The Project on Student Debt and Income-Based Repayment were both cited in a recent report "Repaying Student Loans In Tough Times" on CBS' The Early Show.

Watch the clip below

Posted by Shannon Gallegos at 9:58 AM | Permalink

In direct contrast to federal efforts to increase college access during the current recession, today Governor Schwarzenegger proposed eliminating all new Cal Grants, along with deep cuts to public university systems and other essential state programs and services. The Cal Grant program has been an integral part of California’s commitment to college access and affordability for more than 50 years. Since 2001, all qualified graduating high school students have been guaranteed a Cal Grant.

“The Governor’s alarming threat to eliminate Cal Grants sends a discouraging signal about college affordability to all Californians,” said Lauren Asher, acting president of the Institute for College Access & Success. “Students and families are counting on Cal Grants in these tough times, and the proposed cuts will wreak havoc with college plans for this fall.”

The Governor seeks to cut approximately $250 million from the state budget by:
• Eliminating all new Cal Grants for students at both public and private colleges; and
• Reducing the value of renewal Cal Grants for all returning University of California (UC) and California State University (CSU) recipients by lowering the share of enrollment fees their grants will cover. (Renewal Cal Grant recipients at other colleges would not experience cuts.)

We estimate that more than 200,000 students statewide – over two-thirds of all current students offered Cal Grants – would lose all or part of the Cal Grant they were counting on to help pay for college this fall. These students will see their financial aid packages reduced by between $576 and $9,708. Based on our analysis, here is a snapshot of these high- achieving, financially needy students and what is at stake for them.

At least 118,300 students would lose their entire grant, worth up to $9,708, this fall: Eliminating allnew Cal Grants would deny approximately 118,300 students access to aid dollars they needed and expected for the 2009-10 academic year. These students have very low to moderate incomes, and vary greatly in age and type of college, although nearly half would have attended community colleges.
• 26,000 students face cancelled Cal Grant A offers. A typical Cal Grant A student has a 3.45 grade point average (GPA) and a family income of $48,733.
• 84,500 students face cancelled Cal Grant B offers. Cal Grant B students, who receive 70% of new awards and would therefore be among the hardest hit, come from much needier families. A typical Cal Grant B student earns slightly above a 3.0 GPA, and has a family income of $17,791.
• 7,800 students face cancelled Cal Grant C offers. A typical Cal Grant C student has a 2.67 GPA and a family income of $21,859.
• The elimination of new awards affects both young adults and older students: 88,000 new High School and Transfer Entitlement students, whose average age is between 18 and 22, would lose their grant offers, as would 30,300 new Competitive and Cal Grant C students, whose average age is between 29 and 33.
• Eliminating new awards affects students at all types of public and private colleges, but community college students would lose the largest share – 45 percent – of new Cal Grant offers.
• Cal Grants A and B provide four years of eligibility for students, including transfers from community colleges to four-year schools. An estimated 110,500 students would not be able to receive these new grants in 2009-10, and over four years could miss out on as much as $38,000 each in needed aid.

At least 90,000 returning students would lose part of their Cal Grant this fall: An estimated additional 90,000 UC and CSU students would see their promised renewal grants reduced by up to $600 for 2009-10, a result of the Governor’s proposal to eliminate support for fee increases.

“The loss of Cal Grants will push lower income students off the college track, delay their progress, or leave them even deeper in debt as they struggle to make ends meet. Making it harder for Californians to get the training and education they need puts our state’s troubled economy at even greater risk, now and in the future,” said Asher. The Public Policy Institute of California recently found that California needs more than a million new college-educated workers by 2025 to protect the state economy from decline.

Posted by Shannon Gallegos at 4:02 PM | Permalink

As July 1 (the first day the Income-Based Repayment option becomes available for borrowers) draws closer, coverage of IBR and Public Service Loan Forgiveness is ramping up.

The Institute's acting president Lauren Asher was featured in a recent USA Today article focused on IBR.

An excerpt:

Starting July 1, borrowers will have a new option: a repayment program that caps monthly payments based on income. It targets borrowers who would have a hard time paying basic living expenses if they had to make standard monthly payments on their loans, says Lauren Asher, acting president for the Project on Student Debt.

Under the income-based repayment program, such borrowers will never have to spend more than 15% of their discretionary income — an amount based on federal poverty guidelines — on student loan payments. Most who qualify for the program won't spend more than 10% of their income on student loans. Those whose income falls below 150% of the poverty level (see box) won't be required to make any payments, Asher says.

Read the entire article here

Additional Coverage

• "Crushed by Student Loans? Help's Coming,"Terry Savage, TheStreet.com, 5/18/09

• "A Final Lesson: Repay Student Debt Quickly," Michelle Singletary, The Washington Post, 5/17/09

• "Income-Based Repayment: The Timing Could Not Be Better," Tim Ranzetta, Student Lending Analytics, 5/18/09

For more information about Income-Based Repayment visit IBRinfo.org

Posted by Shannon Gallegos at 1:57 PM | Permalink

The Institute for College Access & Success has updated the fact sheet "Quick Facts About Financial Aid and Community Colleges, 2007-08," where we focus on community college students who apply for financial aid and attend full time.

About one in four full-time college students in the U.S. -- 2.2 million students -- attends a community college. Of full-time community students who applied for financial aid, 80 percent did not get as much aid as they needed in 2007-08. We also found that although a relatively small percentage of community college students take out private student loans, these borrowers were much more likely than their peers at four-year institutions to miss out on cheaper federal loans.

Additional findings from the fact sheet include:

• While community college students are more likely to receive federal Pell Grants than four-year college students because of their lower incomes, they are less like to receive state or school grants, or federal work-study.

• Community college students are most likely to have "unmet need" after taking advantage of available sources of financial aid. For these students, the gap between what they can afford, including aid, and the full cost of college is similar to students at public four-year colleges.

• Federal Stafford loans, which any student can qualify for regardless of income, are safer and more affordable than private loans. Relatively few community college students borrow student loans of any type, but those who do unnecessarily turn to private loans more frequently than students at other types of colleges.

Read the fact sheet here

Posted by Shannon Gallegos at 4:33 PM | Permalink