Vol 1: Issue 8  |  Home   


Table of Contents

  1. Evaluating The School’s Financial Aid Award Letter
  2. How Much Should You Borrow For Your College Education
  3. Federal Updates
  4. Odds’ n Ends
  5. College Humor


Evaluating The School’s Financial Aid Award Letter

One of the more difficult tasks a family faces is evaluating the college’s Financial Aid Award Letter (FAAL). Upon the surface one’s financial aid award might appear to contain more need and or merit-based aid, however, the family must scrutinize the offers line by line to determine need based debt and how much money the family will have to contribute towards the school’s overall costs.

Below are FAALs for school A and school B: On the surface each one provides substantial financial aid, but upon closer assessment, one school’s financial aid offer will have a family paying substantially more in out of pocket expenses with the balance due to that school.

School A cost is $22,500.00

School Tuition Grant $6,500.00
Perkins Loan $2,400.00
Stafford loan (JR. eligibility) $5,500
Pell Grant $2,000.00
State Grant $2,000.00
Federal Work Study +$1,800.00
Financial aid award total


Financial aid toward costs $18,400.00
Total school year costs $22,500.00
Balance due School A $4,100.00

On the surface, school A’s FAAL came to $20,200.00, however, the financial aid that could be applied to the school’s costs was only $18,400.00. The reason: Federal Work Study funds cannot be applied towards tuition or room and board, thus the total of the financial aid toward school costs is reduced by $1,800.00.

The only means that the work-study could help the family is if the student is renting an off-campus apartment or house, which the work-study funds could be applied. Since the work-study is only $900.00 per semester, the family would still have to contribute towards the student’s rent and food and household items.

The need-based debt for the above offer totals $7,900.00 (Stafford and Perkins loans) and the out-of-pocket expenses, even though the student may put the total towards the rent, food and household items, the family, in reality will still have to cover $4.100.00, plus the cost for books and supplies.

Below, school B’s cost also comes to $22,500.00, which generates greater clarity when evaluating the school’s FAAL when comparing it school A’s FAAL.

School B’s financial aid amount is $19,500.00, or $700.00 less than school A’s financial aid award, yet upon closer study, though the need-based debt remains the same at $7,900.00, the family’s out-of pocket expenses are less, at $3,000.00 compared to $4,100.00 for school A., or a difference of $1,100.00.

School B’s cost $22,500.00

School Tuition Grant $6,000.00
Perkins Loan $2,600.00
Stafford loan (JR. eligibility) $5,500.00
Pell Grant $3,000
State Grant $2,400
Financial aid award total


Financial aid toward costs $19,500.00
Total school year costs $22,500.00
Balance due School B $3,000.00

Essentially, all financial aid awarded does not glitter like gold: True in school A, the work study could possibly be applied to off campus living expenses, but it has been my experience that the family with a student attending school A, will still have the greater out of pocket expenses than the family whose student attends school B.

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How Much Should You Borrow For Your College Education

The first thing to do is to analysis your schools financial aid award letter: Determine how much of your award is Stafford and or Perkins loan funding, then see what additional aid you received as either need-based and or merit-based financial aid. Once calculated, add any outside scholarships you may have received, and you have the total monies that you can subtract from your school’s total costs.

Once you have computed the amount of money you will require, it is time to consider the amount you will need to borrow to cover the school’s remaining cost. Point of interest: If you received a work-study stipend as part of your financial aid package, this money normally is not applied toward tuition and room and board. Instead students use this money to weekly living expenses or towards the rent of their off-residence. You may even consider working part time to meet your weekly expenses, but that is a matter you should discuss with your parents/guardians, especially if you are an incoming freshmen.

The first loan that will be brought to your attention is the Parent PLUS Loan (http://www.parentplusloan.com/) as they are more favorable toward the borrower, however tuition increases over the past twenty-five years have forced families to rely more and more on alternative financing to cover the gap between available school financial aid and a family’s resources toward overall costs.

A fast growing alternative is the private loans sector. Foe whatever reason you may not qualify for a parent PLUS Loan (a federal loan) or if the amount your financial aid award is insufficient to cover expenses, a private loan may be your financial ticket.

There are a multitude of lenders offering private student loans, but be wary as their terms vary. Since these loans are not guaranteed by the federal government, the private lender assumes the greater risk when compared to the federal government as interest rates and fees are normally higher than corresponding federal loans.

Private loan rates and fees are generally tied to the borrower’s credit history. If you have a good credit history, you will probably receive rates and fees considerably lower than a borrower with a poor credit history. Also private loans are more expensive, so make your decision carefully if you find yourself in a position that requires you to seek a non-federal loan. You need to do a debt analysis concurrently with your ability to repay all of your loans after graduation.

To help you in this, please find below several private loan web sites so that you may compare rates, fees and repayment plans...

Sallie Mae
National City
Next Student
Alternative Student Loan
College Loan Solutions, Inc.
Well Fargo
Educational Financial Partners
Student Loan Funding
Loan to Learn

This being said, be sure not to borrow more than you need – it may be tempting at the time but you won’t think so when repayment begins – for you are not required to borrow the loan’s full amount, but only what you need. Be sure to apply for your loan as soon as possible-follow the instructions diligently as you do not want to incur any delays -- so you know if the loan has been approved and for what amount before payment is due to the school.

As another point of interest, don’t become angry if your Stafford, Perkins Direct or Parent PLUS Loan’s amount paid to the school is not exactly the same amount you borrowed: A fee of up to 4 percent will be subtracted from the loan before the check is sent to your college.

It is never too early (once the loan(s) have been approved) to begin calculating what your monthly repayments will be. Should you feel the need or should the immediate situation require you borrow more than originally planned, seek advice from the loan’s originator or from the school’s financial aid department.

You may also wish to check into State offered college loans (example... New Jersey has the NJ Class Loan), but still follow the above advice while checking to see if the loans can be used for an out-of-state school (some states insist they be must be used for in-state schools only).

Should an unsubsidized Stafford loan and or a Parent PLUS Loan, or any loan where you have to pay the interest, if your budge will allow, begin paying the interest now so you can the capitalization of the interest payments.

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Federal Updates

The Interest Rate for variable federal student loans is set to climb 1.84 percentage points on July 1, to 7.14 percent, following the results of a Treasury Department auction held on Tuesday.

The Maximum Pell Grant would rise by $100, to $4,150, under a bill approved by a U.S. House subcommittee on Wednesday, but the panel provided no increase for the National Institutes of Health. The plan would restore funds for several education programs that President Bush sought to eliminate in his budget for the 2007 fiscal year.

Tucked Into a Supplemental Spending Bill nearing completion in Congress is a provision that would repeal a rule that requires many borrowers in the guaranteed-student-loan program who wish to consolidate their loans to do so with the company that originated their loans.

The U.S. Education Department is proposing several changes in the federal student-aid application for 2007-8, largely as a result of provisions in a budget-cutting bill signed in February by President Bush. The changes are largely technical, but some of them might make the form less useful to some colleges.

Under A Little-Noticed Loophole in a new federal law, money set aside in college-savings plans will not be counted in determining a dependent student’s eligibility for need-based financial aid if the account is in the student’s name, according to guidance released last week by the U.S. Department of Education.

Public Colleges In States that allow their resident illegal immigrants to pay cheaper in-state tuition rates would be barred from receiving federal aid under an amendment adopted on Tuesday by the U.S. House of Representatives Appropriations Committee.

Fuss Over A Financial Aid ‘FIX’ College aid directors clash over plan to correct Congressional drafting error by increasing loan interest rate for some parents. Inside Higher Education

Relief For Disabled Students Congressional measure would provide partial exemption from 2005 crackdown on college students in subsidized housing.Inside Higher Education

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Odds N’ Ends

A Majority of the country’s wealthiest colleges do not make their endowment investments public and do not disclose their proxy voting records, according to survey results released on Tuesday.

State Spending on student financial aid rose by more than 8 percent in the 2004-5 academic year, amid signs that efforts by states to expand financial assistance may be catching up with the growth in public-college tuition, according to a report to be released today.

Race Disclosures At America’s Top Colleges: Applicants to top colleges are becoming more reluctant to disclose their race, a study by the journal has found. If the trend continues, it will become harder to track the progress being made by minorities in higher education.

Sallie Mae, the nation’s largest provider of federal student loans, announced on Thursday that it had agreed to buy Upromise Inc., a company that helps families save money for college. The acquisition will give the loan giant a significant foothold in the college-savings business.

Skidmore College Will Receive about $42-million from the estate of the late Arthur Zankel, who was a financier and philanthropist, college officials have announced. They say the gift is the largest in the college’s history.

Duke University Will Reinstate its men’s lacrosse team this fall, holding its players to new codes of conduct and maintaining greater supervision over them, Richard H. Brodhead, president of the university, announced on Monday.

Many Students At Four-Year Public Colleges face a gap between their ability to pay for college and the cost of attending, even with money from financial aid, and the gap is largest for students from lower-income families, according to a new report from the Southern Regional Education Board.

The National Collegeiate Athletic Association needs to update its enforcement and infractions procedures, according to a private report issued on Monday by a Washington law firm.

Another Round (or Five) New study shows many students greatly exceed traditional criteria for binge drinking, and urges focus on those most at risk. Inside Higher Education

What Really Counts In Getting In Study finds surprising correlations between certain extracurricular activities and college admissions -- and Bourdieu may have provided explanations. Inside Higher Education

How Healthy Are Campus Health Centers? Directors share perspectives on where their profession is going -- and some worry about the trends. Inside Higher Education

Moving Up By Moving Down Many colleges seek to gain stature through sports. Birmingham-Southern switches from Division I to III and eliminates sports scholarships. Inside Higher Education

Opening Up The Elites Presenting powerful new data, a researcher advocates "class based" affirmative action that credits students for overcoming backgrounds. Inside Higher Education

Paying For College: Paper or Plastic? To cut costs, some colleges are turning to a third-party vendor for transactions involving credit card tuition payments. Inside Higher Education

Yes, The Sky Is Falling Political and financial support for American higher education is waning compared to global competitors, researcher argues. Inside Higher Education

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College Humor

Presidential Proposal

Megan E. Nutt will always remember her graduation from Greensboro College, in North Carolina – but not for the reasons you might think.

As Ms. Nutt crossed the stage to receive her degree, she had no idea that President Craven E. Williams was about to slip a ring on her finger.

Mr. Williams had been approached several days earlier by Ms. Nutt’s boyfriend of three years, Tyler Clapp, who was also graduating from the college. He wanted to propose to Ms. Nutt as part of the graduation ceremony and asked Mr. Williams to help. "I’ve already put one ring on one woman’s finger, and I thought that’d be the last time I did that," says Mr. Williams, who agreed to Mr. Clapp’s plan.

Mr. Clapp crossed the stage earlier than Ms. Nutt and, as Mr. Williams handed him his degree, whispered, "Are we still on go?" Later, when Ms. Nutt received her diploma, Mr. Williams told her he had something else to give her – an engagement ring. "I know the president, but I never expected that," Ms. Nutt says.

Mr. Williams then turned her around to face Mr. Clapp, who had followed her onto the stage to propose. Ms. Nutt said yes, and the crowd cheered, though the couple never really heard them. "I don’t really know" about the audience’s reaction, says Mr. Clapp. "I was too nervous to look at them."

The happy couple, who were both art majors and met in a ceramics class, are planning a small wedding for August.

Pretty Ugly Language

The richness of the English language is under daily assault, particularly on college campuses, where the clich’s of popular culture are, like, omnipresent. To force his students to really think about their language rather than falling back on the vernacular, Robert Wolverton, a classics professor at Mississippi State University, asked a hundred of them to list the most beautiful and the ugliest words. He was pleasantly surprised by the diversity of choices. The question remains, he says, "Are the words beautiful or ugly depending upon the sound or the meaning?" Here are the top selections in each category:

Beautiful Ugly
Love pus
serendipity vomit
lovely fungus
luminous death
melody mucus
beautiful puke
lavender ugly
lily cacophony
eloquent hate
euphoric mullet
glorious phlegm
gorgeous pimple

The Inner Beauty of Spam

Image by Alex Dragulescu

A visual artist at the University of California at San Diego has found a use for spam – not the gelatinous meat product, but the kind that clogs up your e-mail inbox with offers of cheap Rolexes and rapid weight loss.

Alex Dragulescu, manager of the university's Experimental Game Lab, makes art out of Internet trash by "recycling" junk e-mail messages into intricate computer art.

Last spring, for his master’s thesis in fine art, he created a work called "Pseudocode," a computer program that uses algorithms to convert e-mail text into 3-D computer "sculptures" of flowers and geometric structures. The program assigns values and characteristics to patterns within each message to create a unique image. So, for example, the placement of the word "Webcam" might affect the color of the petals on a digital flower, while the incidence of "Viagra" might determine the height of a building.

"I was interested in this piece of data that everybody is so quick to discard," says the artist. In what most people view as a nuisance, he sees metaphor. "Spam tells you interesting things about society. There’s commercialism – they’re trying to sell you all kinds of things. But there’s also human creativity with the way they try to fool the spam filters" by placing a series of unrelated words in the text of the message.

Mr. Dragulescu typically creates each of his artworks from a single spam message.

While fascinated by spam, he has also experimented with similar projects based on such sources as video games, blogs, and databases. This year, in honor of the 250th anniversary of Mozart’s birth, he is creating 3-D digital forms based on the notes, timbre, and tempo of Mozart compositions. The resulting images are every bit as vibrant as one would expect from the famously reckless composer.

Grinnell’s Green Secrets

Beer cases and note taking don't usually mix, except at Grinnell College.

The bookstore there sells an array of eco-friendly notepads bound in cardboard from Budweiser and cereal boxes and filled with pages of used photocopy paper, blank on one side and printed on the other with a confection of essay drafts and academic writings. The only new parts are the backs and plastic comb-style binders.

Two student groups, the Grinnell College Environmental Action Group and Free the Planet, produce the notepads as a way of reusing paper, which students consume in prodigious amounts. The used paper comes from marked "green boxes," in which students deposit their one-sided printouts for use in the notebooks. The environmental group discards any papers with questionable content.

Cassie Wherry, manager of the bookstore, says the full run of about 200 notepads sells out every year for $2.99 and $3.49 apiece. "They're very popular because they're so unique," she says. "Visitors especially enjoy them. And you can look through the pages and see what's printed on the back."

That voyeuristic peek into the student body's paper trail is a big part of the notebooks' popularity. "Sometimes you cringe because it's like looking at something private," says Jason Carpp, a spring graduate. "When classes get boring, it can be a lot of fun."

Eli Zigas, the project's founder, observes a more profound effect: "It's great to see an environmental project harness excitement and be economically viable."

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