College Planning Interns BANNED at State-Sponsored Financial Aid Event – Event Officials Threaten, Intimidate Interns, Rip Literature, Call Police
Here's a press release we just issued about the outrageous events this weekend.
For Immediate Release
Weston, Florida, February 23, 2008 – Officials at “Countdown to College,” a state-sponsored financial aid event, muzzled a local college planning firm that attempted to shed light on the sponsors behind the event.This weekend, the state of Florida featured the “Countdown," a series of financial aid form assistance workshops ostensibly designed to help parents of college-bound teens fill out the Free Application for Financial Aid (FAFSA). Unbeknownst to the attendees, however, the events were underwritten by student loan companies. When student interns hired by CollegePlanningAdvice.com, a Weston-based college planning firm, showed up at the event to distribute information urging families to consider other sources of college funding – including free, need-based grants and scholarships - they were met by angry, outraged organizers. Event officials moved swiftly to intimidate the teenaged interns with threats of calling the police, tearing up their flyers and banning them from the parking lot.
“This event was held in a public forum. These cowardly officials shamelessly violated the interns’ rights to free speech under the 1st amendment!” said Andrew Lockwood, J.D., co-owner of CollegePlanningAdvice.com. ”But the true victims were the families who were coerced into applying for high fee, high debt student loans when unknown alternatives were available.”
Lockwood and Peter Ratzan, M.B.A. co-owners of CollegePlanningAdvice.com, were shocked once they learned that event which was sponsored by USA Funds -- a student loan guarantor—and Citicorp - a student lender - would steer cash-strapped and uninformed families to risky, high cost and unsubsidized private student loans without offering an alternative solution to their college funding crisis.
"There are better, even free ways to pay for college, if you know the "rules of the game" about how federal grants are given, and to whom. There's more than 80 Billion dollars of need-based aid available through the financial aid system,” said Razan. “Andy and I were shocked to learn that we would not be allowed to present that information to the families at the Countdown. Wouldn’t you think that this would be information that they’d want to know?”“We just wanted to make sure that parents found out that there was a legitimate alternative to burdening their children with deceptive, low "teaser" rate payments that, after they adjust, create late payments, non-payments, defaults and ruin your student's credit rating for the indeterminate future" said Lockwood.
“Unfortunately, here’s what happened instead,” said Ratzan: "The parents filled out their FAFSA. Then, they pushed a button and learned what their Expected Family Contribution (EFC) is. This is a critical number - it’s the dollar amount that parents are expected to pay according to the FAFSA."
"For most parents, the EFC is not pretty,” said Lockwood. “The EFC is usually several thousand dollars per year, per child. Parents freak out. Then, at the ‘Countdown,’ vulnerable parents rushed to apply for high fee, high rate student loans, solely because they did not see any alternative to incurring this debt! For these student lenders, signing borrowers was like shooting fish in a barrel, but with a machine gun!” said Lockwood.“The key to avoiding being pigeon-holed like this is to start the college planning process by sophomore or junior year. This is one area where procrastination can cost you literally thousands of dollars of lost aid and high interest payments,” said Ratzan.
Lockwood and Ratzan offer free college planning workshops that encourage parents to reduce or flat-out eliminate high fee, high interest rate debt. Details are available at: http://collegeplanningadvice.comLockwood and Ratzan co-host “The College Planning Power Hour” radio show, Sundays, 10:00-11:00 AM on ESPN Radio AM 1400, starting March 2, 2008. Their firm, CollegePlanningAdvice.com is located in Weston, Florida and helps parents “Pay for College Without Going Broke.”
For more information and/or an entertaining interview, please contact Andrew Lockwood, J.D. at 954.659.1234 or info@collegeplanningadvice.com
Tuesday, February 26, 2008
Tuesday, February 19, 2008
Warning About Florida's "College Countdown"
Weston, Florida, February 19, 2008 -
We're very uptight about the State of Florida-sponsored "Countdown to College," a series of college financial aid form assistance workshops throughout Florida. The promotion is designed to help parents of college-bound teens fill out the Free Application for Financial Aid (FAFSA).
Although the event seems helpful on its face, we at CollegePlanningAdvice.com advise attendees to scratch below the surface to learn the true incentive of the event sponsors.
Check out who's sponsoring these events. USA Funds - a lender! Citicorp - another lender!!!.
Correct me if I'm out of line - wouldn't it be nice for your student to go to college without borrowing money from high fee, high rate lenders? Wouldn't it be great if you didn't burden your student with deceptive, low "teaser" rate payments that, after they adjust, create late payments, non-payments, defaults and ruin your student's credit rating for the indeterminate future?
I can predict exactly what will happen at these events. Parents will fill out their FAFSA. Then, they'll push a button and learn what their Expected Family Contribution is - in other words, the dollar amount that they will be expected to pay according to the FAFSA.
It won't be pretty. This number will be several thousand dollars per year, per child.
Parents will freak out. Then, I bet you dollars to donuts that these parents will rush to apply for high fee, high rate student loans, because they will not see any alternative to borrowing for college.
And with the friendly student lenders lurking nearby, these parents are fish in a barrel.
If you are the parent of a sophomore, junior, or, in some cases, a senior, you still have time to prevent yourself from being coerced like the attendees of the "Countdown." There are better, even free ways to pay for college, if you know the "rules of the game" about how federal grants are given, and to whom.
For more information, attend one of our three, free workshops this month:
* Tuesday, February 26th, 6:15 pm - Southwest Regional Library, Pembroke Pines;
* Wednesday, February 27th, 6:15 pm: West Regional Libary, Plantation; and
* Thursday, February 28th, 8:00 pm: West Broward Family YMCA, Weston.
Details are available at:
http://collegeplanningadvice.com
The workshops are free and nothing will be sold or "pitched." (There will be no loan applications to fill out, either.)
The secret to avoiding high fee, high rate and high payment student loans is to position yourself to qualify for maximum aid by Sophomore or Junior Year. But even if your child is a Senior, there are still alternatives to student loans.
Lockwood and Ratzan co-host "The College Planning Power Hour" radio show, Sundays, 10:00-11:00 AM on ESPN Radio AM 1400, starting March 2, 2008. Their firm, CollegePlanningAdvice.com is located in Weston, Florida and helps parents "Pay for College Without Going Broke."
For more information call 954.659.1234 or "info@collegeplanningadvice.com"
We're very uptight about the State of Florida-sponsored "Countdown to College," a series of college financial aid form assistance workshops throughout Florida. The promotion is designed to help parents of college-bound teens fill out the Free Application for Financial Aid (FAFSA).
Although the event seems helpful on its face, we at CollegePlanningAdvice.com advise attendees to scratch below the surface to learn the true incentive of the event sponsors.
Check out who's sponsoring these events. USA Funds - a lender! Citicorp - another lender!!!.
Correct me if I'm out of line - wouldn't it be nice for your student to go to college without borrowing money from high fee, high rate lenders? Wouldn't it be great if you didn't burden your student with deceptive, low "teaser" rate payments that, after they adjust, create late payments, non-payments, defaults and ruin your student's credit rating for the indeterminate future?
I can predict exactly what will happen at these events. Parents will fill out their FAFSA. Then, they'll push a button and learn what their Expected Family Contribution is - in other words, the dollar amount that they will be expected to pay according to the FAFSA.
It won't be pretty. This number will be several thousand dollars per year, per child.
Parents will freak out. Then, I bet you dollars to donuts that these parents will rush to apply for high fee, high rate student loans, because they will not see any alternative to borrowing for college.
And with the friendly student lenders lurking nearby, these parents are fish in a barrel.
If you are the parent of a sophomore, junior, or, in some cases, a senior, you still have time to prevent yourself from being coerced like the attendees of the "Countdown." There are better, even free ways to pay for college, if you know the "rules of the game" about how federal grants are given, and to whom.
For more information, attend one of our three, free workshops this month:
* Tuesday, February 26th, 6:15 pm - Southwest Regional Library, Pembroke Pines;
* Wednesday, February 27th, 6:15 pm: West Regional Libary, Plantation; and
* Thursday, February 28th, 8:00 pm: West Broward Family YMCA, Weston.
Details are available at:
http://collegeplanningadvice.com
The workshops are free and nothing will be sold or "pitched." (There will be no loan applications to fill out, either.)
The secret to avoiding high fee, high rate and high payment student loans is to position yourself to qualify for maximum aid by Sophomore or Junior Year. But even if your child is a Senior, there are still alternatives to student loans.
Lockwood and Ratzan co-host "The College Planning Power Hour" radio show, Sundays, 10:00-11:00 AM on ESPN Radio AM 1400, starting March 2, 2008. Their firm, CollegePlanningAdvice.com is located in Weston, Florida and helps parents "Pay for College Without Going Broke."
For more information call 954.659.1234 or "info@collegeplanningadvice.com"
Monday, February 11, 2008
The Latest Crisis Affecting Florida College Students
Today's Sun-Sentinel front page headline screamed about the latest crisis. No, I'm not talking about Beyonce's "Thunder-Thigh" Grammy outfit - it's amazing that Tina Turner's 69 year old legs looked better - I'm giving you the 411 on how the dream of an affordable college education is vanishing for as many as 60,000 Florida students!
The headline: "Enrolling in College Gets Harder. Good grades, high scores no match for budget cuts."
So in the spirit of the Grammys, I'd thought I'd offer my own performance, even if it does exploit a family member whom I love.
http://videopostcard-004.com/X.asp?5674054X1920
P.S. If you or someone you know is worried about affording college in Florida or anywhere else, may I humbly suggest you attend our free workshop, "How to Pay for College Without Going Broke."
We're running them twice this week - Tuesday in Coconut Creek; Wednesday in Tamarac. See our website for details:
www.CollegePlanningAdvice.com
The headline: "Enrolling in College Gets Harder. Good grades, high scores no match for budget cuts."
So in the spirit of the Grammys, I'd thought I'd offer my own performance, even if it does exploit a family member whom I love.
http://videopostcard-004.com/X.asp?5674054X1920
P.S. If you or someone you know is worried about affording college in Florida or anywhere else, may I humbly suggest you attend our free workshop, "How to Pay for College Without Going Broke."
We're running them twice this week - Tuesday in Coconut Creek; Wednesday in Tamarac. See our website for details:
www.CollegePlanningAdvice.com
Saturday, February 9, 2008
Good News for a Change!
Here's a story by Insider Higher Ed about the House bill on Financial Aid. It's a good bill that calls for some important changes to the financial aid process.
*******************************************************
House, Focusing on Cost, Approves Higher Education Act
The House of Representatives on Thursday overwhelmingly approved legislation to renew the Higher Education Act that would toughen regulation of the student loan industry and simplify the process of applying for federal financial aid, among many other things. But while the legislation touches on an enormously broad range of issues and programs, the debate and discussion surrounding the measure focused heavily on the rising prices of college and the increasing difficulty students and families have paying for a higher education.
The House bill (H.R. 4137), known as the College Opportunity and Affordability Act, represents Congress’s most aggressive efforts yet to pressure colleges to contain both their own internal costs and what they charge to students. In drafting the bill, Democratic leaders cast their lot with Republicans who have been pressing the issue for a decade, greatly increasing what colleges would have to report on their finances and agreeing to create lists designed to embarrass colleges that increase their tuitions significantly.
Under the legislation, the 5 percent of institutions in each sector (public, private, for-profit, two-year, four-year, etc.) that raise their tuitions by the highest percentage over a three-year period would have to create “quality efficiency task forces” to analyze why the colleges are raising prices more than their peers. Institutions on the list would also be required to report to the education secretary on the factors contributing to the price increases.
On top of those provisions, Thursday’s debate over the Higher Education Act legislation was dominated by the bipartisan embrace of several amendments — opposed by college leaders — designed to intensify the scrutiny of college spending and prices. Lawmakers, for example, approved amendments Thursday that would require colleges to (1) give prospective students information about what their tuitions are likely to be over multiple years and (2) report to the Education Department annually about how much of their endowments they spend on “reducing the costs of instruction offered by such institution, including the specific amounts expended for grants and other aid to reduce the amounts charged for tuition, fees, textbooks, meals, room and board.” An amendment that would have gone further — requiring a minimum payout from all college endowments — was withdrawn by its author, Rep. Peter Welch (D-Vt.), on Wednesday.
“Last year, by enacting a $20 billion increase in federal student aid – the largest increase since the G.I. Bill of 1944 – this Congress took an historic step to help American families pay for college,” said Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee. “Now we are redoubling our commitment to college students and parents by reining in skyrocketing tuition prices and making our whole system of higher education far more consumer-friendly.”
“Despite the considerable federal investment — or perhaps, in part, because of it — colleges and universities have increased tuition and fees year in and year out,” said Rep. Howard P. (Buck) McKeon of California, senior Republican and Miller’s counterpart on the House education panel. “The increases have come in good economic times and in bad, with steady enrollments and surging enrollments. It seems the only thing consistent about college costs is that they’re going up, and fast. With this bill, we hope to change that.”
The overarching agreement between leaders of the two parties over the centrality of the cost issue reflected the general consensus with which the key piece of legislation, which governs most federal higher education programs, was both drafted in recent weeks and discussed on Thursday. The day’s debate was largely devoid of drama — the final margin of the vote was 354-58 — and the only real moments of contention came at the very start, when Republicans balked that the Democratic-controlled Rules Committee had declared most of the potentially controversial amendments (most of which came from Republicans) to be “out of order” Wednesday night.
Only 4 of the 27 amendments cleared for consideration on the House floor Thursday came from Republicans, with the Rules Committee blocking votes on such core GOP issues as restricting aid for undocumented/illegal immigrants and endorsing David Horowitz’s Academic Bill of Rights, as well as McKeon’s plea to have the Education Department explore the damage being done to the student loan industry by last fall’s Congressionally mandated subsidy cuts and the current credit
crunch.
Those moves prompted Republicans to bemoan what they characterized as a disruption of the bipartisan approach the committee’s leaders had used in crafting the underlying bill. “Why are Republicans being shut out of a bipartisan bill” by a “heavy-handed majority?” McKeon asked on the House floor, as he complained about the Democratic majority’s rejection of one of his amendments and those from several of his colleagues. McKeon said that the strict limits on amendments “taints the bipartisanship of the underlying bill.”
Once that unpleasantness was done, very little else disturbed the general geniality and accord of Thursday’s discussion. Even the few contested votes on amendments generated little in the way of discord from lawmakers across the aisle that separates the two parties. The only major disagreement came on an amendment that would have allowed borrowers to discharge private student loans after five years in bankruptcy.
Advocates for students supported the provision, which was proposed by Rep. Danny Davis (D-Ill.), because they say expensive and private student loans have become a major source of financial turmoil for borrowers and should be treated like many other forms of consumer loans, which can be discharged in bankruptcy.
But opponents said such a change could serve to drive up the cost of private loans for all borrowers because such loans would become riskier for lenders and therefore made at higher interest rates. “This would help a small number of people, but hurt a larger number,” said Rep. Ric Keller (R-Fla.), who heads the House’s postsecondary education committee. Although the bankruptcy provision appeared to win approval in an early-afternoon voice vote, it failed by a margin of 236 to 179 when lawmakers had to put their votes on the record.
“We are disappointed that the House chose to stand with big banks instead of students who fall victim to predatory private student loans,” said Luke Swarthout, higher education advocate for the U.S. Public Interest Research Group.
Other amendments approved on the House floor Thursday would direct the Education Department to study the pros and cons of allowing federal aid to flow to students who attend college less than half time, and urge the U.S. Education Department and the Internal Revenue to collaborate so that information that citizens submit on their tax returns can be used when they apply for federal financial aid. “I hope that both of the bureaucracies involved will really heed this,” Rep. John Doggett (D-Tex.) said of the latter amendment, which he sponsored.
The Underlying Bill
The Higher Education Act bill, which gives most federal college programs the authority to operate for five years and was last renewed (because of repeated false starts since then) in 1998, touches on an enormously wide range of issues. Among many other things, the legislation would:
Give the Education Department significantly more authority to regulate private student loans, as part of a broad set of provisions — prompted by last year’s investigations into illegal inducements given to colleges by lenders — aimed at cracking down on the behavior of lenders
and college officials in making loans to students.
Dictate that colleges craft plans for giving their students legal ways to download movies and music, and that institutions explore technologies to stop illegal peer to peer file sharing. This provision had been strongly opposed by several college groups, especially since those promoting it based their arguments largely on data about campus downloading that have since been shown to be seriously flawed.
Bar the U.S. Education Department from issuing regulations governing higher education accreditation, designed to ensure that colleges are measuring student learning outcomes. Education Secretary Margaret Spellings vehemently opposes the provision (leading the White House to “strongly oppose” the bill) and will try to alter it when House and Senate negotiators meet to craft a compromise version of the Higher Ed Act legislation in coming weeks. The legislation would also create a new federal position, an “ombudsman,” to intervene in disputes related to accreditation.
Extend to three years from two the period the federal government uses to calculate the rate at which student loan borrowers default, but delay implementation of the change until 2012 and raise some of the rates at which penalties against institutions with high rates kick in.
Set a ceiling on the maximum Pell Grant of $9,000, and allow for students to receive Pell Grant funds year-round, instead of just during the traditional academic year.
Require states to maintain their financial support of higher education and allow the Education Department to withhold some funds to states that cut their college appropriations — an idea endorsed by some college officials but strongly opposed by many state legislators.
Make some much-sought changes in the Academic Competitiveness Grant Program, including making the much-maligned grants for low-income students available to part-time students and those seeking certificates as well as degrees, and taking the education secretary out of the business of deciding whether high school programs are of sufficient academic rigor to quality students for the grants, leaving that decision instead up to state officials.
Mandate that textbook publishers expand the information they provide to faculty members about pricing and changes from past editions, and that colleges put information about required boooks in their course schedules to help students shop for books more cost effectively, among other provisions aimed at easing textbook prices.
Crack down on diploma mills by directing the Education Department to publish lists of accredited institutions and accreditation agencies, among other things.
Make several changes designed to make it easier for students to get information about their financial aid awards and to generally simplify the process by which students — particularly those from low-income families — can qualify for federal financial aid.
Establish a loan fund to help colleges and universities damaged or otherwise impaired by natural disasters such as the 2005 hurricanes in the Gulf Coast.
Toughen standards for teacher education programs.
Leaders in the Senate and the House both said they hoped lawmakers from the two chambers could meet soon to work out differences between their respective versions of the Higher Education Act legislation and get a compromise version to President Bush, who has expressed concerns about both versions but not threatened to veto either one.
*******************************************************
House, Focusing on Cost, Approves Higher Education Act
The House of Representatives on Thursday overwhelmingly approved legislation to renew the Higher Education Act that would toughen regulation of the student loan industry and simplify the process of applying for federal financial aid, among many other things. But while the legislation touches on an enormously broad range of issues and programs, the debate and discussion surrounding the measure focused heavily on the rising prices of college and the increasing difficulty students and families have paying for a higher education.
The House bill (H.R. 4137), known as the College Opportunity and Affordability Act, represents Congress’s most aggressive efforts yet to pressure colleges to contain both their own internal costs and what they charge to students. In drafting the bill, Democratic leaders cast their lot with Republicans who have been pressing the issue for a decade, greatly increasing what colleges would have to report on their finances and agreeing to create lists designed to embarrass colleges that increase their tuitions significantly.
Under the legislation, the 5 percent of institutions in each sector (public, private, for-profit, two-year, four-year, etc.) that raise their tuitions by the highest percentage over a three-year period would have to create “quality efficiency task forces” to analyze why the colleges are raising prices more than their peers. Institutions on the list would also be required to report to the education secretary on the factors contributing to the price increases.
On top of those provisions, Thursday’s debate over the Higher Education Act legislation was dominated by the bipartisan embrace of several amendments — opposed by college leaders — designed to intensify the scrutiny of college spending and prices. Lawmakers, for example, approved amendments Thursday that would require colleges to (1) give prospective students information about what their tuitions are likely to be over multiple years and (2) report to the Education Department annually about how much of their endowments they spend on “reducing the costs of instruction offered by such institution, including the specific amounts expended for grants and other aid to reduce the amounts charged for tuition, fees, textbooks, meals, room and board.” An amendment that would have gone further — requiring a minimum payout from all college endowments — was withdrawn by its author, Rep. Peter Welch (D-Vt.), on Wednesday.
“Last year, by enacting a $20 billion increase in federal student aid – the largest increase since the G.I. Bill of 1944 – this Congress took an historic step to help American families pay for college,” said Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee. “Now we are redoubling our commitment to college students and parents by reining in skyrocketing tuition prices and making our whole system of higher education far more consumer-friendly.”
“Despite the considerable federal investment — or perhaps, in part, because of it — colleges and universities have increased tuition and fees year in and year out,” said Rep. Howard P. (Buck) McKeon of California, senior Republican and Miller’s counterpart on the House education panel. “The increases have come in good economic times and in bad, with steady enrollments and surging enrollments. It seems the only thing consistent about college costs is that they’re going up, and fast. With this bill, we hope to change that.”
The overarching agreement between leaders of the two parties over the centrality of the cost issue reflected the general consensus with which the key piece of legislation, which governs most federal higher education programs, was both drafted in recent weeks and discussed on Thursday. The day’s debate was largely devoid of drama — the final margin of the vote was 354-58 — and the only real moments of contention came at the very start, when Republicans balked that the Democratic-controlled Rules Committee had declared most of the potentially controversial amendments (most of which came from Republicans) to be “out of order” Wednesday night.
Only 4 of the 27 amendments cleared for consideration on the House floor Thursday came from Republicans, with the Rules Committee blocking votes on such core GOP issues as restricting aid for undocumented/illegal immigrants and endorsing David Horowitz’s Academic Bill of Rights, as well as McKeon’s plea to have the Education Department explore the damage being done to the student loan industry by last fall’s Congressionally mandated subsidy cuts and the current credit
crunch.
Those moves prompted Republicans to bemoan what they characterized as a disruption of the bipartisan approach the committee’s leaders had used in crafting the underlying bill. “Why are Republicans being shut out of a bipartisan bill” by a “heavy-handed majority?” McKeon asked on the House floor, as he complained about the Democratic majority’s rejection of one of his amendments and those from several of his colleagues. McKeon said that the strict limits on amendments “taints the bipartisanship of the underlying bill.”
Once that unpleasantness was done, very little else disturbed the general geniality and accord of Thursday’s discussion. Even the few contested votes on amendments generated little in the way of discord from lawmakers across the aisle that separates the two parties. The only major disagreement came on an amendment that would have allowed borrowers to discharge private student loans after five years in bankruptcy.
Advocates for students supported the provision, which was proposed by Rep. Danny Davis (D-Ill.), because they say expensive and private student loans have become a major source of financial turmoil for borrowers and should be treated like many other forms of consumer loans, which can be discharged in bankruptcy.
But opponents said such a change could serve to drive up the cost of private loans for all borrowers because such loans would become riskier for lenders and therefore made at higher interest rates. “This would help a small number of people, but hurt a larger number,” said Rep. Ric Keller (R-Fla.), who heads the House’s postsecondary education committee. Although the bankruptcy provision appeared to win approval in an early-afternoon voice vote, it failed by a margin of 236 to 179 when lawmakers had to put their votes on the record.
“We are disappointed that the House chose to stand with big banks instead of students who fall victim to predatory private student loans,” said Luke Swarthout, higher education advocate for the U.S. Public Interest Research Group.
Other amendments approved on the House floor Thursday would direct the Education Department to study the pros and cons of allowing federal aid to flow to students who attend college less than half time, and urge the U.S. Education Department and the Internal Revenue to collaborate so that information that citizens submit on their tax returns can be used when they apply for federal financial aid. “I hope that both of the bureaucracies involved will really heed this,” Rep. John Doggett (D-Tex.) said of the latter amendment, which he sponsored.
The Underlying Bill
The Higher Education Act bill, which gives most federal college programs the authority to operate for five years and was last renewed (because of repeated false starts since then) in 1998, touches on an enormously wide range of issues. Among many other things, the legislation would:
Give the Education Department significantly more authority to regulate private student loans, as part of a broad set of provisions — prompted by last year’s investigations into illegal inducements given to colleges by lenders — aimed at cracking down on the behavior of lenders
and college officials in making loans to students.
Dictate that colleges craft plans for giving their students legal ways to download movies and music, and that institutions explore technologies to stop illegal peer to peer file sharing. This provision had been strongly opposed by several college groups, especially since those promoting it based their arguments largely on data about campus downloading that have since been shown to be seriously flawed.
Bar the U.S. Education Department from issuing regulations governing higher education accreditation, designed to ensure that colleges are measuring student learning outcomes. Education Secretary Margaret Spellings vehemently opposes the provision (leading the White House to “strongly oppose” the bill) and will try to alter it when House and Senate negotiators meet to craft a compromise version of the Higher Ed Act legislation in coming weeks. The legislation would also create a new federal position, an “ombudsman,” to intervene in disputes related to accreditation.
Extend to three years from two the period the federal government uses to calculate the rate at which student loan borrowers default, but delay implementation of the change until 2012 and raise some of the rates at which penalties against institutions with high rates kick in.
Set a ceiling on the maximum Pell Grant of $9,000, and allow for students to receive Pell Grant funds year-round, instead of just during the traditional academic year.
Require states to maintain their financial support of higher education and allow the Education Department to withhold some funds to states that cut their college appropriations — an idea endorsed by some college officials but strongly opposed by many state legislators.
Make some much-sought changes in the Academic Competitiveness Grant Program, including making the much-maligned grants for low-income students available to part-time students and those seeking certificates as well as degrees, and taking the education secretary out of the business of deciding whether high school programs are of sufficient academic rigor to quality students for the grants, leaving that decision instead up to state officials.
Mandate that textbook publishers expand the information they provide to faculty members about pricing and changes from past editions, and that colleges put information about required boooks in their course schedules to help students shop for books more cost effectively, among other provisions aimed at easing textbook prices.
Crack down on diploma mills by directing the Education Department to publish lists of accredited institutions and accreditation agencies, among other things.
Make several changes designed to make it easier for students to get information about their financial aid awards and to generally simplify the process by which students — particularly those from low-income families — can qualify for federal financial aid.
Establish a loan fund to help colleges and universities damaged or otherwise impaired by natural disasters such as the 2005 hurricanes in the Gulf Coast.
Toughen standards for teacher education programs.
Leaders in the Senate and the House both said they hoped lawmakers from the two chambers could meet soon to work out differences between their respective versions of the Higher Education Act legislation and get a compromise version to President Bush, who has expressed concerns about both versions but not threatened to veto either one.
Thursday, February 7, 2008
Why Surprising Amounts of Free College Aid Are Available For You
Here's a piece that I came across today, from Inside Higher Ed. It picks up on a theme College Pete and I have been talking about forever - that it actually may cost you less out of pocket at an elite, private, "high ticket" private school than if you were to enroll at a cheaper, Florida (or other state) college.
This article examines why from the angle of a trend in Congress to demand a certain percentage of endowment be allocated to lower-income students. Enjoy!
(For a schedule of our upcoming free workshops, "How to Pay for College Without Going Broke," go to our website: http://www.collegeplanningadvice.com/ or call the office directly, 954.659.1234.)
Degrees of Wealth and Generosity
If there’s a fun (or depressing) game for college presidents these days, it might be imagining: What could I do with Harvard University’s endowment — or just the earnings on its endowment? With members of Congress and other critics raising questions about why the wealthy institutions need so much, more attention than before is focused on the funds in Cambridge, New Haven, Palo Alto and a few other select locations.
MaryAnn Baenninger, president of the College of St. Benedict, in Minnesota, looked at it this way: With just the $6 billion in last year’s earnings on the endowment (not touching a penny of the original), she could pay for tuition, room and board for every one of her 2,000 students — for the next 85 years. Unlike some in Congress, Baenninger isn’t advocating an endowment raid and has no expectation that Drew Gilpin Faust, Harvard’s new president, is about to send her a check.
But the fact that earnings alone could cover all costs for enrolling at a small college for so long (admittedly at today’s rates) drives home why the endowments look so obscenely large at some institutions. But is the relationship between endowment spending rates and generous financial aid policies as clear as some say it is?
The link is talked about with increasing frequency. When powerful senators asked colleges with large endowments for information about their policies, they suggested that higher spending rates would lead to more generous aid. Sen. Max Baucus, a Montana Democrat who is chairman of the Senate Finance Committee, praised the colleges that have recently made aid more generous and said that he wanted to understand how colleges could “use their endowments to make certain that talented young folks in Montana and across the country aren’t left out of the classroom.”
And in her higher education platform, Hillary Clinton raised the issue. “Hillary is challenging some of the most selective schools in the U.S. to further expand access for low-income and minority students by spending a greater percentage of their endowment annually on recruiting more low-income students and students of color, supporting them so that they graduate and growing the pipeline of students that are prepared to compete for admission to the most selective schools,” the position paper says. “The endowments of the 12 wealthiest universities total $155 billion and in recent years and have gotten tax-free returns of almost 20 percent.
These elite institutions benefit tremendously from their tax-exempt status as well as from federal student financial aid and research grants.
A closer look at three colleges — all of them with endowments large enough to be receiving Congressional scrutiny — suggests, however, that the relationship between endowment spending rates and access for low income students is limited, if it exists at all.
Arguably one of the most generous financial aid packages in American history’s (Harvard University’s latest offering) came with a spending rate that is significantly below the level being kicked around as an acceptable minimum (5 percent). An institution that is less wealthy than Harvard (Cornell University) increased its spending rate significantly — to 5 percent — in part to offer more generous aid, but will not come close to Harvard’s level. And an institution with much less money, less generous aid packages and lower spending rates — Smith College — actually enrolls far more low-income students than do wealthier institutions that (as in Harvard’s case) adopt policies Congress likes to praise or (in Cornell’s case) increases the spending rate on its endowment.
Consider Harvard, whose aid policies have been praised by the same members of Congress who are saying that colleges need to explain why they don’t have a 5 percent endowment spending rate. In December, Harvard announced an aid policy under which students from families with incomes of up to $60,000 will pay nothing, while those with incomes of up to $180,000 would be assured of paying no more than 10 percent of family income — and without loans in aid packages. Harvard’s announcement set off a wave of policy shifts from colleges — but with just a few exceptions, the policies didn’t come close to Harvard’s level of aid.
So how did Harvard afford that level? With a high spending rate? Actually, the spending rate that produced that largesse was 4.6 percent — the kind of rate seen as inadequate by the same lawmakers who praise Harvard’s aid plan.
Last week, Cornell University became one of the institutions trying to play catch-up with Harvard’s aid bonanza. It took Cornell a while, in part because it is much less wealthy than Harvard (their respective endowments are $5.4 billion and $34.6 billion). But Cornell also tends to enroll a greater share of low-income students (not to mention twice the total number of undergrads) and thus any increase in aid promises has greater ramifications. So when Cornell announced its plan, it featured loan caps (but not loan elimination) at the $75,000 and up family income level. But Cornell and Harvard will end up spending about the same on financial aid under their new plans (about $120 million annually).
For Cornell, with its smaller endowment, to spend that amount, it is increasing its spend rate to 5 percent from 4.7 percent — reaching the level senators want. But is spend rate the relevant factor? Compare the $120 million financial aid cost to the endowment earnings of the two universities in the last year. If the two universities were to finance all of their aid budgets from endowment earnings, that $120 million would make up 2 percent of Harvard’s earnings but 11 percent of Cornell’s earnings. That suggests that the relevant factor isn’t spend rates but wealth to start with.
But the Smith example suggests that equally important may be the question of who gets admitted. More than 13 percent of Cornell undergraduates receive Pell Grants. But at Smith, more than 23 percent of students receive Pell Grants, and the formula used by the college for endowment payout is based on an average of 4.75 percent, with some modest adjustments based on the market. Both Smith’s endowment and student body are a fraction of those at Cornell and Harvard.
From an aid policy perspective, not only is Smith not in a position to compete with Harvard, but it isn’t able to be need blind in admissions. Each year a small share of the Smith class is admitted on a need-aware basis — meaning that the final slots go to those who can pay.
So if Smith’s spending rate isn’t what Congress is demanding and its aid policy doesn’t come close to Harvard’s or even the places pushing to keep close to Harvard, what is the key to enrolling low-income students in larger numbers? The answer, according to Smith, has nothing to do with endowment spending rates or even aid policies. To enroll more low-income students, you need (this will sound obvious) to recruit and enroll them.
Audrey Smith, dean of enrollment at Smith, said that the success there comes from an institutional commitment and also the idea that “women’s colleges have sought talent broadly for a long time.”
Ultimately, she said, the key is “thinking more about the potential” of students in admissions decisions and not just going after those with “perfect preparation at the secondary level.” In admitting such students — who may have lower test scores or have never attended prestigious high schools, the college looks for “the ability to take full advantage of an environment like this one,” but not at numerical measures.
Smith is able to provide aid that it gives to students based on the “intergenerational equity” of not spending too much of its endowment in any one year, Smith said.
But the key issue is who gets admitted, she said, not the endowment payout rate — and especially not the endowment payout rate at the places with mega-billions that attract the attention of Congress. Of the public discussion of late linking endowment payout rates to access issues, Smith said: “In all honesty, it just adds to the longstanding frustration that I have that a place like Smith and so many others can do a wonderful job and make a difference in the lives of students, but the spheres of influence in Congress are focused on a small number of institutions and on other issues.”
#End#
College Pete and I will be keeping close track of this trend! For a schedule of our upcoming free workshops, "How to Pay for College Without Going Broke," go to our website: http://www.collegeplanningadvice.com/ or call the office directly, 954.659.1234.
This article examines why from the angle of a trend in Congress to demand a certain percentage of endowment be allocated to lower-income students. Enjoy!
(For a schedule of our upcoming free workshops, "How to Pay for College Without Going Broke," go to our website: http://www.collegeplanningadvice.com/ or call the office directly, 954.659.1234.)
Degrees of Wealth and Generosity
If there’s a fun (or depressing) game for college presidents these days, it might be imagining: What could I do with Harvard University’s endowment — or just the earnings on its endowment? With members of Congress and other critics raising questions about why the wealthy institutions need so much, more attention than before is focused on the funds in Cambridge, New Haven, Palo Alto and a few other select locations.
MaryAnn Baenninger, president of the College of St. Benedict, in Minnesota, looked at it this way: With just the $6 billion in last year’s earnings on the endowment (not touching a penny of the original), she could pay for tuition, room and board for every one of her 2,000 students — for the next 85 years. Unlike some in Congress, Baenninger isn’t advocating an endowment raid and has no expectation that Drew Gilpin Faust, Harvard’s new president, is about to send her a check.
But the fact that earnings alone could cover all costs for enrolling at a small college for so long (admittedly at today’s rates) drives home why the endowments look so obscenely large at some institutions. But is the relationship between endowment spending rates and generous financial aid policies as clear as some say it is?
The link is talked about with increasing frequency. When powerful senators asked colleges with large endowments for information about their policies, they suggested that higher spending rates would lead to more generous aid. Sen. Max Baucus, a Montana Democrat who is chairman of the Senate Finance Committee, praised the colleges that have recently made aid more generous and said that he wanted to understand how colleges could “use their endowments to make certain that talented young folks in Montana and across the country aren’t left out of the classroom.”
And in her higher education platform, Hillary Clinton raised the issue. “Hillary is challenging some of the most selective schools in the U.S. to further expand access for low-income and minority students by spending a greater percentage of their endowment annually on recruiting more low-income students and students of color, supporting them so that they graduate and growing the pipeline of students that are prepared to compete for admission to the most selective schools,” the position paper says. “The endowments of the 12 wealthiest universities total $155 billion and in recent years and have gotten tax-free returns of almost 20 percent.
These elite institutions benefit tremendously from their tax-exempt status as well as from federal student financial aid and research grants.
A closer look at three colleges — all of them with endowments large enough to be receiving Congressional scrutiny — suggests, however, that the relationship between endowment spending rates and access for low income students is limited, if it exists at all.
Arguably one of the most generous financial aid packages in American history’s (Harvard University’s latest offering) came with a spending rate that is significantly below the level being kicked around as an acceptable minimum (5 percent). An institution that is less wealthy than Harvard (Cornell University) increased its spending rate significantly — to 5 percent — in part to offer more generous aid, but will not come close to Harvard’s level. And an institution with much less money, less generous aid packages and lower spending rates — Smith College — actually enrolls far more low-income students than do wealthier institutions that (as in Harvard’s case) adopt policies Congress likes to praise or (in Cornell’s case) increases the spending rate on its endowment.
Consider Harvard, whose aid policies have been praised by the same members of Congress who are saying that colleges need to explain why they don’t have a 5 percent endowment spending rate. In December, Harvard announced an aid policy under which students from families with incomes of up to $60,000 will pay nothing, while those with incomes of up to $180,000 would be assured of paying no more than 10 percent of family income — and without loans in aid packages. Harvard’s announcement set off a wave of policy shifts from colleges — but with just a few exceptions, the policies didn’t come close to Harvard’s level of aid.
So how did Harvard afford that level? With a high spending rate? Actually, the spending rate that produced that largesse was 4.6 percent — the kind of rate seen as inadequate by the same lawmakers who praise Harvard’s aid plan.
Last week, Cornell University became one of the institutions trying to play catch-up with Harvard’s aid bonanza. It took Cornell a while, in part because it is much less wealthy than Harvard (their respective endowments are $5.4 billion and $34.6 billion). But Cornell also tends to enroll a greater share of low-income students (not to mention twice the total number of undergrads) and thus any increase in aid promises has greater ramifications. So when Cornell announced its plan, it featured loan caps (but not loan elimination) at the $75,000 and up family income level. But Cornell and Harvard will end up spending about the same on financial aid under their new plans (about $120 million annually).
For Cornell, with its smaller endowment, to spend that amount, it is increasing its spend rate to 5 percent from 4.7 percent — reaching the level senators want. But is spend rate the relevant factor? Compare the $120 million financial aid cost to the endowment earnings of the two universities in the last year. If the two universities were to finance all of their aid budgets from endowment earnings, that $120 million would make up 2 percent of Harvard’s earnings but 11 percent of Cornell’s earnings. That suggests that the relevant factor isn’t spend rates but wealth to start with.
But the Smith example suggests that equally important may be the question of who gets admitted. More than 13 percent of Cornell undergraduates receive Pell Grants. But at Smith, more than 23 percent of students receive Pell Grants, and the formula used by the college for endowment payout is based on an average of 4.75 percent, with some modest adjustments based on the market. Both Smith’s endowment and student body are a fraction of those at Cornell and Harvard.
From an aid policy perspective, not only is Smith not in a position to compete with Harvard, but it isn’t able to be need blind in admissions. Each year a small share of the Smith class is admitted on a need-aware basis — meaning that the final slots go to those who can pay.
So if Smith’s spending rate isn’t what Congress is demanding and its aid policy doesn’t come close to Harvard’s or even the places pushing to keep close to Harvard, what is the key to enrolling low-income students in larger numbers? The answer, according to Smith, has nothing to do with endowment spending rates or even aid policies. To enroll more low-income students, you need (this will sound obvious) to recruit and enroll them.
Audrey Smith, dean of enrollment at Smith, said that the success there comes from an institutional commitment and also the idea that “women’s colleges have sought talent broadly for a long time.”
Ultimately, she said, the key is “thinking more about the potential” of students in admissions decisions and not just going after those with “perfect preparation at the secondary level.” In admitting such students — who may have lower test scores or have never attended prestigious high schools, the college looks for “the ability to take full advantage of an environment like this one,” but not at numerical measures.
Smith is able to provide aid that it gives to students based on the “intergenerational equity” of not spending too much of its endowment in any one year, Smith said.
But the key issue is who gets admitted, she said, not the endowment payout rate — and especially not the endowment payout rate at the places with mega-billions that attract the attention of Congress. Of the public discussion of late linking endowment payout rates to access issues, Smith said: “In all honesty, it just adds to the longstanding frustration that I have that a place like Smith and so many others can do a wonderful job and make a difference in the lives of students, but the spheres of influence in Congress are focused on a small number of institutions and on other issues.”
#End#
College Pete and I will be keeping close track of this trend! For a schedule of our upcoming free workshops, "How to Pay for College Without Going Broke," go to our website: http://www.collegeplanningadvice.com/ or call the office directly, 954.659.1234.
Subscribe to:
Posts (Atom)
