Student Loan Blog : tuition costs

Ohio Schools Prep for No-Cost College Education Program for Vets

Student Loan Girl — Tue, 19 May 2009 22:53:00 GMT

Last summer Ohio Gov. Ted Strickland offered American military veterans worldwide a no-cost education at any of Ohio’s public colleges. The state has just now finished tallying its number of veteran students in preparation for the program’s Aug. 1, 2009 start date, the same day the new GI Bill goes into effect, reports The Columbus Dispatch (“Colleges Put Out Welcome Mat for Vets,” May 13, 2009).

Currently about 10,600 veterans and their family members take classes at Ohio institutions, including about 850 veterans at Ohio State University.

But about 57,000 veterans residing in Ohio who have served in the ongoing Gulf wars will be able to receive benefits under the expanded GI Bill, which covers the cost of in-state tuition at the most expensive public college, a small housing stipend, and $1,000 annually for books.

Veterans may also take advantage of the Ohio GI Promise initiated by Gov. Strickland, which extends in-state benefits, including tuition costs, to out-of-state veterans and their families as part of the state’s effort to eliminate brain drain.

Creators of the Ohio GI Promise program are hoping that the combination of their program with the new GI Bill benefits will attract 230,000 students to the state by 2017.

Programs Expand to Accommodate Anticipated Veteran Enrollment

When the new GI Bill goes into effect this August, Ohio State alone estimates an additional 300 to 400 students will enroll. To accommodate the projected hike in veteran enrollments under the new GI Bill, the school is analyzing what services it currently offers and how its programs can be expanded to meet the needs of these students.

Veterans will be able to participate in counseling, healthcare, and mentoring opportunities as well as attend monthly meetings with other veterans for encouragement and support through Ohio State. The school will offer veterans-only general education classes that facilitate the return of former military members back to civilian life.

Columbus State Community College has also instated a service that puts veterans in touch with counseling, housing, and financial services.

If a large number of veterans choose to remain in Ohio following graduation, Ohio leaders believe that a higher number of skilled workers will repopulate sections of the state that have been depopulated because of military campaigns in the Gulf.

“We see it as a magnet,” said Ohio Board of Regents Chancellor Eric Fingerhut, “to lure veterans to come and build a life in Ohio.”

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

Top-Performing Students Denied State Scholarship Funds

Student Loan Girl — Mon, 27 Apr 2009 23:02:00 GMT

Some 1,500 Georgia high school students will not receive the state scholarship funds they were promised for becoming valedictorians or for graduating in the top of their class, The Associated Press reports (“Georgia Scholarships to End for 1,500 Students,” April 26, 2009).

In a last-minute decision, state legislators cut the Governor’s Scholarship Program out of Georgia’s 2009 state budget, leaving the state’s Student Finance Commission to notify students they won’t be receiving the financial aid they were promised for the coming academic year.

The scholarship program was created in the mid-1980s to encourage the state’s top high school graduates to choose in-state schools for their college education. Over the past few years the state has significantly reduced funding for the scholarship, cutting the program’s funds from more than $4.5 million in the mid-1990s to $1.3 million in recent years.

Governor’s Scholarship recipients also receive Georgia’s HOPE scholarships, which give students up to $3,500 to cover tuition, fees, and books at the state’s public institutions. The Governor’s Scholarship is intended to help students pay for room and board and other miscellaneous college expenses.

Some state officials have argued that the funding cuts to the program may have made it difficult for the program to meet its intended goal of retaining the state’s top students.

“[$900 is] not enough to say, ‘Instead of going to Harvard or going to Vanderbilt or going to Duke, I am going to the University of Georgia,” said president of the Georgia Student Finance Commission, Tim Connell. “It’s probably became more of an ‘attaboy’ for valedictorians.”

State Representative Kathy Ashe, a former teacher and a member of the House Education Committee, said she wasn’t made aware of the program’s elimination until she received a copy of the Student Finance Commission’s letter to students but she believes that these incentive programs are needed.

“We need to make it a priority to reward these deserving students and keep them in the state,” Ashe said. “I think it’s one of those places where priorities become very clear.”

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

Students Reach Record-High Levels of Credit Card Debt

Student Loan Girl — Wed, 15 Apr 2009 23:00:00 GMT

College students are piling up alarming amounts of credit card debt, according to a recent survey by student loan company Sallie Mae, which suggests that not only are more students relying on credit cards to pay for their rising college costs, but that more students are charging more frequently (“Average College Credit Card Debt Rises With Fees, Tuition,” April 13, 2009, USA Today).

“The message is clear,” said Edmund Mierzwinski, consumer program director for the U.S. Public Interest Research Group. “Students are carrying more debt on credit cards, and more students are paying for education on credit cards.”

Sallie Mae’s survey of 1,200 private student loan applicants found that 84 percent of undergraduate students had at least one credit card, a 76-percent increase from 2004 when the survey was last conducted. The survey also revealed that students are carrying an average $3,173 in credit card debt — the highest level seen since the data was first collected in 1998.

Financial aid experts attribute these increases, in part, to the fact that college tuition and fees have increased 439 percent over the past 25 years and that the average median family income has not kept pace, rising only 147 percent by comparison, according to the National Center for Public Policy & Higher Education (“Study: Undergrads Relying on Credit at Record Levels,” Creditcards.com, April 13, 2009).

In fact, students in the survey cited not having enough “savings or financial aid to cover all the costs” of college as their number one reason for taking out a credit card, a problem that has been exasperated by the fact that private student loan lenders have scaled back lending and tightened their credit standards due to the waning credit markets.

Because lenders have severely limited students’ access to private student loans, students have more often been charging textbooks, room and board, and schools supplies to credit cards. In 2008, students charged an average of $2,200 in educational expenses on their cards, a 134-percent increase compared to four years ago.

Once considered the “lender of last resort,” says Kalman Chany, president of Campus Consultants, a college funding advisor, credit cards are now higher up in the hierarchy of students’ college funding sources. “If (students) can’t get private loans, they turn to credit cards.”

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

Despite Down Economy, College Student Aid Still Thriving

Student Loan Girl — Tue, 24 Mar 2009 00:18:00 GMT

In economic downturns, colleges and universities become flooded with students of all ages looking to better prepare themselves for an increasingly competitive job market. But these schools haven’t been immune to the effects of today’s recession.

Fortunately, for every recent economic downturn in higher education — tuition hikes, state budget cuts, scholarship and grant cutbacks, and a fluctuating student loan market — there’s also been a tangible upside (“Glimmer of Hope for Student Aid in a Bad Economy,” USA Today, March 19, 2009).

Tuition Assistance

Downside: Public colleges have increased tuition by 4 percent per year over the past 10 years, and many schools are set to bump up tuition even more this year as they face unprecedented state budget cuts.

Upside: Federal stimulus money should help some public colleges to better cope with the loss of state funding and to minimize any increases in tuition. The state of Maryland is hoping to go a fourth-straight year without in-state tuition increases. Other colleges are offering one-time deals to students; Kent State University in Ohio is offering laid-off workers a one-time tuition and application waiver at its Trumbull campus, and Manchester College in Georgia is offering to refund one year of tuition for students who aren’t able to secure a job or admission to grad school within six months after graduation.

Institutional Aid

Downside: Trouble in the stock market has caused colleges’ endowments to drop 25 percent in value this year, which has severely hampered schools’ ability to offer scholarships.

Upside: Despite their endowment losses, more than 90 percent of the nation’s private colleges and universities will be increasing financial aid next year by 9.8 percent to make up for 4-percent tuition increases, according to the National Association of Independent Colleges and Universities.

Government Grants

Downside: Aid for merit scholarships has taken one of the biggest hits this year, primarily due to state budget cuts.

Upside: The federal stimulus package has increased the maximum award for Pell Grants — federal financial aid for low-income students — from $4,731 to $5,350 for the coming academic year and to $5,500 for the 2010–2011 academic year. And, an additional 800,000 students are expected to receive Pell Grant funding this year.

Federal Student Loan Programs

Downside: The $50 billion Federal Family Education Loan Program — the government program that provides federal student loans to more than 10 million students through third-party lenders — has been the larger of the two federal student loan programs. But over the past two years, the FFEL program has lost business to the Direct Loan Program, the government’s other federal student loan program through which the U.S. Department of Education provides federal student loans directly to families, as hundreds of cash-strapped FFELP lenders have been forced to exit the program.

Upside: The FFEL program has still managed to increase its student loan volume this year, and some lenders are returning to the student loan market now that the federal government has bought nearly $25 billion in lenders’ student loan securities, providing them with the capital to make new loans. The Direct Loan Program has picked up the slack, providing an additional $7 billion in lending this year.

Private Student Loans

Downside: The overall supply of capital for private student loans is estimated to have decreased by one-third — a decrease of between $6 billion and $7 billion — due in large part to the fact that lenders have made it harder for families to qualify for private student loans.

Upside: Increased government funding for federal Stafford student loans has helped to reduce students’ reliance on private student loans. And more students are maxing out their federal financial aid before turning to private student loans, which the USA Today suggests has helped students avoid over-borrowing in private student loans.

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

Citing the Economy, Students Transfer from Private to Public Schools

Student Loan Girl — Mon, 09 Mar 2009 22:29:00 GMT

Public colleges and universities are experiencing a greater influx of transfer applications from private school students as the flagging economy heightens students’ concerns about their ability to pay for college, Bloomberg reports (“Rutgers Sees 50% Jump in Transfers as Economy Sours,” March 5, 2009).

“Students seem to be price shopping,” said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers. “People are hedging their bets financially. There is a real economic motivation.”

According to the College Board, students at four-year private colleges pay, on average, $34,130 for tuition, room, and board, while students attending a four-year public school generally pay only $14,340 — a price discrepancy prompting more students to switch schools as the recession lingers.

Schools See Sizable Jumps in Transfer Applications

Rutgers University is just one of a growing number of public schools, including state universities in Texas, Indiana, and Florida, that is seeing more transfer requests coming from students attending private institutions; this year it has received 632 transfer student applications, which is a 52-percent increase from the 416 applications it received last year.

At Florida Atlantic University, a public school where state residents pay just $3,662 in tuition for a 30 credit-hour semester and are eligible for state scholarships that cover 75 percent of their college costs as long as they maintain a B average, transfer applications have increased 37 percent for the summer term and 22 percent for the fall semester. For its summer session starting in June, the school has already received 265 transfer applications from students at private colleges, a figure that will easily surpass last year’s total of 277.

“I’d love to take credit for it all, but I know the economy has to have some part,” said Barbara Pletcher, Florida Atlantic’s director of admissions.

While admissions officers have noticed that transfer applications have increased more than in past years and that a greater number of them have come from students at private colleges, they are quick to point out that applications don’t always translate into enrollments. Students often don’t realize they can’t afford to pay for school until they receive their tuition bills, by which time it’s too late to transfer and too late to take out additional student loans to cover the expenses they didn’t account for.

“After they get their tuition bill, you’re going to see a group scrambling and we will be full,” said Jason Langdon, director of admissions at Montclair State University in New Jersey, which has received 22 percent more transfer applications this year. “The earlier in the process they can get everything lined up, the better off they’ll be.”

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

UC System Considers “Free” Tuition for Lower-Income Families

Student Loan Girl — Tue, 27 Jan 2009 23:02:00 GMT

The University of California is considering a program which would offer certain students free tuition, reports The Chronicle of Higher Education (“U. of California to Consider Covering Tuition for Families Below State’s Median Income,” Jan. 22, 2009).

As part of a series of measures intended to “broaden the reach of the university during the recession,” the university would cover the tuition and fees at any of its nine college campuses for an estimated 50,000 qualified students whose families have incomes below the state’s $60,000 median household income level.

The proposed tuition plan, known as the Blue and Gold Opportunity Plan, is intended to encourage more low and middle-income students to attend a UC school, at a time when tuition costs are rising and state funding for colleges has been significantly reduced.

Estimated to cost the school $3 million a year, the plan will likely be funded from tuition increases, as well as from existing state, federal and institutional aid, said university system president Mark Yudof. The University of California’s Board of Regents must first approve the proposal, a process that The Chronicle of Higher Education reports could take several months.

It’s possible that the regents could vote to raise undergraduate tuition by as much as 10 percent, the Chronicle suggests, at the same time that regents approve the “free tuition” plan.

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

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.”

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

Paying for College Gets More Challenging For Families

Student Loan Girl — Thu, 23 Oct 2008 00:42:00 GMT

Paying for college definitely isn’t getting any easier.

“It just seems like it’s really hard, because it is,” says Diana Jacobs, a mother of twin, college seniors, whose husband recently lost his job, forcing the family to go from borrowing modestly to maxing out their student loan amounts (“In Downturn Families Strain to Pay Tuition,” The New York Times, Oct. 16, 2008).

To meet her sons’ college expenses this year, Jacobs pressured the twins’ schools to increase their financial aid offers — each school offered $3,000 more in aid. And for the first time, Jacobs told her sons that she wouldn’t be able to assume their student loan debt, leaving the twins to take out their college loans in their own names.

“We all came to that consensus, but I hate it,” Jacobs said. “I hate for them to come out of school with $20,000 in student loans.”

The Jacobs family is not alone. The current economic conditions have made it even more difficult for families to afford the continually rising cost of college: unemployment is rampant, the cost of living is increasing, and home values are declining, making it more difficult for families to get home equity loans to help fund college expenses.

Slow Economy Causing Widespread Financial Challenges

Economic times have become so challenging that a recent survey of nearly 3,000 parents found that 62 percent of families plan to use student loans to help pay for college expenses this year, up from 53 percent just a year ago, according to Fidelity Investments’ College Savings Indicator.

The survey also revealed that parents may meet only 21 percent of the total cost of their children’s college education this year, down from 24 percent last year.

Families’ financial challenges have led to a 10-percent increase in financial aid applications this year. Aid administrators are concerned that this increased demand for federal financial aid — from 12.3 million applications last year to 13.5 million this year — may be too much for the government and schools to handle, now that more than 100 private, third-party lenders, citing reduced profit margins and increased difficulty finding investors, have left the federal student loan program.

Making the federal financial aid problem worse, states are facing widespread budget shortages and cutting back on the financial aid funding they give to colleges and universities, and schools’ own financial aid funds are dwindling due to disappointing returns on their endowments.

The economic downturn has also forced private student loan lenders who offer credit-based private student loans, which help families fill the gap between federal financial aid and the total cost of attendance, to rapidly adapt to changes in the credit markets. In recent months, these lenders, to avoid having borrowers default on their loans, have tightened their credit criteria, causing students who had previously borrowed on their own to need cosigners this year.

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

Government Warns: Pell Grant Program in Trouble

Student Loan Girl — Mon, 22 Sep 2008 21:47:00 GMT

Without additional taxpayer funds next year, the government’s “most important” federal financial aid program may be unable to provide Pell Grants to millions of eligible low-income students, likely pricing these students out of a higher education, according to an article in The New York Times (“Pell Grants Said to Face a Shortfall,” Sept. 17, 2008).

In a memorandum issued last week, the Department of Education warned that it predicts a $6 billion shortage for the federal Pell Grant program next year, stemming from continuous budget shortfalls and compounded by the record-high number of students qualifying for the federal Pell Grant program.

Rising tuition costs, shrinking state aid to colleges and universities, and a growing number of adults who are reenrolling in college are all putting a strain on federal financial aid resources, particularly on Pell Grants, which don’t have to be repaid. This school year alone, six million students out of the nine million who applied for federal financial aid received Pell Grants, some of the highest numbers the program has seen since its inception in 1972.

“It’s the mother of all shortfalls,” said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers. “There’s more unmet need than anyone predicted.”

Last year Congress appropriated nearly $14 billion for the Pell Grant program, but as the troubled economy continues to force adults out of the workforce and back into the classroom, the Department of Education said it will either need to allocate more taxpayer money to the Pell Grant program or decrease the grant award amounts students can receive next year.

Should the Education Department decide to reduce Pell Grant awards, it would make an announcement detailing its decision sometime in February 2009, according to the memorandum.

“If [the Pell Grant program] is threatened, you’ll hear about it,” said Edward M. Elmendorf, senior vice president of the American Association of State Colleges and Universities. “The decibel level will be deafening.”

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

Undocumented Students in Arizona Buckle Under Higher College Costs, Leave School

Student Loan Girl — Tue, 26 Aug 2008 00:13:00 GMT

Unable to afford the out-of-state tuition fees that Arizona state law requires non-legal U.S. citizens to pay, nearly 5,000 undocumented college students have dropped out of school over the last year, according to an article in the Arizona Daily Star (“Illegal College Students Dropping Out,” Aug. 24, 2008).

Under Proposition 300, which passed in 2006, students attending colleges and universities in Arizona must be able to prove that they are legal U.S. citizens or residents in order to qualify for in-state tuition, which, for six course units, costs about $200 less than out-of-state tuition.

The proposition was supported by Arizona voters who disagreed with the state giving taxpayer dollars to illegal immigrants. Supporters of the proposition contended that the estimated 200,000 to 250,000 illegal immigrants living in Phoenix two years ago were costing the state too much money.

Now, with only limited funding in private scholarships available to undocumented students, thousands of them — some 950 from Pima Community College alone —have dropped out of school this year and, in some cases, are moving back to Mexico after living in the United States for almost their entire lives.

Twenty-two-year-old Jesus Pineda, whose family moved to the United States when he was 11 years old, said moving back to Mexico may be his only option.

“I have no idea what to do in Mexico,” Pineda said. “I’m from there because I was born there, but I believe I’m from [the United States] too, because I grew up here. But here, I’m nobody.”

Students Wait To See If Proposed Law Could Help Them Return to College

Three other states — Colorado, Georgia, and Oklahoma — have laws similar to Arizona’s Proposition 300. These states’ laws could all be reversed if Congress passes the Dream Act, a proposed bill that would allow undocumented students to stay in college, qualify for in-state tuition, and be placed on a path toward citizenship.

However, co-sponsor of U.S. Rep. Raul Grijalva, D-Ariz., said the bill has been stalled in Congress and is unlikely to receive attention during this election year.

Ricardo Castro, vice president of Fundación México, an organization that aims to improve the relationship between Mexico and the United States, said until citizenship reform legislation passes, most of these students, unless deported, will end up staying in the United States without the ability to further their education.

“They will be second-class citizens, and that is contradictory,” Castro said. “They are people who grew up here; they are an important part of their communities.”

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