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Even in a Recession, College Pays


Apr 8, 2009
Nervous about shelling out big bucks for a college degree in this economy? Here's a compelling reason to go to college: data collected by the Bureau of Labor Statistics for 2008 indicates that higher education attainment still translates to a lower rate of unemployment and a higher salary.  A handy graphic here breaks it down. The annual average unemployment rate for adults over 25 with only a high school education was 5.7 percent in 2008, 5.1 percent for adults with some college but no degree, and 9.0 percent for those with no high school diploma or GED.  Just finishing a degree at a community college drops the average unemployment rate to 3.7 percent, and getting a bachelor's degree reduces it to 2.8 percent.  The drop in unemployment was less substantial for master's, professional, [...]
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92 months ago 0 comments

For current and future college students, April is a time for big, and potentially painful, decisions. Right now prospective college students are beginning to sort through their acceptance letters and financial aid offers and current students are starting to think about how to pay for school next year.  If the financial picture is much bleaker than you'd hoped, but you're hesitant to commit to the [...]

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Yesterday, the House and Senate both passed outlines for the 2010 federal budget.  Both propose about $3.5 trillion in spending and preserve many of the priorities of President Obama's budget, including more spending on federal student financial aid. A conference committee will hammer out the differences between the two packages and create a compromise budget. On financial aid, the main point of [...]

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Earlier this week, we blogged about the recession making getting into a PhD program more difficult for prospective graduate students.  Prospective undergraduates are also facing a changing admissions landscape, but the picture for them is more complicated. Articles about colleges' admission conundrums have abounded this week as acceptance letters and financial aid notices make their way to [...]

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Earlier this week, the House of Representatives passed a "technical corrections" bill that would make several changes to the Higher Education Opportunity Act passed last year.  Most of the changes are minor corrections, such as fixing typos or clarifying language, but the bill also includes two major fixes that would help borrowers if signed into law. One of the corrections taken up in the bill [...]

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In a bad economy, many recent college grads and laid off workers decide to make the move to go back to school.  A number of current undergraduate students are also hoping to delay entry into the working world until the economy improves.  Many of these prospective students will apply to graduate programs, hoping to land financial aid like a fellowship or assistantship on their way to a master's or [...]

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Student loan default rates increased in 2008, according to a preliminary report released by the Department of Education.  The numbers, which still aren't finalized, indicate an increase from 5.2 percent last year to 6.9 percent this year in the two-year default rate on federal student loans. The increase in default rates is likely due to continued economic difficulties facing new graduates. The [...]

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Student loans are becoming increasingly difficult for the average college student to obtain.  However, it appears at least one group is able to borrow private loans with relative ease: 80-something hospice patients in Florida.  A student loan scam recently uncovered in St. Petersburg, Florida involved two stolen identities and between $15,000 and $18,000 in loans. An 80-year-old woman and an [...]

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On the heels of last week's announcement that Sallie Mae would not participate in the upcoming PLUS loan auction, the student lending giant once again comes bearing news that may ruffle some feathers and potentially hurt its customers' ability to pay for school. In a move to reduce default rates, Sallie Mae has announced changes to their popular private loan program.  As of next week, borrowers [...]

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A bill to expand AmeriCorps and create new community service opportunities has passed the House of Representatives.  The Generations Invigorating Volunteerism and Education, or GIVE, Act passed today with bipartisan support in the House, and a similar bill, named the Serve America Act, has also been approved by the Senate education committee.  It will move to the Senate floor early next week, [...]

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New college grads may face an especially tough time due to the recession.  The growth in anticipated new hires, which is measured twice a year by The National Association of Colleges and Employers, has been slowing since it reached a high in spring 2007, falling almost flat in the fall.  The numbers for spring 2009 show that for the first time in years, businesses actually anticipate hiring fewer [...]

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More students are completing the FAFSA early for 2009-2010 according to data collected by the Department of Education.  By the end of February, more than 3 million students had filed their FAFSA for the next academic year, an increase of over 20 percent from the first two months of 2008.  As application deadlines approach, this flood of applications could slow, but right now it looks like there [...]

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According to US Department of Education data, over the last year colleges and universities have continued to leave the Federal Family Education Loan Program in droves, switching to the federally run Direct Loans Program.  Between February 2008 and February 2009, the number of schools issuing federal Direct Loans increased from 1,072 to 1,620, an increase of nearly 34 percent. Direct Loans and [...]

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With all the talk about spending and stimulus legislation and bailouts, it can be easy to lose track of what benefits taxpayers can actually expect to receive. Most likely, everyone knows that the American Recovery and Reinvestment Act, perhaps better known as “the stimulus,” will create jobs through funding “shovel-ready” projects and will put a little extra in paychecks through a tax rebate [...]

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Details of President Obama's proposed 2010 budget are emerging, with education being one of the first sections unveiled.  In the budget proposal are increases and structural changes to Federal Pell Grants, changes to Federal Perkins Loans, and the potential elimination of the Federal Family Education Loan Program, so that all new Stafford Loans and PLUS Loans for 2010-2011 would be originated by [...]

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An omnibus appropriations bill for the current fiscal year passed the House yesterday and is on its way to the Senate.  This piece of legislation will raise the maximum award for Federal Pell Grants to $5350 for 2009-2010.  The bill was put on hold last year due to threats of a veto from President Bush. While Pell Grants received a funding boost, SEOG grants will remain at 2008 funding levels, [...]

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In a speech delivered before a joint session of Congress, President Obama called for every American to complete at least one year of postsecondary education and pledged greater financial support for those attending college.  He also urged that America become the "best educated" nation and set the goal of having the highest proportion of college graduates in the world by 2020. In addition to [...]

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This week, several groups of students have decided to take a new approach in attempting to reduce their college costs.  Students in Minnesota and South Carolina both held rallies at their state capitols this week to try to influence their state legislature's decisions regarding their schools.  Meanwhile, students at New York University have barricaded themselves inside a building on campus, [...]

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Reducing college costs continues to be a hot topic of discussion, especially given survey results that show that college affordability is a growing public concern.  Recent congressional acts, including the education provisions in the stimulus bill President Obama will sign today, the Ensuring Continued Access to Student Loans Act of 2008, and last year's reauthorization of the Higher Education [...]

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The House of Representatives just passed the compromise version of the economic stimulus package.  Now there are just two stop left for it before it becomes law: the Senate and President Obama's desk.  The Senate plans to vote later this evening, putting it on track to be signed on Monday. As the dust settles, more detailed accounts of what's actually in the bill are emerging.  While the final [...]

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The Senate passed their version of the economic stimulus bill Tuesday, and by late afternoon yesterday it was announced that a compromise had been reached between the House and the Senate. The compromise bill includes less funding than either version--$789 billion as compared to $820 or $838 billion, and one of the areas that faced cuts was education. While the final draft of the stimulus bill [...]

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The loss in funding faced by state and community colleges this year may not be a one-time thing.  A report issued this week by the State Higher Education Executive Officers (SHEEO) indicates that state budget cuts to higher education made during recessions tend to become permanent.  With many attempting to eliminate multi-billion dollar budget shortfalls, cuts to education are almost certain to [...]

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The recession seems to be bringing an almost constant stream of stories about people in all sorts of circumstances who are facing new and varied financial troubles.  These stories could easily be read as a guide for "things not to do in a recession."  The latest addition?  "Default on your student loans." While neglecting even one payment is a bad idea at any time, borrowers who have found [...]

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More Americans are regarding a college education as necessary, but fewer are regarding college as accessible for everyone according to survey results released today by Public Agenda and the National Center for Public Policy and Higher Education.  While the economy is likely a factor, these trends have been ongoing since at least 2000, even during times of relative economic strength. In the [...]

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The student loan rescue plan that will allow the Department of Education to buy up student loans issued since 2003 will begin operating in February.  The plan will set up a bank to act as a "conduit" for purchasing older student loan assets and will also allow the Treasury to become the buyer of last resort for assets the conduit bank is unable to refinance.  The Treasury will buy up student [...]

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College and university endowments plunged an average of 23 percent between July 1 and November 30 in 2008, with many sustaining further losses since then.  While almost everyone who's been reading higher education news or attending college knows that endowments have dropped, the depth and the breadth of the damage has largely been left to the realm of speculation. Endowment losses had [...]

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