Blog

Despite the hefty sticker price associated with all Ivy League institutions, estimated yearly costs are actually quite affordable. In fact, Ivy Leaguers graduate with less debt than their peers who attended less prestigious schools. How? Turns out healthy endowment funds play a huge role in aiding low-income, middle-income and even upper-income students with tuition costs. Score!

According to statistics from U.S. News & World Report, many of the best colleges in the county are relative steals for the lucky few who earn admission. For example, Princeton University students graduate with about $5,096 of debt for all four years – the lowest sum for alumni leaving a national university with debt. Amy Laitinen, a former White House education adviser now at the New America Foundation, said, "Folks look at the sticker price and assume that's what everyone is paying. The truth is that the more elite schools have more resources."

But with acceptance rates hovering at less than 10 percent, gaining access to those Ivy League dollars is fiercely competitive. Do you think it’s fair for students who don’t meet the Ivies’ steep admissions standards to be saddled with crippling debt or should the few that do be rewarded with an affordable, brand name education? Let us know what you think in the comments section.

High school seniors heading to college in the fall, listen up: The average cost at the nation’s four-year public universities rose 2.9% this year, the smallest annual increase in more than three decades (yay!) but the slowdown in tuition increases have been offset by reductions in federal grant aid (boo!).

According to a new report from the College Board, public colleges have raised tuition prices so sharply in recent years not to gouge students but to bank on the increased state aid. And although the increase is moderate, "this does not mean that college is suddenly more affordable," says economist Sandy Baum, co-author of Trends in Higher Education reports on tuition and financial aid. "It does seem that the [upward tuition] spiral is moderating. Not turning around, not ending, but moderating." Unfortunately, students continue to suffer from the constant cycle of rising costs and serious college debt. Shrinking state aid for public colleges and universities has translated into the cost of public schools to jump $1,770 in inflation-adjusted dollars. The amount of government aid received last year fell $6,646 for every full-time student at those institutions while just five years ago, each student received $9,111 in today’s dollars. (For more on this report, click here.)

If college is in your forecast, what do you make of the report’s findings? Let us know in the comments section.

With fall semester in full swing, high school seniors are mere months away from deciding where they’ll spend the next four (or more) years. And while there are multiple factors to consider when making such a major decision, most would argue that prestigious universities and high-earning salaries are intrinsically tied...or are they?

According to a recent study by College Measure, students who earn associate degrees and occupational certificates often earn more in their first year out of college than those with traditional four-year college degrees. Examining schools in Arkansas, Colorado, Tennessee, Texas and Virginia, the study found that short-term credentials such as two-year degrees and technical certificates were worth more than bachelor’s degrees in a graduate’s early years. College Measures President Mark Schneider said, “The findings challenge some conventional wisdom, showing for example that what you study matters more than where you study. Higher education is one of the most important investments people make. The right choices can lead to good careers and good wages while the wrong ones can leave graduates with mountains of debt and poor prospects for ever paying off student loans.” (For more on this study, click here.)

It’s important to remember that the study focuses on short-term gains as opposed to long-term/lifelong earnings. It’d be interesting for College Measure to reexamine their findings over the next few years but what do you think of its current report? Share your thoughts with us in the comments section!

If you’re a high school senior and you don’t think a traditional four-year university is for you, attending a community college does have its perks. Whether you’re interested in completing your general courses or testing the waters with a major that you're not absolutely set on, community colleges offer students the luxury of figuring out their educational path for a fraction of the cost...or at least they used to: California Gov. Jerry Brown signed a bill that would allow a handful of community colleges to charge inflated prices for in-demand courses. Let’s say it all together now: Booooooo!

The higher costs – $200 per unit instead of $46 – would only affect the shorter summer and winter sessions. Supporters insist that the pilot program would prevent more students from being shut out of courses they need to graduate but critics said that lower-income students would be denied the opportunity to obtain course credits essential to their educational success. "The state would be shifting the burden for funding access from the state general fund to the backs of students," said Vincent Stewart, the community college system's vice chancellor for governmental relations, after the California Legislature approved the measure. "Creating a pay-to-play fee structure, where students who have greater wealth and means can get on a fast track, is patently unfair."

Even with the rate per unit almost quintupled, the overall cost of studying at a community college is still considerably less when compared to traditional options but is it fair to charge more? Let us know your thoughts in the comments section.

For those of you that don’t closely follow politics, tonight President Barack Obama will deliver his fifth State of the Union address. If you aren’t familiar, the address not only reports on the condition of the nation but also allows the President to outline his legislative agenda and national priorities. And with potentially millions of young Americans watching, we wondered what issues mattered most to Millennials? Fortunately, Generation Progress asked them just that! Check out some of the top responses below: (For the full list, head over to Generation Progress.)

• A solution to the student debt crisis. With 40 million Americans shouldering $1.2 trillion dollars in educational debt, Millennials want to see President Obama call for ways to address this crisis.
• Create a fair economy that shrinks the income inequality gap by raising the minimum wage to $10, maintains federal government programs like unemployment benefits, expands the U.S. apprenticeship system, supports young entrepreneurs to create new business and reinvest in national service programs like AmeriCorps.
• Every state needs to expand Medicaid under the Affordable Care Act (ACA), so young Americans can purchase affordable health care plans with subsidies Medicaid provides via the law.
• Invest in green jobs while addressing the effects of climate change.
• Enact common-sense gun legislation such as mandatory background checks.

What do you think of the top issues that Millennials want discussed? Any you would add? Let us know in the comments section.

The recession seems to be bringing an almost constant stream of stories about people in all sorts of circumstances who are facing new and varied financial troubles.  These stories could easily be read as a guide for "things not to do in a recession."  The latest addition?  "Default on your student loans."

While neglecting even one payment is a bad idea at any time, borrowers who have found themselves in default on their loans are facing an even more difficult time as a result of the credit freeze.  The Chronicle of Higher Education published a story today about this particular aspect of the trouble facing participants in the Federal Family Education Loan Program. Currently, 19 of the nation's 35 guarantee agencies (the companies that service student loans in the FFEL program) lack a buyer for their student loans, including rehabilitated loans.

People who borrowed Stafford loans, defaulted on their payments, then agreed to "rehabilitate" their loans, or make consistent payments until the loan can be repackaged and resold and thus brought out of default, are finding that there's currently no market for their rehabilitated loans, so they're stuck in default status longer than necessary. This hurts their credit score and also keeps them from being eligible for federal student financial aid if they choose to go back to college, as many people affected by the recession are doing.

Currently, the federal government cannot buy up these loans, though legislation may be in the works to fix this.  While students do have other options, such as consolidation through Direct Loans (the federal government loan program), students were typically pushed toward rehabilitation before the credit crunch, as it was most profitable for the lenders, according to the Chronicle of Higher Education article.

If you have a student loan currently in repayment, be sure to work with your lender if you're having trouble making payments.  Look into consolidation loans, and ask about extended payment plans, in-school deferments (if you're planning to go back), loan forgiveness programs for certain career paths, and hardship forebearances.  Student loan debt cannot be discharged in bankruptcy, so if you default, you're stuck with the consequences--possibly for much longer than you'd think.

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

Per-student state higher education spending peaked in 2001, when it hit the highest level in inflation-adjusted dollars since data was first collected in 1983.  A recession in 2001 prompted drops in education spending that continued until 2006, when spending began to grow again until 2008, though per-student funding did not return to 2001 levels before another recession interfered.

In response to cuts in funding of around 7 percent between 1998 and 2008 and increases in enrollment of around 25 percent over the same period, tuition revenue has risen 20 percent.  The report suggests this trend is likely to continue, with funding potentially falling off permanently and tuition hikes continuing as a result of this year's budget cuts.  Thus, the burden is passed on to already cash-strapped students and families, who are already facing the prospect of needing more student loans due to losses of income and declines in college savings plans.

The SHEEO expressed hope that the stimulus package currently moving through Congress might mitigate this effect.  However, the version passed yesterday by the Senate eliminated billions of dollars that would have gone to offset state budget cuts, so the positive impact on higher education could be less than is hoped.  Additionally, members of Congress have expressed frustration with rising tuition rates, especially given tuition's likelihood to continue to outpace increases in Federal Pell Grants, such as the new funding currently included in the stimulus.

This week, several groups of students have decided to take a new approach in attempting to reduce their college costs.  Students in Minnesota and South Carolina both held rallies at their state capitols this week to try to influence their state legislature's decisions regarding their schools.  Meanwhile, students at New York University have barricaded themselves inside a building on campus, refusing to come out until the university meets their list of demands.  Each group has different requests, but most come down to money.

More than 200 students from state colleges and universities in Minnesota protested outside the State Capitol Wednesday.  Many held signs stating their anticipated student loan debt (answers included $38,000 and "too much" according to an article in The Minneapolis Star-Tribune), while others gave speeches and encouraged their legislators to reject the governor's proposed budget cuts to higher education.  Several legislators expressed solidarity with the students, and a newly formed student group plans further protests.

Students in South Carolina also urged their state legislature to make college funding a spending priority, though their actions were largely in protest to a proposed state tuition cap.  Students expressed concern that their universities may need to sacrifice educational quality by cutting faculty or course offerings to deal with reduced funding.  Students were concerned they'd wind up getting less for their money and possibly paying more money over time by taking longer to get the classes they needed to graduate.  They urged the legislature to leave the power to set tuition in colleges' hands.

New York University had the most radical student protest and the lengthiest list of demands, with a small group of students taking over a cafeteria and demanding greater accountability and transparency in the university's budgeting process.  The NYU students also wanted a tuition freeze, a union and better benefits for graduate student assistants, and according to one sign, "enough financial aid" for all students, among other things.  The students and the university have been in an ongoing standoff since Wednesday night, with crowds of up to 300 students gathering outside the occupied building at one point yesterday.

Whether student rallies, protests, or sit-ins are the best means of funding your education is debatable.  Students with activist inclinations who seek other routes to paying for college with better odds of immediate success should consider doing a scholarship search.  There are numerous scholarship opportunities for students who are involved in their communities and interested in bringing about change, and they don't require presenting anyone with a list of demands.

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

The report also shows a difference in default rates between the Federal Family Educational Loan Program and the Federal Direct Loans Program, though FFELP advocates are arguing that the differences are largely due to different makeups of the schools participating in each program (For example, students at for-profit schools are more likely to default, and are also more likely to participate in FFELP).  However, even among similar groups, FFELP still had a slightly higher default rate.

Typically, reports on default rates are released around September and don't compare FFELP and Direct Loans, but Congress had requested data earlier to aid with the federal budget decision-making process.  This is only the latest bit of bad news for FFELP, which President Obama urged Congress to eliminate in the 2010 federal budget.  The Congressional Budget Office has said that eliminating FFELP could save more money--$94 billion, double the previous estimate.  Additionally, a report by two interest groups states that the proposed increases in Pell Grants, some of whose funding is tied to cutting FFELP, would increase the average grant award by $121 and would make 260,000 more students eligible for the program.

If you're a college student looking to minimize student loan debt and reduce your risk of default, it's still not too late to start your scholarship search and find free money you won't need to pay back.

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

One of the corrections taken up in the bill was a move to postpone the controversial PLUS loan auction program by a year.  Under the auction plan, lenders would bid to service PLUS loans in each state, a move that made much more sense when proposed in 2007 than when enacted in 2009.  Bids for the auction were due this week, but so far it has generated little interest from most lenders and a statement from major lender Sallie Mae saying they had no plans to participate.  Congress hasn't scrapped the plan entirely, but tabling it for a year will hopefully allow it to be revisited under more favorable, or at least different, conditions, and in the meantime will allow parents and graduate students to continue borrowing as normal.

The other much talked about provision would provide relief to people currently repaying their student loans who have defaulted in the past.  The credit crunch has made it difficult for borrowers who are now making payments on time to move out of default and have their credit rehabbed and federal aid eligibility reinstated.  Guarantee agencies have had trouble finding borrowers willing to buy up the rehabbed student loans and allow the default status to be removed from the borrowers' credit.  A provision in the correction bill will allow the federal government to buy up rehabbed loans under the same authorization they're currently using to buy up other loans from student lenders.