The study — “Into College, Out of Poverty? Policies to Increase the Post-secondary Attainment of the Poor” — is actually a review of 17 previous studies, all which examined the efficacy of various programs aimed at increasing access to college and keeping students enrolled.

The authors of “Into College, Out of Poverty” found that confusing and cumbersome paperwork is a major deterrent to programs, such as the Pell Grant, in reaching their goal of enrolling (and retaining) low-income students who would not otherwise have gone to college.

If targeted students are deterred by administrative hurdles, these programs will not work as well as intended.

You can read more about the study from InsideHigherEd.com.

• 36 percent of 1999-2000 bachelor’s degree recipients received at least one Pell Grant while in college.

• Pell Grant recipients had greater undergraduate “risk characteristics,” including delaying post-secondary enrollment or failing to graduate from high school than non-recipients

• Pell Grant recipients whose parents did not attend college took longer to finish their Bachelor’s degree than recipients whose parents held a least a bachelor’s degree. They also enrolled in graduate school at a lower rate.

• When controlling for these risk factors — including parents level of higher education — Pell Grant recipients actually graduated more quickly than non-recipients.

While I don’t think getting a Pell Grant will make or break your graduation time statistic, it is undoubtedly a great way to pay for college.  And if President Obama gets his way, there will soon be more students who are Pell Grant eligible — more than ever before.

Learn more about the Pell Grant for low-income students from FinancialAidFinder.

Known as the Student Aid and Fiscal Responsibility Act of 2009, the President’s plan would expand the number of students eligible for Pell Grants.

Currently 40 percent of American college students receive Pell Grant assistance. In addition, the bill would tie the dollar amount of the Pell Grant to the rate of inflation, allowing for a maximum increase from $5,550 next year to $6,900 by 2019.

In order to pay for the increase in Pell Grant funding, the bill would eliminate subsidies for federal student loans by private lenders such as Sallie Mae, replacing them with direct loans from the federal government. To learn more about the Student Aid and Fiscal Responsibility Act, check out this post from back in February when the President first announced his plan to overhaul student loans.

It was good to see that staying in school is still a priority for the two families featured in the piece, but rather heart-wrenching to read the real life stats.

For example, did you know that, across the board, the value of savings in 529 Plans has dropped 21% over the past year? And the market drop isn’t just hitting parents who were saving for their kids’ future. It is also hitting universities and their endowment plans, which are a major source of funding for university-based aid like scholarships and tuition reductions.

The article cites that Harvard University alone lost $8 billion in the past year. (Bear in mind that Harvard has the largest endowment of any university in the United States — often cited as worth more than the GDP of many developing nations!).

So how are families coping with job loss/possible job loss, slashed college savings plans, and rising tuition rates? Here are some of the ways:

• Downgrading — Students that were considering elite private schools, with $50,000+ yearly costs, are now applying to in-state four-year colleges. Would-be four-year college students are instead applying to local junior colleges.

• Taking out unplanned student or parent loans — Some families with slashed 529 Plans (or other college savings vehicles) are taking out PLUS loans or Stafford loans for the earlier years of college, in the hopes that their 529 account will rebound in time to pay them off.

• Delaying contributions to 401Ks and other retirement plans — Some parents are choosing to put off saving for their own retirement in order to help cash flow their kids’ college education today. This seems like a risky proposition to me. I can certainly see the immediate benefit and appeal (your kid gets to finish school), but the loss of compounded interest means that your nest egg could be taking a serious hit. Of course, given the current state of the market, maybe families feel like the potential (likely?) negative interest rates isn’t worth stopping their child’s education.

• Bulking up on cheaper college credits — If your college lets you transfer in credits, you can take courses at your local community college during the summer for a fraction of the cost. You might also want to consider giving yourself a head start by taking as many AP classes as possible. (Did you know that many universities will give you credit for AP classes?)

• Asking the financial aid office to reconsider your aid award –  If you or your parent has recently lost a job, incurred unexpected medical expenses, or experience another financial hardship, you are in a good position to ask your school for more assistance. They might not always be able to help you, but it never hurts to ask.

• Applying for as many private scholarships as you can find — Spending just 5-10 hours a week applying for scholarships can net big results. Even if you only win $500 scholarships, a handful of those can add up to more than half your annual tuition bill. (Check out our weekly Scholarship Announcements posts for an up-to-date list of pending scholarship deadlines.)

• Availing yourself of tax credits — Congress signed new tax legislation in February, which included the American Opportunity tax credit. The new credit increased the tax credit for educational expenses to $2,500, and made it available to families for four years, rather than just two. (See Tax Credits and Deductions for Students for more information about this and other credits.)

Have you found a creative way to finance your or your child’s college education? Tell us about it in the comments section (legal ideas only please ;-)).

The Teacher Education Assistance for College and Higher Education (TEACH) Grant Program was created by Congress in 2007 to provide provides grants of up to $4,000 per year to education students planning to teach in schools that serve low-income students.

Unlike other federal education grants (such as the Pell Grant), the TEACH Grant is not need-based. While you must complete a FAFSA to qualify, you do not have to demonstrate financial aid.

Here’s the catch: In exchange fro a TEACH Grant, you agree to serve as a full-time teacher for at least four years in a high-need area (see the list of subjects below) with low-income students. You have eight years from your graduation to complete these four years, but if you fail to meet your obligation, your grant will convert to an unsubsidized Stafford Loan payable to the Department of Education. Interest will be charged back to the date the original grant was disbursed.

What’s a “High-Need” Field
In order to “pay back” your TEACH Grant, you must teach full-time for at least four years in a high need field, which the federal government defines as:

• Bilingual Education and English Language Acquisition
• Foreign Language
• Mathematics
• Reading Specialist
• Science
• Special Education
• Teacher shortage areas in your state at the time that you begin teaching

What’s Considered “Low-Income” Students?
In addition to teaching in a high-need field, you must also be working in an area that serves students from low-income families, which is defined by the federal government as:

Schools designated as such by the Department of Education’s Annual Directory of Low-Income Schools, including both public and private schools. Click here to see the most recent directory of these schools.

What else is required of me?
The biggest obligation of the TEACH Grant is clearly the post-graduation teaching requirements. Beyond that, however, eligible candidates must:

• Be enrolled in a college or university that is participating in the TEACH Grant
• Maintain a 3.25 GPA
• Be a U.S. citizen
• Participate in TEACH Grant Initial and Subsequent Counseling
• Sign a TEACH Grant Agreement to Serve (ATS)

How do I apply for a TEACH Grant?
If you think you meet the eligibility standards for the TEACH Grant, the first step is to contact your school’s Office of Financial Aid. You will need to complete a FAFSA, although the TEACH Grant does not require applicants to demonstrate financial need.

The Pell provides need-based grants to low-income students. While the amount of the grant is set each year by the Congress, the Pell Program is often criticized for not providing enough aid to keep up with the rising costs of higher education.

If President Obama passes his budget, however, the Pell Grant Program will be transformed into an entitlement program that grows every year to keep pace with inflation. Just like Social Security and Medicare, Pell Grants would no longer be dependent on Congressional approval for rate increases. Instead, low-income students would be guaranteed an inflationary bump every year. While it may still not be enough to keep pace with skyrocketing tuition hikes, it will certainly help.

To get a better overall picture of the higher education in the Obama budget, see this February article from Inside Higher Ed. And you can learn more about the proposed changes to student loans from the Financial Aid Finder two weeks ago.

Essential FAFSA Documents
FAFSA PIN
Common FAFSA Blunders
FAFSA Deadlines

Well, we have arrived at the final installment of our FAFSA workshop. For some of you, this may no longer be relevant, since you had March 1st (or earlier) deadlines by which to complete your FAFSA. If you are still working on your application, however, you might find some good tips in today’s FAQs. A special thank you to everyone who sent me their questions. I hope that our answers today are able to help you, but if you are still confused, leave me a comment below so I can follow up with you.

I am applying to three private schools and two state schools. How many FAFSAs do I need to complete?
Just one. You can list up to 10 schools on your application.

Keep in mind, however, that each of these schools may have a different deadline. Check with the school’s financial aid office to confirm each deadline, then make sure you finish your FAFSA in time to meet the earliest one. Also keep in mind that some private schools require additional documentation beyond the FAFSA, such as the CSS Profile form. The PROFILE is used by many private colleges and universities and typically takes a more complete family profile than the FAFSA. For more information on the CSS Profile, visit the College Board website.

* My dad just got laid off two months ago, but our 2008 tax returns don’t reflect that, obviously. How can I make a note of this on the FAFSA?

First, I’m sorry to hear about your dad’s layoff. I’m sure that is stressful for everyone. As to your question, unfortunately the FAFSA is not designed to accommodate special circumstances, whether or not they occurred in the previous tax year. In your situation, you should complete the FAFSA as required and then contact the school (or schools) directly. The financial aid office may ask you to present your situation in writing, with relevant documentation. At which point, the school may decide to take this additional information into consideration in determining your Estimated Family Contribution — which could mean that your financial aid award will be higher than expected, based only on the FAFSA.

*How long will it take for my school to get the information from my FAFSA once I submit it?

That’s a good question, especially since some schools make decisions about financial aid on a first come-first serve basis. If you fill out the FAFSA online, it will be processed by the Department of Education within 2-3 business days after you submit it. If you fill it out on paper and mail it in, your FAFSA could take up to three weeks to process. Once processed, the school(s) you selected should have the results within a week to ten days. If you complete the FAFSA manually, it could take an addition two to three weeks.

*Where do I find my school’s code?

Every school has a unique code, which you must fill out on your FAFSA, so that the Department of Education knows where to send the results. Use the FAFSA site’s Federal School Code Search to find your school’s code. You can include up to 10 schools on your application and the results will be sent to each school. Be sure you verify that the code is correct before submitting the FAFSA.

*My parents saved up a good amount of money for my college. It’s not quite enough to pay for everything, but I guess you could say we’re in a good position. I doubt I’d even qualify for federal aid. Is there any point in filling out the FAFSA?

Yes, absolutely. You may not qualify for student loans, grants or work-study — but without a completed FAFSA, you definitely won’t. Additionally, a number of private scholarship foundations require a copy of your FAFSA report, even if theirs is not a strictly need-based award. Don’t cut yourself out of the running for scholarship money — no matter how much money your parents have.

Bear in mind, as well, that the impact of your parents’ saving will be determined by the vehicle in which they saved that money. Meaning, if your parents saved your college money in a 529 Plan or an ESA Coverdell, for example, you could still be in good shape. A 529 plan owned by a parent is considered a parental asset and is assessed at a maximum rate of 5.64% when determining your Expected Family Contribution (EFC). This rate is quite low. Assets that are held in your name, however, are assessed at a much high rate (up to 20%). So, long story short, definitely complete and submit the FAFSA because you may still be eligible for federal financial aid.

*My parents are divorced and have joint legal custody, but I live most of the time with my mom and step-dad. Whose information do I need to list on my FAFSA?

Joint legal custody does not matter as far as the FAFSA is concerned. Nor does whose turn it is to claim you on their tax return. For the FAFSA, you need the tax returns of the parent you lived with most during the last 12 months. Since your mom is remarried, you will need to include your stepfather’s info as well. If your mom and stepdad filed a joint return, then that should be easy. But even if they filed separately, you still need to include your stepfather’s information.

If your parents are separated but not yet divorced, then the situation would be a bit less clear. If your parents are legally separated, you should use the W2s of whichever parent you have lived with most over the past 12 months to determine his or her share of the reported income.

That’s it for me — but if you have other questions, please leave them in the comments section. Or for more information, you can check out the FAFSA site’s very extensive FAQ section.

• Essential FAFSA Documents
• FAFSA PIN
• Common FAFSA Mistakes

And remember that next week, I will be answering your FAFSA questions, so send ‘em in to me on email or leave me a comment with your queries.

Today, I am focusing on FAFSA deadlines. You would think that with something like a deadline, this post would be pretty short. But the reality is, when it comes to the FAFSA, deadlines are anything but cut and dry.

Let’s start with the obvious. The federal deadline for FAFSA on the Web applications is midnight Central Daylight time, June 30, 2009.

But June 30th is far from the end of the story and here’s why: Although the FAFSA is the form you fill out to receive *federal* student aid (student loans, grants, work study), it is also your key to state aid and some private scholarships as well.  Which means that you need to know when your state deadline is, as well as when your school requires you to have filed your FAFSA plus any scholarship that you want to apply for that requires the FAFSA.

The first step in figuring out your specific deadline requirement is to call your college’s office of financial aid. Just ask them what their deadline is — and, while you’re at, what the state deadline is.

You can also check out this list of state deadlines (scroll half way down the page) from the FAFSA website. The deadline for some states, like Connecticut, have unfortunately already passed. But most states have March – May deadlines, so you still have some time.

** Please note that if you live in one of the following states, your deadline is Sunday, March 1st.  I think I know what you will be doing this weekend!

Arizona
Idaho
Maryland
Michigan
Montana
New Jersey
Rhode Island
Tennessee
West Virginia

Throughout most of the application process the potential student is courting the college but as a recent article in the New York Times points out, when decision making time approaches the roles are reversed.

Some schools will lay on the charm extra thick to entice students to choose their acceptance. Personal e-mails, letters, phone calls from Professors, small receptions are all just a few examples of how the college will court their acceptees. According to some college admission staff high quality students have more options to choose from because they are applying to more schools, therefore to them it is increasingly important to lay it on thick.

I don’t know about you but I missed the boat when it came to personal invites to sail on the dean of admissions yacht before I made my decision on where I ended up. But if it had happened I’m pretty sure I would have based my decision on which school was going to cost the least.

• Brown University
• Columbia University
• Cornell University
• Dartmouth University
• Harvard University
• Princeton University
• University of Pennsylvania
• Yale University

Don’t automatically rule these schools out by presuming they are out of your league. Many of these schools offer a great multitude of scholarships and are often very good at offering financial aid as a means to “diversify” their students. The rule of thumb is you never know until you apply!