Scholarships for Low Income Students at Elite Universities

I know you’re out there. The statistics prove it. While only a fraction of you actually applies to Harvard or Princeton, many more probably flirt with the thought then dismiss it’s too unrealistic, who would believe it, right? SAT records prove a much deeper pool of academically eligible low-income students than most educators would have us believe, or maybe no one expected, and expectations do play a part, don’t they?

The List

Here’s the list of colleges and universities, and it’s constantly growing, that provide full scholarships to academically talented low-income students (and you’re out there):

• Harvard
• Princeton
• Stanford
• Amherst College
• University of North Carolina
• University of Virginia
• Williams College
• University of Washington
• University of Chicago (starts Fall 2008)

One study showed that based on SAT scores, low-income students from over 10,500 high schools in the U.S. possessed scores that would make them eligible for Harvard’s admissions requirements, but that students from only 5,000 (that’s half, 50%) of those schools actually applied. If there was only 1 student counted from each of those schools, then over 5500 students chose something else.

Why?

Deeper factors contribute to the college choices made by underserved students, factors like family and parental opinions, even self-perception.

See Yourself to a Free and Elite Degree

1. Picture Yourself [ here], now fill in the blank with one of the names off that list right up there. Imagine yourself everyday on that campus; get a real good picture in your mind. Call or write for the catalog and cut out pictures of the campus & pin them up in your room, tape them to the fridge.

2. Reach out and contact someone on the campus. For example, many colleges and universities have student and faculty bloggers. Logon and ask questions, post a comment, become engaged with a piece of the college life. In the case of faculty blogs, this is an excellent way to make an academic contact, a possible mentor and someone who may be able to actually lend some gentle guidance and advice. A couple blogs I quickly found:

• A Harvard Economics Professor
• The Amherst Chirp
• Stanford School of Medicine student blogs

Just a few ideas… Take your catalog, your admission form, and contact information to your high school career counselor and tell him or her to picture you [ there].

Scenario: What If Every Student Went Directly to College, What Then?

The rhetoric is that education is important, but is our economy really prepared for the scenario in which every student does choose to attend a four-year college? First responses are “Sure, no problem.” But if you take up a strong cup of coffee and sit down with some friends to jaw over it, it’s likely you’ll dig up some pretty big reasons why this scenario could backfire, economically.

If everyone suddenly chose to go to a four-year college and earn a degree—Utopian at best, but a mind-bending what-if….

• Would we lose employees in the McDonald’s down the street?
• Would Ford and Chrysler be forced to move operations to countries where there was still a manufacturing work force?
• Would there be builders to make houses with hammers and nails?
• Would asphalt be laid for new super highways?
• Would there be someone to tow your car when it breaks down?

Let’s ease up just a bit on this farfetched concept and try this one: What if every graduating high school student next year entered college right out of high school; just one class of graduating seniors? (Again, Utopian because as rumpled as secondary schools are, too many seniors fail to graduate or be adequately prepared to enroll in college). Right now there is a population that does, in fact, graduate and go directly to school, but there is also a population that divides work with school, and a population that enters the work force. Without the population of high school students that foregoes college to enter the work force, how many jobs would go unfilled?

Get a Technical or Trade Education–Millions of Skilled Jobs to Fill

According to the Bureau of Labor Statistics, by 2012 there will be an upsetting shortage of laborers in a number of key sectors: healthcare, IT, and manufacturing and production, are among them. The reasons are multi-pronged. Since education has re-routed students to college, as opposed to trades, there are fewer and fewer skilled laborers entering the work force. By 2012 more workers in these sectors will retire, leaving jobs unfilled.

Doesn’t sound so competitive, does it?

Since jobs will be unfilled because students are heading to college or dropping out of high school—leaving them totally unprepared for anything but unskilled jobs—then it’s necessary to see the numbers associated. The BLS reports that, between new job creations and retiring workers, over 56 million new and existing jobs will possibly sit vacant! Some of these will require two or four-year degrees, but plenty of them only require career or “on-the-job” training. Are we encouraging well qualified technical students? Is anyone in education brave enough to counsel students, perhaps underachieving in academics, to consider a skilled and well-paying trade as opposed to the alternative—dropping out?

Scholarships Available for Trade/Professional Programs

There has been some recent excitement in some types of career programs: cosmetology (notice increasing number of Aveda Institutes, for example), massage therapy (a high-demand skill), and HVAC, which goes hand in hand with the construction industry. All of these professional trades require a term of specialized schooling and increasing numbers of sources are funding scholarships and grants for interested students.

Lack of Vocational Choices

Once upon a time vocational schools were innately partnered with many public high schools. Students with a drive for auto mechanics, agriculture, and carpentry and construction could spend part of their high school careers learning a trade—a well-paying one, at that. In the 90s, though, in Education’s zeal to see every student remade into a robotic scholar, vocational schools were severed from the public systems and most are defunct, non-existent.

Political Waffling

In 2006, President Bush signed back into action the Carl D. Perkins Vocational and Technical Education Act. The act is designed to allow for increased support for technical and vocational education programs. Currently there is some buzz on the Presidential campaign trail that favors cutting budget spending on technical education. So what’s it going to be?

Education’s One-Track Mind

But as much as one might try to force a square peg into a round hole, there are some students failing out of school simply because they are not the next great academicians. Twenty years ago, he or she had the option to pursue farming or auto repair or welding or computer repair and networking versus so called college prep, but most have no such choice. A growing chorus of career counselors and educators is brave enough at least to suggest we explore steering some students into trade schools versus four-year liberal arts colleges, inspire them to success as opposed to failure. In fact, in surveys, some high school drop-outs cite “boredom” and lack of challenge as significant factors in their decisions to part ways with academia.

Maybe if some of these students had had options for careers, they might have felt less pressure to vacate a one-track system.

In some cases students may have options for scholarship funds to vocational schools—like the state of Kansas Vocational Scholarship—but without the proper guidance in high school many will not likely find these sources on their own.

The New Innovators—Trade and Technical Students Will Drive Economic Growth

If innovation and entrepreneurship will be key to worker success in the future, as many predict, then students with the hutzpah to step off the beaten path and machete a pathway to a vocational or technical career will be the most successful among the innovators and entrepreneurs. God knows they will have to be their own best advocates—no one else is at the helm.

The Undercurrent in Undergraduate Education

As exciting as college prep can be, there is an alarming undercurrent that threatens almost half the population of incoming freshman—attrition. How do colleges and universities keep disillusioned students from dropping out?

The number of college freshman dropouts is typically cited between 1 in 4 or 1 in 5, with some sources positing arguments that nearly half of all college students fail to graduate. Surveys of high school students show no lack of interest for a college degree, in fact 95% of high school students when asked about college indicated a “very strong desire” to complete a degree program.¹ If only a fraction of those respondents actually earns a degree, then what happened to change their attitude and/or desire?

A complex array of contributory factors may be to blame, and a growing stable of remedies offered for their cure. But what are the fundamental causal factors of college freshmen attrition and how can they be more directly halted?

High School Grads Poorly Prepared for Campus Challenges

High schools are generally motivated to make sure students go to college. The drive to go to college has little to do with the success rates of students, however. In fact, a mountain of research clearly illustrates that the motivation to excel in college has little to do with the reality of contemporary campus living. The real meat of the drop out problem is the academic preparation, or lack thereof, that students receive prior to arrival on campus.

High School Seniors that “Blow Off” School Likely to Suffer on Campus

A common practice among high school seniors is to take that last year as easy as possible, blow it off, waste it in easy courses. Perhaps this worked, once upon a time, but today’s high school senior slumming it his or her last year is doing more harm than good, report most studies.² College advisers these days urge high school seniors to avoid “resting on their laurels,” and instead spend their senior year immersed in courses that pose academic challenge. This is the best method for college prep, say administrators. A Department of Education study proved the importance of academic challenge in regards to college performance:

“…the academic intensity of a student’s high school course work was the top factor influencing whether students earned a college degree — more than family income, high school grades, ethnicity or test scores.”³

Even for students that work very hard and then take it easy their final year of high school the odds are not so good. This is a wasted year, time in which every bit of a student’s good work can be undone. Given the fact that studies show students lose learned knowledge over the course of a summer break, it’s understandable how they could become quite academically bankrupt, after a full year of cushy coursework and time off from serious studies. Their GPAs are still high, but academic agility is low.

High School Students Fail New College Admissions Standards

College admissions standards have also become a major hurdle to clear for students. Add on a “lost” year of academics and students that for all intents and purposes should be college-ready, are unable to make the academic cut. Colorado State University system’s administrators decided, out of sheer necessity, to ease new admissions requirements for incoming freshman in the Fall of 2007, or risk losing about 20% of their incoming freshman class.⁴

Why the Strong Desire to Go to College?

Problem: 95% of high school students expect to earn a college degree and indicate a strong desire for the same, but, regardless, more and more incoming college freshman are disastrously unprepared and unmotivated to achieve that goal. What, then, drives them in herds onto America’s campuses every fall?

Those same student respondents that expressed the “of course” attitudes about college, also responded that their primary motivators for pursuing college were: good job, good salary.⁵ Somewhere between the illusion of the American Dream and a Bachelors degree lies the truth. Do students simply expect to earn a degree with little work? It makes sense that students whose educational experiences up through secondary school have been somewhat boring, unchallenging and downright lackluster, may expect that their college experience will be similar. Given this illusion, then of course, most students see a college degree in their future, and are justifiably caught very off guard when their first semester of college rolls around and kicks them squarely between the eyes.

What High-Performing High Schools Know That Others Don’t

Samples of select high school teaching methods and policies, chosen for their success rates with college-ready students, reveal fundamental strategies that consistently nurture college campus-ready high school students:

• High quality, experienced, and flexible teachers.
• Teachers capable of evaluating the teaching-learning paradigm and prepared to adjust techniques given the results.
• Auxiliary mentors, tutors, and after school study assistance, available and engaged.
• Advanced college preparatory coursework “beyond state and district standards.”⁶

Any suggestion from naysayers that these methods would fail in certain high schools is moot– these methods belong to and were observed in practice in a handful of “high-performing” schools in high minority, high poverty areas. Which means, essentially, that if these methods work to develop the skills of high school students in disadvantaged schools, they should work in almost any high school in America. Furthermore, the study that distilled these findings was ultimately presented as a primer for education lawmakers.⁷

Some Students Face Deeper Challenges on Campus

Academic shortcomings notwithstanding, there are student populations that statistically struggle even harder.

Why First Generation Students Face Further Adversity

First-generation college students, especially minorities, face challenges stemming first and foremost from lack of familial support. In fact, the majority of ethnic minority students rate “parental influence” as a number one factor in their “educational choices.”⁸ This is not to say that parents do not want a college education for their children, but parents without experience of academic life beyond high school are less prepared to provide the emotional and psychological support and motivation necessary to keep their first-in-family student on campus. These types of students may also feel disenfranchised from higher education, and out of place with students whose families take college as a matter of course.

Male Freshman May Struggle with College Structure

Males are, on the average, less agile than their female counterparts when it comes to standardizing their on-campus lives, including organizational skills, prioritization and time management, and defining successful study habits and methods. Course assignments tend to fall behind and concrete goals are elusive. When these factors fall apart or are non-existent, males may be unable to remain academically buoyant, further supporting the alarming statistics: for every 100 women that graduate college, only 73 men will do the same.⁹

If so many college freshmen are surprised by the rigors of college academics—in combination with the traditional transition to campus life—that they are at risk for dropping out, then what’s being done to change the freshman experience?

Since America’s high schools are failing to adequately renovate curriculum or recruit (and pay for) the type of teachers necessary to maintain a high-performing program, then it must become the responsibility of colleges and universities to provide the necessary student support.

Freshman Survival: Retention Programs Stem Anxiety

Some college and university administrators are quite concerned that the drop out rate among college freshman is their responsibility. In response, retention programs have begun to spring up. Whether grassroots, campus-created, or pre-packaged Freshmen Survival courses administered by professional educational coaches, retention programs essentially guide students with bumpy campus transitions and connect them to the resources—academic, social, religious, medical, financial—they will need to succeed on campus.

Preparedness for college life goes well beyond the pale of sheer academics. Fueling the need for transition programs. High school students are equally unprepared for the responsibilities of a more “adult” world. Common challenges that await freshman on traditional college campuses:

• Financial matters
• Study and time management
• Personal organization and prioritization

“Give Them Time, They’ll Find Their Way Around”

Students most likely to drop out do so before they reach their sophomore year. Some leave for holiday breaks, Spring Breaks, and summer vacation, and never return, some with little indication they are leaving. The general excitement about college quickly wanes, but many administrators still believe much of the work is done once kids are on campus. As bright an idea as retention programs seem, they are only being used on a fraction of America’s campuses—29%.¹⁰

Factors in College Retention: What Programs Can Be Put in Place to Help Students?

Over the last few years college administrators, as well as students, have tackled the issues inherent to student retention. A large number of colleges and universities of all kinds, collectively assigned the following practices as primary in retention programs:¹¹

• Freshman seminars and courses.
• Academic assistance, from mentors and tutors to remedial courses.
• Available advisors willing to engage with students and offer sooner-than-later guidance on academic goals.

Alternative indicators suggest that there are other factors that make a difference in student engagement and transition:

• Evidence suggests that students with campus-based jobs are less likely to drop out. Perhaps they are more disciplined with study skills and time management.¹²
• Remediation programs, or high school level courses that help bring students up to speed with essential freshman courses. Remedial coursework remains popular in community college systems, a controversial issue in higher education, but possibly a strong reason why an increasing number of students are opting for 2+2 programs, or community college to four-year transfer programs. Some supporters of remedial programs insist the concept must be accepted among four-year colleges, as well, to stem the dropout rate or discourage transfers to community colleges.¹³
• Available advisers are seen by students as “concerned person[s] in the campus community” able to interact and connect with freshman. Student responses have suggested this type of “quality interaction” may be one of the simplest solutions for new students away from home for the first time and feeling lost in the shuffle.¹⁴

Retention Tools

Colleges and universities unable to design and develop their own retention programs may utilize pre-packaged programs or resources from a number of providers:

• Of the 29% of schools that have retention programs, 13¹⁵ so far participate in the “Foundations of Excellence in the First College Year.” Policy Center on the First Year of College administers this program with a mission to inspire college and university campuses to become “engaging” environments for first year students. With tools provided through the Foundations of Excellence program, institutions may conduct careful self-assessment of all aspects of campus life, including “policies and practices.” Eventually changes are developed—the outcome, a totally synthesized campus that embraces first year students and their experiences, instead of excluding and isolating.
• The National Resource Center for the First Year Experience and Students in Transition provides written materials, seminars, conferences, and networking opportunities for institutions interested in creating a “first year experience” worth hanging around to savor. The Center is best known for its University 101 course, an innovative and very successful program that guides new students in their shift to campus life.
• The Center for the Study of College Student Retention provides a stable of resources for institutions. Administrators have access to research specific to the issues, as well as a general guide designed to lead any institution through development of a retention program.

High Dollar Freshman “Coaches” Hit a Mother Lode

Plenty of lip service is paid to for-profit “coaching” services prior to college—professional assistance with admissions forms, guidance during college and financial aid processes, as well as scholarship and grant assistance. But some colleges and universities are paying top dollar for another kind of coaching service—retention coaches.

First year coaches function as a freshman’s guardian angel; they provide motivation when students feel down, guidance in mapping academic goals, and offer tips and advice for improving study habits, managing time, coexisting with roommates, and building successful relationships with campus faculty and advisers.¹⁶

A mere handful of student coaching businesses exist, but plenty more are sure to follow—the money making potential is great and this segment of the education market, so far untapped. But with service fees of “$800 to $1,400 per student”¹⁷, what colleges and universities are paying? Apparently, plenty.

Freshman Attrition: No Easy Answer

Given the disparity of issues facing contemporary college freshmen, it’s clear there is no one easy answer to halt freshman dropouts. Students begin their college careers with little understanding of the impending rigors. Apparently high schools, save for a few high-performers, dish up less than desirable college preparatory curriculum. Admission to a college would also seem to validate a students’ academic record, but this is misleading, as well.

Retention programs are likely to continue spreading among college campuses; they must. Sources suggest that the federal government may soon challenge higher education on the dropout issue, perhaps with fines for high numbers of students that fail to make it to graduation.

First year on campus, given all the factors at work, is a tricky balancing act. Groundwork for first year transitions must be built. On the other end of the spectrum, is it just a dream that U.S. high school education will make the sweeping changes necessary to lead kids to college level academics; to inspire them as opposed to bore them?

¹ National Freshman Attitudes Report, Noel-Levitz, 2007, accessed August 30, 2007,

² Perez, Gayle, “Educators Support Temporary Lower Admissions Standards,” August 17, 2007, accessed August 27, 2007, http://www.chieftain.com/metro/1187335298/6.

³ “Study: One in Five Drop Out of College Before Sophomore Year,” Albany Democrat-Herald, February 21, 2006, accessed August 27, 2007, http://www.democratherald.com/articles/2006/02/21/news/oregon/state03.txt

⁴ “Study: One in Five Drop Out of College Before Sophomore Year,” Albany Democrat-Herald, February 21, 2006, accessed August 27, 2007, http://www.democratherald.com/articles/2006/02/21/news/oregon/state03.txt

⁵ National Freshman Attitudes Report, Noel-Levitz.

⁶ “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 .

⁷ Implications for Policymakers, ACT, 2005, accessed August 30, 2007, http://www.act.org/path/policy/pdf/success_implications.pdf.

⁸ Szelenyi, Katalin, “Minority Student Retention and Academic Achievement in Community Colleges,” 2004, accessed August 29, 2007, http://www.ericdigests.org/2001-4/minority.html .

⁹ National Freshman Attitudes Report, Noel-Levitz.

¹⁰ Draeger, Justin, “An Examination of First-Year College Students,” NASFAA, 2007, accessed August 26, 2007, http://www.nasfaa.org/publications/2007/examinationoffirst-yearcollegestudents.html .

¹¹ Wesley Habley, Randy McClanahan, What Works in Student Retention? All Survey Colleges, ACT, 2004, accessed August 30, 2007, http://www.act.org/path/postsec/droptables/pdf/AllColleges.pdf .

¹² Cermak, Katherine, “On-Campus Employment as a Factor of Student Retention and Graduation,” DePaul University, February 19, 2004, accessed August 26, 2007, http://oipr.depaul.edu/open/gradereten/oce.asp .

¹³ Gehrman, Elizabeth, “What Makes Kids Drop Out of College?” Harvard University Gazette, May 4, 2006, accessed August 26, 2007, http://www.news.harvard.edu/gazette/2006/05.04/13-dropout.html

¹⁴ “Many U.S. Colleges Overlooking a Potential Cure for College Dropouts,” ACT News, June 23, 2004, accessed August 26, 2007, http://www.act.org/news/releases/2004/6-23-04.html .

¹⁵ “MSU Fights to Retain Freshman Students,” KFYR-TV, August 21, 2007, accessed August 26, 2007, http://www.kfyrtv.com/News_Stories.asp?news=9751 .

¹⁶ DeBare, Ilana, “Executive Style Coaches Put College Students on Track to Success,” San Francisco Chronicle, August 19, 2007, accessed August 26, 2007, http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/08/19/BU2QRJB29.DTL .

¹⁷ DeBare, “Executive Style Coaches Put College Students on Track to Success.”

Now Accepting Applicants!

This year we have $10,000 ready for the grand prizewinner of our Blogging Scholarship Contest.

The eligibility requirements are pretty simple:

• U.S. Citizen
• Attending school full-time in a post-secondary institution
• Have your own blog or be a blogger at a community blog

This was a very fun contest for us last year, and we know it will be even better this year. The award will be presented at the Blog World and New Media Expo in Las Vegas, November 8-9. We hope to see you there!

Don’t forget to APPLY TODAY…

College Cost Reduction Act “Soft” on Low-Income Students

The College Cost Reduction Act of 2007 passed the House and Senate, but is likely to be hung up with negotiations before it hits President Bush’s desk. Bush has threatened to veto the new measure due to the flimsiness of the bill in regards to low-income students. Many politicians have talked up the bill’s success, but much of this is marketing rhetoric.

As it currently stands, the College Cost Reduction Act is more oriented to post-college individuals, less focused on current students and those most challenged to get a college degree.

The biggest winners are the Pell Grant recipients—they will likely receive a significant boost in funds, although still far short of the funds once available only a few decades ago.

The bill cuts major subsidies to student loan lenders that offer the FFEL program. This action seems almost a reprimand for the past months’ worth of controversy brought on by unscrupulous and greedy lenders.

Components of the CCR Act:

• Pell Grants will be increased from $4,050 to $4,900 and a maximum $5,200 by 2011.
• Students pursuing a teaching profession stand to earn full tuition compensation in exchange for service in underrepresented schools. This takes calculated aim at the problem of inadequate teachers in poor schools.
• Forgiveness of student loans owned by public service professionals, including law enforcement, firemen, nurses, and even librarians after 10 years.
• $500 million in new investments to minority and underrepresented institutions.
• Student loan interest cuts for need-based loans.
• Federal student loan maximum borrowing limits to be increased.

“Drug Provisions” Remain Uncertain

Part of the proposed amendment to the Higher Education Act still faces an uncertain future. Currently any student convicted of a drug offense is summarily denied government aid regardless of how trivial the offense. Some sources suggest that the number of students affected by this controversial contingency is well over 100,000.

The FAFSA form requires applicants to answer the “drug conviction” question.

This “drug offense” measure was zipped onto the Higher Education Act of 1965 as the Aid Elimination Provision of 1998, also called the Souder Amendment.

We have only been notified of a couple submissions for our web design scholarship. Hoping to give more students a chance to discover this opportunity to win $5,000 we have extended the entry deadline until Saturday, August 18th. Please help out by doing one of the following

• applying
• telling any friends that might be interested in applying
• mentioning it on your site if your readers would be interested in applying

With the unfolding of the current fiasco between student loan providers and college financial aid offices, one student loan company has seen the fallout as a marketing opportunity. MRU holdings is using aggressive marketing reminding students of the recent fraud. The WSJ reports:

One of the MRU ads called the relationships between schools and lenders a “racket.” Another said more pointedly, “Before you choose, ask your financial aid office about the lenders on their preferred lender list. Ask if any of these lenders offered kickbacks or incentives to get on the list.”

MyRichUncle is offering a discount on their federally backed Stafford loans and PLUS loans with the hopes of later upselling students on more expensive private student loans.

A Government and Private Sector Conflict

Over the last few months, Big Student Loan has been under fire. Almost simultaneously two big guns aimed their sights on the industry: first, New York Attorney General Andrew Cuomo in February, launched further inquiry into the alleged improper goings-on between some college financial aid administrators and student loan lenders. Innuendo had continued to swirl for some time alleging paybacks, stock options, and pay for inclusion deals for the infamous preferred lender lists published by schools.

Also in February, Senator Ted Kennedy had amassed reports of similar near scandals thick enough to make a novel. His solution? Write a bill—the Student Loan Sunshine Act—that could federally regulate the lender-school relationship, now clearly spun out of control.

Senate Cuts Deep Into Big Student Loan

Late Thursday, the Senate voted 78-18 to a slew of new cutbacks aimed at Big Student Loan, almost as punishment for the last few months of bad press and just plain bad business. Senators voted to make repayment of federal student loans forgivable for “public service employees,” like law enforcement and public school teachers, and to raise the amount for Pell Grant recipients up to “$5100 by next year, and $5400 by 2011,” read a New York Times article (“Senate Approves Major Overhaul of the Federal Student Aid Program,” Schemo). The major change most consumers will see is a reduction in their student loan interest rates over the next few years, and the FFELP lenders will likely feel the sting of sweeping profit cuts, the subsidies they earn from the feds. Seems that most Senators (and their constituents) think that enough is enough.

The few critics in the crowd argued that these newest reforms were a cleverly disguised ploy to undo the Federal Family Education Loan Program (FFELP). Senator Kennedy applauded the moves, arguing that students and parents have been increasingly burdened with the high cost of continually inflated tuition and costly student loan repayments, including the FFELs.

Colleges That Choose Affordability Over Money-Making

Well outside the political sphere other developments of a student loan variety also took shape. New England’s prestigious, Amherst College, officially did away with institutional student loans and replaced them, 100%, with scholarships. The move is a measured step by AC to make their education more affordable for all students. Only two other schools, reported the Boston Herald, have taken such bold steps–Princeton University and Davidson College.

College costs have outdistance inflation by nearly 40% over the past 5 years. While government has been subsidizing education, many of these subsidies have been going to loan corporations like Sallie Mae, not students.

A new bill that was approved in the House of Representitives and is headed for the Senate may slash government subsidies to lenders by as much as $18.3 billion. To offset this drop they are also increasing Pell grants for students by over $500 over the next for years. The NYT reports on the changes

As well as cutting lender subsidies, the bill reduces the share the government would guarantee in the event of student default. It halves the interest rate on federally backed loans gradually over the next five years, to 3.4 percent from 6.8 percent, and would limit monthly payments to 15 percent of the borrower’s discretionary income.

The bill raises the maximum Pell grants by $500 over the next four years, to a total of $5,200 by 2011. It also grants $5,000 in loan forgiveness for police, firefighters, prosecutors and other public servants, and a complete release from student loans for public servants after 10 years. It would also provide for complete forgiveness of federal student loans after 20 years for economic hardship.

In that article they also said that the smaller student loan providers are likely to be hardest hit. That is not for the least of reasons because they can’t compete with equal marketing budget, and at as many as 800 US colleges the top loan provider offered over 70% of the student loans. Andrew Cuomo has been investigating some of those backdoor deals at Sallie Mae, Nelnet Inc., Education Finance Partners Inc., EduCap Inc., the College Board, and CIT Group Inc. for many months.

According to Cuomo, investigators found:

• Lenders pay kickbacks to schools based on a percentage of the loans directed to the lenders.
• Lenders foot the bills for all-expense-paid trips for financial aid officers to posh resorts and exotic locations. They also provide schools with other benefits like computer systems and put representatives from schools on their advisory boards to curry favor.
• Loan companies set up funds and credit lines for schools to use in exchange for putting the lenders on their preferred lender lists and offer large payments to schools to drop out of the direct federal loan program so that the lenders get more business.

Students: it Just Won’t Stop

State college tuitions are going up. So scream a disturbing number of news headlines. In Tennessee, the state community college system is boosting the tuition by a little over $130 dollars per person. Last year tuition within the state was raised, too, about 4 percent, in contrast to this newest increase of 6 percent. What are the major reasons for the hike? To “expand enrollment and educate more Tennesseans.” Are that many more students actually being educated, and at what price? The price is about 94 percent higher than it was just half a dozen years ago, argue residents. This shocking up-shot in state tuition is markedly out of step with workers’ wages and other quality of life metrics.

In Michigan, lawmakers have yet to balance their budget and right now it looks as though tuition will again go up. Governor Granholm rallies against the potential tuition crisis; she measures it against her term so far—it’s gone up “37-percent since she took office.”

New Hampshire is kicking up state college tuition, as well. Surprisingly enough, though, the biggest increase is being leveled at in-state students. State residents will pay 7 percent more for their state college education in 2008. Out of state students will only pay 5.2 percent more for their education. What do NH lawmakers contend are the primary reasons? First, money asked for from the government never panned out; a bigger state investment in low-income students has cost big; and then there are heady operating costs (maintenance, fuel for heating and cooling, and construction and repair materials).

Oklahoma is facing its own state tuition hike of over 8 percent (!). Critics of the hikes have leveled criticism at the state board of regents, which now governs the state higher education system. Some critics of the agency, claim things were better when the state legislature made the decisions.

While some of these tuition rises are typical, some critics fear the loss of middle-income students at state colleges, or an even bigger debt problem for new grads. Connecticut Governor, Jodi Rell, recently made a tough political decision—to deny state tuition to illegal immigrants. This move, a controversial one among Hispanic constituents, nevertheless was made with legal state residents in mind. Handing out discounted tuition to illegal students could cost the state millions, and in turn drive the cost of an affordable education too far afield for the average state resident.

To Do List: Get a 529 Savings Account

With all this talk about tuition hikes and no end in sight, maybe it’s advisable to renew chatter about the advantages to state-managed 529 College Savings Plans. These pre-tax savings accounts feature some very attractive incentives in over half the states that offer them. North Dakota just joined the ranks of those governments that will kick in $300 grants for low-income residents that open up 529 accounts.

Start saving early—who knows where states’ tuition could be in another decade or so. Click through the associated section of our site if you would like to find background information about your state’s scholarship, grant, and loan programs.