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The Higher the Price Tag, The Higher the Debt

by Nathan Nodolski

People think that colleges with higher price tags result in more debt after graduation. Consequently many high prestige schools miss out on many applications from students because they believe it will not be worth it. According to a US News and World Report college survey, the high priced prestigious schools with large endowments often graduate students with LESS college debt than less prestigious, lower price tag schools.

Students graduating from Harvard and Yale on average owed about a quarter of the sticker price. So if tuition alone would be $200,000 after 4 years, the average student who graduated from there only owed about $50,000; which is less than the less prestigious schools. With the ivy league name on your resume as well, it may not be that difficult to pay that back.

According the survey a Princeton graduate’s average debt after 4 years is $5,096, while a student from the less prestigious Massachusetts Wheelock College has around $50,000 debt after graduation. All Ivy League schools however have endowments of over $1 billion. The more money – the more prestige. 59% of Harvard’s annual endowment payments goes to student financial aid.

So if you are smart enough to get into those high prestige colleges, go for it. Their billion dollar endowment will help you end up in less debt and with more success after college.

 

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It’s Not About Where You Go, It’s About What You Study

By Lauren Robson

“What do you want to be when you grow up?” It’s the question every indecisive person, much like myself, dreaded being asked through elementary school, middle school, and high school. Senior year, come graduation, the questions tend to drift. It’s no longer about what you’re studying and more of where you’re going to study. If it’s not an Ivy League, no one seems to care or even believe that you will be successful. The truth is that people look down on small, under the radar schools. What if the truth was that they should stop worrying about where they were going and go back to worrying about the why?

According to Jon Marcus’s article, “Elite degrees don’t necessarily earn more, study finds,” students don’t need to attend elite colleges to be successful. On average, the students who attended less-prestigious schools earned about the same as their Ivy-League counterparts. There are also graduates out there with associate’s degrees that are actually earning more money (up to $11,000 more) than some graduates with bachelor’s degrees. The future paychecks of students with certain majors look more fortunate than others’ as well, no matter what school they attend. Majors such as engineering, business, and nursing are ranking in the most well-paid majors while those in liberal arts, such as philosophy and music, are on the lower side of the spectrum.

It’s about time people stop judging futures by the college one attends. The college does not determine the success of the individual, rather it is what they take from the college that will give them the edge.

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Three Views on President Obama’s Higher Education Reform Proposals

Obama’s Plan Aims to Lower Cost of College

by Marie Herb

As colleges across the nation begin another new school year, President Obama recently proposed to help students make college more affordable. He suggested that by the beginning of the 2015-2016 school year colleges will be “ranked” according to a few different principles including: the costs to attend the school, the percentage of students from lower-income families, the percentage of students who graduate, the amount that students accrue in debt after graduation, and students’ the post-graduation income. All of these factors will be used to “rate” the colleges and apply it to financial aid for students across the country by the year 2018. It is anticipated that this will make school more affordable for many students and their parents. In the current system, the government disperses aid based on the size of the school rather than other factors. Under this plan, the schools with the highest ratings – regardless of private or public – would receive the most financial aid from the federal government.

In general, this proposal has a concrete purpose and goal. If Congress approves this proposal, it will be interesting to see the execution of this idea. While this system of “rating” colleges could be useful, there would need to be different factors regarding the type of school which the student attends and the significance of each of the criteria. If Congress is able to agree on an improved system of financial aid, students across the United States will ultimately benefit, and thus, the rest of the nation.

To view the original article in the New York Times Click Here!

NCLB for Higher Ed?

by Jessica Dembeck

President Obama recently spoke about the need for reform, as the cost of college tuition continues to rise. What’s his solution? The President proposed to tie federal funding to students’ performance and to create a ranking system for universities that rates them according to affordability, graduation rates, successful loan repayment, etc. That sounds incredibly familiar…

The No Child Left Behind Act (2005) did exactly the same thing at the elementary level, linking funding to students’ performances on the state assessment and whether or not they attain adequate yearly progress. As a future teacher, I’ve observed the results of this policy in full effect. Teachers are now only teaching their students how to pass the state assessment, and now, subject areas like science and social studies are being put to the side and barely addressed in the classroom. Of course, this isn’t happening everywhere, but the fact is that it’s still happening.

Similar to NCLB, Obama’s proposal seems like a great idea in theory, but the actual execution of the proposed policy doesn’t sit too well with me. The rating system doesn’t take into consideration all of the qualitative information that is crucial to education, just like NCLB. A university can have all of the right quantitative information, but if the quality of instruction is poor, then what? With how many colleges and universities there are in the United States, how can the government ever know exactly what they are funding?

The Cost of College

Leyette Moll

President Obama stated that “…if a higher education is still the best ticket to upward mobility in America — and it is — then we’ve got to make sure it’s within reach.”  While the president has supported initiatives to ease the pains of college costs such as the “Pay as you Earn” program, a program that caps loans at 10 percent of what a student’s income is and which few people are eligible for, he has also stated that he is planning to install 3 governmental changes to increase college accessibility to the middle and lower class American: “[1] Increasing value, making sure that young people and their parents know what they’re getting when they go to college; [2] encouraging innovation so that more colleges are giving better value; [3] and then helping people responsibly manage their debt” are the keys to accessible higher education, says President Obama.

All of the president’s ideas appear to be magical solutions to a growing problem, but are they fast acting solutions? Unfortunately these changes, even if they were ready to be enacted tomorrow, would have little affect for those attending college at the moment. Going to a school that has better bang for its buck and changing a school’s innovative tactics are ideas lost on those already attending a 4 year institution. Managing debt is also a great idea, but what if manageable debt was exceeded after one year of college for those who are now sophomores or further along in their college years? Good luck next time? There is not a next time or a re-do for those who have already begun college, and where preventative measures should not be discouraged, perhaps more immediate results would be welcome in regards to putting a dent on college costs.

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Financial Aid for the Neediest Students is Down at State Universities

A story co-published in ProPublica and The Chronicle of Higher Education shows that poor students are receiving less financial aid from public universities at the same time that wealthier students are given larger scholarship packages. This chart shows how these trends have developed since 1996:

Grants_to_Low_Income_Students

There are several reasons for why this shift has taken place.

“For some schools, they’re trying to climb to the top of the rankings. For other schools, it’s more about revenue generation,” said Don Hossler, a professor of educational leadership and policy studies at Indiana University at Bloomington.

To achieve these goals, schools use their aid to draw wealthier students — especially those from out of state, who will pay more in tuition — or higher-achieving students, whose scores will give the colleges a boost in the rankings.

Private colleges have been using such tactics aggressively for some time. But in recent years, many public colleges have sought to catch up, doing what the industry calls “financial-aid leveraging.”

The math can work like this: Instead of offering, say, $12,000 to an especially needy student, a school might choose to leverage its aid by giving $3,000 discounts to four students with less need, each of whom scored high on the SAT, who together will bring in more tuition dollars than the needier student.

According to the article this trend may escalate as state universities are held more accountable for graduation rates.

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US Department of Education & For-Profit Higher Ed Rules

The US Department of Education has released a list of potential regulations aimed at student debt at for-profit universities. According to Politico:

The regulation would cut off federal aid to programs at for-profit colleges and vocational programs at all colleges whose graduates’ debt is more than 30 percent of their discretionary income and 12 percent of their annual income for two out of three years.

And the regulation would create a new warning zone for programs whose graduates’ debt exceeds 8 percent of discretionary income or 20 percent of annual income. Those programs would have to warn prospective students and limit their enrollment. After four years in the warning zone, the programs would lose federal financial aid.

Negotiations between the Department of Education and affected higher education programs began on September 9.  Another Politico article claims that the debates will be contentious and take place against a politicized backdrop pitting President Obama against Congressional Republicans who oppose the regulations.

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Some Academics Aren’t In Tune With President Obama on Higher Ed Reform

Last week President Obama discussed his proposals for reforming higher education in an effort to control costs, debt and increase graduation rates. Over the next week knowyourcollegecosts.org will blog a variety of viewpoints concerning the president’s proposed reforms.

The first reaction comes from academics polled by Inside Higher Ed (“Disappointed but Not Surprised”). Colleen Flaherty states:

in reacting to Obama’s higher education policy speech at the State University of New York at Buffalo Thursday, in which the president proposed a ratings system for institutions to be tied to federal aid, faculty members expressed disappointment. While emphasizing that access to college is a good thing, they said, the speech failed to address deeper problems facing higher education — such as lack of funding, skyrocketing tuition and the increasing employment of adjunct faculty — and was too enthusiastic about massive open online courses (MOOCs), whose pedagogical effectiveness remains largely untested.

Faculty noted a number of perceived flaws in the plan. First, they argued that the outcomes-based assessment (graduation rates) was just an extension of K-12 federal No Child Left Behind Act. Rudy Fichtenbaum, president of the American Association of University Professors stated that non-elite Universities would become obsessed with ratings and move toward a more standardized curriculum that produced graduates in able to get more funding. Other professors also voiced displeasure with the idea of focusing on outcomes rather than learning. The idea of providing “value” in higher ed was viewed as problematic because as one professor mentioned:

I’m not seeing the value of a college education in terms of participation in public culture, or a graduate’s acquisition of the skills and curiosity essential to ‘learning how to learn.’ … Do we really want to say that an elementary school teacher has had a less successful college education than a hedge fund manager? I hope not.

Please read the article for the full range of views.
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Stats Show AP Courses May Not Be the Answer to Less Student Debt

Student debt levels have been rising and have recently reached $1.2 trillion in outstanding loans. One solution to helping students reduce their debt is to have them graduate in four years or even a semester early since student loans tend to really add up beginning in the fifth year of college. Passing Advanced Placement (AP) courses in high school allows students to get college credit before they arrive on campus,  giving them a leg up on graduating on time. AP courses have also been touted as an opportunity for students to experience the rigors of university courses – thus preparing them for better success in their freshman year.

An analysis by Politico shows that AP courses haven’t been making the grade. They state that

Enrollment in AP classes has soared. But data analyzed by POLITICO shows that the number of kids who bomb the AP exams is growing even more rapidly. The class of 2012, for instance, failed nearly 1.3 million AP exams during their high school careers. That’s a lot of time and money down the drain; research shows that students don’t reap any measurable benefit from AP classes unless they do well enough to pass the $89 end-of-course exam.

In its annual reports, the nonprofit College Board, which runs the Advanced Placement program, emphasizes the positive: The percentage of students who pass at least one AP exam during high school has been rising steadily. Because so many students now take more than one AP class, however, the overall pass rate dropped from 61 percent for the class of 2002 to 57 percent for the class of 2012.

Even more striking: The share of exams that earned the lowest possible score jumped from 14 percent to 22 percent, according to College Board data.

Further,

Advanced Placement classes, available in 34 subjects from art history to calculus, are supposed to be taught at a college level. The exams are graded on a scale of 1 to 5. The College Board considers 3 a passing grade, though fully a third of the universities that grant college credit for AP require a score of 4 or 5. Dartmouth College, questioning the program’s rigor, has announced it will soon stop accepting any AP scores for credit.

 

Advocates often argue that students benefit from being exposed to the high expectations of an AP class, even if they don’t pass the test. Yet there’s no proof that’s true.

 

In fact, taking an AP class does not lead to better grades in college, higher college graduation rates, or any other tangible benefit — unless the student does well enough to pass the AP test, said Trevor Packer, a senior vice president at the College Board.

For access the Politico article, please click here.

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Number of Students Receiving Aid Reaches All Time High

The U.S. Department of Education released statistics today showing the number of college students receiving financial aid is at an all time high. Data from the 2011-12 academic year show that 57% of students receive some type of aid from the federal government. This is the first time that a majority of college students are receiving federal aid.  According to an article in Politico

About 41 percent of all undergraduates took out loans, up from 35 percent four years ago. Borrowing is on the rise even in top income brackets. About 46 percent of students with families making more than $100,000 per year took out student loans, and a majority of students from families making $80,000 or less borrowed to pay for college.

The numbers also show the effect of skyrocketing spending on the Pell Grant. About 41 percent of all students received the grant in 2011-12, a 14 percent increase. Congress expanded the grant program several times between 2007 and 2009. As the economy faltered and incomes fell, spending on Pell grew from $12.8 billion in 2007 to $35.6 billion in 2011 before falling slightly last year.

A competitive financial aid market is causing colleges to offer more money to attract students on the basis of their accomplishments rather than need.

About 39 percent of students from families making less than $20,000 per year received grants from colleges’ own funds. But so did 38 percent of students from families with incomes of more than $100,000, up from 33 percent four years ago. The average grants were higher for the wealthiest students, who averaged $10,200 in college aid, than for the poorest, who got about $8,000.

The full study is available on the website of National Center for Education Statistics.