Vice President Joe Biden intends to make higher education a reality for more young people, the Associated Press reports, in part by closing the gap between families’ incomes and rising college costs (“Biden Wants to Make Higher Ed More Affordable,” USA Today, April 18, 2009).
At a town hall–style meeting he hosted in St. Louis Biden told about 300 people that he’ll be asking the Treasury Department to figure out how to make college savings plans more effective and more reliable.
“We’re going to make a series of investments, investments in our families and our students,” he said, highlighting the administration’s efforts to improve tax breaks for families and increase need-based grants for low-and middle-income families.
White House Taps Existing Programs to Increase College Affordability
Since so many families save for college using tax-deferred 529 savings plans, which allow families to set aside funds to cover future tuition expenses, fees, books, and supplies, the Obama administration is examining a program that would allow families to take out low-interest loans against their 529 plans to help them cover college costs.
Obama has already increased funding for the need-based federal Pell Grant program, which helps low-income students afford school, but Biden said the Obama administration also wants to ensure continued Pell Grant funding by setting up the program to be automatically subsidized each year.
The government is also considering extending The American Opportunity Tax Credit beyond 2010, which allows families to claim a $2,500 tax credit for college expenses for up to four years.
But by far the most sweeping proposal from the Obama administration, which has drawn fierce criticism from leaders in the student loan industry, is the suggested cancelation of the federally funded student loan program.
Lenders say that cancelling the program will eliminate families’ option to choose from a variety of private lenders and federal student loan incentives and, instead, require them to borrow federal student loans through government’s Direct Loan Program.
Biden alleges that the move to cancel the federal student loan program would result in up to $94 billion in savings to the federal government over the next 10 years, which he said, “We can take … and reinvest … in more loans, more grants and more access to college.”
Tuesday, October 20, 2009
student loan debt
College graduates who were lured into high-need fields, including teaching, nursing, and public service, by programs that would forgive a portion or all of their student loans are receiving this sobering news: The cavalry isn’t coming after all.
These graduates, who in some cases were enticed by the loan forgiveness programs to take out student loans that exceeded their earning potential, are now discovering they’re on the hook for their large debts — and are struggling to pay them — because the state agencies originally offering the loan forgiveness can no longer afford to do so.
“We’d gotten married in June and bought a house, pretty much planned our whole life,” said Travis Gay, a special education teacher in Kentucky (“Recession Imperils Loan Forgiveness Programs,” The New York Times, May 27, 2009).
Gay and his wife, Stephanie, also a teacher, thought they had a handle on repaying the $100,000 they owed in combined student loans. They were under the impression that a portion of their college loans would be forgiven each year over the next five years under a state program offering loan forgiveness for schoolteachers.
Then the Gays received a letter from the Kentucky Higher Education Student Loan Corporation, the lending agency that offered the program, “saying that our forgiveness this year was next to nothing.”
The student loan agency contends that it never promised the thousands of indebted public school teachers and nurses who have been affected by cuts to the program that their loans would definitely be forgiven. Financing for the loan forgiveness program was never actually guaranteed, says Ted Franzeim, vice president of customer relations for the student loan agency.
And it’s not just Kentucky borrowers who are being hurt by program cuts. Student loan forgiveness programs are on the chopping block throughout the country as the state agencies and nonprofit student loan organizations that sponsor these programs reel from dwindling government aid and strained market conditions.
The New Hampshire Higher Education Loan Corporation, for example, suspended its loan forgiveness program for teachers, and the Pennsylvania Higher Education Assistance Authority has put the brakes on its loan forgiveness program for nurses and people called to active duty in the military.
These graduates, who in some cases were enticed by the loan forgiveness programs to take out student loans that exceeded their earning potential, are now discovering they’re on the hook for their large debts — and are struggling to pay them — because the state agencies originally offering the loan forgiveness can no longer afford to do so.
“We’d gotten married in June and bought a house, pretty much planned our whole life,” said Travis Gay, a special education teacher in Kentucky (“Recession Imperils Loan Forgiveness Programs,” The New York Times, May 27, 2009).
Gay and his wife, Stephanie, also a teacher, thought they had a handle on repaying the $100,000 they owed in combined student loans. They were under the impression that a portion of their college loans would be forgiven each year over the next five years under a state program offering loan forgiveness for schoolteachers.
Then the Gays received a letter from the Kentucky Higher Education Student Loan Corporation, the lending agency that offered the program, “saying that our forgiveness this year was next to nothing.”
The student loan agency contends that it never promised the thousands of indebted public school teachers and nurses who have been affected by cuts to the program that their loans would definitely be forgiven. Financing for the loan forgiveness program was never actually guaranteed, says Ted Franzeim, vice president of customer relations for the student loan agency.
And it’s not just Kentucky borrowers who are being hurt by program cuts. Student loan forgiveness programs are on the chopping block throughout the country as the state agencies and nonprofit student loan organizations that sponsor these programs reel from dwindling government aid and strained market conditions.
The New Hampshire Higher Education Loan Corporation, for example, suspended its loan forgiveness program for teachers, and the Pennsylvania Higher Education Assistance Authority has put the brakes on its loan forgiveness program for nurses and people called to active duty in the military.
NextStudent Tool Helps Students Find Online Education Degree Programs
Students looking to finish their college degree, start a new career, or increase their earning potential now have a quick and easy way to find the best online education degree program that meets their needs, with NextStudent’s new eLearners college search program.
This free interactive tool allows students to search for online colleges and universities and to browse through thousands of online courses in hundreds of fields including:
* Game Design
* Criminal Justice
* Forensics
* Counseling
* Education
* Web Development
* Fashion and Design
* Business Management
* Public Health
* Nursing
* Computer Science
NextStudent’s eLearners college search program delivers results at the click of a button and helps students research thousands of higher education options:
* Over 6,500 courses
* Over 1,700 degree programs
* More than 450 certificate and diploma programs
* More than 140 accredited online schools
Once students have used the eLearners program to narrow down their list of accredited online colleges and the fields of study they would like to explore, students are put in touch with education advisors at the nation’s top accredited online schools that meet their search criteria.
Online Degree Programs Fit Student Lifestyles
With online degree programs, students are able to decide the “when, where, and how” of getting their degree. Enrolling in an online college is a convenient way for student to get a college degree on their own time and terms.
Students can study and attend classes on their own schedule, participate in class discussions without leaving home, eliminate commutes and scheduling conflicts, and work at their own pace to master subjects that are more difficult.
This free interactive tool allows students to search for online colleges and universities and to browse through thousands of online courses in hundreds of fields including:
* Game Design
* Criminal Justice
* Forensics
* Counseling
* Education
* Web Development
* Fashion and Design
* Business Management
* Public Health
* Nursing
* Computer Science
NextStudent’s eLearners college search program delivers results at the click of a button and helps students research thousands of higher education options:
* Over 6,500 courses
* Over 1,700 degree programs
* More than 450 certificate and diploma programs
* More than 140 accredited online schools
Once students have used the eLearners program to narrow down their list of accredited online colleges and the fields of study they would like to explore, students are put in touch with education advisors at the nation’s top accredited online schools that meet their search criteria.
Online Degree Programs Fit Student Lifestyles
With online degree programs, students are able to decide the “when, where, and how” of getting their degree. Enrolling in an online college is a convenient way for student to get a college degree on their own time and terms.
Students can study and attend classes on their own schedule, participate in class discussions without leaving home, eliminate commutes and scheduling conflicts, and work at their own pace to master subjects that are more difficult.
business school
BearStearns CEO, Jimmy Cayne, seems to have been the only former Stearns employee to make it out of the JPMorgan Chase buyout relatively unscathed — at least in non-CEO terms — walking away with $61.3 million in sold shares. Even though, in his own high-priced executive world, Cayne took his buyout at a massive loss: Just a year ago, his entire Stearns portfolio was valued at almost $1 billion.
Former Bear Stearns employees, along with Cayne, saw the value of their shares plummet 85 percent in the buyout to a mere $10 a share. Bears Stearns shares were trading at about $67 two weeks before the buyout and as high as $170 a year ago.
Now add to the list of people adversely affected by the Stearns debacle, business-school students whose full-time job and summer internship offers from Bear Stearns have recently been rescinded, according to a BusinessWeek article by Alison Damast (“Bear Stearns Rescinds Job Offers,” April 3, 2008).
A spokesman from JPMorgan Chase won’t disclose how many job offers to soon-to-be college graduates and MBAs have been affected by the dissolution of the firm, at least 12 students at New York University’s Stern School of Business have already received their unhappy phone calls from the company.
According to The New York Times, the final count of rescinded job and internship offers will tally in the dozens (“J.P. Morgan Said to Withdraw Bear Job Offers,” April 3, 2008).
Students Left Out in the Cold
When JPMorgan announced its takeover of failing Bear Stearns on March 16, the status of the student jobs and internships was still uncertain. It wasn’t until April 2 that students who were offered positions in the investment banking, sales, and trading and research units of the former company were notified about the fate of their job and internship positions.
Over the next few weeks, as the school year draws to a close, these students will be frantically trying to nail down offers for replacement positions.
“I’m not sure what we are all supposed to be doing now with the few weeks before start-dates, but I would imagine that, like me, the other 25 or so students who were to start as associates are all in a mad scramble to figure out what the future holds,” one student told BusinessWeek.
In the meantime, students who had their full-time job offers rescinded will be allowed to keep their signing and relocation bonuses and will also be able to use JPMorgan’s career-service resources.
And for those students who will no longer be interning with the company this summer, JPMorgan has offered a full 10 weeks’ pay if they find a new summer position with a nonprofit organization instead.
To Fear or Not to Fear the Economy
Although Bear Stearns is the only investment firm so far this recruiting season to withdraw already-extended job offers, fears about the current state of the economy and its effect, in particular, on the financial-services sector have left business-school students and administrators wondering about the security of jobs and job offers with other firms.
To some, the rescinded Bear Stearns offers recall the results of a similar economic downturn in 2001, Damast writes, when several companies that had hired students were forced to scale back.
Tom Kozicki, board president of the MBA Career Services Council, says he believes the Bear Stearns situation doesn’t necessarily foreshadow what lies ahead for the financial industry, but is definitely something business students need to keep in the back of their mind as they prepare for this particularly shaky job market.
“It sounds like the shoe has dropped. I think it’s unfortunate, but I don’t think it comes as a surprise to most people,” Kozicki told BusinessWeek. “The economy is shaky, [Fed Chairman Ben] Bernanke has indicated that he thinks we are going into a recession and I think that students need to be prepared for some uncertainty in the market.”
Former Bear Stearns employees, along with Cayne, saw the value of their shares plummet 85 percent in the buyout to a mere $10 a share. Bears Stearns shares were trading at about $67 two weeks before the buyout and as high as $170 a year ago.
Now add to the list of people adversely affected by the Stearns debacle, business-school students whose full-time job and summer internship offers from Bear Stearns have recently been rescinded, according to a BusinessWeek article by Alison Damast (“Bear Stearns Rescinds Job Offers,” April 3, 2008).
A spokesman from JPMorgan Chase won’t disclose how many job offers to soon-to-be college graduates and MBAs have been affected by the dissolution of the firm, at least 12 students at New York University’s Stern School of Business have already received their unhappy phone calls from the company.
According to The New York Times, the final count of rescinded job and internship offers will tally in the dozens (“J.P. Morgan Said to Withdraw Bear Job Offers,” April 3, 2008).
Students Left Out in the Cold
When JPMorgan announced its takeover of failing Bear Stearns on March 16, the status of the student jobs and internships was still uncertain. It wasn’t until April 2 that students who were offered positions in the investment banking, sales, and trading and research units of the former company were notified about the fate of their job and internship positions.
Over the next few weeks, as the school year draws to a close, these students will be frantically trying to nail down offers for replacement positions.
“I’m not sure what we are all supposed to be doing now with the few weeks before start-dates, but I would imagine that, like me, the other 25 or so students who were to start as associates are all in a mad scramble to figure out what the future holds,” one student told BusinessWeek.
In the meantime, students who had their full-time job offers rescinded will be allowed to keep their signing and relocation bonuses and will also be able to use JPMorgan’s career-service resources.
And for those students who will no longer be interning with the company this summer, JPMorgan has offered a full 10 weeks’ pay if they find a new summer position with a nonprofit organization instead.
To Fear or Not to Fear the Economy
Although Bear Stearns is the only investment firm so far this recruiting season to withdraw already-extended job offers, fears about the current state of the economy and its effect, in particular, on the financial-services sector have left business-school students and administrators wondering about the security of jobs and job offers with other firms.
To some, the rescinded Bear Stearns offers recall the results of a similar economic downturn in 2001, Damast writes, when several companies that had hired students were forced to scale back.
Tom Kozicki, board president of the MBA Career Services Council, says he believes the Bear Stearns situation doesn’t necessarily foreshadow what lies ahead for the financial industry, but is definitely something business students need to keep in the back of their mind as they prepare for this particularly shaky job market.
“It sounds like the shoe has dropped. I think it’s unfortunate, but I don’t think it comes as a surprise to most people,” Kozicki told BusinessWeek. “The economy is shaky, [Fed Chairman Ben] Bernanke has indicated that he thinks we are going into a recession and I think that students need to be prepared for some uncertainty in the market.”
College Crisis
College Crisis – Are Tuition Free Programs On Their Way Out?
November 7, 2008 by lawlibrarian
Not even 24 hours ago, I posted on students seeking tuition free colleges in the face of economic turmoil. Now, the New York Times is reporting that the economic crisis is hitting colleges particularly hard and the effects are being felt in layoffs, hiring freezes, postponed construction projects, and tuition increases. The article specifically notes that Tufts University, which currently has a need-blind admissions policy, is reconsidering that position:
“The target of being need-blind is our highest priority,” said Lawrence S. Bacow, president of Tufts. “But with what’s happening in the larger economy, we expect that the incoming class is going to be needier. That’s the real uncertainty.”
On the other hand, some colleges, such as Vassar, are actually committing more to financial aid, in spite of the crisis:
Vassar College will give out $1 million more in financial aid this year than originally budgeted, even though the endowment, which provides a third of its operating budget, dropped to $765 million at the end of September, down $80 million from late June. President Catharine Bond Hill of Vassar said the college would reduce its operating costs, but remain need-blind.
In the face of these stories, I can’t help but think that programs offering free tuition to the neediest students will be the first to be cut. Hopefully, Obama’s economic stimulus package will take higher education costs into account.
November 7, 2008 by lawlibrarian
Not even 24 hours ago, I posted on students seeking tuition free colleges in the face of economic turmoil. Now, the New York Times is reporting that the economic crisis is hitting colleges particularly hard and the effects are being felt in layoffs, hiring freezes, postponed construction projects, and tuition increases. The article specifically notes that Tufts University, which currently has a need-blind admissions policy, is reconsidering that position:
“The target of being need-blind is our highest priority,” said Lawrence S. Bacow, president of Tufts. “But with what’s happening in the larger economy, we expect that the incoming class is going to be needier. That’s the real uncertainty.”
On the other hand, some colleges, such as Vassar, are actually committing more to financial aid, in spite of the crisis:
Vassar College will give out $1 million more in financial aid this year than originally budgeted, even though the endowment, which provides a third of its operating budget, dropped to $765 million at the end of September, down $80 million from late June. President Catharine Bond Hill of Vassar said the college would reduce its operating costs, but remain need-blind.
In the face of these stories, I can’t help but think that programs offering free tuition to the neediest students will be the first to be cut. Hopefully, Obama’s economic stimulus package will take higher education costs into account.
College Scholarships
An anonymous donor is playing secret Santa with at least a dozen colleges and universities nationwide, but instead of giving $5 trinkets this Santa has left schools with $1 million to $10 million gifts, The New York Times reports (“Anonymous Donor Gives Millions to Colleges,” April 24, 2009).
Over the past two months the donor has given away $70 million to select schools. To remain anonymous, the donor employs a bank to contact the schools either with a call or letter that relays sentiments similar to what was written in one letter: “It is hoped that this will make a substantial difference to your students during these challenging times… enabling a more confident, sharper focus on their studies with improve career and life prospects.”
None of the school officials at the selected schools know whether the donations are coming from a man, woman, or organization, and no one seems to want to jeopardize their gift by speculating too much about the reasoning behind the donor’s selections. There’s a pretty clear consensus, however, that the schools share one common trait: they’re all led by women.
Lois DeFleur, president of Binghamton University in New York, is more than fine with this reasoning, if it is indeed the case, “The actions say, ‘I’m investing in an institution because it has achievements and I believe that with women leaders it will have future accomplishments.’ That’s pretty powerful in my view.”
The donations, which at some schools have been the single largest donation in the school’s history, have ranged from the $10 million given to Michigan State University, to the $1.5 million given to the University of North Carolina in Asheville. In return the donor has asked for complete anonymity and for the majority of the donation — 50 percent to 80 percent of the total donation in each case — to be used for financial aid.
The schools say they are extremely grateful for being chosen, particularly since higher education institutions across the country have seen an increasing demand for financial aid at the same time that state funding and endowments are drying up.
“In the best of times we never have enough scholarship money for students who have financial need,” said Susan Cole, president of Montclair State University in New Jersey. “In these difficult times, that is multiplied. The gift is incredibly important to us. I cannot adequately express the depth of our gratitude.”
Over the past two months the donor has given away $70 million to select schools. To remain anonymous, the donor employs a bank to contact the schools either with a call or letter that relays sentiments similar to what was written in one letter: “It is hoped that this will make a substantial difference to your students during these challenging times… enabling a more confident, sharper focus on their studies with improve career and life prospects.”
None of the school officials at the selected schools know whether the donations are coming from a man, woman, or organization, and no one seems to want to jeopardize their gift by speculating too much about the reasoning behind the donor’s selections. There’s a pretty clear consensus, however, that the schools share one common trait: they’re all led by women.
Lois DeFleur, president of Binghamton University in New York, is more than fine with this reasoning, if it is indeed the case, “The actions say, ‘I’m investing in an institution because it has achievements and I believe that with women leaders it will have future accomplishments.’ That’s pretty powerful in my view.”
The donations, which at some schools have been the single largest donation in the school’s history, have ranged from the $10 million given to Michigan State University, to the $1.5 million given to the University of North Carolina in Asheville. In return the donor has asked for complete anonymity and for the majority of the donation — 50 percent to 80 percent of the total donation in each case — to be used for financial aid.
The schools say they are extremely grateful for being chosen, particularly since higher education institutions across the country have seen an increasing demand for financial aid at the same time that state funding and endowments are drying up.
“In the best of times we never have enough scholarship money for students who have financial need,” said Susan Cole, president of Montclair State University in New Jersey. “In these difficult times, that is multiplied. The gift is incredibly important to us. I cannot adequately express the depth of our gratitude.”
community college
Although school administrators across the nation are reporting an increase in applications, they’re worried about just how many college students will actually enroll in their institutions this fall as families continue to tighten their budgets amid this recession, reports Inside Higher Ed (“Parents’ View of the Economy,” March 30, 2009).
However, a new survey of parents of college students indicates that while administrators’ concerns are valid, the economy may not have affected parents’ finances as much as educators originally thought, particularly among parents whose children are entering their freshmen year. Eduventures, an organization that tracks higher education trends, surveyed 7,000 parents with college-age children at a mix of 19 public and private colleges and universities.
Eduventures found that a majority of parents with freshmen — about 66 percent — said the downturn won’t affect how they will finance their children’s education this upcoming fall.
Overall, relatively few parents told Eduventures that they would not enroll their children in college due to lack of funding, although some parents indicated that they might choose to enroll their children in less expensive institutions to cut costs.
Of those parents with students at private schools, less than 12 percent indicated that their children were considering transferring to a less expensive school, and nearly 7 percent said they would encourage their children to take some classes at a community college. Of these same private school parents, less than 3 percent indicated that their students wouldn’t be returning to college in the fall, and less than 0.5 percent said that their children were considering dropping out of college permanently.
The numbers were only slightly different for parents whose children attend public colleges, with almost 9 percent saying that their children may have to consider transferring schools and less than 3 percent who believed that their children would need to look at dropping out of college. Nearly 6 percent of these parents thought that their children would need to live at home instead of on campus this fall.
However, a new survey of parents of college students indicates that while administrators’ concerns are valid, the economy may not have affected parents’ finances as much as educators originally thought, particularly among parents whose children are entering their freshmen year. Eduventures, an organization that tracks higher education trends, surveyed 7,000 parents with college-age children at a mix of 19 public and private colleges and universities.
Eduventures found that a majority of parents with freshmen — about 66 percent — said the downturn won’t affect how they will finance their children’s education this upcoming fall.
Overall, relatively few parents told Eduventures that they would not enroll their children in college due to lack of funding, although some parents indicated that they might choose to enroll their children in less expensive institutions to cut costs.
Of those parents with students at private schools, less than 12 percent indicated that their children were considering transferring to a less expensive school, and nearly 7 percent said they would encourage their children to take some classes at a community college. Of these same private school parents, less than 3 percent indicated that their students wouldn’t be returning to college in the fall, and less than 0.5 percent said that their children were considering dropping out of college permanently.
The numbers were only slightly different for parents whose children attend public colleges, with almost 9 percent saying that their children may have to consider transferring schools and less than 3 percent who believed that their children would need to look at dropping out of college. Nearly 6 percent of these parents thought that their children would need to live at home instead of on campus this fall.
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