AMID A NATIONAL OUTCRY for higher education institutions to do more to increase access for poor students – especially elite schools with billion-dollar endowments – new data show that nearly half of all endowment spending by colleges and universities supports financial aid.
“This was the largest single area of endowment spending,” Susan Whealler Johnston, president and CEO of the National Association of College and University Business Officers, said this week in a call with reporters. “This clearly demonstrates the deep commitment colleges and universities make to support financial aid and student success.”
The endowment spending data was included for the first time in the annual endowment report, published Thursday by the National Association of College and University Business Officers and the investment firm TIAA. Colleges and universities reported that 49 percent of their endowment spending went to support student scholarships and other financial aid programs, and 16 percent for academic tutoring and other similar student support programs.
Today, the U.S. Department of Education’s Federal Student Aid (FSA) office posted a series of updates to its data center, a collection of key performance data about the federal student aid portfolio. The updates, which continue the Department’s commitment to greater transparency on the federal student loan portfolio and other key financial aid metrics, include three new federally managed portfolio reports by loan status, repayment plan, and delinquency status, and a report about the Teacher Loan Forgiveness program.
Further reflecting the Department’s commitment to transparency and to serving students and borrowers, today the Department released a preliminary report about the FSA feedback system. The feedback system, launched in July 2016 to fulfill one of the primary objectives of President Obama’s Student Aid Bill of Rights, is an online portal that allows federal student aid customers to submit complaints, provide positive feedback, and report allegations of suspicious activity.
As part of the Obama Administration’s commitment to helping students and borrowers, today, the Department of Education is announcing the publication of two regulatory packages that will protect students in the rapidly-expanding college debit and prepaid card marketplace and add a new income-based repayment plan so more borrowers can limit the amount of their payments to 10 percent of their income.
“Since day one, protecting students and borrowers has been a key priority for the Obama Administration,” said Secretary of Education Arne Duncan. “The two final rules published today represent a continuation of our efforts. These regulations will help make sure student loan debt is affordable for all borrowers and bring overdue reforms to campus cards, a sector that too often puts taxpayer dollars and student consumers at risk.”
Continuing its work to make student loan debt more manageable, the U.S. Department of Education today announced its plans to provide an additional six million federal loan borrowers access to student loan payments capped at 10 percent of income.
Last year, as part of his year of action to expand opportunity for all Americans, President Obama issued a Presidential Memorandum directing the Department to propose regulations to ease the burden of student loan debt by expanding repayment options available to borrowers and building awareness of income-driven repayment plans.
“A college education is one of the most important investments that Americans can make in their futures. Unfortunately, for too many hardworking families, it feels like a higher education is simply slipping out of reach,” said U.S. Secretary of Education Arne Duncan. “This proposal is an investment in our economy’s future that provides targeted benefits to even more borrowers, so they can stay current on their loans and furthers our commitment to lifting the burden of crushing student loan debt.”
The U.S. Department of Education announced proposed regulations, available for public inspection today in the Federal Register, aimed at protecting as many as 9 million college students receiving $25 billion in federal student aid by providing tougher standards and greater transparency surrounding agreements between colleges and companies in the rapidly expanding college debit and prepaid marketplace. The proposed regulations are intended to safeguard students from excess fees and provide students the freedom to choose how to access their federal student aid funds when paying for college. The action by the Department would bring much needed reforms to a sector that has operated without sufficient transparency, putting taxpayer dollars at risk of financial loss.
“It is critically important to ensure that students can freely choose how to receive their federal student aid refunds,” said U.S. Under Secretary of Education Ted Mitchell. “Students need objective, neutral information about their account options. For example, students should be able to choose to receive deposits to their own checking accounts and not be forced to utilize debit cards with obscure and unreasonable fees.”
The U.S. Treasury Department and the U.S. Department of Education will continue working with tax preparers during the 2015 tax filing season to increase federal student loan borrowers’ awareness of income-driven repayment plans. This year, two of the largest tax preparers in the country, H&R Block and Intuit, Inc., are using their online tax preparation tools to share information about repayment options, including the President’s Pay As You Earn (PAYE) plan and the Department of Education’s Repayment Estimator with student loan borrowers.
Income-driven repayment plans allow eligible borrowers to lower their monthly federal student loan payments to as low as 10 percent of the borrower’s discretionary income. The Repayment Estimator enables borrowers to compare estimates of their monthly student loan payments, projected loan forgiveness where applicable, length of repayment, total interest, and total amount paid under all federal student loan repayment plans.
If you’re a parent of a college-bound child, the financial aid process can seem a bit overwhelming. Who’s considered the parent? Who do you include in household size? How do assets and tax filing fit into the process? Does this have to be done every year? Here are some common questions that parents have when helping their children prepare for and pay for college or career school:
Why does my child need to provide my information on the FAFSA®?
While the federal government provides nearly $150 billion in financial aid each year, dependency guidelines for the FAFSA are determined by Congress. Even if your child supports himself, he may still be considered a dependent student for federal student aid purposes. If your child was born on or after January 1, 1992, then he or she is most likely considered a dependent student and you’ll need to include your information on the Free Application for Federal Student Aid (FAFSA).
It’s been tough for me to come to terms with, but, unfortunately for me, I am not in college anymore. In fact, this spring marked three years since I graduated from college and went into repayment on my student loans. I know, not the most exciting thing in the world, but important. So while I don’t claim to be a student loan expert, I have learned a lot of lessons along the way, mostly through trial and error. In hopes that you won’t make the same mistakes I did, here are some things I wish I had known when I was graduating and getting ready to start repaying my student loans:
I should have kept track of what I was borrowing
Let’s be real. When you take out student loans to help pay for college, it’s easy to forget that the money will eventually have to be paid back … with interest. The money just doesn’t seem real when you’re in college, and I didn’t do a good job of keeping track of what I was borrowing and how it was building up. When it was time to start repaying my loans, I was quite overwhelmed. I had different types of loans and different interest rates. When I did eventually see my loan balance, I was pretty shocked.
If you’re among the millions of current or former students with debt, you’ve probably been tempted to click on an ad that says, “Obama Wants to Forgive Your Student Loans!” or “Erase Default Statuses in 4 – 6 Weeks!” or some equally enticing student loan debt relief offer … available only if you click or call NOW!
Many the companies behind these offers have sophisticated marketing tactics to target unsuspecting students, borrowers, parents, military service members, and their families. As the Student Loan Ombudsman for the Office of Federal Student Aid at the U.S. Department of Education, I hear about these pitches a lot. My strong advice: Before you pay somebody to help you with your student loans, do your homework.
More students than ever before are relying on student loans to pay for their college education. 71 percent of students earning a bachelor’s degree graduate with debt, averaging $29,400. While most students are able to repay their loans, many feel burdened by debt, especially as they seek to start a family, buy a home, launch a business, or save for retirement.
That’s why, as part of his year of action to expand opportunity for all Americans, President Obama is taking steps to make students loan debt more affordable and manageable to repay.