Once upon a time, the price of a year of schooling at elite private colleges matched the price of the average new car – not any more.

The news from The Chronicle of Higher Education certainly was not positive for students and families. After surveying private schools as to the charges for a year of attendance (tuition, fees, room and board), The Chronicle revealed that 58 private colleges had passed the 50K pricing milestone for 2009-2010.

Leading the way was one of the perennial front-runners, Sarah Lawrence College, at $55,788. Rounding out the top five were Landmark College, a school for students with learning disabilities ($53,900), Georgetown University ($52,161), New York University ($51,993), and George Washington University ($51,775).

Not Actually a New Barrier

While news, it is important to note that the $50K threshold had already been broken. It was just that a year ago, the Club had but five members.

And it is the calculus or rate of change for these numbers that is raising eyebrows. Ultimately, the sheer number of schools topping the threshold led The Chronicle to call $50K the new norm.

Amazingly, the $40K threshold once represented a major psychological milestone for many. But that figure has been rendered obsolete in the matter of just six years time.

In 2003, just two colleges set their tuition, fees, room, and board above $40,000. Including the members of the $50K club, 224 schools were above that threshold in 2009.

Unfortunately, reading the folks at The Chronicle, the average citizen may have even more bad news on the horizon. While some are wondering aloud if we are not on the edge of a precipice, others insist college prices are nowhere near a ceiling.

In fact, The Chronicle reports that “the most expensive institutions have seen no drop in demand.” Sadly, of these high costs, one school, Harvey Mudd, offered this assessment: “So long as we’re staying roughly in the same range, we don’t worry about it too much.”

Some Good News Exists

One positive in the midst of this data is that grants and other forms of financial aid help many students pay far less than the sticker price. Even more importantly, it seems that colleges have actually increased their financial aid at a faster rate than they have increased tuition and fees.

As one might expect, a large number of students receive need-based grants or merit-based scholarships with a significant amount of those funds come from the colleges themselves. The Chronicle was able to dissect data for 42 of the 58 colleges whose list price was more than $50,000 for 2009-10.

For 2008-2009, the average grant per full-time student was just over $13,000 – that meant that the “average bill last year for tuition, fees, room, and board, after grants, was about $36,000.”

However, the best news might be that some of these elite private schools are beginning to become concerned. Leadership at one of the schools that has become a member of the $50K club, Bryn Mawr, revealed they were “concerned because we fear the loss of access for students who deserve this education but might be priced out of it.” It should be noted that Bryn Mawr appears serious on both ends having offered an average grant package of about $30,000 last year.

$50K Too Pricey

But such figures also mask the real issue, that the costs of college are soaring at a rate that is unsustainable for the average student. And the clearest sign that $50K should flat out be considered too much is to return to the once relatively firm, age-old equivalent for private schools.

A year of college at the elite private institutions, the total costs including tuition, fees, room and board, should match the sticker price of a new Chevrolet.

And that might well be the most telling fact as to where things stand today. As at least one interviewee told The Chronicle:

“You don’t have to pay $50,000 for a new Chevy these days.”

The recent enactment of H.R.3221 The Student Aid and Fiscal Responsibility Act of 2009 by Congress has many students wondering what impact the new changes will have on them and their student loans.

According to the Seattle Times, “Congress’ overhaul of the college student-loan system offers welcome relief to students at risk of drowning in debt.”

But, while many are applauding the proposed changes, others are taking a more skeptical view. Today we offer readers a Q & A with Tara Payne of the New Hampshire Higher Education Assistance Foundation. Ms. Payne currently serves as the Vice President of Corporate Communications for the NHHEAF Network Organizations.

The New Hampshire Higher Education Assistance Foundation (NHHEAF) was established in 1962 to guarantee student loans. Since 1965, it has been the designated guarantor for the Federal Family Education Loan Program (FFELP) in New Hampshire.

As one major function, NHHEAF is responsible for the initial application, disbursement of funds, default prevention, default collections, and oversight of the federal loan programs. For fiscal year 2008, NHHEAF guaranteed over $213 million in federal loans and the agency continues to rank among guarantors recording the nation’s lowest default rates.

Yet under the proposed legislation, NHHEAF, one of those so-called ‘middlemen’ in the loan process, might no longer exist. Such a scenario led us to the agency to try and gather additional perspective on the legislation.

We were fortunate to have the opportunity to pose a number of very specific questions to a person with more than a decade of experience at the organization. Ms. Payne offers a wealth of perspective having helped construct the organization’s Center for College Planning department. Today, that department reaches almost 30,000 New Hampshire students and parents each year, offering free college planning, financial literacy and financial aid expertise via presentations, materials and websites.

Can you explain in brief terms exactly what Congress is debating and the rationale for the debate? What is meant by the phrase, the new loan process will “cut out the middle man?”

The President’s budget proposal includes the elimination of the Federal Family Education Loan Program (FFELP). As a FFELP provider, the NHHEAF Network Organizations (NHHEAF) is involved in funding, originating, disbursing and servicing student loans for New Hampshire students from our New Hampshire office. The Presidents budget eliminates the local role in the student loan process. The government’s language about “middlemen” implies that agencies like ours are a “cog in the wheel”, not a major source of community support for families, schools and citizens of our state.

New Hampshire’s program is managed by a nonprofit FFELP provider. This means that proceeds from the loan program are reinvested in our community. We reinvest into strong financial literacy programs, early college awareness and financial aid preparation for students and their families at K-12 schools.

We employ 200 New Hampshire residents who are truly dedicated to supporting student loan borrowers. Our success is evident in NHHEAF having among the lowest default rates in the nation. When these local services go away, students suffer.

Our focus is on increasing aspirations, providing funding and best-in-class service. No government program can replace this local resource. As a school counselor who utilizes our programs shared recently, “NHHEAF is the best thing to happen to higher education since I started teaching in 1974.”

In what ways would students and parents be positively impacted by this legislation? Are there any potential negatives?

The legislation includes several positive aspects including increased Pell Grant funding for the lowest income students and increased funding and support for community colleges. Supporting New Hampshire’s low income students is essential to our mission. We fully support any effort to provide additional funding to the neediest students.

However, under current legislation, FFELP would be eliminated and yet Pell would still not be an entitlement. “Eliminating subsidies to lenders” is a politically-charged cry for support. The public hears this and reacts with unbridled support … assuming that those subsidies will go into making the program less expensive for them.

As Bill Spiers, the Financial Aid Director of Tallahassee Community College described, “While the media has focused on the profitability in the FFELP program, little has been said about the fact that the federal government must fund Federal Pell Grant Program increases off the backs of student borrowers.

The government borrows money at very low rates, much lower than those available to lenders, yet the government would continue to charge the same interest rates as FFEL lenders. Under the current proposal the “federal government isn’t providing any breaks to the students and is actually making more off the program than lenders ever could”

While most student borrowers pay a fixed 6.8% interest rate on federal student loans and parent borrowers 8.5%, lenders in the FFELP are required to pay back the difference between what borrowers pay and today’s lower market yield to the federal government.

The difference between the cost of funds and the borrower rate of interest is even greater in the Direct Loan program, so much that the proposed record increase in Pell Grants would be largely funded from the interest rate spread the Department of Education will enjoy from student and parent borrowers paying a far higher rate of interest on their federal education loans than the federal government is paying on its borrowing costs. Enacted legislation required that loans made on or after July 1, 2006 carry a higher fixed rate for students and parents that is not market driven. Had interest rates remained variable, Stafford loans today would have been an extremely favorable 1.88% (in school and grace) interest rate (2.48% repayment rate), and PLUS loans would be at 3.28% in the current low interest rate environment.

Will these changes have any impact on the FAFSA application process?

The CEO of our agency, Mr. Rene Drouin, actually sits on the Federal Advisory Committee for Financial Assistance and has been an advocate for these changes which simplify the financial aid process for students. By reducing the number of questions and simplifying the FAFSA form, families may not be as intimidated. Still, while shortening the form may help for those already committed to going to college, it will not increase college aspirations.

When our staff visits schools in communities like Colebrook and Nashua and Portsmouth and Keene, we offer consistent support which encourages education beyond high school and personalized assistance filing the forms and understanding the award letters for free. Ninety-three percent of New Hampshire high schools invite our full-time college counselors to their schools to educate their students and families throughout the academic year.

Which types of loans will be impacted: Stafford, Plus Loans, Consolidated Loans?

All federal student loans.

How will the legislation impact colleges and universities?

It is important to note that the Direct Loan program has been around since the Clinton administration. To offer some perspective on the use of Direct Loans in New Hampshire, consider that in fiscal year 2008, FFELP loan volume was at $409 million for 89,000 borrowers. Federal Direct Loan volume was only $13 million for fewer than 3,000 borrowers.

Nationally, 70% of post-secondary schools chose to work with FFELP because of the strong technological, programmatic and financial literacy programs it offers. Now, they will have no choice. And, they will have no local support.

Right now, NHHEAF has a full-time staff which provides a hotline, technical support and regular visits to schools for financial literacy activities for their students. NHHEAF also has a strong Compliance Department which ensures that schools have local support for any regulatory or student-eligibility questions that might arise. Both departments also provide in person training and webinars on a range of professional topics.

Supporting the financial aid professionals goes hand-in-hand with supporting the student borrowers on their campuses. Further, the proposal assumes that the government can effectively and efficiently run a program this large. It is estimated that 4,400 schools will be forced to convert from FFELP, their program of choice, to the Direct Loan program on July 1, 2010.

The U.S. Department of Education will be tasked with converting an average of nearly 500 schools a month over the course of a nine month period. Since the Direct Loan program’s inception in 1993, roughly 1,600 schools have been converted over a 16 year timeframe. For schools currently in the FFEL program, this would mean investing staff, time and money to change systems and processes at a time where budgets have been cut to the core. It’s realistic to imagine that those costs may have to be absorbed through increased tuition and student fees.

Will anyone theoretically be hurt by these changes? If private banks lose this source of revenue, what negative impact might it have on their role as lending institutions within the community?

Minimally, 40,000 jobs are at stake across the nation. For agencies like ours, student loans are the only source of revenue. It would be devastating. And, the impact on the local economies would be brutal. Consider that in NH alone, NHHEAF spent $6.8 million on local vendors and contributed $5.1 million in charitable spending. Multiply that by all of the agencies like ours across the country and it is severe. And, again, at the end of the day, will most college-bound families experience any significant savings? It is unlikely.

The amount that could be saved by the Federal Government is projected to be in the billions of dollars – based on the current legislation as proposed what is the plan for this money? Will it be used to attack the current federal deficit or will the funds be rolled into further funding support for students?

The Office of Management and Budget (OMB) indicates that, under the President’s budget proposals, which include the switch to 100-percent Direct Lending, debt held in the Government’s various Direct Loan accounts is expected to rise from $632 billion in FY 2009 to $1.58 Trillion in FY 2019, an increase of more than $900 billion. Nationalizing the education loan programs will add substantially to the national debt over the next decade and the beneficiaries of student loans will have to pay interest twice: first, the interest they’ll owe on their loan as a student borrower and second on the interest they’ll owe as a taxpayer via the national debt.

Corporations exist to earn and distribute business earnings to shareholders, while nonprofit agencies like NHHEAF exist to provide programs and services that are of public benefit. Often these programs and services are not otherwise provided by local, state, or federal entities. Particularly in a state with low levels of state aid, high public tuition costs and high debt burdens, promotion of college opportunities, financial aid and affordability is even more critical in order to get students to think realistically about higher education.

Can you briefly explain why the legislation is seen so differently by Republicans (opposed to these changes) and Democrats (support for the changes)?

I couldn’t speculate on this except to offer that many legislators want to support the President’s budget proposal for its supposed savings while many others doubt the savings purported will materialize. Originally, the Congressional Budget Office (CBO) estimated that savings from the President’s proposal would total $94 billion.

In June, the costs savings were estimated at $87 billion. Senator Judd Gregg urged CBO to recalculate its projection to incorporate market risk cost. The CBO then revealed that the proposal to replace new guaranteed loans with direct loans would lead to estimated savings of about $47 billion over the 2010–2019 period. Most recently, the OMB predicted that the savings from the proposed transition to 100-percent Direct Lending will be $41.4 billion over the same time period. And, many legislators question the role of government in taking over a public-private program that has supported students and schools successfully for decades.

Still, it is important to note that some do see that there is a role for nonprofits in the student loan process. In fact, Representative Carol Shea-Porter (D-NH) worked tirelessly to ensure that nonprofit student loan servicers would not be shut out of future Government contracts. Note that Under the Sense of Congress from the FY10 Concurrent Budget Resolution, sec. 605, it reads, “any reform of the federal student loan programs to ensure that students have reliable and efficient access to federal loans should include some future role for the currently involved private and non-profit entities, including state non-profits with 100% FFEL lending in the State, and capitalize on the current infrastructure provided by private and non-profit entities, in order both to provide employment to many Americans during this time of economic distress and to maintain valuable services that make post-secondary education more accessible and attainable for many Americans; and therefore, pursuant to any changes to the student loan programs, loan processing, administration, and servicing should continue to be performed, as needed, by for-profit and non-profit entities.”

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As borrowing rates soar and debt accumulation spirals upward, the national student loan default rate hits a nine year high.

A recently released report from the U.S. Department of Education revealed yet another alarming trend regarding college graduates and student loans. According to the report, the 2007 national default rate hit 6.7 percent, an increase of nearly 30% over 2006.

It was also the highest percentage in nine years.

As a percentage, the 6.7% represents about one student in fifteen, but that overall statistic is extremely misleading. According to the criteria used to define non-payment, those reported to be in default are those students who were scheduled to begin loan repayment by September 2007 but failed to make payments by September of 2008. That means that one in fifteen graduates had defaulted by the end of the first year of the scheduled repayment period! There is little doubt, that if the data were to include a two year period or a three year period, the percentage would grow significantly.

Too Much Borrowing

While most folks point to the economic downturn as the key factor, some college financial experts see the issue a tad differently. Tom Schmidt, Office of Student Finance associate director at the University of Minnesota, provided Mackenzie Martin of the The Minnesota Daily an entirely different take on the matter.

“Students need to be aware of their student loan debt at all times,” Schmidt told Martin. The associate director went on to explain that while the economy might be considered a contributing factor, the issue was exacerbated by students taking out larger and larger sums of money to cover increasing tuition and living expenses.

At the same time, Schmidt suggested students might be borrowing more than they really needed, that perhaps students may be “living better than they probably need to live.”

In other words, too many students are not thinking properly about the debt they are accruing.

We have discussed many times our concern with student debt rates. According to the CollegeBoard’s 2008 Trends in Student Aid report, roughly 60 percent of bachelor’s degree recipients borrowed some amount to fund their education. As of 2007, the average debt of graduating seniors was nearly $23,000.

The percentage of borrowers is too high and the average debt is simply too large. Simply stated, the downturn in the economy provides a strong reminder that debt is not something to enter into carelessly. While some may think a debt load of $23,000 should prove very manageable, that amount is far too much for those struggling to find viable employment (the status of the majority of college graduates the past two years).

It is imperative that you graduate with as small a debt-load as possible: a reasonable goal is to keep it under five figures (<$10,000 maximum) though an even better goal is zero. And the best way to keep that debt to a manageable level is to reduce your expenses.

That process begins with selecting a school that is in your price range and ends by limiting unneeded expenditures. Yet both of those elements remind us of a clear message – think twice about taking on significant amounts of debt.

That college degree could actually do you more harm than good if you begin your post graduate life defaulting on loans and destroying your credit score before you have had the chance to build one.

According to Anne Marie Chaker at the Wall Street Journal, “New numbers from the U.S. Education Department show that federal student-loan disbursements—the total amount borrowed by students and received by schools—in the 2008-09 academic year grew about 25% over the previous year, to $75.1 billion.”

The overall news may not be shocking to most people, after all the amount of money students borrow for school has been rising steadily in recent years. But the key number here is the size of the increase.

To put the 25% increase in perspective, we turn back to the WSJ.

“…last year far surpassed past increases, which ranged from as low as 1.7% in the 1998-99 school year to almost 17% in 1994-95.”

In addition to the increase in borrowed funds, the percentage of students taking out loans to pay for school is also on the increase. Today, nearly 70 percent of college students are borrowing funds to help pay for school. Just 12 years ago, the percentage of borrowers totaled 58%.

To get a sense of this distressing trend and its impact on students, the Journal offers a number of frightening examples. First, they discuss the plight of “Kordi Solo, a senior majoring in journalism at Central Michigan University,” who “expects to owe about $60,000 in student loans by the time she graduates in the spring.” Later they tell the tale of “Zack Leshetz, a 30-year-old lawyer in Fort Lauderdale, Fla.,” who “has $175,000 in student loans from his seven years in college and law school.”

Even with a law degree, Leshetz lives paycheck to paycheck. And while Leshetz is struggling, Solo might be in an even worse position at one-third the debt level. Given the extent to which the journalism field has been hammered by the recession and an evolving media model, her accumulated debt could well be insurmountable.

Losing Investment?

The impact of this borrowing on students and their future opportunities is significant. Chaker notes:

“The ripple effects for today’s heavily indebted young people are becoming palpable. A growing body of research suggests that tough loan payments are affecting major life decisions by recent graduates, forcing them to put off traditional milestones—from buying a first home to even marriage and having children.”

While most everyone continues to tout the college degree as a must for future job options, Chaker notes that borrowing such sums to obtain that coveted sheepskin put students into a tough spot when they first enter the world of work.

These numbers and the impact on major life decisions have Karl Denninger of Market-Ticker uttering some almost unthinkable words:

“Students are literally coming out of college with more debt than they can ever reasonably hope to amortize over their working lives, making their education a negative net equity position – that is, a guaranteed losing investment.”

In other words, the debt load accrued by the majority of students is so large that even with the greater pay associated with a job based on earning a degree, that pay is not enough to cover both the costs associated with taking care of oneself and the debt payments that must be made.

Borrowing Begets Higher Costs and an Additional Need for Loans

As but another sign the system is not working, it seems that all the borrowing ultimately is triggering an even greater need to pursue loans.

“The rising levels of borrowing,” writes Chaker, “may ironically be contributing to the accelerating cost of college, say some college-finance experts. Loans can give colleges an artificial sense of a family’s ability to pay tuition.

“To some extent, that false sense of security gets built into the assumptions schools make when setting prices, say experts.

“The idea is that as prices rise, families borrow more and more, spurring prices to rise further, which in turn requires more borrowing.”

The untenable position students are finding themselves in has Seth Godin insisting that higher education may well be at the crossroads.

Godin suggests that higher education is going to have to make basic decisions in three distinct areas moving forward.

• Should higher education be scarce or abundant?
• Should higher education be free or expensive?
• Should higher education be about school or about learning?

Currently, Godin suggests that college tends to be focused on scarce, expensive schooling. The result could be categorized as a monopolistic format.

Students can only obtain a college degree by spending gobs of money to gain access to specific curricula at institutions that have ascertained accreditation. Yet once in an institution, there is little emphasis on what a student has actually learned. Instead, credits are paid for and collected and when enough money is spent and enough credits accumulated the degree is awarded.

Godin instead imagines what higher education might be like if a school were to be built around inexpensive, abundant learning. A place where an unlimited number of materials were made available for a modest fee and the emphasis was not on charging per course or per credit, but for access, with a degree awarded based not on the courses or credits or fees, but on demonstrated knowledge.

One Option Exists

While most students continue along the traditional path, one that is taking too many down a road of false promises of future prosperity, it is interesting to see that one company today is challenging the status quo.

A new educational entity called StraighterLine is delivering Godin’s suggested option, offering online courses in subjects like accounting, statistics, and math for a flat rate of $99 a month. Instead of a per course or per credit fee, the rate is $99 for the month. In addition, instead of a semester or yearly or four year degree schedule, there are no semesters or defined calendars.

You as a student decide how many courses you want to take at a time and for how long you want to take them. Instead of heading off to some distant location or stopping your schedule to meet that of higher education, you work online, from home.

Students can “access course materials, read text, watch videos, listen to podcasts, work through problem sets, and take exams” all over the internet. In addition, to make the program more consistent with one critical aspect for learning (the need for a sense of community) StraighterLine also features online study groups where students can collaborate with one another via a “listserv and instant messaging.”

Most importantly, tutors are available to help students when they need additional support. These support personnel are available any time, day or night, and there is no extra costs for accessing such services.

A student completing a traditional college semester of 15 weeks and 15 credit hours in the traditional time frame would spend a total of just $400. Compare the cost of one full year under such a format with the numbers bandied about today for America’s elite colleges, as much as $40 and $50 thousand per year if a student chooses to live on campus.

StraighterLine is actually the idea of a man named Burck Smith. The entrepreneur has created an educational model that seems to fit Godin’s inexpensive, abundant learning concept by getting some other established (i.e., accredited) colleges to allow the transfer of credit from Straighter Line to the traditional learning model.

This is ultimately the biggest hurdle as it allows learners to earn that coveted diploma from an accredited institution. In other words, at the end of the line they have that all-important degree.

StraighterLine is indeed a new model, one where students are not tied to some college campus or program. Instead, students can assemble a degree from various course providers from their own computer.

More importantly, they can do so at a cost that is reasonable, a step that protects their long term fiscal future. Perhaps most importantly, it is a step WashingtonMonthly.com sees as a proper one for higher education.

It may be some time before the “Internet bomb explodes in its basement,” writes Kevin Carey. “The fuse was only a couple of years long for the music and travel industries; for newspapers it was ten.

“Colleges may have another decade or two, particularly given their regulatory protections. Imagine if Honda, in order to compete in the American market, had been required by federal law to adopt the preestablished labor practices, management structure, dealer network, and vehicle portfolio of General Motors. Imagine further that Honda could only sell cars through GM dealers. Those are essentially the terms that accreditation forces on potential disruptive innovators in higher education today.”

Time for a Change

We would like to think the fuse has been lit, that the current accumulating debt loads being assumed by college students would be cause for society to demand a new model for higher education.

Yet, because it is so early in the process, StraighterLine is likely to seem a bit too much cutting edge, a little too groundbreaking and novel for a public that tends to prefer tradition. It is also, dare we say it, a little too inexpensive to be considered a viable alternative by a populace that equates higher cost with higher quality.

But with accruing debts making the current model a net negative for students at precisely the same time that society is placing greater emphasis on earning a college degree, more cost-effective methods must be created.

That would indicate that we are at the crossroads as Godin postures, a time when higher education does move from its current scarce, expensive schooling format to one that features a more abundant, cost-effective learning model.

There is little doubt that the conventional financial wisdom is changing amid the current economic uncertainty. Dave Copeland of the Boston Globe recently highlighted a number of thoughts that today’s families will find noteworthy.

Quoting Larry Glazer, managing partner of Boston-based Mayflower Advisors, and Adam Bold, author of “The Bold Truth about Investing,” Copeland raised a number of issues, two of which pertain directly to parents and college students.

Good Debt, Bad Debt

Glazer, presenting to 100 public school teachers in New Hampshire, insisted it was time to rethink a number of longstanding financial practices. Those educators all taught personal finance classes in the state.

Glazer informed his audience that he took exception to the longstanding notion that there was such a thing as good debt, particularly the idea that “mortgage debt is good debt.”

The financial advisor noted that many experts still touted mortgage debt as being good. This is in large part due to two current factors.

First, the interest on mortgage debt is tax deductible. Second, current interest rates on home mortgages are at historic lows. Ultimately, those experts insist investment returns over time should outpace those mortgage rates of four percent plus.

Glazer thinks differently, pushing his clients to retire mortgage debt as soon as possible, suggesting they double up on payments whenever possible. In addition, Glazer frowns on another traditional aspect of home mortgages, taking the biggest loan that one can qualify for.

“Over the past two decades, ‘good debt’ became a buzzword, and if you could get debt, you took it,” Glazer told Copeland. “That is part of what got us into trouble. Maybe no debt in retirement is the new standard for good debt. ”

Saving for College

While another conventional practice has been to insist that families begin funding a 529 college savings plan as soon as possible, Bold insists that saving for college should come only after a number of other savings options has been addressed. The author notes that many families have followed that advice and made the placement of money in a college fund their number one priority.

Bold indicates the number one priority for parents should instead be their 401(k) and IRA plans. The author insists the first priority should be to maximize retirement contributions.

Only after they have met that commitment should they consider setting money aside for college. The rationale for that recommendation comes from one simple fact.

Bond correctly notes that there are multiple options for paying for college including scholarships and grants. In contrast, there are no scholarships or grants for retirement.

Bond also notes that students can take out loans for college or families can opt for a pay as you go philosophy during the college years using the funds that might otherwise be set aside for retirement.

Current Crisis Offers Some Lessons

While Bond advocates that families make their retirement contributions the first priority, he by no means is advocating that students turn to indiscriminate borrowing for their education. The continuing theme from the current downturn is to rethink some longstanding financial strategies, especially the notion that there is such a thing as “good debt.”

Debt represents a claim on future earnings. If the current economic downturn has taught us anything, it is that borrowing represents a risky financial strategy.

Whether it is to borrow for a house or a college education, such debt should be minimized and paid off as soon as is possible.

There are those news stories that really give you pause. And we are not talking about those AOL headliners mind you, the ones like “NASA astronaut insists government covering up evidence of alien visits.”

What we are talking about is the latest news regarding college students and credit cards. According to a study from Sallie Mae, many students are now using credit cards for almost all of their college expenses, including tuition.

Talk about giving one pause – we might have expected students charging books and fees on their card. But we could never imagine anyone in their right mind putting their tuition on one, not with those cards carrying anything from 14.99 to 18.99 percent interest rates.

The Numbers

Today, Sallie Mae notes that more than 84 percent of undergraduates have at least one credit card. Half of all college students carry four or more cards with the current average at 4.6 per student.

An incredible 92 percent of all undergraduates with a credit card charged textbooks, school supplies or other education expenses. College seniors led the way with an average credit card debt of $4,100.

According to the report, “How Undergraduate Students Use Credit Cards: Sallie Mae’s National Study of Usage Rates and Trends, 2009,” students charged an average of $2,200 in direct educational expenses per person, more than double the $942 amount from four years ago. Of those charging educational expenses, roughly 30 percent actually placed tuition on a credit card as well.

Terrible Choice

While many students were using the cards for convenience, the overall findings of the study pointed to college students using credit cards to live beyond their means. In fact, 82 percent of the students incurred finance charges by carrying a monthly balance.

In a clear indication that credit management was a huge problem, roughly 40 percent indicated they had charged items even though they knew they did not have the funds to pay the bill.

Given the going interest rates and monthly charges of as much as $30.00 for transactions beyond credit limits, the idea that students would place their tuition charges on their credit card demonstrates a real lack of knowledge regarding how credit cards work.

There is no doubt that credit cards offer great convenience. No need to fill out the FAFSA forms and no need to complete additional paperwork to apply for a loan. Add in the ease of online payments and the process is indeed extremely easy.

But credit card interest rates of 15 percent are more than double the current rate for Federal Stafford loans (6.8 percent). Even private loans, considered the least advantageous of loan options carry current rates of only 8 percent.

The result is that credit card users are overpaying for college big time. Unless a student pays off his or her card in full, by placing these charges on a credit card he or she is paying far more than the list price for books, fees and tuition.

College, Expensive Enough

There is no doubt that college expenses are extremely taxing – however, students should be aware that using credit cards to cover these costs only makes the costs of college less manageable in the long run.

First and foremost, students need to build a budget ahead of time that tallies the cost of tuition, books, fees and travel. Once the need is determined, students must pursue the most advantageous funding help available.

That means completing the FAFSA, the standard federal form that is the ticket to potential grants, scholarships and federal loans. Filling out the FAFSA form does take time but it is a must for any serious student.

Even if students do not qualify for grants or scholarships, the first credit option everyone should pursue is the Federal loan program. Simply stated, they represent the best borrowing bargain.

Only after completing the federal application process should students pursue the more expensive private loan option. Such loans carry higher interest rates and other processing fees may be assessed depending on a student’s credit standing.

Still, private loans are a bargain compared to the fees and rates associated with credit cards. Unless a student has a wealthy friend or relative paying that credit card bill for them, placing one’s tuition on a credit card is a recipe for disaster.

In fact, it is as preposterous to us as that NASA astronaut claiming our government is hiding evidence of intergalactic visitors.

Editors note: The full study is available in PDF format online.

The recent economic downturn has Americans thinking very differently about the process of borrowing. In what just might be the silver lining of the current crisis, the idea of creating extensive future debt obligations has both students and college trustees rethinking recently-accepted borrowing practices.

Borrowing for College

The first concern centers upon the amount of debt students have been taking on as they pursue a college degree. While most students have always needed some financial assistance to be able to attend college, the level of debt many students have recently been willing to rack up while in school has truly gotten out of hand.

Today, the median debt load for a student earning a bachelor’s degree is about $20,000 while the average now exceeds $21,000. Most alarmingly, roughly one-fourth of all undergrads borrow more than $25,000 and a tenth borrow more than $35,000.

If the choice is made to attend graduate school, then students generally add tens of thousands of dollars to the accrued debt. Depending on the graduate degree program students pursue, the current average debt for graduate degree students ranges from $42,000 to more than $125,000.

However, a student loan for school is often referred to as “good” debt because it is an investment in one’s future The reason is simple, upon earning a college degree, you will have the chance for a better job and far greater earnings than a person without a degree.

But many students are starting to realize that those greater earnings still may not be enough to pay off the debt incurred while securing that degree. All too often, students are finding their debt obligations from school eating up such a large portion of their pay check that purchasing a home or starting a family is beyond their financial means.

Colleges Borrowing

On the flip side of student’s borrowing, it seems that colleges themselves have also been incurring significant debt in recent years. Now, amidst the current economic downturn, some colleges face financial perils.

According to the folks at The Chronicle of Higher Education, “June 30 could be a day of reckoning” for many colleges. What makes the issue so compelling is this day of reckoning is one that most never saw coming.

Effectively, the competitive rush for top shelf facilities led many schools to borrow tens of billions of dollars over the past ten years. With their borrowing, many schools created extensive debt obligations against the potential for future earnings.

However, the financial downturn has made it tougher for students to attend school and thereby has greatly reduced projected future returns. At the same time, in the process of borrowing funds, colleges used the existing value of their facilities and endowments as asset collateral. Here again, the recent downturn has greatly reduced the value of these assets.

With large liabilities accompanied by shrinking assets, some schools are now finding themselves in violation of specific bond or loan requirements. At the same time, with banks and lenders under pressure, cash-strapped colleges are not as likely to be given forbearance should it be requested.

According to the Chronicle, the result could create a situation where bondholders subsequently “demand immediate repayment on part or all of an institution’s bonds.” In addition, in the cases of a school facing variable-rate debt obligations, those institutions holding a loan could legally hike the interest rate exacerbating the debt repayment challenge.

To repay these loans on the quick, schools must then turn to their endowments for cash, a factor that then further reduces their assets and thus increases their debt to asset ratio.

Beyond the debt obligations themselves, strapped schools could ultimately violate the eligibility standards set by the U.S. Department of Education for federal student aid. Any college so indebted as to lose eligibility to receive federal student aid would soon find its enrollment falling through the floor. That drop in enrollment would further exacerbate the debt repayment issue to the point that the school would have to cease its operations.

Carefully Consider Any Debt Contract

Any incurred debt carries with it an expectation of repayment, plus some additional cost (interest). Debt also generally requires some type of collateral in case the borrower defaults on the repayment expectations.

It is extremely important that students understand that debt is ultimately a claim against future labor and earnings. The borrower essentially gains something immediately but in turn makes a pledge to pay for that something down the road.

The recent economic downturn has hopefully taught many people a great lesson. First, as many have recently found, there is no guarantee that those future earnings will in fact be enough to meet the debt commitment. Second, if you default on that commitment, you will lose your collateral as well as your credit rating.

The number of home foreclosures and businesses filing for Chapter 11 combined with the current issues facing institutions of higher learning serve as a great reminder to us all: entering into debt is not to be taken lightly.

What We Can Learn From Suze Orman

The other night I had television on, just on, background noise. At some point in the evening the Suze Orman Show came on. I paid relatively little attention until one of her guest callers asked her opinion on student loans: Her daughter was in the process of choosing colleges. She was down to a choice between a private, four-year college and a state university. Did Suze think the value of the private college matched the increased expense or should she encourage her daughter to choose the more affordable state university? And would the education at the state university offer comparable value?

Two separate college issues were addressed in that call:

• Value between types of colleges
• Expense of high tuition costs

Lesson One from Suze: The additional cost associated with the four-year college would most likely have to be financed via private student loans. According to her, an absolute no-no.

Lesson Two from Suze: She attended a state university and look where she is right now.

Private Student Loans: The Bottom Line Revealed

Private student loans, or alternative student loans, have generated colossal business for lenders—really the meat and potatoes—in the last few years. The startling statistics (College Board): Since 2001 private student loan borrowing has increased 27 percent annually and is fattened enough to monopolize 20 percent of the student loan market. Just a decade ago, private student loans constituted a mere sliver–7 percent–of the same market. Regionally the behavior may be even worse; one source reports that private student loan borrowing among Maryland students has increased by 600 percent since 2000.

As I speak there are some alarmists extolling the evils of the private student loan market—bloated beyond belief, they say, could cause another market debacle not unlike the recent mortgage fiasco. But how did the alternative student loan market get so heady? The advertising message is: don’t worry if your federal student loans don’t cover the cost of your education; with a private loan you can carry enough credit to cover everything, in some cases even add on auxiliary expenses such as textbooks, transportation, and computers.

No Limits and Interest Rates as High as Your Worst Credit Card

Suze’s message was, of course, right: private student loan interest rates are all over the place and lenders may hike them at will, much like those attached to credit cards. Also, most have no limit. Borrow as much as you’d like—no problem…. Lenders sell them as easy, as quick and simple as opening a checking account. You can be approved and paid overnight, so the perception is that these loans are no big deal. It’s usually thousands and thousands of dollars worth of a deal.

Private Loan Gluttons

Some in the education industry have commented that the gluttony in private loans is due in large part to the leaner Pell Grants. Hmmmm. Pell Grants certainly fail to cover the same costs they did when they were first established, but the statistics I’ve seen suggest that it may not be the Pell Grant crowd gobbling up the private loans—it’s middle to upper income students! A sample of student loan data (ECMC Group) from 1992-3 and then again in 1999-2000, reveals absolutely no increase in the number of low-income students borrowing with student loans. BUT—here’s the dope: middle income borrowing increased “from 32 to 45 percent” and upper income borrowing “from 15 to 31 percent.”¹

Where’s the Steering Wheel for this Fancy Sports Car?

Stories emerge that illustrate how ignorant college borrowers really are when choosing private loans. The sad reality is that for many college grads there is little latitude following graduation for traditional rites of passage, such as hiking across Europe or volunteering with the Peace Corps. Those times are gone. Better find a damn good job because loan repayment is knocking on your door and it’s a pretty big payment for a pretty long time–and it doesn’t come with a high performance engine or a steering wheel.

Cultural Barriers to Incurring Debt, ECMC Group Foundation, March 2003, accessed September 6, 2007, http://www.ecmcfoundation.org/documents/CulturalBarriersExecSummary.pdf.

Barriers to Higher Education are Alive and Well

The Higher Education Act of 1965 launched some of the first financial programs aimed at the support of low-income and disadvantaged students. Since then, dozens of federal and state scholarship and grant programs have been developed to assist the same. A popular theory remains: more and more free money will put more disadvantaged and minority students into college and solve the problem of low college attendance rates among high poverty students. Regardless of the money higher education continues to throw at low-income students, the numbers actually attending college and staying in college remain low. If money is not the solution, then what’s the problem?

The Problem

There are significant numbers of public funds already available for low-income students. Add to this the increasing trend among elite and reputable colleges and universities to spring for full tuition scholarships for academically eligible disadvantaged students and a more relevant question becomes: “With the money available already for low-income and minority students, why do so many fail to earn a college degree?” What circumstances beyond the financial, continue to impede the educational roadway of the disadvantaged student, and why does higher education, at large, repeat the same ineffective gestures in its quest for the solution?

Dream of College Access for All Americans

President Lyndon B. Johnson dreamed of building our country into one in which “a high school senior [could] apply to any college or any university in any of the 50 States and not be turned away because his family is poor…” He further declared, “Education in this day and age is a necessity.”¹ He made these statements on the same day he signed the Higher Education Act of 1965 into legislation. If higher education was deemed a necessity in 1965, then it has become critical by today’s standards.

For the most part President Johnson’s dream has become a reality, but outside of the financial, some of the same barriers to higher education remain:

• Schools that fail to adequately prepare students for college.
• Outside influences and expectations, especially those of parents/family and educators.
• Psychological factors.

Secondary Schools Fail to Prepare Students for College

Regardless of the money available to low-income students, in many cases students fail to even qualify for college admission. Perhaps, as some critics of the current system argue, where career and guidance counselors proactive in “talking up” college as soon as middle school, kids particularly from disadvantaged backgrounds would incorporate college goals into their futures much more naturally than when career and education goals are thought inconsequential.

Educators, including teachers, counselors, and principals, simply have low expectations of disadvantaged students, say some proponents of education reform. An overall neglect of college preparation routinely takes place at most minority and high poverty high schools. The perception that disadvantaged students will either not make it into college, have little interest in higher education, or be unworthy of the time spent to get them prepared, are all subversive and deeply damaging perceptions. At best this disregard is a primitive throwback to the same circumstances President Johnson sought to bury.

The Non-Existent College Prep Curricula

Average, college bound high school seniors are alarmingly unprepared for the rigors of college academics, but an even more disturbing population of low-income and minority students seem to avoid college altogether or possess test scores and academic records that have put many in higher education on alert. In fact, the circumstances renew debate over the quality of public school systems: “Nine in ten high school graduates from families earning more than $80,000 attend college by the time they are 24, compared to only six in ten from families earning less than $33,000.”²

Research proves that many of the so-called high school assessment tests “bear little resemblance to the work [students] are expected to do in college.” Despite the best hopes of those students that do possess college degree expectations, preparation for such is sorely lacking—students again and again clearly “lack crucial information on applying to college and on succeeding academically once they get there.”³ College administrators report that most students only think they are academically prepared; the sobering reality is that the so-called college prep curriculum they slogged through in high school was not college level work, after all.

Ironically, this lack of preparedness is the ailment of many average high school grads, and not exclusive to low-income students. But evidence shows that “a greater percentage of low-income students are marginally qualified or unqualified for admission at four-year institutions.”⁴

And college prep includes providing students the appropriate information with which to pursue college, including college search, financial aid and scholarships, and admissions processes. But in many disadvantaged schools the information is not disseminated, not included as a natural progression in education.

For students interested in pursuing college the process becomes a bit like fumbling in the dark: “many low-income college students need aid and do not know how to apply for federal or state assistance.”⁵ Low-income students often opt for a community college—open access and remedial coursework, and schedule flexibility that allows students to work part time and carry on normal family responsibilities.

High Scores vs. Student Success and the “Push-Out” Phenomenon

High schools across the country have new standards by which to adhere. Accountability in secondary education may play a significant part in the collegiate success or failure of certain students. Since the inception of No Child Left Behind the reliance on test-based schools has split students down the middle—in some areas. Students are either an asset or a deficit to a school.⁶

In New York City, test scores served to define a dispensable archipelago of students most likely to fail. Students at disadvantaged schools throughout the region were so overlooked that rogue administrators and educators systematically amputated from the system whole populations of underachievers for the “betterment” of the whole. The plan was simple: “push out” students with poor grades and low test scores and test score averages would look a lot better.⁷

The Teacher Factor

Does a high quality teacher make a difference to a low-income and/or disadvantaged student, and if so, why? A growing body of evidence shows that teachers do matter. But studies have begun to prove an alarming trend: “The very children who most need strong teachers are assigned, on average, to teachers with less experience, less education, and less skill than those who teach other children.”⁸

A study that surveyed three Midwest revealed consistent data proving that in most low income schools teachers were much more likely to be “inexperienced, out-of-field, and uncertified.” Furthermore, as school enrollment of low-income students increased, the population of teachers hired grew increasingly inexperienced.⁹ Most studies declare five years of teaching experience as the dividing line between experienced and inexperienced.

The less experienced the teacher the less likely he or she is to be qualified or motivated to guide disadvantaged students in wise career and education choices. Surprisingly, teacher surveys have also proven that on the whole they, too, tend to have an unsure grasp on the college preparatory process.¹⁰

The qualities most valued and effective in high-quality teachers include:

• Over five years experience teaching within their specialty.
• Teachers able to modify methods on-the-fly and in direct response to student abilities.
• Teachers with degrees from reputable institutions.

Contemporary findings such as these provide more leverage for school systems, and lawmakers when it comes time to plan teacher distribution models designed to serve future generations of students.

Can Experienced Teachers Get Disadvantaged Students to College?

Data has been culled from a crew of challenged high schools, turned-high-performing, in various regions of the U.S. that proves high quality teachers can make a significant difference with at-risk youth. In every high performing school surveyed almost half the student bodies were from high minority-high poverty backgrounds. And in every case the population of college bound students had increased above the national average.

What factors set high performing high schools with diverse student bodies well above others in nurturing college ready graduates?

• High quality and experienced teachers able to adjust methods to suit students.
• A very relevant and challenging college preparatory curriculum that surpasses state requirements.
• Unlimited access to academic tutors and career advisors.¹¹

Part of the goal of the Higher Education Act of 1965 was to promote improvement in high minority/high poverty schools, including attracting more experienced teachers. Contrary to some, both these factors—schools and teachers—continue to figure prominently in the educational futures of students.

College Admission Requirements Detrimental to Disadvantaged Students

Whether high school or college, the fact is that reputation, high marks, selectivity ratings, and even cost of tuition, all constitute factors that conspire to create an institution’s reputation. Ratings and credentials have become a beacon for student business, a means to market and advertise a college to expanding populations of prospective students.

The annual U.S. News and World Report: America’s Best Colleges has become a much-anticipated publication.

New criticism, though, from college administrators aims to downplay the relevancy of some of the ratings, which many say have nothing to do with a good college education. Why so much fuss over ratings? The report has been widely dubbed the college “beauty contest,” and the higher colleges and universities have driven ratings the better their business. But in the process, some pieces of the academic puzzle have been forsaken, like some populations of students.

Ratings Drive Business, Which In Turn Drives Up Admission Reqs

Colleges and universities that rank well in the U.S. News report seek to be considered “selective.” This kind of marketing seems to make business more brisk, but it also makes it challenging to attract a large minority or low-income student population. In order to make a college accessible for the majority of low-income and disadvantaged students, admission requirements must be relaxed.

The traditional metrics of admission include SAT scores and GPA, precisely the type of measurements most low-income students suffer by. As we explored above, it’s not their responsibility—educators have been loath to provide the proper guidance and nurture—and, besides, SAT and GPA are rarely accurate indications of academic worthiness. This then is why a growing stable of college administrators is taking aim at the notoriously exclusive annual ratings race.¹²

Compared to the relatively small number of college administrators backing away from the ratings game, there are plenty that believe in its promise. For instance, a strong cadre of schools believes the marketing theory that overpriced products and services attract buyers and consumers because high price implies high quality. This then is why tuitions are hiked and SAT and GPA requirements inflated. Yet again, disadvantaged students are unable to reach certain institutions where, ironically, money is likely to exist for their education.

When Admission Hikes Purposely Dismiss Disadvantaged Students

Another strategy behind ramped up admission requirements seeks to purposely define the splinter group of underachievers and those students with low test scores and make it impossible for them to essentially clog the way of those students without academic challenges. Low income and minority students with low SAT scores and low GPAs “will be steered” to the state’s community colleges.

Simultaneously more college prep programs are being built into the state’s public school system. Students will now have a system in place able to alert them should their academics fall below realistic first year college goals.¹³

Outside Influences Offer Most Resistance to College Life

Besides money and academic challenge, many low-income and disadvantaged students face challenges much more murky to middle and upper income, white Americans. In some cases the influence of parents and family are more profound than more mainstream issues.¹⁴

Parental Influence

Consider the idea that many minority and low-income students come from first generation families, meaning no one else has yet gone to college. For many average American students, the dream of a college degree is fueled over the years by parents. When that drive is not there, other priorities may take precedence, such as job, finance and family.

It’s not that parents of first gen college students have no desire to see their children succeed, even go to college, but most are unable to provide the type of support necessary to bolster a fresh and, perhaps, disenfranchised college newbie.

Cultural Perceptions of Debt

Financial aid experts may also have discovered another roadblock—“cultural aversion to debt.” Over the years the financial aid needs of middle and upper income students have risen, but statistics have shown little or no increase in the student loan debt among low-income and ethnic minority student groups, which “calls into question the effectiveness of student loans in aiding low-income populations.” Studies strongly suggest that minorities are “more sensitive to price and less willing to use educational loans to pay for college when making their college decisions.”¹⁵

Tuition sticker shock may be a similar deterrent. Even though academically talented low-income students may qualify to enroll in elite universities where the ability to prove a certain level of disadvantage buys them a free ride, only a fraction of those actually eligible partake of the opportunity. The scholarships from institutions like Harvard and Princeton are not just in place for altruistic purposes. These “white-bread” institutions want to diversify and offering money for disadvantaged students seems a good idea. Surprisingly, a much larger wellspring of academically qualified low-income students is out there. SAT scores prove the numbers,¹⁶ but where are they?

Educator Expectation Matters, Too

The nation’s low-income students, including those with academic fortitude and those dubbed low-achievers, may share common bonds: many face familial and cultural obstacles, but do they also face low educator expectations? Studies have already measured the effect of educator expectation on the college outcomes of low-income, minority students and found alarming numbers of low-quality teachers and counselors with little hope for students in lower income brackets.

Teachers and advisors acting out of their personal beliefs and stereotypes may be unable to provide the unbiased guidance underserved students require to get them to the doorstep of a college campus, whether it be a community college or one of the elite universities.¹⁷

What Then if Not Money?

Considering the obstacles discussed above, are there further psychological impacts? If I am a student from a low-income household in which neither of my parents attended college, isn’t it likely that a college degree will not be a main priority in my life? And if I am academically talented, would I not feel out of place and disenfranchised on a Harvard campus even if my education were fully funded?

If I overheard teachers in my high school complaining about their jobs and saying that many of the students will be lucky to make it to graduation, much less college, would I not doubt my teachability, my worth as a student?

Harvard can roll out its red carpet and dangle full scholarships ‘til the cows come home, but what really eats away at the collegiate futures of low-income, minority students—talented or not—has little to do with money.

Footnotes

1. LBJ for Kids, accessed September 3, 2007, http://www.lbjlib.utexas.edu/johnson/lbjforkids/edu_whca370-text.shtm.
2. “Harvard Announces New Initiative to Aimed at Economic Barriers to College,” Harvard University Gazette, February 28, 2004, accessed September 5, 2007, http://www.hno.harvard.edu/gazette/daily/0402/28-finaid.html.
3. Rooney, Megan, “High Schools Fail to Prepare Many Students for College, Stanford Study Says,” March 3, 2003, accessed September 4, 2007, http://ed.stanford.edu/suse/news-bureau/displayRecord.php?tablename=susenews&id=25.
4. Andrea Venezia, Michael Kirst, Anthony Antonio, Betraying the College Dream: How Disconnected K-12 Schools and Postsecondary Education Systems Undermine Student Aspirations, 2003, accessed September 4, 2007, http://www.stanford.edu/group/bridgeproject/betrayingthecollegedream.pdf.
5. Kirst, Michael, “Betraying the College Dream in America,” The College Puzzle, August 21, 2007, accessed September 4, 2007, http://thecollegepuzzle.blogspot.com/2007/08/betraying-college-dream-in-america.html.
6. Beveridge, Andrew, “Counting Drop Outs,” Gotham Gazette, August 2003, accessed September 4, 2007, http://www.gothamgazette.com/article/demographics/20030814/5/492.
7. Beveridge, Andrew, Gotham Gazette.
8. Heather Peske, Kati Haycock, Teaching Inequality: How Poor and Minority Students are Shortchanged on Teacher Quality, The Education Trust, June 2006, accessed September 2, 2007, http://www2.edtrust.org/NR/rdonlyres/010DBD9F-CED8-4D2B-9E0D-91B446746ED3/0/TQReportJune2006.pdf.
9. Peski, Haycock, The Education Trust.
10. Venezia, Kirst, Antonio, Betraying the College Dream
11. “Preparing All High School Students for College and Work: What High-Performing Schools are Teaching,” ACT, February 23, 2005, accessed August 30, 2007, http://www.act.org/news/releases/2005/2-23-05.html.
12. “U.S. News College Rankings Debated,” The Online News Hour (transcript), PBS, August 20, 2007, accessed September 5, 2007, http://www.pbs.org/newshour/bb/education/july-dec07/rankings_08-20.html.
13. Tresaugue, Matthew, “UT Campuses Will Raise Admission Standards,” University of Houston, May 10, 2007, accessed September 5, 2007, http://www.uh.edu/ednews/2007/hc/200705/20070510admission.html.
14. Szelenyi, Katalin, “Minority Student Retention and Academic Achievement in Community Colleges,” 2004, accessed August 29, 2007, http://www.ericdigests.org/2001-4/minority.html.
15. Cultural Barriers to Incurring Debt, ECMC Group Foundation, 2003, accessed September 3, 2007, http://www.ecmcfoundation.org/documents/CulturalBarriersExecSummary.pdf.
16. “Large Numbers of Highly Qualified, Low-Income Students Are Not Applying to Harvard and Other Highly Selective Schools,” Journal of Blacks in Higher Education, 2006, accessed August 26, 2007, http://www.jbhe.com/news_views/52_low-income-students.html.
17. Patricia George and Rosa Aronson, How Do Educators’ Cultural Belief Systems Affect Underserved Students’ Pursuit of Postsecondary Education?” Pathways to College Network, 2003, accessed September 3, 2007, http://www.pathwaystocollege.net/pdf/EducatorsCulturalBeliefs.pdf.