Student Loan Blog : college tuition hike

Colleges With Highest Tuition Wary of Economic Downturn

Student Loan Girl — Thu, 06 Nov 2008 00:57:00 GMT

After years of ranking among the nation’s top five most expensive schools, Sarah Lawrence College — a private, liberal arts school in Bronxville, New York with a tuition price tag of more than $53,000 a year — is now the priciest school in America, beating out George Washington University and New York University, according to a new College Board report.

With such a hefty cost of attendance, the former all girls school, like many private colleges and universities, is concerned about its financial outlook in today’s economy (“Even at Costliest College, Unease Over Downturn,” The New York Times, Nov. 1, 2008).

Unlike public schools, which receive state and federal funding, private institutions like Sarah Lawrence depend on their tuition and fees, their fundraising efforts, and their endowments to pay for the bulk of their operational expenses.

Sarah Lawrence’s endowment, which the school uses to supplement its $80 million operating budget, has shrunk 16 percent from $77 million since May 2007. Yet, Sarah Lawrence still manages to offer 53 percent of its students some sort of financial aid — an expense that makes up 21 percent of the school’s budget.

While Sarah Lawrence has yet to see an uptick in the number of requests for financial aid this year, school president, Karen Lawrence, is wary of the economic pressures bearing down on the middle-and-upper-class families who may soon be or are already putting their kids through college.

“It’s really hard to tell how much we are going to be impacted,” Lawrence said. “Some students are struggling more because family finances are changes. We are trying to help them out.”

But, Lawrence said, the school’s small $65 million endowment, which pales in comparison to the $34 billion endowment of fellow liberal arts school Harvard University, is making it more difficult to help families meet Sarah Lawrence’s rising tuition costs.

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Technical College May Lose Ability to Offer Federal Financial Aid For Violating Newly-Relaxed Aid Rule

Student Loan Girl — Wed, 20 Aug 2008 20:05:00 GMT

Star Technical Institute, a technical college in New Jersey, may not be able to offer federal financial aid to students at two of its seven campuses for allegedly violating a federal law that requires colleges to obtain 10 percent or more of their revenues from nonfederal sources in order to participate in the federal student-aid program, reports The Chronicle of Higher Education (“Just as Congress Eases Aid Rule, College Is Accused of Violating It,” Aug.18, 2008).

A recent audit conducted by the U.S. Department of Education’s Inspector General found that from January 2004 to December 2006 the technical college relied on federal funds for 93 to 96 percent of its revenues at the two campuses, known as Star Upper Darby.

Since the college received more than 90 percent of its funds from the federal government, auditors recommended that both of the institute’s campuses located in Philadelphia, Pa., and Egg Harbor Township, N.J., have their eligibility for federal financial aid revoked.

Auditors also said that the school should return almost $10-million in federal grants and loans it received between 2004 and 2006.

New Legislation Seeks to Relax 90-10 Rule As Student Loan Borrowing Limits Increase

The allegations and recommendation to revoke federal aid are at odds with provisions in the College Opportunity and Affordability Act of 2008, just signed into law by President Bush, which seeks to ease the 90-10 requirement.

Legislators feared that earlier legislation passed by Congress, which raised the loan amount of subsidized federal Stafford student loans by $2,000 per student, would cause some institutions to run afoul of the 90-10 rule. With students’ ability to borrow more in federal financial aid — increasing the likelihood that they could pay for their college costs solely through grants and student loans — colleges run the risk of receiving more than 90 percent of their revenue from federal sources.

To account for the increased limits in student loans and to help institutions maintain their federal funding below the 90 percent threshold, the College Opportunity and Affordability Act allows schools to temporarily treat the extra $2,000 in federal student loan funds as part of their 10 percent, and enables them to work with the Department of Education to resolve violations within a two -year time period.

Resolution, Federal Funding Uncertain

It remains to be seen whether the Department of Education will work with Star Technical Institute to resolve the issues raised by the department’s inspector general under the new provisions of the law or if the department will proceed to revoke the college’s federal funding.

Star’s president, Karen Manin, disputes the audit’s findings and defends her position that the school received only 90 percent of its revenues from federal sources. In a formal letter to the Education Department, Manin noted that the Department of Education appeared to accept formulas her institution used in audits conducted prior to its current audit of 2004 to 2006.

Based on the department’s perceived approval of its previous formula calculations, Manin said, “Star Upper Darby reasonably relied on the DOE’s acceptance of these audits and made decisions about its business.”

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Sen. Edwards Ends College Scholarship Program Originally Proposed As a National Model of Higher Education

Student Loan Girl — Tue, 05 Aug 2008 20:50:00 GMT

After awarding more than 191 college scholarships over the past three years, a North Carolina scholarship program begun by former U.S. Sen. John Edwards is ending with the Class of 2009, according to an article in The Chronicle of Higher Education, (“John Edwards Ends Scholarship Program He Called a National Model,” August 1,2008).

Established in the state’s Green County school system in 2005 using private donations, the College for Everyone Scholarship Program paid the tuition, fees, and book costs of eligible North Carolina students at any public college in the state for one year. In return, the student agreed to work at least 10 hours a week while enrolled in college, take college prep courses in high school, and stay out of trouble.

Originally proposed during Edwards’ 2004 democratic presidential- nominee bid, and set up after his return to North Carolina, the program was intended to improve college access for all students and to be a major component of his 2008 presidential campaign platform. The former senator had hoped the program would serve as a national model of higher education.

Some educators were surprised to learn the college initiative was ending, but Pamela Hampton-Garland, College for Everyone’s program director, said that the scholarship program had always been intended to be a three-year pilot effort. It will end with this year’s graduating class at Green Central High School.

Green County school district superintendent Patrick Miller, praised Edwards’ initiative, saying it “certainly was an accelerant” in helping his school system increase the number of students who are college-bound. The district serves a population that falls below state averages in both income and education.

When the program was initiated in June of 2005, the percentage of graduating seniors who applied to at least one college was at 74 percent. With the help of Edwards’ program, this spring, 94 percent of the program’s final graduating class applied to at least one college.

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Teachers in California Oppose $340 Million in Cuts to Education

Student Loan Girl — Mon, 09 Jun 2008 23:36:00 GMT

Following a tuition-increase protest last month by students in the University of California and California State University systems that resulted in 16 arrests, California educators are voicing grievances of their own.

Tens of thousands of teachers at nearly 900 schools throughout Los Angeles left their classrooms Friday to protest California Governor Arnold Schwarzenegger’s proposed state budget cuts to education, according to an article in The New York Times ("California Teachers Challenge Proposed Cuts," June 7, 2008).

During the scheduled hour-long protest, teachers and parents voiced their opposition to the budget cuts, which, if passed, would reduce funding for Los Angeles schools next year by $340 million, says A.J. Duffy, president of the United Teachers of Los Angeles union representing 48,000 teachers.

Teachers took to the streets, despite an attempt by Los Angeles Unified School District officials last month to win a court injunction that would have prevented the educators from leaving their classrooms to join the picket line.

To account for the teachers’ absence, administrators and substitute teachers from neighboring districts were brought in to sit with students in school auditoriums, gymnasiums, and on playgrounds, writes New York Times reporter Rebecca Cathcart.

The suggested education budget cuts and college tuition hikes are part of Schwarzenegger’s plan to help reduce the state’s projected $17-billion budget deficit.

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