Student Loan Debate Reaches Senate

For the first time in U.S. history, student loan debt is expected to pass consumer debt.  According to an article in The Wall Street Journal, student debt has now topped $1 trillion, causing many college graduates to postpone purchasing their first home, getting married, or having children.  The student loan debate has reached the Senate, where the White House has pressed lawmakers Monday to back legislation preventing interest rates on federal student loans from doubling in July as the two parties remained deadlocked over how to pay for the move. If the bill passes, it would mean that the federally-subsidized Stafford Loan Program would keep its current interest rate of 3.4 percent, rather than doubling for another year.  This decision affects 7.4 million students, whose borrowing costs would rise by $1,000 over the lives of their loans if the interest rate doubled, as mentioned in an article in The Huffington Post. The Department of Education estimates students will borrow $31.6 billion in Stafford loans in the year beginning July 1, average $4,226 for each student.

This post is based on article that appeared in The Huffington Post on May 7, 2012. For more information on how you can financially prepare your child for college, visit our Links & Docs Page, which provides free information on financial aid and scholarships.

Colleges with Best Return-on-Investment

Payscale.com, a salary data website, has compiled a list of colleges based on best monetary return on tuition paid. The information was featured in an article on The Huffington Post; for more information on the methodologies used to finalize the list, click here.

This post is based on article that appeared in The Huffington Post on April 16, 2012. For more information on how you can prepare your child for college, visit our services page.

Milestone in Education Attainment at the Undergraduate Level Achieved

It may not sound impressive, but according to the Census Bureau, America has hit a milestone in how many members of its population have achieved an undergraduate degree. According to an article in The New York Times, more than 30 percent of American adults now hold bachelor’s degrees—the first time this has occurred in the nation’s history. As of March, 30.4 percent of people over the age of 25 in the U.S. hold at least a bachelor’s degree; 10.9 percent have a graduate degree, but there is a large disparity between blacks and Latinos, who trail behind their white counterparts.

This post is based on article that appeared in The New York Times on February 23, 2012. For more information on how you can prepare your child for college, visit our services page.

Students Begin Collegiate Preparations Earlier

We have discussed mounting evidence on this blog that there is a paradigm shift occurring in the homes of American families with middle- and high-school children. No longer is it acceptable to wait until junior year to start planning college matriculation. This evidence is now further highlighted by a new breed of New York for-profit schools who asking students to start college hunting as early as the ninth grade. With increasing pressure from the international arena and the advent of independent college counselors on the rise to prepare the most competitive students, beginning early is not longer an option but a necessity. Parents are investing time and financial resources to ensure that their student stands to be the most competitive.

This post is based on article that appeared in The New York Times on March 7, 2012. For more information on how you can prepare your child, visit our services page.

International Applicants to U.S. Schools Rise

A previous post on this blog discussed the many pressures that the modern college applicant experiences these days—from increased domestic competition from increasingly-qualified peers to ever-increasing college costs that vastly surpass the rate of inflation. Add to that, the now mounting pressure for domestic applicants to compete on an international scale with mass influxes of students coming from other countries to take American college seats.

The economic rise of China has created a parallel rise in its citizens’ standards-of-living. Increasingly so, more middle-class Chinese parents can now afford to spend money on grooming their children to be viable candidates in the college matriculation pool in the United States. From NBC’s Behind the Wall series, which examines trends in China, reports have found that the number of Chinese undergraduates has more than doubled in the last two years. In fact, during the 2010-2011 academic years, the number of international students increased by five percent to 723,277, of which forty-six percent claim India, China, or South Korea as their homelands, according to the Institute for International Education.

The controversy lies in the universities’ willingness to accept students from abroad: from the university perspective, foreign-born students are advantageous because they tend to pay the full cost of tuition, thereby subsidizing those students who are accepted domestically. Take the extreme case of California, where in 2010-2011, over 95,000 students were accepted from overseas to buttress its financially dilapidated school system. With a combination of decreased federal funding and budget shortfalls, school systems that lack the financial wherewithal to finance their operations from domestic students are increasingly looking towards the international community to foot the bill. Moreover, foreign students also benefit the American economy—to the tune of nearly $21 billion a year in tuition and living expenses. In fact, the government finds this figure so appealing that it is working on expanding its visa-processing capabilities in China to meet increasing demand for U.S.-bound students.

What does all of this mean for the domestic student? Competition is going to increase exponentially. In fact, foreign students are posing a challenge to even the brightest of domestic students as they vie for precious American university placements. If this trend is to continue, we can expect the international applicant to comprise an increasingly larger percentage of the American university campus. While diversity at the university level undoubtedly enriches one’s collegiate experience, it is worth mentioning that at this rate of change, college becomes increasingly more elusive to even the brightest American mind.

This post discusses an article posted on MSNBC’s Behind the Wall series.

College Costs to Climb to Nearly a Half-Million Dollars by 2030

The rise of university education has been a centric grievance of the heavily lauded and scrutinized Occupy Wall Street movement. Socioeconomic pundits state that, at the current rate, only the financial elite will be able to attend university in the coming decades. And now, according to a recent article in The Daily, a newborn today can expect to pay nearly a half-million dollars for a private education eighteen years from now—in the year 2030. If the current rate of college tuition increases holds true, and if the past three decades are an indicator of future trends, then the prices of inflation-adjusted college tuition will double at private and triple at public universities, as analyzed by The Daily.

Inflation-adjusted college tuition has increased by 3.5 percent at private and 4.5 percent at public universities on the whole. As an example, a year’s tuition at Sarah Lawrence College, named this year’s most expensive four-year institution, would increase to $87,400 by 2030 as measured in 2011 dollars (it costs $45,212 today).

Many economists and scholars debate whether the rise in college tuition is legitimate. According to Tuition Rising: Why College Costs So Much by Ronald Ehrenberg of Cornell University, there are a myriad factors contributing to college tuition increases, not the least of which is pressure on the university to excel in all aspects of their academic endeavors.

Ehrenberg states that there is a multiplicity of cost pressures on tuition including: a winner-take-all mentality, shared governance structures, federal government policies, external university pressure, public ranking importance, and personnel and organizational structure. Although each of these categories is detailed in Ehrenberg’s report, suffice it to conclude that the cost pressures on tuition are due to synergistic combinations of the need for consistent improvement to attract the best student and faculty talent, increased demands from the federal government with decreased support, and the lack of efficiency in organizational structures coupled with the enduring need to ascend the public college ranking ladder, the latter of which so crucially affects the amount of applicants—and, by virtue, matriculating students—to a university’s incoming class.

An article on NPR’s website adds some merit to the argument of decreasing federal and local support: state governments cover less of the total tuition cost than in years past, explains Sandy Baum, a professor at George Washington University. Baum adds that as state budgets decrease in size and scope, the student’s share of paying for education increases accordingly.

If pressure is to be taken off of escalating collegiate costs, then Ehrenberg suggests that colleges and universities must grow by substitution, not by unrestricted expansion. Additionally, academic institutions should increase interdisciplinary cooperation with competitors to share resources—both administrative and academic. This, Ehrenberg suggests, can promise significant savings in a number of areas. Unfettered, the current rate of tuition increase institutions of higher learning cannot sustain current rates unscathed.

Lastly, there are some measures being taken to help students pay for education during this anemic economic climate: the U.S. Congress and the Obama administration have rolled out a number of measures to help students in danger of falling behind on their federal loan payments. Nearly a half-million students have signed up for income-based repayment, stemming from the College Cost Reduction and Access Act of 2007, which limits the amount of your income that you have to pay towards your loans.  As the economy lags on its way back up, officials say many more students could be signing up for this program while they wait for a better economic climate.

This post is based on an article that appeared in The Daily on January 9, 2012. For more information on financial aid, please visit the U.S. Government’s Website on Student Aid.

2012 – 2013 Free Application for Financial Student Aid (FAFSA) Now Available!

As of January 1, 2012, the 2012 – 2013 FAFSA form was made available to college-matriculating students around the country applying for federal student financial aid. The FAFSA is the doorway for college-bound students who wish to gain access to billions of dollars of financial aid available. In fact, according to the College Board, between the 2010 and 2011 academic year, the federal government supplied more than $175 billion in federal financial aid!

Since federal aid is on a first-come first-served basis, students are highly encouraged to apply early and accurately to maximize their federal financial aid eligibility.

For more information on the FAFSA and other important financial aid information, visit the Cornerstone Links & Docs Page or go directly to FAFSA.