College InTuition Column

R.J. Chavez, a college access advisor for Cleveland Scholarship Programs who works in the Elyria Schools with the GEAR UP program, is writing an online blog for the AvonLedge.com.

Read his columns here.

New Tools Find Cheap Private Student Loans

By Kim Clark

Posted June 21, 2010 (US News & World Report)

Until recently, banks and other private lenders have made it hard for anyone to shop for college loans, in some cases because they didn’t want to compete by cutting profit margins. But several web entrepreneurs and state agencies have developed new tools to help students and parents find private loans that, in June of 2010, charged as little as 1.78 percent in interest.

[Read 7 Ways Private Student Loans Are Getting Better]

Before shopping for private loans, students and parents should  first apply for federal student aid, including low-cost government loans, lenders say. (First step: fill out a Free Application for Federal Student Aid.) Unlike private loans, federal student loans offer fixed interest rates as low as 4.5 percent, easy repayment terms, and the possibility of forgiveness for public service.

[Read about cheaper, easier federal student loans. ]

Students who need more than the federal government’s student loan maximums should consider cutting their costs or switching to a cheaper college instead of borrowing more, many financial aid officers suggest. Students who owe more than the $31,000 total maximum the government lends to undergraduates through the Stafford program can find it difficult—and occasionally impossible—to make their monthly private student loan payments. And they have little hope of relief, since bankruptcy courts rarely erase educational debts. (MORE)

Grads need sound plan to repay student loans

June 7, 2010

BY TERRY SAVAGE Sun-Times Columnist

Millions of college graduates are about to ask this question: Was it worth it? And it’s a question that students just entering college should be asking as they start looking at taking out student loans to finance their college degree.

It’s not the education, or the college experience that’s the issue. It’s how you will repay those student loans.

Today’s college graduates enter a job market that has few jobs available. Yet, within months of graduation, they must work out a plan to repay the loans that made their degree possible. Those loans now look like the worst deal they could have made, because many carry high fixed rates of 6.8 percent, or more.

Even a fixed-rate 30-year mortgage would cost less than 5 percent annual interest these days. Plus that mortgage interest is deductible. And if your mortgage loan doesn’t work out, you could always default. (MORE)

Student Debt and a Push for Fairness

By RON LIEBER, New York Tines, Published: June 4, 2010

If you run up big credit card bills buying a new home theater system and can’t pay it off after a few years, bankruptcy judges can get rid of the debt. They may even erase loans from a casino.

But if you borrow money to get an education and can’t afford the loan payments after a few years of underemployment, that’s another matter entirely. It’s nearly impossible to get rid of the debt in bankruptcy court, even if it’s a private loan from for-profit lenders like Citibank or the student loan specialist Sallie Mae. (MORE)

Cuyahoga Community College to open Hospitality Management Center

By SHANNON MORTLAND, Crain’s Cleveland Business, 10:56 am, May 25, 2010

Cuyahoga Community College is taking over the first floor of the former May Co. building on Public Square, which has been empty for years.

Tri-C is spending $6.5 million to renovate 25,000 square feet on the first floor of the building at 180 Euclid Ave. to house its new Hospitality Management Center. The center will be home to a culinary area, classrooms, a demonstration studio and a video wall that will be visible from the street. An October opening is planned.

Students can enroll in a 16-month accelerated degree program in international business or business management, or they can take classes in areas such as cooking or wine tasting, said Al Moran, vice president of marketing and communications for Tri-C. Culinary arts, lodging/tourism management and restaurant/food service management programs also will be offered at the new center, he said.

With the new medical merchandise mart and Cleveland convention center expected to open in a few years, there will be an abundance of new jobs in the hospitality industry, and Tri-C wants to prepare local residents for those positions, Tri-C president Jerry Sue Thornton has said.

Mr. Moran said Tri-C chose to locate the center downtown because 54% of survey respondents said they would be likely or very likely to take a class at the center if it was on Public Square.

High Hopes, Big Debts (Class of 2008)

The Project on Student Debt, May 2010

In 2008, more than two-thirds (67%) of students graduating from four-year colleges and universities had student loans, and their average debt was $23,200.1 Most college graduates with debt at or below average levels will be able to repay their loans without going broke. However, the number of borrowers with far more debt is growing quickly. Borrowers with such high levels of debt are more likely to have difficulty repaying their loans, especially in tough economic times when high-paying jobs are hard to find. The unemployment rate for young bachelor’s degree recipients was a sizable 5.7% in 2008 and rose to 8.8% by 2009, the highest on record.2 This fact sheet focuses on seniors who graduated from four-year institutions with $40,000 or more in student loans.

More students than ever (1 in 10) graduate with $40,000 or more in student loans.

• Ten percent of borrowers who graduated from four-year colleges and universities in 2008 owe at least $40,000 in student loans, up from 3% in 1996 (in constant 2008 dollars).

• That represents a nine-fold increase in the number of graduates with high debt, from 23,000 in 1996 to 206,000 in 2010. (MORE)

9 ways to improve the Post-9/11 GI Bill

Vet groups, critics say changes needed to spur participation

By Rick Maze – Staff writer, Navy Times

The sweeping Post-9/11 GI Bill has made college affordable for more than 275,000 veterans, service members and even some of their family members since it began last August.

But a series of issues have kept the landmark program from realizing its full potential, two key veterans organizations say.

Overly complicated benefits formulas, gaps in coverage and perceived inequities in some specific benefits may be keeping some veterans from tapping into their benefits.

The Veterans Affairs Department estimated in 2008 that 525,000 people would use the new GI Bill in its first year.

But less than half that number — about 248,000 students — actually received benefits during the fall 2009 and spring 2010 terms.

To add to the mystery, about 425,000 people have taken the first step of becoming certified as eligible to receive benefits — meaning that 42 percent of those people have yet to follow through by enrolling in classes.

Iraq and Afghanistan Veterans of America and Student Veterans of America — two groups representing the new generation of veterans at whom the Post-9/11 GI Bill is aimed — say they believe certain changes will knock down some of the barriers that may be discouraging people from using the generous new program.

Here are some of their ideas:

1. Give active-duty members the book stipend.

Active-duty members may use the Post-9/11 GI Bill, but they — and their spouses who use transferred benefits — may not receive the program’s monthly living stipend or its $1,000 annual book allowance.

Not providing the living stipend makes sense; service members already live in military housing or receive an off-base housing allowance, and a spouse using transferred benefits is assumed to be living with the member. (MORE)

Report: Few Hispanic High School Dropouts Earn GED

Diverse Issues in Higher Education, by Christine Armario, Associated Press , May 18, 2010

MIAMI— A report released last week by the Pew Hispanic Center found that one in 10 Hispanic students who drop out of high school go on to earn a General Equivalency Development degree.

Educators and students say limited outreach, immigration and pressure to work may be to blame.

Using data from the Census Bureau, researchers found that fewer Hispanic students earn a GED credential than White or Black dropouts. Black students earned a GED at a rate of two in 10. For White students, the rate is three in 10.

The nonpartisan research organization says the lower rate among Hispanics is notable because they also have higher dropout rates: 41 percent of Latinos ages 20 or older do not have a regular high school degree, compared with 23 percent of Blacks and 14 percent of Whites.

Richard Fry, a senior research associate at the center, said some of the Hispanics who did not finish high school are immigrants who may not have had any educational training in the United States. For these students, it takes time to learn and access information about earning a U.S. educational credential. (MORE)

Some Experts Sound Caution Against Too Many Americans Seeking College Degrees

by Alan Scher Zagier, Associated Press , May 14, 2010

COLUMBIA Mo. – In a town dominated by the University of Missouri’s flagship campus and two smaller colleges, higher education is practically a birthright for high school seniors like Kate Hodges.

She has a 3.5 grade-point average, a college savings account and a family tree teeming with advanced degrees. But, in June, Hodges is headed to the Tulsa Welding School in Oklahoma, where she hopes to earn an associate’s degree in welding technology in seven months.

“They fought me so hard,” she said, referring to disappointed family members. “They still think I’m going to college.”

The notion that a four-year degree is essential for real success is being challenged by a growing number of economists, policy analysts and academics. They say more Americans should consider other options such as technical training or two-year schools, which have been embraced in Europe for decades. (MORE)

Measure on Card-Payment Fees Could Benefit College Students

Kelly Clark, Chronicle of Higher Education (May 13,2010)

The U.S. Senate has approved an amendment to financial-reform legislation that could lower the fees that colleges pay when students use credit and debit cards to pay for tuition or books.

The amendment, which was approved by a vote of 64 to 33 during deliberations on the larger bill, S. 3217, takes aim at the “interchange” or “swipe fees” that banks charge merchants to process credit- and debit-card payments. The fees average 1 to 2 percent of a purchase, and are often passed on to consumers in the form of higher prices or extra fees.

College bookstores, which paid banks some $85-million in swipe fees in 2003, have lobbied hard for the amendment, joining other business groups to push for its approval.

Critics say the fees are far higher than the actual costs of processing the transactions and penalize small businesses.

The amendment would require the government to issue regulations to ensure that debit-card swipe fees are “reasonable and proportional” to the cost of processing transactions.

The amendment would also allow retailers to set minimum transaction amounts for card purchases and offer discounts to customers who pay with lower-cost cards or with cash.