Archive for ‘trends’

September 17, 2014

GoFundMe can help pay your college tuition bills

by Grace

Education is the second-most-popular category on GoFundMe.

It’s easy to do.

… GoFundMe and other sites, like Crowdrise, let individuals pursue personal fund-raising. You create a profile, including a photo and an explanation of what you’re seeking the money for, and then spread the word on networks like Facebook and Twitter.

The rules are loose.

Unlike Kickstarter, which requires its users to meet a goal to get the money, GoFundMe and Crowdrise allow individuals to keep the donations whether or not the goal is met.

Crowdrise’s chief executive, Robert Wolfe, said his site had recently added an option for individuals — rather than recognized charities — to raise funds and that the educational category is growing….

Neither GoFundMe nor Crowdrise independently verifies the claims made in profiles.

Since most donors are friends and family, low-income students often find it challenging to raise substantial funds.  Another barrier is that contributions to individuals are not eligible for tax deductions.

Other similar sites, like ScholarMatch, use more stringent criteria and do not allow donations to specific individuals.

A dramatic story helps raise more money.

Heart-rending stories tend to gain the most attention and donations from beyond a student’s circle of friends. A Vanderbilt University student whose profile told of her mother’s suicide shortly before her freshman year raised $50,000, double her goal. And GoFundMe says its most successful campaign raised more than a million dollars for a child with a rare genetic disease.

For students who are willing to share their stories, crowdfunding seems like a no-brainer.  Given that young people seem eager to share many details of their personal lives online, I can see how this idea will continue to grow.

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Ann Carrnssept, “That Selfie Is So Good, It Could Help You Pay for College”, New York Times, Sept. 11, 2014.

September 11, 2014

Homeschool is more popular than private school in this state

by Grace

In North Carolina, the number of homeschoolers has now surpassed the number of students attending private schools.

That statistic may seem shocking if you’ve been a stranger to the growth of the homeschooling movement, which has rapidly increased in recent decades.

In 1973, there were approximately 13,000 children, ages 5 to 17, being homeschooled in the United States. But according to the National Center for Education Statistics, as of the 2011-2012 school year, that number has grown to almost 1.8 million or approximately 3.4 percent of the school age population. Other sources report numbers well over 2 million.

Homeschooling has grown 27% over the last two years in North Carolina.

Those are pretty impressive numbers for a movement considered “fringe” not that long ago and that has only been legal in all 50 states since 1996.

The top three reasons parents give for homeschooling their children:

A concern about environment of other schools
A desire to provide moral instruction
A dissatisfaction with academic instruction at other schools

Dissatisfaction with Common Core may be fueling the growth in homeschooling.

And my guess is when the figures are reported related to the past two years you’ll see the number of parents citing “dissatisfaction with academic instruction” spike with the growing uprising against Common Core and national standards. Those who run local homeschooling groups in North Carolina say Common Core is a big factor.

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Genevieve Wood, “In One State, More Children Homeschool Than Attend Private Schools. Why That Shouldn’t Shock You.”, The Daily Signal, September 08, 2014.

September 1, 2014

Will today’s families regret that they “grossly overpaid” for college?

by Grace

20 years from now, people who grossly overpaid for their bricks & mortar college experience and are still paying off their massive student loans, will feel like incredible chumps.

Looking at families digging deep into their pockets to pay exorbitant college tuition, this same thought has crossed my mind.  As college administrators ponder the rough road ahead, Stuart Butler of the Brookings Institution advises that it will take more than a few tweaks for some institutions to survive the coming years.

…  if today’s college leaders—even at the Ivies—believe they can merely tweak their business models to carry them into the future, then they are in for an even more unpleasant surprise. They should ponder the still recent experience of the music industry, film and television, booksellers, and news media. If they did, they would soon recognize that the higher education industry is encountering a multi-pronged and existential threat composed of successive waves of disruptive innovation. This disruption will force top-to-bottom changes in the very concept of higher education and its relationship with the broader economy.

Butler sees a pattern affecting many industries, including higher education.

1. The underserved consumers are targeted first, “leaving the upstarts to occupy a sector of the market of little interest to industry leaders”.  Online news aggregators looked to “young people with distinct tastes and only casual interest in the news”.

…Early versions of online courses appealed to students who could not easily maintain a regular schedule, or who needed more time to understand material….

2. The initial product is substandard.

… The Apple I, introduced in 1976, hardly seemed a harbinger of doom to the managers of IBM’s mainframe monsters. So it is no surprise today to read college presidents denigrating MOOCs and the cheap, no-frills degrees being rolled out in Texas and Florida….

3. Episodes of adaptation and refinement occur amid harsh criticism.

… The clunky Apple I sold just a couple hundred units, but the elegant Macintosh, introduced twenty years later, ransacked the computing industry.

That’s why the shortcomings of MOOCs today should be of little comfort to the higher education establishment….

4. Unbundling is to be expected, as both hospitals and newspapers have discovered.

As with hospitals and newspapers, bricks-and-mortar institutions of higher education are particularly vulnerable to unbundling. Universities are modular institutions, and lower-cost competitors can easily siphon off customers and revenue from individual modules. For instance, universities are partly a hotel and food service industry, and partly sports and entertainment centers. They have invested heavily in buildings and services that package these elements together at essentially one price. But this makes them vulnerable to competitors that find much less expensive ways to provide discrete modules like housing or even basic first-year classes—or that simply shed costly facilities like libraries or student centers, as online colleges have done.

While credentials are highly valued, academic information is priced at nearly zero.

Indeed, the most challenging and decisive feature of unbundling and competition for the low-cost parts of the college bundle of services comes from the fact that the price of academic information is falling nearly to zero. Why pay a ton of money to sit with 300 other freshmen, listening to a Nobel Prize winner you will never actually meet on campus, when you have access to everything he has written, maybe even video versions of his lectures, free of charge on the internet?…

Even the social part of college can be unbundled.

But what about the social “college experience”? Well maybe that can be unbundled, too. Does undergraduate college have to last four years, or could the residential, networking, or sports elements occupy just part of the period of study at much less total cost? Britain’s Open University has for years brought students on campus for just a few weeks each year. It retains a similar model today using online classes instead of its original televised courses. Yet it is number three in the UK for student satisfaction, tied with Oxford. Moreover, for many young people today online networking provides the relationship of choice for professional purposes, not just for social life. For them, Facebook, LinkedIn, and texting can be a more efficient and even more personal way of building and maintaining future career contacts than paying for a dorm or hanging out at a college gym.

How should universities respond?  Brooks recommends that they need to “price discriminate” in a way that supports what they are selling.  And “they will have to determine their true competitive advantage”.  So some schools, Ivies and other elite institutions, will be able to maintain high prices for the exclusive campus experience they are selling.  Other schools will drop their prices for the cut-rate learning experience they provide.

How should families respond?  Butler’s forecast is consistent with other predictions of sharper class distinctions and a  ‘growing bifurcation between elite universities and “trade schools”‘.  So families should be careful about paying premium prices today for what may be heavily discounted 20 years from now.

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Stuart Butler, “Tottering Ivory Towers”, The American Interest, August 11, 2014.

August 20, 2014

Enrollment in two-year colleges continues to grow

by Grace

As families seek ways to make college affordable, the percentage of students choosing two-year colleges continues to grow.

Enrollment by School Type, Over Time

20140805.COCTwoYearCollegeGrowth2

School choice may be a key driver in containing total average spending.

This year, families reported the highest enrollment in two-year public colleges since the survey began, 34 percent in 2013-14 from 30 percent the previous year. At the same time, enrollment at 4-year public colleges declined from 46 percent to 41 percent. Although the proportion enrolled at 4-year private colleges remained the same year-over-year (22%), the average spending at that type of institution appears to reflect a reduced cost to the families who chose them.

In 2013 the private college tuition discount rate – the amount of financial aid as a percentage of tuition and fees – was “again at an all-time high”.

Not surprisingly, the amount spent to attend four-year schools is higher than two-year schools. The average yearly amount spent for two-year public schools was $11,012, a slight increase of $344 from the prior year but $10,060

In affluent Westchester County, New York, more high school graduates seem to be “choosing community college as a way to save money”.

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How America Pays for College 2014, Sallie Mae & Ipsos Public Affairs, August 2014.

August 19, 2014

Families are finding various way to cope with rising college costs

by Grace

Sallie Mae reports that American families are finding various ways to cut college costs.  They are relying more on out-of-pocket contributions and less on student loans.

Cost-Saving Measures

How America Pays for College 2014 finds that families are adopting multiple strategies to reduce the cost burden of paying for college, such as opting for in-state tuition (69%), living closer to home (61%) or at home/with relatives (54%), filing for education tax credits (42%), getting a roommate (41%)6, accelerating the pace of coursework (28%), or not deferring payments on student loans (23%). Not only was the choice of an in-state school the most frequently mentioned response, it is also most likely to be mentioned if only one cost-saving measure is adopted by the family. Most families, however, are likely to adopt a combination of cost-reduction approaches, such as opting to go to school in state and living at home or with relatives (43%).

Paying from current income and savings increased while borrowing decreased.

Out-of-Pocket Contributions

A significant source of college funding comes from the income and savings of families known generally as “out-of-pocket” contributions. In 2014, American families reported that out-of-pocket spending from parents and student combined was $8,850, accounting for 42% of the total amount paid for college. This breaks a three-year trend in decreasing out-of-pocket spending (46% in 2010, 41% in 2011, 40% in 2012, and 38% in 2013). Compared to 2013, American families increased their contributions from income and savings by $839 while decreasing the total spent on college by $295.

 

How the Typical Family Pays for College, Year-over-Year

20140804.COCHowFamiliesPayForCollege2 20140804.COCHowFamiliesPayForCollege3 20140804.COCHowFamiliesPayForCollege4

Borrowing

Families’ use of borrowed money used to pay for college in 2014—a combined parent and student amount of $4,610— dropped to the lowest it has been in five years. Borrowed funds paid for 22 percent of college costs in 2013-14, a decline from 27 percent the prior year. Student borrowing (15%) accounted for twice as much as parent borrowing (7%).

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How America Pays for College 2014, Sallie Mae & Ipsos Public Affairs, August 2014.

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August 12, 2014

Interest in Ivy League schools continues to be strong

by Grace

20140731.COCIvyLeague2014Apps3

Despite a drop in applications at Dartmouth, Harvard and Columbia, overall interest in Ivy League schools continues to be strong.

The number of applications has risen steadily for over a decade (perhaps best shown HERE), so even small drops in applications won’t have a huge effect on admission rates at the Ivies. Harvard may have dropped 2% in the number of applicants, but their admit rate went from 5.79% last year to 5.90% this year, not a massive change. Columbia received 1.73% fewer applications from last year to this year, but the competition is not exactly wavering; their admit rate for the Class of 2017 was 6.89% and for the Class of 2018 was 6.95%. Want an even scarier number? Across all Ivy League universities plus MIT and Stanford last year 305,101 students applied and 26,758 were accepted (8.77% overall acceptance rate). This year? 313,981 students applied and 26,154 were accepted. So what’s that percentage tell us? It’s not easier to get in. 8.33% overall acceptance rate. Admissions is a numbers game and the numbers aren’t bending.

There seems to be a general consensus that even with the current downsizing trend in higher education, “elite colleges will continue to hold their value”.

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“Breaking Down the Numbers in Admissions”, Application Boot Camp, July 24th, 2014.

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July 24, 2014

Loans overtook grants as the main source of college financial aid in 1982

by Grace

In the early 1980s loans begin to exceed grants as the primary form of college financial aid.

20140720.COCLoansHistory2

Figure 3 shows the amount of financial aid provided in each major category since 1980, in constant dollars (institutional grants are excluded, as they are treated as a discount off of tuition). In the early 1980s, federal, state, and private grants were the largest form of financial aid. But beginning in 1982, loans began to outpace grants, and since then they have remained the largest form of aid available to students to help them pay their costs of attending higher education.

The federal government had first stepped up its role in college financial aid in the 1960s.*

… The United States has long had financial aid for students, awarded in different forms (loans, grants or scholarships, government-subsidized jobs on college campuses, and tax benefits) and from different sources (federal government, state governments, higher education institutions, and private entities). The federal government first began provision of broad-based financial aid in the forms of grants and loans to students with the passage of the Higher Education Act of 1965. This Act also had a provision, the State Student Incentive Grant program, which encouraged states to create their own grant programs. These programs, along with the continued expansion of institutionally-funded scholarships, have helped to subsidize the price paid by students for attending college and have also served to lessen the impact of rising “sticker” prices, or the amount charged by universities before any discount is provided.

*The G.I. Bill began offering federal education benefits to veterans in 1944.

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Geiger, Roger & Heller, Donald. “Financial Trends in Higher Education: The United States” (Working Paper), Peking University Education Review, January 2011.

July 14, 2014

College tuition discounts continue to climb

by Grace

The college tuition discount rate – the amount of financial aid as a percentage of tuition and fees – is “again at an all-time high”.

20140710.COCTuitionDiscountRate2

College continue their “high tuition, high discount” policy.

Private colleges are continuing unabated their strategy of setting high sticker prices while giving most of their students steep discounts, according to the latest survey of private colleges by the National Association of College and University Business Officers.

The colleges, many of which are struggling to meet enrollment goals, are taking in only 54 cents for every $1 they claim to charge in tuition.

The “high tuition, high discount” business model is often confusing to students and parents, but it’s how things are done at most private colleges: the colleges charge high prices and then offer students they want huge discounts. The discount comes in the form of need-based aid for low-income students and “merit” aid for students with characteristics that make them desirable to a college. At wealthy colleges, endowments may have actual funds to replace lost tuition revenue, but most colleges are just waiving the chance of getting more.

Is steep discounting a desperate, short-term strategy?

“If you do too high a discount, then perceptions of desperation creep in,” says Rao. People start to ask: “Are they going out of business? Is this product a dud?”

Mitchell Hamilton is an assistant professor of marketing at Loyola Marymount University. He says deep discounts are a short-term strategy at best. “When you’re looking at discounts of half off or more, or buy one get one free, those are for businesses that need immediate results,” he says. “Private universities are hoping that this is just a strategy to stay afloat until the economic situation gets better.”

Most observers seem to agree that if this trend becomes a race to the bottom, the losers will be ‘”smaller-sized, ‘no-name,’ tuition-driven schools.”‘  Top ranked colleges will continue to thrive.

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Ry Rivard, “Discount Escalation”, Inside Higher Ed, July 2, 2014.

Anya Kamenetz, “How Private Colleges Are Like Cheap Sushi”, NPR Ed, July 12, 2014.

July 11, 2014

Parents help sustain their adult children’s extended financial adolescence

by Grace

Most parents are providing some financial support to their children even after they graduate from college, thereby promoting a period of sustained adolescence among 20-somethings.

… nearly 85% of parents plan to offer their children monetary aid after graduation, according to a survey Tuesday from Upromise by Sallie Mae. Almost one-in-three parents plan to provide their grad with financial assistance for up to six months, and around 50% plan to foot bills anywhere from six months to more than five years.

The new normal means that adult children continue to rely on mom and dad.

So, what has changed since my son graduated a few decades ago? Sure, new graduates are entering a much more difficult job market than he did, and even those who do secure jobs are unlikely to have the job stability he’s enjoyed. But a difficult job market is only part of the story. Social norms have shifted so that accepting help from Mom and Dad well into your 20s is “OK.”

Psychologists call this trend “emerging adulthood.” As Eileen Gallo and Jon Gallo note in their paper “How 18 Became 26: The Changing Concept of Adulthood,” for a certain socioeconomic set, growing up and moving out—permanently—means downgrading your lifestyle. The authors quote sociologists Allan Schnaiberg and Sheldon Goldenberg as stating:

“The supportive environment of a middle-class professional family makes movement toward independent adulthood relatively less attractive than maintenance of the [extended adolescence] status quo. Many of the social gains of adult roles can be achieved with higher benefits and generally lower costs by sharing parental resources rather than by moving out on one’s own!”

Keeping their 20-something children on the family cell phone plan is one common example of how “sharing parental resources” makes it easier on young adults as they transition to financial independence.  Another example is health insurance, where Obamacare now requires family policies to continue coverage for children up to age 26.  Individually these are small examples, but in total many parents are heavily subsidizing their adult children’s lifestyle.

Retirement expert Dennis Miller says parents should consider tough love instead of risking their own future financial security.

Retiring rich is hard enough without paying for your child’s extended adolescence. The job market may be tough for new graduates, but forcing your child to navigate it anyway might just be the best way to help.

Miller believes it’s possible to be supportive without hindering a young adult’s financial and emotional independence, and has some tips that can be read at the link above.

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Kathryn Buschman, “The New Normal? Some Parents Plan to Aid Children 5 Years after Graduation”, FOXBusiness, May 27, 2014.

Dennis Miller, Paying bills for adult children? Try tough love instead, MarketWatch, July 8, 2014.

June 26, 2014

More students are receiving special accommodations for SAT and ACT tests

by Grace

Some recent numbers show the increase in students receiving special accommodations for SAT and ACT testing.

During the 2010-11 school year, 5 percent of all test takers were provided with some feature that was intended to adapt the test to their needs, ACT spokesman Ed Colby said, compared with 3.5 percent of test takers in the 2007-08 school year.

The numbers of requests have been rising among SAT takers, too, along with an increase in test takers overall. Once students are approved for an accommodation, they don’t have to reapply. Of new requests—almost 80,000 during the 2010-11 school year, compared with 10,000 fewer five years earlier—about 85 percent are approved, said Kathleen Steinberg, the spokeswoman for the College Board. The ACT said roughly 90 percent of requests made are granted.

Rich kids are more likely to receive accommodations.

Controversy has swirled for years about which students deserve special help. A 2000 California audit concluded that those getting college entrance testing accommodations “were disproportionately white, or were more likely to come from an affluent family or to attend a private school.”

More than a decade later, the Tribune’s review of data obtained under open records laws indicates that’s true in Illinois, where the percentage of test takers with accommodations doubled the national average.

Schools in wealthy enclaves with predominantly white students were at the top of the list when it comes to students getting ACT testing accommodations in Illinois, the 2011 data show.

A recent report from the General Accountability Office found that testing for qualifying disabilities “can cost from $500 to $9,000″.  Wealthy families can afford to pay these costs when the schools will not.  They also tend to have the expertise and money to force schools to pay for legally required testing.

One local affluent school district recently had a long list of applications for accommodations that was waiting to be submitted, probably typical for high-income locales.

The most commonly requested accommodation is extended time, but some others include “a quiet testing room, a reader or a scribe, enlarged print test booklets and/or answer keys, the use of a computer, additional or extended breaks, and multiple-day testing on the ACT”

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Nirvi Shah, “More Students Receiving Accommodations During ACT, SAT”, Education Week, May 14, 2012.

 Diane Rado, “Many Illinois high school students get special testing accommodations for ACT”, Chicago Tribune,  April 29, 2012.

Jed Applerouth, “SAT and ACT Accommodations”, Independent Educational Consultants Association, April 9, 2014.

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