Did you see that Hillary Clinton unveiled more of her education policy platform?  It was reported in an article in InsideHigherEd.com.  Part of her plan is to make college more accessible to students of limited means by using some economic tools and expanding the student loan program.  Here’s an excerpt from the article.

Sen. Hillary Clinton, the Democratic front runner for president in 2008, unveiled a college aid plan Thursday that would pour $8 billion a year in new funds into an expanded tuition tax credit, bigger Pell Grants, support for community colleges, and work force training, among other things. It would also require public colleges to set multiyear tuition rates to help families better plan to pay for college and compel them to publish information about the employment rates and earnings of their students upon graduation (proposals that even the Spellings Commission might love). And like the other leading Democratic candidates, Clinton calls for financing her increased spending in part by eliminating the guaranteed student loan program.

As a college counselor, it’s nice to see that access to higher education is being addressed in the campaign.  Perhaps it’s not as hot an issue as the Iraq War, and perhaps the folks at Ed in ’08 are not feeling that education is getting the attention it deserves.  But these issues of access are crucial in American higher education.
Mark Montgomery
Educational Consultant and Independent College Counselor
Technorati Tags: Hillary Clinton, education policy, student loans, financial aid, Iraq War Del.icio.us Tags: Hillary Clinton, education policy, student loans, financial aid, Iraq War Furl Tags: Hillary Clinton, education policy, student loans, financial aid, Iraq War

I recently began reading a new blog carnival that focuses on financial issues related to college.  It is hosted by the folks at College and Finance.  The latest issue is found here.  It contains a lot of interesting, helpful posts.  I’ll continue to check it out.
Mark Montgomery
Montgomery Educational Consulting

An article the other day on MSNBC asked the above question.
The answer? Hard to know. Depends on how Congress reforms the industry through oversight and legislation.
Here’s an excerpt:

Congress is also proposing significant changes in the way the $85 billion market for student loans is subsidized and guaranteed. The House and Senate have enacted separate bills with some common ground, but it remains to be seen just how the final law will impact the cost of a student loan.
Both bills would ease the burden on student by placing limits monthly payments based on income; once out of school, graduates would have to pay no more than 15 percent of their income each month. All debt would be canceled after 25 years. And more loans would be “forgiven” for graduates who take public-service jobs like teachers, nurses, police and firefighters.
The bills also both call for cutbacks in subsidies for lenders that participate in government-backed loan programs. By shaving roughly a half-percentage point from those subsidies, Congress is hoping save as much as $19 billion a year. The government would also require lenders to cover more of the losses from defaulted loans — the House and Senate bills differ on just how much more.
At issue is how and where those savings are diverted. The House bill would slash the rate on need-based loans in half — from the current 6.8 percent to 3.4 percent — and provide additional money for so-called Pell grants, a program that currently pays up to $4,010 a year in direct aid to low-income students. The Senate bill doesn’t include a rate cut, but is more generous with increases in Pell grants.

No matter what Congress does, three things will remain constant:

• 1. The cost of a college education will continue to go up.
• 2. More families will be taking out more loans to pay for college.
• 3. The amount of information necessary for families to make good consumer decisions to finance a college education will continue to grow.

Mark Montgomery
Montgomery Educational Consulting
Technorati Tags:
financial aid, student loans, educational consultant, MSNBC
Del.icio.us Tags:
financial aid, student loans, educational consultant, MSNBC

The New York Times reported on August 23 that the College Board–the home of the SAT–has decided to leave the student loan business in the wake of crackdowns on shady practices in the industry. Here’s an excerpt:

In explaining its decision to abandon the business, the College Board cited new legislation and regulations cracking down on relationships between lenders and colleges that have been enacted in the wake of revelations that numerous lenders were paying colleges commissions or bonuses in exchange for business. College officials have also received free trips, meals and other perks to win spots on the so-called preferred lender lists that students rely on when selecting a loan company. …

The association also emphasized that its student lending operation had accounted for less than 1 percent of the $618 million in revenue in the year ending June 30, and that shutting it down would affect only 15 employees.

It’s a shame that access to higher education in this country has become so expensive that families have been duped by dodgy lending practices. Let’s hope that this scandal will help clean up the industry a bit. Let’s also hope that families will become better educated consumers, and that they will find the expertise they need to play the college admissions and financial aid game.
Mark Montgomery
Montgomery Educational Consulting
Del.icio.us Tags:
college admissions, educational consultant, financial aid, College Board
Technorati Tags:
college admissions, educational consultant, financial aid, College Board

The September 2007 Issue of Consumer Reports contains a call for greater clarity and consistency in the way colleges award financial aid and communicate those aid packages to families. Here’s an excerpt:

Students and parents should have access to understandable information at critical points in the financing process. The current system makes that nearly impossible. Colleges calculate the cost of attending in different ways, so comparisons are difficult. Financial aid award letters don’t always make clear the difference between grants, which don’t need to be repaid, and loans, which do. They also give little or no guidance on how to minimize loans, secure low-cost financing, or figure out the bottom-line costs of loans.

The article goes on:

Research by Consumers Union, the nonprofit publisher of Consumer Reports, has found that students and their parents turn most often to a college’s financial aid office for the ins and outs of paying for an education. But the information they get is often inconsistent and at times misleading. For example, some expensive colleges give enticingly large financial aid awards, but hide the amount families must pay.

The editorial then calls upon Congress to make legislative requirements for colleges to disclose financial aid information in a more consistent manner, and for lenders to disclose loan terms more clearly.
All this points to the fact that colleges are businesses, and they will continue to try to entice students to their campuses. I don’t believe most college in America are trying to be sneaky. But they are trying to award aid dollars in a way that will bring in the maximum number of students to the campus at the lowest possible subsidy.
This also points to the fact that many families need independent, expert advice to help them navigate the college admissions and financial aid process. Colleges and lenders have become more savvy over the years in how they market to families. Now it’s time for families to learn how to best play the same game to their own advantage.
Mark Montgomery
Montgomery Educational Consulting
Technorati Tags:
college admissions, educational consultant, financial aid, Consumer Reports
Del.icio.us Tags:
college admissions, educational consultant, financial aid, Consumer Reports