FAP555: Political changes in higher ed, PR scholarship, mail bag, Girls Stuff

Student Financial Aid News
+ From Inside Higher Ed: Democratic leaders of the House of Representatives education committee unveiled wide-ranging legislation Tuesday that over five years would take as much as $20 billion in federal funds away from lenders and redistribute most of it to students and borrowers, in the form of increased Pell Grants and lower student loan interest rates.
+ The bill also includes Republican-drafted proposals aimed at punishing colleges perceived to increase their tuitions excessively and, remarkably, would strip federal funds from states that reduce their spending on public colleges.
+ The measure, which will be considered today by the House Education and Labor Committee, emerges as part of Congress’s “budget reconciliation” process, which allows members to tap into funds from federal entitlement programs and use them to expand spending on discretionary programs (those typically supported by annual federal appropriations), as long as they agree to put some of the money toward deficit reduction. In this case, the Democratic measure would reduce the deficit by $750 million — but spend the vast majority of the funds on bolstering student aid and other higher education programs.
+ Democrats control the committee and will have the votes to pass the measure, the College Cost Reduction Act of 2007, which a Miller news release said would make the “single largest investment in college financial aid since the G.I. Bill.” It would do so by:
+ Increasing the maximum Pell Grant by $100 a year for five years beginning in 2008-9, to $5,200 (assuming that Congress is poised to raise the Pell to $4,700 in the 2008 fiscal year), and letting students use the grants year-round.
+ Cutting the interest rate on federally subsidized student loans in half, to 3.4 percent, by 2012-13.
+ Instituting a system of “income-based repayment” for borrowers, in which their student loan payments would be capped at a manageable percentage of their income and their debt canceled after 20 years of repayment.
+ Raising the amount that working students can earn — through the “income protection allowance” — without reducing their financial aid awards.
+ Lifting the annual and aggregate limits on how much individual students can borrow from the federal loan programs, with the goal of reducing borrowers’ dependence on private (and typically more expensive) loans.
+ Forgiving up to $5,000 in loans, and otherwise easing the loan repayment burden, for students who enter public service fields and fulfill other national needs.
+ Among other cuts to loan providers, the Miller legislation would:
+ Cut lender profits on new federal loans by 0.55 percentage point.
+ Reduce the proportion of their collections that guarantee agencies can keep to 16 percent from 23 percent.
+ Double the fee that lenders pay the Treasury when consolidating loans to 1 percentage point from 0.5 percentage point.
+ Reduce the amount that the government reimburses lenders on defaulted loans, to 97 cents on the dollar from 95 cents.
+ End a program that rewards loan providers who are “exceptional performers” in servicing their student loans.
+ While the Democratic plan focuses most of its help for students on bolstering student aid spending and making loans cheaper — objectives college officials overwhelmingly support — it also embraces a campaign that makes many academic leaders uncomfortable: efforts to restrict tuition increases.
+ Any college that increased its “sticker price” over any three-year period at a percentage that was more than double the basic consumer inflation rate would have to report to the Education Department explaining its increases.
+ The bill would offer carrots as well as sticks to colleges, though. Institutions that increased their net tuition by less than the higher education price index would be eligible for additional Pell Grant funds for their students, as would institutions that guarantee to students that they would pay the same or only slightly higher tuition prices during their college careers.

Scholarship Update
+ Common Knowledge Public Relations Scholarship Challenge
+ The PR/communications industry has experienced tremendous growth over the past decade. PR consultants have a wide range of tasks including portraying a company in a favorable light, communicating with the media, managing crises and planning special events.
+ This scholarship contest has two rounds: Round 1 is a short, multiple choice quiz based on questions from college-level PR courses. You receive 500 points for each correct answer and lose 1 point for each second taken to complete each question. The top 20 students with the most points at the end advance to Round 2.
+ The PR Scholarship Challenge is open to all Public Relations/Journalism/Advertising/Communications college students in the United States.
+ Details at our free college scholarship search site

Mail Bag
+ Christina wrote: We met at PodCamp Boston a while back. Hope you are well. My fabulous friend and colleague here at Topaz Partners is about to lose her mind dealing with enormous student loan payments. We know there must be a solution out there, and I thought if anyone could help, it would be you.
+ That would likely be student loan consolidation
+ Sharon wrote: Chris, do you have an entrance counseling podcast like you do the exit?
+ Not yet, but very soon!

Podsafe Music
+ Girls Stuff, I’m Sorry
+ Music via the Podsafe Music Network

Reminders
+ Join the Financial Aid Podcast Loyalists on Facebook
+ Make me your Facebook friend
+ Buy Virtual Hot Wings, the Matthew Ebel live bootleg album!
+ Private student loans available at any time - visit AlternativeStudentLoan.com
+ Stafford federal student loans at StaffordLoan.com
+ Student loan consolidation at StudentLoanConsolidator.com
+ FAFSA form tutorials and free help at FAFSAonline.com
+ Financial Aid Podcast Show Notes at FinancialAidPodcast.com.
+ The Financial Aid Podcast is a publication of the Student Loan Network.

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