Student Loan Blog : Stanford

Senator Pushes Colleges for Enhanced Oversight of Funded Research and Endowments

Student Loan Girl — Tue, 29 Jul 2008 04:57:00 GMT

Sen. Charles Grassley, ranking member of the Senate Finance Committee, wants colleges to be held more accountable in both their academic research and their endowment spending, according to a recent article in The Chronicle of Higher Education (“Sen. Grassley Pressures Universities on Science Conflicts and Financial Aid,” July 25, 2008).

In an exclusive interview with the Chronicle, Grassley said the National Institutes of Health should revoke any of the grants it awards to scientists if a researcher fails to report a conflict of interest with her or his institution. The senator has singled out several institutions of higher education, including Harvard University, Stanford University, and the University of Cincinnati, after his office determined that some scientists at these schools had not fully reported their own financial interests in research projects supported by the NIH, as research institutions are required to do by law.

Grassley has asked 20 other colleges and universities to provide details about possible financial conflicts of interest between university researchers and the NIH.

Colleges Need to Direct More of Their Endowment Funds Toward Financial Aid

The senator has also criticized academic institutions with large endowments for spending too little on financial aid for disadvantaged students. The senator recently asked 136 schools to specify how they spend their endowment income.

Institutions that responded indicated that much of these endowments comes from donors who have earmarked their financial gifts for purposes other than financial aid. The senator said he wasn’t persuaded by the argument and noted that he may still pursue legislation that would require universities to spend as much as 5 percent of their endowments each year, although he hopes such a requirement won’t be necessary.

Grassley stated that he may not sponsor such legislation if more schools begin voluntarily following the example set by some of the nation’s elite institutions that began funneling more of their endowment funds to student financial aid packages earlier this year.

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Davidson College Sees Positive Results After Eliminating Student Loans

Student Loan Girl — Thu, 10 Jul 2008 03:44:00 GMT

While Princeton was the first university to completely eliminate student loans from its financial aid packages in 2001, it was Harvard’s announcement to follow in Princeton’s footsteps this fall that garnered national media attention as no-loan financial aid policies for 2008–09 began to turn up at elite colleges and universities across the country: Amherst, Columbia, Dartmouth, Stanford, Swarthmore, Yale.

So far, some 50 institutions across the country have implemented no-loan and loan-cap financial aid policies, according to the Project on Student Debt, a nonprofit advocacy group — in some cases for all students; in others, only for students whose families fall below a certain income cutoff, although that cutoff runs as high as $150,000 a year at some schools.

After stinging rebukes from legislators critical of yearly tuition-hikes that have outstripped inflation and the proliferation of costly private student loans in undergraduate debt loads, many of the nation’s richest schools have moved to reduce student dependency on college loans and to entice greater numbers of low- and middle-income students to enroll at their institutions.

But it’s a small, selective liberal arts institution in North Carolina — Davidson College — that’s already seeing the results of eliminating student loans from its financial aid packages (“At Davidson, Getting Rid of Loans Shows Early Signs of Success,” The Chronicle of Higher Education, July 11, 2008).

While the long-term, broader nationwide impact of these new financial aid policies may not be seen for a few years, Davidson — which got a head start over the rest of the Ivy Leagues by instituting its no-loan policy a year earlier, in the fall of 2007 — has already experienced a three-percent jump this year in the number of incoming students who demonstrate financial need.

Although Davidson’s endowment of $489 million is much smaller than the multibillion-dollar endowments of its Ivy League competitors, the school has set a goal to have 40 percent of its incoming students receiving only need-based aid by 2011 — a plan that Davidson’s dean of admissions and financial aid, Christopher Gruber, says will cost $3.5 million to implement.

"We're moving in the right direction with a year to promote it," Gruber says.

Davidson’s early results aren’t surprising, says Jonathan Epstein, from the education consulting firm Maguire Associates. But families shouldn’t expect no-loan policies to become the norm. “My take is, it’s not something that, as announced policy, is going to spread across the country.”

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Stanford School of Medicine Won't Follow Harvard's or Yale's Financial Aid Initiatives

Student Loan Girl — Sat, 10 May 2008 18:04:00 GMT

Students at the Stanford School of Medicine will not be offered the same type of tuition breaks students attending rival medical schools Harvard and Yale will see next year.

Harvard Medical School and the Yale School of Medicine recently announced they are eliminating the expected family contribution for households that earn less $120,000 and $100,000, respectively.

Charles Prober, Stanford’s senior associate dean of medical student education, told The Stanford Daily that there are no plans to extend such an offer to Stanford medical students (“No Change in Store for Med School Aid,” May 5, 2008).

Stanford a Leader in Minimizing Medical Students Loan Debt

However, he pointed out that Stanford is already a leader in medical school affordability. Stanford graduates have less student loan debt than those who graduate from competing schools, he said. Stanford’s 2007 graduating class had a debt of $78,000 in student loans, compared to $98,953 at Harvard and $115,385 at Yale.

The median medical school debt is $140,000, according to the Association of American Medical Colleges.

Stanford also sets a cap on the amount of federal student loans that can be borrowed each year, which this year is $13,500. If students have remaining tuition costs after the estimated parental contribution is determined, the school covers up to $30,000 of a student’s remaining costs with a need-based grant.

Student Loans Aren’t the Only Option

Students must cover any remaining costs with private student loans or other sources but Stanford, Prober said, offers its students a number of alternatives to student loans.

Medical students can earn up to $72,000 in Stanford’s Medical Scholars research Program by doing health-related research projects. Students can also offset their tuition costs by working as teaching assistants, a job in which they can earn about $18,000 per quarter. After 13 quarters, Stanford drops its tuition costs by 80 percent.

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The New Financial Aid Landscape

Student Loan Girl — Sat, 26 Apr 2008 19:41:00 GMT

In the last few months, the media has been drawn to the potential student loan crisis, focusing on how students will be able to weather accessibility issues to get the funds they need for college next fall.

At the same time, many of the country’s top colleges and universities have been revamping their financial aid programs to better assist parents and students in covering their college costs.

Schools Modifying Financial Aid Programs

To date, about 50 schools have made substantial changes to their financial aid programs, writes Anne Marie Chaker of The Wall Street Journal (“The New Math of College Financing,” April 21, 2008).

Several schools have chosen to replace student loans with grant money that won’t need to be repaid, effectively lowering their tuition. Others have waived tuition costs altogether for families that fall below a specific income. Some have capped the amount of money a family is required to contribute toward college costs at a certain percentage of the family’s yearly income.

Student Loans Being Replaced with Grants

Undergraduates attending Stanford, Dartmouth, Harvard, M.I.T., Yale, or Cornell next fall now have a better chance of graduating with less debt from student loans, thanks to a significant shift in the financial aid programs at these schools.

Under pressure from Congress, with legislators questioning growing student debt levels and skyrocketing tuition costs that outpace inflation even as the wealthiest schools report endowments of $500 million or more, colleges and universities with sizeable endowments are tapping into those endowments to replace student loans with grants in their financial aid awards.

Although Harvard is using grant awards to eliminate student loans from its financial aid packages entirely, other schools are reserving these loan-replacement grants for families at qualifying income levels, Chaker notes.

Cornell, for example, in the 2009–10 academic year, will only replace student loans with grants for families making less than $75,000 annually. (The threshold was $60,000 for the current school year.) Students from families earning between $75,000 and $120,000 a year may still be awarded student loans, but those loans will be capped at $3,000 for 2009–10.

Tuition Waivers for Middle-Income Families

A handful of the nation’s top schools have also implemented programs that eliminate tuition charges completely for middle-income and even upper-middle-income families, with qualifying income levels as high as $100,000.

At M.I.T. and Dartmouth, families who make less than $75,000 a year will be able to send their children to college at zero tuition cost (although they may still have to cover room and board, books, and other living expenses). At Stanford, the income cutoff for a tuition waiver is $100,000 (with assets typical for that income level).

Family Contribution Capped Even for $100K+ Incomes

Last year, Harvard announced “one of the most ambitious [financial aid] plans out there,” writes Chaker, allowing families earning between $120,000 and $180,000 a year, with standard corresponding assets, to put just 10 percent of their annual income toward their child’s cost to attend — in other words, paying only between $12,000 and $18,000 of the 2008-09 sticker price of roughly $50,000.

Yale followed on Harvard’s heels with its own 10-percent policy that went even further up the income bracket, applying to families who make up to $200,000 a year.

As part of these new financial aid plans, both Yale and Harvard require that students contribute between $2,500 and $4,000 of their own funds, earned through a part-time or summer job or both, in addition to their parents’ 10-percent contribution.

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Malls and Retail Stores a No-Go for Depressed Shoppers

Student Loan Girl — Sat, 16 Feb 2008 06:33:00 GMT

Signs of depression:

Loss of appetite
Loss of interest in daily activities
Loss of energy
Hopelessness
Self-loathing

Recommendations for treatment:

Don’t go shopping.

Primed for Sadness, People Spend More

A recent research experiment shows that people who exhibit signs of depression tend to be more willing to cough up the dough, according to a TIME Magazine article by Barbara Kiviat (“Depressed? Don’t Go to the Mall,” Feb. 8, 2008).

Researchers from Carnegie Mellon University, Harvard, Stanford, and the University of Pittsburgh split up their experiment participants into two groups: one that watched a sad video clip involving the death of a boy’s mentor and one that watched an emotionally-neutral video clip about the Great Barrier Reef.

The two groups were then asked how much of the $10 they were getting paid for the experiment they would be willing to pay for a water bottle. Participants in the sad video group were willing to spend about four times more than those in the Great Barrier Reef video group ($2 on average, compared to 50 cents).

Researchers say the results from their experiment indicate that people who are unhappy tend to overcompensate by buying new things.

“Feeling blue causes people to have a devalued sense of self, so spending more money on a new object — which people may identify, in a way, as an extension of themselves — starts to undo that deflation,” Kiviat writes.

This “emotional hunger,” as the researchers call it, may also contribute to other acquisitive behaviors, like looking for a new relationship or trading big on the stock market.

Shift Gears and Step Outside Yourself

The study’s findings, the researchers say, hinge on self-focus: When researchers looked at how much the participants were dwelling on themselves, they found that those who were sad but not self-focused didn’t spend as much.

Cynthia Cryder, a Carnegie Mellon doctoral candidate and co-author of the study, says that spending is a common way for people to try to breathe value into their lives, but that there are alternatives for cheering yourself up besides doling out cash.

“If you’re sad, maybe you should seek out something other than shopping. A new book to read, a new friendship. Something that’s novel and attractive to fill the need you’re seeking to fill,” Cryder told TIME.

Or, she added, break the cycle of self-focus by shifting your mindset outward and thinking about other people.

“You could try to think about others by rehearsing a series of sentences that involve others as the subject,” she said.

Or try calling a friend, Kiviat offers, “and instead of suggesting a trip to the mall, ask how her day is.”

5 Ways to Get Happy Without Spending

Next time you come down with a case of the blues, instead of throwing the credit cards in your wallet and speeding off to the mall, try some of these activities instead, that cost nothing and feel great.

Go for a walk. Sometimes just getting some fresh air and experiencing a natural environment can boost your mood. And exercise produces endorphins, which serve as natural uppers. Plan your route to go through your neighborhood or a nearby park to reduce your chances of coming across a spending opportunity.

Volunteer. As Cryder points out, shifting your thoughts from yourself to someone else can do wonders for your mood and self-esteem. Instead of buying another pair of shoes you don’t need, more downloads for your iPod, or the latest Xbox game, donate your time to someone really in need.

Get rid of clutter. Sifting through old belongings you’ve outgrown or no longer need can help you appreciate all the things you have in your life. You might even discover items you forgot you had, turning a tedious task into a home shopping spree.

Trade with friends. Gather up a group of friends and swap your give-away clothing, CDs, or anything else. You’re killing three birds with one stone: socializing, shopping, and saving.

Plant a garden. Taking responsibility for something living can feel extremely rewarding and uplifting. Gardening not only provides you with a daily activity to keep your hands — and mind — busy, but it’s good for you. The American Horticultural Therapy Association says gardens have healing capabilities, improving health and well-being.

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