While we’re on the topic of student loans and the lifetime of debt college grads will face, here are some informative articles and resources to peruse (find a paper bag and try to remember to breathe slowly and evenly).

Compare student loan default rates at different colleges and universities with Ben Miller’s 411 on Cohort Default Rates.

More Articles of Interest:

What’s a Degree Really Worth?
College Grads Struggle to Repay Student Loans
Students Borrow More Money Than Ever for College
A Steep Climb for Indebted College Grads
Average Student Loan Debt By State
NY Times: Student Loans Information and Resources
Where You Enroll Can Make a Difference for Student Borrowers
Linking Debt and Income

Posted by Alexa Harrington

Obama is upgrading the higher education system in this country (we hope), starting with an increase in Pell Grant award amounts. What does that mean for Pell Grant applicants? Who qualifies and for how much? Basically, the results of the FAFSA number-crunching are what determine a student’s eligibility.

Sandra Proulx lays it all out and takes a closer look at Pell Grant qualifications:

…there is no “one size fits all” recipient.
Keep in mind, the Pell Grant is awarded to undergraduates with a high degree of unmet financial need; most Pell money goes to students with a total family income around or below $20,000. But, students whose families have a total income of up to $50,000 may be eligible too. In 2005-2006, students with family incomes of less than $20,000 accounted for 57% of Pell Grant recipients.

…Pell Grant qualifications can be affected by a student’s enrollment status as well as income earned through employment, too. Think about it – if you are enrolled half-time, your tuition is less and therefore you will require less aid. Undergraduates who work while they are enrolled are more likely to have incomes that decrease their eligibility for federal need-based aid (ahh, didn’t think of that, did you?). Some low-income students may even find themselves ineligible for Pell Grants because they are enrolled part time at very low cost colleges, or they work while they are enrolled, or do both. More…

Further Reading:

Excellent FAFSA Resources

Posted by Alexa Harrington

Good news for FAFSA applicants: the 2010 version will be easier to apply for. The form is simplified and is no longer written in a language incomprehensible to even students with 4.0 GPAs and off-the-charts SAT scores. As an added bonus, volunteers will be available to help parents and students fill those suckers out.

While the total amount of grants and scholarships likely to be handed out this year won’t be anywhere near enough to meet most students’ needs, at least it will be easier to apply for aid. The online version of the notoriously headache-producing Free Application for Federal Student Aid, which is the scholarship application used by the federal government and most states, charities, and colleges, has been streamlined and simplified. Even better: There is a growing network of volunteers who will help anyone fill out the FAFSA free of charge.

Volunteer financial aid experts will be stationed at more than 800 YMCAs, churches, colleges, schools, community centers, and other locations around the country in January and February for College Goal Sunday events. The aim of the nonprofit events: to help students and parents get their aid applications in on time. Originally, College Goal Sunday events were held the Sunday after the Super Bowl. The program has grown so much in the past few years that many states now have several events on various days throughout January and February, says Marcia Weston, director of the program, which is funded by the Lumina Foundation and operated by the YMCA. Some states, such as California, use a different name for their volunteer event. But the College Goal Sunday website lists the times and places for events in 47 states plus the District of Columbia. Some sites will also provide transportation, she says. More…

Posted by Alexa Harrington

Again with the slapping. This time it’s for the jackasses in charge of higher education in this country. If you still feel they (the schools, the loan people, and the government) aren’t lacking in smarts and high-moral-ground-standing cojones, then please read this excerpt from WSJ’s Journal Editorial Report.

It’s a conversation between Paul Gigot, Naomi Schaefer Riley, and Dan Henninger regarding the cost of college, who’s in charge of making it cost so damn much, and the three-year-degree option. It’s buried three conversations down in the transcripts, so I’m posting the conversation in its entirety.

Also, when I tried to narrow it down to just the really good, informative chunks, ninety-nine percent of the conversation made my slapping hand twitch, so I figured it needed to be posted in complete form. Not long, not boring, and full of jaw-clenching tidbits about the Orwellian state of higher education. (Spoiler alert: They’re all bastards.)

Gigot: It’s a trend that most parents are keeping an anxious eye on: the skyrocketing cost of a college education. According to a new report by the College Board, those costs continued to rise last year despite a 2.1% decline in the Consumer Price Index. Hit hard by state budget cuts, four-year public colleges raised tuition and fees by an average of 6.5%, while prices at private colleges rose 4.4%. Add room and board, and the average cost of attendance at a public four-year college is now more than $15,000 a year. At private colleges, the price tag is $35,000. The sticker shock has led some, including Tennessee senator and former education secretary Lamar Alexander, to push for a three-year degree program at the college level.

We’re back with Dan Henninger and Steve Moore. And also joining us, The Wall Street Journal’s deputy Taste Page editor, Naomi Schaefer Riley.

Naomi, why do college costs keep rising even if the price level doesn’t for everyone else?

Ms. Riley: Well, it’s a third-party-payer system. I mean basically what you have is, colleges know they can keep raising the price, and they know that the government, through financial aid programs and various grants that they give to universities, both public and private, is basically going to pick up the difference. Unfortunately, for middle-class parents, it doesn’t always work out that way. They’re not picking up all of the difference for them, but colleges keep raising the sticker price.

Gigot: Because there’s income limits on who gets the subsidies, but the subsidies are vast–I mean, the Pell Grants, direct grants for people. There are basically subsidized loans, and then there are subsidies for saving for school too, which is how a lot of middle-class parents help. Are you saying there’s a kind of chasing-your-tail quality here? The tuition goes up, subsidies follow, and then the people say, tuition can go up again, and then subsidies have to go up again?

Ms. Riley: That’s absolutely true. And then in addition to that, you also get a kind of arms race among the colleges. I mean, you get a situation where, first of all, it turns out that parents think the college is better if they raise a price. So if you see a $50,000 cost on college–which by the way, happened this year.

Gigot: Where is that?

Ms. Riley: Middlebury College. It costs $50,000 for tuition, room and board.

Gigot: In Vermont.

Ms. Riley: Yes, for this year. Vermont, you know, a very high-cost-of-living state. And, you know, but parents see that sticker price, and they assume, “Oh that must be a great college education.” So, you know, it’s–all of the wrong incentives are in place. And then colleges are spending money on things like landscaping and fancy food programs and Wi-Fi in the bathrooms and, you know, it’s really hard to sort of figure out where the quality is.

Gigot: I have a hard time imagining. I barely used a PC, Dan.

Henninger: Well, you know, it’s going to get worse, Paul. The College Board just reported that private loans last year for college dropped by 50%, while the public federally subsidized loans rose 15%. Now, we also know that the Congress has taken–is going to disadvantage the private loan program, which means that the federal program is–

Gigot: They’re going to put it out of business.

Henninger: They’re going to put it out of business, right, which means that basically colleges are going to become a wholly owned subsidiary of the federal government. You will never get countervailing price pressure under those circumstances.

Gigot: All right, Steve, is this going to lead to you want to go send your kids to college for only three years?

Moore: Well, you know, Paul, I have an 18- and 16-year-old. I’m listening to these prices that Naomi’s talking about and I’m going to need a big fat pay raise, or else my kids are going to be with me another four years, which is a nightmare.

But look, this is a real issue. It’s going to cost now $200,000 to put a kid through college. You have to start asking yourself the question, “Look, I’ll give you a $200,000 check. Maybe that’s a better way to start your life than going to college.” But Naomi put her finger on the problem. The two areas–I was looking at the inflation rates in health care and education–both of those have booming costs. Education costs have gone triple the rate of inflation over the last decade. And it’s because the people who are getting the service aren’t the ones who are paying for it, and that leads to exploding costs.

Gigot: Naomi?

Ms. Riley: Yeah, I just want to say something about the three-year college costs. You know it’s funny, if you go back to the 1970s, which we’ve been thinking about a lot lately, a lot of colleges actually reduced the length of their semesters, and they said this was to save costs for parents. But of course, the semesters stayed shorter, so kids got less education overall. And the prices never went down. So I think you also have to kind of take these big ideas from schools about saving you money with a grain of salt.

Gigot: The likelihood is that they’d find a way to charge the same amount anyway, even if you only went for three years.

Ms. Riley: Exactly. That’s exactly right.

Henninger: But you get a year earlier to start work and pay back those loans.

Gigot: That would be the benefit. It’s an opportunity cost would be lower. But Dan, the government is going to–isn’t going to change any of this. If anything, they’re increasing the subsidies. they want to make Pell Grants an entitlement. Right now, it has to be passed with annual appropriation. They want to make it automatic.

Henninger: Yeah, and, you know, there is a social aspect to this as well. It’s pretty well proven that the payoff to a college education is higher lifetime earnings. The demand for college now is tremendous. People are just going to these colleges. Probably what we need is either online colleges or more colleges to meet the supply.

Gigot: But which college doesn’t necessarily help, does it?

Ms. Riley: No, no. There are a lot of studies that show, if you are a person who got into both Harvard and, say, the University of Arkansas, and you chose the University of Arkansas, your lifetime earnings would not be that much different. Of course one solution is just improving K-12 education.

Gigot: That would help enormously. And you might get higher returns on people who then don’t go to college or go to community colleges.

Ms. Riley: Yeah, the way it used to be.

Posted by Alexa Harrington

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College Scholarships.org has the bad financial news for college students explained simply and graphically below. The immediate effects of student loans are explained, as well as the long-term effects (the ones you thought you’d be done thinking about that many years down the line). I’m hoping that the nationwide foreclosure situation has educated everyone as to what happens when people are allowed to borrow beyond their means.

I get it that paying for college so you can have some decently-paying career options is a big fat Catch-22 as well as a vicious circle. It also just plain sucks a real lot. However, it’s still better to have the information prior to heading into the jungle. No one’s going to make you use the info, but it’s good to at least have it back there in your grey-matter archives, just in case.

Posted by Alexa Harrington

(hat tip to jennifer)

Dartmouth College just announced that out of an applicant pool of 18,130 hopefuls, they’ve admitted 2,134 for the incoming class of 2013. Dartmouth’s admissions battle plan is to admit students based solely on academic achievement, which means it’s a “fully need-blind admissions process.” The college admits the best of the best, and then figures out with the students afterward the financial aid package they’ll be requiring.

“The academic credentials of admitted students are very strong, particularly in the number of students ranked in the top 10 percent of their class as well as students ranked first in their class,” said Maria Laskaris, Dean of Admissions and Financial Aid.

Of those who were ranked by their secondary schools, 95 percent of students admitted were in the top 10 percent of their secondary school’s graduating class, including 42.5 percent who were valedictorians and 10.8 percent who were salutatorians. The mean SAT scores for students admitted this year are: 729 Verbal, 733 Math and 732 Writing.

Dartmouth strengthened its financial aid program last year, offering free tuition for students who come from families with annual incomes at or below $75,000. Dartmouth has a need-blind admissions policy, accepting students, both domestic and international, regardless of ability to pay. Once admitted, the College meets 100 percent of the student’s demonstrated need for all four years through a combination of scholarships and campus employment.

Fairly impressive. I’m a big proponent of looking at a given student’s whole picture when deciding whether or not to admit them to a school; I always want the kid from the family that can’t possibly afford to pay for admissions coaching and SAT prep courses to get into a great school anyway, just because they want it and they’ve done the best with what they have and will work their ass off once they’re admitted.

That being said, I also have to confess that I’m impressed with Dartmouth for not shying away from students who may require an extreme amount of financial help. They want the best, they clearly get them, and they’re not afraid to pay for the privilege. Did I mention that there are no loans involved? It’s all scholarships and campus employment.

Posted by Alexa Harrington

image credit: jon gilbert fox for the ny times

Seth Allen, the Dean of Admission and Financial Aid at Grinnell College, has answered some relevant questions regarding financial aid and the economy. If a college student’s family has experienced loss of income or assets, what does that mean for his/her financial aid package, and what needs to be done to fill in the new cracks in the levee? In the article, Allen lists possible problems and how best to address them.

It’s all very practical, which always reassures me, and he makes a point of noting that the media has painted a much bleaker picture of how adversely the economic downturn is affecting college students and their ‘rents. The situations still sucks, but it might not actually be the end of the world. Not yet, anyway.

Posted by Alexa Harrington

image source

If you were maybe sticking your head in the sand and hoping to wait this economic slump out by pretending it’s not happening, then don’t read these denial-crushing articles.

The New York Times is reporting that college students (and/or their ‘rents) are paying more for less. Excellent.

College students are covering more of what it costs to educate them, even as most colleges are spending less on students, according to a new study.

The study, based on data that colleges and universities report to the federal government, also found that the share of higher education budgets that goes to instruction has declined, while the portion spent on administrative costs has increased.

And the Associated Press has an equally optimism-crushing article about tuition rates rising at exactly the same time that college-money stockpiles have been decimated by a sucky stock market and limited access to second mortgages.

Most high school seniors and their families have not made final college plans for next fall. But they know this: It’s probably going to cost more than they had planned.

Even in good economic times, states and colleges have largely failed to hold tuition increases in line with inflation. Now as the slumping economy forces states to slash spending, students can expect the sharpest increases in years.

I would advise next year’s freshmen to wait a few years on attending the four-year schools and head to a community college instead. Unfortunately, that’s what everyone else is probably going to do, which means it’ll be hard to get in, let alone get the classes they’ll need. Taking online versions of some general ed courses through a community college would circumvent the overcrowding issue (making sure the credits are transferable is a necessary step in that process).

Taking a gap year doesn’t really work because, you know, that takes money.

The only other option I can see would be for students to head off to college as planned, but to take a light enough course load so that working part-time won’t derail the knowledge absorption.

There’s also the live-at-home, work-at-the-convenience-store option, which will no doubt inspire all takers to higher-education greatness once they’ve escaped and have catapulted themselves into college and beyond. Those kids will do whatever it takes to never ever have to return to either home or minimum wage. See how I pulled that shred of optimism out at the last second?

Related Previous Posts:

“Wobbly Time for College Tuition”
Pokémon Economics
Higher Ed Budget Cuts in California and Washington
Adventures in Education: Paying for College
Investing in Students’ Futures

Posted by Alexa Harrington

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The triune of mettle-proving tests for young adults are: (1) getting into college; (2) getting through and graduating from college; and (3) paying for college. All are difficult. The only part from which any enjoyment can be wrung is the going to college part. The other two just suck.

If your parents aren’t able to casually hand over a tuition check every term, and you’re worried that it might not be possible to busk and study at the same time, then you (and the ‘rents) might want to check out Adventures in Education. They’re a non-profit (an excellent indicator that they aren’t out to screw you) and they’ve been around since 1995 so they probably know what they’re talking about.

The site is designed to help students and parents make sense of the insanity that is figuring out college scholarships, grants and loans.

Here’s what the site has to offer:

Valuable information on developing career goals, finding the right school, and financing your education;

An interactive design attractive to target audiences;

Content areas arranged by audience (students and parents of middle school students, high school students, college students, and guidance counselors);

AIEmail, weekly dispatches of e-mail updates providing time-sensitive information on events, activities, and suggestions relevant to students and parents;

AIE Counselors Network, open to guidence counselors by registration, offers information on deadlines, admission requirements, and financial aid resources as well as access to monthly counselor checklists, ideas to implement in counseling, and a Counselor Directory for exchanging ideas and information;

Comprehensive site index and search capabilities;

Full content availability in Spanish.

Posted by Alexa Harrington

photo: ASA Photography

I’ve explained my utter disdain for the current state of the college admissions process here and here and here and also here. It’s completely warped and fubar and several other descriptive expletives that I probably shouldn’t write on a site devoted to all things educational.

Mr. Sam Jackson over at The Sam Jackson College Experience, in his powers-for-good brilliance, has come up with a way to aggregate many students’ experiences with the admissions process so as to bring said experiences to the attention of postsecondary institutions and (hopefully) have some changes made for the better. He, along with myUsearch, is offering a $1000 College Admissions Frustration Scholarship to the student who writes the essay best answering these questions:

What has been the most frustrating part of your college admissions process? Why is it important for colleges and universities to change this? What suggestions do you have for colleges and universities to try to relieve your frustration and the frustration of your fellow students?

Sam started his blog as a high school student when he was in the throes of his own personal college admissions process hell, and is continuing to try to point out to the powers that be which bits of the process are warped and what might be done to change the warpiness for the better. See? Using his powers for good.

Posted by Alexa Harrington