Financial Aid: Old Methods May Not Be The Best Methods

1739 words - 7 pages

The banking credit crisis of 2008 highlighted the issues of students and parents becoming limited in their options for both obtaining and repaying student loans. Scrutiny regarding misuse of governmental loan subsidy funds by lending institutions and for-profit colleges was occurring. Student debt loads were at an all-time high. High unemployment meant students could not make payments on the loans and were defaulting at record rates. The Student Aid and Fiscal Responsibility Act (SAFRA) proposed in 2008 and passed in 2009 rewrote student financial aid rules in a positive way and outmoded the ineffective old student loan system. Lending institutions and for-profit colleges lobbied hard to block the forward progress of SAFRA based on the claims that the government was creating a monopoly on student loans and was creating a further loss of jobs in the lending industry. At no point in the lobbying were the following student loan issues mentioned: the misuse of subsidy dollars, the growing number of students unable to pay on their loans, or the large loan default rates the for-profit colleges were causing. The issues of subsidy dollar abuse, the possible monopoly of loans, claims of possible job losses, ability to obtain loans, loan defaults and loan forgiveness concerning the old loan program are reviewed below to state why the old loan program had to end.
A Short History of FFEL
The Family Federal Education Loan (FFEL) was a program started by the government back in the 1960’s. FFEL’s subsidy program gave funds to banks, other lending institutions and for-profit colleges so student loans would be more affordable. Lending institutions would receive the subsidy funds and, in turn, loan dollars to students enrolled in colleges. The lending institutions could use the subsidy funds at their discretion.
Once a student left school, dropped to less than half-time enrollment or graduated, the student would receive notice to begin payment on their loan(s) to the lending organization(s). If the student would default on the loan(s), then the Department of Education (DOE) would repay the loan(s) plus interest to the lending organization(s).
Change Can Be Good
The movement for change began during the banking credit crisis of 2008, which highlighted the lending industry’s abuse of loans and loan subsidy dollars. Occasionally, lending institutions would give subsidy dollars to schools in exchange for recommendations (which was against the law) or use the dollars as bonuses for lending institution executives. As lending institutions lost the financial capital to stay afloat, the lenders quickly stopped participating in the Family Federal Education Loan program (FFEL) and began selling their student loans to the Department of Education (DOE). As students defaulted on loans still held by lending institutions the DOE, which guaranteed the student loans, paid the lending institutions for the value of the loans plus the interest. The lending institutions were not...

Find Another Essay On Financial Aid: Old Methods May Not Be the Best Methods

Great Sphinx by the best writer. not! Well it has some good information some people may not no yet

743 words - 3 pages Mycerinus their Greek names, but in the old Egyptian language they were called Khuphu, Khaphra, and Menkaure. They were father, son and grandson. Most experts agree that the Great Sphinx was built during the reign of Chephren (Khaphra), and that the face of the Sphinx is of him. The lion was a very powerful symbol in ancient Egypt. It represented strength and courage. Chephren probably had the Sphinx built because he wanted a great tribute to himself

Quantative Methods For Business. Managerial And Scientific Report Best Bike Ltd. Simulation With Excel Cristal Ball

3095 words - 13 pages there is a certain risk is involved, this risk is expressed in the standard deviation. It is possible to generate a loss while investing in the mountain bike. On the other hand when the Road Bike is produced, it is not possible to make a loss. Finally, in almost 60% of the cases the ROI of the Road Bike is higher than the ROI of the Mountain Bike.Graph 2.1: ROI distributionSo because of a more stable and most of the times a higher ROI we would like

Evaluation of CLASSIFICATION ALGORITHMS Using MCDM Methods FOR Financial Risk Prediction

845 words - 4 pages Proposed work of this paper includes Bayesian Network,Naïve Bayes, LIB SVM, Logistic Regression,Nearest Neighbor GE, RBF Network,Random Forest,and Simple CART. All algorithms are implemented using WEKA 3.7. 3.1. Evaluation Measures Different measures/criteria’s are available to measure the performance of classification algorithms [3]. Some classification algorithms achieve the best for one criterion may not be the best for some other criteria

Blade Runner Question: Suppose that the Voigt-Kampff test did not exist and that there were no methods to tell if someone were human or replicant. Would that mean that a given replicant was indeed...

1358 words - 5 pages Blade RunnerQuestion: Suppose that the Voigt-Kampff test did not exist and that there were no methods to tell if someone were human or replicant. Would that mean that a given replicant was indeed fully human?The film Blade Runner directed by Ridley Scott, is based on the science fiction novel by Phillip K. Dick entitled Do Androids Dream of Electric Sheep? Set in the a dystopian Los Angeles, in the year 2019, main character Rick Deckard

Blade Runner Question: Suppose that the Voigt-Kampff test did not exist and that there were no methods to tell if someone were human or replicant. Would that mean that a given replicant was indeed...

1358 words - 5 pages Blade RunnerQuestion: Suppose that the Voigt-Kampff test did not exist and that there were no methods to tell if someone were human or replicant. Would that mean that a given replicant was indeed fully human?The film Blade Runner directed by Ridley Scott, is based on the science fiction novel by Phillip K. Dick entitled Do Androids Dream of Electric Sheep? Set in the a dystopian Los Angeles, in the year 2019, main character Rick Deckard

Financial Aid: The Problem with Merit-Aid

1397 words - 6 pages criteria used to distribute merit grants favor wealthier White students at the expense of low-income African-Americans” (Redd, Kenneth). Yet all students are supposed to be equally equipped to take and perform well on ACT and SAT tests (as well as standardized tests). Not to mention the financial burden of taking the test. It is these tests primarily, that decide if or how much merit-aid a student will receive. With the exception of outstanding

Parents May Not Be Licensed

1810 words - 8 pages this paper, I will argue that the difficulty of clearly defining the three criteria for an activity to be licensed undermines LaFollette’s assertion that parenting ought to be licensed. After describing LaFollette’s basic rationale for licensing parents, I will indicate that parenting may not meet the three criteria that LaFollette proposes for an activity to be licensed, under certain situations in the real world. In addition, I will show that

The Varying Educational Methods

867 words - 4 pages The Varying Educational Methods While the United States, the most influential and powerful country in the world, struggles for educational excellence, perhaps a huge role model to look up to would be Finland’s. America’s school system offers education that is consistently changing, while as Finland offers a steadily unique approach to the educational school system. Finland’s school system and the American school system differ in the ways

May the best pet win

736 words - 3 pages which pet is best for you. A cat has a minute amount of costs associated with it. You will have to pay for its vet bills for when it is sick or it needs to be spaded or neutered. Furthermore, you have to feed it twice a day with either dry or wet food. Lastly, you have to pay for litter if the cat needs it, and for flea and tick medicine. Even though a cat might take less to care for, unexpected vet visits may make the costs equal to those of a

Waste Disposal Methods Must be Improved

2630 words - 11 pages "financial motive". If people know how recycling helps environment and what environment their child will live, they may have motives to recycle. Also, if WM price the wastes even as small amounts of money, then it may give people a financial motive to encourage people to recycle. If they do so, people still may not recycle, but there will be some people who collect recyclable wastes from roads or some other places to get little money. As people

The Methods of Effective Supervising

1482 words - 6 pages need to hover over their employees because the employees cannot be trusted to get the job done. This type works well with workers who are immature and who are not dependable. Second is the Laissez Faire and this is more laid back they give more freedom to their employees and not as much supervision. They would like to see the workers using their skills and talents to get the job done. The workers who work the best under the Laissez Faire are the

Similar Essays

Methods For Determining Financial Performance Essay

1040 words - 4 pages company's fortunes.Indicates whether a business has sufficient assets in cashHelps with industry comparisonsWeaknesses:Seasonal performance can distort ratiosComparisons to industry averages may not always be an avid indicator that the company will do well.Does not address intangible non-financial key indicatorsPro Forma Financial StatementsA pro forma income statement is similar to a historical income statement, except it projects the future

Government Financial Aid For Students Should Not Be Based Solely On Merit

1776 words - 7 pages questioning the fact on why should the lower income students not struggle harder than their colleagues who have obviously earned the scholarship. I believe that students will find a way to overcome these obstacles if they truly want to succeed. (Financial Aid at Georgia Tech should be primarily merit-based, rather than need-based. shevanel 2005). However, it is common knowledge that not everyone is born naturally with high IQ. Furthermore, poor and rural

Integration Issues Businesses May Encounter And Methods Of Countering Them

969 words - 4 pages communication blanketing several groups ('cross-pollination') is ongoing. These three factors have impacted everyone involved in the corporation.HP has struggled with providing 'one face' to the end-consumer. Due to huge platform and technology-base variances in the pre-integration companies, entire programs were slashed, opting for one or the other pre-existing technology. Often this decision did not take into consideration the additional burden to

Discuss The Methods That The Government Uses To Communicate Its Monetary And Fiscal Policy And The Barriers It May Face

1046 words - 5 pages attitude of people. Conclusion The sender of the message must ensure that the information sent does not contain too much information, because individuals may not be able to fully understand the message. Furthermore, must ensure that the right medium was used and the good feedback has been received. The biggest issue that the Government is likely to face when they are communicating, either internally or externally, is to make sure the communication