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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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Students Shamed for Not Contributing to Senior Gift

Two Ivy League Students Publicly Humiliated for Not Donating

October 29, 2010

Students Shamed for Not Contributing to Senior Gift

by Suada Kolovic

“Have pride in giving back to the institution that has given you so much” is surely the sentiment colleges intends for students to graduate with. And while a majority may decide to give back, what will come of the students who decide not to? Two students from elite Ivy Leagues – where you might expect a higher degree of integrity – were faced with that exact predicament and were subsequently shamed by their peers for not contributing to the senior class fund.

At Dartmouth, the single student from the 1,123-student Class of 2010 that did not contribute was publicly criticized in the college newspaper where they addressed Laura DeLorenzo directly without publishing her name, writing she has “symbolically shown the Class of 2014 that she did not consider their chance at happiness valuable.” The next day, another student – writing under a pseudonym – revealed DeLorenzo’s identity on the Little Green Blog, a popular blog on campus. But why was there such a hostile response towards a student with possible financial strains? Her decision jeopardized a potential donation from the Class of 1960, which had promised to give $100,000 to the college if every graduating senior contributed. In response, DeLorenzo sent out an e-mail, posted on the Little Green Blog, writing that her decision not to donate was personal and reflected “that the negative aspects of Dartmouth outweigh the positive, and nothing more."

At Cornell, volunteers overseeing fund raising efforts were provided lists of classmates who had not donated. They were encouraged to send multiple e-mails and to call students on their cell phones, telling them that they were among the few who had not yet given. One student, Erica Weitzner, reported getting four or five e-mails in addition to phone calls imploring her to contribute. "I understand the theory behind the Cornell campaign is they want their seniors to donate, but pushing this hard makes it seem like it's no longer really a donation but more like part of tuition," Weitzner told the New York Times.

Do you think imploring such pressure tactics – repeatedly calling and sending multiple e-mails – and public humiliation is the approach in which well-respected institutions should conduct themselves in order to solicit donations?

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Students Shamed for Not Contributing to Senior Gift

Two Ivy League Students Publicly Humiliated for Not Donating

October 29, 2010

Students Shamed for Not Contributing to Senior Gift

by Suada Kolovic

“Have pride in giving back to the institution that has given you so much” is surely the sentiment colleges intends for students to graduate with. And while a majority may decide to give back, what will come of the students who decide not to? Two students from elite Ivy Leagues – where you might expect a higher degree of integrity – were faced with that exact predicament and were subsequently shamed by their peers for not contributing to the senior class fund.

At Dartmouth, the single student from the 1,123-student Class of 2010 that did not contribute was publicly criticized in the college newspaper where they addressed Laura DeLorenzo directly without publishing her name, writing she has “symbolically shown the Class of 2014 that she did not consider their chance at happiness valuable.” The next day, another student – writing under a pseudonym – revealed DeLorenzo’s identity on the Little Green Blog, a popular blog on campus. But why was there such a hostile response towards a student with possible financial strains? Her decision jeopardized a potential donation from the Class of 1960, which had promised to give $100,000 to the college if every graduating senior contributed. In response, DeLorenzo sent out an e-mail, posted on the Little Green Blog, writing that her decision not to donate was personal and reflected “that the negative aspects of Dartmouth outweigh the positive, and nothing more."

At Cornell, volunteers overseeing fund raising efforts were provided lists of classmates who had not donated. They were encouraged to send multiple e-mails and to call students on their cell phones, telling them that they were among the few who had not yet given. One student, Erica Weitzner, reported getting four or five e-mails in addition to phone calls imploring her to contribute. "I understand the theory behind the Cornell campaign is they want their seniors to donate, but pushing this hard makes it seem like it's no longer really a donation but more like part of tuition," Weitzner told the New York Times.

Do you think imploring such pressure tactics – repeatedly calling and sending multiple e-mails – and public humiliation is the approach in which well-respected institutions should conduct themselves in order to solicit donations?

Comments

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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Colleges Revive the Humanities

November 9, 2010

Colleges Revive the Humanities

by Suada Kolovic

Due to the drastic economic downturn, students are flocking to majors considered “safe” – economics, engineering and computer science – and steering clear of ones that develop creative thinking and imagination – the humanities. It makes sense, since the objective after graduation is to obtain a well-paying career to pay for that prestigious college education and the best way to do so, in the eyes of the majority of college students, is to select a major where the potential for a generous return on your investment is high. According to the American Academy of Arts and Sciences, student interest in the humanities – which include the classics, literature, languages, history, philosophy, and religion – has dropped dramatically in recent years. Only 8 percent of American undergraduates majored in a humanities field in 2007, compared with 17 percent in 1966.

At esteemed universities, including Cornell, Dartmouth, and Harvard, there is concern that without humanities students won’t develop the kind of critical thinking and empathy “necessary to solve the most pressing problems facing future generations.” Drew Faust, Harvard’s president, explained, “That’s a real shift from seeing an undergraduate education as general preparation in a wide range of fields to seeing undergraduate education as getting a particular vocational emphasis. People worry a lot about what you do with that degree. I think the change has been accelerated and intensified by people’s immediate concern of getting a job — especially with the increasing cost of higher education and the challenges in the economy.’’ (In case you were wondering, the most popular field of study at Harvard is economics.)

In response, colleges have begun pledging huge sums to their literature and arts departments, while others have begun erecting buildings. Among the universities attempting to restore interest in the humanities is Brandeis, which recently dedicated a new $22.5 million glass-and-slate hilltop home, called the Mandel Center for the Humanities. Harvard and Brown have also received millions to support new humanities initiatives.

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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.
Comments

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.
Comments

GPA, SAT, and a Great Sense of Humor Walk into a Bar

November 12, 2010

GPA, SAT, and a Great Sense of Humor Walk into a Bar

by Suada Kolovic

When you envisioned what your college application process would be like, I’m sure you anticipated stress and anxiety but I doubt you expected a joke could get you in. This was the moment you were told to draw on your strengths and articulate every achievement – countless community service hours, stellar GPA, and the fact that you were senior class president. Every sentence would be so perfectly and meticulously thought-out that who you were just leapt right off the page. You prepared your answer on why you belonged at your dream college and pinpointed what you had to offer…until you opened the actual application and found a serious curveball.

In addition to common essay prompts, more and more institutions are jumping on the unconventional question bandwagon and are interested knowing not only in why students want to gain admission but just how creative they can be when challenged. Here are the far-from-average questions schools are asking this year:

California Institute of Technology

Caltech asks applicants to not overanalyze:

  • “What are three adjectives your friends would use to describe you?”
  • “Caltech students have long been known for their quirky sense of humor and creative pranks and for finding unusual ways to have fun. What is something that you find fun or humorous?”

University of Chicago

Each year the University of Chicago asks newly admitted and current students for essay topics:

  • “Dog and Cat. Coffee and Tea. Great Gatsby and Catcher in the Rye. Everyone knows there are two types of people in the world. What are they?”

Yale University

Yale asks applicants to write essays, plus answer the following questions in 25 words or less:

  • “If you could witness one moment in history, what would it be and why?”
  • “Recall a compliment you received that you especially value. What was it? From whom did it come?”

University of Dallas

Along with three conventional questions, including “What influenced you most to apply to the University of Dallas?” the school also asks:

  • “Tell us your favorite joke or humorous anecdote.”

Soon-to-be college applicants, what do you think of this technique? Are you a fan of the challenge or frustrated by the fact that not only are you expected to impress them with your achievements and extracurricular activities but now you’re expected to be witty, too?

Comments

Student Loans Leave Student $200,000 in Debt

Northeastern Grad Starts Website to Help Make Payments

November 23, 2010

Student Loans Leave Student $200,000 in Debt

by Suada Kolovic

Figuring out how to pay for a college education can be complicated, but what happens once you’ve graduated and your loans become so overbearing that even with a full-time job, monthly payment are implausible? A few weeks ago, we blogged that the average college student leaves school with $24,000 in debt, but what about the student who’s debt is about eight times that amount? Northeastern alum Kelli Space, 23, found herself in that exact predicament: With $200,000 in debt, Space was unable to pay her stifling student loans – her monthly payments to Sallie Mae are $891 and by next November that figure will nearly double – so she started a website, Two Hundred Thou, in order to solicit donations from the public.

The site is devoted to sharing her story about the naivety of an 18- year-old, who was the first in her family to attend college and her reliance on readers to foot the bill. Space explains, “At the moment, I like to think I have great things going for me! A job, an accommodating family, loyal friends, etc... but these loans are crippling my ability to enjoy these things – or pay rent. Can I live?” She goes on to explain that by donating to her cause, you’ll also be helping the country as a whole.

Two Hundred Thou also tracks Space’s progress and so far she’s raised $1,726.50, leaving a mere $198,273.50 to go. Space ends with the notion that once her student loans are paid off she’ll spend her money elsewhere, “probably single-handedly spurring the economy.” To think you’re just a click away from cleaning up the mess of a recent college graduate, while fixing the economy and helping the country as a whole – and at $200,000, that’s a bargain.

However, we should point out – before you lend a helping hand – that we really don’t know who this person is or even whether this story is embellished or even entirely fabricated. The domain is registered privately, hiding the identity of the registrant, and the email address is just a gmail account anybody could have created. Sure, maybe this is on the up-and-up, but there’s really no way of knowing. It wouldn’t be shocking to see a bunch of these sites spring-up if this idea gains traction and exposure.

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