The Kept-Up Academic Librarian

With Less Aid Available More Students Are Lowering Their College Expectations

After loosening their coffers to help families cope during the recession, some colleges now are cutting back on grants and scholarships, aid that students don't have to pay back. The move—prompted in part by the colleges' own financial troubles—is prompting students and their families to borrow more to close the gap, raising the already-heavy debt load many graduates will face. some students and their families are taking on more debt or are opting for lower-priced public schools or two-year institutions. Some students also are passing on dorm life, choosing instead to live at home to save on room and board. Read more at:
http://online.wsj.com/article/SB10001424052702303612804577528770015146982.html

 

Even With Loan Interest Deal College Students Will Pay More

College students are facing a roughly $20 billion increase in the cost of their federal loans, despite a much-heralded deal in Washington to contain the expense of higher education. Starting Sunday, students hoping to earn the graduate degrees that have become mandatory for many white-collar jobs will become responsible for paying the interest on their federal loans while they are in school and immediately after they graduate. That means they’ll have to pay an extra $18 billion out of pocket over the next decade. Meanwhile, the government will no longer cover the interest on undergraduate loans during the six months after students finish school. That’s expected to cost them more than $2 billion. Read more at:
http://www.washingtonpost.com/business/economy/some-student-loans-to-become-more-expensive-despite-deal/2012/06/27/gJQAltw46V_story.html

New Data Indicates For-Profits Must Improve On Loan Default Rates

Former students in career-training programs at dozens of for-profit institutions have had so much trouble paying off their loans that the schools could lose access to federal student aid if they don't improve, new data from the U.S. Department of Education finds. The Education Department reported that at 193 programs at 93 schools, students were unable to meet any of three measures under the agency's new "gainful employment" rule. Twelve percent of all students in higher education attend a for-profit institution, yet they represent 46 percent of all student loan dollars in default. Read more at:
http://seattletimes.nwsource.com/html/businesstechnology/2018531078_apuspayingforcollege.html

Let Private Investors Finance Students' College Education

To avoid the next credit bubble and debt crisis, we need to eliminate government subsidies and link tuition financing to the incomes of college graduates. These subsidies also distort the credit market. Since the government guarantees student loans, lenders have no incentive to lend wisely. Investors could finance students’ education with equity rather than debt. In exchange for their capital, the investors would receive a fraction of a student’s future income — or, even better, a fraction of the increase in her income that derives from college attendance. Read more at:
http://www.nytimes.com/2012/06/14/opinion/the-college-graduate-as-collateral.html?nl=todaysheadlines&emc=edit_th_20120614

Federal Aid For College May Be What's Pushing Tuition Higher

Based on just my personal experience (thus far), I think that more expensive colleges tend to be worth their higher costs.  Certainly they must be worth their higher costs if they continue to attract students, and I know many students go to these expensive colleges without any subsidized aid–because they can afford it and decide it is worth spending their own money that way over other ways.  More expensive homes are worth their prices, too, given that (or to the extent that) there are people who demand such expensive homes.  The public policy question about whether we want to be subsidizing expensive homes, however, seems a more damning criticism than asking the same question about subsidized college aid, because there’s probably more value added–to society, broadly–in encouraging higher-quality educations that happen to come with higher prices, than in encouraging higher-priced homes that are made possible with larger mortgages.  Read more at:
http://www.csmonitor.com/Business/Economist-Mom/2012/0613/Q-How-is-college-like-owner-occupied-housing

To Attract New Residents Some Small Cities Are Offering To Help Students Pay Their Loan Debt

In Niagara Falls, N.Y., a man shortly will attempt a daring feat—and he isn't Nik Wallenda: Seth Piccirillo, Niagara Falls' new director of community development, will attempt to lure young professionals to live in his city's beleaguered downtown, which for decades has been hemorrhaging residents--young ones especially. He'll do it, he says, by offering to help them pay down their college loans. Here and there around the U.S.—from rural Kansas to Detroit—communities concerned over shrinking, aging populations are attempting novel experiments to attract the young and zippy. If they're not offering to pay off student loans, they're dangling other incentives aimed at budding professionals. Read more at:
http://abcnews.go.com/Business/towns-paying-off-student-loan-debts/story?id=16543649#.T9jHPBdfGwC

High-Interest Private Student Loans Are Coming Under Increasing Scrutiny

Unlike the federal student-loan program, which lets consumers borrow at fixed rates directly from the government, these loans from at least 30 banks and other private lenders feature mostly variable rates that can be more than twice what some people pay in the U.S. program. With college costs spiraling, the marketing and interest rates of these loans are drawing increasing complaints from borrowers and regulators, who say teenage consumers often don't understand their terms. Read more at:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/06/06/BU9Q1OT271.DTL 

 

 

Colleges Agree To Be Clearer About True Costs Of Getting A Degree

Ten private U.S. colleges and state university systems announced plans on Tuesday to be more upfront about the costs of higher education, including detailing the monthly loan payments students would face after graduation. The White House has focused on college affordability as part of its outreach to young voters ahead of the Nov. 6 election, and as Congress struggles to end a standoff over the interest rates on federal education loans, which are set to double to 6.8 percent on July 1. Read more at:
http://www.huffingtonpost.com/2012/06/05/paying-for-college-schools-pledge-cost-disclosure_n_1571683.html

Colleges Are Making Questionable New Deals With Financial Institutions

College campuses have long been attractive hunting grounds for financial institutions looking for new customers. In recent years, however, their efforts to woo students have gotten banks and other financial institutions in trouble with regulators.  But many colleges, struggling to offset cuts in state funds and under pressure to keep tuition down, are finding new ways to strike deals with financial institutions, by turning student IDs into debit cards and allowing lenders to take over disbursement of financial aid. Read more at:
http://www.nytimes.com/2012/05/31/business/on-campus-new-deals-with-banks.html?nl=todaysheadlines&emc=edit_th_20120531

Debt But No Degree

Nearly 30 percent of college students who took out loans dropped out of school, up from fewer than a quarter of students a decade ago, according to a recent analysis of government data by think tank Education Sector. College dropouts are also among the most likely to default on their loans, falling behind at a rate four times that of graduates. That is raising new questions about the wisdom of decades of public policy that focused on increasing access to higher learning but paid less attention to what happens once students arrive on campus. Read more at:
http://www.washingtonpost.com/business/economy/college-dropouts-have-debt-but-no-degree/2012/05/28/gJQAnUPqwU_story.html?hpid=z4