With college just starting up or about to start shortly, the news and views are heating up.  Here are some items of interest in the spotlight. 

Beloit College Mindset List Class of 2013

Every year Beloit College, a private liberal arts college located in Beloit, Wisconsin, comes out with a list of what the current freshman class has experienced throughout their lives or what may not have been a part of their lives.   

Here are the first ten in the list and also #28 which refers to Bobby Cox-Atlanta Braves manager (we couldn’t skip this once since we’re based in Atlanta).  For the complete listing, go to http://www.beloit.edu/mindset/2013.php

1. Dan Rostenkowski, Jack Kevorkian, and Mike Tyson have always been felons.

2. The Green Giant has always been Shrek, not the big guy picking vegetables.

3. They have never used a card catalog to find a book.

4. Margaret Thatcher has always been a former prime minister.

5. Salsa has always outsold ketchup.

6. Earvin “Magic” Johnson has always been HIV-positive.

7. Tattoos have always been very chic and highly visible.

8. They have been preparing for the arrival of HDTV all their lives.

9. Rap music has always been mainstream.

10. Chocolate chip cookie dough ice cream has always been a flavor choice.

28. Bobby Cox has always managed the Atlanta Braves.

Trends in Student Loan Industry 

• Credit underwriting standards have been raised as credit performance within the student loan industry has been strained due to the current recessionary environment.
• Loan default rates have materially increased.
• Immediate repayment option is being emphasized.
• Obama administration proposal to have federal Direct Loan Program replace FFELP in 2010.

How will this impact those that are applying for or receiving student loans

•  You will need to get a co-signer if credit is marginal or worse.
• Private loans are getting more difficult to get.
• The amount of unmet need is likely to rise.
• The majority of disbursements will be going directly to the school.

Banks Increase Margins on Private Student Loans

Many large banks have recently increased their margins on the funding of both new and existing Private Student Loans.  Some of these increases have been without warning..

If you currently have existing Student Loans with a financial institution that has increased your rate, you may want to consider your options to refinance that loan.

US News and World Report-Solving the College Crisis

This edition has something for everyone who plans to go to college or may currently be in college.  It’s divided into four sections:

• 1. How To Fix Higher Education
• 2. The Changing Face of College
• 3. Paying For College
• 4. The Rankings

Resources-US News and World Report, Chase Bank, Chronicle of Higher Education, Inside Higher Education

Take some time to learn these terms when preparing to send a student to college.  By understanding these terms about what may be available to you can increase your chances of receiving or qualifying for financial aid.   

Educational Assistance Plan- A plan set up by an employer to pay for the cost of an education.  This is also known as a Section 127 Plan.  Any benefit received is tax-free up to $5,250.    

Appeal Letter- This is a letter written to challenge a decision by a college for a financial award or determination of admission. 

Income Protection Allowance- The amount of income that is excluded from the Expected Family Contribution calculation for financial aid purposes.  The number of students in college and the number of family members will determine the amount of the exclusion.  See Table A3 (Dependent Student) under The EFC Formula for additional information- http://ifap.ed.gov/efcformulaguide/attachments/111408EFCFormulaGuide0910.pdf

Asset Protection Allowance- This formula excludes assets from the calculation of the Expected Family Contribution.  Factors that determine the allowance include the age of the parent and whether there are one or two parents in the household.  See Table A5 (Dependent Student) under The EFC Formula for additional information-  http://ifap.ed.gov/efcformulaguide/attachments/111408EFCFormulaGuide0910.pdf 

Untaxed Income- Certain items that are not taxed as income or reduce taxable income may have to be added back in determining the Expected Family Contribution.  The FAFSA will add the following items to income for financial aid purposes: Employee payments to tax-deductible retirement plans, child support received, tax exempt interest income, untaxed IRA or pension plan distributions, living allowances, veterans non education benefits, and other untaxed income.    

Federal Subsidized Stafford Loan- This is a federal loan that is available for students that demonstrate financial need.  Financial need is determined by filling out the FAFSA.  A subsidized loan does not accrue any interest during the time you are attending school.  In addition, there is no accrued interest for the six month grace period after you graduate, leave school, or drop below half-time enrollment.  The maximum available for a Freshman is $3,500, $4,500 for a sophomore, and $5,500 in each year for a Junior and Senior.    

Federal Unsubsidized Stafford Loan-This is a federal loan that will accrue interest from the time the money is disbursed.  This loan is not based on financial need.  The maximum Stafford Loan (combination of Subsidized and Unsubsidized) that can be taken out each year is as follows: Freshman-$5,500, Sophomore-$6,500, Junior and Senior-$7,500.  For additional information on Stafford Loans- Go to the following URL- http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp PLUS Loan- This is known as the Parents Loan for Undergraduate Students.  This is an non-need based loan.  The PLUS loan can be taken out for the total Cost of Attendance less any financial aid awards or other scholarships.  For additional information on PLUS loans- Go to the following URL-http://studentaid.ed.gov/PORTALSWebApp/students/english/parentloans.jsp

Federal Perkins Loan- This is a federal loan available to students with exceptional financial need.  The interest on the loan is subsidized similar to the Subsidized Stafford Loan.  The maximum loan is $4,000 per year for undergraduate study.

Here are some items of interest in helping you plan for college.

Studies on Universities that Produce the Highest Salaries for the Graduate

PayScale is a company that collects data on salaries for different professions.  This company can help students answer the many questions they have regarding salaries.  PayScale has recently released a data set on the salaries of graduates from hundreds of universities and colleges.  Here are the top 5 colleges that produce the highest Mid Range Median Salaries. 

Sending Struggling Students to College

The Bill and Melinda Gates Foundation started The Early College High School Initiative.  The Initiative is coordinated by Jobs for the Future, and also includes 19 additional sponsors/partners.   The sponsors include the Carnegie Corporation of New York and the Lumina Foundation for Education.  The Board of Regents of the University System of Georgia and City University of New York are two of the partners.  The project opened its first three schools in 2002.  The goal was to expand to 170 by 2008. The Initiative has grown faster than expected.  Now, In 2009, there are 201 schools serving 42,000 students, who enroll in college courses tuition-free.

This year the schools graduated about 2,500 students, the most ever. Approximately 89 percent of the 2008 graduates enrolled in two-year or four-year colleges right out of high school, compared with 66 percent of students nationwide.  The vast majority of the Initiative’s class of 2008 earned at least some college credit while in high school.

What are Universities Doing to Keep Growing in Hard Times

Keep expanding to meet increased student demand- Many colleges have instituted hiring freezes to save money, Montclair State University continued its push to hire full-time professors.

Fill seats in the face of drastic state-budget cuts- When the University of the Pacific hired Robert J. Alexander as associate provost for enrollment a year ago, his task was to raise the number of undergraduate applications and increase the visibility of the 6,200-student private college in Northern California.  Mr. Alexander, who filled classes at Tulane University after Hurricane Katrina, put an aggressive marketing program into place, helping Pacific almost triple the number of applications and become more selective.

Spreading the word about a generous aid policy- This spring private colleges were concerned about the ways the economic crisis would affect enrollment for the fall, and how price-sensitive families would be. At the University of Richmond, which has a sticker price of $49,000, applications were down about 1 percent, yet its yield went up. The target was 805 students; 895 freshmen have committed to attend.  The new vice president for enrollment attributes the results to generous financial-aid policies and to a campaign to spread the message that Richmond, despite its cost, is affordable for many families. The university has need-blind admissions and a guarantee to meet 100 percent of demonstrated need. Each student’s contribution through work and loans is capped at $4,000 a year.  

The Agnes Solution- Agnes Scott College in Decatur, Georgia, is offering additional financial aid for Georgia Hope Scholars.  The grant from Agnes Scott College is $15,300 per year.  Add this to the Georgia Hope Scholarship and the Tuition Equalization Grant, this brings the award total up to $20,000 per year.  The Agnes Solution provides significant reductions in the cost of college!  There may also be some additional merit aid or need based aid.