New law to help in paying back college loans

By Sally Holland
Posted by Leah Gorham

WASHINGTON (CNN) -- As a graduate from Syracuse University with a master's degree in international relations, Jana Morgan was hoping to help victims of human rights violations caused by resource wars.

The tight job market, though, has made her put those dreams aside for now while she pays her bills -- by waiting tables at The Barrack's Inn in Sackets Harbor, New York.

Morgan is realistic about her future income options. "If you are going into public service, you aren't going there to make money, you are going there to help people," she said in a recent interview.

Her less-than-anticipated income means that it is difficult for her to make her student loan payments for the nearly $80,000 in debt she accumulated getting through college. Morgan is looking at a new law that goes into effect July 1 that would help her cap her student loans at 15 percent of her adjusted gross income.

Then, if she completes 10 years of public service, her loans would be dropped completely. Based on her current income, her $800 payments would go away for the time being, according to calculations she did on the Department of Education's Web site.

The College Cost Reduction and Access Act that created the new Income-Based Repayment program was signed into law in 2007 to help make student loan payments more manageable.

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Banks, credit unions offer help saving for college

Posted by Jorden Meltz

As the volatile market batters college nest eggs, a growing number of financial institutions are rolling out incentives to help families save or pay for higher education.

Citizens Bank is giving a $1,000 bonus to consumers who open a college savings account by a child's sixth birthday. Justice Federal Credit Union — which serves Department of Justice and Homeland Security employees — is offering a discount on a loan to pay for college costs. And Grow Financial Federal Credit Union in Tampa is donating money to student scholarships based on a local university football team's "return yards," which is how far players run with the ball after receiving a punt or kick.

The incentives won't significantly ease the pain of surging tuition or shrinking investment portfolios. Yet banks and credit unions hope that their efforts will provide some comfort to consumers as they struggle to finance their children's education.

Yearly tuition and fees at public four-year colleges have risen 62% in the past decade, to $7,020 in 2009, after adjusting for inflation, the College Board says.

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7 Alternatives to Pay for College

Posted by Nick Porcell

The news on college costs is mighty grim, but there are plenty of creative ways to keep your college dream on track.

Dwindling state and federal aid, lower endowments and drops in fund raising have forced many colleges and universities to raise tuition prices and cut back on financial aid programs.

What's a cash-strapped student to do?

Never Give Up on Scholarships

You don't have to be a stellar student to land a big scholarship. Unless it's strictly an academic scholarship, your grades don't really matter. As long as your grades make the cutoff, often a 2.5 GPA or higher, you have as good a chance as any applicant of bagging a scholarship.

And there's no reason your scholarship search can't continue through four years of college.

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Rising College Tuition and How to Handle It

By Leah Gorham

According to a survey released by the College Board Tuesday, tuition and fees at private 4-year schools rose 4.4% in the current school year to $26,273. Charges at public 4-year universities spiked as well, over 6% for both in-state and out-of state students. There are several reasons why tuition costs are going up. Private schools have seen their endowments shrink and public schools are suffering from a drop in state funding, which decreased 5.7% per student this year. Moreover, the availability of financial aid isn't keeping up with these climbing costs. Grant funding grew only 4.7% in the 2008-2009 academic year. As a result, student loans are also up, with total borrowing increasing by 5% between the 2007-2008 and 2008-2009 school years.

Looking at these numbers we may wonder, why even during a recession do college tuition rates continue to rise and where does all the money we pay for tuition really go? At many colleges with tuition rates on the rise, management is more similar to a political environment then that of a private corporation. In other words, colleges are not good at cutting programs when they add. For example, it is hard to cut faculty members because of tenure and many colleges also spend more on nonfaculty salaries than it does on pay for the teachers.

There are several strategies one can use to make paying for college a little bit easier on the wallet. It is important to use savings strategically, such as pulling money out of a 529 savings account before borrowing, even if the account has been devalued over the past year. It is also important to borrow smart by using Stafford loans and PLUS loans and check for available tax breaks for paying college tuition. Also, always encourage someone applying to college to apply to several safety schools and to apply to two or three schools with average GPA and SAT scores lower than theirs. They may be able to get more financial aid from these schools, who are looking to boost their reputation by attracting smarter students.

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College Costs Jumped $1,000 in 2009

Posted by Leah Gorham

On the bright side, scholarships totaling an estimated $71.2 billion were handed out last year

By Kim Clark

The total sticker price of a year at a typical university rose by more than $1,000 in 2009, even though living costs, as measured by the consumer price index, fell.

The average asking price for tuition, room, board, books, and all other expenses at public universities jumped by $1,062, or 5.8 percent, to $19,388 for the academic year that has just started. The total student budget for private colleges rose by $1,638, or 4.4 percent, to $39,028, the College Board reported today as a part of its annual analyses of college prices and financial aid trends.

The tuition prices have risen even faster than recent and significant increases in federal grants and education tax breaks, the College Board calculates. That means the net out-of-pocket costs of a year at college rose several hundred dollars in 2009, while families struggled through a recession.

"Families are facing these prices with incomes that are not making any progress at all," Sandy Baum, a College Board analyst, noted. Considering how public colleges and universities, especially, have had their state subsidies slashed over the years, however, Baum said the tuition increases could easily have been worse.

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5 Tips for College Students to Boost Credit Scores

By Leah Gorham

It is important to being keeping an eye on your credit score in college because once you graduate and are on your own, you will need to have a good credit score in order to open new bank accounts, get a new apartment, condo, or house, or buying a new car. Here are 5 tips from CollegeCandy.com to build a good credit score:

1 .Get a Credit Card
You can't build credit without having a credit card. Get a credit card and charge a couple small things on it each month, making sure to pay off the bill in full. Paying your bill in its entirety will show you are responsible and handle money well.

2. Put Your Name on the Bills
Although your parents may be paying many of your bills during college, you won’t have very strong credit references when it’s time to get out on your own if nothing is in your name. Start small by putting bills such as the cell phone bill in your name.

3. Pay What You Can and Pay on Time
Pay more than the minimum payment on credit card bills. Paying only the minimum payment will result in large finance charges and higher balances, causing your credit score to suffer.

4. Keep Old Accounts Open
Do not constantly open credit cards and then close them or build up large amounts of debt and transfer your funds to a new card, and close the first account. This type of activity will show that you are a sporadic and unorganized spender. Instead, find one or two really good credit card deals that you can use for years and stick with them.

5. Keep an Eye on Your Credit Score
Regularly check and monitor your credit score so that if it starts to slip you’ll be aware and can re-anaylze your spending and try to get those numbers back into good standing. You’ll also be able to monitor your activity and prevent fraud, identity theft, or unwarranted charges. Use a service such as FreeCreditReport.com or speak to a financial expert to find out your current situation.

For more information on these 5 tips click here.

How to Build Your Credit Score in College

Posted by Mary Clare McGraw

First, a good way to get started is to open a checking and savings account. If you are going to take out a small loan, while still in college, try to co-sign on the loan with someone who has great credit. You basically get to piggyback on their good credit. The thinking is that if someone with great credit is willing to cosign with you, and you pay your bills on time each month, you’re probably very credit worthy. It’s like getting someone to vouch for you. It’s an excellent way to build credit extremely fast. You can try a student credit card but make sure to be careful about the card you sign up for. Don’t take a credit card offer that you get in the mail because they can charge as high as 21% interest! Signing up for a store credit card at your favorite store could be a way to ease into building your credit by only having to pay a bill when you shop at that one store. It minimizes the amount of bills you will have to deal with at first and it is more difficult to rack up a large amount of debt at one store than at various stores you may shop at in one day even. Getting a loan is a good way to build credit in college, even if it is subsidized and there is a grace period until after you graduate. Lastly, if you have a credit card, be sure to use it every month but try not to charge more than 30% of your credit limit. Keeping your balance below this amount shows creditors that you are responsible with credit and are not very likely to overextend yourself financially.

GoCollege.com

Paying For College In Tough Times

Posted by Nick Porcell

If there's one thing that might take your mind off the sorry state of your own retirement, it's worrying about how you'll pay for your kids' college education. Even parents who thought they'd saved enough are coming up short and wrestling with financial aid forms that make tax returns look like child's play.


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