223.Unstack the Odds--Cost, Part 5

Unstack the Odds: Help All Kids Access College—and Graduate!

by

Joe Rottenborn

Executive Director, Mahoning Valley College Access Program (MVCAP)

11. Cost, Part 5

“Self help” refers to the kind of financial aid people love to hate--because a student or parent often has to pay it back! We may not like it, but colleges expect both students and parents to "help themselves" pay for their higher education--hence, the term "self-help." The most common variety consists of a loan—for many, the four-letter word in college financial aid! Loans, of course, must be repaid (with interest), which results in students' loan-debt.

Today, many students--and their parents--will likely consider loans to pay for higher education. To learn more about borrowing for college, Lynn O'Shaughnessy has compiled several of her blog-posts on loans, "Best College Loan Advice: 9 Tips for Borrowing for College," at this link: http://moneywatch.bnet.com/saving-money/blog/college-solution/best-college-loan-advice-9-tips-for-borrowing-for-college/1864/?tag=col1;blog-river

Before a student takes out loans to pay for college, he or she and their family should investigate available options (i.e., “shop” for student loans.) Specifically, they need to consider the kinds of loans offered as well as interest rates and repayment obligations. To become aware of these possibilities, read the blog-post by Lynn O'Shaughnessy, entitled "Find the Right Student Loan," at this link: http://moneywatch.bnet.com/saving-money/blog/college-solution/find-the-right-student-loan/371/?tag=col1;blog-river

Students and their parents who need to borrow to pay for college who research their options for loans often wonder whether they are better off taking out federal student loans or private loans. More than simply interest rates and terms of repayment are involved in this consideration. To see some comparisons between government and private loans, read the post by Sandra Block on May 4, 2010, in USA Today at this link: http://www.usatoday.com/money/perfi/columnist/block/2010-05-04-yourmoney04_ST_N.htm?loc=interstitialskip

Both students--and their parents--often have to borrow money to pay for college. Despite taking out all federal student loans for which they qualify, some still consider private student loans. To get the best (lowest) rates of interest on these loans, shop around! In her blog-post from May 14, 2010, Lynn O'Shaughnessy states: "The interest rates that lenders offer on private student loans are wildly different even for borrowers with the same credit scores." To read her entire post, click this link: http://moneywatch.bnet.com/saving-money/blog/college-solution/private-student-loans-the-good-bad-and-ugly/2078/?tag=col1;blog-river

An important question students need to ask in regard to college loans is "How much should I borrow?" With the hazards of loan-debt so well-publicized today, this is an important question to ponder. Lynn O'Shaughnessy addresses this issue in her blog-post "College Debt: Don’t Borrow More Than $27,000" at this link: http://moneywatch.bnet.com/saving-money/blog/college-solution/college-debt-dont-borrow-more-than-27000/1521/?tag=col1;blog-river

Even after considering all elements a student may receive in his/her financial-aid package, they may still need more money to pay for a particular college or university. In that case, parents often consider taking out loans to assist their child. However, how much parents should borrow is often not addressed. Lynn O'Shaughnessy confronts this issue in her blog-post "College Loans: How Much Should Parents Borrow?" at this link: http://moneywatch.bnet.com/saving-money/blog/college-solution/college-loans-how-much-should-parents-borrow/1510/?tag=col1;blog-river

Borrowing to pay college expenses is becoming a necessity for more students. The percentage of students who have college loans is growing, as Lynn O'Shaughnessy discusses in her blog-post "The Soaring Popularity of College Student Loans" at this link: http://moneywatch.bnet.com/saving-money/blog/college-solution/the-soaring-popularity-of-college-student-loans/545/?tag=col1;blog-river

Borrowing for college is an important issue today, as student loan-debt increases--sometimes to scary levels. To read a report by Sandy Baum and Patricia Steele for The College Board entitled "Who Borrows Most? Bachelor's Degree Recipients with High Levels of Student Debt," click this link:http://advocacy.collegeboard.org/sites/default/files/Trends-Who-Borrows-Most-Brief.pdf

To read Lynn O'Shaughnessy's highlights of this report, check out her blog-post: http://moneywatch.bnet.com/saving-money/blog/college-solution/college-debt-12-facts-about-student-loan-borrowers/1961/?tag=col1;blog-river

Despite all the information available, mounting loan debt of college students is a financial crisis affecting many college students today. Indeed, according to a post in The New York Times, average student debt for college graduates is over $23,000—and rising. According to that article by Jacques Steinberg, “Students who graduated from college in 2008 with loans carried an average debt of $23,200 — an increase of nearly 25 percent, or $4,550, when compared with those who graduated just four years earlier. These figures appear in the latest study by the Project on Student Debt, an initiative of the Institute for College Access and Success, a nonprofit organization.” (Jacques Steinberg, "Average Debt for Graduating College Seniors Rises to $23,200," The New York Times--The Choice: Demystifying College Admissions and Aid, December 2, 2009.) http://thechoice.blogs.nytimes.com/2009/12/02/debt/?src=twt&twt=NYTimesCollege

To read first-hand, student accounts of being in debt from college expenses, click on this series from HuffPost College: http://www.huffingtonpost.com/2010/02/22/college-debt_n_471023.html?slidenumber=1mvKlgmw4aI%3D&&&slideshow#slide_image

To read additional articles about the hazards of taking on too much loan-debt for college, click on the following links:

a. re: private loans--http://www.walletpop.com/blog/2010/02/25/money-college-why-one-student-advises-avoiding-private-student/

b. re: community college students-- http://www.usatoday.com/news/education/2008-07-23-comcol-debt_N.htm?csp=usat.me

138. MVCAP fyi

See free MVCAP e-books on college admissions and financial aid for sharing, printing, and downloading at our online resource library: http://issuu.com/mvcap

1. U. of Virginia Explains Its Return to Early-Admissions Arena, by Jacques Steinberg -http://thechoice.blogs.nytimes.com/2010/11/23/virginia/

‎"The 22,500 students who applied for the 3,240 seats in the current freshman class represented an increase of 4,000, or 22 percent, over applications three years earlier. With U.V.A.’s decision over that same period to accept the Common Application — which helped add to its popularity by making it easier to apply — the institution seemed to have little incentive to bring back early admissions. And yet. . . ."

2. Flogging For-Profit Colleges, by Doug Lederman - Inside Higher Ed: http://bit.ly/elgJF2

"The study, released Tuesday by Education Trust, largely repackages previously published data on higher education companies -- their booming enrollments (particularly of minority and low-income students), escalating dependence on federal financial aid, relatively low graduation rates (compared to most public and independent four-year colleges), and high student debt and default levels . . . ."

3. Opening Up Dormitories, by David Moltz - Inside Higher Ed: http://bit.ly/eOrJmo

"The institutions are a half mile apart, Eastern Michigan in Ypsilanti and Washtenaw in Ann Arbor. The university is also the top transfer destination of students from the community college. But when Eastern Michigan had extra dorm space to spare, the two institutions drew even closer. “They approached us,” said Linda Blakey, Washtenaw associate vice president of student services, of Eastern Michigan officials."

4. College Student Borrowing On The Rise: Pew Report - http://www.huffingtonpost.com/2010/11/23/college-student-borrowing_n_787587.html

"The rise in attendance numbers at private, for-profit colleges has caused the uptick in student borrowing, Pew reports: Over the past decade, the private for-profit sector has expanded more rapidly than either the public or private not-for-profit sectors. In 2008, these institutions granted 18% of all undergraduate awards, up from 14% in 2003."

5. Rise of College Student Borrowing, by Rebecca Hinze-Pifer & Richard Fry http://pewsocialtrends.org/2010/11/23/the-rise-of-college-student-borrowing/

‎"Undergraduate college student borrowing has risen dramatically in recent years. Graduates who received a bachelor’s degree in 20081 borrowed 50% more (in inflation-adjusted dollars) than their counterparts who graduated in 1996, while graduates who earned an associate’s degree or undergraduate certificate in 2008 borrowed more than twice what their counterparts in 1996 had borrowed. . . ."

6. Where College Hoops Reign Supreme: Best Colleges for Basketball Fans - http://www.usnews.com/education/best-colleges/slideshows/best-colleges-to-attend-for-basketball-fans/

"There are many students that choose a college based on the quality of a school’s athletic program. If you’re one of those students looking for a school with a top-notch basketball team, this list is for you."

7. Don't Let the Student Loan Crisis Kill Families, by Jennifer Openshaw - http://www.huffingtonpost.com/jennifer-openshaw/act-now-to-avoid-college-_b_786531.html

"As students take on more debt -- $14,000 on average for those earning just associate degrees at the for-profits -- the default rates are growing. Some $275 billion in loans made to students at for-profit colleges will default over the next 10 years. In fact, these for-profit universities represent 10% of all university students, yet they account for 43% of all student-loan defaults, according to the Department of Ed. . . ."

8. International Students: Who Is Attending American Universities, by Lynn O'Shaughnessy - http://t.co/JEdmr8m

"The influx of international students is hardly new. Since 2006, every college admission cycle has attracted more foreign students who are eager to study in the United States. Chinese students are the biggest source of international students by far, according to the annual Open Doors report conducted by the Institute of International Education."

9. Report Finds Low Graduation Rates at For-Profit Colleges, by Tamar Lewin - http://nyti.ms/fqGCuv

"A new report on graduation rates at for-profit colleges by a nonprofit research and advocacy group charges that such colleges deliver “little more than crippling debt,” citing federal data that suggests only 9 percent of the first-time, full-time bachelor’s degree students at the University of Phoenix, . . . ."

10. Report Faults For-Profit Colleges As Providers of 'Subprime Opportunity', by Kevin Kiley - http://chronicle.com/article/Report-Faults-For-Profit/125486/

"The report finds that, on average, only 22 percent of students who enroll in four-year-degree programs at for-profit colleges graduate within six years, compared with 55 percent and 65 percent at public and private nonprofit colleges, respectively. But there was wide variation within the for-profit sector."

• Follow the most important stories on college admissions and financial aid on Twitter at http://twitter.com/rottenbornj


• For links to articles on college admissions and financial aid, you can "friend" Joe Rottenborn at http://www.facebook.com/profile.php?id=23325544


• "Like" the MVCAP fan page: http://www.facebook.com/profile.php?id=23325544#!/pages/Mahoning-Valley-College-Access-Program-MVCAP/284002915922


• You can join the group MVCAP Financial-Aid Friends at this page: http://www.facebook.com/?sk=2361831622#!/group.php?gid=126580419181


• Read The Joe Rottenborn Daily for today's top stories on college admissions/financial aid in newsletter form - http://paper.li/rottenbornj