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Spending on Sports Up at High-Profile Colleges

April 2, 2010

by Scholarships.com Staff

The country's top college sports programs haven't been faring as well as you'd think when it comes to bringing revenue in to their respective schools. With the close of March Madness upon us, USA Today decided to release a data analysis looking at the finances behind some of the most high-profile college athletic programs. And it seems that the schools are keeping their sports programs afloat by tapping into student fees and other general funds.

According to USA Today, more than half of the athletic departments at public schools in the Football Bowl Subdivision (formerly known as Division I-A) were subsidized by at least 26 percent last year. Those figures are up from 20 percent in 2005, or an additional $198 million if you account for inflation. That means athletic programs are getting subsidized by student fees and whatever general funds schools have set up to cover budget shortfalls. The analysis also shows that spending on athletics has increased, despite more of a reliance on outside funding to cover the costs of sports funding in the past year compared to the previous four years.

Why the increase in athletic expenses? Inflation could be one culprit. Drops in ticket sales, declining endowments and state appropriations overall, and general overspending all contribute to rising costs. Many of the big programs also embarked on expensive capital campaigns over the last few years, and those costs are catching up to them. According to USA Today, the number of schools that have sports programs that pay for themselves - via ticket sales and general marketing revenue, for example - fell from 25 to 14 schools over the last year.

Another story published in USA Today as part of their look at sports programs' finances looks at rising coaches' salaries as another factor. Although sports program budgets have shrunk over the last year, coaches' salaries have not shrunk alongside those figures. The country's top coaches, who had been making upwards of $2 million annually just two years ago, now make around $4 million. (Mike Krzyzewski at Duke University and Rick Pitino at the University of Louisville both made more than $4 million this season.) Coaches' compensation has grown so much that it has become the number one expense for college sports programs, replacing athletic scholarships. Last year, Division I schools spent more than $1 billion on coaches' salaries.

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Should More Changes Follow Switch to Direct Loans Program?

May 14, 2010

by Scholarships.com Staff

July 1 marks the official date that colleges, if they haven’t already, must transition to the recently approved Federal Direct Loans Program. Schools will no longer offer students the option of having private banks or credit unions handle their federal loans; federal loans will now be coming directly from the U.S. Department of Education. Advocates of the student loan bill have said this will make the process more seamless and fair, with the government taking responsibility for keeping interest rates manageable. And private loans will still be available via the traditional channels, although those loans are typically offered at higher interest rates.

The student loan debate has been a constant in the world of higher education, as legislators and administrators look for ways to reduce the debt of graduates. This week, The Christian Science Monitor considered student loans in a different way. Is it ethical to send students out into the world with all this debt, especially when they may not be making enough in their chosen careers to pay back those loans in a timely fashion? Are student loans moral?

The Christian Science Monitor piece looks at the history of the student loan industry, questioning whether it was ever right for Congress to increase borrowing amounts to current levels, or to offer students described as “in need” much easier access to federal loans through the re-authorization of the Higher Education Act in the 1990s. According to the Project on Student Debt, student loan totals only continue to rise. The average national debt for graduating seniors with loans rose from about $18,650 in 2004 to $23,200 in 2008. Meanwhile, employment prospects have not increased at comparable levels; by 2009, the unemployment rate among new graduates hovered near 11 percent, the highest on record.

It isn’t just a case of telling college students not to borrow so much. Student loans are often a necessary evil, and while debt can be minimized some through scholarships and grants, most students will end up taking on some amount of debt. The Monitor questions whether there should be more strict limits on borrowers that exist in other scenarios where credit checks and expectations that borrowers will be able to pay back what they borrow are enforced. There is no guarantee of a job after college, after all, so why shouldn’t the fact that a student is unable to pay off more than the minimum on their credit cards be taken into account more when they take out loans? (On that note, the U.S. Senate has approved an amendment that would lower “swipe fees” that banks charge college bookstores when students use their credit cards for purchases.)

Student loans are a hot topic, and will continue to be. What do you think? What else can be done to reduce graduates' debt, especially among those graduates who are not entering high-paying fields?

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eBay Removes Purdue Diploma Listing

June 1, 2010

by Scholarships.com Staff

Internet auction site eBay has removed a recent listing from a Purdue alum, citing a terms of use violation in his attempt to sell his bachelor’s degree in psychology.

Nick Enlow, a 2008 graduate from Indiana University-Purdue University at Indianapolis, set the starting bid for his diploma at $36,000, plus $3.50 for shipping. His justification for the listing was that the student loan debt he accrued to complete his bachelor’s wasn’t worth the degree. While he wasn’t confident that he’d get any bids—he thought perhaps a wealthy eccentric might take pity on him and his student loan burden—he was fairly confident that the move would strike up a dialogue on the value of a liberal arts degree. The listing was removed by eBay last week “due to the sensitivity and nature of the item,” according to a recent article in the Journal and Courier.

In that article, Enlow said he felt universities should be held more accountable, as they are “handing out too many degrees that have zero real-world application.” A main complaint was that he felt unprepared to face the $470 monthly payments to his loan provider Sallie Mae; the only job he’s been able to find is one substitute teaching, work that barely allows him to make ends meet. Enlow admits that he was somewhat naïve as a college student at Purdue, assuming that his degree would land him automatic employment in an area he loved. His college’s response has been sympathetic, but realistic. Irwin Weiser, interim dean of Purdue’s College of Liberal Arts said in the Journal and Courier that a liberal arts degree “is not an automatic ticket to a job, but then again, no degree is.”

This isn’t the first time a recent graduate has been unhappy about job prospects post-graduation. Last August, Monroe College graduate Trina Thompson tried suing her alma mater to recoup the $70,000 she spent on a degree that she says left her jobless and with few options for employment. In response to students’ worries that they would complete school only to be met with student loan debts and increased competition in the job market, Lansing Community College introduced a plan earlier this year where students would be guaranteed jobs if they completed training in high-demand fields.

If you find yourself struggling to cover student loan payments as a recent graduate, know your options. If you can’t find a job, you may defer your loans until you’re on better financial footing. And if you’re just starting your undergraduate degree, remember that the fewer student loans you take out, the better. Check out our tips for borrowing responsibly and making the most of your financial aid package.

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NYU Looks for New Ways to Address High Cost of Attendance

June 16, 2010

by Scholarships.com Staff

It’s rare for a college to tell a prospective student that their school may not be affordable enough for them to attend come fall. For a year, New York University did just that, calling admitted students and their parents and families to talk about the debt they could get themselves into if they chose to attend the pricey college. Citing little effect on enrollment rates, however, the school will not be pursuing a similar effort this summer, according to a recent article in The Chronicle of Higher Education.

The purpose of the calls was to make sure students and parents were aware how much an education at the school cost long-term. NYU doesn’t offer as much “free money” in scholarships and grants as many other schools, leaving students no choice but to take out student loans to cover the more than $50,000 annual tuition, fees, and room and board bill. According to previous articles on the school’s efforts in The Chronicle, the 58 percent of students who carry debt loads once graduating from NYU do so with an average of more than $33,000 in student loans. (The national average hovers around $20,000.)

NYU won’t be abandoning all efforts to inform students and parents about the costs of attending the college. Administrators say they’re now looking for ways to make sure those admitted know of ways to finance the “significant investment” that is NYU, according to The Chronicle, and that these efforts need to start sooner rather than later when students are still deciding where to enroll. The college also plans to give students a more “general financial education” rather than giving them advice based on their specific circumstances. However, Randall C. Deike, NYU’s vice president for enrollment management, said in the Chronicle article that he has already told some students it may be better for them to start out at a less expensive college and then transfer to NYU later on.

NYU has gotten quite a bit of criticism lately from students graduating with mountains of debt, degrees in the humanities, and limited job prospects. One article last month in The New York Times took a look at Cortney Munna, a 26-year-old graduate of NYU with nearly $100,000 in student loan debt. Munna is saying she wasn’t counseled properly about the true cost of college and what it would be like to repay a loan that high once she was done at NYU. According to The New York Times article, it was NYU that suggested she take out an additional $40,000 private loan when she and her mother found that the lower-interest student loans didn’t cover all of the costs of attendance. The college has since said it would have been inappropriate for them to counsel Munna out of NYU, or to counsel her out of taking on more debt to remain at the school. Who is to blame here? Were Munna and her mother naïve in assuming they could handle the loan? Should private lenders consider students’ existing loan totals when doling out funds? Should the college have been more forthright?

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Data Suggests More Default on Loans than Government Reports

July 13, 2010

by Scholarships.com Staff

An analysis of long-term data conducted by The Chronicle of Higher Education has found that the number of students who default on their loans is far greater than what the federal government has been reporting. According to the data, about one in every five federal student loans overall has gone into default since 1995; the default rate for student loans covering costs at for-profit colleges is even higher, at 40 percent. The default rate for community college students is about 31 percent.

The federal government’s numbers are much lower. The U.S. Department of Education reported default rates for federally guaranteed student loans at about 6.9 percent for fiscal year 2007’s cohort. Why the disparity? The Chronicle says the government’s numbers only show those students who defaulted on their loans two years after entering repayment. The Chronicle’s analysis looks at 15 years of data. According to their new analysis, default rates only worsened as time went on, increasing years after those borrowers had left college.

For-profit colleges have already been getting some negative attention lately, with legislators concerned about the share of federal financial aid the schools receive compared to their total enrollment numbers. (The for-profit sector accounts for less than 10 percent of total enrollments but about 25 percent of federal financial aid disbursements.) This new data certainly won’t help them. If the federal government moves to pass rules on student loan default rates, a number of those institutions could be at risk for losing federal aid if they cannot improve their numbers. According to the Chronicle, there are a number of for-profit colleges out there that have default rates even higher than 40 percent, including the Tesst College of Technology and Chicago’s College of Office Technology.

No matter how you skeptically you look at the numbers—critics of the data have already said the numbers don’t consider the economy and the demographics and total enrolled at community college and for-profit universities versus four-year institutions—default rates should be taken seriously. Defaulting on your student loan is never a good idea. It hurts your credit, and any wages you do have may be seized by the government that issued you that loan. It’ll then be harder to not only make ends meet, but to get other loans years down the line, including mortgages and new credit cards. You may also be faced with higher interest rates if you are able to land that car loan. You can see now how important it is to borrow responsibly and make sure that if you do need to take out student loans, you’re doing so to pay for the costs of an accredited program that will help you land a decent job after graduation.

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New Education Department Rule Targets For-Profit Colleges

July 23, 2010

by Scholarships.com Staff

In response to recent criticisms of for-profit colleges, the U.S. Department of Education announced a rule today that will cut off federal aid to those schools that leave students with loan debts they are unable to handle once they receive their degrees and certificates. The new “gainful employment” rule would also penalize those programs with the lowest loan-repayment rates, meaning for-profit colleges will be more on the hook to make sure those enrolled in their programs are being prepared for the job search and for entering the workforce.

The for-profit sector currently accounts for less than 10 percent of total enrollments but about 25 percent of federal financial aid disbursements. Congress has also been looking at the issue this summer, with some legislators concerned by the large amounts of debt students were being saddled with at some for-profit colleges when compared to the comparably low salaries they could expect to receive upon completion of those programs, or the difficulty they may have finding work at all. In an article in The Chronicle of Higher Education today, officials with the Education Department said this was a way to both protect students and taxpayers, as the measure could help prevent both groups from incurring the high costs of student-loan defaults. 

According to the article, the new rule would consider the number of borrowers repaying their federal student loans against the ratio of total student loan debt to average earnings. About 5 percent of for-profit programs nationwide may be affected by the new rule, and thus would become ineligible for federal aid. About 55 percent on the cusp of ineligibility might need to become more forthright with potential students about excessive borrowing. The new rule doesn’t go as far as the Education Department had initially proposed; that first proposal would have cut federal aid to those programs where a majority of students’ loan payments exceeded 8 percent of the lowest quarter of students’ expected earnings over 10 years of repayment, according to The Chronicle.

Most for-profit schools do serve an important purpose, especially for students changing careers or looking for a flexible alternative. If you’re interested in a career college, just make sure you do your research. There are programs out there that are accredited, or that meet a set of standards from the Education Department, and qualified to give you an advantage in the job market.

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No Need to Wait - Start Your Scholarship Search NOW!

August 29, 2011

No Need to Wait - Start Your Scholarship Search NOW!

by Shari Williams

I am your average student. I got decent grades in high school, applied to college, got accepted to college, and paid for my education with multiple student loans. I have taken classes I loved (and didn’t love), been involved in extracurricular activities and clubs, and have truly grown as a person during my time in college. Unfortunately, I didn’t receive prestigious grants or scholarships to limit the debt I’ll surely incur after graduation.

There are many college students who are in the same boat...so what can we do? How can we afford the education we deserve? How can we make sure we have enough funds for books and food? How can we buy those super trendy shoes Kim Kardashian was just spotted wearing when we have loan payments looming? Okay, maybe the last question isn't as important but if you want to avoid student loan debt, start searching for scholarships.

And don’t just search – search early! There are plenty of scholarships out there and the more you apply to, the better your chances are of winning one. All awards are different but many scholarship providers begin their application processes at the beginning of the fall semester so start looking now to avoid missing important deadlines. I learned this the hard way: I found lots of perfect scholarships...after the deadlines had passed.

Whether you’re still in high school or a super senior in college, do me – and yourself! – a huge favor: Make scholarships a priority. You can do this easily by creating a Scholarships.com account; not only will you have access to an entire database of awards but you’ll also receive regular email reminders about new awards and due dates. With the college costs showing no signs of decreasing, every penny counts – just make sure they come without interest if you can!

Shari Williams is a junior at Towson University with a double major in deaf studies and broadcast journalism and a minor in entertainment, media and film. With experience in public relations, a love for music and a passion for acting, she longs to be a jack of all trades. A Baltimore native, Shari is an avid traveler and opportunity seeker. She hopes to become the next face seen on the morning news or the voice heard over the radio.

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When Choosing a College, Research Early and Often

August 26, 2013

When Choosing a College, Research Early and Often

by Abby Egan

I started looking for colleges in my junior year of high school because I was so unsure about what I wanted. Deciding on a college was a scary thought to me because I was under the impression that I was going to be stuck at whichever school I chose for four whole years. So to ease my ever-increasing stress levels, I visited my dream school (MCLA) almost seven times before accepting to attend for the fall of 2011.

I jumped at every opportunity to get to know my top choice better and better: I visited on long weekends with my parents, signed up for multicultural nights and participated in overnight programs bussed from Boston. I took the drive to MCLA whenever I needed to talk to the Bursar about bills or the financial aid office about student loans. Though it was a long ride, I got on a first-name basis with the librarian and a handful of school officials, putting faces to names and breaking down that wall between being strangers and being acquaintances.

I took the time to really determine whether I wanted to spend the next four years at MCLA. Though my parents researched facts online and talked on the phone with MCLA officials, I made sure to do my own research as well. The bottom line was that I was attending MCLA, not my parents, so I made sure everyone I encountered at the school I spoke to knew me and not just the me my parents spoke about.

I knew I wanted to attend MCLA after my first visit but I’m glad I took the time to get to know the institution a little bit better. It made me feel more prepared for my first semester of freshman year but even if you visit 100 times, you might not know if your school is the one for you until you immerse yourself in the community. If for whatever reason you don’t feel it’s right, don’t panic: You can always transfer. Deciding on a college isn’t the end all be all – there’s always room for change – but you just have to find what’s right for you.

Abby Egan is currently a junior at MCLA in the Berkshires of western Massachusetts, where she is an English Communications major with a concentration in writing and a minor in philosophy. Abby hopes to find work at a publishing company after college and someday publish some of her own work. In her spare time, Abby likes to drink copious amounts of coffee, spend all her money on adorable shoes and blog into the wee hours of the night.

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Popping the Bubble: How to Keep Up on Current Events in College

August 28, 2013

Popping the Bubble: How to Keep Up on Current Events in College

by Mary Steffenhagen

The crisis in Syria! The Bradley Manning sentencing! The fracking debate! Yet another random act of violence!

The media bombards us with information and news every second of every day – a sensory overload of grim stories and political biases. It's overwhelming but college can become a sort of bubble, a relaxing retreat from the cares of the outside world. You don’t see the news unless you turn on your own TV or radio or follow a news site or newspaper. With all the other fun things to do, who’s got time to be depressed and bored by other people’s problems?

It’s incredibly easy to feel that what you see on CNN doesn’t affect you – a college student in America – but it does. You may not live in a small village in the Middle East but actions cause ripples and what happens across the globe may, in any small way, touch your life. Some events will affect you directly. For example, President Obama recently signed a bill to restore lower interest rates on student loans: This directly affects you and me, who will now be paying a 3.4 percent interest rate on our loans as opposed to the previous 6.8 percent.

Current events are nearly always incendiary topics as well. You will encounter a diverse range of people in college with a diverse range of ideologies...and a shrug and a “Whatever, I don’t really care about that” won’t get you off the hook in discussions anymore. It’s important to know where you stand and even more important to do your research, so as not to form a hasty assumption. First off, it will help you not to look like a buffoon or needlessly offend others and secondly, being able to form and articulate a well-thought argument is an invaluable skill!

Lastly, being cognizant of “the outside world” is an important development in the whole messy process of becoming an adult. Forming opinions, arguments and worldviews – and having them challenged – is a necessary part of life...especially in an environment such as college, where it’s okay to make mistakes and learn from them. So don’t let college become a bubble and cut you off from the vital circulation of ideas and news. Get (and stay) informed!

Mary Steffenhagen is a junior at Concordia University of Wisconsin who is majoring in English with a minor in business. She hopes to break into the publishing field after graduation, writing and editing to promote the spread of reliable information and quality literature; she is driven to use her skills to make a positive impact wherever she is placed. Mary spends much of her time making and drinking coffee, biking and reading dusty old books. In an alternate universe, she would be a glassblower.

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Obamas Free College Proposal Raises Questions

January 20, 2015

by Ben Archer

Sure, anything Obama proposes is going to have detractors across the aisle politically. Perhaps due in part to his recent and seemingly more and more frequent use of executive action or just plain old typical partisanship, our president can scarcely do anything these days without intense scrutiny. Naturally, among the chief concerns of Obama’s opponents on the matter is the increase in taxes that would be necessitated by such action. But let’s discuss the other aspect of offering "free" college for all first.

Some people (perhaps none more than those who had to work before, during and/or after attending college to pay for the education and experience they received) may feel as though it would be beneficial for anybody who attends college, community or otherwise, to have some "skin in the game". Certainly, there is a certain psychological aspect to consider; the potential subconscious assignment of value to things that are "free" vs. the ones for which one has worked and saved to attain, isn’t there? Definitely a point worth discussing and possible consideration when discussing the cost of college. Naturally, not all prospective beneficiaries of the "free college" plan would respond in the same way. Certainly, there are many who would take full advantage of such a program and benefit greatly from the opportunity, but would they comprise a large enough portion of the qualifying applicants to the program for it to be viable and sustainable?

Of course, there is also the debate about funding of such a plan. We all know that there is no "free" college or anything else in this world, so who ends up paying for the college education that the students in question would receive through such a plan? Should the taxpayers at large, whether they have kids or not, have already paid for their children to attend college, etc. be required to pay for other people and their children to attend college? Is this the only or, more importantly, the best solution to the problem of the rising cost of post-secondary education? Does anybody have a better idea?

Of course, at first glance, the idea of providing everyone with the opportunity for a free post-secondary education is very appealing to those who can't afford college. This would be, at the very least, a "leg-up" for those who don't have the money to pay for college; a chance to prove to themselves and perhaps to a school to which they might later transfer, that they possess the dedication and aptitude to earn a degree. But with the country still in tremendous debt and many college grads being forced to take jobs that don't require a college degree at all, is this a practical solution? Would students who were not paying take the opportunity for granted due to the lack of having invested any of their own money in the endeavor? Is this a solution that will actually accomplish the goal of providing education to those who need but cannot afford it? There are still many questions yet to be answered and, as always, we would love to offer our comments section for you to annotate and contribute to this debate.

So, what do you think? Should community college be free? Do you think students will do as well in such a situation as they would if they were required to pay tuition? How would you propose supporting such a program? C'mon, speak up and tell us your thoughts!

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