Election Day!

Election day is finally here and I hope everyone that hasn't voted yet took the time to cast their ballot. Voter turnout may be affected here due to gloomy weather and rain but lets hope everyone just put put on some rain boots and jackets and voted anyway. I know I voted last week but I saved some stickers and took full advantage of free Starbucks and Ben and Jerry's ice cream. Shame on you to all of you non voters who don't want your voice to be heard. According to CNN Obama is in the lead right now with 174 electoral votes and McCain with 64 but since it is only 9:23 many states including a few swing states are still processing their votes so we can't count our chickens before they hatch. With all the excitement from the election one thing is for sure, there will be many disappointed voters tomorrow morning , but there will also be many ecstatic voters as well. As for who will be happy and who be sad, I guess we will just have to wait and see...

One Last Look at Candidates Views on Student Loans Before Election Day

It's almost election day and it looks like the race is heating up. Before everyone goes out to vote tomorrow, I just want to review the candidates stance on financial aid one last time and make sure everyone has an idea of what is going on.

John McCain views the federal aid application and tax benefits as "too complicated" and as often deterring "eligible students from applying for financial aid." He wants to simplify tax breaks and consolidate aid programs so students can track their options more easily. McCaint has not called for expansion of grant programs like Obama, but he has suggested an increase in the lender-of-last-resort capability of the federal government to back loans. McCain also proposed using community colleges to "retrain displaced workers" but hasn't yet set specific goals.

Obama also believes in simplifying the federal aid system, but also propses The American Opportunity Tax Credit, which would ensure $4000 dollars of college tuition in return for 100 hours of communtiy service. Obama also believes in Pell Grant increases and funding for community colleges. His Community College Partnership Program would attempt to reward community colleges for sending students to four-year institutions.

While all of these are great ideas, there is one problem, the budget deficit. Both candidates proposals, particularly Obama's require money, which the government is short of right now. Obamas tax credit would cost the Treasury an estimated $10 billion, which might not be the best idea with the state of the economy right now.“Whoever wins will not have any money to do anything new,” said Thomas G. Mortenson, a longtime independent analyst of student financial aid program. The bottom line is, even with great ideas, it's kind of hard to get anywhere without the cash flow to support them.

Further Reading

The following links provide excellent information for anyone wishing to research student loans and education further.

http://www.nytimes.com/pages/education/index.html
The New York Times has the latest news about all kinds of issues locally, regionally, and internationally. This specific link provides the most recent and most important articles on all things education including elementary, college, private, public, and anything in between.

http://www.barackobama.com/issues/education/
Obamas website presents his platform and here you can learn his views on education and how he plans to change the education system.

http://www.johnmccain.com/Informing/Issues/19ce50b5-daa8-4795-b92d-92bd0d985bca.htm
McCain presents his ideas and views here and this link takes you straight to his education platform so that you can look at his views for yourself.

http://library.cqpress.com/cqresearcher/cqresrre2008012500
CQ Researcher provides all sorts of information on student aid as well as many useful links top different sites about student aid.

http://studentaid.ed.gov/PORTALSWebApp/students/english/fafsa.jsp
This website allows students to fill out the FAFSA form as well as tells about the federal aid offered to students.

http://www.cnn.com/ELECTION/2008/issues/issues.education.html
This webpage from CNN also discusses the views and stance of the 2008 presidential candidates on education policy.

http://www.nextstudent.com/student-loan-blog/blogs/sample_weblog/archive/2008/10/30/1366.aspx
This blog on student loans is updated often and helps student to know what is going on as far as financial aid is concerned. It also gives advice to students on how to recieve loans and what would be best for them.

Self-Analysis

This blog project has brought a unique perspective to the thinking and writing process. It has allowed me to not only research my own topic, but to form opinions of other issues dealing with the election by reviewing my peer's blogs. For example, I learned about health care from Kelli, taxes from Robert, energy from Tommy, immigration from Emily, and many others issues and blogs that I simply haven't named. I really enjoyed being able to learn more about the election because it helps me make educated decisions on who would be the best president for both America as well as for my family. Blogs are a great way to supply information and present your opinion on matters. I really like that instead of writing a works cited page with in-text citations, I can simply insert a link that will take the reader straight to the web site that the source was found on. I also enjoy being able to write and receive comments from my class mates on my own time rather than in the classroom. This allows me to better organize my thoughts and put together a better post. I think this project disproves Nicholas Carr's theory that the internet inhibits our deep thinking and reading patterns. The blogs had to be carefully read and analyzed to develop ideas and opinions and have caused me to really think about and debate the dilemmas being discussed.

Don't get me wrong, blogs are not perfect. Many sources that seem perfectly creditable are often not and sometimes I found that there wasn't as much talk about student aid as there might have been in the past so updated information and articles became harder to find as the project progressed. I do agree with Carr that the internet does offer many distractions. The other day, I was discussing with my friend how I was supposed to be doing homework but I got distracted by Facebook and she mentioned that "Facebook is the downfall of all college students". I thought this was funny because it is so true, all of my friends agree that Facebook is very distracting when it comes to doing homework and blogs allow instant access to such distractions.

As far as the election is concerned, this blog really helped to sway my vote. Before beginning my research, I was undecided on who to vote for president, but leaning towards McCain simply because most of my friends were voting for him and they had the greatest influence over my decision. When I actually began researching, I found that I agree with many of Obamas plans more than I agree with McCain's and when I voted early on Tuesday, I decided to cast my ballot for Obama. Although both candidates have similar views on education and want to improve it, Obama, who was able to recieve an education though scholarships, is the more ardent supporter of student aid and mending the "No Child Left Behind Act".

Through this blog, I have also been able to develop my thoughts on not only higher education, but lower education too. In my first post, I wrote about merit-based student aid versus need-based aid. I believed need-based was important since it allows for more diversity in colleges but after thinking about it, I also see that the need for need-based stems from lower-level education and family background. In order to help students have equal opportunities, I believe that programs such as charter schools should be put into effect by the government. These schools would help low-income and minority students learn skills, which are to middle and upper-class children by their parents, that are important for both school and the real world and will hopefully help under privileged kids to operate on the level as their upper and middle class peers. Everyone is created differently and some people are smarter than others, but some are also just as smart but have less privileges. It isn't fair that some kids never get to go to college because they weren't taught basic skills such as manners and socialization skills. My hope is that some day charter schools and other organizations will help all children to have the same opportunities that were given to me by my parents.

Icreased College Tuition

Although federal and state governments are doing the best they can to support the economy, it looks like tuition prices for college could take a nasty spike in the next few years. Recent reports from College Board's annual survey of tuition and fees showed relatively modest increases in tuition costs for the 2008-2009 academic year, with costs rising 1 percent to 3 percent above inflation. But the report also was based on data collected before June and does not reflect the economic issues now embroiling the nation. According to the report, tuition for the year climbed 6.4 percent for in-state students at public four-year institutions to an average cost of $6,585 and 5.9 percent to an average of $25,143 for private colleges. Amazingly the cost of attending community colleges actually declined, after adjusting for inflation, by 0.8 percent to $2,300 for the year. Although financial aid, including both grants and federal loans, increased for the year, particularly from public programs and federal student loans which jumped 6 percent, the number of private loans for higher education, which had been climbing, began to shrink even before the current credit crisis. Experts such as the American Council on Education, a coalition of more than 1,600 college and university presidents, warn that conditions are increasingly ripe for some of the biggest tuition jumps in more than a decade. The main reason is that "state governments, struggling to balance budgets at a time of plummeting tax revenue, are beginning to slash appropriations to post-secondary institutions. Private schools are also having problems as their endowments decline in the stock market and donors grow more cautious with their giving" the group said.

Because of the economic crisis, people are losing jobs and money. Many parents, even in well-off families that normally wouldn't be anxious, are worried about paying for their kids education and in states such as New York, more and more parents are actually pushing their kids toward SUNY(State of New York University) less-expensive, public schools rather than cherished yet costly Ivy League schools such as Harvard that they normally would have supported. Not only are tuition prices going up but applications have increased by roughly 50% so far this fall.
As stated by the New York Times, "Clearly along with the high stress level that comes with a record number of students applying to colleges, there’s the even higher stress level that comes with the realization that in tough times, affording college is no given and there are things that trump fancy windshield stickers from brand-name colleges." Although parents care about what's best for their kids, they also need to be sensible financially, and if that means sending them to top ranked public schools rather than private, it definitely seems too be the better plan.

High School Dropout Rate Increases

According to recent studies kids today are more likely to drop out of high school than their parents. Approximately 1 in 4 kids has been dropping out of school for the last 5 years, and approximately 1 out of 3 minorities drops out of school. Researchers are not positive of the reason for the increased number of dropouts but some evidence points to the increase of disadvantaged children and the influence that family background has on children's shaping educational and adult outcomes. As discussed in my previous post, if the number of poor children continues to rise it will reduce productivity and increase inequality within America.
Many states are taking measures to boost high school graduation rates back up. New Jersey has developed a yearlong, multi-agency plan, called New Jersey High School Graduation Campaign, to boost the state’s graduation rates. It will be led not by the state’s Department of Education but by the state attorney general’s office, with funds from businesses like Verizon and Prudential, among others. New Jersey’s campaign is part of a national effort to reduce dropout rates by America’s Promise Alliance, a Washington-based children’s advocacy group founded by Colin Powell in 1997. Since April, the group has awarded grants of $25,000 to 14 states, including New Jersey and New York, to hold summits to develop communitywide plans for reducing dropout rates. According to spokeswoman Colleen Wilbur, dropouts are more than just a problem for schools, because those students are more likely to become a burden to society — ending up in jail, on welfare rolls or without any health insurance. Solving the dropout crisis will require not only the schools and parent's support, but the support of the entire community, including businesses and churches.
Hopefully if schools can increase their graduation rates and the government can support programs to decrease the number of disadvantaged children in America, more children will be able to attend college and therefore receive better jobs that will propel the out of their lower-class slump. Also if drop-out rates are decreased, welfare programs and the number of people in jail will decrease as well, which would help out the American economy. Another benefit of increased college graduates would be that the united states would be able to keep up with the high-tech competition from other countries and stay ahead in its modern inventions and technology.

Implications Post

In my theory post, I mentioned how lower level education and the No Child Left Behind Act affect students abilities to get into and succeed in college. I also mentioned another factor that affects higher level education: family background. Many low-income and minority Americans are finding it harder to go to college because of the rising inequality and polarization of society. A greater fraction of young Americans are graduating from college, but at the same time a greater fraction is also dropping out of high school. More children are being born into disadvantaged environments and are receiving relatively less stimulation and resources to promote child development than those born into more advantaged families. Without the resources and backgrounds of more advantaged children, these kids are never able to truly compete on a level playing field and are always behind their more knowledgeable peers in school and in the basic survival skills of life.
There are some options being researched to fix this situation. Three major advocates of of poor children are James J. Heckman, Susan B. Neuman and Geoffrey Canada. Heckman developed the theory that poverty is a problem of skills and poor children grow into poor adults because they are never able, either at home or at school, to acquire the abilities and resources they need to compete in a high-tech service-driven economy .Heckman stresses that these skills are both cognitive (the ability to read and compute) and noncognitive (the ability to stick to a schedule, to delay gratification and to shake off disappointments). According to Heckman if intervention into poor childrens lives is started in infancy and continued through childhood, the skill gap between poor and middle class will be diminished.
That is where the work of Newman and Canada come into play. Neuman has spent several years crisscrossing the nation, examining and analyzing programs intended to improve the lives of disadvantaged children and is publishing a book in November called “Changing the Odds for Children at Risk," that describes nine nonschool interventions. She includes the Nurse-Family Partnership, which sends trained nurses to visit and counsel poor mothers during and after their pregnancies; Early Head Start, a federal program, considerably more ambitious than Head Start itself, that offers low-income families parental support, medical care and day-care centers during the first three years of the lives of their children; Avance, a nine-month language-enrichment program for Spanish-speaking parents, mostly immigrants from Mexico, that operates in Texas and Los Angeles; and Bright Beginnings, a pre-K program in the Charlotte-Mecklenburg school district in North Carolina that enrolls 4-year-olds who score the lowest on a screening test of cognitive ability and manages to bring most of them up to grade level by the first day of kindergarten. These programs all yield positive results but are scattered throughout the country and only influence the first few years of a child's life meaning once students are takne out of the programs the effects begin to diminish.
Canada has designed an agency called the Harlem Children’s Zone that offers integrated social and educational services for thousands of children at once. His program begins with Baby College, a nine-week parenting program that encourages parents to choose alternatives to corporal punishment and to read and talk more with their children. Under his organization students progress through an all-day prekindergarten and then through a charter school,where they have continuous access to community supports like family counseling, after-school tutoring and a health clinic, all designed to mimic the often-invisible cocoon of support and nurturance that follows middle-class and upper-middle-class kids through their childhoods. The goal, in the end, is to produce children with the abilities and the character to survive adolescence in a high-poverty neighborhood, to make it to college and to graduate. So far his results have been uplifting. When the charter schools’ inaugural kindergarten class reached third grade and took their first New York state achievement tests: 68 percent of the students passed the reading test, which beat the New York City average and came within two percentage points of the state average, and 97 percent of them passed the math test, well above both the city and state average.
My point is that unless America does something to help it's poor children, the discrepancy between poor and middle class will continue to grow. How is this applied to higher level education? Colleges are always trying to create more diversity within their campus's by increasing the number of poor and minority students who attend, but if Americas poor children are not well educated or don't have the necessary skills to succeed then that makes college diversity harder to obtain. Not only that but it creates a nearly impossible barrier for poor students to get ahead in life. With Americas growing emphasis on college education, we should look into these different programs and help our poor children obtain the levels of education received by middle and upper class kids. Obama has looked into at the reforms I mentioned above and while they could be expensive, they will also allow poor kids to have the same opportunities as everyone else when they graduate. If America is really about freedom and equality, then these programs should definitely be taken into consideration because unless they are able to receive the benefits that middle and upper class children have from their parents and schools, there is not equality or freedom for poor kids in America.

Credit Card Scam

One reason more and more college students are find themselves in debt could be contributed to the credit card industry. A recent article by CQ researcher found that between 1980 and 2005, Americans' annual credit card purchases jumped 25-fold — from $69 billion to $1.8 trillion and even worse credit card companies seem to be targeting college students, with many students receiving hundreds of credit card offers in just one year. Credit companies unfairly target student because of the expense of college life and many students who but into these companies schemes end up in debt. Many university officials and congressmen have begun investigating these companies and placed restrictions on how credit cards can be marketed t public universities. With financing from the Ford Foundation, U.S. PIRG has begun a national campaign urging schools to adopt some common-sense principles that would help shield students from credit card marketers and financial ruin. Hopefully with a better education on the damages of credit cards and more protection from greedy companies students will be able to make wise decisions regarding credit cards and focus on more important and manageable issues such as paying off student loans.

Thoery Post

As I mentioned in my last blog student loans are becoming more common and are in high demand due to higher rates of unemployment and debt within families, a result of the recent financial crisis. Not only are low-income families affected by the economy failure, middle class families are also finding it harder and harder to put their children through college.The federal government is doing its best to supply loans to families in need but with both tuition costs and the federal deficit at an all-time high, this is more easily said than done. Although the government has been able to provide some loans to most families in need, they rarely cover the entire cost of tuition and many students must find other means of paying their tuition in full. Both Obama and McCain seem to agree that student loans are an important aspect in allowing students to receive a higher education as well as that reform is needed on the no child left behind act in K-12 schools.

Before I discuss lower level education more thoroughly I want to recall one of my older blog posts dealing with loans versus merit-based scholarships. The federal government right now offers a majority of its aid in the form of loans because it fairer for low-income and minority students who normally don't have the grades to earn scholarships. The capability of minority and low-income students to earn good grades is a result of both the schools they attend and their family background. One way the government is trying to improve education and school quality is through the controversial no child left behind act. While this act, originally designed to bring all students at every American school to proficiency in reading and math by 2014, has helped students show improvement, many people, particularly teachers believe it places way to much emphasis on standardized tests and sets near impossible standards. For example in California students are required to increase 11% in proficiency each year until 100% is reached and many states have more rigorous testing than others . In order to improve this act, Congress should lower the requirements it sets but continue to place emphasis on highly-qualified educators and improvement in schools. If there was another way to determine the effectiveness of the act besides testing I believe the act would help improve schools much more efficiently because teachers would not have to base their curriculum according to tests.

How badly is the economy affecting college students?

According to a recent article in the New York Times the recent financial crisis is affecting students ability to pay for college. Federal loans account for 3/4 of student borrowing and the government assured to keep money flowing by buying those loans even with fewer companies in business but often times these loans are not enough to cover the entire tuition. With an increased rate of unemployment and the threat of recession gripping the country, many more families are expecting to need student loans this year. The number of applications for federal aid so far this year has risen to 13.5 million, up nearly 10 percent from 12.3 million from last year. One way that students and parents are paying the extra cost of tuition is by purchasing PLUS loans, which are the same as Stafford loans but are signed in the parents name. However many students do not qualify for PLUS loans and must resort to borrowing from relatives or private lenders who are becoming hard to recieve due to the financial crisis. Although colleges have taken many measures to make tuition more affordable, such as converting loans to grants and allowing tuition cuts to families making certain amounts, the financial crisis has placed a bump in the road and outweighed the amount of help colleges can provide. Hopefully the next elected president can help get our economy back on track so that not only student loans, but stock markets, government funding, and everything else affected by the failure of the economy can get back to normal and work more efficiently.

Recommended Blogs

With the 2008 election occurring next month things are really heating up in politics. In my opinion some of the most important issues in todays society are the economy, the energy crisis, and the always controversial debate over taxes. Below are three blogs that I have found to be extremely helpful in keeping up with the fast-paced and ever changing world of politics, especially in the issues described above.

Renewable Energy:The New Oil?
With the depletion of nonrenewable resources such fossil fuels and natural gas, the growing price of gas and oil, and increased global warming, America is in serious need of some new energy resources. This blog by Tommy discusses the danger of Americas large consumption of nonrenewable resources and offers many different renewable techniques such as geothermal energy, biofuels, solar energy and hydropower that can be improved and mastered to help make our energy use more efficient. Through his blog, readers learn not only learn the views and solutions offered by McCain and Obama but are also well informed of the effects of fuel consumption in US and the rest of the world. Tommy keeps his blog up to date and has the latest information on the election and energy world.

Apparently Money Doesn't Grow on Tree's
2008 has introduced a lot of new problems into the economy. The mortgage bubble that has been building up for the past few years has finally been recognized and created a major financial crisis. Huge companies are crumbling, banks are declaring bankruptcy, and the stock market is crashing. All of these factors have created the need for a bail plan, which is just one of the issues discussed in Britney's blog. It also provides details on candidates plans for boosting the economy back up and discusses whether the US government places enough regulation on its capitalist economy. Britney includes many interesting video clips and images and updates her blog regularly to help readers stay in touch with the financial issues of America and the latest plans to bailout the economy.

The Issue On Taxes
No matter who gets elected in this years election, one thing is for sure...the amount Americans pay in taxes will see drastic change. Whether this change will be good or bad and who is affected most will be determined according to who is elected president. If Obama is elected president then lower and middle class Americans earning less than 250,000 a year will be very greatful to see tax breaks while those earning more will not be as happy to see an increase in taxes. If McCain is elected, Americans earning over 250,000 will be appreciative of tax breaks while those earning less will have a heavier burden to pay. This and other issues relating to taxes and the economy are analyzed and discussed in this blog by IGetNosSleep. The views of the candidates are expressed in extreme detail while possible consequences of their plans to the economy and government services are presented. This blog really helps readers to develop an educated opinion of whose tax policy will best benefit the economy and who to support and vote for in the 08 election.

Nationalization of Banks

The US is following Europe's example in the financial crisis as a race to stabilize the economy forms. The $700 billion bailout plan has failed so Bush has advocated $250 billion of it directly to banks. Bush proposes an extra $100 billion to buy troubled assets held by firms or to make additional capital infusions into banks. The US guarantees 3 years of new debt issued and unlimited guarantee on banks deposits without interest. Federal deposit insurance will cover small businesses as well. The goal is to recapitalize banks and get them lending again among themselves, consumers, and businesses. Conservatives are upset, but liberals applaud this action. Conservatives worry about government interevention in a capitalist society but as Bush states "These measures are not designed to take over the free market but to preserve it." This plan has already triggered the biggest jump in stocks in history, but will it be enough to freeze the credit market and stabilize the economy? Only time will tell...

Student Loans, Education, and The 2008 Presidential Campaign

When it comes to financial assistance, the amount received by college students could be extremely impacted in the coming years depending on who is elected president in the 2008 election. While both Obama and McCain believe in increased access to higher education, Obama's plan seems to be more beneficial to future college students than McCains plan. McCain's plan focus's on simplification, specifically higher education tax benefits and federal financial aid, and repairing the student lending programs. By simplifying the complicated existing tax benefits, McCain hopes to ensure that a greater number of families will have a lower tax burden when sending their kids to college. McCain also plans to consolidate financial aid programs and the application process for student aid in order to simplify the administration of these programs and help students have a better understanding of their eligibility for aid. McCain has also proposed an expansion of the lender-of-last resort capability of the federal student loan system and will demand the highest standard of integrity for participating private lenders. Effective reforms and leveraging the private sector will ensure the necessary funding of higher education aspirations, and create a simpler and more effective program in the process. Obama is also in favor of simplifying the financial aid process, only he plans to eliminate the current federal financial aid application and allow families to apply simply by checking a box on their tax form, authorizing their tax information to be used, and eliminating the need for a separate application. Another plan Obama has proposed is the creation of the American Opportunity Tax Credit which makes college affordable for all Americans. This universal and fully refundable credit will ensure that the first $4,000 of a college education is completely free for most Americans, and will cover two-thirds the cost of tuition at the average public college or university.
In a presidential debate on Tuesday, October 7, the candidates discussed their higher education goals in more detail. Obama is a strong advocate of government spending for higher education placing the issue of education as his top third priority, right after energy and health care. According to him education has to be at the top of the list so that the nation can help young people be competitive in the global economy. Obama relates his views to personal experience thanking scholarships for his ability to attend college. He remarked that the American dream seems to be diminishing, in part because young people “who’ve got the grades and the will and the drive to go to college” don’t attend because they don’t have the money. While Obama advocated higher education spending, McCain focused on eliminating wasteful spending by eliminating earmarks — spending that individual lawmakers allocate on a noncompetitive basis to colleges and other entities — and by freezing most federal spending. The areas he singled out as exceptions that might receive more government support were defense and veterans affairs. “Obviously we’ve got to stop the spending spree that’s going on in Washington,” was McCain's explanation adding that he wanted to reduce the debt being left to young people.
The candidates approach the matter of government spending form opposite directions. Senator Obama believes in increasing financial aid spending while reining in government spending in other areas.,This will directly affect students and families and allow a more immidiate solution to college affordability. McCain believes in eliminating federal earmarks that often benefit college projects, and advocates an across-the-board freeze in federal spending, to help stabilize the economy. This will not help families in paying for college but may help with the current financial crisis. Obviously being a student, I am going to side with Obama, as his plan will allow students many more options in paying for college tuition.

Student Loans: Analysis

College can be extremely expensive, especially when it is paid for through private loans. This is why the federal government offers a variety of student aid packages in the form of both loans and grants. Students can apply for federal aid through FAFSA (federal application for student aid) and even though it is a long, complicated process, the benefits it provides to low income and middle class students are worth it. Examples of the grants available through the federal government include Teacher Education Assistance for College and Higher Education Grant's(TEACH grant), Federal Pell Grant's,Federal Supplemental Educational Opportunity Grant's (FSEOG), Academic Competitiveness Grant's(ACG), and National Science and Mathematics Access to Retain Talent Grant's (National SMART Grant). There is some controversy concerning the TEACH grant because students don't always realize that if they fail to uphold certain standards required by the grant, such as performing service as a highly-qualified teacher, then they are must repay the government in the form of a direct unsubsidized loan. Grants differ from loans in that loans must be repaid while grants do not need to be paid off. A major federal loan awarded to students is the Stafford loan which is divided into the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Under the Direct Loan Program, the loan funds come directly from the federal government whereas funds for FFEL will come from a bank, credit union, or other lender that participates in the program. In addition to being direct or indirect(FFEL), loans can also be also be either subsidized or unsubsidized. Subsidized loans are loans based on financial need and allow the government to pay (subsidize) the interest on the loan while students are in school and for the first six months after they leave school. Students with lesser financial need are eligible for unsubsidized loans. Students with unsubsidized loans are responsible for the interest from the time the unsubsidized loan is disbursed until it's paid in full. They can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (that is, added to the principal amount of your loan). Capitalizing the interest will increases the amount to be repaid. Another loan similar to the Stafford loan that can be taken out by parents is the PLUS loan. PLUS loans are available to parents good credit history with dependent undergraduate students enrolled at least half time in an eligible program at an eligible school. Graduate and professional degree students are also eligible to borrow under the PLUS Loan Program. The terms and conditions applicable to Parent PLUS Loans also apply to Graduate/Professional PLUS loans. These requirements include a determination that the applicant does not have an adverse credit history, repayment beginning on the date of the last disbursement of the loan, and a fixed interest rate of 8.5 percent in the FFEL program and 7.9 percent in the Direct Loan program. Other forms of federal financial aid (called campus-based programs because they are administered directly by the financial aid office at each participating school) include The Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS), and Federal Perkins Loan programs. Not all schools participate in all three programs.Both FFEL and Direct federal loan interest rates provide far greater savings over more expensive private loans, whose interest rates can run as high as 19%. Another reason to choose federal loans over private loans is that private loans often have variable rates that can result in an unexpectedly high monthly payments. In contrast, federal loans will stay fixed at the same low rate over the life of the loan. Due to the College Cost Reduction Act of 2007, rates on subsidized federal Stafford Loans will continue to drop over the next few years: to 5.6% for loans disbursed between July 1, 2009 and June 30, 2010; to 4.5% for loans disbursed between July 1, 2010 and June 30, 2011; and to 3.4% for loans disbursed on or after July 1, 2011.
In April 2008, Congress enacted the Ensuring Continued Access to Student Loans Act of 2008 , to protect families’ access to federal students loans from turmoil in the nation’s credit markets. The law provides new protections, in addition to those in current law, to ensure that students and families could continue to have access to all the federal loans they were eligible for – and at no cost to taxpayers. While no student or college has reported any problems accessing federal student aid to date, it is only prudent for the federal government to make sure that contingency plans are in place that would provide students and families with continued, uninterrupted access to federal loans, regardless of what’s happening in the credit markets. Goals involved with the act include reduceing borrowers’ reliance on costlier private college loans, encouraging responsible borrowing, giving parent borrowers more time to begin paying off their federal PLUS college loans, helping struggling families pay for college and providing the U.S. Secretary of Education additional tools to safeguard access to student loans. Thanks to the Ensuring Continued Access to Student Loans Act of 2008, the recent mortgage crisis has not affected federal student loans.
On another note due to the state of the economy and the energy crisis, education does not seem to be nearly as important in this years presidential election as it has been in the past, and when it is discussed, it normally focuses on lower level K-12 education such as reforming the No Child Left Behind Act put in place by the Bush administration, rather than higher level education. Even so demcratic candidate Barrak Obama stresses federal spending on higher education much more than Republican John McCain. Obama has proposed creating new Teacher Service Scholarships that will cover four years of undergraduate or two years of graduate teacher education, including high-quality alternative programs for mid-career recruits in exchange for teaching for at least four years in a high-need field or location. This in turn will hopefully strengthen our school systems and promote equality for all schools K-12. Obama also plans to make college affordable for all Americans by creating a new American Opportunity Tax Credit. This universal and fully refundable credit will cover two-thirds the cost of tuition at the average public college or university and make community college tuition completely free for most students. Obama also plans to ensure a tax credit to pay up to $4,000 of college expenses for students who perform 100 hours of community service a year to and simplify the Application Process for Financial Aid by eliminating the current federal financial aid application and enabling families to apply simply by checking a box on their tax form, authorizing their tax information to be used, and eliminating the need for a separate application. John McCain is proposing a student loan continuity plan. Students face the possibility that the credit crunch will disrupt loans for the fall semester. John McCain also plans on simplifying the financial aid process and tax benefits as well as calls on the federal government and the 50 governors to anticipate loan problems and expand the lender-of-last resort capabilities for each state's guarantee agency.
According to a blog by Sara Hebel, in a debate Tuesday night Senator Obama spoke about making college affordability a priority even as he would rein in government spending in other areas while Senator McCain focused on eliminating spending he considers wasteful, including federal earmarks that often benefit college projects, and advocated an across-the-board freeze in federal spending. I believe that even though both candidates share similar views such as simplifying the federal aid application process, Obama tends to lean more towards helping make college more affordable while McCain doesn't express much concern on the matter.

College Cost Reduction Act

As of July 1st, 2008, college students really had something to cheer about. The interest rate of federal student loans was dropped from 6.8 % to 6%, the first of four cuts within the next four years in an effort to half interest rates, dropping them down to 3.4% by 2012. This reduction of interest rates is a result of the College Cost and Reduction Act designed by House of Reps Chairman George Miller's legislation, and signed into law on September 27, 2007. The act was proposed as a result of the unfair interest rates, kickbacks, and preferential treatment being imposed on student by lenders. As the cost for college tuition continues to rise , student are borrowing record amounts, more than 2o billion dollars a year on some accounts, and before the college cost and reduction act student loans were one of the largest profits for lenders, second only to credit card interest.
The College Cost and Reduction Act provides the single largest increase in college aid since the GI bill and does so at no cost to taxpayers by cutting excess subsidies paid by the federal government to lenders in the student loan industry. The interest rate cut will save the typical student borrower beginning college in 2008 about $2,570 over the life of his or her loan. Need-based federal student loans are primarily awarded to low- and middle-income students; according to the Congressional Research Service, 75 percent of need-based federal student loan borrowers have family incomes below $67,000. About 5.5 million students borrow these loans each year to help pay for college. Altogether, the College Cost Reduction and Access Act will boost college financial aid by $20 billion over the next five years. Other benefits of this law include increases in the Pell Grant scholarship by 490 dollars, the first of five annual steps towards boosting the Pell Grant scholarship by a total of 1,090 dollars by 2012, providing up-front tuition assistance to college students who commit to teaching high need subject area in high-need public schools after graduation, and providing loan forgiveness to college graduates who enter public service professions after 10 years of public service and loan repayments.
Political interest in student loans has slowed since the passing of this bill and neither presidential candidate has much to say as far as higher level education is concerned.
Although this bill helps many students pay for college and greatly reduces the corruption of student loans(at least federal student loans), there are still many problems that arise from the continuing increase in college costs. It is difficult for both middle-class and low-income families, especially those with more than one child in college, to pay for tuition and while lately the number of federal student loans has increased, they should an option for anyone with the brains to go to college but not the money. One of the main problems with student loans is that they are not always widely advertised and are complicated to understand. One thing that the government can do to help is to increase awareness of loans and grants offered and decrease the amount of work involved in applying. Time is money and many people simply don't have the time to search for and apply to lengthy government aid applications and programs.

The Financial Crisis and Student Loans

With the growing mortgage crisis in the United States, many student are worried about receiving and paying off college loans. Large numbers of private investors including Wachovia have fled the student loan business due to the collapse of their mortgage systems. Although this mishap in the American economy is unfortunate, it has also been a wake-up call to many American families financing college through private investors. Without the help of private institutions, people are looking more to the federal government for help, but isn't this what they should have been doing all along? The fixed rates on a government loan run from around 6.8% to 8%, compared with an adjustable 8% to 20% for a private one. The average credit-card rate tops 13%. So if government loans are so much better than private and credit loans, why have Americans waited so long to really take advantage of them? The answer is convenience. It is much easier for students and parents to charge tuition to a credit card or find the nearest private investor than it is to spend hours applying for student loans. Research done by the American Council on Education indicates there are more than 1 million students across the country who may very well be eligible to receive aid but are not getting it. A major reason students don't apply for federal loans is that they don't understand how to. FAFSA( Free Application for Student Aid) is a huge advantage for college students who meet certain requirements, especially those with low incomes, but with 145 questions, it is longer and more eye-crossing than the standard tax form and takes about 10 hours to gather all the documents required and actually fill it out. Even after students have applied to FAFSA, they have to distinguish the fine print within the aid programs surrounding it. Some college financial aid officers, for example, are balking at helping student apply for the new federal $4,000-a-year "TEACH Grants," which are supposed to help aspiring teachers pay for college.This is because the name "grants" misleads students. The program actually consists of loans that will be forgiven only if the student gets certified as "highly qualified" and works full time teaching a "high-need" subject at a federally designated, low-income school for at least four years within eight years of graduation. Those who don't jump through all those hoops could see $16,000 worth of "grants" turn into a $24,000 bill after interest charges. Many students that have been relying on private loans need not worry too much about the ability to finance; however, they will not acquire the needed financial assistance without a hefty amount of research and time.

Need based versus Merit based Aid

A college education does not come cheap, and the cost of a higher education only seems continue increasing, making it difficult not only for low income and minority students to afford, but for middle-class families as well. Because of the extensive costs involved with paying for college, the federal government and many institutions offer financial assistance to low-income individuals; however, in the past decade much of the need-based aid has been replaced by merit based scholarships. Need based aid, such as student loans, allows for minority students who would normally not be able to afford college to receive a higher education, while merit based based scholarships take away from need-based aid and reward students for good grades. The question to answer is which is more important, need-based or merit? Merit based aid is a huge benefit for middle class and even some upper class families and has shown to be a motivator for students to do well in school, but most low income and minority students do not have the grades to receive merit based scholarships. Merit based aid also takes away from loans that need based aid students would receive and makes it even harder for them to attend college, decreasing the already low percentage of low-income and minority students that attend college.

"Only 7 percent of high-school sophomores from the lowest quartile of socioeconomic status eventually earn a bachelor's degree, compared with 60 percent of those from the highest quartile," according to Associate Professor of Public Policy Susan M. Dynarski and doctoral candidate Judith Scott-Clayton, both at Harvard. "Only 12 percent of Hispanics and 16 percent of African-Americans eventually earn a B.A., compared with 33 percent of non-Hispanic whites." Moreover, the gaps persist "even among well-prepared students," so difficulties paying for college are at least partly to blame, the researchers say.

Obviously most middle class and upper class families would find merit based aid a more substantial option, while lower class families and minorities lean towards student loans and need based aid. There is a group for of higher-education professionals, policy experts, and researchers called the Rethinking Student Aid study group who have been working for the past two years to create a set of proposals to simplify and improve the federal student aid system. Their latest report expresses the importance of providing financial assistance to families of lower incomes than those of higher incomes as well as well as recommending simplifying federal grants and tax benefits, giving loan subsidies to students during the repayment period, providing federal savings accounts to children of low-income families, and rewarding states and institutions for the success of low-income students in college.