Posts published in June, 2012
Guest Blogger:Katheryn Rivas
In the last days of the debate over federal loan rates, lawmakers seem to be reaching a compromise. Students who take out loans for the 2012-2013 school year will most likely be offered the same 3.4 percent interest rate from the 2011 enrollment year.
The gradual drop in rates was part of the 2007 College Cost Reduction and Access Act, a temporary budgeting tactic scheduled to expire July 1 of this year. Though the law has had controversial effects on student and government spending, many are championing the low rate as a pro-education win that will provide more students with access to higher education.
Others argue that – in a country where student loan debt is tipping $1 trillion – maintaining an attractive interest rate for federally subsidized loans is the wrong decision. To keep the interest rates low, lawmakers will need to slash $6 billion in the budget, which they have proposed to do through corporate pension requirements and restrictions on the loan itself.
Like its parent law, the compromise, which is anticipated to affect 7.4 million students, would be temporary as well, ending June 30 of next year. Reports say that though new borrowers will lock in a low rate, they will not be able to skirt interest rates for more than six years and will not receive an interest-free period coinciding with the six-month grace period.
Is a Low Rate a Good Solution?
Though the low interest rate lower the financial burden for students – reports have quoted $1,000 to $5,000 over the lifespan of the loan – by subsidizing this low interest rate, the federal government has justified cuts in financial aid such as the Federal Pell Grant.
In his article “The Problem with Cheap Stafford Loans,” Josh Barro, a contributor for Forbes, suggests there is also a risky consumer mentality associated with lower interest rates. Essentially, by making the loan a “good deal”, students can perceive the value of the subsidy to supersede that of the actual debt. This makes it easier for them to take out a loan, or borrow more for their education than they may have otherwise done.
Barros suggests a real win for education would be to invest in financial alternatives for students:
“Instead of extending the policy of holding Stafford Loan interest rates very low, why not let rates go back up and redirect the cost of the subsidy into an expansion of Pell Grants and refundable tuition tax credits?”
Is Education Still a Vehicle of Economic Mobility?
Any debt-financed investment poses certain risks, and higher education is no exception. With half of today’s graduates underemployed or unemployed, the burden of repaying student loans has become an economic stumbling block for many recent graduates
However, many students are forced to rely on student loans to bridge the gap between their household income and the costs of tuition. This can be attributed to fewer financing alternatives and increasing tuition prices. On a national average, state and local funding has declined by 24 percent while the cost of college has increased by 72 percent.
Those who hold college degrees still earn significantly more than non-graduates in their lifetimes, but among college graduates struggling to reach middle class standing or above, debt has become a major factor in mobility. Graduates are reportedly stalling life-cycle events such as buying a car, purchasing a home and even getting married and starting a family due to the burden of student loan debt.
Student loan debt cannot be dismissed in bankruptcy, and the extreme case for graduates (and for co-signing parents) is facing retirement either deeply in debt or with a depleted savings account.
Katheryn Rivas is a freelance writer and resident blogger at online universities, a site dedicated to distance higher education. She welcomes your comments at firstname.lastname@example.org.
California students’ improvement on AP exams deserves more attention – by Michael Kirst
There is some good news in California student achievement trends. High performers, as measured by passage of the Advanced Placement exam, are increasing, and rank very high in interstate comparisons. AP is college level work in high school, and indicates that students attending California’s most selective colleges are better prepared than ever. This positive trend is […]
Public colleges must do a better job of measuring their efficiency and quality, said an affiliate of the U.S. Chamber of Commerce, which released a report that grades states on the “bang for the buck” of their higher education systems. The report, dubbed Leaders and Laggards, seeks to provide a detailed data analysis of performance of higher education in each state. The range of criteria is impressive, and some of the low grades are very worriesome.
When the University of California dangled a $30,000 incentive to thousands of professors in 2010 inviting them to create UC-worthy online courses, just 70 responded, and only a few classes materialized.
Faculty members at California State University were similarly skeptical and warned of “Walmartization” last year as trustees charged each campus $50,000 to help fund “CSU Online.”
It turns out that California professors’ wariness of online education is shared by faculty across the country, according to a survey released Thursday by Inside Higher Ed, an online publication widely read by academics.
The San Francisco Chronicle
College enrollment shows signs of slowing
“Harvard, Yale and a few other selective universities may be announcing record numbers of applications for the semester beginning in the fall, but higher-education officials are fretting about ominous signs that overall college enrollment is starting to drop. More schools have space still available than at any time in at least a decade. Already, in the academic year just ending, many universities had to offer greater discounts just to fill seats. Yet fewer admitted students enrolled, and more than 40 percent of private colleges reported enrollment declines. Even community colleges—drowning in double-digit growth the past few years—experienced enrollment dips this year.”
Training Counselors a Critical Component for Improving College Access and Success
Developing better college readiness counseling programs in is a key to achieving our national goal of increasing postsecondary education access and success according to a new research paper from NACAC. The paper, authored by Mandy Savitz-Romer, addresses a key shortcoming in school counselor preparation programs at institutions of higher education—the absence of pre-service training in college readiness counseling. Learn more.
Bridging the Gap: An Impact Study of Eight Developmental Summer Bridge Programs in Texas (An NCPR Report)
By: Elisabeth A. Barnett, Rachel Hare Bork, Alexander K. Mayer, Joshua Pretlow, Heather D. Wathington, and Madeline Joy Weiss, with Evan Weissman, Jedediah Teres, and Matthew Zeidenberg
Developmental summer bridge programs provide accelerated and focused learning opportunities in order to help recent high school graduates acquire the knowledge and skills needed for college success. This report presents findings from an experimental study of eight developmental summer bridge programs offered in Texas during the summer of 2009. The programs had a positive impact on introductory college-level course completion in math and writing in the year and a half following the program, but these effects were not statistically significant at the end of two years. There is no evidence that the programs impacted persistence or the average number of credits students attempted or earned.Learn more and download the report at: http://www.postsecondaryresearch.org
National leadership, successful programs, and emerging research are making the case for providing developmental education as a co-requisite with college-level courses instead of as a prerequisite to these courses. This blog by Bruce Vandal Of ECS explains why the co-requisite model is gaining attention and should be considered by more institutions.
Guest Blogger: Paul Wrubel, College Adviser, San Mateo , Ca.
Again this year, millions of hopeful Americans will complete the FAFSA and CSS Profile forms in order to qualify for need-based financial aid. They will pay attention to deadlines and try to follow the rules out of an innate sense of honesty and a desire to play it straight. They will do their job.
For their troubles, the promised outcomes will rarely if ever occur. Financial aid awards across the nation will reflect a different reality with elusive, shifting rules and an opaque strategy of determining who gets what. Families at any income and a few dollars left in the bank will be routinely “short-sheeted” by college-produced aid awards. If a family reporting an income of $65,000 were judged by their financial aid award, you might guess that the family had an income of $90,000 or even more. For millions of American families the college financial aid system will be a cruel and costly hoax.
For years, there has been a clamor to simplify the FAFSA so that families can more readily apply for need-based aid but with every passing year, it is clear that simplification would merely add to the growing chorus of disillusioned Americans. What real benefit is there to gain easy access to a theater if the play is bad? Simplification of the financial aid paperwork would merely add to the audience of disappointed and increasingly angry college-bound students and their families. But the illusion runs much deeper than mere paperwork.
An actual experience with financial aid looks like this. A family had submitted precisely the same financial and demographic information to three private colleges, two in Massachusetts and one in Oregon. Each college received exactly the same numbers. Two colleges responded with offers that suggested a family contribution of about $19,000 and $32,000 while a third proclaimed that the family did not qualify for one cent of aid making their family contribution a whopping $45,000+ or an assumption of an income of around $150-200,000. Same numbers, same formula, different outcomes. Why?
For a complete version of this piece go to: http://www.paulwrubel.com/college-financial-aid-the-grand-illusion/
Guest Blogger: Amanda Watson
The U.S. Department of Education announced on Tuesday that it has updated several lists on its College Affordability and Transparency Center site. This update comes at a time when most college-bound students have already made their decision on where they will attend this fall, but for those who are just getting started on college applications, the updated information may help narrow down some choices.
The new list on the College Affordability and Transparency Center website contains tuition costs for1, 878 accredited institutions (nonprofit and for-profit). The site also features lists of schools with the highest and lowest tuition prices, and schools where prices are increasing the fastest (along with explanations why prices were increased).
In addition to tuition costs, students and parents can also compare schools in regards to majors offered, campus size and safety and graduation rates.
U.S. Secretary of Education Arne Duncan said this update will help students figure out how much college will cost them before they get their first student loan bill after graduation.
The reason all of this information is being updated is because it is required by the Higher Education Opportunity Act of 2008, and last year a lot of consumers were requesting more in-depth information and comparisons. The Obama Administration also says it has made it a top priority to make the costs of college more transparent to students and their families.
The question we all must ask, though, is will these lists really make it any easier for students to pay for college? For one thing, even if you do choose to attend a school with a lower than average tuition rate, you can’t be certain if that rate will remain constant throughout your four years of undergrad.
Even more important, these lists could deter students from applying to top universities for fear that they cannot afford it.
Although the Department of Education means well, students and families need to remember that choosing where to go to college is about way more than just the cost of tuition. In defense of the Affordability and Transparency Center site, they do give users the opportunity to compare schools in terms of available major programs and size, too.
The point that is trying to be made here is that tuition rates should not serve as the be-all, end-all when choosing where to go to college. In fact, the most important factor to consider when choosing a college is- drum roll, please- academics.
It doesn’t matter how cheap a school costs, if the academics aren’t at a level you expect, you are wasting your money and killing your college dreams. However, if attending a top-rated school isn’t the most important thing on your list, you still need to keep in mind that it is always best to choose a school with good accreditation, especially in your major program of interest.
On top of academics, you should also consider the difference between attending an in-state school versus an out-of-state school. Is it worth the increase in cost to attend an out-of-state school? Are you comfortable with being far away from your family and your home?
Then you have to consider available scholarships and programs of study, extracurricular activities, teacher to student ratio…and the list goes on.
Although everyone may tell you so, college is not the obvious stepping stone after high school. It is a serious decision that shouldn’t be taken lightly. And tuition rates should never stop you from pursuing a dream. If it means applying for hundreds of scholarships and keeping a part-time job, apply to the school that you know is the best choice for you, regardless of cost.
An experienced writer on all things related to higher education and business, Amanda Watson spends her days covering the latest stories on various topics such as online MBA rankings, web entrepreneurship and social media marketing. You can contact Amanda at email@example.com.