Tuesday, February 26, 2008

The New Math: Four Years of College...in Five Years

When one discusses the factors that drive college loan burdens, the fact that a FOUR YEAR degree----a misnomer for many----MUST be considered.

College graduation rates for the last 24 years reveal some interesting findings. In private four year colleges, 43% of graduates require MORE than four years to obtain a degree!! In public, state-funded four year colleges, 60% of graduates require MORE than four years to obtain a degree!! The national average for all four year colleges shows that 48% of graduates require MORE than four years to obtain a degree!!

Isn’t it about time to call a four year degree what it truly is?? A FIVE YEAR DEGREE----that is possible to obtain in four years----ONLY IF the sun, moon, and stars are perfectly aligned.

Is it any wonder that it is so difficult to budget for the cost of a degree, when the price of that degree is (according to the above statistics) often under-estimated by 20%.

More food for thought on why college loans are escalating more rapidly than any family budget item----with all deference to gasoline prices ---- which are controlled by the Middle East, NOT Americans!!

Thursday, February 14, 2008

Forgive Us Our Student Debt

I recently heard about a collection agency in the Southern Tier of New York State, which has 225 collection representatives who are ALL attempting to collect $1.5 Million in bad COLLEGE LOANS; that one small center is attempting to recover over $300 Million in college loans----IN DEFAULT!!

With a bit of imagination, what are those numbers nationwide?

One of the unknown statistics about college students is that almost 40% DO NOT GRADUATE. That means that many, many college students incur huge amounts of college debt but NEVER receive degrees.

Although much has been made of the impact of the sub-prime mortgage loan debacle, very little has been written about the devastating impact of college debt. The answer IS NOT in Federal assistance. Pressure must be brought to bear on the colleges who have no downward pressure on inevitable 6% yearly price increases.

In this politically-charged election year one of the issues that MUST be addressed is the increasing impact on future generations----who feel they have no other choice but to borrow greater and greater sums to fund their education.

Friday, February 8, 2008

College Financial Aid - the 1,000 Pound Gorilla

Recently I heard Hillary Clinton denigrate “predatory college lenders” in a political TV commercial.

As I reflected on the accuracy and intent of that comment, it caused me to reflect on the TRUE REASON for these so-called “predatory lenders.”

My wife and I attended a wedding in Boston last summer where the bride and groom had a COMBINED TOTAL of $208,000 in college debt! Then, last evening at our favorite restaurant, our waitress casually mentioned that she was finishing up her senior year in college (with a degree in Early Childhood Education), and she has $78,000 in college debt!

In the last 30 years colleges have raised their prices 294%, while the average starting salary of a college graduate (INFLATION—ADJUSTED!) is still $42,000 per year!!!

Why are colleges continuing to raise their prices, on average 7% per year??? Because students and families are willing to borrow the monies to pay those prices----with a FALSE perception that it will all be WORTH IT.

This is one of the biggest lies foisted on the American family today, and is propagated daily by academia.