Financial Aid Answers - presented by eLearners.com : Miscellaneous

New York At It Again. Are You Kidding Me?

ter — Sat, 28 Feb 2009 01:59:00 GMT

A little blurb came through a daily higher education email that I received the other day. The title, which mentioned a threat to online learning, definitely caught my eye. The New York State Department of Taxation and Finance wants to start charging a sales tax to its students who take an e-course offered by SkillSoft Corporation, which is based in New Hampshire. Why is this important to all of you readers? New York often sets a precedence on financial activity. If you'll remember, it was New York Attorney General Andrew Cuomo who blew the whistle on colleges that were accepting bribes from lenders to be on a preferred lender list for Federal Family Education Loan Program (FFELP) Stafford Loans. Instead of punishing those few schools who were unethical, all FFELP schools were punished.

Let me preface the rest of this article by saying that I don't know if any schools through Elearners.com use SkillSoft. I performed a search using SkillSoft and came up with nothing, but did get many hits with Skill Soft. The main point of my message is to alert you to the fact that distance learning could be coming under attack in the future. I know this isn't related to the financial aid information I'm supposed to report, but you should be aware of the implications.

Some software companies may already charge a sales tax for software. The whole issue is based on human interaction. Video-based courses offer some type of human interface, but the view of New York State Department of Taxation and Finance is that online courses do not provide this interaction. At best, a mentoring service may be provided. If interface is not available with the professor, then the course should be considered "software" and taxed.

An argument against this proposal is that SkillSoft does provide an elearning venue, but the software is not available to students once they complete the course. In other words, the student is not purchasing the software for permanent use to use over and over; the student does not have a tangible piece of property after the course is finished.

This whole thing will come down to semantics. What constitutes "software" or "transfer of possession"? With this dwindling economy, it's apparent that New York feels that charging a sales tax for online learning will boost its economy. Hmmm, let's see. The trend over the past couple of decades has been to promote distance learning and provide students with a venue to receive a college education in a setting which otherwise wouldn't be available, but now you may have to pay a sales tax as a result.

All I can say is, keep your ears and eyes open. If New York is able to force SkillSoft to charge its students a state sales tax, any online learning course may be up for grabs.

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State Funding in Peril

ter — Wed, 21 Jan 2009 23:54:00 GMT

The state in which I work has experienced a serious shortage of funding in higher education over the past decade. The old trend was to initiate state appropriations for financial assistance, then readjust that funding at a later date as money ran out. However, the new trend is for budget cuts almost as quickly as the budget is set.

Many states are given funding, but only to be put into reserves for possible revocation at a later date. As a result, financial aid applications increase, tuition increases, but financial aid stays the same or decreases. This is a sad state of affairs that many public institutions are facing.

Our country's economic distress isn't just at the federal level. Already, over one-fourth of U.S. states report decline in state tax spending on higher education, and almost another one-fourth will have an increase of less than 2 percent. The most hardest-hit areas are New England, the Southeast, and the Southwest. These are some of the more imperiled states:

Fiscal 2009 Appropriations 1-Year % Change

Alabama           -10.5%
Arkansas          -3.0%
Connecticut      - 3.2%
Florida              -8.8%
South Carolina   -17.7%
Texas                -4.7%

As you can see, these states are facing a loss of state funding in higher education. This reduction isn't solely made up of financial aid funds, but funding in general. However, my experience tells me that financial aid is usually the first program on the chopping block.

So what does this mean? If you rely on your state's financial aid program to help pay for college, you should probably look for other resources to supplement your education.

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Missing Link

ter — Sat, 25 Oct 2008 16:27:00 GMT

Do you know all you need to know about your financial aid application, college costs, and billing information? If not, have you checked out your school's financial aid Website?

More and more schools are depending on the Web to deliver financial aid and cost information rather than the award notification to the student.

How easy is it to find your school's financial aid Website? Is the layout user-friendly? Or does it bore you to death?

I decided to do a little research and wasn't too happy with my findings--even with my own college.

Financial aid doesn't seem to be first and foremost thought of most universities. As a result, the link to the Financial Aid Office Webpage can be buried and extremely difficult to find. In selecting various college Websites, I found that very few had financial aid as a main link from the school's homepage.

Take my school for example. The Financial Aid Office is housed in Student Services, but who would know that? Unless you go to the A-Z directory at the top of the homepage, you'd spend a lot of time trying to find us. We've spent great amounts of time putting information out there for students, but our handbook is page upon page of unappealing information that I don't want to read, let alone a student! (We're working on fixing this.)

We are deep in the electronic age where more schools are relying on email, texting, and even facebook/myspace to disburse information to students. All schools are required to send an award notification to students who complete a FAFSA, but what is on that award letter may be bare bones. I can't fault the financial aid office. Too much wording bogs down the bottom line: the aid for which you qualify and what your out-of-pocket expenses will be. More and more schools are putting information on their financial aid Webpage, including extremely important policies to which you must adhere.

When you get your financial aid award letter, don't think you're getting all of the information you need. It's critical that you access your school's financial aid Webpage and peruse through the information provided, even if it's a little at a time.

Do you know your school's Satisfactory Academic Progress policy for receiving financial aid? You should, because you have to follow it.
Do you know that if you withdraw from classes you could end up owing money? You should, because it could keep you from enrolling again.

These are two instances where the information is probably on your school's Website and not on your award letter.

Many colleges have gone beyond the basic "flat" information to provide worksheets and interactive Webpages to help you budget and calculate expenses. Utilize the information available to you. It will only help you in the long run.

Your assignment: find your school's financial aid Website. Bookmark it. Read it.

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Enhanced Veterans Benefits

ter — Tue, 21 Oct 2008 10:58:00 GMT

I am thrilled to write this post. I have been, and continue to be, a huge supporter of our military and its veterans. Regardless of my thoughts on war, our men and women are serving our country on our behalf and I am proud of you all.

In 1944, Franklin D. Roosevelt signed into law the GI Bill. The GI Bill gave veterans the opportunity to participate in an education or training program. In 1984, Senator Montgomery enhanced the bill which has since been called the Montgomery GI Bill. Once again, the bill is being enhanced to offer even more educational benefits to veterans.

Effective August 1, 2009, the Post-9/11 GI Bill will affect veterans with active duty service on or after 9/11/2001. The best part? The veteran has the ability to transfer unused educational benefits to a spouse or child.

Enhancements:

Length of eligibility increased from 10 years to 15
Books and supplies stiped of up to $1,000
Up to 100% of tuition costs
Monthly housing stipend
Benefits extended to activated Guard and Reservists

Service requirements:

90 consecutive days of active duty in the Armed Forces since 9/11/2001.
Full benefits if you have three years of active duty after 9/11 or have been discharged due to a service-connected disability

Eligibility based on service:

100%-36 or more total months
100%-30 or more consecutive days with a disability-related discharge
90%-30 total months
80%-24 months
70%-18 months
60%-12 months
50%-6 months
40%-90 or more days

Application for the enhanced benefits is not yet available. For more information, go to the U.S. Deparment of Veterans Affairs and bookmark the GI Bill site for future information. God Bless.

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Looking Down the Road

ter — Fri, 17 Oct 2008 21:18:00 GMT

Let me start by saying that this post has nothing to do with the 2009-10 FAFSA changes I outlined in my last two posts. This is something that is being considered by a study group made up of higher education professionals and experts.

If you've ever filled out the Free Application for Federal Student Aid (FAFSA), you know what a pain it is! I hear families say they'd rather have surgery than fill out the paperwork. There is a driving motivation to simplify the whole financial aid process, and the idea is gaining popularity with legislators and financial aid administrators. However, there are still many questions yet to be answered. I have my own reservations.

Why the change, you ask? The major premise is to provide more access to low-income students. The main objective is to funnel more Pell Grant eligibility to low-income students rather than expand eligibility to middle-income families. In addition, the changes would provide for tax incentives and federal savings accounts to low-income families planning for college.

So what's the change? To put it simply, the FAFSA would be extinct. The proposal is that families will apply for financial aid by filing a federal tax return. Only the Adjusted Gross Income and household size would be used to determine eligibility. There would no longer be the Expected Family Contribution that schools use to determine eligibility. And families can use the IRS fiancial aid results as a planning tool for their students as they progress through K-12 grades.

Drawbacks? Of course. Will IRS take on this task? The IRS will provide an index to states in awarding state funds, but the concern is how all 50 states will use this index and if there will be any type of conformity. There is still some support of eliminating tax credits and funneling those savings directly to increasing the Pell Grant program.

My thoughts:

Tax credits are okay, but they don't help that first-year student who is struggling to pay for college since the credit doesn't apply until the end of the tax year.
How many families will actually use a tax refund (via credits) to apply toward next year's college expenses?
If only the IRS information is used, how does that apply to families who cannot claim all of their children? For example, it's very common in divorced cases to split children as a tax credit even though they may be living under one parent's roof. This would give a false household size and most likely hurt a family's outcome for financial aid.
Adjusted Gross Income on a tax return is subjective, especially for business owners. A family could have a huge business/net worth asset in which to tap for college expenses, but show a negative income on the tax return due to business write-offs.
What if the family doesn't file a tax return? What if they have to file an extension beyond the April 15 IRS deadline? Does that mean no aid?

While I'm all for simplifying the financial aid process, I am one of those who would rather see a simplified version of the FAFSA rather than using a tax return to decide my child's financial aid eligibility. Undoubtedly, there will be a lot more discussion and rationalizing before this proposal ever takes a strong foothold.

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