Tom Bottorf at GetCollegeFunding has an article that clearly explains why predicting financial aid can be so difficult. Basically, Tom explains that the average financial aid award listed by colleges is just that, an average, and the individual awards can vary dramatically.

I have often discussed the information that families need to know if financial aid is a concern. For those colleges that do not provide 100% of a families need, the understanding of how your statistics, such as grades and test scores compare to the average student, can help estimate whether the college might sweeten your aid offer. If your grades and test scores are on the high side for that college, you may get a better than average aid award. But if you have typical grades and test scores for that school, your aid award may be worse than the “average”.

The federal government has a new grant program that starts today for students who plan to become teachers. The name of the program is the Teacher Education Assistance for College and Higher Education, or TEACH, for short. The program provides up to $4,000 per year in grants for 4 years to undergraduates. Graduate students may qualify for $4,000 a year for 2 years. To qualify for the grants the student must maintain a certain grade point average and agree to teach in a “high need” subject in a “high need” school for at least 4 years within 8 years of graduation.

The biggest catch to this grant program is that if the student fails to follow all of the requirements, the grant turns into an unsubsidized Stafford loan. The Congressional Budget Office is estimating that 80% of students receiving the grants will fail to complete the program.  Those students who do not complete the program will potentially have the standard loans that many students receive and if they don’t complete the program will have the additional loans from the converted grants. In other words, these students may have the worst of all possible worlds with higher loans than other student

This program again points out the risks involved in many parts of the college admissions process for the uninformed. Knowledge truly is power and as students and parents facing the world of college admissions, you owe it to your self to be an informed consumer.

This time of year many families are trying to figure out how to pay for the cost of college. One of the most common options are loans but not all loans are created equal. The Federal Trade Commission has a new fact sheet out called “Student Loans: Avoiding Deceptive Offers“.  This fact sheet reviews the two basic types of loans, federal loans and private loans, and discusses how to avoid a number of problems that may occur with private loans and with loan consolidation.

I always encourage families to consider federal loans before turning to the private loan market, but sometimes, there is a need for private loans. All families considering taking out a private loan, or doing a loan consolidation, should review this helpful fact sheet.

Sallie Mae has announced that they are “affirming (their) commitment to provide federal student loan access to all students, all schools”. I will be the first to say that I am not generally a great fan of Sallie Mae but they are one of the leaders in the college student loan industry so it is important when they make an announcement such as this. Personally, I think the credit crises in the student loan industry is in large part a myth, but if there was any concern about students being able to get loans for college, this news should help.

The Project on Student Debt has put together an analysis of what a typical family with different income levels would have to pay at many of the colleges that have revised their financial aid packages in the past year. This analysis reviews the colleges that have pledged to improve their aid and then examines what a family at different income levels would pay at each college. For example, a family making $60,000 a year with typical assets would pay $13,800 at a University of California school, $11,306 at Amherst, and only $4,000 at Harvard.

This document makes it very easy to compare many of the highly selective colleges that a student might be considering to determine where they might get the best financial aid package, assuming acceptance. Of course, as I have said many times before, cost is not the only factor in choosing a college. But for many families it is an important factor. However, given the current difficulties with acceptance to many of these colleges, one needs to evaluate their reasonable chances of acceptance into a particular college and not focus entirely on the cost. While Harvard might be the cheapest choice for a student from a family earning $60,000 a year, with an acceptance rate below 8%, I would never recommend that a family count on acceptance.

The University of Vermont has announced that they will be offering grants to cover the cost of tuition and costs to all Vermont undergraduates who are eligible for Pell Grants and who are Vermont residents. This policy will begin with the 2008 entering fall class and will be phased in over the next 4 years to include all undergraduates eligible for the Pell Grant.

The announcement makes it clear that the grants are for tuition and costs only which means that these students will still have some obligation to pay for room, board and books. Still it is good to see a state university taking action to improve the financial aid available to the neediest of their students. As noted in the past few months, more and more of the colleges without tremendous endowments are figuring out ways to improve their financial aid without breaking the bank. Hopefully more college will continue to follow the lead of those colleges that have improved their financial aid in the past year.

Amherst College has announced that they are extending their need blind admission policy to international students. Need blind admissions means that Amherst will admit international students without regard to their ability to pay for their college education. This makes Amherst one of only 8 colleges in the US that offers need blind admission to international students.

It is difficult for many deserving international students to seek admissions to US colleges because they can’t afford the cost. Amherst’s move to need blind admissions is good news for all international students seeking to attend college in the US.

Oberlin College has announced that they are eliminating all loans for students who receive Pell grants and replacing the loans with grants. Pell grant recipients typically come from low income families making less than $35,000 a year. About 12% of Oberlin’s 2,800 students receive Pell grants.

Although Oberlin’s move will effect a limited number of students it is an innovative way to use limited resources to improve the financial aid package of those students least able to afford college. Hopefully more colleges will continue the trend of improving the financial aid available to their students.

The New York Times had a recent article discussing athletic scholarships and the fact that most athletic scholarships do not cover the full cost of a college education. This article should be read by any student or parent who is under the believe that their athletic prowess can get them a full ride to any college. It is true that top athletes in the money sports of football and basketball can get some attractive offers of aid but these are the unusual case, not the rule.

As I have said on this blog on some many other occasions, students and parents need to understand financial aid as a whole package and not just rely on the hope for an athletic scholarship. Otherwise, the disappointment may be greater than necessary.

Lafayette College in Pennsylvania has announced their new financial aid policy. This new policy will eliminate loans for students with family incomes below $50,000 and will cap loans at $2,500 per year for students from families with incomes between $50,000 and $100,000. This new policy applies to both new students and continuing students. Lafayette has also announced that they will be increasing the size of the faculty by 35 positions in the next 5 years which is an approximate 20% increase in the size of the faculty. This will be done without increasing the size of the student body.

Congratulations Lafayette.