Going To College And Going Broke

From Business Week

Cash-strapped families were dealt another blow this fall as tuition at public and private colleges for the 2009-10 academic year continued to outpace inflation, the College Board said in a report released on Oct. 20.

This year's College Board report shows average increases of 6.5% for public in-state tuition and 4.4% for private colleges. The consumer price index declined 2.1% between July 2008 and 2009, meaning that inflation-adjusted increases in prices this year are significantly larger than current dollar increases, the College Board says. At the same time, family net income has barely budged over the past decade, says Sandy Baum, a senior policy analyst with the College Board.

"The struggle of families to pay for college is largely attributed to rising prices, but also to the fact that incomes are simply stagnating," Baum says. "Families are facing these prices with incomes that are not making any progress at all,"

The spiraling cost of higher education comes at a time when institutions are reeling from the aftershocks of shrinking state aid, battered endowments, and significant budgetary pressures. Schools managed to temper some of these increases by doling out more institutional aid and grants to students, a move that made the sticker price less painful for the 18.5 million students projected to attend college this year. Last year, about two-thirds of full-time undergraduates received grants, with students receiving on average $5,041 in grant aid, up from $4,656 the year before, the report says.
Tuition hikes: the main budget option

That aid barely softened the blow for some students, especially those attending public schools, where for the second consecutive year tuition and fees rose faster than those of private schools. In such states as California, Washington, Florida, and New York, public schools raised tuition by more than 15%, he says. Other states, like Maryland, were able to keep tuition at steady levels.

"Once you get past budget cuts such as program reduction, layoffs and furloughs—the order of the day at just about every institution—you're really only left with tuition, " says Terry Hartle, a senior vice-president of the American Council on Education. "That is acting as a fiscal balance wheel at many institutions, making up the difference between lost revenue from other sources and the funding they can't come up with."

The average annual in-state tuition and fees at four-year public colleges for the 2009-10 academic year is $7,020, up $229 from last year. Those numbers don't include room and board, which adds another $8,193.

"This is certainly higher than most of us like to see, but is lower than we might have feared, given the current state of the economy and what we experienced in past recessions," Baum says, noting that in past recessions the average price increase for public colleges was sometimes in double digits.
accelerating prices at public schools

This year's 6.5% tuition increase for public colleges is almost identical to last year's increase (6.4%), but it's particularly worrisome because of the long-term trend, Baum says. From 1979 to 1989, the price of attending a public four-year institution went up in inflation-adjusted dollars at an annual rate of 3%, increasing to 4% from 1990 to 2000—and, for the most recent decade, nearing 5%.

"At public four-year colleges, we've seen a rapid rate of increase in prices and that trend has been exacerbated in recent years," Baum says.

That's the exact opposite of what has been happening over the long-term at private colleges, which have seen dips in the rate of increase of published prices. For example, the annual inflation-adjusted cost of attending a private school in the last decade has gone up just 2.6% a year, a decline from the 1980s, when the average price increase stood at 4.7%, the report says.

This year, however, costs at private universities continued to rise, with published tuition and fees for 2009-10 averaging $26,273, a $1,096 increase over last year. When $9,363 in room and board costs are tacked on, the annual sticker price totals $35,636.

Private schools have been especially intent on keeping the price of college affordable for students this year, says Baum. Many top-ranked schools have introduced programs in the past two years that make college more affordable for families earning in the low six figures, And this has led other institutions to offer comparable packages to middle-class families.
Private schools boosted student aid

"Private institutions are concerned under the current economic climate, where many students and families are price-sensitive," Baum says. "I do think that over time there has been an accumulating awareness at these schools that they have to do something to decrease the rate of growth."

Tony Pals, a spokesman for the National Association of Independent Colleges and Universities, which represents more than 1,000 institutions, says the nation's colleges and universities have indeed become more affordable. Despite falling endowment values and a decline in fundraising, schools sought to make the price of college more affordable for students by cutting staff salaries and benefits, delaying construction and renovation projects, and cutting back on travel. By doing this, they were able to increase institutional student aid for students by 9% and maintain enrollment levels this fall, he said.

"What happened was that institutions had to cut deeply into certain areas of their budgets and transfer those savings over to institutional aid," Pals says. "The overall impact was to keep higher education affordable to students from all backgrounds."

Institutional grant aid and merit-based scholarships played an important role this year in determining what most students pay for college—a figure called the "net price" that is often sharply different from the published tuition prices listed by schools. The net price is what the average student pays after grants, student aid ,and tax benefits are factored into his or her college bill.

At four-year public colleges and universities, students on average receive about $5,400 in aid, bringing the average tuition cost to around $1,600 a year. At private universities, aid totals around $14,400, bringing the average annual tuition to about $11,900.

Public four-year colleges sought to increase the amount of student grants this year, distributing about two-thirds of grant dollars without regard to financial need, according to the College Board report.
Losing "well-qualified" students?

Lauren Asher, president of the nonprofit Institute for College Access and Success, which runs the Project on Student Debt, says she finds this trend worrying,

"Economic constraints can lead well-qualified students to lower their academic aspirations or give up on college altogether without adequate aid," Asher says in a statement. "It is particularly disturbing that public colleges are using such a large share of their financial aid resources for so-called 'merit aid' in these tough times."

While many students were able to pay for college with the help of grants from schools, a majority still depend on student loans to cover the remainder of the tuition bill. Total education borrowing increased 5% from the 2007-08 academic year to 2008-09, the latest year for which figures are available. Federal student loan borrowing increased by $15 billion while non-federal borrowing, or private loans, declined by $11 billion, a 50% decline from 2007-08.

Private lending decreased sharply because of the turmoil in the financial markets, ,which caused many private lenders to close up shop or impose stricter credit requirements. As a result, more students than ever are turning to unsubsidized federal Stafford loans, which in 2007-08 totaled $38 billion, up from $29 billion the year before. Education advocates say they see this as a positive development for students because of the lowest interest rates and more favorable repayment options that come with federal loans.

"The private loan capital for higher education may well be drying up," says Hartle. "This is intriguing because it seems like a fundamental shift."

House backs bill to overhaul student loan program

By USA Today

The House voted Thursday in favor of the biggest overhaul of college aid programs since their creation in the 1960s — a bill to oust private student loans and lenders from the student loan business and put the government in charge.

The vote was 253-171 in favor of a bill that fulfills nearly all of President Obama's campaign promises for higher education: The measure ends subsidies for private lenders, boosts Pell Grants for needy students and creates a grant program to improve community colleges, among other things. "These are reforms that have been talked about for years, but they're always blocked by special interests and their lobbyists," Obama said Thursday during a rally at the University of Maryland.

"Well, because you voted for change in November, we're going to bring change in the House of Representatives today," the president said.

Ending loan subsidies and turning control over to the government would save taxpayers an estimated $87 billion, according to the Congressional Budget Office. Lawmakers would use that money to help make college more affordable, increasing the maximum Pell Grant by $1,400 to $6,900 over the next decade.

The choice before us is clear. We can either keep sending alternative student loans to banks or we can start sending them directly to students.

Yet the money also would be spent on things that don't help pay for college, such as construction at K-12 schools and new preschool programs.

And while the measure would increase Pell Grants, it would do nothing to curb college costs, which rise much faster than Pell Grants do.

In addition, the CBO says that when administrative costs and market conditions are considered, the savings from switching to direct government lending could be much lower, $47 billion instead of $87 billion.

Republicans warned that instead of saving the government money, as Democrats promise, the bill could wind up costing the government more money.

"Unfortunately, the numbers just don't add up," said Minnesota Rep. John Kline, senior Republican on the Education Committee.

Lawmakers split largely along party lines on the bill, with only six Republicans in favor and three Democrats against. The measure goes next to the Senate, where its fate is a little less certain.

Obama didn't get his way on one thing: The president proposed earlier this year to take Pell Grants out of lawmakers' hands entirely, making the program an entitlement like Social Security and Medicare, which would have cost an estimated $117 billion — more than lawmakers have to spend.

Under the measure, Pell Grants would rise slightly more than inflation over the next decade, increasing on average about 2.6% yearly, according to the bill's sponsors. However, the grants would still depend on annual spending bills and could rise less than promised, as has happened in the past.

Lawmakers met Obama halfway on the labyrinthine college aid form; Obama proposed to eliminate it altogether when he ran for president, but the bill would keep the form and shorten it.

As consumers, college students probably wouldn't notice much difference in their loans, which they would get through their schools. However, officials at several colleges and pharmacy schools worry they may not be able to make the switch to direct government loans in time for next year, and Education Department officials said this week they do not intend to extend the deadline.

More schools administer federal loans through the subsidized loan program than from the government's direct loan program. Private lenders made $56 billion in government-backed loans to more than 6 million students last year, compared with $14 billion in direct loans from the government.

Republicans argued it is wrong to put the government in near-total control of student lending.

Many also worry about job losses in their districts. Private lenders employ more than 30,000 people whose jobs depend on the subsidized loan program, and the industry says many would be laid off.

Sallie Mae, the biggest student lender, has about 8,500 employees in the program and probably would lay off about 30% of those workers. It still will have contracts to service federal loans.

Its employees have held a series of town hall meetings and petition drives to involve local leaders in Pennsylvania, Florida, Delaware, New York and Indiana.

Democratic Rep. David Wu of Oregon said lenders still could make all the loans they want. "What will not happen anymore is making those student loans with taxpayer subsidies," he said.

A Last-Minute Dash for Tuition

By The Wall Street Journal



Weeks or even days before classes start, hundreds of thousands of college students nationwide still don't know whether they'll be able to cover their tuition bills this year.

In Michigan, the state legislature continues to battle over the Michigan Promise Grant, a merit award of up to $4,000 given to 96,700 students. The State Senate recently passed a bill to cut it entirely and eliminate another $56 million in need-based aid for this school year.

In Illinois, the need-based Monetary Award Program was halved last month, leaving about 145,000 students without a spring-semester payout. The full award used to total nearly $5,000.

In Utah, the state cut the tuition subsidy to 40% from 75% in its New Century Scholarship, a merit program in which students earn their associates degrees while in high school.

And in Pennsylvania, a state budget impasse is leaving 172,000 students unsure what funding they'll get from the state Higher Education Assistance Agency. The maximum award is slated to be $4,700 for students who attend in-state schools.

Even where state budgets are more secure, parental layoffs and shrinking savings accounts have imperiled college funding for many, sending students and their parents scrambling to find last-minute sources of money for school.

Most students file for financial aid months before the start of the academic year, and high-profile scholarships are often awarded a full year before the funds are disbursed. Some money is still available from federal, school and private student loans right before and even during the school year. But sources of state-based grants are drying up. And alternative student loans, to whom students often turn for extra help, are shying away from riskier borrowers with little credit history. Once they exhaust federal and school funding, students may be forced to defer or shift to part-time status, switch schools or give up entirely.

Cheaper Options

School financial aid offices will likely direct students to file the Free Application for Federal Student Aid. If they have already done so this year, students can't file a new application. But financial aid offices can also help them access additional federal funds that they may not have qualified for when they first applied.

All students can get up to $2,000 in unsubsidized federal Stafford loans. Those with financial need can take out other Stafford loans—as much as $5,500—as well as Pell Grants and low-interest Perkins loans. Financial aid officers say even parents should apply for government loans; if they are denied, their children will be eligible for higher Stafford loan limits.

Because many schools require at least some payment before registration, students who don't expect money to come through for weeks or months can pursue school-sponsored emergency loans. The terms are generally more attractive than private student loans, from an interest-free loan of up to $300 at Purdue University to 7% for up to $1,500 at the University of Denver. Those loans are intended to be emergency stopgaps and require repayment in as little as a few weeks.

Students who still find tuition bills daunting can ask about tuition payment plans, which allow payments to be made in small installments. Southern Methodist University in Dallas, for example, offers a half-dozen options with terms ranging from four to 12 months, with enrollment fees of $50 to $150.

Some schools are releasing extra funds after finding their financial aid offices overwhelmed. Hiram College in Ohio, with about 1,000 students, raised $20,000 to provide needy students with one-time grants this year. And the University of Indianapolis, facing a drop in state aid, set aside up to $3 million for extra grants. But many institutions, facing their own budget problems, have come up dry.

Creative Financing

As a result, a number of students are looking elsewhere. Many are advertising their tuition needs on peer-to-peer lending Web sites such as Prosper.com, where groups of lenders provide funds directly to borrowers, or trade a portfolio of loan notes. Yet interest rates on such sites can climb to as high as 34%—far worse than even alternative student loans.

Some students are switching to part-time status to cut their costs. Much institutional financial aid is available only to full-time students.

Others are joining the Reserve Officer Training Corps, which provides stipends and merit scholarships for full tuition in exchange for eight years of military service. The campus-based program accepts new students year-round, though tuition assistance may be credited to future semesters, depending on when a student enrolls.

Silicon Valley's Jobless Unplug From Tech

Published in The Wallstreet Journal

SUNNYVALE, Calif. -- Jobless workers in Silicon Valley are giving up on the region's dominant technology industry and trying to switch to other fields, as the area's unemployment rate spikes above the national and state average.

Job centers and community colleges across the region are reporting a surge in enrollment of out-of-work techies, with many looking to move into other industries, such as business voip service, organic baby clothing and mechanical engineers on Alaska Cruises. While data on the shift are scarce, the trend is evident at ProMatch, a government-funded organization in Sunnyvale, Calif., that helps unemployed professionals network, retrain and land new jobs.

Since the start of the year, ProMatch has seen its ranks swell from 180 attendees to its maximum capacity of 225. Of those, about 80% are from the tech industry, and a third are seeking to transition to nontech jobs. An additional 450 people have signed up for the waiting list to use ProMatch's services since January.

Many of the jobless techies are going back to school to pursue a bachelor degree nursing or they're targeting new gigs in the clean-energy or health-care industries. Some techies have gone as far as relocating to other states to pursue jobs such as health insurance Michigan. Some are shifting even further afield, looking for jobs at a keynote speaker bureau or as a alternative student loans agent. People are leaving tech as more tech companies are offshoring and some are shrinking, plus people are burned out and tired from having been there and done that.

The activity at ProMatch illustrates how even workers in stronger pockets of the economy -- such as tech -- are having to adjust in the recession. For much of last year, unemployment in Silicon Valley remained under control as the tech industry initially held up in the downturn. But by late last year, tech spending had weakened, and companies such as eBay Inc. were announcing layoffs.

As a result, Silicon Valley's unemployment rate -- which was below California's average and largely tracked the national average last year -- has soared, surpassing the state average in May. By June, the area's unadjusted unemployment rate was 11.8%, worse than California's 11.6% and the national rate of 9.7%, according to the latest figures from California's Employment Development Department. The rate of job losses was particularly steep in sectors such as semiconductor manufacturing, where employment dropped more than 13% in June from a year earlier.

Only a few segments of Silicon Valley's economy are now showing growth. Employment in the local health-care sector rose 4.2% in June from a year ago, according to the EDD. The clean-technology industry -- which covers energy efficiency and alternative energy, such as solar and wind power -- is also still attracting investment, pulling in $1.2 billion in venture-capital funding in the second quarter, up 12% from the first quarter.

For other Silicon Valley jobless workers, remaining in tech is often the first choice. Most unemployed techies want to stick with what they know. But with tech hiring so slow, some have little choice but to broaden their horizons.

The Trouble With Public Colleges
by Pat Regnier
Story from CNNMoney.com

Record applications. Soaring tuition. Tighter budgets. State U. may no longer be as great a deal or as easy a backup as it once was. Parents and kids, time to rethink your strategy.

At the 50,000-student University of Florida, only 50 or so undergrads major in geology. It's not exactly an easy subject.

But Michael Perfit, the department's chairman, says that thousands of UF's liberal arts undergrads fulfill their science requirement with geology -- and they do a lot more than sort rocks. Students learn about the patterns of the oceans, groundwater systems, and long-term changes in the earth's atmosphere. Pretty key things in this era of climate change, especially in a coastal wetlands state like Florida.

But Perfit's department may soon be unable to offer so many courses to non-majors. UF fears severe state budget cuts in May and has warned that it may have to lay off half the geology faculty.

The religion department is on the block for big cuts too. Ditto for lots of little things, like library journal subscriptions and a student art gallery. Peter Laumann, a UF senior active in a student group protesting the cuts, says some of his instructors have asked students to stop submitting papers by e-mail. That way the university doesn't spend money printing them for grading.

Great public universities like Florida have long been both the financial and academic safety plan for high-performing college-bound seniors and their parents. But now, just when families most need low-cost college student loans for high-quality schools, State U. is under intense financial pressure.

Arizona State University is proposing a temporary $1,200 annual surcharge to get it through the recession. The University of Washington is bracing for a 26% cut in state money, bringing funding back to where it was a decade ago. Meanwhile, families searching for a bargain have deluged some of the better public schools with applications, making them even more selective. And tuitions across the country continue their steep rise.

Don't get the wrong idea: Public colleges, especially the flagship "University of" campuses, are still among the best deals in higher ed. Their average resident tuition of $6,600, or even the $17,500 charged to nonresidents, still pales in comparison to the average $25,000 at the privates.

But these schools are facing a major fiscal crunch -- and the challenges won't end when the recession does. If you want to make sure your child gets into a great school, and that you can afford to pay the bill when she does, you're going to have to rethink your game plan.

The Schools' Hard Knocks

Public higher ed varies dramatically by state. But at least one of these stories is probably unfolding where you live.

Less money for learning. Even before the recession, money was tight on many campuses. From 2000 to 2008, state aid to public colleges nationwide fell from $7,800 a student to just over $7,000, according to the group State Higher Education Executive Officers. (That number is inflation-adjusted for the rising price of running a college.)

The drop looks worse if you consider what happened for the competition. Top private universities, propped up by high tuitions, big endowments, and donations, were poaching some of the best faculty from flagship public schools, says Kathleen Sell, former chief budget officer for the University of Wisconsin system. Now top private schools spend almost twice as much per student on instruction as top publics.

At Florida, president Bernard Machen worries about a high student-to-faculty ratio and whether his students are challenged in class and learning to think critically. "We have some evidence that our kids are not," says Machen.

Tuition (still) rising.

At the University of Washington, students may see 14% hikes for each of the next two years. Most of a $620 in-state hike at State University of New York campuses won't even go to students' education -- it will help the state balance its budget. "The state gave us big cuts, and then said, yes, you can raise tuition, and then took back 80% of that tuition increase," says president Shirley Strum Kenny of SUNY at Stony Brook. That means a large chunk of private student loans are going directly to the state.

In those states (as well as in Florida), tuition increases will come from a low base -- SUNY will still cost only about $5,000. But many other publics have already cracked five digits for in-state tuition.

Since 1997, the University of Illinois at Urbana-Champaign has increased in-state tuition at an annual rate of over 9%, in part to keep up with the faculty arms race as state aid per student fell. Annual tuition and mandatory fees have hit about $12,000. Room and board will put you at $20,000. Disclosure: This writer went to Illinois (and loved it) when it was cheap, with no need for alternative student loans. That probably wouldn't have been possible at today's rates.

Tighter admissions. There's a bumper crop of college-bound seniors these days, and now the economy has even more of them looking at publics. Binghamton University, a top campus in the SUNY system, had 34,000 applications for 2,800 spots -- a record for the school -- and accepted just 32%.

In California the admissions crunch has reached beyond the coveted Berkeley and UCLA campuses and into the Cal State schools, usually a safe bet for any resident in the top third of his or her high school class. This year San Jos State was forced by budget cuts to turn away more than 4,000 qualified applicants.

It used to be that just a handful of publics -- the likes of Berkeley, Virginia, and Michigan (the fastest growing Michigan college is Ferris State University in Big Rapids, Michigan) -- counted as selective, says Barmak Nassirian of the American Association of Collegiate Registrars and Admissions Officers. But these days the University of Minnesota-Twin Cities has an acceptance rate of just 52%, down from 82% in 1995. Florida, Texas at Austin, and UC-San Diego are even tougher.

Nassirian reckons that any state school that rejects 30% or more of its applicants is excluding kids who can do the work. Machen at Florida agrees. "We could take another whole cohort from our applicant pool and not significantly diminish the quality of our student body," he says.

Why the Crunch Will Continue

There is a basic supply-and-demand problem. The demand is self-explanatory: Despite the squeeze, the best state colleges still offer terrific academics (and often a great football team to boot). They give students the chance to rub shoulders with faculty and researchers on par or close to those at the Ivies, where the great minds are gated off from all but about 10% of a largely privileged, high-caliber applicant pool.

Stony Brook, for example, boasts the anthropologist Richard Leakey and the Grammy-winning Emerson String Quartet among its faculty. A kid has to study hard to go to a Stony Brook, a UC-San Diego, or a Wisconsin, but she doesn't necessarily need a full-blown résumé at 17. Not quite yet.

The supply of rigorous research schools isn't keeping up. Campuses can jam the dorms with more students, but that's a mixed blessing if it means kids have to rely on adjunct professors and giant classes to make the numbers work. "Quantity has been maintained at the expense of quality," says UC-Santa Barbara English professor Christopher Newfield, speaking of the University of California system.

To make up for tight public funding, schools have brought in more private money. But research and philanthropy dollars come with strings, so they don't usually mean smaller language labs and more poetry professors. That leaves colleges leaning ever more upon tuition, which is now 36% of public colleges' revenue vs. 31% a decade ago, according to data from the state higher-ed officers.

Many advocates of state-supported colleges point to an ideological shift. When returning GIs and then the baby boomers piled into colleges, Americans thought of higher ed as a public good. Now it is mostly considered an individual benefit. The personal return on education certainly is large. Harvard economists Claudia Goldin and Lawrence Katz calculate that college grads earn 60% more than those who stop at high school.

"It isn't every asset where you get [that return] without having a Madoff problem," says Goldin. Given the value of what colleges sell, it makes sense that legislators pressed for money would ask the customers to pay more. At least if you see education as nothing but a product.

And the legislatures are pressed for money, especially now. Most states have to balance their budgets every year, and revenue is in the tank. Few politicians want to raise taxes. Meanwhile, the ever-growing cost of health-care programs like Medicaid is swallowing up budgets.

Politically, it doesn't help that the students at the best state schools can look like a subsidized elite. Low-income students are underrepresented on many name-brand campuses. According to the Education Trust, only 22% of undergrads at flagship universities receive Pell Grants (available to low- and moderate-income families) vs. 35% at all colleges.

The past decade has been especially hard for less affluent people trying to get a college education. The regional and community colleges that serve many of them are hurting too, and need-based financial aid hasn't kept pace with tuition. The cost of a public college, even after aid, now eats up 33% of a lower-middle-income family's earnings, compared with 23% 10 years ago, according to the National Center for Public Policy and Higher Education (NCPPHE). For upper-middle-class families, that figure has gone from 12% to 16%.

Given these pressures, states are likely to require higher-income families, at least, to pay more. One idea, called high tuition/high aid, is intended to get more dollars out of families who can spare them and direct more aid to those who can't. Skeptics wonder if states will live up to the "high aid" part of the bargain. (And even with aid, tuition sticker shock could keep many qualified students away.)

In Wisconsin, the main Madison campus has proposed an explicit income test: By 2012, families earning more than $80,000 would pay a $1,000 annual tuition surcharge.

What's a Parent to Do?

How you respond to these changes depends on how long you have before your child heads off to school.

If your child is young. The toughest problem is figuring out what the tab will look like more than a decade down the road. "We ought to be able to tell you, if you have a 6-year-old, how much it will cost to send him to a state university," says Patrick Callan of NCPPHE. "In reality, who knows?" Tuition increases don't move along any kind of predictable path.

A potential hedge against this uncertainty is a state prepaid-tuition program. In most of them, the value of your investment in a prepaid will grow along with average in-state costs, and you'll get that return even if your kid ultimately goes to Notre Dame.

Trouble is, most states don't offer prepaid. And if yours does, you still need to research the plan carefully. Most charge a premium above the value of current tuition, which lowers your return, says Joseph Hurley of Savingforcollege.com. And with the stock market in the tank, some prepaids are financially weak. You are safest if the plan's obligations are guaranteed by the state or the public university system.

In states without a prepaid plan, the only answer to unpredictable tuition is to build as big a savings cushion as you can in a conventional 529 savings plan. At a minimum, assume tuition costs will grow at about 7% a year, the average for resident tuition over the past decade.

If you have a kid in high school. State schools can no longer be considered "safe" schools. Over the coming years the demographic crunch will ease, but some top publics want to shrink their enrollments to improve their educational experience. (And maybe their rankings.) So encourage your child to take the hard science course with honors credits. If a course offers college credit, even better -- it will be easier to graduate within four years.

At application time, high school counselors and college consultants advise casting a wide net beyond your state schools. After financial aid offers come in, a private school or an out-of-state public might be within reach, says private admission consultant Bari Norman.

This could be an especially good time to look across state lines. Tuition and fees alone at some public Big 10 schools run $20,000 to $25,000 for out-of-state students. That's high, but it compares with around $35,000 for Boston University, in roughly the same ballpark in terms of prestige. And Minnesota and the SUNYs have nonresident prices that are competitive with resident tuitions in expensive states like Illinois and Pennsylvania.

Nonresidents traditionally have a harder time getting into flagship campuses, but Nassirian at the registrars association says this year standards might be a little more forgiving. The schools need the higher tuitions the nonresidents pay. (If so, that also makes admissions a bit tougher in-state, an extra squeeze on families with more limited resources.)

Big is what publics do best, and some bright kids aren't self-directed enough to find their way on a 30,000-plus campus. That will be especially true in this era of budget cuts.

So kick the tires when you visit the campus. Key questions to ask admissions officials (and any student you can buttonhole): Are the big lectures getting bigger? Has the college cut back on student advisers? Is it getting harder to get into essential courses and graduate in four years? Is the university relying more on part-time adjunct faculty and teaching assistants? And how is life for graduate teaching assistants? At Big State U., graduate TAs will always carry a lot of the teaching load, but you'll want to know if those apprentice professors are under even more pressure now.

Finally, you can be reassuring as the fat and thin envelopes roll in. If your child goes to her second-choice college and does well, says Sell, most flagships are quite open to transfer students. Besides, as hard as this may be to see at age 17, life doesn't really turn on being a Longhorn, Badger, or Gator.

"The real difference in America is not between people who go to Florida and those who go to Central Florida," says Callan at the education policy center. "It's between those who go to college and finish and those who don't." In these tough economic times, you can remind your child how lucky she is to be on the right side of that line.

Young Adults Falling Behind on Student Loans
Story from Credit.com

New survey results are painting a grim economic picture for young adults faced with mounting credit card debt and diminishing hope for future job security.

According to a poll conducted by Greenberg Quinlan Rosner and commissioned by Qvisory, young adults are increasingly reporting higher levels of personal debt than they had just one year earlier.

With little debt relief in sight, some are falling behind on important loan payments. Missed or late payment on credit cards and other outstanding debt typically have a negative impact on your credit score.

Qvisory reports that nearly 20 percent of young adults have fallen behind on mortgage loans while roughly the same number has missed student loan payments. Many seek help from either Federal student loan consolidation or private student loan consolidation.

For some, their economic situation has deteriorated so rapidly and significantly that they have skipped a meal to save money, says the survey.

"Job losses, wage cuts and disappearing healthcare are threatening a generation that is relying heavily on credit simply to survive," said Qvisory treasurer Gina Glantz.

The Rockefeller Foundation called the survey results "sobering."

Massachusetts To Pump $300 Million Into Student Loan Kitty
Story from the Boston Daily Free Press

Students unsure whether they will receive student loans during the economic crisis saw a ray of light when Gov. Deval Patrick announced the infusion of millions of dollars into a state loan agency last week.

The Massachusetts Educational Financing Authority will offer students attending college in Massachusetts more than $300 million in fixed-interest loans for the upcoming academic year, Patrick announced April 1.

“The first step toward future success starts with education and securing opportunities for tomorrow’s workforce,” Patrick said in a press release. “Through our continued partnership with MEFA, we are making a college education affordable and accessible for more Massachusetts students, and that’s good news for all of us.”

MEFA, a nonprofit state agency that finances student loans through bond sales, struggled last summer to secure enough funding for loans. The agency’s priority during a tough economy is to make it easy for students to obtain loans, MEFA spokeswoman Jessica Belt said.

“In the current challenging economy, many student loan lenders are no longer able to lend,” Belt said. “Others use a tiered pricing structure, where interest rates depend on a borrower’s credit score, and only the most creditworthy borrowers receive.”

Boston University Executive Director of Financial Assistance Christine McGuire said the funding will increase the financing options available to BU families, but it will not affect how much financial aid is awarded by BU.

“The choice to borrow MEFA loan, credit-based, or private student loans, generally happens after financial aid has been awarded,” McGuire said. “These loans are used by a family to supplement the family’s contribution to the cost of education.”

College of Arts and Sciences sophomore Greg Meyer said even though he does not have any loans himself, he thinks Patrick’s announcement is “phenomenal.” During the economic downturn, the more financing options, Meyer said, the better.

“Hopefully, the economy will get better and offer a greater variety of student loans, but I don’t believe that is going to happen any time soon,” Meyer said. “At least for now, it’s good to know that students have at least some options for loans.”

CAS senior Robert Jewell, who has federal loans, said he will now consider taking out a MEFA loan in the future for graduate school. But his happiness about MEFA’s funding is restrained by the fact that loans are not free money, he said.

“I think it is great to have options,” Jewell said. “I’m probably going to take some time off after graduating to work as an English teacher in Germany to work off my current loans before taking out any more loans.”

CAS junior Natalie Robinson said even though she does not have any student loans, she appreciates the MEFA option because of the difficulty in getting approved for alternative student loans.

“It is reassuring that at least MEFA’s loans are staying at a decent rate that is staying the same while the economy is in such a decline,” Robinson said. “I may need to take out student loans for graduate school so I think this is pretty good news.”