Posts tagged ‘Tuition payments’

July 18, 2013

Don’t hold your breath for Oregon’s ‘free’ college tuition plan

by Grace

“Pay it Forward, Pay it Back”,  Oregon’s plan to let students attend college without paying tuition, needs a lot of work before it becomes a viable solution to making higher education more affordable.  First of all, despite the headlines, it’s not “free” tuition.

When an advertisement says “No money down,” an asterisk and some fine print typically follow. And it’s probably wise to look for that.

That seems to be the case with an Oregon proposal that has generated headlines such as “Plan would make tuition free at Oregon colleges,” “Oregon is doing free higher education the right way,” and “Oregon looking to eliminate tuition and loans for higher education students.”

Despite the headlines, the state didn’t suddenly abandon all plans to charge tuition. Last week the Oregon legislature took the first steps toward possibly implementing a plan that would allow public college and university students to forgo upfront tuition payments in exchange for paying a portion of their wages back to their alma mater for about 25 years following graduation. While it may mean no money down, it could still add up to large tuition bills.

One proposal calls for students to agree to pay “3% of their salaries annually for 24 years“.

Don’t hold your breath.

  • It is unlikely to become active for another three to four years at the earliest.  The bill still requires the governor’s signature, and many logistical issues need to be finalized before a possible 2015 pilot program.
  • The budget for implementation has not been approved, a significant hurdle given the current economic climate.
  • The plan faces strong opposition from many critics, particularly those who see it as transferring increased financial responsibility from the taxpayers to individual students.

A myriad of potential problems

Pay it Forward faces a myriad of potential problems.  It does not seem to address the problem of soaring college costs, but only defers payment to some future time of supposedly improved economic conditions.  In particular, with dropout rates approaching 50%, many who leave college without degrees may find it particularly challenging to pay back tuition costs.  There is also concern about how the program can be manipulated, with graduates taking on jobs that pay in cash to escape paying back their debt.  And then there’s the problem how this program would drive away many of Oregon’s strongest students, those with the highest potential to earn financial aid at out-of-state schools.  This would increase the percentage of low-earning participants, creating an imbalance that could threaten the financial stability of the program.

Related:  Oregon’s Very Radical and Very Terrible Plan to Make College ‘Tuition-Free’ (The Atlantic)

May 9, 2013

Tuition discounting grows to all-time high at private colleges

by Grace

Tuition discounts continue to climb at private colleges.


The average “tuition discount rate”—the reduction off list price afforded by grants and scholarships given by these schools—hit an all-time high of 45% last fall for incoming freshmen, according to a survey being released Monday by the National Association of College and University Business Officers.

Rising discounts along with the smallest sticker price increases in years have combined to make college more affordable for many families.

“It’s a buyer’s market” for most colleges “as more families focus on cost and value”.

Some facts and figures:

  • 65% of private colleges increased their discount rate in the fall of 2012.
  • About one in eight U.S. undergraduates is enrolled at a private nonprofit college, which provided 70% of all grant aid to undergraduates in 2009.
  • “The average discount rate at private colleges has climbed for seven years in a row.”
  • The median sticker price at about 280 private schools rose 3.9% last year, the smallest increase in about 12 years.
  • At four-year public colleges and universities, in-state tuition and fees rose 4.8% last year, also the smallest increase in about 12 years.
  • “The discount rate for public universities fell modestly in 2012 … after rising from 2007 to 2011.”
  • Last fall, enrollment fell at about half of 400 private colleges surveyed as the number of high school graduates dropped.

Both need- and merit-based aid appear to be part of this trend of growing discounts.

The economic downturn boosted the number of families who qualify for aid. In addition, even those earning too much to demonstrate need under aid formulas “expect to see some sort of merit aid,” unless the school is highly selective, said Trey Chappell, a college adviser in Scottsdale, Ariz.

Is it a “fundamental shift”, or simply the result of a weak economy?

The question of whether the revenue problems facing colleges and universities are a result of a fundamental shift in the country’s attitude toward paying for college – the so called “college bubble” – or whether it’s simply the result of several years of weak economic growth will only be answered if families begin to experience the kind of economic growth they were accustomed to prior to the recession.

Related:  Tuition Discounting: Not Just a Private College Practice (CollegeBoard)

April 30, 2013

Families paying for college tuition have been hardest hit by inflation

by Grace

It’s clear to see which group has been hurt the most by rising inflation over the last 30 years.


Inflation disproportionately affects specific groups of people, with families paying college tuition among those who have been hit the hardest.

The increase has been ‘staggering’.

According to the Bureau of Labor Statistics, while the Consumer Price Index for all urban consumers (CPI-U) has risen 179 percent since 1980, college tuition and fees have increased nearly five times more— a staggering 893 percent.

If we use our imagination and apply the staggering inflation rate of higher education to other consumer items, it would mean that a pair of jeans that cost $12 in 1980 would cost about $120 today, and a house that sold for $125,000 back then would sell for about $1.2 million today.  The unfortunate reality is that college tuition of $1,600 in 1980 is priced at about $16,000 today.

HT Joanne Jacobs


March 18, 2013

College tuition benefits are cut for soldiers and expanded for illegal immigrants

by Grace

One news source labeled this scenario as ‘upside down’.

Army suspends college tuition assistance.

The Army announced Friday it is suspending its tuition assistance program for soldiers newly enrolling in classes due to sequestration and other budgetary pressures….

The Army’s announcement follows a similar move by the Marine Corps.

Colorado will lower college tuition for illegal immigrants.

The bill allows students who graduate from Colorado high schools to attend college at the in-state rate regardless of their immigration status.

 20,000 illegal aliens apply for college financial aid under California’s new Dream Act.

More than 20,000 college-bound students are seeking state financial aid for the first time under California’s new Dream Act laws that allow them to get the help despite their immigration status.

While far from a complete picture, that number is the best indicator yet of how many students hope to benefit from a pair of laws that could radically change the college experience for a generation of students whose parents brought them to the U.S. illegally when they were young — the same group that has taken center stage in the national immigration reform debate.

Related:  More states are allowing in-state college tuition for illegal immigrants (Cost  of College)

August 3, 2011

Paying college tuition is like . . .

by Grace

“Paying college tuition is like buying two sports cars each year, driving them to college and leaving them on campus with your kid.”  —  A car enthusiast describing the pain of paying for college.

Makes me think of this graph from Professor Mark J. Perry.

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