Student Loan Blog : higher education

Cost of College Continues to Climb, Even in a Recession

Student Loan Girl — Wed, 21 Oct 2009 20:14:00 GMT

Even as the recession has depressed consumer prices and the cost of living has fallen over the last year, college tuition rose in 2009, with the largest percentage increases coming at community colleges and public four-year schools — the mounting expense of an education revealed in the College Board’s latest reports on financial aid and the cost of college, released yesterday (“Trends in Student Aid 2009” and “Trends in College Pricing 2009”).

Squeezed by state budget cuts, public colleges and universities have found themselves forced to raise tuition prices. Tuition and fees at public four-year institutions rose by 6.5 percent for in-state students, to an average of $7,020 in the 2009–10 school year from $6,591 in 2008–09, and by 6.2 percent for out-of-state students, to $18,548 from $17,460.

The rise in community college tuition, to $2,544 this year from $2,372, although only a little shy of $200, represented the sharpest increase percentage-wise, a jump of 7.3 percent.

Costs at private four-year universities also crept upward, although at a slower rate of 4.4 percent, to $26,273 from $25,177.

“Given the financial hardship of the country, it’s simply astonishing that colleges and universities would have this kind of increases,” said Patrick Callan, president of the National Center for Public Policy and Higher Education. “It tells you that higher education is still a seller’s market” (“College Costs Keep Rising, Report Says,” The New York Times, Oct. 20, 2009).

Noting that the high school graduating class of 2009 was the largest in history, Callan went on, “Colleges and universities are capitalizing on that more than any other institution in the economy. If you walk around a shopping mall, nobody else is raising prices at the same rate” (“College: More Expensive Than Ever,” CNN Money, Oct. 20, 2009).

The Impact of Financial Aid

Only about a third of students pay these published “sticker” prices, however, underscored Sandy Baum, a senior policy analyst for the College Board and author of the two reports. Most students’ actual out-of-pocket costs are thousands of dollars lower because they receive some type of financial aid in the form of scholarships, grants, and student loans.

“If you look at net prices students pay, considering the grant aid and tax benefits, students at public two-year institutions are actually paying less, in inflation-adjusted dollars,” Baum pointed out. “Even though the sticker price, adjusting for inflation, is up 20 percent in the past five years, the net price is actually lower than it was five years ago.”

Net prices are also down at both public and private four-year universities.

Student Loans Still on the Rise

This drop in out-of-pocket costs notwithstanding, the gap between families’ available resources and the overall cost of attending college remains on a steady incline. Grant funding hasn’t kept up with the hikes in college costs, leaving students in a position of having to take out ever-larger amounts of money in student loans, particularly in the current economic climate, as more families struggle with unemployment, stagnant wages, and curtailed sources of credit.

“There’s a certain cruelty to a rise in education costs amid an economic slump,” observes Randy James, in a piece for TIME. “It makes the single most effective tool to help the underemployed and jobless out of their rut become all the more unreachable” (“The Incredible Climbing Cost of College,” Oct. 21, 2009).

Total education borrower increased by 5 percent from 2007–08 to 2008–09, the latest year for which student aid data are available. The volume of federal student loans — Stafford loans, Grad PLUS loans, and parent PLUS loans — grew by $14.7 billion last year.

“The level of debt we’re asking people to undertake is unsustainable,” said Callan.

In one bright note for student debt watchdog groups, this surge in federal college loans was accompanied by a sharp decline in nonfederal education loans. Nonfederal private student loans tend to have less flexible repayment terms, typically carry higher interest rates, and are generally more costly than federal student loans.

The volume of private student loans shrunk by half last year, to $11.9 billion.

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Students’ College Access to Improve, Vice President Pledges

Student Loan Girl — Thu, 23 Apr 2009 23:50:00 GMT

Vice President Joe Biden intends to make higher education a reality for more young people, the Associated Press reports, in part by closing the gap between families’ incomes and rising college costs (“Biden Wants to Make Higher Ed More Affordable,” USA Today, April 18, 2009).

At a town hall–style meeting he hosted in St. Louis Biden told about 300 people that he’ll be asking the Treasury Department to figure out how to make college savings plans more effective and more reliable.

“We’re going to make a series of investments, investments in our families and our students,” he said, highlighting the administration’s efforts to improve tax breaks for families and increase need-based grants for low-and middle-income families.

White House Taps Existing Programs to Increase College Affordability

Since so many families save for college using tax-deferred 529 savings plans, which allow families to set aside funds to cover future tuition expenses, fees, books, and supplies, the Obama administration is examining a program that would allow families to take out low-interest loans against their 529 plans to help them cover college costs.

Obama has already increased funding for the need-based federal Pell Grant program, which helps low-income students afford school, but Biden said the Obama administration also wants to ensure continued Pell Grant funding by setting up the program to be automatically subsidized each year.

The government is also considering extending The American Opportunity Tax Credit beyond 2010, which allows families to claim a $2,500 tax credit for college expenses for up to four years.

But by far the most sweeping proposal from the Obama administration, which has drawn fierce criticism from leaders in the student loan industry, is the suggested cancelation of the federally funded student loan program.

Lenders say that cancelling the program will eliminate families’ option to choose from a variety of private lenders and federal student loan incentives and, instead, require them to borrow federal student loans through government’s Direct Loan Program.

Biden alleges that the move to cancel the federal student loan program would result in up to $94 billion in savings to the federal government over the next 10 years, which he said, “We can take … and reinvest … in more loans, more grants and more access to college.”

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Students Increasingly Choosing Private Student Loans

Student Loan Girl — Wed, 22 Apr 2009 22:39:00 GMT

According to analysis of Department of Education data released last week, the number of college students taking out private student loans over the last five years has risen sharply. Analysis by student advocacy group The Project on Student Debt revealed that the percentage of all undergraduates who took out private student loans last school year jumped to 14 percent from 5 percent during the 2003–04 academic year (“New Data Show Big Increases in Private Student Loan Borrowing,” The Project on Student Debt press release, April 21, 2009).

The data showed that students attending schools that charge more than $10,000 in tuition and fees were more likely to use private student loans than were students attending less costly institutions. In fact, these for-profit colleges and universities saw the percentage of students who took out private student loan skyrocket to 42 percent last year compared to 13 percent five years ago.

The Project on Student Debt also found that slightly more than a quarter of private student loan borrowers didn’t take out federal student loans: 14 percent didn’t even apply for federal financial aid, and 12 percent filled out the Free Application for Federal Student Aid but chose not to take out a federal Stafford student loan.

These federal student loan statistics are particularly concerning, said Laura Asher, acting president of the Institute for College Access & Success, which runs The Project on Student Debt, because federal loans are available to nearly all students, regardless of their income, and because federal loans tend to have more favorable interest rates and repayment terms than private student loans.

“Too many students,” Asher said, “are missing out on federal loans and going straight to one of the riskiest borrowing options.

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Colorado Colleges ‘Safe’ for Now, Won’t Face $300 Million in Cuts

Student Loan Girl — Tue, 21 Apr 2009 20:42:00 GMT

Colorado Governor Bill Ritter recently announced his refusal to eliminate $300 million in funding for Colorado public colleges and universities to ensure that that the state’s schools remain qualified for $760 million in federal stimulus money, The Denver Post reports (“Ritter Rejects Cuts to Colleges,” April 14, 2009).

Colorado institutions have already taken a $150 million hit, which the governor said he plans to make up over the next two years with stimulus funds from the federal government, assuming the state gets the funds. But short of saying that he would veto the $300 million in funding cuts for higher education — the governor’s first public stance on the state budget — Ritter has failed to offer any solution to the state’s budget crisis, critics say.

Like many governors across the nation, Ritter faces a huge state budget shortfall — $800 million to be exact — as he attempts to balance Colorado’s $17.9 billion budget.

Colorado lawmakers, for their part, have planned to raid cash funds, suspend property-tax breaks for seniors, and cut education budgets to partially cover the budget shortfall. And currently the state is considering two of several other possible initiatives to reduce the budget gap to manageable proportions: requiring furloughs for state employees and taking money from a worker’s compensation insurer.

Though an alternate plan to replace the $300 million in college cuts is not yet in place, college officials have said they’re cautiously optimistic.

Ritter's announcement was “a good step, but we aren’t out of the woods yet,” said Nancy McCallin, Colorado Community College System president. “We clearly don’t know where the $300 million will come from.”

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2010 College Enrollment Numbers May Not Be So Bad, Survey Reveals

Student Loan Girl — Thu, 02 Apr 2009 21:51:00 GMT

Although school administrators across the nation are reporting an increase in applications, they’re worried about just how many college students will actually enroll in their institutions this fall as families continue to tighten their budgets amid this recession, reports Inside Higher Ed (“Parents’ View of the Economy,” March 30, 2009).

However, a new survey of parents of college students indicates that while administrators’ concerns are valid, the economy may not have affected parents’ finances as much as educators originally thought, particularly among parents whose children are entering their freshmen year. Eduventures, an organization that tracks higher education trends, surveyed 7,000 parents with college-age children at a mix of 19 public and private colleges and universities.

Eduventures found that a majority of parents with freshmen — about 66 percent — said the downturn won’t affect how they will finance their children’s education this upcoming fall.

Overall, relatively few parents told Eduventures that they would not enroll their children in college due to lack of funding, although some parents indicated that they might choose to enroll their children in less expensive institutions to cut costs.

Of those parents with students at private schools, less than 12 percent indicated that their children were considering transferring to a less expensive school, and nearly 7 percent said they would encourage their children to take some classes at a community college. Of these same private school parents, less than 3 percent indicated that their students wouldn’t be returning to college in the fall, and less than 0.5 percent said that their children were considering dropping out of college permanently.

The numbers were only slightly different for parents whose children attend public colleges, with almost 9 percent saying that their children may have to consider transferring schools and less than 3 percent who believed that their children would need to look at dropping out of college. Nearly 6 percent of these parents thought that their children would need to live at home instead of on campus this fall.

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Cutting-Edge Colleges Deliver Courses Via Cell Phones

Student Loan Girl — Fri, 06 Feb 2009 22:48:00 GMT

In order to reach a more diverse population of learners, several institutions are offering full college course content delivered via a user’s cell phone, reports UniversityBusiness.com (“Cellular Colleges: The Next Small Thing,” February 2009).

“Cellular” courses will be similar to their online counterparts and will include access to self-paced tutorials and student chat rooms, as well as to several other features, educators say.

Mobile education courses are already available at Fukuoka (Kyodo) Cyber University, Japan’s first Internet-based university, which specializes in delivering course content using SoftBank 3G smart phones. The university, which opened in 2007, entices new students to enroll by offering a student’s first course free of charge as long as students use the school’s provider, and pay for all equipment and transmission fees.

Colleges and universities in the United States have also recently begun experimenting with video instruction over personal mobile devices, including Ball State University in Muncie, Indiana, which is considering mobile education as part of the school’s new emerging media initiative.

The Louisiana Community & Technical College System is also considering offering several different online courses that could be delivered to students on their iPhone, Google Phone, Blackberry or other mobile devices as a means of expanding students’ access to higher education throughout the state.

“The top barriers in attaining their degrees are geographic access, cost of higher education and scheduling conflicts,” said school system president Joe May. “We are excited to be able to bring a greater level of access to potential students.”

The school system has teamed with AT&T, eCollege and Pearson Custom Solutions to ensure that courses will be optimized for online and mobile delivery and that courses remain compatible with new mobile services and features as they become available.

“This partnership completely changes the future of how online learning is delivered,” said Don Kilburn, CEO of Pearson Custom Solutions. “We don’t just live in an online environment — we live in a mobile environment. This partnership gives working adults in Louisiana the most flexible and reliable working option available- whether it’s on a desktop, laptop, or mobile device.”

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‘Frill-Less’ Campuses Shave Thousands Off College Tuition

Student Loan Girl — Thu, 05 Feb 2009 20:24:00 GMT

At a time when parents and students are finding it increasingly challenging to get the money they need for college, some schools are coming up with creative options to cut thousands of dollars off annual tuition bills, The Boston Globe reports (“Students Forgo Frills to Save Thousands,” Feb. 3, 2009).

Offering savings of up to approximately $10,000 to $15,000 annually, these colleges are gambling that parents and students — worried about layoffs, getting student loans for college, and an unstable economy — will go for these less-expensive satellite campuses that forgo the traditional college campus amenities of lavish food courts, fitness centers, and dorms.

Students Find Value In Commuter Education

Twenty miles south of its main campus in Manchester, Southern New Hampshire University has established a no-frills sister campus in Salem, New Hampshire.

Freshmen and sophomore students attend classes taught by some of the same professors found on the Manchester campus and study subjects as diverse as Greek tragedy, the Roman Empire, and business statistics.

The school believes that many students will be willing to pay considerably less, $10,000 as opposed to $25,000 in tuition, for the same quality of education that students receive on its main campus.

Daniel Webster College, another small private school located in Nashua, New Hampshire, intends to extend a comparable tuition break for freshmen students who live at home and commute to the main campus — $15,000 a year in tuition versus $26,000 for those students who live on campus.

And in Pennsylvania, the public university system is contemplating whether to move forward with plans to create four-year colleges without dorms, athletics, or extracurricular activities in order to lower the price of a bachelor’s degree.

Cheaper Model as Effective?

While many parents may relish the savings that these new frill-less colleges represent, other people question whether the less expensive, commuter-based model of higher education is as effective as the traditional campus-based model, the Globe reports. Research indicates that those who live on campus are, on average, more likely to graduate on time, get better grades, and be happier in college.

However, Richard Ekman, president of The Council of Independent Colleges says, “A no-frills approach is better than nothing, but it’s very difficult to achieve the same thing as having a total educational experience that comes with living on campus.”

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Proposed Budget Cuts Leave Arizona Universities Reeling

Student Loan Girl — Thu, 22 Jan 2009 22:44:00 GMT

Arizona’s three state universities are considering making drastic budget cuts, including shutting down campuses and eliminating degree programs, as the colleges face a 30-percent reduction in state aid — a projected loss of more than $300 million for all three public universities.

Proposed budget cuts to the state’s university system come as Arizona grapples with a $3 billion-budget deficit this fiscal year and next, reports the East Valley Tribune (“Crow: Cuts Could Close ASU Polytechnic,” Jan. 21, 2009).

If the proposed budget cuts are approved, Arizona State University could lose $320 million over the next two years and Northern Arizona University nearly $50 million, while the University of Arizona stands to lose $103 million in state funds just this year.

The schools, which have already implemented budget reductions precipitated by the economic downturn, are scrambling to find new ways to further slash their already strained budgets.

ASU is considering laying off 2,500 employees, doubling tuition, and shutting down one, or possibly two, of its campuses.

“We could eliminate the nursing school, journalism school, the law school, and the engineering school and still not meet these cuts,” said ASU President Michael Crow. “It’s hard for people to understand the scale.”

“I’m a bit shell-shocked,” said NAU President John Haeger in a university press release. “We have not even modeled a budget for cuts of this magnitude.”

Haeger says the reductions at NAU won’t be possible without fee increases, fewer class offerings, and larger class sizes, as well as work furloughs, increased workloads for employees, and possible staff layoffs.

While it is not known how University of Arizona President Robert Shelton will address cuts the university needs to make, he says the school is exploring money-generating options, including accepting a larger number of out-of-state students who pay higher tuition and fees than in-state students.

Shelton says he agrees that cuts to higher education are needed, but he maintains that the type of reductions the state legislature is asking for “are so extreme that they would absolutely cripple higher education in our state.”

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Down Economy May Be Driving Students to Online Education

Student Loan Girl — Thu, 15 Jan 2009 21:05:00 GMT

As jobs continue to disappear and unemployment soars, large numbers of adult learners may soon be enrolling in online programs, particularly at two-year colleges and for-profit institutions, according to a new online education survey (“Recession May Drive More Adult Students to Take Online Courses,” The Chronicle of Higher Education, Jan. 9, 2009).

These two-year colleges and for-profit institutions, which offer programs tailored to working adults, will likely see the biggest boost in enrollment, but all types of colleges could experience an enrollment surge as more people turn to higher education to gain marketable skills in the recession, revealed the 2008 online education survey by the Sloan Consortium, a non-profit organization working to improve online education.

“A lot of people want to increase their skill levels or get that degree they didn’t have,” said I. Elaine Allen, one of the report’s authors. The threat of losing their job can be as big a motivator for people to get a degree as actually losing their job, Allen told The Chronicle.

She said that the primary motivator for adults turning to online education over a traditional classroom-based education may be one of convenience. “Time-wise, you have the flexibility of logging online and taking the course whenever you want,” Allen said. With Internet -based courses, “you don’t have to leave your house. If you have a family, that’s going to make things much easier for you.”

Over 20 percent of all U.S. students enrolled in higher education were taking at least one online course in the fall of 2007, according to data from the Sloan Consortium. And, The Chronicle suggests, if the recession were to drive more students to take courses online as expected, the percentage of online education students is likely to rise sharply.

Most of that growth will likely come from the two-year and for- profit colleges that have not yet maximized their potential for online enrollment, Allen predicts, while public institutions likely won’t see “huge growth” in Web-based learning. Of all the colleges surveyed, 58 percent said that online courses were critical to their enrollment strategies, and a full 70 percent reported that competition for the growing number of students pursuing an education online is increasing.

Allen said, “For the first time, [schools] are seeing students choose another college for its online program.”

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Program to Offer NY Students Low-Cost College Loans

Student Loan Girl — Wed, 17 Dec 2008 23:36:00 GMT

Despite New York’s $15 billion budget deficit, Gov. David Paterson announced he is creating a student loan program that would allow New York college students to borrow $350 million in low-cost private student loans directly from the state, reports The New York Times (“Governor to Unveil a Low-Cost Student Loan Program,” Dec. 15, 2008).

State officials say the new student loan program, meant to help the state “retain the best and the brightest young minds,” will offer lower rates than most private student loans — potentially as low as 8 percent. Interest rates will be adjusted annually based on market conditions.

Paterson plans to allocate $50 million in state funds to jumpstart the program and $10 million each year thereafter — a key recommendation of the Commission on Higher Education. The commission studied New York’s higher education system for more than a year and found that the state’s 1 million college and graduate students had taken out $2 billion in private loans, and that those students often paid as much as 12 percent on their loans, double the interest that students paid in states with low-cost student loan programs.

Paterson hopes the loan program will help ease the financial challenges that face students now that lenders have tightened their credit criteria and as public and private colleges consider tuition increases to cope with state budget cuts. To help balance the state budget, Paterson has proposed increasing tuition at the City University of New York and the State University of New York.

“One of the big problems in the student loan program is that it is drying up,” said Jeffrey Gordon, a spokesman for the budget division of the governor’s office. “People who were able to get loans last year can’t get them this year.”

Under the loan initiative, students at two-year colleges would be eligible to take out a maximum of $20,000 in loans, while undergraduates at four-year institutions could borrow up to $50,000. New York students pursuing both an undergraduate and graduate degree would be capped at borrowing a combined total of $70,000 in private student loans.

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College Board Settles Inquiry into Its Student Loan Practices

Student Loan Girl — Thu, 11 Dec 2008 23:40:00 GMT

The College Board, which administers the SAT, ACT, and AP college admissions tests, has agreed to resolve an investigation by New York Attorney General Andrew Cuomo and Connecticut Attorney General Richard Blumenthal into its student loan practices.

As part of the settlement agreement, the College Board — which exited the student loan business last year — will allocate $675,000 to developing a set of tools, including calculators, that would help families and financial aid administrators across the country to compare student loan offers (“College Board Rapped for Student Loan Marketing,” North County Gazette, Dec. 8, 2008).

The tools will “help parents, students and educators with the college loan process” by identifying the lowest cost student loan options, said Jennifer Topiel, a spokeswoman for the College Board, in an emailed statement.

“Our investigation of the student lending industry revealed arrangements — concealed from students and families — between the College Board and financial-aid offices at several schools,” Blumenthal said in a statement December 8. “The College Board provided discounted equipment and services to the schools in exchange for a coveted spot on the schools’ preferred-lender lists.”

Cuomo characterized the College Board’s loan arrangement with colleges as deceitful, although he did say that the testing company, with “its national reach and extensive expertise in higher education,” was well-suited to help parents and students “borrow smartly” (“College Board Resolves Two State Student-Loan Probes,” Bloomberg.com, Dec. 8, 2008).

“Loans are hard enough to come by these days; the last thing we need are deceitful arrangements like this one that stand squarely in the way of students and parents getting the facts,” Cuomo said. “We should be doing absolutely everything we can to guide students to the least expensive, least complicated option for affording higher education.”

Code of Conduct Seeks to Protect Students

Should the College Board ever resume its college lending programs, it has said it will abide by the Attorney General’s Direct-to-Consumer Marketing Code of Conduct, which prohibits lenders and marketers of student loans from using deceptive marketing practices.

The code of conduct is the result of Cuomo’s investigations into the student loan industry that have uncovered widespread conflict of interest practices among colleges and student loan lenders. Colleges and financial aid officers received both payments and perks from lenders in exchange for placement on schools’ preferred lender lists.

Cuomo spokeswoman Emily Browne said that 22 lenders and 26 institutions have pledged to sever financial ties and abide by a code of conduct that prohibits accepting gifts or payments from lenders.

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VA Keeps Processing of New GI Bill Education Benefits In-House

Student Loan Girl — Mon, 10 Nov 2008 20:10:00 GMT

The education benefits of the new GI Bill — which will provide eligible veterans of the wars in Afghanistan and Iraq with four years of college funding — will be processed in-house by the Department of Veterans Affairs and not outsourced to a private contractor as originally planned, reports The Chronicle of Higher Education (“Veterans Affairs Department Cancels Plan to Outsource New Education Benefit,” Nov. 6, 2008).

The VA said it abandoned its controversial plan to put a private contractor in charge of processing the benefits — a proposal opposed by some veterans groups and members of Congress — after the department didn’t receive enough bids.

Out of 10 submissions, five were selected for review, but the proposals failed to prove that the vendors “could deliver in the very short time frame that we have to stand this up,” said Keith Wilson, director of the VA’s education service.

The American Legion lauded the department’s decision, saying that a contractor can’t offer veterans the same level of service that VA employees can provide.

“The VA employs IT personnel with intimate knowledge of how to best serve the veterans’ community,” said David Rehbein, national commander for the Legion.

Administering the new GI Bill benefits will be unusually complex, says Patrick Dunne, the VA’s undersecretary for benefits, since payment amounts are based on both in-state tuition and living costs, meaning benefits would vary by state and by region.

The new GI Bill, which Congress passed in June, will give veterans enough financial aid to cover up to the cost of in-state tuition at the most expensive public college in their state, along with a stipend for housing and books.

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Struggling Colleges’ Predicted Dilemma: Merge or Close Up Shop

Student Loan Girl — Tue, 26 Aug 2008 22:58:00 GMT

Over the next few years, more small, private colleges may be faced with the decision to either merge with another school or close their doors as rising energy costs, increased competition for students, and the lingering credit crisis eat away at these private colleges’ profit margins, according to an article in Inside Higher Ed (“Will More Colleges Merge?,” Aug. 25, 2008).

The economic downturn that is threatening both families’ ability to pay for college and donors’ ability to continue financially supporting schools to the same extent they have in the past, may mean that “colleges in difficulty are going to be willing to try more ambitious solutions such as mergers,” says Richard Ekman, president of the Council of Independent Colleges. This month, Woodbury College in Vermont announced it would merge with fellow state school Champlain College. In July, California schools John F. Kennedy University and National University joined together.

Ekman wonders if other small colleges, which have typically “found amazingly imaginative ways to thrive” under financial hardship, may also be on the verge of merging or closing. Other industry experts contend that the private sector of higher education has always been in some degree of flux with colleges constantly having to adapt to demographic changes and students’ shifting interests.

“There will be a handful of colleges opening, closing or merging [every year],” says David Warren, president of the National Association of Independent Colleges and Universities. But Warren sees “no compelling evidence that we are entering a new era of consolidation in private higher education.”

Private Colleges Experiment With New Ways to Stay Afloat

Still others argue that the number of colleges officially merging may understate the extent to which small colleges are considering radical changes in order to survive, writes Inside Higher Ed reporter Scott Jaschik. More colleges are turning to collaborative partnerships with other universities to keep their doors open.

Last year, Shimer College, a small independent liberal arts school that bases its education model on small class seminars and emphasizes the study of classical literature, relocated 40 miles away to the Chicago campus of the Illinois Institute of Technology. This year, Shimer also started a joint B.A./J.D. program with the Chicago-Kent College of Law.

The moves were needed, Shimer officials say, to help the “great books” college, which was struggling to keep enrollment at 100, attract new students. This year, enrollment at Shimer is up by 25 students.

Robert Zemsky, CEO of the Learning Alliance for Higher Education, an organization that advises colleges and universities on market strategies, predicts that mergers may grow in their appeal among both small, cash-strapped colleges and financially secure schools that see merging as a better way to grow enrollment and diversify their offerings.

This merger trend could be a blow to the U.S. system of higher education, Ekman says. “The diversity of the types of American colleges and universities has always been the wonderful strength of the American system,” he says. “To me, it’s a shame when any college goes out of business or needs to sacrifice its distinct identity.”

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Montana Senator: Give Tax Break to Companies That Pay Off Employees’ Student Loans

Student Loan Girl — Sat, 09 Aug 2008 00:59:00 GMT

Roy Brown, a Montana state senator and candidate for governor, would like to reward companies that repay their employees’ student loans with a tax break, reported the Great Falls Tribune (“Brown Says Companies Could Help With Student Loans,” Aug. 6, 2008).

The senator says that his plan would offer an incentive for Montana students to remain in state and could help keep them from becoming overwhelmed by high student loan payments.

As another way of encouraging Montana students to attend a state school, Brown also proposes allowing Montana high school graduates with a 3.7 GPA or better to attend a public college or university free of charge. These education grants would be funded by a portion of the interest income from the Coal Severance Trust Fund.

“It is absolutely critical,” says Sen. Brown, outlining this proposal and others on the higher education page of his website, “that the most affordable place for a Montana student to pursue their higher educational goals is right here, in their home state.”

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Sex Offenders May Lose Pell Grant Eligibility Under Revised Higher Education Act

Student Loan Girl — Mon, 04 Aug 2008 23:49:00 GMT

Starting July 1, 2009, sex offenders confined in treatment centers throughout the country may no longer be eligible to receive need-based federal Pell Grants, under a new provision of the reauthorized Higher Education Act, according to an article in the Associated Press (“Congress Cuts Off College Aid For Sex Offenders,” Aug. 4, 2008).

President Bush has yet to sign the act into law, but after the act passed through Congress July 31, Rep. Ric Keller, R-Fla., said, “Today, the most insane wasteful spending program in America comes to an end.”

Keller cited an AP article from March that revealed dozens of rapists and child molesters had taken higher education classes at taxpayers’ expense while confined to treatment centers after serving their prison sentences. Some prisoners were using the financial aid to buy clothes, DVD players, and music CDs even after they had dropped their classes in some cases.

While the U.S. Department of Education does not know exactly how many sex offenders receive Pell Grants, spokeswoman Stephanie Babyak predicted that making sex offenders ineligible for the aid would save taxpayers millions.

Critics say the new measure may rule out a higher education for sex offenders who are trying to rehabilitate themselves. Instead of cutting off grant aid to all sex offenders, Congress should better regulate how it administers the program in order to help prevent abuses, said Michael Macleod-Ball, chief legislative and policy counsel for the American Civil Liberties Union.

The grant aid provision would affect the 20 states that allow violent sex offenders — those who it is believed would likely repeat their crimes if they were to be released — to be held indefinitely in treatment facilities after they have served their prison sentences. Prison inmates have been ineligible for Pell Grants since 1994, but sexual offenders can qualify for the grants once they are transferred from prison to treatment centers.

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