Ohio Works to Make College More Affordable

John Carey, the Chancellor of the Ohio Department of Higher Education, has written a guest column outlining the steps that the Buckeye State has taken to make college more affordable.

Ohio has increased spending on higher education by 8.5% and frozen tuition and fees at state supported schools for two years. Additional money has been appropriated to help underprivileged and under-represented students pay for tuition at community and four year colleges.

One of the biggest sources of increased debt for college students is not graduating on time. Ohio has tried to address this by devoting resources to helping students get college credit in high school and to creating guidelines for more skilled counselors to keep students on track for a four year graduation once they are in college.

For more details on the Ohio plan please see the article.

 

SCOTUS Asked to Hear Student Loan Fees Case

Inside Higher Education published this piece about fees related to delinquent student loans:

The loan guarantor USA Funds plans to file a petition with the U.S. Supreme Court today seeking to overturn a federal appeals court ruling that barred the agency from collecting fees from a borrower who had defaulted on her student loan but started repaying it. The court’s decision was backed by the Obama administration and cheered by consumer advocates. But USA Funds believes the Supreme Court is poised to overturn an earlier ruling, in a case known as Auer v. Robbins, on which the appeals court largely based its decision in the USA Funds case.

Community Colleges, Debt & Default: New Data

The Association of Community College Trustees has released a new study analyzing student debt and default rates at Iowa Community Colleges. The report is especially important given that students at community colleges are more likely to default on student loan debt than at other types of higher educational institutions.

Community College Default Rates Compared to Other Types of Higher Ed

One of the major findings was that students were more likely to default if they were not making progress toward the completion of an Associates Degree or other types of diplomas/certifications. According to the report

Sixty percent of defaulters earned less than 15 credits and nearly 90 percent of defaulters did not
earn a credential.
Students with the least amount of credits completed were the most likely to default on their loans.
Community College Default Rates by Credits

New Data on Colleges!

The Federal government has released new data on American colleges in an effort to help students choose where they want to study. According to Inside Higher Education

These new data show publicly, for the first time, the share of a college’s former students who make some progress in paying down their federal loans within the first three years after leaving college. And they provide the first comprehensive look at how much students who receive federal loans and Pell Grants end up earning after they leave a specific college, both in the short term and long term.

The College Scorecard is available at https://collegescorecard.ed.gov/

 

 

 

 

New Data on the Real Costs of College

Parents often suffer sticker shock as they look at the prices of college. However, a new study shows the cost of higher education is similar to purchasing a new car: few people pay list price. This is because most students receive grants from “federal, state, institutional or private sources” according to data from the National Center for Education Statistics.

The study breaks down costs into three categories. First, the average total price of attending the institution. This includes tuition, room and board, fees and transportation costs. Second, the average net price after grants. Finally, the average out of pocket price for students. This is calculated by subtracting student loans from the average net price after grants. Here’s the break down of costs:

Chart - Undergraduate Education Prices

529 College Plans No Longer Face Demise

Recently President Obama announced a plan to end the tax breaks associated with popular 529 college savings plans. According to the New York Times

The idea was to end one tax break…and plow that billion-dollar savings over 10 years into a far larger expansion of another tuition tax credit aimed more squarely at the middle class.

However, President Obama came under fire from House Speaker John Boehner, former Speaker Pelosi, states and other politicians for ending what is perceived as a middle class tax break.

The opposition has caused President Obama to drop the idea. According to a White House spokesperson

“Given it has become such a distraction, we’re not going to ask Congress to pass the 529 provision so that they can instead focus on delivering a larger package of education tax relief that has bipartisan support, as well as the president’s broader package of tax relief for child care and working families”

Obama Relents on Proposal to End ‘529’ College Savings Plans

 

College Degrees Still Worth the Investment?

by Amanda Greisman

College is thought to provide opportunities for graduates not available to those not pursuing higher education. However, the increases in the price of college and the decline in wages for those with degrees are making people question the importance of college and if it really is worth the investment.

Mary Beth Marklein argues that a college degree is still worth the investment. One point was that college graduates, whether they earn a bachelor’s degree or an associates degree, will still tend to earn more money over their lifetime versus those who do not go to college, information found based on 4 decades of analysis. And even though wages have declined for those who have earned college degrees, they have also declined for those who did not receive a college education, and the gap between the two is still at an all time high, with those people who earned college degrees earning much more money in their occupations.

Another point made was that even though student loan debt has soared by the end of 2013, a federal reserve study on data of wages for ages 16-64 for those without a degree, with an associates, and with a bachelors had shown that those with a bachelors degree have kept a return on investment of 15%, where 7% return is sound. This proves that even with student debt rising, the return on investment proves the investment is definitely worth it. Majors were also found to play a role on the returns of investment, where some majors can earn a return of 21%.

Some facts stated in the article were that over 4 decades, a bachelors degree will earn an average of about 56% more than a high school diploma and an associates will earn 21% more. However, studies have shown that the earnings of bachelors and associates degrees over high school diplomas has decreased from where they were in the years 1982-2001 to 2001-2013. Along with this statistic, the wages have declined over these same time spans. So the question is, even though those with a bachelors or associates degree do tend to make more money, is this decline in wage and earnings a permanent reversal in the demand of college graduate’s skills, or is it just a phase that will pass?

Marklein, M. College Degree Still Worth the Investment, Data Suggest. USA Today. Retrieved on October 5, 2014