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Pew Reports Students Borrowing More than Ever

November 24, 2010

Pew Reports Students Borrowing More than Ever

by Suada Kolovic

On the heels of our latest post – a story about a Northeastern grad who accumulated $200,000 in student loans – the Pew Research Center released a report that members of the class of 2008 borrowed 50 percent more than their counterparts who graduated 12 years earlier. According to the report, increased borrowing by college students has been driven by three trends: more college students are borrowing, college students are borrowing more, and more college students are attending private for-profit schools. The report reveals that the number of undergraduates borrowing rose from 52 percent in 1996 to 60 percent in 2008 and among those who borrowed, the average undergraduate loan increased from $17,000 in 1996 to $23,000 in 2008. The rise in attendance at private, for-profit colleges also resulted in the increase of student borrowing; the report states, “Students who attend for-profit colleges are more likely than other students to borrow, and they typically borrow larger amounts.”

This isn’t the shock of the century by any means. In August, the Wall Street Journal reported that for the first time in history, student-loan debt surpassed credit card debt. The figures are staggering: According to the Federal Reserve, Americans owe $826.5 billion in revolving credit, while students owe an estimated $829.785 billion in loans. In fact, so many college graduates are plagued by massive amounts of debt that the Huffington Post has provided an outlet for college graduates to share their stories - almost as a cautionary tale – through an ongoing project, Majoring in Debt.

What do you think? With recent college graduates facing debt in the hundreds of thousands, what are you doing to ensure you don’t end up in the same situation?

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Guess Who’s Coming to Thanksgiving Dinner?

Our Tips on What to Bring While Sticking to a College Budget

November 25, 2010

Guess Who’s Coming to Thanksgiving Dinner?

by Suada Kolovic

Thanksgiving break, for many college students, is the first real trip home since the start of the fall semester. And after months of Ramen and cold pizza, a Thanksgiving feast may just be what the doctor ordered. But rather than just be on the receiving end of the delicious grub, we have a few simple suggestions on what you can bring to the table without breaking the bank:

  • Cranberry sauce. It doesn’t get any easier than this: Grab a can, mush it up and put in a decorative bowl or, if that’s more “cooking” than you initially planned on, visit your local deli for a more homemade version.
  • Bread. A fresh loaf of bread or dinner rolls are a great addition to any Thanksgiving table. To kick it up a notch, consider bringing along a special kind of butter such as almond, apple or pumpkin.
  • Veggies. You can’t go wrong with a veggie platter. While guests are anxiously waiting for dinner, they can munch on these healthy snacks. Most grocery stores offer premade veggie trays in the produce section, fancy platter and all.
  • Dessert. End a meal the right way, with a delectable dessert. Depending on how adventurous you’re feeling, try out a simple recipe or check out your local bakery. Make sure you purchase your dessert early to beat the rush and to keep it festive, order pumpkin pie or soft gingersnaps.
  • Coffee. Sure, the hostess probably has a cabinet stocked with coffee, but bringing along a blend specific to Thanksgiving flavors is a great way to add to the meal as a whole. Steer clear of Dunkin’ Donuts and Starbucks and visit a local café to find that perfect Thanksgiving blend.
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Rose Bowl Tickets Scalpers Beware

Wisconsin’s Badger-Herald is Taking (and Publishing) Names

December 7, 2010

Rose Bowl Tickets Scalpers Beware

by Suada Kolovic

On Sunday night, diehard Badger fans – as well as those looking to make a quick buck – lined up to purchase coveted Rose Bowl tickets. Unfortunately, within minutes the 5,800 tickets allotted to the university were completely sold out but to the surprise of many, dozens of tickets were listed shortly after the sale concluded on web sites such as Facebook Marketplace and Craigslist. Great…only the price had suddenly skyrocketed to as much as $400 apiece – a stark increase from the face value of $150. The Badger-Herald, the Wisconsin independent student newspaper, decided to take action and published the names of the Wisconsin students selling their tickets under the headline, “The Worst People on Campus.”

The opinion piece calls out those students looking to profit from their Rose Bowl tickets and below the list of names they wrote: “Truly, there is a special place in Hell for people who buy Rose Bowl tickets with the sole intention of profiting from them. It is entirely unfair to those who actually love this football team and were counting on a cheap face value ticket in order to make the trip to Pasadena an economic reality. We'll keep printing names of those we catch on Facebook marketplace. And feel free to send an e-mail to editor@badgerherald.com if you know of anybody whose name should be added to the list — particularly the 100 people who have already made a listing on Craigslist.”

Since being published, an Editor’s Note was added to the article asking those commenting on the story to be more respectful. It seems like this is a growing trend among college students – shaming one another publicly – but do you think public humiliation the only way to teach these students a lesson? My worry is that shaming is only the tip of the iceberg here: What if students seek out those selling tickets and things turn violent?

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What Ever Happened to Thou Shalt Not Steal?!

Iona College Nun Axed for Allegedly Stealing $1.2 Million

December 10, 2010

What Ever Happened to Thou Shalt Not Steal?!

by Suada Kolovic

Over the course of a decade, an Iona College nun known as Sister Susie allegedly embezzled more than $1.2 million from the Catholic college in Westchester County. Sister Marie E. Thornton, a former vice president of finance for Iona College and nun, allegedly diverted college funds for her own use by turning in phony vendor invoices for reimbursement and having the college pay credit-card bills for “personal expenses.”

Officials wouldn’t say where the funds went but, according to Talk of the Sound, a former men’s basketball coach at the school hinted that Thornton may have gambled away at least some of it. In October, the college’s president, Brother James Liguori, publicly acknowledged the loss of only $800,000 but insisted that it had “recovered a major amount.” And in a statement issued Thursday evening, Iona said they had taken swift action after discovering the missing funds a year and a half ago, had conducted a follow-up investigation and put preventative procedures in place to avoid similar fraud.

Thornton was released without bail after waiving indictment and pleading not guilty to a single felony count of theft involving a federally funded program, but if convicted Thornton could face up to 10 years in prison for her unholy scam. I guess the vows of poverty, chastity and obedience don’t apply when you’re on a hot streak at the craps table.

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College Dropouts Cost Taxpayers Billions

October 12, 2010

College Dropouts Cost Taxpayers Billions

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?"

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Obama Extends an "Opportunity" to College Students

The American Opportunity Tax Credit, That Is

October 13, 2010

Obama Extends an "Opportunity" to College Students

by Suada Kolovic

The financial aid process can be a daunting one but if you’re planning on attending college any time soon, you should know that there are tons of federal student aid options out there – from Pell Grants to Perkins Loans to FAFSA – but your eligibility to receive aid depends on your level of need and, subsequently, how much aid you are eligible to receive. So, to the folks right in the middle: How does a tax credit sound? The American Opportunity Tax Credit, created in the 2009 economic stimulus bill, expires in 2010, but President Obama has proposed making it permanent, with a price tag of $58 billion over 10 years.

Now what does this mean to you? Because the Opportunity Tax Credit is more generous than its predecessor, the Hope Tax Credit, it provides a credit of up to $2,500 rather than $1,800 and it phases out at a higher income level – $160,000 for married couples filing jointly instead of $100,000. According to a report by the Department of Treasury, it’s also partially refundable so students and families with little or no tax liability can receive up to $1,000 of it as a tax refund. The report comes as lawmakers are debating a bill to extend several expiring tax credits. Recent versions would not extend the American Opportunity Tax Credit, but President Obama hopes lawmakers will reconsider.

"The president obviously feels strongly that this is an important relief for middle-class families," said Gene Sperling, counselor to the Treasury Secretary.

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The End of Traditional Textbooks is Near

Colleges to Force Switch to E-Textbooks

October 25, 2010

The End of Traditional Textbooks is Near

by Suada Kolovic

The start of every new semester calls for a new set of textbooks- very expensive textbooks. Students can’t really think about the cost of college today without factoring in the skyrocketing cost of textbooks. For years students have improvised on ways to dodge buying a new copy- purchasing a used one, borrowing a copy from the library, sharing with a friend, renting one, downloading an illegal version, or simply going without. We recently posted about how e-textbooks and textbook rental services are saving students money but it may not be too long before they’ll be a students’ only option. The plan is to have colleges require students to pay a course-materials fee, which would be used to buy e-books for all of them (whatever text the professor recommend, just as in the old model).

And why not? Electronic copies are far cheaper to produce than printed text, making a bulk purchase more feasible and with colleges ordering books by the hundreds of thousands, they can negotiate a much better rate than students were able to get on their own, even for used books. The hope is to thwart the possibility of students dropping out because they could not afford textbooks, whose average price rose 186 percent between 1986 and 2005, and continue to shoot up each year faster than inflation.

"When students pay more for new textbooks than tuition in a year, then something's wrong," says Rand S. Spiwak, executive vice president at Daytona State, who is leading the experiment there. "Our game plan is to bring the cost of textbooks down by 75 to 80 percent."

But not everyone is buying into the hype of the e-textbook. Issues of ethics have aroused, for instance, what if a professor wrote the textbook assigned for his or her class? Is it ethical to force students to buy it, even at a reduced rate? And what if students feel they are better off on their own, where they have the option of sharing or borrowing a book at no cost?

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Coca-Cola’s $20,000 Scholarship

Deadline Quickly Approaching

October 25, 2010

Coca-Cola’s $20,000 Scholarship

by Suada Kolovic

Are you in search of a scholarship with a huge dollar amount? Coca-Cola’s Scholars Scholarship may be just what you’re looking for. It's an achievement-based scholarship awarded to 250 high school seniors each year. Fifty of these are four-year, $20,000 scholarships ($5,000 per year for four years), while 200 are designated as four-year, $10,000 scholarships ($2,500 per year for four years). And with odds like that, it wouldn’t hurt for you to give it your best shot!

In order to be eligible for a Coca-Cola Scholarship, a student must be a current high school or home-school senior planning to pursue a degree at an accredited U.S. post-secondary institution and have a minimum 3.00 GPA at the end of your junior year of high school. But you better work fast because high school seniors must apply online through October 31. Good luck!

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Community College Tuition Rise Looming

Community Colleges Charging More For In-Demand Programs

October 26, 2010

Community College Tuition Rise Looming

by Suada Kolovic

As state funding for higher education across the country continues to shrink, more community colleges are considering charging higher tuition rates for costly career and technology programs. This notion of charging differential tuition is definitely a new concept for community colleges and Pima Community College, in Tucson, Ariz., is exploring the idea after having its state appropriation cut by 30 percent in two years. Some of the college’s most popular programs, like nursing and avionics, would be among those charging a premium.

“It looks like we’ll have budget cuts for the foreseeable future,” said Roy Flores, the college’s chancellor. “I’m mindful of price elasticity and that some students might be shut out if the price goes too high.… But it’s a balancing act, and we’re a long way from shutting people out.” In 2009, the college’s enrollment grew by nearly 14 percent, with a high demand for occupational programs, such as those in the health sciences and engineering. And the reality is, these programs are more expensive due to low student-teacher ratios they must maintain and the expensive training equipment required.

It is interesting to note that in states like Arizona, where there is no state community college board or coordinator board for all of public higher education, individual institutions and community college districts can set their own tuition polices. So, while currently in-state tuition at Pima is $53 per credit hour, it may not be too long before there is an increase for in-demand workforce programs. Flores insisted, “We would just want to close up that gap a little bit. We have yet to do an analysis on this, but my… estimate would be that there would be somewhere between a 10 and 30 percent premium charged for these courses. And it would be phased in, of course, and not brought on all at once.”

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Credit-Card Companies Paid Colleges Almost $84-Million

Payment Based on Cards Issued to Students and Alumni

October 27, 2010

Credit-Card Companies Paid Colleges Almost $84-Million

by Suada Kolovic

As a college student, I must admit I was duped into opening a credit card my freshman year. I was lured in by the fact that all my friends were rockin’ their free TCF sweaters and, of course, the concept they pushed of “buy now, pay later.” But credit-card companies marketing themselves heavily on college campuses isn’t new: It’s the perfect place to find new customers who are low on cash and looking for a sweet deal. But have you ever wondered why some colleges allow TCF on campus as opposed to Bank of America- they pay to be there. That may not be the shock of the century but with payments hovering at almost $84 million, you have to question the ethics of it. According to a report released by the Federal Reserve Board, credit-card companies paid $83.5 million to colleges, their foundations and alumni organizations last year under agreements that allow them to market credit cards to students and alumni. Under the agreements, schools and affiliated groups were generally paid for each account opened.

Why were credit-card companies willing to disclose such details? Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, credit-card issuers are required to submit their agreements with colleges and related organizations to the Board of Governors of the Federal Reserve; they must also disclose the total number of opened accounts. Of the agreements reported, about 40 percent were with colleges and 33 percent were with alumni associations. The agreements resulted in the opening of 53,000 accounts in 2009.

The college with the most accounts was Penn State Alumni Association at 1,600 and they were paid $2.8 million by the card issuer FIA Card Services, a subsidiary of Bank of America. The University of Illinois Alumni Association received the most money at about $3.3 million. If you’re interested about your school’s agreement with credit card issuers, check out the Federal Reserve database.

The agreements, certainly ones that involve marketing credit cards to students, can be considered predatory in nature. An examination of this year’s contracts found that they required colleges to provide personal information about their students and, in some cases, even paid the institutions extra when students carried a balance on their cards. And with what sounds like colleges profiting from student debt, it would seem that “free sweater” doesn’t seem like such a sweet deal after all.

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