Student Loan Blog : American Council on Education

Students Could Save $40,000 by Completing College Degree in 3 Years

Student Loan Girl — Fri, 27 Feb 2009 20:31:00 GMT

Students attending Hartwick College in New York may now be able to save over $40,000 on their education by enrolling in a new three- year college degree program, according to a recent news release from the college (“Hartwick College Announces Three-Year Bachelor’s Degree,” Feb. 24, 2009).

The new initiative will reduce colleges costs for the school’s students and their families by 25 percent at a time when the country remains deeply mired in a recession, but, Hartwick officials contend, the program will maintain the “rich educational experience” that is characteristic of the school.

“This three-year program will deliver the same educational opportunity to qualifying students as our four-year program,” said Dr. Margaret Drugovich, Hartwick’s president. “We believe it is imperative for the higher education community to preserve the option of a top-quality education for any student who seeks it, regardless of the prevailing economic challenges or personal circumstances.”

To qualify for the three-year college degree program, students must have graduated high school with at least a 3.0 GPA. Once enrolled, students must take 40 credits each academic year instead of the usual 30, and take classes during a special January term each year in order to complete the standard 120 credits needed to graduate. The required extra winter session will allow students to keep their summers free for study abroad, internships, research practicums, or spending time with family.

Increased Interest in Three-Year Programs

Drugovich is anticipating a great deal of interest in the three-year degree program, but her students aren’t the only ones taking notice of these types of programs. With the skyrocketing cost of college continuing to squeeze families often already hard-pressed to come up with money for school, the concept of a cheaper three-year degree may be gaining favor.

At the American Council on Education’s annual meeting held earlier this month, Sen. Lamar Alexander, R-Tenn., a former university president, urged more college presidents to consider three-year college degrees at their institutions, the Associated Press reports (“Some Colleges Offering Degrees in 3 Years,” Feb. 24, 2009).

And lawmakers in Rhode Island are drafting legislation that would encourage three-year college degree completion. Their bill would create standardized college-level classes for the state’s high schools that would be intended to enable all students to complete college in only three years.

Three-Year Degrees Face Uncertain Future

But prior to the country’s recession, three-year degrees had largely failed to catch on.

At Upper Iowa University, only five students have chosen to pursue the school’s three-year degree program over the five years it has been in existence and every one of those five students ended up taking four or more years to complete their degree. The school has not had a single student interested in the program since.

Educators attribute the lack of participation in these accelerated programs to the fact that students may still prefer the full four- year college experience, academically, socially, and athletically, Joy Newcom, spokeswoman of Waldorf College, told the Associated Press about her Iowa school that is just now phasing out its last three-year program due to lack of student interest.

Newcom said, “What we’re finding they’re saying is, ‘Why did I want to grow up so fast?’ .”

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Economy Takes Its Toll: Some Small Colleges to Shut Their Doors

Student Loan Girl — Wed, 19 Nov 2008 22:59:00 GMT

Americans could see more college closures, particularly among small schools with shrinking enrollment numbers as the slowing economy continues to claim more victims across every sector, The Associated Press reports (“College Closings Rare, but Could Rise in Downturn,” Nov, 17, 2008).

While the American Council on Education reported that only four out of 4,400 colleges closed in all of 2007, this year alone, four schools have announced they will either shut down certain branch campuses or close entirely by next school year.

Tuition costs that far exceed what state schools charge, diminishing enrollment numbers, and mounting debt loads have made it increasingly difficult for some small colleges, most notably those with religious affiliations, to stay afloat in recent years.

And now the same effects from the mishaps that took down the mortgage industry have bled into the higher education sector. Some schools may be discovering, much like many American consumers and homeowners, that the allure of low-interest loans caused them to take on more debt than they should have. The median debt of private colleges has increased 50 percent in the last five years, according to Moody’s Investors Service.

But now, like homeowners with variable-rate mortgages, some schools have seen their once low debt payments skyrocket to unmanageable proportions.

“Instead of holding long-term debt at lower interest rates, they have gotten stuck with short-term obligations at higher rates — a scenario [colleges] knew existed on paper but never expected to happen,” writes Justin Pope of The Associated Press.

Faith-Based Schools Hardest Hit by Economic Decline

Cascade College, a small Christian school in Portland, Ore. with just 280 students, announced it will be shutting down after the current academic year as it continues to struggle with a $4 million debt load. as will Pillsbury Baptist Bible College in Owatonna, Minn. and Vennard College in University Park, Iowa. Vennard, with just 80 students, will close its doors two years shy of its 100-year anniversary.

Taylor University in Indiana, another Christian institution, will shut down the undergraduate program at its Fort Wayne branch.

Paul Corts, president of the Council for Christian Colleges & Universities, said the financial crisis has become a “very serious” problem. “I think people are sensing that this is not short-term. It’s something that’s going to take a couple of years to play out.”

Enrollment at the council’s 102 member schools grew 71 percent between 1990 and 2004, and Corts said he doesn’t foresee that many of its schools will be closing.

He adds, however, that school closures may be difficult to predict because, “Nobody knows what the ultimate extent of this whole financial crisis is going to be.”

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Current Generation May Soon Be Less Educated Than the Former

Student Loan Girl — Thu, 16 Oct 2008 22:17:00 GMT

Traditionally, young adults achieve higher levels of education than the preceding generation, but that may be changing. For possibly the first time since World War II, the current generation of adults may be headed toward becoming less educated than its predecessor, according to the “Minorities in Higher Education in 2008” report by the American Council on Education.

The report found that in 2006, 18 percent of older Hispanics, ages 30 and up, held an associate’s degree or higher, while only 16 percent of younger Hispanics, ages 25–29, reached that same level of education (“Falling Behind,” Inside Higher Ed, Oct. 9, 2008). Among American Indians the gap is even greater with 21 percent of older adults, compared to only 18 percent of younger adults, attaining at least an associate’s degree.

This new data shows that Hispanics and American Indians each have a large enough gap in education between generations that the current generation is, on average, starting to fall behind.

“We are at a tipping point in our nation’s history,” said Molly Broad, ACE president, in reference to these findings. “The alarm bells should be going off,” she said.

White Americans ages 25–29 reached slightly higher levels of educational attainment, 41 percent, compared to white Americans who were at least 30-years-old, 37 percent. The younger generation of Asian Americans reached significantly higher levels of education than the previous generation, 66 percent versus 54 percent, respectively.

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Sen. Schumer Calls for Government to Protect Student Loans Amid Passage of $700 Billion Bailout Bill

Student Loan Girl — Tue, 14 Oct 2008 20:17:00 GMT

Concerned that students who are eligible to go to college won’t be able to pay for their education costs in light of the current credit crisis and a steadily worsening economy, Sen. Charles Schumer is urging the federal government to make sure student loans are still available, according to an Associated Press article (“Schumer Wants Student Loan market to Be Protected” Oct. 6, 2008).

Schumer recently wrote Secretary of Treasury Hank Paulson and Federal Reserve Chairman Ben Bernanke, advising them to keep tabs on the student loan market as the government implements a $700 billion bailout plan for the financial sector. The senator fears that the deteriorating credit market might burden college students with higher interest rates on loans or may prohibit borrowers from qualifying for student loans all together.

“The price we’ll pay will be that of a generation,” Schumer said.

Over 100 third-party lenders in the Federal Family Education Loan Program have suspended their participation in the federal student loan program, which is responsible for nearly half of all public and private student loan money, or about $60 billion. Students can access these federal student loan funds either through private lenders in the FFEL program, or through the government itself using the Direct Loan Program.

Schumer recommends that all colleges allow students to get loans through the government’s Direct Loan Program, instead of through a middleman, FFELP lender. The senator says he will be drafting letters to encourage New York college presidents and the American Council on Education to pursue a similar course of action.

Just last month, Congress passed legislation that will enable students who rely on loans to continue their education, regardless of the difficulties in the private credit market. The legislation is effective through the 2010 academic year.

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As Lawmakers Consider G.I. Bill Expansion, Colleges Reach Out to Veterans

Student Loan Girl — Thu, 19 Jun 2008 01:33:00 GMT

In spite of the financial assistance offered by the current G.I. Bill, military veterans face a series of daunting challenges when it comes to getting their college degree, including administrative hurdles and navigating the often complicated maze of veteran support services, according to an article in The Chronicle of Higher Education (“As Congress Prepares to Expand GI Bill, Colleges Reach Out to Veterans,” June 9, 2008).

Though 71 percent of veterans use some portion of their G.I. Bill benefits, according to the U.S. Department of Veterans Affairs, only 6 percent of veterans exhaust the higher education benefits they’re entitled to.

In an attempt to help rectify this problem, Congress is considering ways to expand the current G.I. Bill to enhance veteran benefits and remove some of the existing barriers in place for veterans’ trying to obtaining a higher education.

At the same time, educators are looking at other ways to reach out to vets and to make their campuses more friendly to those who have participated in the Iraq and Afghanistan conflicts. A recent conference in Washington, D.C. sponsored by the American Council on Education, addressed colleges' ideas regarding how to better meet the needs of their veteran students:

Extend scholarships to disabled veterans (University of Idaho)
Award academic credit for military training (Minnesota State Colleges & Universities)
Offer courses in Iraq and Afghanistan (University of Maryland University College)
Hold free entrepreneurial boot camps for aspiring business owners (Syracuse University)

College and university administrators say they have a lot to gain academically and financially from offering increased support services that help attract veteran students and maintain higher veteran student enrollment numbers. If Congress passes the revised G.I. Bill, which covers the cost of attending the most expensive public college in a veteran’s state, the veteran population would have the potential to generate even more tuition dollars for the nation’s colleges.

And as Stephen Weber, president of San Diego State University, told the Chronicle, veteran students typically have better grades, lower drop-out rates than civilians, and bring “a maturity and discipline to their studies that traditional students sometimes lack.”

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Kennedy to Colleges: Have Back-Up Plan for Students

Student Loan Girl — Tue, 22 Apr 2008 00:34:00 GMT

In a letter sent to the American Council on Education on April 15, Sen. Edward Kennedy, D-Mass., the chairman of the Senate Education Committee, urged colleges to sign up for the Department of Education’s Federal Direct Loan Program as a preventive measure against the potential funding inadequacies within the Federal Family Education Loan Program.

His recommendation to colleges and universities to enroll in the direct-lending program as a backup option for student loan funding is yet another one of Kennedy’s attempts to help protect students against a federal funding nightmare this fall.

Kennedy has also introduced the Strengthening Student Aid Act of 2008 into the Senate that would, in part, allow the federal government to inject liquidity into the student loan market and enable the Department of Education to purchase FFELP loans from failing lenders.

Kennedy’s efforts to help secure the federal student loan sector come at a time when almost 50 FFELP lenders have suspended their federal student loan programs in recent months, including 21 of the top originators of federal student loans and five of the largest holders of student loan portfolios, according to FinAid.org.

Several schools had already made the move to the Direct Loan Program before Kennedy sent his letter to the ACE, including Pennsylvania State University, which, at $276 million, has a substantial federal student loan volume. Secretary of Education Margaret Spellings has assured schools that the Education Department is equipped to handle double the volume within the Direct Loan Program, if necessary.

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Higher Education Accreditation

Student Loan Girl — Fri, 20 Apr 2007 20:03:00 GMT

Who gets to choose what is acceptable when it comes to student performance in higher education; bottom-line, what agency sets the standards for accreditation. According to an April 19, 2007 article written by Doug Lederman, titled “Showdown Looms on Accreditation,” that appeared in Inside Higher Ed, “For months, college leaders and Education Department officials have been sparring over whether and how the federal government should change its rules governing higher education accreditation. The core issue: to what extent the department should demand that accrediting agencies, rather than individual colleges themselves, set minimum levels of acceptable performance by institutions on measures of how much their students learn.”

So, what’s the big deal anyway? Why shouldn’t the Department of Education and the federal government be allowed to change its own rules governing the standards by which to measure students? Well, the same reason you might not want the Department of Motor Vehicles to choose what you have for dinner, because it is federal intrusion, not on your dietary habits but into academic policy making by making it more institutionalized.

The Soft Sell Change

Although the Department of Education is beginning with a “soft sell,” many see this as the path to federal control. For example, Lederman reported:

“Most notably, institutions and programs themselves, rather than accrediting agencies, would be required to set their own ‘expected levels of performance’ and demonstrate that performance using ‘quantitative and qualitative measures that are externally validated, as appropriate.’

“But at their core, the regulations would seem to have largely the same end result: Because the standards would require accrediting agencies to judge ‘the appropriateness of the level of performance established by the institution or program’ and whether the institution has shown evidence of ‘acceptable performance,’ accreditors would still be telling institutions whether they are performing adequately.

“And because, under the draft regulatory language, the federal government would evaluate accreditors based on their ‘judgments’ of the institutions’ standards, the federal government would still be dictating definitions of ‘quality’ to American colleges, if slightly less directly, critics say.

“‘At the end of the day, this would be federalizing accreditation,’ said Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education, higher education’s main lobbying group. ‘It would represent a fundamental change in the relationship between accreditors and schools, and therefore between the Department of Education and schools.’”

Transfer of Academic Credit Issues

It appears as if the other hot button issue that is being raised with the policy changes is the issue of transfer credit between colleges, specifically between accredited for-profit schools and regionally accredited colleges. Lederman wrote:

“The new regulatory language released by the department this week would also make a change in the other most controversial aspect of its agenda: accreditors’ and colleges’ policies on the transfer of academic credit. Officials of many for-profit and other nationally accredited colleges have complained that the academic credits of their students are routinely turned away by regionally accredited colleges in the admissions process, based solely on the fact that they came from nationally accredited colleges. This issue deeply divides nonprofit and for-profit colleges, and the latter have pushed hard for a change in federal policy.

“The new proposals maintain a plan to require accrediting agencies to have policies stating that the colleges they monitor cannot base decisions about whether to accept a transferring student’s credits on the accreditation status of the ‘sending’ institution, and to require that institutions inform prospective students about their transfer policies. But the department’s new proposal would eliminate the previous draft’s requirement that an accrediting agency must ‘ensure’ that a college’s decisions on credit transfer are not made based on accreditation status. Accrediting officials had complained that that requirement would force them to become ‘cops’ auditing colleges’ transfer policies, and department officials say the change would eliminate that problem.”

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Be sure to tune in next Thursday for my next blog on student loan advice.

Student Loan Girl

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American Council on Education Meeting

Student Loan Girl — Tue, 13 Feb 2007 17:02:00 GMT

The American Council on Education opened its 89th annual meeting this past Sunday, Feb. 11, 2007. According to a Feb. 12, 2007 article by Richard Byrne titled “At Annual Meeting, Council Focuses on Issues of Access and Accountability,” that appeared in The Chronicle of Higher Education, “The theme of the council’s 2007 meeting, which continues through Tuesday, is ‘The Access Imperative.’”

Access to higher education for lower-income families seems to be the prominent theme lately among higher education legislators, advocates and watchdogs. Byrne reported that within the American Council on Education circles, “Much of the discussion of the access issue has focused on a lack of preparedness for higher education among low-income and minority students, and the social and cultural barriers to their entry to universities in greater numbers.”

Questions on Accountability

As well as access to higher education, members at the meeting discussed the ever-looming issue of quality control when it comes to higher education and the pursuit by some institutions to rank on consumer guides to college such as that of U.S. News & World Report.

The article reports, “The members of a panel titled ‘Who Is Defining Quality in Higher Ed? At What Cost?’ agreed that a number of factors have created something of a mania for assessment and accountability in higher education. Those factors include recommendations made by the federal Commission on the Future of Higher Education and a scrum by universities to rise in popular institutional rankings, such as U.S. News & World Report’s annual college guide.

‘One of the great things about the blossoming of rankings is that there are a lot of different ways of looking at institutions from the outside,’ said Ben Wildavsky, a senior fellow in research and policy at the Ewing Marion Kauffman Foundation. (Before joining the foundation, Mr. Wildavsky served as editor of the U.S. News & World Report’s annual college rankings.)”

Low-Income Kids Given the Boot

Apparently, some members of the council see a correlation between a college’s desire to rank on consumer lists and limited access to higher education for low-income students. Byrne reported, “Some of the practical fallout of the pursuit of prestige has been reflected in a lessening of flagship universities’ commitment to low-income and minority students, said Kati Haycock, director of the Education Trust. Her group, an independent research and advocacy organization, released a report in late 2006 that ranked top state universities’ commitment to such access issues and found many of them wanting (The Chronicle, November 21, 2006). Those rankings suggest that ‘most flagship universities have walked away from low-income kids and kids of color,’ Ms. Haycock said on Sunday.”

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Be sure to tune in next Monday for my next blog on student loan issues in the news.

Student Loan Girl

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