repayment.
The United States Department of Education developed a plan in which students repay federal loans based on how much they make after graduation.
According to a June 29 New York Times article, the income repayment plan limits what the borrowers have to pay to 15 percent of the difference between their gross income and 150 percent of poverty guidelines, which is $10,830 a year for an individual in 2009.
Additionally, the balance of the loan is forgiven after 10 years of payments and employment for students who take public service jobs. This would include nonprofit organizations, government employees and teachers.
The balance will also be forgiven if the borrowers make all payments on time for 25 years.
If a borrower is unemployed, the program allows leniency, letting borrowers without work to defer payments for up to 3 years.
Senior psychology major Alex Edwards said he did not expect to make a lot of money upon graduation, but he was skeptical as to the practicality of the plan. He said he didn’t understand who would cover the difference when people stopped paying their loans.
“I’m working two jobs now, and I barely make ends meet, so I’m thinking I’m definitely not going to be paying a lot of it right away,” he said. “It seems like a nice idea, but like most nice ideas, I still wonder if it’s going to work.”
According to a June 16 Boston.com article, this was meant to encourage recent graduates to accept jobs in low-paying fields.
Director of Career Services Maria Stein said while money is a necessity, it should not change the way students decide which jobs they take.
“I don’t think loan repayment is going to change a student’s job acceptance habit,” she said. “The main factor is typically not the money. It’s whether it meets your personal and professional goals.”
Financial aid isn’t the only thing that has been affected by the current economic downturn.
While many graduating seniors now look to find their first full-time job, Career Services is hosting March Career Madness Month, holding events all month to help seniors make post-graduate plans, Director of Career Services Maria Stein said.
The series of events range from salary negotiation to how to handle the stress of searching for a job. There are an additional two events tonight: Students can meet with one of 12 participating companies to find out what potential employers think of their resume at ‘Resumania,’ and find out how to use Facebook and other networking tools to find jobs at ‘Using LinkedIn to Find a Job.’
“We decided we needed to do more programming aimed toward graduating students to help them have more support and information on job searching and options after school,” Stein said.
The program was introduced because of the recession, and a study conducted by the National Association of Colleges and Employers (NACE) that predicted employers will hire 22 percent fewer graduates from the class of 2009 than last year, Stein said.
Because of this, Stein stressed the importance of networking, which these events encourage. Stein said most jobs are never officially posted, and positions are obtained because of connections, which is becoming more frequent in this economy.
“Open positions are few and far between, so networking is even more important,” she said.
Also, Stein said it was important to bring in outside sources who are experts to relay the information to students, so many of the events included panels of employers.
“I can say the same things, but [students] will listen more if it’s from an employer,” she said.
Though the last event is April 7, the programming may be continued next year depending on the state of the economy, she said.
“If the economy is continuing in the same vein as now, we will probably look at similar programming,” Stein said. “We’re going to look at what feedback we’ve gotten and we’re going to continue to help students.”
With the current financial crisis, finding a student loan can be difficult. However, in an effort to counteract the struggle, university officials have developed four core focuses to help students find funding for tuition and board costs.
“Financial aid and grants have always been high,” said Senior Vice President of Enrollment and Student Life Philomena Mantella said. “We want to make sure that the institution is available to those that want it and that they can sustain themselves to a degree. It’s a constant theme and area of focus, but this year in particular, since unemployment is up and lending is strained.”
The first focus is to move more towards direct student lending, Mantella said.
“Part of the economic shift is just more liquidity and less loans available,” Mantella said. “We want to make sure the students that rely on student loans have those resources secure.”
A retention fund will also be created so students have access to grant money if they have a drastic change in family income. This will ensure there’s money available to close the gap between the money they have secured and their tuition costs. Mantella said this is where a majority of additional university funding will go.
The third focus is on increasing scholarships, for which there has been active fundraising. These are sponsored by alumni, who also create the criteria for the scholarship recipients.
“A lot of people are offering funding as a recognition for students that have strong academics and characteristics,” Mantella said. “Those kinds of individual awards [alumni are offering] can range from very basic to very specific.”
Some students said they think increasing these funds is a positive step.
“I think it’s good because investing in education is a guaranteed return in the long term,” said senior electrical engineering major Jean Blanc. Blanc said he is currently on two scholarships.
The last part of the initiative emphasizes servicing students to make sure they are aware of the funds available to them, like holding financial aid workshops on campus.
“One of the things we want to do is make sure students think early enough to have everything available to them,” Mantella said.
By working on expanding each of these four sections regarding financial aid, finding funding for school should be easier for students, she said.
“What you have to think about is if you are out looking for all available options,” she said. “You have to think of a portfolio of opportunities, a lot of which the institution provides.”
To ensure financial security, when the university gives out initial scholarship and grant awards they are typically for all eight semesters to ensure the availability of these funds throughout students’ time in school.
“These steps are especially helpful for students paying for the majority of their schooling,” said sophomore chemical engineering major Emma Neirinckx.
“I really need help paying for school,” she said. “A lot of people need money, and I’m doing it mostly on my own besides my parents cosigning my loans. I know a lot of people in similar situations and they really need the extra help.”
Though Neirinckx said she’ has not applied for scholarships for next semester because she will be on co-op, more students than usual are projected to. Mantella said she expects an increase because of the economic conditions in comparison to last year.
“I think that if you project that, most institutions are finding an increase,” she said. “But if it’s in the single or double digits is to be determined at a later time.”