Obama’s Budget Blockbuster
Inside Higher Ed has an excellent article today outlining how Obama’s proposed budget would affect higher education:
The 2010 budget blueprint released by the Obama administration Thursday was decidedly bare bones, lacking detailed numbers for most federal programs and clocking in at about one-tenth the normal number of pages of explanatory material. But while the administration’s proposal might have skimped on specifics, its proposal for the Education Department had no shortage of blockbuster ideas that, taken together, would begin to radically transform federal higher education programs.
The Obama proposals would:
- # ransform the Pell Grant Program into an entitlement program that, like Social Security and Medicare, would ensure a minimum level of funding that would increase each year. This would spare the government’s bedrock need-based financial aid program from having to depend on the whims of Congress each year.
- Eliminate the bank- and lender-based guaranteed student loan program beginning in July 2010, originating all loans in the government’s direct loan program and requiring lenders and other contractors to compete to “service” (collect) the loans once issued. This proposal was immediately attacked by lenders and Republican lawmakers who have historically supported the private-sector program and opposed excessive government takeover of student lending.
Colleges Cut Anything but Aid to Keep Students
Colleges Cut Anything but Aid to Keep Students
By KATE ZERNIKE
With the economy forcing budget cuts and layoffs in higher education, colleges and universities might be expected to be cutting financial aid. But no.
Students considering a wide range of private schools, as well as those who are already enrolled, can expect to get more aid this year, not less.
The increases highlight the hand-to-mouth existence of many of the nation’s smaller and less well-known institutions. With only tiny endowments, they need full enrollment to survive, and they are anxious to prevent top students from going elsewhere.
Falling even a few students short of expectations can mean laying off faculty, eliminating courses or shelving planned expansions.
“The last thing colleges and universities are going to cut this year is financial aid,” said Kathy Kurz, an enrollment consultant to colleges. “Most of them recognize that their discount rates are going to go up, but they’d rather have a discounted person in the seat than no one in the seat.”
So at Nichols College, a business-oriented school in Dudley, Mass., the president has asked staff members to teach classes normally handled by adjunct professors. The savings will allow the college to discount tuition for 20 prospective students and help 40 current students who could not afford to return.
Ithaca College, in upstate New York, is laying off faculty and cutting its 401(k) contributions as part of $4.2 million in budget cuts, but it is also offering increased tuition discounts that will make up the largest financial aid budget in its history. The college, which relies on tuition for more than 90 percent of its budget, saw the dangers of losing students last fall, when it had 240 fewer than anticipated, resulting in a $5 million decline in revenue.
“The good news is that we haven’t taken as much of a hit in our budget as some institutions that rely very heavily on their endowments,” said Dave Maley, a spokesman for Ithaca, which has 6,000 undergraduate students. “The alternative is, since we rely heavily on enrollment, any loss in student numbers hits us harder.”
In a survey of 372 institutions in December, the National Association of Independent Colleges and Universities found that 93 percent said they were moderately or greatly concerned about preventing enrollment declines. Only 8 percent said they would cut financial aid, compared with 50 percent that said they had stopped hiring, 49 percent that had delayed construction or renovation and 22 percent that were freezing salaries.
It is a tricky balance. “If they invest more dollars in financial aid, they may not end up with enough of an enrollment gain to offset the additional expense,” said Nathan Mueller, an enrollment consultant. “But if they don’t do something, they can expect to see enrollment decline.”
In some cases, colleges are increasing their aid budgets to cover current students who have found themselves unable to pay. But many are also increasing budgets for prospective students, anticipating that they will be needier as savings plans have suffered and home equity has declined. Northwestern University announced this week that it would require all departments to reduce their operating expenses by 5 percent, while financial aid is increased by 10 percent.
While much of the assistance will go to the neediest students, institutions are also increasing merit aid.
Albright College, in Reading, Pa., had been splitting its financial aid budget evenly between need-based aid and merit aid. But this year, it will tip the balance toward merit, with 60 percent. The college used to send offers of merit aid shortly after it mailed acceptance letters; this year, it sent them together in hopes of winning students over early.
Many colleges discount tuition an average of 30 to 40 percent. Still, by offering even a relatively small cut, colleges get students who pay a hefty price.
“The full-pays are few and far between,” said Greg Eichhorn, the vice president for enrollment management at Albright. “What we’re looking for are better-pays.”
Some schools have tried to reduce their merit-aid budgets over the last several years, arguing that an emphasis on need-based aid was more philosophically in line with their goals of getting a more diverse student body. But economic pressures may delay those aims.
At Dickinson College, in Carlisle, Pa., for example, merit aid, at its highest, made up about 22 percent of the financial-assistance pie. The share declined to 6 percent two years ago, but crept up to 7 percent last year and will increase to 8 percent for next year’s entering class.
“The families I’m concerned about are the near-misses — the $90,000 to $130,000 families, who almost qualify for aid but not quite,” said Robert J. Massa, the college’s vice president for enrollment. “Those are the families I want to target more merit-based aid to.”
The most selective colleges are also increasing or protecting financial aid: Cornell, Princeton and Vanderbilt, among others, have announced in recent weeks that they will continue plans to replace loans with grants, even as they suspend hiring searches and cut back on capital projects.
But the issue is most pressing for the smallest and less-selective schools.
“Our biggest concern is losing students,” said Tony Aretz, president of the College of Mount St. Joseph in Cincinnati. “You have to cut your costs, and then you’re in a death spiral — students don’t want to come to you because they sense you’re on the rocks.”
Dr. Aretz, like many presidents of colleges in the Midwest, sees public universities as his main competition. They have attracted a larger share of more affluent students in recent years. But with states cutting their budgets and public universities raising tuition, the private institutions also see an opportunity to win over parents now feeling economic pressure.
Some pitches are more direct than others. California Lutheran University in Thousand Oaks is advertising a public school price tag to any student accepted at the University of California, Santa Barbara, or at the University of California, Los Angeles — an average annual saving of $16,000 off the normal cost of $41,767.
Agnes Scott College in Decatur, Ga., is offering $64,200 in merit aid over four years for anyone who is eligible to receive the state’s HOPE scholarships, which were developed to attract stellar but not necessarily needy students to state colleges and universities. The discount will cut the cost of attending the private college in half. (To pay for the increase in aid, no cut is too small: the college even replaced its traditional holiday greeting card with an e-card.)
The colleges are also trying to hold down tuition increases. But increases in financial aid are not without consequence. At Ithaca, officials project that tuition discounts will result in a net revenue decline of $2.66 million and force the college to carry a $2.5 million deficit, its first since the 1950s.
Evidence of decline in enrollments at high priced public universities in this report from University Colorado-Boulder
According to a report this morning in the Denver Post, “Freshman applications to the University of Colorado through mid-February are down almost 15 percent from the same point last year, which represented a record admissions cycle. (more)”
Live Podast – 02/24/09 – Dr. Mitchell Kalpakgian – Children’s Liturature
Join us for our next Live Podcast will be February 24, 2009 at a special time – 3PM Mountain – as Dr. Mitchell Kalpakgian discusses with Dr. Bishirjian Children’s Literature
Mitchell Kalpakgian was awarded his Ph.D. by the University of Iowa in 1974. For thirty-one years he has been a professor at Simpson College in Iowa, teaching courses from Advanced Composition to Shakespeare, Chaucer, The English Novel, The Literature of Western Civilization (Great Books), and The Classics of Children’s Literature. Currently he is a tutor at Magdalen College in New Hampshire.
Professor Kalpakgian is the author of The Marvelous in Fielding’s Novels and The Mysteries of Life in Children’s Literature. He is a frequent contributor to New Oxford Review, Culture Wars, The Catholic Faith, and Homiletic And Pastoral Review. Among his most recent articles are “What Manliness Is All About,” “Hospitality,” and “Why the Entertainment Industry is Bad for Children.” In his article, “The Magnificence of Marriage” Dr. Kalpakgian reviews “Marriage,” a book by Dietrich von Hildebrand about the whole story of love, that is, the “Christian marriage.”
Professor Kalpakgian has been honored with a National Endowment for the Humanities Summer Seminar Fellowship and an Andrew W. Mellon Fellowship, and in summer, 1985, he was invited to participate in the National Endowment for the Humanities Institute on Children’s Literature. In 2007 Dr. Kalpakgian became Professor of Humanities and the Trivium at Wyoming Catholic College.
His favorite activities include writing, long distance running, and coaching soccer.
You’ll be able to listen here by clicking on the player below. If you’d like to join in the chats, you’ll need to register for a Blog Talk Radio listener account. If you are a Blog Talk Radio member, be sure to add Yorktown-University to your favorites.
The Big Test Before College? The Financial Aid Form
The following is from Tamar Lewin, of the New York Times, February 22, 2009.
Most everyone agrees that something is very wrong with the six-page federal form for families seeking help with college costs.
Created in 1992 to simplify applying for financial aid, it has become so intimidating — with more than 100 questions — that critics say it scares off the very families most in need, preventing some teenagers from going to college.
Then, too, some families have begun paying for professional help with the form, known as the Fafsa,a situation that experts say indicates just how far awry the whole process has gone.
“We’re getting thousands of calls a day,” said Craig V. Carroll, chief executive of Student Financial Aid Services Inc., whose fafsa.com charges $80 to $100 to fill out the form. “Our calls for the month of January are up about 35 percent from last year. There’s been a huge increase in the desperation of families.”
Last year, Congress ordered the form streamlined, but in the very same bill it added seven new questions. Critics say that even when all those questions are answered, the form does a poor job of assessing financial worth, both because it excludes assets like cars, boats, the family home and some family businesses, and because it does not factor in the high cost of living in areas like New York.
On the campaign trail, President Obama promised to eliminate the form — officially, the Free Application for Federal Student Aid. And his secretary of education, Arne Duncan, talked about the problem at his confirmation hearing, saying, “You basically have to have a Ph.D. to figure that thing out.”
But whether it will be replaced soon, and with what, remains an open question.
Between the recession and the rising cost of college, more families than ever are filing the forms this year, their first step toward Pell grants, Stafford loans, Perkins loans, work-study programs and much state aid. As of Feb. 15, the Department of Education had already received 2,213,408 forms, 20 percent more than at this time last year.
Some researchers have found that the form could be drastically simplified without any great impact on students’ aid eligibility. But experts warn that if the form becomes too simple, some states and universities might create new forms to get additional information.
“In the long run, I think the Fafsa will get easier,” said Lauren Asher, acting president of the Institute for College Access and Success. “But not this year.”
The Department of Education is considering two approaches to simplifying the form, said Robert Shireman, founder of the institute and currently a consultant to Mr. Duncan. One, proposed by former Secretary of Education Margaret Spellings in a Jan. 16 letter to Congress, would cut out most financial questions, asking only for adjusted gross income and the number of tax exemptions. Her sample form is two pages and has fewer than 30 questions. (The current form, with accompanying instructions, has more than five times as many words as this article.)
The other approach, favored by Ms. Asher and others, would let taxpayers direct the Internal Revenue Service to share information from their tax returns with the Education Department.
“It’s not yet been decided which way to go,” Mr. Shireman said. “One way is simple, using very few data elements, and the question is whether that’s enough. The other approach gets a little more data, but has the drawback that not everyone files taxes, especially lower-income people. And it raises some timing questions, since the Fafsa starts in January, and the information the I.R.S. has at that point is from the prior tax year.”
While some pilot projects may be ready for next year’s application season, he said, transforming the whole system will not be that quick, particularly since some changes would require Congressional action.
“One thing we will have, by August, is a Government Accountability Office analysis of the effects of the different options,” Mr. Shireman said.
The form becomes available each year on Jan. 1, and counselors urge families to file early because some aid is first come first served.
Free help for filing is widely available, from the Education Department, counselors and workshops like College Goal Sunday offering line-by-line guidance.
“It’s daunting,” said Janette Logan, a Connecticut mother who had her daughter, Kate Brown, in tow recently at College Goal Sunday at Norwalk Community College. “Kate met her deadlines in applying for college, and now this is mine.”
But after about an hour in the computer room, Ms. Logan realized that she did not have all the necessary information, so she and her daughter left without submitting the form. As the afternoon wore on, many families drifted away without finishing.
“I didn’t bring everything I need, but at least I know what to do now,” said Gary Curto, who had researched the form on the Internet, landed at fafsa.com, assumed it was the official government site and nearly paid for help.
“I was just about to pay, but my wife knew it was supposed to be free,” he said.
But Brigid Duffy, a mother of four in Lynn, Mass., decided the help was worth the cost.
“I know it sounds silly, but what appealed to me was that you could be done in 20 minutes,” said Ms. Duffy, who used fafsa.com for her son Griffin’s form. “I’d done the Fafsa myself in the past, for my 22-year-old, and it took five or six hours. It’s not fun.”
Without help, however, many give up. “Students who would be eligible for aid see how complex the form is, get what I call ‘form fright’ and just stop,” said Pat Watkins, director of financial aid at Eckerd College in St. Petersburg, Fla.
Many affluent families now use high-priced financial advisers to maximize their eligibility for financial aid. Kalman A. Chany, the president of Campus Consultants Inc., attracts many families to his $1,450 service through financial aid presentations for parents at dozens of New York schools, including Dalton, Horace Mann and Brooklyn Tech.
We’ve had a lot more people sign up this year, especially since October,” said Mr. Chany, whose clients’ children often apply to private colleges that require both the Fafsa and an even more detailed form, the College Board’s CSS Profile.
“We’re not like the services that just take the data and put it on the form,” said Mr. Chany, author of “Paying for College Without Going Broke.” “We analyze the clients’ situation and then tell them, ‘If you change this, your financial aid picture could be different.’ ”
Each current proposal for revising the federal aid form has drawbacks — and detractors.
“The financial aid community wants precision, and a formula that accurately assesses ability to pay, so there’s resistance to any approach that’s simpler but less precise,” said Mark Kantrowitz, president of finaid.org, a financial aid site. “There’s also a very real concern that if you discard the questions the states, or certain institutions, wanted answered, they’ll create their own financial aid forms, putting us right back where we were before the Fafsa.”
U.S. News Ranks States by the Affordabilty of a College Education
…And 49 of the 50 (or 57, if you’re campaigning for POTUS) states flunked The National Center for Public Policy Higher Education’s test, according to a report by Kim Clark in USA News:
…Families in many states…are facing painfully high bills. The average cost of a year at a public university in Pennsylvania is a nation-leading 41 percent of family income, for example. Some of the expensive states, such as Michigan, offer top-ranked colleges. Unfortunately, some states, such as Maine, Montana, and Rhode Island, are comparatively pricey (after considering local wages and financial aid) but do not appear at the top of U.S. News rankings…(more on US News)
 :
Get a Free Digital Copy of the Book: EduBubble
Edububble.com is giving away a free book about how to beat rising college costs.
To receive your free digital copy of EduBubble, click HERE, and enter the requested information in the middle column of the page.
Does Academe Have a Problem with the Military?
That’s the subject of a symposium conducted at the annual conference of the National Association of Scholars. Click HERE or on the image below for a four-part video of that panel.
1/3 of Community College Students are ‘Reverse Transfers’
David Moltz, at Inside Higher Ed, explains that more and more students are transferring from four-year colleges and universities back to two-year community colleges:
“…Nationally, the American Association of Community Colleges notes that a third of all two-year students previously attended a four-year institution. The recession has led to surge in community college enrollments this year, and some experts believe these “reverse transfers” are an important and sometimes overlooked portion of that growing student body at two-year institutions.
[...]
“…Cuyahoga officials said most of the “reverse transfers” they welcome have made the decision to come to a community college because attending a four-year institution is no longer economically feasible for them. Peter Ross, Cuyahoga vice president for enrollment, said his institution has taken advantage of this by actively marketing the college’s affordability in comparison to some of the state’s public universities. He added that he expects the number of “reserve transfers” to continue to rise as the economy worsens…” (More, on InsideHigherEd.com)
Live Podcast – 02/19/09 – A Discussion about the History of American Entrepreneurship
UPDATE: This podcast has been rescheduled from earlier in the month for this Thursday, 02/29/09, at 3PM Mountain
Dr. Gerald Gunderson of Yorktown University will be discussing with Dr. Bishirjian the History of American Entrepreneurship.
Gerald Gunderson, is the Shelby Cullom Davis Professor of American Business and Economic Enterprise, and Director of the Shelby Cullom Davis Endowment at Trinity College, Hartford, Connecticut, positions he assumed in 1982. He holds a Ph.D in economics from the University of Washington, 1967, with a thesis in economic history supervised by Douglas North, Nobel Laureate. He has held faculty appointments at the University of Massachusetts at Amherst, Mount Holyoke College, and North Carolina State University.
Professor Gunderson has published numerous academic papers, including studies of the cause of the American Civil War. the demise of the Roman Empire, and models of entrepreneurship. He has authored columns in more than 20 newspapers in the United States, including the Wall Street Journal, and he has worked with national professional associations concerning entrepreneurship, economic and business history, private enterprise systems, economic education, and public policies. He served as President of the Association of Private Enterprise Education, and is now Editor of The Journal of Private Enterprise.
Dr. Gunderson was a founding member and is a member of the Executive Board as well as the Director of the Academic Advisory Board for the Yankee Institute for Public Policy Studies. In 1980 he received the Freedom Foundation’s award for Excellence in Private Enterprise Education. He was appointed by the Governor to the Educational Improvement Panel in Connecticut to develop solutions to poor public schooling.
Dr. Gunderson is the author of The New Economic History of America and The Wealth Creators: An Entrepreneurial History of the United States, which Peter Druker, the mentor of modern management, described as “brilliant.” Currently, he is completing a book analyzing the role of entrepreneurship in the global economy, Entrepreneurship for Smarties: How the World is Changed.
You’ll be able to listen here by clicking on the player below. If you’d like to join in the chats, you’ll need to register for a Blog Talk Radio listener account. If you are a Blog Talk Radio member, be sure to add Yorktown-University to your favorites.
