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by Agnes Jasinski

Although community colleges nationwide have seen significant boosts in enrollment, a report released yesterday suggests many will be forced to put their educations on hold or find new sources of funding if their institutions continue blocking access to federal student loans.

The Project on Student Debt released the report, and despite their stance on promoting that students take on as low a student loan burden as possible, they say community college students are at risk for taking on riskier private student loans or watching their grades slip as they take on more work hours to cover gaps in funding because they aren't able to apply for and receive federal student loans. About one in 10 students in 31 states surveyed don't have access to federal student loans, and in some states, more than 20 percent of students can't get the federal loans. Minority students have less access to federal loans than other student groups, as the report found many minority students attending community colleges that don't participate in the federal student loan program.

Why have many community colleges moved away from offering federal student loans? In an uncertain economy, the answer is risk, according to the report. Defaults on student loans have begun to rise among not only community college students, but among all college students over the last few years. The report always says many community college administrators believe students shouldn't have to borrow to attend their schools. Tuition is lower, they say, and if students are saddled with large amounts of debt now, they could hurt their chances for qualifying for low interest rates and federal student loans if they were to transfer to a more expensive, four-year institution.

But some students do need the additional funding even at a low-cost option like a community college, especially in the current economic climate. According to survey results released by the National Council of State Directors of Community Colleges last month, about half of the nation's community colleges are expecting budget cuts and midyear reductions in their state appropriations. Many administrators in that survey also reported that stimulus money provided by the Obama administration went toward meeting existing budget deficits, and that they would be forced to raise tuition rates substantially despite record enrollments to make up for a lack of state funding. (The average tuition increase among community colleges is expected to be about 5 percent for the 2009-2010 academic year.)

While you should always exhaust your options with grants and scholarships first, student loans are often a necessary evil, and we have plenty of tips on how to go about applying for them and making sure you're getting the best rate possible. Never rely on credit cards to fund your education, or you'll run the risk of getting into more debt than you can handle not only post-graduation, but while you're still in school. Browse through our site for more information on your student loan options.

by Agnes Jasinski

The U.S. Supreme Court began hearing arguments today on the intricacies of one student's 20-year-old debt that could change the way bankruptcy law handles student loan cases.

The case, United Student Aid Funds Inc. v Espinosa, goes back to 1992, when Francisco Espinosa, a technical school graduate, filed for Chapter 13 bankruptcy. Espinosa by then owed nearly $18,000 in not only student loans taken out four years earlier, but interest on those loans to lender United Student Aid Funds Inc. He filed for bankruptcy to relieve him not of his loan debt, but the nearly $5,000 in interest accrued on the $13,000 he initially borrowed. Thinking he had reached an agreement with his lender, Espinosa eventually paid off the principal on the loan over a five-year period.

Several years later, however, he received notice from his lender that he still owed the remaining interest. The lender claimed Espinosa had not sufficiently shown "undue hardship," a requirement under bankruptcy law for students to qualify their student loans under Chapter 13. Espinosa says he fell on hard times when the hours for his baggage handler job through airline America West were cut, and he was unable to find a job that fit his degree in computer drafting and design through the technical college.

That's when the legal battle began. Espinosa won on the bankruptcy court level, but the district courts ruled in favor of the lender and demanded a hearing to show whether Espinosa met the criteria for a bankruptcy filing. The Ninth Circuit Court of Appeals ruled that it was too late for the lender to challenge the filing, which then landed the case in the U.S. Supreme Court.

An article in the Chronicle of Higher Education previewing the case this week looked at the implications of the court's eventual ruling. If the Supreme Court overturns the last appeals court's decision, lenders could feel free to collect back interest on student loans that have already been approved for Chapter 13. If the Supreme Court rules in favor of Espinosa, lenders could be open to abuse by borrowers taking advantage of the law to get out of their student loan repayments. The article suggests that the Court should consider redefining the "undue hardship" criteria to make it easier for judges to apply that criteria across the board, as many say it is already too subjective.

The case is an important one for students, especially in a difficult economic time when college students are not only borrowing more, but having a tougher time finding jobs to make payments on their student loan debt. Student loan default rates are also on the rise for both federal and private loans as tuitions only continue to rise. If you're worried about the amount of debt you'll accrue going to that dream school, consider all of your options. Factor college cost into your college search, and make sure you have a good idea of financial aid and scholarship money available to you before taking out student loans.

by Agnes Jasinski

Open access may become a thing of the past at community colleges if they cannot find a way to accommodate a marked increase in applicants using their limited budgets.

A recent article in The New York Times described the tough spot community colleges were in. On the one hand, President Obama has expressed his desire to see an increase in five million community college graduates by 2020 via his American Graduation Initiative. On the other, an increase in visibility for the two-year schools has led to the colleges being stretched to their limits enrollment- and budget-wise.

The article opens with a student who was shut out of winter-term classes because he was assigned a late registration slot. By the time he was able to sign up for his next round of college classes, the ones he needed were full. Being unable to register for classes has led some students to delay completion of their programs. The article gives another example of a student at Mt. San Antonio College who has taken a dance class three times so far because she has been unable to register for any required courses that would get her on the path to transferring to a four-year university.

The problem is greater elsewhere; some schools have had to turn students away as classrooms are already packed with as many first-year students as they can hold. In California, a state that has had to introduce wait lists in its public university system, about 21,000 fewer students were admitted to community colleges there for the upcoming school year. According to the Times article, some districts had to reject half of those applicants interested in enrolling at the community colleges. The City University of New York and its six community colleges have also had to limit their enrollment numbers for the fall. The schools have introduced wait lists, but hundreds of students will probably not be allowed admittance into the state system.

Unfortunately, the situation won’t improve until community colleges return to the levels of funding they need to accommodate the influx of students. In states like California, both community colleges and four-year institutions have been struggling with cutting classes and consolidating programs to save some money in their budgets. Schools across the country hope to see more generous budgets come the next enrollment cycle.

by Agnes Jasinski

As tuition and fees continue to rise and students need more financial aid to complete their college educations, ideas on how to both keep costs for students low and bring schools' budgets under control continue to crop up among lawmakers.

Sen. Lamar Alexander, a former president at the University of Tennessee turned Republican lawmaker, has an editorial on the topic in Newsweek this week, where he compares the three-year degree track to a fuel-efficient car. It would save students money, ease the dependence on federal and campus-based financial aid, and allow students  to move into the working world or to pursue an advanced degree in less time. And it would be up to the students to decide whether to complete their degrees in three years.

Many schools allow students to complete their degrees in three years, but few have official programs set up where students enter college knowing they'll be done in three years. Hartwick College has allowed students to complete their studies in three years for a while, but announced earlier this year a more official academic program for high-performing students that could be completed in three years. Students in that program will save about $43,000 in tuition and fees by forgoing a fourth year. This fall, 16 first-year students and four second-year students entered into the three-year program at Hartwick. Lipscomb University also unveiled a three-year option this year to students willing to attend classes in the summer. The state of Rhode Island has legislation on the table this month that would require all schools in the state to offer a three-year option.

On the other side, Waldorf College will stop offering the three-year programs it had set up as most students and staff preferred a traditional four-year track. Many students want the full four (or however many) years on campus. I still often wish I was back there. Students who have compressed a four-year program into three years have less time for what often makes the college experience memorable - time for friends, social outings and extracurricular activities that make you more well-rounded and able to juggle many aspects of your life at once. Alexander acknowledges possible obstacles in his piece, but maintains that something needs to be done to stay competitive and address an economic fallout that could affect schools for years to come.

Why not leave the choice to the students? What do you think of the opportunity to complete a college degree in three years? It could make sense for students looking at completing advanced degrees in addition to their master's. And the cost-saving aspect of the idea would turn many students on to the idea, especially returning adult students. Let us know whether you're planning on completing a degree in three years, and whether you think all schools should offer a three-year program as an option.

by Suada Kolovic

Dropping out of college would surely ruffle a few feathers at home, but it seems mom and dad may not be the only ones affected. While dropping out after a year can translate into lost time and a mountain of debt for the student, now there’s an estimate of what it costs taxpayers: billions.

According to a report released Monday, states appropriated almost $6.2 billion for four-year colleges and universities between 2003 and 2008 to help pay for the education of students who did not return for year two. The report takes into account spending on average per-student state appropriations, state grants and federal grants – such as Pell grants for low-income students – then reaches its cost conclusions based on students retention rates. It’s worth mentioning though that the report’s conclusions are considered incomplete: Because it’s based on data from the U.S. Education Department, it does not take account of students who attend part time, who leave college in order to transfer to another institution, or who drop out but return later to receive their degrees.

And with figures in the billions, critics agree that too many students are attending four-year schools – and that pushing them to finish wastes even more taxpayer money. Robert Lerman, an American University economics professor, questions promoting college for all. He said the reports fleshes out the reality of high dropout rates. But it could just as easily be used to argue that less-prepared, less-motivated students are better off not going to college."Getting them to go a second year might waste even more money," Lerman said. "Who knows?"

by Suada Kolovic

With the typical six-month grace period on student loans right around the corner, recent college graduates across the country will start making monthly payments whether they’re ready to or not . If you’re one of those students, or just starting your college career, here are a few suggestions from the Project on Student Debt, an initiative of the Institute for College Access & Success, a nonprofit independent research and policy organization, on how to manage your loans.

• Know where you stand.

  A great way to get the exact amount you owe is to visit your lender – in some cases, lenders – or you can find details of your student loans, including balances, by visiting the National Student Loan Data System, the U.S. Department of Education’s central database for student aid. If you have non-federal loans, there is a possibility they won’t be listed so contact your institution for that information.

• When’s the first payment?

  The grace period for student loans is the time after graduation before having to make your first payment. But the length of grace periods can vary; for Federal Stafford loans it’s six months, nine months for Federal Perkins Loans and Federal Plus Loans depend of when they were issued. To find out the grace period attached to private loans contact your lender.

• Keep in touch with your lender.

  It’s important to remember to keep your contact information updated with your lender. Whether you’re moving or changing your phone number, an updated contact sheet could save you from unnecessary fees.

• Consider what repayment option works best for you.

  One option is the Income-Based Repayment Program (IBR), which is not available on private loans, that sets a reasonable monthly payment based on a borrower’s income and family size. Under IBR, after 25 years of qualifying payments, your remaining debt, including interest, will be forgiven.

• Prepare for life and the unexpected.

  Sometimes life doesn’t go according to plan. If you can’t make payments due to unemployment, health issues or other unexpected financial challenges, you have options for managing your federal student loans. There are options to temporarily postpone your payments, such as deferments and forbearance. Contact your lender for more information and the interest attached to those options.

• Never ignore your financial responsibilities.

  Ignoring your student loans – or any loan for that matter – can result in serious consequences that can last a lifetime. When you default, your total loan balance becomes due, your credit score is ruined and the total amount you owe increases dramatically. If you default on a federal loan, the government can garnish your wages and seize your tax refunds.

by Agnes Jasinski

The University of California is planning to place some incoming freshmen on wait lists for the 2010 academic year to address uncertainties in the state's higher education budget. This would be the first time in history that the university system is considering a wait list, and more than 1,000 students may be affected by the change.

According to an article in The Daily Californian, the wait list would allow the school to be flexible in the number of students it enrolls for the upcoming school year. Enrollment numbers may change depending on state funding available; the decision to increase enrollments is dependent on the more than $51 million in Gov. Arnold Schwarzenegger's proposed budget. That $51 million would fund 5,121 out of around 14,000 currently unfunded enrollments. Last month, Schwarzenegger proposed restoring $370 million to the university in his budget, and also proposed a a constitutional amendment that would earmark at least 10 percent of the state's general fund to higher education.

Wait lists are typically more common at private institutions where enrollment numbers are much lower and the unpredictability of students' decisions about whether to enroll in those private schools is much higher. An interview with Nina Robinson, the university’s director of student policy and external affairs, in the New York Times last week, looked at the unstable environment at schools across the state of California, and what a wait list could mean for students looking to attend colleges there.

Robinson said the wait lists would help the school hit their enrollment numbers without over-enrolling students, which has contributed to budget shortfalls. "It’s one thing to over-enroll 100 students if you’re going to get the funding for them anyway, but now if you’re adding 100 students and you‘re already over enrolled 1,000 students, that’s a serious problem," she said in the interview. Robinson also suggested a wait list may lead applicants to think space at the University of California is more scarce, allowing them to plan accordingly and apply to more "Plan B" schools.

Whether this would be a temporary change or a more permanent one is difficult to tell. California's financial woes go far deeper than over-enrollment at the University of California, and the lack of state support up to this point has made it difficult for the university system to avoid fee increases - the state's Board of Regents approved a fee increase that would raise costs by at least $2,500, or 32 percent - and turning away transfer students. Whether those students placed on a wait list face a good chance to eventually gain admission to the school is also difficult to tell, and largely dependent on the state's budget, something administrators won't know until well into the fall semester. Typically, a student’s odds of getting admitted off a wait list is about 1 in 3. If you're concerned about your chances, or if you intend to attend the University of California, it may not be a bad idea to expand that college search.

by Agnes Jasinski

Remember that Monroe College student who sued her alma mater when she failed to find a job? Lansing Community College plans to introduce a new program next month that would provide training in high-demand fields and a guarantee of employment upon completion, or your money back. (The Monroe College student, Trina Thompson, sued for the full cost of her tuition, or about $70,000.)

The Michigan community college announced the plan at a State of the College speech yesterday morning. An article in the Lansing State Journal included an interview with the school's president, Brent Knight. "Why spend money, take time to learn when you may not get a job?" Knight said in the interview. The program will be called "Get a Skill, Get a Job or Your Money Back."

The program will be offered only to those pursuing short-term, non-credit training programs for high-demand occupations, according to the Lansing State Journal. Those include programs targeting pharmacy technicians, customer service call center workers, certified quality inspectors, and home technology integration technicians. (You didn't think this was a blanket guarantee, did you?) Students interested in the program will be asked to sign contracts where they agree to attend all of their classes, complete all assigned work, and participate in a job preparedness workshop. The students will also need to make "good-faith efforts" to find a job once they complete their programs. The college plans to begin offering the program this May.

As the economy has only just begun to rebound and students' job outlooks continue to suffer, colleges have been getting creative to address not only declining enrollment numbers, but an increase in applicants. Most community colleges have actually seen a growing number of returning adults coming onto their campuses, and are in need of more funding to accommodate all of those students. Nationwide, full-time enrollment at community colleges is up 24.1 percent since 2007, with overall community college enrollment increasing 16.9 percent over the same period.

These growing enrollments have also caused some problems on the four-year college level. Last fall, Ithaca College offered 31 students $10,000 each to defer their enrollment for one year after they ended up with an incoming class that was 20 percent larger than expected. The University of California plans to use a waiting list for incoming freshmen if it does not receive the necessary funding that would fund 5,121 out of around 14,000 currently unfunded enrollments. This would be the first time in history that the university system is considering a wait list, and more than 1,000 students may be affected by the change.

by Suada Kolovic

It seems like students are willing to do just about anything to save on tuition, from saying “I do” to asking for handouts to applying early and often for college scholarships. But what if you’re not willing to take the plunge, have a sense of humility and scholarships just aren’t covering the astronomical costs tied to college tuition? Then attending a public school might be your best bet and to slash the bill even further, selecting an in-state public school is the way to go!

According to a survey conducted by U.S. News, the average tuition and fees for in-state residents among the 452 public colleges that reported data was $7,042 for the 2010-11 school year. Check out the 10 least expensive public schools for in-state students, accounting for tuition and required fees (but not room and board, books, transportation or other miscellaneous college costs) below.

1. New Mexico Highlands University
2. Macon State College
3. Fayetteville State University
4. California State University—Northridge
5. Elizabeth City State University
6. University of Wyoming
7. University of North Carolina—Pembroke
8. North Carolina A&T State University
9. Eastern New Mexico University
10. Fort Hays State University

by Suada Kolovic

Due to the drastic economic downturn, students are flocking to majors considered “safe” – economics, engineering and computer science – and steering clear of ones that develop creative thinking and imagination – the humanities. It makes sense, since the objective after graduation is to obtain a well-paying career to pay for that prestigious college education and the best way to do so, in the eyes of the majority of college students, is to select a major where the potential for a generous return on your investment is high. According to the American Academy of Arts and Sciences, student interest in the humanities – which include the classics, literature, languages, history, philosophy, and religion – has dropped dramatically in recent years. Only 8 percent of American undergraduates majored in a humanities field in 2007, compared with 17 percent in 1966.

At esteemed universities, including Cornell, Dartmouth, and Harvard, there is concern that without humanities students won’t develop the kind of critical thinking and empathy “necessary to solve the most pressing problems facing future generations.” Drew Faust, Harvard’s president, explained, “That’s a real shift from seeing an undergraduate education as general preparation in a wide range of fields to seeing undergraduate education as getting a particular vocational emphasis. People worry a lot about what you do with that degree. I think the change has been accelerated and intensified by people’s immediate concern of getting a job — especially with the increasing cost of higher education and the challenges in the economy.’’ (In case you were wondering, the most popular field of study at Harvard is economics.)

In response, colleges have begun pledging huge sums to their literature and arts departments, while others have begun erecting buildings. Among the universities attempting to restore interest in the humanities is Brandeis, which recently dedicated a new $22.5 million glass-and-slate hilltop home, called the Mandel Center for the Humanities. Harvard and Brown have also received millions to support new humanities initiatives.