After weighing the pros and cons, Harrison decided that she like many other students across the nation would move home and attend a cheaper university.  Not only would she get in state tuition in Arizona, but it would also be cheaper to live there.

Attending classes at her private college was no longer financially possible, unless she wanted to leave school over $100,000 dollars in debt.  The one year of school, almost drained her college fund.  Not only are college students being forced to make a college change, but high school seniors are also being forced to make this same decision.

Many high school seniors have already decided to forgo costly schools.  Instead they have decided to attend schools that are closer to home and have cheaper tuition.  Many public colleges have seen an increase in the number of transfer applications this year.  Many students reported their decision to transfer was due to money.

Some tips for determining whether an expensive institution is right for you.  First of all, make sure that the expensive private school is really what you want and need.  Second, make sure that you will still be able to go to grad school, medical, or law school after earning your bachelor’s degree. 

And if you already attended the expensive school but are considering transferring to a different school but you have already completed two years of a degree, then it may be better to stay at your school.  Otherwise, you might have to spend an extra semester or two retaking classes required by the new school.

So the take home message is make sure that an expensive institution is right for you.  Make sure you have a lot of money and a financial plan beyond the first year.  Have realistic expectations and really consider your options.  And make sure that when you have chosen a degree that you are going to stick with it; or else you will waste a lot of time and money.
 

Arne Duncan, Education Secretary announced the changes last Wednesday.  They are trying new avenues, in order to boost college enrollment among low and middle income students.  Duncan said "We need to educate our way to a better economy."  The new form will make the process easier for students and families applying for federal financial aid.

Due to the economic downturn, many students and their families are seeking financial aid.  After the recession the number of applications increased 12 percent to more than 16 million.  In 2007, 58 percent of college undergraduates applied for aid, and 47 percent received it.

Due to the high demand and the fact President Obama wants more people applying; the administration is trying to shorten the online Free Application for Federal Student Aid (FAFSA).  There will be two-thirds fewer screens to fill out.  There will also be a Web application where families can access their tax data already sent to the IRS. 

This tax information will help families answer the questions on the form.  Paperwork shouldn’t stand between students and a college degree.  The administration has a goal set and that is to increase the Pell Grants for low-income students by 75 percent over the next ten years.

There is money out there for education and it just got easier.  Because of the stimulus, over $17 billion has been designated for Pell Grants.  The Federal Perkins Loan Program will also increase to $6 billion in loans every year over the next decade.  There has never been a better time to get an education so sign up today and improve your life.

Loans can even be forgiven after 10 years for those in the public service. Eligibility for the income-based repayment (IBR) is determined by the size of the loan, and income of the borrower. The plan will become available Wednesday for those that are interested.

This new IBR program comes from the College Cost Reduction and Access Act of 2007. It allows students that have both Federal Education Loan (FFEL) and Direct Loan Borrowers on all Stafford and graduate PLUS loans to apply.

Monthly payments would be less than 10 percent of an individual’s income for most of the expected one million people in the program.  Payments would not exceed 15 percent of any income above $16,000 a year. For those who earn less than $16,000 a year, they would not make any monthly payments.

This plan is supposed to help relieve those with average salaries that are struggling to repay student loans. By stretching the repayment over a longer period of time, monthly payments stay at a reasonable proportion of their income.

IBR "can lower costs and provide light at the end of the tunnel" for borrowers. There is greater financial flexibility to buy a home, pay off a car, save for retirement or save for their children’s education. However, the accruing interest can increase the loan.

The wise thing to do would be to maintain your payments and pay off the loan as soon as possible.  However, if someone does decide to go on the program and their salary jumps, and they are disqualified as a borrower for the capped monthly payments; then they are still responsible for the cost of the loan and the interest that has accrued to that point.

Granted this is easier said than done, but try to stay out of debt as much as possible. It’s better to be poor while you’re in college than being poor later on. There are lots of different options out there on how to finance your education, so check all of the different avenues before taking out a loan.

For those with debt this repayment plan can help those that are struggling to make ends meet; but only use ithe plan if it’s absolutely neccesary.  The plan almost guarantees that the borrower will end up paying more on the loan the longer it takes to pay off. Getting an education is very important, but be careful with the loans that are used to finance that endeavor.