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Student Loan Demand Rises as Availability Decreases

January 22, 2010

by Scholarships.com Staff

Despite more cost-conscious students, demand for student loans has continued to increase over the last two years according to a new analysis by Reuters and the credit bureau Equifax. According to Equifax’s data, both the number and the balance of student loan accounts in the United States have risen markedly.

According to Reuters, the number of student loan accounts in the U.S. has risen 29 percent in the last two years, with the total loan volume increasing by $105 billion to $527 billion. Meanwhile, most other lines of credit are contracting, including car loans and credit cards. Equifax has called the current student loan activity unprecedented, and the bureau’s U.S. Information Systems president, Dan Adams, expressed concern over young adults’ ability to pay down this debt.

Banks also appear concerned about students’ ability to pay. Despite what may be a historic high in overall loan balances, private student loan origins are actually dropping, according to Student Lending Analytics. A recent post on their blog forecasts that the 50% drop in private loan originations in 2008-2009 will be followed by a further 24% drop in 2009-2010. The reduced volume is mostly attributed to wary banks making it difficult for students to borrow.

As private loan originations have been slowing, increases in federal loan limits, Pell Grant amounts, and some state and campus grant and scholarship programs have been helping students pay for college in the face of a recession. However, there is concern that many of these increases are temporary, while many funding cuts enacted due to the recession might be more permanent. There’s also growing concern in the higher education community that students may find themselves priced out of the colleges they want to attend or left in a lurch after college, either unable to find money to continue or unable to pay back what they’ve borrowed.

With widespread difficulties and concerns, it’s more important now than ever to start planning early for college and to focus on finding sources of college funding other than student loans. Starting a college savings plan for students while they’re still young is one step, and beginning the scholarship search as a high school junior (if not earlier) is another. With planning and determination, college success is still very possible, but without those things, it might be more difficult to come by than it used to be.

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Financial Education Gaining Ground in High Schools

January 25, 2010

by Scholarships.com Staff

Whether it’s preparing students for college or providing vocational education, one of the purposes of high school is to help students transition from depending on their parents to living in the real world. Recently, more high schools have begun incorporating personal finance into their core curricula, hoping to prepare students to manage the money they make once they move out on their own.

Money management courses have been offered by high schools for decades, but they were often included in family and consumer sciences classes, often with vague and unappealing names like “independent living.” Many college-bound students would regard these as blow-off classes that couldn't possibly relate to their lives, while other students might avoid them out of fear of having their GPA torpedoed by demonstrating inadequate ability to sew, cook, or care for a baby doll.

However, widespread financial difficulties of the last few years have prompted an increased interest financial literacy among high school and college students who are hoping to avoid the mistakes they see their family and friends making. Financial literacy classes have also changed, focusing on a wider range of skills required for modern life, including taking out a mortgage and starting a retirement fund, rather than the checkbook-balancing and grocery shopping skills students may have found themselves learning just a few years ago.

As the value of personal finance education has become more apparent, states and school districts have begun incorporating it into their core curricula. According to the Council for Economic Education, 13 states require personal finance courses for high school graduation, up from seven in 2007, and a total of 34 states now require schools to implement content standards for personal finance education.

Taking personal finance classes in high school can prepare students to make smart financial choices right out of the gate, rather than learning the hard way in college or after. Students with a strong personal finance education may be able to avoid the financial pitfalls that trapped their parents, potentially helping to break the cycle of poverty for some, and helping others minimize suffering from credit cards or student loans acquired in college. Some school districts believe so strongly in playing a greater role in financial education that they’ve started guiding students toward healthier financial habits as early as kindergarten, according to an article in USA Today.

Colleges have also begun putting more emphasis on financial literacy. In the last few years, a number of colleges have added financial literacy courses, while others are offering or better publicizing financial counseling and advising services. One school, Syracuse University, has even tied financial aid to financial literacy for some students, offering grants to a selected group of students if they agree to participate in a financial education program.

Even if your high school or college doesn’t offer financial literacy training, it’s important to educate yourself about personal finance and build money management skills. Learning how to budget, pay bills on time and build your credit score can help you live a better and less stressful life before, during and after college.

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Online Enrollment Up By 17 Percent on College Campuses

January 27, 2010

by Scholarships.com Staff

More than one in four college students took at least one online class in the fall of 2008, according to an annual survey released yesterday called "Learning on Demand: Online Education in the United States." Those numbers, which come from the Sloan Consortium and reflect data from thousands of colleges and universities across the country, illustrate a 17 percent increase in the number of students enrolling in online classes since the survey was released last year.

To put things in perspective, the number of students enrolling in higher education overall only grew by 1.2 percent. More than 4.6 million students are enrolled in online courses across the country, compared to 3.9 million the previous year. Less than 10 percent of students were taking classes online in 2002; today that figure is more than 25 percent. The survey did not take a close look at online degree universities, although it would be interesting to see whether distance learning has also seen an increase in applicants who see the benefits of completing their coursework at their own pace. (About 73 percent of fully online universities reported requests from students to offer even more online courses than they already do.)

The Chronicle of Higher Education today describes the survey's data even further, and suggests that despite the increase in online enrollment, many colleges are still not offering a sufficient number of online offerings despite the potential for that strategy to address some schools' budget problems. (According to the report, enrollment numbers in general increase in times of economic crisis.) Public institutions are more likely to offer more online courses, according to the article. At the University of Central Florida, for example, more than half of the student population is taking at least one class online each year.

Other highlights of the report include:

  • More than 80 percent of these students taking online courses are studying at the undergraduate level, with only 14 percent taking graduate level courses and the remainder in some other for-credit course.
  • 54 percent of institutions report that the economic downturn has increased demand for existing face-to-face courses.
  • 66 percent of institutions report increased demand for new courses and programs, and 73 percent report increased demand for existing online courses and programs.
  • Less than one-third of administrators believe that their faculty accept the value and legitimacy of online education. (This has changed little over the last six years.)
  • Nearly 300 institutions with no current online offerings are reporting increased student demand to begin such offerings.
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White House Proposes Federal Budget Freeze

January 27, 2010

by Scholarships.com Staff

Immediately on the heels of an announcement that President Obama would be calling for additional assistance to college graduates struggling to repay student loans, the administration also unveiled a proposal to hold federal discretionary spending to current levels for the next three years, a move that could potentially have serious implications for colleges and students.

Currently, most federal education spending, including student financial aid, is discretionary, not mandatory, so it would fall under the umbrella of the budget freeze. This makes it possible that students will see limited increases to federal grants, work-study, and subsidized student loans in the coming years. The White House has pledged to make education a funding priority, but with states and colleges also struggling financially, it’s quite possible that financial aid programs will see an end to the boost in financial support they’ve received in the last few years.

It’s possible one federal aid program, at least, may be spared from the budget freeze. Last year, President Obama proposed making the Pell Grant an entitlement, putting it in the category of Medicare and other programs that would be exempt from the budget freeze, but the bill to do so still has not passed the Senate. If the bill passes, Pell funding will be mandatory and increases in Pell Grants will be tied to inflation, guaranteeing students a small, but steady, increase in available aid. If not, it’s up to Congress to allocate limited resources for any increases in grant amounts, and with increases in the numbers of college attendees, applications for financial aid, and Pell Grant recipients, it may be all Congress can do to hold funding levels steady for the next three years.

As details of federal and state budgets emerge, and emergency legislation that temporarily boosted funding to schools and student aid begins to be revisited and possibly phased out, exact changes to college funding will become clearer. Already, though, many families are finding paying for college increasingly challenging, even with the aid of college scholarships and grants. There’s a possibility that a federal budget freeze could mean that students in the next few years will see a situation similar to the one that faced students at the start of the last decade, where tuition increased rapidly while federal aid held steady and more and more students came to rely on private student loans.

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University Considers Four-Day Week to Cut Costs

January 28, 2010

by Scholarships.com Staff

Has the week been feeling a little long lately? Can Friday never come soon enough? If you're at the University of Montana, you could be in luck. In response to continued economic troubles and predicted shortfalls in state and federal revenue, the university's president announced this week that the school could benefit from a four-day work week that would reduce operating costs and address their budget woes.

The measure would make faculty and students' days longer, and professors would still make the same salaries. Faculty and staff had mixed feelings about the idea - Does this mean more cutbacks in the future? Are jobs on the line here? - but students have found few negatives to bring up. It'd mean every weekend was a three-day weekend, and for the green among them, a reduced carbon footprint since there would be fewer commuters on that day off and less energy expended to run the school. Others think it could allow them to pick up more hours at on-campus and off-campus jobs to help cover those college costs. Students who have expressed concerns worry that this may mean it takes them longer to graduate. Programs with rigorous curriculums, like law and pharmacy, may have trouble fitting in all of their required instruction into a shortened week.

According to the Western Montana newspaper "The Missoulian," the change would involve the following: The University would be open Tuesday-Friday, to account for the many activities that happen on Fridays. Classes would run at 90 minutes, which already happens campus-wide on Tuesdays and Thursdays. More classes would be offered early in the morning and late in the evenings, meaning more 8 a.m. classes for students. Faculty and staff would work 10-hour days. Administrators think the change would save the college about $450,000 each year, or about 15 percent of the university's overall budget to heat and light buildings. The earliest a shortened week would take effect is July 2010.

Some community colleges already operate in a similar fashion. The unusual thing here is that the University of Montana is a research institution, where arguably more time on campus is needed by those who are there for the school's research capabilities. Administrators say they have a few things to iron out before discussing the idea further, including whether the school's library and University Center would remain open on Mondays.

What do you think? What are your pros and cons of a short week? Should other schools consider it to save some money or recoup some funding for their budgets? Let us know what you think.

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University of California Plans to Use Wait List for Incoming Freshmen

February 1, 2010

by Scholarships.com Staff

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.

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Food Banks Open Doors to College Students

February 9, 2010

by Scholarships.com Staff

Several colleges across the country have opened food banks to assist students struggling to make ends meet at a time when tuition costs continue to rise and schools look to find ways to recoup budget losses over the last academic year.

Michigan State University, where students have dealt with the loss of the Michigan promise scholarship, has seen a 25 percent increase since 2008 in the number of students who visit its student-run food bank. Grand Valley State University opened a food pantry in April to help students cope with higher tuition costs. An article in the Detroit Free Press over the weekend describes the situations students have found themselves in. Some have parents who have been laid off and can no longer contribute to college educations, some have children and families of their own that they have had trouble supporting, some have lost part-time jobs that covered the costs of food, and others just need some help in between paychecks as they work campus jobs when they're not attending class.

Michigan State's Olin Health Center, where the food bank operates biweekly, and the Grand Valley State pantry, which has helped more than 200 students since it opened. Both are able to run through regular donations of cash and food.

Food banks across the country have seen an increase in visitors, both student and not, in tough economic times. Nearly one in 10 Massachusetts residents visited a food bank in 2009; one in eight people in both Fort Worth, Texas, and Greensboro, North Carolina visited a food bank last year. College campuses have responded with other types of emergency financial assistance, as well. The University of Michigan has been offering emergency grants to students who need help paying for the costs of food or medication, or an unexpected move. Students can apply online and receive $500 by the next morning, according to the Free Press article. Western Michigan University offers short-term emergency loans to help with living expenses.

If you're having trouble covering costs, despite living frugally and within your means, there is help out there. Whether you look to your local community or explore options through your financial aid office, consider every option.

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Can't Find a Job? Get Your Money Back

February 12, 2010

by Scholarships.com Staff

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.

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Middlebury College Plans to Place Ceiling on Tuition Hikes

February 16, 2010

by Scholarships.com Staff

The president of Middlebury College has introduced a plan that would cap the school's annual comprehensive cost increases at 1 percentage point above inflation, a proposal that would slow increases that have been running well above and independent of changes in the Consumer Price Index. The school's board is expected to approve the proposal prior to planning its budgets for the next year.

According to an article in Inside Higher Ed today, the decision to come up with a proposal for a tuition increase cap came when administrators started talking a hard look at the ever-growing cost of a liberal arts degree. At Middlebury, the "comprehensive fee" of an education there - tuition, room and board - has reached past the $50,000 per year mark. And despite a record number of students applying to the school, administrators felt they should be forward-thinking rather than taking advantage of the current windfall of applicants. Those numbers won't keep up forever, after all. In a speech at the college on Friday, the school's president, Ronald D. Liebowitz, said there would eventually "be a price point at which even the most affluent of families will question their investment; the sooner we are able to reduce our fee increases the better."

A number of schools have tried to impose tuition freezes in the past, only to revert back to their old ways when budgets tightened. Princeton University tried in 2007; Williams College tried in 2000. Middlebury administrators, however, hope their cap is sustainable for the long term. Middlebury's increase for the current 2009-10 year was 3.2 percent, 3 points above inflation. The average annual increase for private, four-year colleges is 4.4 percent, according to the College Board. Critics of the proposal worry that cuts will come from elsewhere to make up the funds lost by the cap; the school loses about $900,000 for each percentage point increase it doesn't make. In the Inside Higher Ed article, Liebowitz said he saw revenue potential in the school's unique programming, and that the move could make the college even more desirable to applicants also applying to private colleges who are not considering tuition increase caps.

In 2008, only five colleges charged $50,000 a year or more for tuition, fees, room, and board. In 2009, 58 did, making $50,000 the new norm. Still, it could be worse. Tuition and fees increased by an average of 4.3 percent at private colleges and universities nationwide for the 2009-2010 academic year, according to data from the National Association of Independent Colleges and Universities. Those figures, although much higher than the rate of inflation, were still lower than previous averages. In fact, those tuition increases were the lowest they have been in 37 years, despite the struggling economy. On average, schools also allocated 9 percent more to college scholarships and grants for 2009-2010 than the previous academic year.

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Study Analyzes the Most Educated—and Unemployed—Generation

February 24, 2010

by Scholarships.com Staff

The country's Millennials, the 50 million or so teens and 20-somethings who are entering adulthood around the start of the new millennium, are on track to become the most educated group of individuals the country has ever seen. But they're also entering adulthood to face the largest number of unemployed and out of work people in more than 30 years.

A study released today by the Pew Research Center included new data that surveyed 2,020 adults, including 830 Millennials, to determine how future generations will look and to nail down the "Millennial Identity." The study also drew on more than two decades of Pew Research Center surveys, and was supplemented by an analysis of Census Bureau data and other relevant studies. Among the findings, a record 39.6 of Millennials were enrolled in college as of 2008.

Although the recession has greatly affected their chances of landing jobs post-graduation (22 percent of businesses report they will hire fewer college graduates than in previous years), the group remains confident and upbeat about both their chances on the job market and the economy. About nine-in-10 either say that they currently have enough money or that they will eventually meet their long-term financial goals, despite the 37 percent of Millennials who reported they were unemployed, the largest number among this age group in more than three decades.

Among other findings: 

     
  • About one-in-six aged 22 and older admitted to returning to a parent's home because of the recession.
  •  
  • Nearly six-in-10 said that work ethic was one of the big differences between young and old workers; about three-fourths said that older people had the more impressive work ethic.
  •  
  • Nearly one-in-four have a piercing in some place other than an earlobe, and nearly four-in-10 have a tattoo. (Of those who are tattooed, half have two to five and 18 percent have six or more.)
  •  
  • More than eight-in-10 say they sleep with a cell phone near the bed, and nearly two-thirds admitted to texting while driving.
  •  
  • Three-quarters have created a profile on a social networking site like Facebook or Twitter, and one-in-five have posted a video of themselves online.
  •  
  • Two-thirds agreed that "you can't be too careful" when dealing with people, but place more trust in the federal government than previous generations.
  •  
  • One-in-four are not affiliated with any particular religion, but responded that they pray about as often as previous generations.
  •  
 The study also found that about 74 percent of all respondents, young and old, agreed that there was a generation gap. Most of this was related to technology use, although some was related to the state of the nation. About 41 percent of Millennials say they are satisfied with the way things are going in the country. About 26 percent of those 30 and older said the same, suggesting that the recent troubles with the economy have affected the older more than the young.

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