Department Announces New College Affordability and Value Outreach

Making college more affordable for American families has continued to be a key priority for the Obama Administration, and in August, President Obama proposed a comprehensive plan to address rising college costs and increase college affordability and value. Since his announcement, Department and Administration officials have traveled the country and met with a variety of higher education leaders to hear their thoughts about the three components of President Obama’s plan: paying colleges and students for performance, promoting innovations that cut costs and improve quality, and helping students manage their debt.

obama_university_at_buffalo

President Barack Obama delivers remarks at the University at Buffalo, the State University of New York, during the college affordability bus tour in Buffalo, N.Y., Aug. 22, 2013. (Official White House Photo by Pete Souza)

As part of the proposal to pay college and students for performance, the Department is developing a college ratings system that will better inform families about college value and affordability and encourage institutions to improve, while ensuring that disadvantaged students are served well. Last week, we were excited to announce the first of four opportunities for the general public to interact with Department officials, as well as the broader education community, and share their ideas about how to develop the ratings and address the key themes of college access, affordability and outcomes.

Today, Secretary Duncan announced three additional open forums, in addition to other outreach efforts and events:

  • California State University, Dominguez Hills in Carson, Calif., on Nov. 6
  • George Mason University in Fairfax, Va., on Nov. 13
  • University of Northern Iowa in Cedar Falls, Iowa, on Nov. 15
  • Louisiana State University in Baton Rouge, La., on Nov. 21

Over the coming months, we plan to engage as many stakeholder groups and individuals as possible to help us develop college ratings that are useful to students and take into account the diversity of America’s colleges and universities. As part of our outreach announcement today, we are also unveiling a new College Affordability and Completion website that will host updated information, including details on timing and registration for the open forums, as well as new outreach events.

The public forums will build on the Department’s outreach activities already underway and will coincide with the Department’s upcoming Request for Information (RFI) to ask data experts and researchers to weigh in on methods for creating college ratings. Since the President’s announcement, officials have met in  Los Angeles, Boston, Chicago, and Washington, D.C,  with groups including the American Association of State Colleges and Universities, the Historically Black Colleges and University Presidents’ Board of Advisors, the American Council on Education, student leadership associations, independent college groups in Massachusetts and California, presidents from Hispanic-Serving Institutions – and over the next few weeks will meet with community college and business leaders, parents, students, faculty, and more.

We want feedback from students and parents, state officials, college presidents from a variety of institutions, higher education faculty and administrators, businesses and industry leaders, researchers, data experts, higher education associations, innovators, philanthropies, policy leaders and others. If you can’t join us for an open forum, please submit your ideas by sending an e-mail to collegefeedback@ed.gov or by mail to the U.S. Department of Education headquarters in D.C. at the following address:

Attn: Josh Henderson
400 Maryland Ave SW, 7E313
Washington, DC 20202

 Sara Gast is director of strategic communications at the U.S. Department of Education

Making College Affordable for Every American

I’m thrilled today that President Obama is moving forward with an ambitious new plan to make college more affordable for every American. We know that higher education is more important than ever, but we also know it’s never been more expensive. We have heard from students and families across the country who are worried about affording college, and we believe that higher education cannot be a luxury that only advantages the wealthy.

Cost of College GraphicsCollege must remain an accessible and affordable opportunity that provides a good value for all Americans. We want college to be a secure investment for every student from every background who is willing to work hard, an investment that prepares our nation’s students for a good job and a bright future.

We believe the cost of college is a shared responsibility among the federal government, states, colleges and universities, and our students and families. Since 2009, the Obama Administration and Congress have worked together to make historic investments in higher education. We  raised the maximum Pell Grant grant award by more than $900, created the American Opportunity Tax Credit, now offer additional loan repayment programs that help students manage their debt, and enacted landmark federal student aid reforms that eliminated wasteful bank subsidies and increased by more than 50 percent the number of students attending college from low-income families.

There are remarkable examples of states and institutions across our nation who have taken innovative steps to help American families afford college. New York has committed to restraining tuition growth in its public community colleges and universities over five years, and the University of Maryland system, which operates an Effectiveness and Efficiency Initiative, has saved more than $356 million and helped stabilize tuition for four straight academic years.

But we need to see more innovation and initiative to ensure that college remains a good value for students and families, and that’s what the President’s announcement today is all about. Earlier today at the University at Buffalo, the President laid out a plan with three concise steps to make college affordable. The steps are outlined in this White House fact sheet, and include:

  • Linking federal financial aid to college performance, so colleges must demonstrate they provide good value for the investment students make in higher education
  • Sparking innovation and competition by shining a spotlight on college performance, highlighting colleges where innovations are enabling students to achieve good results, and offering colleges regulatory flexibility to innovate
  • And – because we know that too many students are struggling to repay their debt today – President Obama is committed to ensuring that students who need it can have access to the ‘Pay As You Earn’ plan that caps federal student loan payments at 10 percent of discretionary income, so students can better manage their debt

We need more colleges and universities to keep college affordable while delivering a high quality education, not only for students who are first in line, but for all, especially students who are first in their families to enter college, students from disadvantaged circumstances, students with disabilities and veterans who chose service before completing their education. We need states to increase higher education funding, with proven strategies for student access and success. And we need to make sure that our annual investment of over $150 billion in federal student aid is achieving all that it can to ensure the economic and social prosperity of our nation.

The Obama Administration is going to continue to do everything we can to make college more affordable, and ensure students and families get as much value possible from their investment of effort, time and money in higher education. We’re looking forward to seeing states and institutions do their part, as well.

Additional reading: President Obama Explains His Plan to Combat Rising College Costs.

Martha Kanter is the U.S. Under Secretary of Education 

Answers to Your Questions on Student Loan Interest

A college degree is a vital part of helping students have a successful future and a place in the middle class, and making college affordable is a major priority for the Obama Administration.

Federal Aid LogoAs of July 1, 2013, the interest rate on new subsidized Stafford Loans rose to 6.8% from the previous rate of 3.4%. Our Administration is actively working with Congress to bring rates back down for new loans. In addition, the Administration has advocated that any plan passed by Congress apply to all loans first disbursed after June 30, even loans already disbursed.

If the law is changed, the Department and its servicers will adjust rates for all affected borrowers, including those who had already received their first subsidized loan disbursement, without any further action on the part of the borrower or the school.

We know some borrowers and families may have some questions about what the rate change means and we’ve answered some of the most common questions below. If you do have specific questions about your loan please visit http://studentaid.ed.gov/ or contact 1-800-4-FED-AID for more information.

Q: Should I still apply for federal student aid given the interest rate hike?

A: Students and families who wish to obtain financial aid should complete should complete a 2013-2014 FAFSA if they have not already done so. Schools should continue to award and process Direct Subsidized Loans with estimated disbursement dates. The Administration is working with Congress to bring rates back down for new loans.

Q: What is the current rate of federal subsidized loan?

A: Absent further Congressional action, the interest rate for all Direct Subsidized Loans with a first disbursement date on or after July 1, 2013, is 6.8%. This is the same interest rate that applies to Direct Unsubsidized Loans.

Q: Is the 6.8% rate permanent for the lifetime of my loan?

A: The Obama Administration continues to work with Congress to reach agreement on a plan to reverse the doubling of those interest rates.  Further, the Administration has urged that any plan passed by Congress apply to all loans first disbursed after June 30, even loans already disbursed. If the law is changed, the Department and its servicers will adjust rates for all affected borrowers, including those who had already received their first subsidized loan disbursement, without any further action on the part of the borrower or the school.

What if I already have a loan? Does the interest rate change?

A: No change in interest rates on a loan where the first disbursement was before July 1, 2013

What Is a Student Loan Servicer and Why Should I Care?

repayment plan imageSo you took out a federal student loan and now it’s time to pay it back. I was in your exact position 2 years ago and even though I was working at Federal Student Aid, the student loan repayment process had me overwhelmed.

One of my first questions was: Why am I receiving federal student loan bills from a company rather than the U.S. Department of Education? If you have asked yourself a similar question, this may help:

What is a loan servicer?

A loan servicer is a company that handles the billing and other services on your federal student loans. So those bills you get in the mail? There is a good chance they are coming from a loan servicer on behalf of the U.S. Department of Education.

How do I find out who my loan servicer is?

To view information about all of the federal student loans you have received and to find contact information for your loan servicer, visit www.nslds.ed.gov and select “Financial Aid Review.” You will then be prompted to log in using your Federal Student Aid PIN, so make sure you have that handy.

Note: If you have multiple federal student loans, you may have more than one loan servicer, so make sure you click through each loan individually for information specific to that loan.

Why should I care?

There are lots of reasons you should care!  Among many other things, your loan servicer

Moral of the story: Keep in contact with your loan servicer.

The student loan repayment process can be confusing, especially if you’re new at it, but your loan servicer is there to help. Make sure you stay in touch with them and use the resources they have available for you.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.

4 Things to Do During Your Student Loan Grace Period

Grace 6 month 9 monthYour student loan grace period is a set amount of time after you graduate, leave school, or drop below half-time enrollment before you must begin repayment on your loan. For most student loans, the grace period is six months but in some instances, a grace period could be longer. The grace period gives you time to get financially settled and to select your repayment plan.*

Here are four things you can do during your grace period to prepare for repayment:

1. Get Organized

Start by tracking down all of your student loans. There is a website that allows you to view all your federal student loans in one place.

You can log into www.nslds.ed.gov using your Federal Student Aid PIN to view your loan balances, information about your loan servicer(s), and more.

Note: Don’t forget to check to see if you have private student loans.

2. Contact Your Loan Servicer

loan servicer is a company that handles the billing and other services on your federal student loan. Your loan servicer can help you choose a repayment plan, understand loan consolidation, and complete other tasks related to your federal student loan, so it is important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.

To find out who your loan servicer is, visit nslds.ed.gov. You may have more than one loan servicer, so it is important that you look at each loan individually.

3. Estimate Your Monthly Payments Under Different Repayment Plans

Federal Student Aid recently launched a Repayment Estimator that lets you compare your monthly student loan payment under different repayment plans to help you figure out which repayment plan is right for you.

Just go to www.StudentLoans.gov –> Log in –> Click “Repayment Estimator” in bottom left corner. It will pull in all of your federal student loan information automatically so you can compare repayment plans based on your specific situation.

4. Select The Repayment Plan That Works For You

Although you may select or be assigned a repayment plan when you first begin repaying your student loan, you can change repayment plans at any time. Flexible repayment options are one of the greatest benefits of federal student loans. There are options to tie your monthly payments to your income and even ways you can have your loans forgiven if you are a teacher or employed in certain public service jobs. Once you have determined which repayment plan is right for you, you must contact your loan servicer to officially select a new repayment plan.

* Not all federal student loans have a grace period. Note that for many loans, interest will accrue during your grace period.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.

Class of 2013: What’s Next for Your Student Loans?

choose a repayment plan imageI’m not afraid to admit that being a college senior is a little frightening (okay, slight understatement-it’s extremely frightening!) As the Class of 2013 prepares to say goodbye to the comforts of our college community and say hello to the real world, we are faced with many realities. Where will I live? How am I going to find a job? Will I make ends meet?  Will I be happy?

And with all these new exciting challenges and responsibilities, one of the last things on most of our minds is repaying our student loans. Yet it’s one of our responsibilities and we should be prepared for when the first bill arrives in the mail.

I will be honest in saying that this repayment process is a little intimidating, and before writing this post I was at a loss of where to begin. Luckily, the Department of Education’s Office of Federal Student Aid (FSA) has tools available to walk soon-to-be grads through the loan repayment process:

  • Exit Counseling: Recently redesigned to be more interactive, Exit Counseling provides important information to student borrowers who are preparing to begin student loan repayment. Exit counseling is required when you graduate, leave school, or drop below half-time enrollment, so talk to the financial aid office at your school about completing it.
  • Federal Loan Repayment Plans: Understanding the details of repayment can save you time and money. Find out when repayment starts, how to make your payment, repayment plan options, what to do if you have trouble making payments, and more!
  • Repayment Estimator: Federal Student Aid recently launched a Repayment Estimator that allows you compare your monthly student loan payment under different repayment plans to help you figure out which option is right for you.  Once you log-in, it will automatically pull in all of your federal student loan information so you can compare repayment plans based on your specific situation.

So with all of these great resources, I’ve found that things are clearer, and not quite as scary. Class of 2013 we are about to embark on a new adventure, best of luck to each and every one of you!

For additional information and tips, visit Federal Student Aid on Twitter , Facebook, and YouTube.

Kelsey Donohue is a senior at Marist College (N.Y.), and an intern in ED’s Office of Communications and Outreach

Finding the Right College For You – Tools & Resources from ED

If you are a high school senior who has yet to decide where you’re going to college this fall, you are most likely not alone. May 1st marks the National College Decision Day where the vast majority of U.S. colleges and universities require students to notify them of their decision to attend.

As you navigate the college decision process, the U.S. Department of Education provides tools for you and your family to make it easy to compare important information such as college costs, average student loan debt, and graduation rates across different institutions.

If you are a student or the parent of a college-bound teen struggling with this decision, here are a few tools that can help:

Federal Student Aid The College Scorecard

The College Scorecard includes essential information about a particular college’s cost, its graduation rates and the average amount its students borrow, all in an easy-to-read format. It is designed to help you compare colleges and choose one that is well-suited to your individual needs.

Net Price Calculator Center

Federal Student Aid

The Net Price Calculator Center provides an easy tool to explore the net price of any given college- that is, the price after subtracting the scholarships and grants you are likely to receive. Then, you can easily compare estimated net prices across the institutions that you are considering.

Financial Aid Shopping Sheet

Many colleges and universities have adapted a Shopping Sheet which will be included in your financial aid package. The Shopping Sheet provides personalized information on financial aid and net costs as well as general information on institutional outcomes- all in a standardized format. This tool provides an easy way to make clear comparisons among financial aid offers that you may receive.

FSA2

College Navigator

College Navigator is an interactive website that allows you to explore and compare features of different institutions, including programs and majors, admissions considerations, campus crime statistics and more.

For additional tips visit Federal Student Aid’s Choosing a School resources and follow @USEDGOV & @FAFSA on Twitter.

Now that you have the resources and the tools to pick the right college, you can let out a sigh of relief and show your campus pride with that coveted university sweatshirt. Congratulations!

Kelsey Donohue is a senior at Marist College (N.Y.), and an intern in ED’s Office of Communications and Outreach

College Students Discuss Higher Education Affordability with Secretary Duncan

Secretary Duncan and Undersecretary Kanter talk with StudentsStudents are a crucial voice in education, particularly when it comes to policy debates. To continue its transparency efforts and ensure students have a seat at the table, the Obama Administration has engaged youth, parents, and higher education leaders regarding college affordability and accessibility through roundtables, forums and Secretary Duncan’s Student Voices Series.

Secretary Arne Duncan and Under Secretary Martha Kanter heard directly from college students and youth leaders from the United States Student Association during the most recent Student Voices Series.

Students shared stories on how the Pell Grant and TRIO programs have positively impacted their lives. “Without these programs, I would have not been able to continue my college education and graduate with a degree,” said one youth. Since President Obama took office the maximum award increasing more than $900 dollars and the number of students relying on Pell Grants to pay for college has risen by more than 50 percent.

After hearing from the students, Kanter told them “there are not enough real stories about students who are benefiting from programs that help them manage their educational debt. These stories could help others become aware of opportunities that they may also be able to benefit from.”

”The Obama Administration has made an unprecedented commitment to improve college access and completion for millions of American families,” Secretary Duncan said. The expanded income-based repayment program (IBR) and the new Pay as You Earn plan will help students better manage their debt, and the American Opportunity Tax Credit has lowered the cost of attendance for 9.4 million students and families annually. In addition, the FAFSA or Free Application for Federal Student Aid has also been simplified in order to make federal financial aid more accessible to students. And click here to read President Obama’s blueprint for college affordability.

Secretary Duncan told students their input is important and requested feedback from the youth on the new studentaid.ed.gov website, which outlines many programs to help Americans with educational debt.

Do you have a story of how the Pell grant, IBR or a TRIO program has helped you? If so, we would love to hear it.

Robert Gomez is a higher education and youth liaison in the Office of Communications and Outreach

Top 5 Benefits of the College Navigator

College Navigator LogoWhether you’re a high school student wanting to look into your college options or a parent trying to get ahead of the game, the college research and application process can be confusing. With 4,000 degree-granting institutions in the United States, how are you supposed to find out which one is the right fit for you?

Luckily, ED has a great resource that makes the process of finding a college easier. The College Navigator helps you find, organize, and keep track of the schools that are best suited for you. Here’s a list of the top 5 ways to use this tool:

1.     Cost Calculator

The Navigator estimates student expenses for each college, including tuition, books, supplies, and room and board. Also provided is the net price of attendance and links to each school’s calculator.

2.     Financial Aid

College Navigator reports every college’s financial aid awards, breaking them into categories such as number of students at the school who receive aid and average amount of aid received.

3.     Graduation Rates 

Data are presented on color-coded graphs that make the numbers easy to understand whether students are staying in school and completing.

4.     Student Loan Default Rates

You can see whether former a college’s students are repaying their student loans. If too many are defaulting, it’s a sign the school isn’t preparing them for success after graduation.

5.     Compare Your Favorites

Add colleges and universities that you like to a My Favorites tab. You can compare two or more schools and export results to a spreadsheet.

The college application process is an important one, but it doesn’t have to be stressful. With College Navigator, you can narrow your search and stay connected to your prospective schools’ admissions offices. Before you know it you’ll be on your way to college that’s right for you.

Alexandra Strott is a student at Middlebury College and an intern in ED’s Office of Communications and Outreach

5 Steps for Picking a College

Picking a college can be a daunting task for students and their families. The Obama Administration and the Department of Education are making it easier for students to pick the right school by providing key information on a school’s cost and how much debt the typical graduate has upon leaving a school.

Graduation CapsLast week, Secretary of Education Arne Duncan laid out five easy steps students and their families can take to help pick the right college.

1. Research prospective schools and consider the total cost and student success in the job market and other outcomes. Check out ED’s College Affordability and Transparency Center to get started.

2. Apply to several schools. There are a lot of great options, and your job is to find the highest quality education you can get for the best value.

3. Fill out the FAFSA. Make sure you can get the financial aid you need to be successful. Get started at: studentaid.gov

4. Compare financial aid awards from different schools. Understand how much you will have in grants and scholarships, and determine if loans are necessary. ED’s new “Shopping Sheet” makes this process easy and straightforward.

5. Pick the best school for you. Study hard, get involved and keep focused on your end goals.

Stay up to date with Secretary Duncan and the Department of Education by receiving our weekly news update.

Unraveling the Mystery of College Costs

Waiting for college acceptance letters can be a nerve-racking experience filled with excitement and anticipation, but once approved, students and their families begin another anticipatory wait for financial award letters. The letters, which intend on laying out the cost of college, too often do a poor job of providing the bottom line on how much aid, grants and scholarships, and student loans will be needed to pay for college.

Shopping Sheet Example

An example of the easy-to-read information on the Shopping Sheet

To help solve this problem, the Obama Administration released a model financial aid award letter today called the Shopping Sheet. The Shopping Sheet will standardize award letters, making it easier to comparison shop and provide students with key information including:

  • How much one year of school will cost;
  • Financial aid options to pay this cost, with a clear differentiation between grants and scholarships, which do not have to be repaid, and loans, which do;
  • The net costs after grants and scholarships are taken into account;
  • Vital information about student results, including comparative information about default rates, graduation rates, and median debt levels for the school;
  • And potential monthly payments for the federal student loans the typical student would owes after graduation.

To coincide with the release, Secretary of Education Arne Duncan sent an open letter to college and university presidents, asking them to adopt the Shopping Sheet as part of their financial aid awards starting in the 2013-14 school year. In the letter, Duncan explained that “we must unravel the mystery of higher education so that students can invest wisely and make the best, most informed decision possible about where to enroll.”

Read Secretary Duncan’s letter and see the shopping sheet here.

New Tool Helps Students Manage Loan Debt

The Department of Education launched a new tool this week that helps students with financial management basics including information about current loan debt and estimates for student loan debt levels after graduation.

A picture of the new website.

The Department of Education launched a new tool this week that helps students with financial management basics.

The new tool—the Financial Awareness Counseling Tool—has five interactive tutorials that are tailored for each student after they sign in and access their individual loan history. The five tutorials are:

    1. Understand Your Loans
    2. Manage Your Spending
    3. Plan to Repay
    4. Avoid Default
    5. Make Finances a Priority

The Counseling Tool is part of a larger effort by the Obama Administration to make it easier for students and their families to understand the cost of college. In the coming weeks the Administration will also launch its model financial aid shopping sheet, and encourage colleges to adopt the sheet to ensure prospective students understand the cost of college before their first semester.

Click here to visit the Financial Awareness Counseling Tool, and visit studentloans.gov for more information.