Last week I took my daughter to a private college here in MI for a tour. Thankfully she wasn't all that interested in attending this school because it seemed too small for her liking. Although I like this school, I wasn't too upset since tuition, books, board would run nearly 40 bills a year.
I of course would never be able to afford all of that, or even the full tuition at one of the lower cost state universities here in MI, which leaves us with figuring out how to pay for her college education. The options: student loans, financial aid, and hopefully her near 4 point grade average will net some scholarships.
Michigan officials are blaming the nation's worsening credit crunch for their decision this week to pull out of a federal program that provided a half-billion dollars in loans to nearly 10 percent of the state's college students.
The decision affects 70,000 students at public and private colleges and universities throughout the state, said Tom Saxton, deputy state treasurer for student financial services.
"We just can't go out and borrow money right now, that is the bottom line," Saxton said.
Quote:
Private options in decline
Compounding the worry is the decision by private lenders across the country to offer fewer -- or completely drop -- student loans. They are blaming a federal law enacted last year for making student loans less profitable. That winnows the pool of available loan money and could create bigger problems in the future, Kantrowitz said. He fears a "massive reduction" in private lenders.
"What's going to happen if there's no thawing of the market and no government intervention?" he said.
I'm not saying the sky is falling quite yet on this deal but one has to raise an eyebrow with regard to how this interconnects with the bigger picture at play, i.e. slacking economical times, outsourcing the workforce, etc.
Will this eventually equate to a decline in graduating college students? Would that be a good thing?
Your thoughts?
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We were made by God and for God, and until you figure that out, life isn't going to make sense.
If a nation expects to be ignorant and free, in a civilization, it expects what never was and what never will be.
You can get a point of diminishing return when dealing with expensive private schools. For many majors there is just no good reason to go 40K a year in the hole for a degree that is not really worth that much more than one from a much less expensive state school.
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"Shoot him again....his soul is still dancing"
Just another sign of more troubling economic times on the horizon. Way too many people have to rely on student loans in order to obtain a degree to see the loans suddenly become hard to get. It surprises me that Michigan is opting out of the federal program; are any other states considering this?
I have no idea what's happening in the private sector, but there is a company (can't remember the name) that has been doing a lot of advertising on television here lately. Of course, they're marketing their loans towards students to help them buy laptops and other mostly-luxury items, which I think is silly. Students should never use loans for anything more than tuition, unless they absolutely have to have help with living expenses, but I see no reason why any college student can't work a part-time job to pay for the rent and food. I made the mistake of taking out several student loans that included more $$ than I needed for tuition, and they're still eating up a sizeable chunk of my monthly income. But, anyway, that's getting off-topic.
I can't believe that private lenders, such as EdAmerica, won't continue to offer student loans to all takers at good rates. It's simply too big a market.
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Politics, it seems to me, all too long, has been concerned with right or left instead of right or wrong. ~Richard Armour
Will this eventually equate to a decline in graduating college students? Would that be a good thing?
No. The graduation rate in most schools compared to the number of kids that enter is right around 25-35%. It won't have an effect on graduation rates as those that have the ambition to get a degree will find a way to do it. It will have an effect on the number of people who enter college- if one has to put up their own money up front or find other funding, they might think long and hard as to whether college is right for them- a good decision to make before spending a year or two at college, racking up debt, then dropping out.
A problem with government assistance is that it runs contrary to how private assistance works- if you show a clear financial resposibility and the ability to pay back a loan, you will have a very difficult time getting help from .gov.
Like I've always said, if a person is bright and motivated enough to graduate from college, they are plenty bright and motivated enough to find a way to pay for it, whether it be military, tuition reimbursement from a corporation, or loans from family. The first two are available to just about everyone.
EDIt; I myself got through college and funded it myself, not because I'm particularly bright or motivated, but I worked in a factory at night, delivered pizzas on weekends, and lived within my means- which wouldhave been considered well below the poverty level at the time after tuition was taken out of my annual earnings.
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Obamanfreude - 1. taking pleasure from the misfortunes of an Obama supporter as he or she is adversely affected by the policies of their Dear Leader.
It surprises me that Michigan is opting out of the federal program; are any other states considering this?
Yes, according to the article:
Quote:
Michigan's suspension of the Federal Family Education Loan Program, which includes the Stafford and PLUS loan programs, follows similar moves by Pennsylvania, Texas, Minnesota and Massachusetts. The states have pulled out after being unable to raise the necessary cash to back the programs. Other states are mulling suspensions.
__________________
We were made by God and for God, and until you figure that out, life isn't going to make sense.
If a nation expects to be ignorant and free, in a civilization, it expects what never was and what never will be.
Will this eventually equate to a decline in graduating college students? Would that be a good thing?
No. The graduation rate in most schools compared to the number of kids that enter is right around 25-35%. It won't have an effect on graduation rates as those that have the ambition to get a degree will find a way to do it. It will have an effect on the number of people who enter college- if one has to put up their own money up front or find other funding, they might think long and hard as to whether college is right for them- a good decision to make before spending a year or two at college, racking up debt, then dropping out.
A problem with government assistance is that it runs contrary to how private assistance works- if you show a clear financial resposibility and the ability to pay back a loan, you will have a very difficult time getting help from .gov.
Like I've always said, if a person is bright and motivated enough to graduate from college, they are plenty bright and motivated enough to find a way to pay for it, whether it be military, tuition reimbursement from a corporation, or loans from family. The first two are available to just about everyone.
EDIt; I myself got through college and funded it myself, not because I'm particularly bright or motivated, but I worked in a factory at night, delivered pizzas on weekends, and lived within my means- which would have been considered well below the poverty level at the time after tuition was taken out of my annual earnings.
This private college we toured boasts a 70% graduation rate of which 90% of those students graduate in 3.5 to 4 years. That's their pitch - comparing their curriculum to state schools where statistics dictate a 5-6 year graduation rate - those extra two years could be spent earing a wage to pay back loans rather than racking up more loans.
I agree with Lanse though, private school is not the way to go in my mind.
And yes, Bri, a student who is motivated will find a way to graduate. I did it the stupid way - in my senior year of college (7th year), I had a full load of classes year round, married, new baby, bought a cheap fixer-up'r house I refurbished, and worked full time. Not sure how I found time to fish and hunt, but I did that too. I paid my own way through loans.
I could be way off base here, but the trend I see with this isn't looking good for future generations and the work force. Of course, if everything is manufactured and assembled off shore and if we outsource the work force, we won't need colleges, right? It doesn't take a degree to greet people.
__________________
We were made by God and for God, and until you figure that out, life isn't going to make sense.
If a nation expects to be ignorant and free, in a civilization, it expects what never was and what never will be.
That's their pitch - comparing their curriculum to state schools where statistics dictate a 5-6 year graduation rate - those extra two years could be spent earing a wage to pay back loans rather than racking up more loans.
State schools seem to be set up that way in order to milk as much money out of students (and especially not to mention taxpayers)as possible. It took me 4 1/2 years + a summer to graduate. I can see how an extra year or two causes a huge expense- not only in extra monetary costs, but the cost of lost opportunity.
__________________
Obamanfreude - 1. taking pleasure from the misfortunes of an Obama supporter as he or she is adversely affected by the policies of their Dear Leader.
For some time it has been a hypothesis of public policy that a college education is a private good rather than a public good. In the old days it was thought that having more college graduates around was good for the entire society/economy and thus worthy of substantial public subsidies. This idea has substantially changed and has led to steady but continuing declines in public (federal) funds for college educations. Don't ask for me to defend this hypothesis: I'm just an observer.
Like it or not, most of us are on our own paying for our children's college education and it is painful. My son enters Texas A&M, a public Texas state university, in August. I'm expecting this to cost me most of $20 K/year -- tuition, room, food plan, books, transportation costs (bus pass? I'm not sure), fees. In two years my oldest daughter will be entering college, and so I'm liable to have two children in college concurrently for two years -- $40 K/year.
There is one option you may contemplate. You daughter could move out and begin living on her own. After a period of time this would establish her financial status as independent from your own, and hence her eligibility for financial aid would depend not on YOUR financial situation but on HER financial situation. I used this legal manouevre when I went to college in 1975-1981and I got a lot of financial aid -- various grants ("free money"). You will need to study the specific definitions and time periods that pertain. I moved out in May 1975, began living on my own, matriculated in August 1975, and was able to claim financial independence a year later, making it possible for me to obtain financial aid beginning in my second year of college based on this financial independent status.
I don't know what the exact figures would be in terms of comparing the length of time to earn a degree between private and public schools. I know that i made it through in four years with public schools (two years community college, two years state school). As someone who has worked at both types of schools, i can tell you that they can be somewhat different experiences. However, i would assume that at 40K a year there would certainly be an incentive for kids to graduate as soon as possible as opposed to a state school where the cost is probably half that.
__________________
"Shoot him again....his soul is still dancing"
For some time it has been a hypothesis of public policy that a college education is a private good rather than a public good. In the old days it was thought that having more college graduates around was good for the entire society/economy and thus worthy of substantial public subsidies. This idea has substantially changed and has led to steady but continuing declines in public (federal) funds for college educations. Don't ask for me to defend this hypothesis: I'm just an observer.
Like it or not, most of us are on our own paying for our children's college education and it is painful. My son enters Texas A&M, a public Texas state university, in August. I'm expecting this to cost me most of $20 K/year -- tuition, room, food plan, books, transportation costs (bus pass? I'm not sure), fees. In two years my oldest daughter will be entering college, and so I'm liable to have two children in college concurrently for two years -- $40 K/year.
There is one option you may contemplate. You daughter could move out and begin living on her own. After a period of time this would establish her financial status as independent from your own, and hence her eligibility for financial aid would depend not on YOUR financial situation but on HER financial situation. I used this legal manouevre when I went to college in 1975-1981and I got a lot of financial aid -- various grants ("free money"). You will need to study the specific definitions and time periods that pertain. I moved out in May 1975, began living on my own, matriculated in August 1975, and was able to claim financial independence a year later, making it possible for me to obtain financial aid beginning in my second year of college based on this financial independent status.
Student Loans in Jeopardy?
