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Admission Competition Heating Up at State Colleges

November 16, 2009

by Scholarships.com Staff

While so far it appears that the recession has not had a negative impact on students' desire to go to college, it may be affecting their ability to get there, or at least to get into their school of choice.

State colleges have endured some significant budget cuts in the last year, while also coping with an increased demand for student financial aid and drops in endowments and donations. These circumstances have left schools scrambling to find additional sources of funding to meet everyday expenses and deal with increased demand. To mitigate tuition increases, many state colleges, especially public flagship universities, have begun to admit more out-of-state and international students. These students pay higher tuition, often without significant help from university scholarships, meaning more revenue for the university and lower costs for the in-state students attending.

This is a win-win situation for colleges and out-of-state students, who are more likely than ever to get into their dream school thanks to these new policies. One example is the College of William and Mary, where the out-of-state admission rate has risen from 22 percent of applicants in 2007 to 30 percent in 2009. While out-of-state admission is still significantly more competitive than in-state, students who are able to pay non-resident tuition at public flagship universities may see more success in 2010 than previous years.

However, with more seats being filled by out-of-state students, in-state students are at a disadvantage. At the same time as admissions ratios are being adjusted, more students are applying to in-state schools to take advantage of relatively reasonable tuition costs, especially where a low price corresponds with a top-rate education.

Where competition is fierce and seats and scholarships are limited, students who had been planning on attending their state's public flagship may want to cast a wider net in their college search. Consider a private college-some in California are offering substantial scholarships to students who would otherwise have attended a state college-or think about putting in a year or two at community college first. You may also find a less expensive, but still highly respected, option in a branch campus of a flagship, or in another state college nearby.  It may even be possible to transfer to your dream college later, as more and more university systems and community colleges develop agreements for how credits will transfer between schools.

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Job Outlook for Recent Grads Continues to Suffer

November 17, 2009

by Scholarships.com Staff

Current undergraduate students who are looking towards employment after graduation, as well as graduate students hoping to ride out the recession before beginning their job search may want to make note of survey results just released by Michigan State University's Collegiate Employment Research Institute.  The survey focused on job prospects for new college graduates at 2,500 businesses nationwide, and the numbers don't look good.  Things were even worse than anticipated for the classes of 2008 and 2009, with the job demand for college graduates dropping 40 percent in the past year, far exceeding initial projections of declines in hiring of 8 to 10 percent, and they aren't expected to soon get better.

Hiring of new college graduates is expected to remain low, with overall figures dropping another 2 percent in 2010, with mid-size and large businesses anticipating continued reductions. However, some sectors are starting to show growth, though none can yet be described as booming. Smaller companies, especially, are expecting to hire more recent college graduates: approximately 15 percent more than last year. New graduates looking for jobs will also have better luck in the west than the east.

The types of businesses that are most likely to hire new graduates in the coming months include web design, e-commerce, information systems, nonprofits, statistics, nursing, social work, environmental sciences, manufacturing, agriculture production and food processing. Accounting, banking, and real-estate will continue to be poor bets, along with engineering, transportation, utilities, computer science and computer programming. Education is also likely to continue to suffer without federal stimulus money supporting K-12 teaching, and non-academic university jobs are likely to be scarce.

The Michigan State University researchers who conducted the survey warn that many of these shifts in hiring appear permanent, or at least long-lasting. College graduates will have to continue to compete fiercely for fewer jobs with lower starting salaries for years to come. To improve their chances at landing a job right out of college, students will want to demonstrate their flexibility and critical thinking skills, according to the report. Taking rigorous classes and participating in internship and independent study opportunities can help.

Students who want to be more competitive or who are struggling to find work may also want to consider graduate or professional programs, or other alternatives to employment. These can develop and showcase your thinking, research, and analysis skills, as well as provide advanced training and work experience directly relevant to your intended profession.

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Obama Encourages Studying in China as Budget Cuts Discourage Studying In-State

November 19, 2009

by Scholarships.com Staff

Yesterday, in a joint statement with the leader of China, President Obama announced plans to strengthen the United States' relationship with China through several efforts, including expanding study abroad programs in each country. China currently sends more students than any other country to American colleges and universities, and the President promised yesterday to make an even greater effort to facilitate the enrollment of Chinese students in U.S. schools. Meanwhile, Obama has pledged to greatly expand study abroad in China for American students, from 20,000 currently enrolled, to 100,000, matching the number of Chinese students currently studying here.

Many colleges and universities are trying to boost interest in study abroad, especially among student groups that are significantly less likely to participate. The current administration's emphasis on studying in China could interest more students in exploring the possibilities for studying in other countries, as well as their awareness of the study abroad scholarships and other financial aid that can help.

And for many students attending state colleges in the United States, attending college in another country might be starting to sound good, at least compared to the situation at home. Democrats and Republicans in Congress continue to debate over just what will happen with federal student loans next year, while state budget cuts are continuing to drive up college costs and reduce aid. The most dramatic examples of state cuts are taking place in California and Michigan, the states hardest hit by the recession.

Students in the University of California system found out that their tuition and fees are likely to increase by 32 percent next year, at the same time colleges are forced to scale back enrollment and financial aid due to a significant drop in state funding. The University of California's Board of Regents approved a fee increase that would raise costs by at least $2,500 by next fall, with students in some graduate and professional programs seeing even sharper fee increases.

Meanwhile, Michigan students are receiving bills from their colleges to the tune of thousands of dollars for the current semester, just as spring registration is under way. The state's Promise Scholarship, modeled after the much-lauded Kalamazoo Promise, was canceled this year due to lack of available funding. Students and schools had already budgeted for receiving the money this fall, and now that it's not available, colleges are billing students who lost their scholarships for the amount of their tuition the scholarship would have covered. Typically, unpaid bills prevent students from registering and graduating, though schools have said they'd do their best to accommodate students, provided the money will be paid.

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Supreme Court Considers Student Loan Bankruptcy Case

December 1, 2009

by Scholarships.com Staff

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.

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Pittsburgh College Students Protest Tuition Tax Proposal

December 2, 2009

by Scholarships.com Staff

Pittsburgh city officials have received some criticism over the last few days on their latest plan to cover local budget deficits and shortfalls: a tax on college students.

The 1 percent tuition tax, described as the "Post Secondary Education Privilege Tax" or Fair Share Tax," would target local college students and, officials say, raise $16 million for the city to cover things like city employees' pension funds and costs associated with the public library system until the city is able to get a handle on its budget problems. Pittsburgh has 85,000 students in 10 colleges and universities that would be affected by the tax, attending schools like the University of Pittsburgh, Duquesne University, and La Roche College.

City officials justify the measure with the argument that college students should be paying for the services they use as already residents do. According to a Wall Street Journal article on the issue this week, the tax would range from $27 for students attending the Community College of Allegheny County, to as much as $409 for students at Carnegie Mellon University.

The students don't seem to be taking the news lightly. On Monday night, about 100 students came to a Pittsburgh City Council meeting to protest the measure, calling the idea "Taxation Without Representation" and a "double tax" on those who already pay other taxes, such as property taxes, sales taxes, and fees associated with water use and tickets to sporting events. Critics also argue this is a terrible time to be imposing more fees on students, as post-secondary tuitions continue to rise, student loan debts continue to increase, and the job market only becomes more competitive for recent graduates.

As a response to the students' concerns, the state legislature is already looking for alternatives to the tuition tax through a proposal called the Non-Profit Essential Services Fee Bill. The bill would place a mandatory fee on nonprofit institutions' real estate profits. Many nonprofits already contribute to municipalities voluntary, so lawmakers hope this plan would be less controversial. The nonprofits would have to choose where to cover those costs of the additional fees if they do not already contribute voluntary, however, and if that nonprofit is a university, students could still be expected to cover that services fee bill.

Discussions now will explore whether such a tax is even legal, as tax attorneys disagree about whether a city may tax a population just for being in those city limits, usually temporarily. Also, is it fair to tax one student more than another, just because they attend a school with a higher tuition? If the tuition tax was approved, it could go into effect next year.

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Report Shows Student Debt by State and by School

December 2, 2009

by Scholarships.com Staff

Although the economic downturn has changed some borrowing and spending habits, recent college graduates are more in debt than ever before. Average student loan debt has continued its steady rise, with graduating seniors holding an average of $23,200 in student loans in 2008. This information comes courtesy of a report by the Project on Student Debt on average debt for the college class of 2008, the latest in an annual series profiling the previous year's graduating class and the financial situations they face upon leaving school.

As debt rose for graduating seniors, so did unemployment, with the unemployment rate for workers age 20-24 (the typical age range for recent college graduates) now standing at 10.6 percent, the highest on record. This combination of factors is likely contributing to the rising student loan default rates we've seen in the last year.

The highest-debt states include the District of Columbia, whose class of 2008 held an average of $29,793 in student loans, Iowa ($28,174), and Connecticut ($26,138). Six other states also topped the $25,000 mark, compared to only two last year: Iowa and New Hampshire. Utah and Hawaii held onto their low-debt distinctions, once again being the two cheapest bets in higher education, at $13,041 and $15,156 respectively. Other low-debt states for 2008 included Kentucky, Wyoming, Arizona, Georgia, and California, though soaring tuition and reduced state funding may soon bump California off this list.

South Dakota, West Virginia, and Iowa had the highest portion of student borrowers in 2008, with 79 percent of graduating seniors in South Dakota taking out a student loan at least once in their college career. More than 70 percent of 2008 graduates in Minnesota and Pennsylvania also went into debt to fund their educations. Hawaii, Nevada, and Utah had the fewest students borrowing, with 37 percent of students in Hawaii, 40 percent of students in Nevada, and 41 percent of students in Utah graduating with debt in 2008.

In addition to describing trends state-by-state, the Project on Student Debt also looked at debt by college. An interactive state map offers not only pop-ups of the state's average debt and percentage of students borrowing, but also provides a link to a list of data by college, including the percentage of borrowers and the average debt for 2008 where available. The report, available on the Project on Student Debt website, also lists which colleges' graduates had the highest and lowest average amounts of debt.

This information can be especially useful to students currently involved in the college search or college application process. Schools whose students borrow less to complete college often have low tuition, generous scholarship opportunities, or other programs to keep costs down. If you're concerned about paying for school, this can be very appealing.

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Congress Considers Increased Student Loan Oversight

December 3, 2009

by Scholarships.com Staff

Federal student loans aren't the only form of student borrowing that may soon undergo a legislative makeover. As Congress debates the creation of a Consumer Financial Protection Agency, advocacy groups are continuing to push for inclusion of rules that would give the agency more oversight of student loans.

The Consumer Financial Protection Agency would already oversee other kinds of lending, such as credit cards and student loans. However, there's growing debate over how extensive the agency's student loan oversight should be, specifically regarding loans that some colleges make directly to their students. A House amendment to specifically include these loans under the agency's purview was rejected by the Financial Services Committee, but is expected to be revisited as the House prepares to take up a floor vote on the bill. The Senate version of the bill, meanwhile, does authorize the agency to supervise loans made by colleges to their students.

The House version initially excluded loans schools make to their students because many colleges make small, short-term, "emergency" loans to their students to help them pay bills while they secure other forms of funding. Career colleges, on the other hand, have begun lending large sums to their students, often with terms that are less favorable than many private loans. These loans typically have a high default rate and can burden students with difficult payments, as interest rates can easily reach 18 percent and the schools may have less forgiving repayment processes than traditional lenders. This has student advocates concerned, especially in light of recent economic events.

Colleges have been increasingly encouraged to act as lenders to their students in the face of the economic recession and the preceding credit crunch. As it became harder for students to obtain sufficient student loans from banks and other traditional lenders, schools began to step in to close the gap. This included for-profit career colleges lending significant portions of the cost of tuition to their students. The latter category of loan is increasingly widespread, with many of the largest career colleges reporting plans to lend out tens of millions of dollars directly to their students next year.

In addition to being a way to enroll students who wouldn't otherwise be able to secure funding, these direct-to-student loans are also ways for for-profit colleges to get around the "90/10" rule that states that no more than 90 percent of a for-profit college's revenue can come from federal student financial aid. By charging more in tuition but giving more in loans, colleges can get around this requirement, even as more of their students qualify for federal aid.

This isn't the only career college practice that's receiving criticism at the federal level. The Department of Education has been investigating recruiting practices at for-profit colleges and recently issued several proposed rules in its negotiated rule-making process with career colleges. The proposed changes would do more to ensure that colleges aren't giving incentive pay to recruiters and that students who are being enrolled are able to adequately benefit from a degree.

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Community College Enrollment is Growing

December 18, 2009

by Scholarships.com Staff

If you're a student at a community college, you may have noticed campus has been a lot more cramped lately. Anecdotal reports of students flocking to community colleges have been steadily rolling in over the course of the last couple years. But now a study by the American Association of Community Colleges has numbers to back up these reports. It appears enrollment is up at community colleges nationwide, especially among full-time students.

Nationwide, full-time enrollment at community colleges is up 24.1 percent since 2007, with overall community college enrollment increasing 16.9% over the same period. Enrollment increases are most pronounced in the Rocky Mountains region of the country, where overall enrollment has climbed 36% between 2007 and 2009. In most regions, full-time enrollment increases have significantly outdistanced increases in part-time enrollment. Considering the majority of community college students traditionally attend part-time, this represents a dramatic shift for schools and a greater drain on resources.

Several community college systems have had to cap enrollment, while many others have effectively done so, as they have more students interested in enrolling in classes than they can accommodate. Over 34 percent of respondents to the AACC survey reported that they believed some potential students had been turned away due to capacity issues. Some schools are adding "graveyard shift" sections of classes to try to find room for all of the students who are interested in taking classes. Others, including administrators interviewed by Inside Higher Ed, reported reshuffling administrative and classroom space to try to accommodate more students.

It appears this enrollment boom has not come at the expense of more costly private colleges. Several private schools are reporting that early enrollments for the most part are either flat or up, as compared to last year. Based on these and other reports, it appears college admissions and financial aid may be even more competitive this year than last. If you're planning to attend college next year, whether it's a community college, state college, or private college be sure to meet application deadlines for admission and financial aid, and apply well ahead of deadlines if possible. You may also want to look at broadening your college search and applying for a couple extra schools to maximize your chance of getting in and winning scholarships.

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Pittsburgh Student Tax Proposal Abandoned

December 22, 2009

by Scholarships.com Staff

Pittsburgh has dropped a proposal to enact a tax on college students as a way to raise revenue for the city following several weeks of criticism from not only students but the higher education community. Mayor Luke Ravenstahl announced yesterday that the city would instead focus on a "leap of faith," urging local colleges, nonprofits, and the business community to increase voluntary donations.

At a press conference Monday, the University of Pittsburgh and Carnegie Mellon University both pledged to offer larger donations to the city than they had in previous years. Local insurer Highmark also pledged support. About 100 tax-exempt organizations gave a total of $14 million to the city between 2005 and 2007. The 1 percent tuition tax, described as the “Post Secondary Education Privilege Tax” or Fair Share Tax,” would have raised $16 million for the city to cover things like city employees’ pension funds and costs associated with the public library system until the city is able to get a handle on its budget problems. This "voluntary" agreement with the city's institutions only covers the upcoming fiscal year, however, so whether the city would ever revisit a student tax is unclear. The mayor also failed to say how much money would be offered voluntarily, as those deals have not yet been finalized.

The mayor also said he would target the state for more funding to solve the city's budget problems. A new group, the New Pittsburgh Collaborative, will come up with a list of things to ask the state for when the time comes, according to an article today in the Pittsburgh Post-Gazette. Previous talks have focused on raising taxes for those who in the city and expanding a tax on currently tax-exempt employees' payrolls, two proposals that would also not be met without resistance.

The fallout from the proposal was immediate. About 100 students came to a Pittsburgh City Council meeting recently to protest the measure, calling the idea "Taxation Without Representation" and a double tax on those students already paying taxes on things like sales items and property. An article in Inside Higher Ed today suggests other institutions of higher education were anticipating the outcome of the student tax to determine whether this could be an option in their cities. Some municipalities without strong support from outside organizations and voluntary contributions from their local colleges and universities may look to pass similar measures anyway, especially if those local economies fail to improve.

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2009 Brought Big Changes to Financial Aid

December 31, 2009

by Scholarships.com Staff

A lot has happened in the last twelve months. We inaugurated a new President, weathered a recession, and obsessed over and forgot hundreds of minor crises and scandals. College students and recent graduates have marked all these events, and have very likely also noticed some pretty sweeping changes in their financial situations.  Here are a few of the most memorable.

At the start of the year, President Obama encouraged more Americans to enroll in college, calling for the U.S. to again lead the world in college attendance by 2020.

The recession also motivated more students to go back to college, especially community colleges. Enrollments surged at two-year schools across the country. State colleges also saw increases in applications and enrollment. Along with this, financial aid applications were up in 2009, as were aid appeals.

Colleges and universities searched for creative ways to cope with the recession and the accompanying booms in enrollment and financial aid applications. Several community colleges added late night classes and many public and private colleges boosted their financial aid offerings to assist needy students.

Federal aid also underwent significant changes. Revisions to the Higher Education Act went into effect, as did new and renewed economic stimulus legislation. Pell Grants went up, as did Stafford Loan borrowing limits.  The Income-Based Repayment plan premiered, guaranteeing college graduates affordable federal loan payments, and a new public service loan forgiveness program.

Veterans' benefits were reworked in 2009, as well, and the resulting backlog of applications had students waiting weeks or even months to receive the money they needed to pay their tuition and their bills. Once the bugs are worked out, though, veterans will see an expansion of their college benefits, and in the meantime, veterans were able to receive emergency payments to help them get by.

States also received much needed cash from the government to help them minimize cuts to education while they dealt with budget crises. However, several states had to make cuts to education budgets, including state aid and loan repayment programs. California made some of the most sweeping budget reductions and the state's university systems were forced to cap enrollment and hike tuition over 30%.

As we look toward 2010, more changes appear to be underway. Congress is (still) considering changes to federal loan programs and the creation of a consumer financial protection agency, and recently passed credit card legislation will soon go into effect. States and colleges are still struggling with fallout from the recession and may alter their financial aid offerings more in the next year.

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