Student Loan Blog : governor

Students Brace for Largest Tuition Jump in Years

Student Loan Girl — Tue, 20 Jan 2009 23:18:00 GMT

Tuition increases at the nation’s colleges are inevitable.

However, in the current economic climate — where states are slashing budgets to the bone — public colleges are being forced to raise tuition at rates that haven’t been seen in years, reports The Associated Press (“Families Await Sharpest Tuition Increases in Years,” Jan. 15, 2009).

Public, state-supported institutions have hiked tuition fees by 8 to 10 percent during economic recessions of the past in order to make up for reductions in government contributions, according to Nick Johnson of the Center on Budget and Policy Priorities in Washington.

“This recession is worse. This state fiscal crisis is worse than last time, so we would expect state tuition increases to be larger than in past years,” Johnson said.

With severe budget cutbacks in the governor of California’s new budget proposal, for example, university fees are expected to rise by at least 10 percent at California state schools. And the New York state government’s recent announcement of an unusual midyear increase to state public college tuition made it clear that the state’s budget crisis was so severe it couldn’t afford to wait until fall to impose a 14-percent tuition hike.

John Hayek, interim vice president of finance for the Kentucky Council on Postsecondary Education, says although the state announced it will hold tuition increases below last year’s, which ranged from 6 to 10 percent for in-state students, the state still plans to raise tuition by about 5 percent at community colleges and between 7 and 10 percent at public universities.

Families Uncertain How to Cover Extra Costs

For the four out of five American college students who attend public schools, these tuition increases have become a cause for concern, particularly in regard to their families’ ability to afford their college education.

Since many families lost savings in the stock market or can no longer tap home equity loans due to the real estate crash, says Jim Boyle, president of advocacy group College Parents of America, paying for college next year may be a particularly painful process with fewer means of financing college available.

“We’re probably going to have to take some options off the table (for the other children) unless things change,” said Donna Kopec, whose daughter’s college mutual fund lost a third of its value.

Kopec says that the drop in the market has created a funding challenge for all three of her college-bound daughters. She hopes President Barack Obama will follow through on campaign promises that include increasing Pell Grant amounts and implementing programs that award college grants in exchange for community service.

Share this post: email this | del.icio.us | reddit

Connecticut Credit Unions Begin Offering Low-Interest Student Loans

Student Loan Girl — Wed, 17 Dec 2008 00:04:00 GMT

To help ensure that Connecticut students continue to have access to higher education in today’s economy, Governor M. Jodi Rell recently announced a new $17.5 million initiative that will help students obtain college loans at interest rates as low as 5.75 percent, reports TheDay.com (“Lending a Hand,” Dec. 14, 2008).

The new program, a partnership between the governor’s office and the Credit Union League of Connecticut, enables both incoming and current college students to take out loans at rates between 5.75 percent and 6.0 percent from approximately 18 state credit unions, with funds partially guaranteed by the Connecticut Health and Educational Facilities Authority (“Governor Rell Announces New College Student Loan Program With State Credit Unions,” StamfordPlus.com, Nov. 18, 2008).

“Household budgets are already strained by the effects of our struggling national economy,” Governor Rell said. “Many families have seen the funds they set aside for college evaporate — and they are now hard-pressed to come up with tuition for their children.”

Rell said under the program, which is a first for the state, loans are made available to families who wouldn’t typically qualify for traditional student loans as well as those who have depleted their financial resources and are struggling to find a way to cover college costs.

Credit Unions Uniquely Positioned To Offer Student Loans

To participate in the program, which will run for a full year and may be further extended depending on demand and available resources, credit unions must have allocated a minimum of $100,000.

At Ledge Light Credit Union, one of the participating institutions, students may borrow up to $35,000, and in some instances, defer their principal and interest for several years while attending school, said Bruce Fafard, president and CEO of Ledge Light. Fafard pointed out that many of his customers who had previously expressed interest in student loans from his institution may now be able to get the financial help they need.

With many of the conventional sources of college student loans disappearing, said Jim Metcalf, Ledge Light’s vice president of marketing and business development, “There's a big need out there for exactly what we’re rolling out.”

The governor says helping Connecticut families obtain loans for college is one of the ways in which the state maintains one of the most educated labor forces in the nation, a factor that may ultimately help the state attract more business, create more jobs, and improve its economy.

“This program will be another financial resource for our families and it will serve important needs that in many cases are currently unmet by existing loan programs,” Rell said.

Share this post: email this | del.icio.us | reddit

Congress Joins States and Colleges in Efforts to Reduce Soaring Textbook Costs

Student Loan Girl — Mon, 03 Mar 2008 07:09:00 GMT

With the average college student now shelling out between $900 and $1,000 each year for textbooks and supplies, according to the College Board’s latest Trends in College Pricing report, schools, states, and now Congress are getting involved in the crusade to control the spiraling costs of college textbooks.

Propelled by studies that show the prices of textbooks are rising faster than the rate of inflation, the House of Representatives included provisions in the recently approved College Opportunity and Affordability Act that are specifically targeted at making textbook costs more manageable, reports Elia Powers of Inside Higher Ed (“Different Tacks on Textbook Choice,” Feb. 19, 2008).

The House bill (H.R. 4137), which passed the House on February 7 and renews the Higher Education Act, would have colleges provide advance information in their course schedules about required books to give students time to plan for expenses and comparison-shop for the most cost-effective options.

Also approved by the House was an amendment (H.AMDT.951) proposed by Rep. Tim Ryan of Ohio that would create a pilot competitive grant program to assist a select number of colleges in setting up textbook rental programs.

States Enacting Their Own Textbook Legislation

H.R. 4137 would also require textbook publishers to provide more information about pricing and changes from previous editions, which follows bills already passed by some state legislatures, writes Powers.

Last April, for example, Washington state House Bill 2300 was signed into law, requiring textbook publishers to disclose retail prices and a history of revisions from edition to edition when presenting any materials to faculty.

In June, Oregon passed its similar Senate Bill 365 into law. In addition to charging publishers with providing retail prices and a list of all previous versions of a text to potential adopters, the Oregon measure requires publishers of textbook “bundles” (textbooks packaged with an accompanying CD-ROM or study guide, for instance) to make each component of the bundle available to students separately and to disclose the retail price of each piece.

In California, Assembly Bill 1548, known as the College Textbook Transparency Act, likewise calls for publishers to provide a list of revisions made to new editions, as well as for college bookstores to release the wholesale prices of textbooks. The California bill was signed by Gov. Arnold Schwarzenegger in October and goes into effect in 2010.

Changes at the College Level

In response to the increasingly vocal concerns of students, families, and legislators, not all schools are waiting on Congress or state officials to adopt changes to textbook pricing and marketing practices. Some schools, writes Powers, have already instituted book rental, buyback, or other programs in a move to extend textbook affordability.

At Rio Salado College in Arizona, for example, a partnership with Pearson Custom Publishing allows professors to “build” custom textbooks, drawing material from multiple sources. Administrators believe this program could save students up to 50 percent on reading materials.

The University of Virginia, in addition to expanding its textbook rental and guaranteed buyback programs, is increasing its selection of e-books, which can save students as much as 30 percent over print versions of new editions. And a growing number of U.Va. professors are choosing to purchase older editions of books in cases where the new material isn’t a necessity, a move the university says cuts an average of 75 percent off new book prices.

Share this post: email this | del.icio.us | reddit