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Textbook Alternatives = Big Savings

Open Books, Rentals Preserve Students’ Funds

October 8, 2010

Textbook Alternatives = Big Savings

by Alexis Mattera

As a college student, my pockets were far from deep but they got even shallower when I stopped at the co-op to buy my books at the beginning of each semester. My wallet and I loathed the astronomical price tags (even for used copies!) with a passion because we both knew there had to be a way for me to get books and not be forced to subsist on Top Ramen until my next break. I was right…just kind of bummed it didn’t happen during my collegiate tenure.

Data from the Student Public Interest Research Group’s new survey disclose textbooks available for free online or sold in print for low cost could slash students’ textbook bills from $900 to $184 each year. Using eBooks and textbook rental services like BookRenter.com and Chegg.com can also reduce book costs by $300. Though 93 percent of students surveyed said they would rent “at least some of their textbooks,” Cerritos College student Donald Pass prefers the flexibility of open textbooks because he could read the material for free online, purchase a print copy with study aids or print it himself. (Daytona State's administration agrees and will begin offering eBook access to students this coming January.) Professors like Lon Mitchell of Virginia Commonwealth University, however, say this option is troublesome because students often bring only limited sections of text to class, making it difficult for instructors to review supplemental material in different chapters. Mitchell also said that a number of his students have resisted the online versions of the open textbooks because compared to the print versions, they felt the online text was lacking.

I hear what Mitchell is saying loud and clear but if a student can reduce their spending by up to 80 percent by using open books and textbook rentals, I have a feeling print editions are going to be seen less and less as the years go by. Students, are you utilizing eBooks and textbook rentals or are you still relying solely on hard copies you don't have to share or return? If you’re using both, is there a noticeable difference in the material quality like Mitchell said? What's your preference between these options?

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College Dropouts Cost Taxpayers Billions

October 12, 2010

College Dropouts Cost Taxpayers Billions

by Suada Kolovic

Dropping out of college would surely ruffle a few feathers at home, but it seems mom and dad may not be the only ones affected. While dropping out after a year can translate into lost time and a mountain of debt for the student, now there’s an estimate of what it costs taxpayers: billions.

According to a report released Monday, states appropriated almost $6.2 billion for four-year colleges and universities between 2003 and 2008 to help pay for the education of students who did not return for year two. The report takes into account spending on average per-student state appropriations, state grants and federal grants – such as Pell grants for low-income students – then reaches its cost conclusions based on students retention rates. It’s worth mentioning though that the report’s conclusions are considered incomplete: Because it’s based on data from the U.S. Education Department, it does not take account of students who attend part time, who leave college in order to transfer to another institution, or who drop out but return later to receive their degrees.

And with figures in the billions, critics agree that too many students are attending four-year schools – and that pushing them to finish wastes even more taxpayer money. Robert Lerman, an American University economics professor, questions promoting college for all. He said the reports fleshes out the reality of high dropout rates. But it could just as easily be used to argue that less-prepared, less-motivated students are better off not going to college."Getting them to go a second year might waste even more money," Lerman said. "Who knows?"

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Obama Extends an "Opportunity" to College Students

The American Opportunity Tax Credit, That Is

October 13, 2010

Obama Extends an "Opportunity" to College Students

by Suada Kolovic

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

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

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

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The End of Traditional Textbooks is Near

Colleges to Force Switch to E-Textbooks

October 25, 2010

The End of Traditional Textbooks is Near

by Suada Kolovic

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

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

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

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

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Community College Tuition Rise Looming

Community Colleges Charging More For In-Demand Programs

October 26, 2010

Community College Tuition Rise Looming

by Suada Kolovic

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

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

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

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Credit-Card Companies Paid Colleges Almost $84-Million

Payment Based on Cards Issued to Students and Alumni

October 27, 2010

Credit-Card Companies Paid Colleges Almost $84-Million

by Suada Kolovic

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

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

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

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

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Unemployed Boston College Law Student Wants a Refund

October 28, 2010

Unemployed Boston College Law Student Wants a Refund

by Suada Kolovic

Recent college graduates entered one of the worse job markets in history. And while some have opted to stick it out busing tables to pay the debt caused by their college education, a third-year Boston College Law School student decided he wasn’t willing to bear the cost of an education that did not guarantee a job upon completion. In an open letter posted on EagleiOnline — an online student-run newspaper at BC’s law school — the anonymous student made a proposition to the school’s dean: Refund his tuition and he’ll leave school without a degree.

The student explained that the lackluster job market, a massive student loan debt load and his wife's pregnancy were all causing him undue stress. And he went on to say, “This will benefit both of us: on the one hand, I will be free to return to the teaching career I left to come here. I'll be able to provide for my family without the crushing weight of my law school loans. On the other hand, this will help BC Law go up in the rankings, since you will not have to report my unemployment at graduation to US News.”

How did the school respond? Shockingly enough, BC did not meet the student’s request. According to the Boston Herald, the law school said in a statement that while it is "deeply concerned" about its students' job prospects no institution of higher education can guarantee a job after graduation. "What we can do is provide the best education possible, and work together to provide as many career opportunities as possible," the statement said.

What do you think? Should tuition be conditional?

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How Expensive is "Too Expensive" for a College Education?

Students Willing to Spend More for Academics, Prestige

November 4, 2010

How Expensive is "Too Expensive" for a College Education?

by Alexis Mattera

The true cost of a college education is seldom the number that’s printed in school brochures and on various college comparison lists. When you figure in federal aid, scholarships, grants, room and board, books and supplies, that price fluctuates. One thing remains constant - higher education doesn’t come cheap - but a new poll finds students are willing to stretch their finances for several key factors.

In April, right up until enrollment deadlines, students were still considering “too expensive” schools and were willing to stretch to pay for their education, poll conductors the College Board and the Art & Science Group report. While it would be more financially sound to select the school with the lower tuition and better financial aid package, “too expensive” colleges remained in play if they had strong academics in students’ fields of interest, were places students felt comfortable, had prestigious academic reputations or had excellent records of graduate school acceptance or good job placement after students graduated. Here’s the breakdown:

  • Twenty-six percent of students surveyed said their family would have to stretch a lot, but “I think we’ll make it.”
  • Twenty-two percent chose “I’m not sure how my family will afford to send me to college, but I believe we’ll work something out when the time comes.”
  • Eleven percent said, “I don’t think my family can afford to send me to college, but we are going to try.” Nearly 40 percent of students surveyed did not have a sense of long-term costs, citing “no idea” what their likely monthly payment on student loans would be after graduation.

If you think back to every award show you’ve ever seen, you’ll recall those who do not win always say it is an honor just to be nominated. The same can be said for college admissions: It’s an amazing achievement to be accepted to a prestigious college but is attending worth it if the cost of attendance is going to drive you and your family into debt?

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Ohio Program Rewards Higher GPA’s with Cash

November 8, 2010

Ohio Program Rewards Higher GPA’s with Cash

by Suada Kolovic

Imagine a world where cold, hard cash was the incentive for doing well in school. A new study, that examined three Ohio community colleges, attempted to explore if paying students is the answer for an authentic effort in their education. The report, "Rewarding Progress, Reducing Debt: Early Results From Ohio's Performance-Based Scholarship Demonstration for Low-Income Parents," showed that using financial aid strategically – providing low-income parents scholarships based on their performance – was “encouraging.” The program offered the low-income parents up to $1,800 for one academic year if they earned at least a “C” in 12 or more credits, or $900 for the same grade in six to 11 credits.

According to Lashawn K. Richburg-Hayes, deputy director of young adults and postsecondary education with MDRC, a nonprofit research organization based in New York, “the goal is to understand if performance-based scholarships can work for different populations, in different amounts." The result – of the students assigned to the scholarship group, 33 percent earned the full-time award and 41 percent received the part-time award in the first term. Thirty percent earned the full-time award and 31 percent the part-time award in the second term. The scholarships earned were then paid directly to the students, “allowing them to use the money for whatever expenses were most pressing”, said Reshma D. Patel, a research analyst with MDRC and a co-author of the report. Unlike scholarship funds that must be put towards tuition fees or books, the student has the freedom to use the cash as they see fit. “That flexibility was especially important for the program's target population, low-income parents, who could use the money for child-care or other living expenses,” Patel said.

So, future college attendees, do you think students would be more inclined to put in a wholehearted effort in their education if they were paid to do so?

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Grace Period for Student Loans Coming to an End

Simple Tips to Managing Your Loans

November 11, 2010

Grace Period for Student Loans Coming to an End

by Suada Kolovic

With the typical six-month grace period on student loans right around the corner, recent college graduates across the country will start making monthly payments whether they’re ready to or not . If you’re one of those students, or just starting your college career, here are a few suggestions from the Project on Student Debt, an initiative of the Institute for College Access & Success, a nonprofit independent research and policy organization, on how to manage your loans.

  • Know where you stand.

    A great way to get the exact amount you owe is to visit your lender – in some cases, lenders – or you can find details of your student loans, including balances, by visiting the National Student Loan Data System, the U.S. Department of Education’s central database for student aid. If you have non-federal loans, there is a possibility they won’t be listed so contact your institution for that information.
  • When’s the first payment?

    The grace period for student loans is the time after graduation before having to make your first payment. But the length of grace periods can vary; for Federal Stafford loans it’s six months, nine months for Federal Perkins Loans and Federal Plus Loans depend of when they were issued. To find out the grace period attached to private loans contact your lender.
  • Keep in touch with your lender.

    It’s important to remember to keep your contact information updated with your lender. Whether you’re moving or changing your phone number, an updated contact sheet could save you from unnecessary fees.
  • Consider what repayment option works best for you.

    One option is the Income-Based Repayment Program (IBR), which is not available on private loans, that sets a reasonable monthly payment based on a borrower’s income and family size. Under IBR, after 25 years of qualifying payments, your remaining debt, including interest, will be forgiven.
  • Prepare for life and the unexpected.

    Sometimes life doesn’t go according to plan. If you can’t make payments due to unemployment, health issues or other unexpected financial challenges, you have options for managing your federal student loans. There are options to temporarily postpone your payments, such as deferments and forbearance. Contact your lender for more information and the interest attached to those options.
  • Never ignore your financial responsibilities.

    Ignoring your student loans – or any loan for that matter – can result in serious consequences that can last a lifetime. When you default, your total loan balance becomes due, your credit score is ruined and the total amount you owe increases dramatically. If you default on a federal loan, the government can garnish your wages and seize your tax refunds.
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