TIME Nepal

International Aid to Nepal Ramps Up

Supplies, medics, rescue teams and millions of dollars are pouring in

As the death toll from Saturday’s 7.8-magnitude earthquake surpasses 4,350, international aid agencies and foreign governments are scrambling to deliver much-needed financial assistance and supplies to Nepal.

Since Saturday, supplies, search-and-rescue and medical teams have been sent from around the world to Nepal’s only international airport, located in the capital, Kathmandu.

Here are some of those efforts:

The U.S. announced Monday it would donate an additional $9 million in assistance for Nepal, bringing the total to $10 million through the U.S. Agency for International Development (USAID). In addition, search-and-rescue teams have been dispatched to Nepal as part of USAID’s disaster-assistance response team and 45 tons of supplies have been dispatched.

“This emergency assistance builds on our years of support for risk-reduction partnerships in Nepal,” said Jeremy Konyndyk, director of USAID’s Office of U.S. Foreign Disaster Assistance.

India has been heavily involved in the aid operation to Nepal since Saturday, sending 1,000 National Disaster Response Force personnel to help with search-and-rescue efforts. In addition, India has deployed 13 aircraft, six Mi-17 helicopters and two Advanced Light Helicopters. On Sunday, 10 tons of blankets, 50 tons of water, 22 tons of food items and 2 tons of medicine were dispatched to Kathmandu. As well as aid, India has sent three army field hospitals, an engineering task force and medical units of civilian doctors, according to the Indian Express.

The U.K. is giving $7.6 million in aid, of which slightly more than half will address immediate needs in Nepal, with the rest to be donated to the Red Cross, which is helping with rescue and recovery efforts in Nepal. An eight-member team of disaster-response specialists has been working in Nepal since Sunday. Experts from a number of U.K.-based charities including the British Red Cross and Oxfam are operational in Nepal. A Royal Air Force plane carrying 1,100 shelter kits and more than 1,700 solar lanterns departed for Nepal on Monday.

“I have now activated the Rapid Response Facility. This means we can fast-track funding to aid workers on the ground so they can provide desperately needed supplies including clean water, shelter, household items and blankets,” International Development Secretary Justine Greening said in a statement on Sunday.

China sent a 62-member search-and-rescue team on Sunday and has promised $3.3 million in aid, including emergency shelters, clothing, blankets and power generators.

Israel has sent a 260-member team to Nepal to assist with rescue and relief operations along with 95 tons of aid and medical supplies. On Monday, a plane carrying a medical team of 200 doctors, nurses, paramedics, rescue teams and other personnel landed in Kathmandu and began to set up field hospitals.

Australia’s Foreign Minister Julie Bishop pledged Sunday $3.9 million in assistance that will be split between Australian NGOs, supporting U.N. partners and the Australian Red Cross.

Malaysia said Sunday it will deploy 30 members from the Special Malaysia Disaster Assistance and Rescue Team (SMART) and is sending 20 doctors to help with operations on the ground in Nepal.

Pakistan deployed four Pakistan Air Force aircraft carrying rescue and relief assistance, including a 30-bed hospital and a medical team of doctors and paramedics, to Nepal on Sunday.

The E.U. is making available $3 million in its response to the Nepal earthquake. This is in addition to assistance from member states and the deployment of the European Commission’s humanitarian aid and civil-protection experts to the worst-affected areas. Emergency aid includes clean water, medicine, emergency shelter and telecommunications.

“What is needed most are medical teams and relief supplies. I call on all E.U. member states to join the coordinated European response,” E.U. Commissioner for Humanitarian Aid and Crisis Management Christos Stylianides said in a statement on Sunday.

The U.N. has released $15 million from its central emergency-response fund for earthquake victims in Nepal. Valerie Amos, the under secretary general for humanitarian affairs, said U.N. agencies were coordinating international efforts and were working with partners in Nepal, including the government, to get aid to those affected.

The World Food Programme is also providing food and supplies as well as logistical support on the ground, and UNICEF has mobilized two cargo flights carrying 120 tons of humanitarian aid, including medical supplies, tents and blankets.

Other countries involved in donating financial aid or sending in personnel to help with rescue and relief operations include Canada, Bhutan, France, Italy, Japan, New Zealand, Norway, Singapore, South Korea, Sri Lanka, Switzerland and the United Arab Emirates.

But with so many cargo and civilian planes flying in to help, Kathmandu’s tiny airport is struggling to cope under the strain. Agencies warn that if you want to help, donate money not stuff and avoid hopping on a plane to Nepal to help with relief efforts in person.

“More than your plane ticket or your collection of old T-shirts, what is most needed in Nepal right now is money,” writes Claire Bennett in the Guardian.

Read this next: 6 Ways You Can Give to Nepal Earthquake Relief

MONEY College

5 Expensive College Financial Aid Gotchas

A financial aid letter might look generous but actually come with costly caveats.

It’s crunch time for high school seniors: May 1 is College Decision Day, the day most college-bound students will let universities and colleges know whether they will be enrolling. For students agonizing over multiple offers, a big factor in choices will (or should be) financial aid. After all, the less you borrow as a student, the less student loan debt you’ll have to repay after college.

But those financial aid letters students have received can be confusing at best, and downright deceptive at worst. One parent told me about the worst one her daughter received: “It showed the parents’ out-of-pocket cost after the small award, plus the maximum federal student loan, plus a big Parent PLUS loan … and it looked so reasonable,” she said. Her daughter didn’t fully understand that it would mean a big chunk of debt for both the parents and the student to repay after college.

When reviewing financial aid offers, here are five student aid gotchas to watch out for:

1. Loans in Disguise

Financial aid awards will often lump loans together with grants and scholarships and sometimes may not even use the word “loan” to describe money that will be borrowed. But a loan is a much different animal than grants and scholarships that don’t have to be repaid. “When I hear colleges talk about how loans make school more affordable, it’s misleading,” says Mark Kantrowitz, senior vice president Edvisors.com, which offers free tools to help plan and pay for college. “Loans really provide cash-flow assistance,” he explains. It’s not free money, even if it feels that way. “In most cases loans increase costs because they charge interest,” he says.

Lynn O’Shaughnessy, a higher education expert who teaches parents how to cut the cost of college at TheCollegeSolution.com, is especially concerned about parent loans listed as aid. “They’ll stuff a big Parent PLUS loan in there, but they shouldn’t even be in financial aid letters,” she insists. Interest rates are high, and any parent can apply for one. “Be careful if a big chunk of your award letter is a Parent PLUS loan,” she says.

2. Front-Loaded Grants

Grants and scholarships may make the first year look affordable, but that equation can change in subsequent years. How do you know if a school “front-loads” grants? It can be hard to tell, admits Kantrowitz. One approach is to ask the financial aid administrator what will be required to renew the awards in subsequent years. He also suggests using the government’s College Navigator website which lists average grants for the first year and all other years for each school. “It’s not perfect,” he says. But if you see a substantial decrease after the first year, that can be a red flag.

3. Missing Costs

If you simply compare tuition costs, you’ll likely be missing some key items, including room and board, meal plans, travel, books and “other” fees (a category that can rival a cellphone or cable bill in the number of add-ons). Be sure essential costs are listed and try to make sure they are realistic, Kantrowitz warns. “Some have a textbook allowance of $250 and in some courses a single textbook can be $250,” he says. When aid letters don’t list the total cost of attending that institution, awards may seem more generous than they really are.

4. Missing Expected Family Contribution

Your Expected Family Contribution (EFC) is basically a proxy for how much a family is expected to pay, at a minimum, for one year of college and it’s generated when a student fills out the Free Application for Federal Student Aid (FAFSA) or the CSS/Financial Aid PROFILE (which many private schools use). Just as you don’t have a single credit score, you’re likely to end up with multiple EFCs for private colleges. “Every school that uses the PROFILE can create its own EFC because there are hundreds of questions they can add,” says O’Shaughnessy.

If the EFC is not on your award letter, ask the school what number it is using. “Schools just don’t like to tell people what their EFC is because parents would then be able to tell if the financial aid package is a good deal,” O’Shaughnessy says. She gives the example of a student who is awarded $25,000 in grants. On the surface that may appear like a generous award, but if the total costs are $50,000 and the family’s EFC is $5,000, it’s not. (What that would mean is the gap between what was owed each year and what the family would need to pay would be $25,000 per year — for a family whose realistic ability to contribute is closer to $5,000 per year.)

5. Missing Bottom Line

The net price is the cost of attendance minus any grants you get from any sources. Some aid awards will list the true net price, but others will throw in loans. “You need to know how much you will pay after all the free money is deducted,” says O’Shaughnessy. It’s also possible to appeal a financial aid award if you think it’s too low or if your circumstances have changed since you filled out the FAFSA.

If you end up incurring large amounts of debt to pay for school, it can be difficult and painful to dig out. If you have a high monthly payment or you’ve fallen behind, student loan debt can make it difficult to get a mortgage or other lines of credit. You can see how student loans are affecting your credit by checking your credit scores, which you can do for free on Credit.com.

So read those letters carefully and if the true cost isn’t clear, don’t be afraid to ask questions. After all, this is your future you’re looking at — in more ways than one.

More from Credit.com

This article originally appeared on Credit.com.

MONEY Viewpoint

Taxpayers Should Stop Subsidizing “Country Club” Colleges

An education policy expert argues that it's time for more elite colleges to open their doors to low-income students.

For years, Washington University in St. Louis has held the dubious distinction of being the least socioeconomically diverse college in the country.

Just 85 members of its freshmen class entering in the fall of 2012 (5%) came from families with incomes low enough (typically below $50,000 a year) to qualify for a federal Pell Grant. (That’s the most recent year with federal data available.)

Washington University’s proportion of low-income students is remarkably tiny, considering more than a third of all full-time undergraduates qualify for the need-based Pell Grants. It’s also low for schools with tough academic standards. Other elite colleges maintain top reputations while providing many more opportunities to the non-rich: About a third of the students at the University of California-Berkeley—generally considered one of the top universities in the world—qualify for Pell Grants, for example. And more than 20% of students at elite schools like Amherst College and Columbia University come from low-income families.

Adding financial injury to this insult: “country club” private colleges that bar the door to the poor—thus reinforcing socioeconomic inequality—are receiving large tax subsidies from you and me, in part because of their tax-exempt status.

But there finally may be a little good college opportunity news on the horizon. Perhaps in response to the growing criticism of taxpayer subsidies of such country club colleges, some schools like Washington University are starting to at least inch towards providing more opportunities.

This January, Washington University announced a plan to double the proportion of Pell Grant recipients that it enrolls by 2020. Under the plan, Wash U. will spend at least $25 million a year for five years to increase the share of students who qualify for Pell Grants.

“Improving the socioeconomic diversity of our student body is not just important; it’s critical to our success as a university,” Holden Thorp, the university’s provost and executive vice chancellor for academic affairs, said in a news release.

Four other private colleges that currently have low-income populations of only about 10% tell me they are also now working to recruit more low-income students.

Some of the colleges say the problem—and solution—boils down to money.

Officials at Whitman College in Walla Walla, Wash., for example, say one key reason their student body is currently only 10% low-income is that the financial crisis of 2008 reduced their endowment, which is used to fund financial aid. They are now trying to raise more money for scholarships so a more diverse group of students can afford to attend the school. “We have a responsibility to increase access wherever we can,” says school president George Bridges, who is leaving Whitman at the end of the school year to become president of The Evergreen State College in Olympia, Wash.

Likewise, Elon University, in North Carolina, is in the middle of a 10-year campaign to double the amount of need-based institutional aid that it awards. “Elon must not become a gated community open only to those of privilege,” the college states on its website, “and our classrooms and campus life will be much richer when we recruit more students from diverse backgrounds who challenge and lead us by sharing their own life stories…” Because of the difficulty of raising the large sums needed, however, Elon is making “slow progress” in increasing the proportion of Pell students it enrolls, says President Leo Lambert. “We are digging hard into this issue of access, because it makes a big difference in the quality of the kind of community we aspire to be,” he says.

Other colleges are combining fundraising with new recruiting efforts. Colorado College is raising more money for financial aid and partnering with nonprofits such as QuestBridge to recruit low-income historically underrepresented students. “We are really diversifying the pool of highly qualified low-income students that we enroll,” says president Jill Tiefenthaler.

And Kenyon College, in Gambier, Ohio, is increasing its diversity in part by changing its application. In 2013, Kenyon simplified its admissions application, removing extra essays that the school found discouraged first-generation students. It seems to be working: For next year’s incoming class, Kenyon admitted 408 minority students, up 9% from last year, and 128 first-generation college students, the second most the college has admitted in the last decade. “It’s clear to us that we can do better than where we are and where we’ve been in recent years,” says Sean Decatur, Kenyon’s president.

But this battle is far from won. There are still plenty of other colleges that aren’t making an effort to provide opportunities to more than a handful of lucky low-income students. “Just trying to increase the number of Pell Grant recipients might be good for PR, but may be bad policy for our college,” says Randy Helm, the outgoing president of Muhlenberg College, a private college in Pennsylvania where only 8% of the students come from low income families.

Part of the reason is financial. Washington University can afford to spend more on financial aid, since its endowment equates to about $500,000 per student. Muhlenberg’s endowment equates to one-tenth of that: $50,000 per student.

Helm, who is retiring in June, doesn’t think it would be healthy for Muhlenberg to make a concerted effort to recruit and finance substantially more Pell-eligible applicants. If it did, the school would have to spend its entire $36 million financial aid budget supporting them, and wouldn’t have any aid left for middle-income students who are also struggling to pay the school’s $55,000 annual cost of attendance.

“We’re not going to be a school that serves the very, very rich and the very, very poor,” he says. “I don’t think that would be fair to middle-income students, the college, or the country.”

Another reason for the lack of college opportunities may be the pursuit of prestige. Muhlenberg, for example, devotes a significant share of its institutional aid to the pursuit of high-achieving students, who often come from well-to-do families.

A page on Muhlenberg’s website, entitled “The Real Deal on Financial Aid,” acknowledges that the college and many of its competitors often use institutional aid as a “recruiting tool.” “It used to be that you could try for that reach school and if you got in, you didn’t have to worry because everybody who got in, who needed money, got money,” the college’s financial aid office states. “Today, however, as colleges are asked to fund more and more of their own operation with less and less assistance from government, foundations, and families, they are increasingly reluctant to part with their money to enroll students who don’t raise their academic profile.”

Muhlenberg provides “merit aid”—which is not based on financial need—to about 32% of its freshmen, with an average award of nearly $12,500 per student, according to data the college reports to magazines that publish college rankings.

Higher education researchers, the news media, and even the White House have been putting colleges on notice that they must do a better job serving low-income students. It’s encouraging to see that this pressure has been pushing some of the biggest laggards to make progress in this area. Those colleges that continue to hold out, however, deserve additional scrutiny. At a time of growing inequality, we can no longer afford to subsidize colleges that cater to the rich at the expense of the poor.

(Here are Money’s lists of the Most Generous Colleges and the 25 Best Colleges You Can Actually Get Into.)

Stephen Burd is a senior policy analyst with New America’s Education Policy Program. This story was produced by The Hechinger Report, a nonprofit, independent news website focused on inequality and innovation in education.

MONEY College

What to Make of the Government’s College Watch List

Everest Institute in Silver Spring, Md. Corinthian Colleges, which owns Everest, Heald College and WyoTech schools, is being sued by the federal Consumer Financial Protection Bureau for what it calls a “predatory lending scheme,” the agency said Tuesday, Sept. 16, 2014.
Jose Luis Magana—AP Everest Institute was part of the troubled Corinthian Colleges.

A list of schools that are under the microscope for financial reasons was recently made public. How risky is it to attend a troubled school?

Regulators recently made public a once secret watch list of around 550 colleges under scrutiny for financial irregularities. But inclusion on the list doesn’t automatically mean the schools are about to fail, according to Department of Education regulators, college officials and even the reporter who triggered the release of the list with his Freedom of Information Act requests.

The list gained attention because of the Corinthian Colleges collapse last year. The education department placed Corinthian on the “heightened cash monitoring” watch list over concerns about the for-profit chain’s practices and finances, and then last summer restricted its access to federal financial aid, including loans, grants and work study. Within weeks the already weakened chain ran short of money and agreed to sell or close most of its 107 campuses.


Some of the chain’s 72,000 students are eligible for student loan forgiveness because their campuses closed. Those whose campuses were sold, however, are typically stuck with their debt even if their programs are no longer offered.

So the risks of attending a troubled school are significant. Until last week, though, the education department kept the list a secret, citing concerns that revealing a school’s regulatory status could cause it “competitive injury,” said Michael Stratford, the reporter with trade publication Inside Higher Ed who filed repeated FOIA requests over several months for the information to be made public.

In a blog post that accompanied the watch list’s release, department Under Secretary Ted Mitchell said publicizing it was “another step to increase transparency and accountability,” but said inclusion on the list “is not necessarily a red flag to students and taxpayers, but it can serve as a caution light.”

Mitchell wrote, “It means we are watching these institutions more closely to ensure that institutions are using federal student aid in a way that is accountable to both students and taxpayers.”

Stratford agreed that being on the list “is not an obvious indication of a problem” but is “certainly not a badge of honor.”

“A college can land on this list for any number of reasons, ranging from the really mundane things like not filing paperwork with the department on time to serious things such as the department having concerns about the financial viability of the college on a short-term, immediate basis,” Stratford said.

More than half of the institutions on the list are for-profit programs, including beauty, trade and healthcare training institutes. The list also includes small religious colleges and other private non-profit schools, a few public colleges, and several foreign institutions, including The Hebrew University of Jerusalem and Middlesex University in London.

The majority of the institutions are subjected to the less stringent of two levels of monitoring. Instead of the federal government advancing them money for financial aid, which is normally the case, they must finance themselves and apply for reimbursement. Colleges subject to this “level 1″ scrutiny include several Le Cordon Blue campuses, which are owned by Career Education Corp, and the Art Institutes, part of Education Management Corp, which has said inclusion on the list has not harmed students’ ability to access financial aid or its financial standing.

But 69 institutions are subjected to the higher level of review, which requires they submit detailed documentation for each aid recipient. Education department employees must review and approve the documentation before the financial aid is reimbursed.

The education department initially redacted the names of several of the 69, citing ongoing investigations, before releasing the names Monday. Most of them are flagged as having “severe findings” after audits.

Six public institutions also are under increased review, including Roxbury Community College in Boston; Fort Berthold Community College in New Town, North Dakota; VEEB Nassau County School of Practical Nursing in Uniondale, New York; Taylor Technical Institute, Perry, Florida; Pike Lincoln Technical Center in Eolia, Missouri; and Eastern Oklahoma State College, a community college in Wilburton.

Although the list can give families a heads-up that a college is facing extra regulatory scrutiny, it’s not really “a consumer information tool,” Stratford cautioned.

“It might be a good jumping-off point for students and families that want to do more in-depth research,” he said.

MONEY College

What Your College Isn’t Telling You About Costs

college graduate with price tag on cap
Burlingham—Dreamstime.com

One-third of colleges give students unrealistically low estimates of their living expenses, a new study finds.

It’s an exciting time of year for families and their college-bound students. Acceptance letters arrive, celebration ensues, college visits get scheduled. Now your biggest college worry switches to how you’re going to afford it.

As professors who study college affordability, we know that rising tuition is of real concern to parents and students. But our research has uncovered a surprising and previously little-known source of unnecessary confusion, worry, and heartbreak for students and parents: About one-third of colleges are providing families with cost of attendance estimates that are at least $3,000 less than the amount we estimate the school will really cost.

These are the findings of our recent study, in which we took a close look at what colleges estimate it costs to live off-campus, and what other sources say it really costs. We focused on the off-campus living costs because only 13% of today’s college students fit the traditional stereotype of living on campus. Fully 50% live off-campus on their own. (The rest live with their families and so tend to have lower living costs.)

We found wide variation in off-campus living allowances among colleges and universities located in the same area. For example, colleges in Milwaukee reported living allowances ranging between $5,180 and $21,276 for nine months. And as our chart below documents, we believe all colleges in Washington, D.C., a city with one of the nation’s highest housing costs, underestimate living expenses—in one case by more than $7,000 a year.

You may not realize how important such living costs, and the colleges’ estimates of them, are.

The College Board reports that the average student attending an in-state public university paid $9,140 in tuition in the 2014-15 academic year. But that was just 40% of the total cost of college for public college students who didn’t live at home during their studies. The typical undergraduate who isn’t living with family pays about another $10,000 for nine months of housing and food. Overall, undergraduates at public universities typically paid $14,200 in housing, food, transportation, textbook, and miscellaneous costs, bringing the total cost of a year at the average state university to $23,400.

The federal government requires colleges to provide students and their families with estimates of the costs of living on and off campus. The college’s estimates can be reached through many different approaches, and can be more or less accurate—it’s up to the school.

The “cost of attendance” (COA) estimate is crucial because it determines how much financial aid the family can receive. The federal government caps its aid at a school’s COA, so students who receive outside scholarships may see other aid eligibility reduced. Federal parent PLUS Loans, for example, allow parents to borrow up to—but no more than—their child’s full COA less any other aid.

In addition, families need accurate estimates of these living costs to make smart choices about which colleges they can really afford. The 33% of estimates that we believe are too low can cause students and families to make the heartbreaking discovery during the school year that the college they chose was much more expensive than they had budgeted for. When the money runs out, some students could have to drop out.

The 11% of estimates that are too high can lead families to mistakenly cross some schools off their list as unaffordable.

In order to assess the accuracy of the living allowance schools create, we constructed a standardized approach using publicly available data for each region and community in the country.

We found that nearly 45% of the living allowances reported by colleges and universities were off by more than $3,000. Most of the errors understated the likely cost of living. The underestimaters include colleges as diverse as the Bryant & Stratton College, Holyoke Community College, Chapman University, and Eastern Michigan University.

Even among public four-year colleges, which we found to be the most accurate sector, 30% of colleges reported living expenses that differed from our estimates by at least $3,000.

Having accurate information matters for people making college choices. Schools, states, or even the federal government could use the approach we developed to make the process of estimating living expenses and the COA simpler. This will also relieve colleges and universities of the time and effort required to make the computations, potentially saving even more money. Most importantly, it will help families get a truer sense of what college really costs and enable them to make wise college choices.

College Washington, D.C., living cost estimate*
George Washington University $12,828
Corcoran College of Art and Design $14,000
American University $15,359
Trinity Washington University $15,705
Gallaudet University $16,788
Catholic University of America $16,876
University of the District of Columbia $18,913
National Conservatory of Dramatic Arts $20,342
Goldrick-Rab & Kelchen $20,394

*The living cost estimate covers the cost of housing, food, transportation, books, supplies, and miscellaneous living costs such as laundry in Washington, D.C.

Sara Goldrick-Rab is Professor of Educational Policy Studies and Sociology at the University of Wisconsin-Madison and Founding Director of the Wisconsin HOPE Lab, where she leads a team of researchers seeking effective ways to make college more affordable. Robert Kelchen is Assistant Professor of Educational Leadership, Management and Policy at Seton Hall University and an affiliate of the Wisconsin HOPE Lab.

(To find the colleges that offer the best bang for the buck, check out Money’s college rankings.)

MONEY College

Principal: Colleges’ Chintzy Financial Aid Offers Betray the American Dream

150331_FF_CollegeChintzyOffer
iStock

Colleges and states are expecting students to take on an insane amount of debt.

Editor’s note: One of the nation’s leading public high school principals, a 2014 winner of the prestigious Harold W. McGraw Jr. Prize in Education, wrote this after viewing the financial aid awards sent by colleges to the seniors at his Philadelphia magnet high school. Two-thirds of his students at the Science Leadership Academy are minorities, and one-third are considered economically disadvantaged.

This year has been a fantastic year for Science Leadership Academy college acceptances. We’ve seen our kids get into some of the most well-respected schools in record numbers—and many of our kids are the first SLA-ers to ever get accepted into these schools.

Whether or not they are able to go to is another question.

Today, I was sitting with one of our SLA seniors. She’s gotten into a wonderful college—her top choice. The school costs $54,000 a year. Her mother makes less than the federal deep poverty level. She only received the federal financial aid package with no aid from the school, which means that, should she go to this school, she would graduate with approximately $200,000 of debt.

She would graduate with approximately $200,000 of debt—for a bachelor’s degree.

Now, how in good conscience could a college do that? I’ve sat with kids as they’ve opened the emails from their top choice schools. Watching the excitement of getting into a dream school is one of the real joys of being a principal. It’s just the best feeling to see a student have that moment where a goal is reached.

And as amazing as that moment is … that’s how horrible it is to sit with a student when they get the financial aid package and counsel them that the school just isn’t worth that much debt.

I sat with my student today and pulled up a student loan calculator. I showed her that $200,000 of debt would mean payments of $1,500 a month until she was 52 years old—and then we pulled up a budgeting tool so she saw how much she would have to make just to be able to barely get by.

(Are you in the same situation? Here’s how to negotiate for more aid.)

Then we looked at the state schools she’s gotten into, and we talked about what it would mean to be $60,000 in debt after four years, because Pennsylvania has had so much cut from higher education that Penn State is now $27,000 / year—in state, and we’ve noticed that their financial aid packages have dropped by quite a bit.

So we have to tell the kids to apply to the private schools because the aid packages the kids get from private colleges are sometimes significantly better than what the public schools are offering. Kids have to apply to a wide range of schools and hope. And then we sit down with kids and help them make sane choices, as the $60K a year schools send amazing brochures and promises of semesters abroad and pictures of brand new multi-million dollar campuses, all while promising that there are plenty of ways to finance their tuition.

(Check out Money’s lists of the 100 Best Private Colleges For Students Who Don’t Want To Borrow, 25 Most Affordable Colleges and the 10 Colleges With The Most Generous Financial Aid.)

Dear colleges—you are doing this wrong.

It doesn’t have to be this way. When I was a teacher in New York City even as recently as ten years ago, I felt that kids could go to amazing and affordable CUNY and SUNY schools if the private schools didn’t give the aid the kids needed. But Pennsylvania ranks 47th out of 50 in higher ed spending by state, and as a result, seven of the top 14 state colleges are in Pennsylvania.

And as private colleges hit times of financial crisis and public colleges become more tuition dependent, students are being asked to take out more and more loans, which is putting a generation of working class and middle class students tens—if not hundreds—of thousands of dollars in debt to start their adult lives.

The thing is—I still powerfully agree with those who say that a college education is a worthwhile investment. And on the aggregate, it is true – especially because the union manufacturing jobs of the last century have been lost. But when we look at the individual child, and the choices that kids and families are being asked to make, we have to ask how we can ask kids to take that kind of risk and take on that kind of debt.

Of course, all of this is exacerbated for kids from economically challenged families and for kids who are the first in their families to go to college. And if you are thinking about leaving a comment about kids getting jobs in college to help make it affordable, you show me the job market for college kids to make $30,000 a year while in school full-time. I must have missed those listings in the morning paper.

A college education can—and should—be a pathway to the middle class.

Colleges should have a moral responsibility to offer sane packages that don’t saddle students with unimaginable debt to start their adult lives.

Work hard, go to college, live a meaningful life. That is what we hear promised to children all the time from President Obama to parents across America.

Colleges and universities have to be honest and fair agents in that dream. Asking students to take out $30,000 and $40,000 of debt a year for access to that dream is a betrayal of the educational values so many of us hold dear.

Chris Lehmann is the founding principal of the Science Leadership Academy, a Philadelphia public high school. This story first appeared on his blog, Practical Theory.

MONEY College

Yes, College Costs Are Eating Up More of Your Income

A year of public college costs low-income families 40% of their annual salary now, up from 29% in 2007.

It’s not your imagination, parents: Your kids’ college costs are indeed eating up a higher percentage of your income, a new federal report shows.

The report, which looked at the costs of college in the 2011-2012 academic year (the last year for which data is available) also documents a shocking increase in net costs for America’s lowest earners. That’s raising worries that the poor are increasingly being priced out of college, one of the main paths to a berth in the middle class.

The study found that families with incomes of up to about $31,000—who were the lowest-earning 25% of all American families with kids in college at that time—paid, on average, $12,300 to send a child to a public university, after grants and scholarships were subtracted. That was the equivalent of 40% of that group’s top annual income. In the fall of 2007, that same group would have paid only 29% of their income, a full 11 percentage points less.

For the families in the lower- to- middle- quarter—$69,000 was the midpoint for families with kids in college—net public college costs ate up 23% of the group’s top income, a 2 percentage point hike from the share of income needed by similar families in 2007.

Upper middle class families also saw their net costs rise. Families with incomes of about $111,000 earned more than 75% of all families in the study with children in college. The group with incomes between $69,000 and $111,000 paid about $20,400 (or 18% of top earners’ income) to send their kids to in-state public college, up 2 percentage points from 2007. Families in the top quarter, earning $111,000 a year and up, paid an average of $22,800 for their kids to attend in-state public college.

The data show that when it comes to funding college, “it pays to be rich,” says Margaret Cahalan, director of the Pell Institute for the Study of Opportunity in Higher Education, a Washington, D.C., think tank. The findings, she says, are further evidence that claims the poor are getting more or better financial aid than the middle or upper classes “are simply not true.”

In fact, Cahalan says, the numbers show that financial aid has lagged so far behind rising living and tuition costs that many low-income students are being priced out of college. “Low-income students have to work too many hours to survive, and that is depressing their ability to compete and be successful,” she says. “Many of them end up leaving school because they can’t juggle work and school.”

A growing body of research shows that being priced out of college can have devastating lifetime effects. Workers without higher education are at a disadvantage in the job market and tend to get stuck in lower-paying jobs, according to several reports by the Georgetown Center for Education and the Workforce. A 2014 analysis of the job market, for example, found that just about 28% of all jobs in 1973 required at least an associate’s degree. By 2010, those requirements covered 42% of jobs. And by 2020, 47% of jobs are expected to require at least a two-year degree.

Income quartile
(annual income range)
1st
($0-$31,000)
2nd
($31-$69,000)
3rd
($69-$111,000)
% of top income needed to pay average net price (after grants are subtracted) for 2011-2 at a typical in-state public college 40% 23% 18%
% of top income needed to pay average net price (after grants subtracted) for 2011-2 at a typical private college 64% 34% 26%

Sources: U.S. Department of Education, Money calculations

Read next: How to Find a College That Won’t Drown You in Debt

MONEY College

How to Decipher a Financial Aid Letter

magnifying glass over $5 in dark
Alamy—Alamy

The financial aid letters that colleges send accepted students are often confusing. Here's how to figure out how much a school will really cost.

When colleges start releasing their admissions decisions toward the end of March, it’s easy for applicants and their parents to figure out the end result: You’re in, you’re out, or you’re on the waiting list.

Unfortunately, when those same schools release their financial aid decisions for accepted students, the results aren’t quite so clear.

Over the years that I’ve worked with families as an independent college admissions counselor, I’ve learned that the financial aid letters that arrive in the mail can be terribly confusing. Parents’ sweat turns icy cold as they try to figure out which college offers the best deal. It takes some work to decipher exactly how much help a family is being offered.

The first step for families trying to assess financial aid packages from different schools is to separate “family money” from “other people’s money.” This process helps focus the mind — and the budget — on forms of financial aid that truly reduce the overall cost of a college education.

Each college provides a total Cost of Attendance — the educational equivalent of the manufacturer’s suggested retail price. The COA includes tuition, fees, room, board, a travel allowance, and a bit of spending money that is somewhat randomly determined by the director of financial aid.

Generally, I find these estimates a bit low, so I encourage families to think about these variable expenditures — things like travel, pizza, cell phones, and dorm furnishings — and come up with a more realistic figure. Then I put these figures into a spreadsheet so that we can see how the starting price tags of similar colleges can vary widely.

Then we tally up the “other people’s money” in the financial aid letter — grants and scholarships with no strings attached. OPM reduces the bottom-line cost of a college education.

Throughout the college selection and application process, I like to help my families zero in on those schools that will be most generous. Assuming all has gone well, a good student may receive 50% or more off the price of tuition. That can be a good chunk of change.

Once we’ve subtracted the OPM from the COA, then we look at the part of the financial aid award that’s dressed up as “aid” …but is really just the family’s money in disguise.

This gussied-up aid comes in two forms. First is work-study aid, which is merely an expectation of a kid’s sweat equity in the coming years. Work-study aid is family money that doesn’t yet exist.

Then there are the loans. Generally, I won’t let my clients borrow more than the maximum that the government will lend to the student directly. These are the federal loans that max out at $27,000 for a 4-year undergraduate education.

Armed with all this information, we then create a spreadsheet to line up the different COA prices and subtract the OPM. That helps us arrive at a total cost of the education to the family — including both the immediate costs and the subsequent costs in the form of either future employment or loans that will have to be repaid.

And if we really want to get down and dirty, we can add the cost of interest over the life of those loans to illustrate exactly how much that college education will cost.

Unless the family has front-loaded the process by picking schools that are likely to maximize the grants and scholarships, I’ve found that most families are taken aback by the cost of college.

But with strong planning and a realistic look at the numbers, families can make wiser long-term financial decisions.

For example, a family I worked with a few years back made the painful but smart decision not to send their daughter to Notre Dame, which offered her nothing in scholarship aid, but to choose Loyola University of Maryland, which with a lower COA and hefty scholarship saved the family over $100,000 for her bachelor’s degree.

The family had money left over to buy their daughter a nice used car, cover expenses for a great summer internship in New York, and subsidize a spring-break service trip to New Orleans. And the young woman graduated from college debt-free.

As parents of college-bound seniors suddenly realize this time of year, a college education is not priceless. A cold, hard look at the numbers makes the price very clear, and enables a family to make the most reasonable financial decision possible.

———-

Mark A. Montgomery, Ph.D., is an independent college admissions consultant. He advises families around the country on setting winning strategies for both admissions and financial aid. He also speaks to schools and civic groups nationwide about how to choose, and get into, the right college. His firm, Montgomery Educational Consulting, has offices in Colorado and New Jersey.

MONEY College

The 50 Best Private Colleges for Earning Your Degree On Time

150316_FF_FastestDegree
iStock

There aren't many "super seniors" at these private schools, where almost every student earns a bachelor's degree in just four years—and avoids the high cost of a longer stay.

Paying four years’ worth of college tuition is hard enough. But too many parents and students don’t realize that there’s a good chance they’ll have to pay for five, since 45% of full-time students need at least an extra year of school to earn a bachelor’s degree, according to Judith Scott-Clayton, an economist at Teachers College, Columbia University.

That common miscalculation can be “devastating” to a family’s finances, says Jim Briggs, a founder of Reducing College Costs, a private financial aid consulting firm. Since an extra year at a private college can easily cost more than $50,000 these days, “we are talking about a lot of money,” Briggs adds.

Before committing to a college, you should check the four-year graduation rate with the U.S. Department of Education. If the rate is low, ask the college and some students why that is, Briggs advises.

While students themselves cause many delays—by flunking required courses or changing majors late in their college careers—some schools do an especially good job of helping students get the courses they need to finish up in four years, saving parents that unpleasant surprise of a fifth year’s worth of bills, Briggs says.

At these 50 private colleges, you’ll have the best chance of graduating on time. At all of them, the average student graduates in 4 to 4.1 years, and more than 80% of the student body earns a bachelor’s degree within those four years. This list, ranked by four-year graduation rate, also includes Money’s best college values ranking and our estimate of how much the degree will cost if you get the typical amount of financial aid.

Your net cost will be lower if you take advantage of, say, federal education tax credits, or if you receive scholarships from private organizations or federal, state, or local government agencies. It will be higher if you don’t receive any financial aid.

College State Money ranking % of freshmen who earn a bachelor’s in 4 years Estimated average net cost of a degree for class of 2019
1) Pomona College CA 50 93% $167,662
2) Haverford College PA 122 91% $187,297
3) Yale University CT 15 90% $188,279
4) University of Notre Dame IN 20 90% $190,073
5) Williams College MA 14 90% $173,630
6) Carleton College MN 79 90% $183,529
7) Davidson College NC 72 90% $170,095
8) Vassar College NY 129 90% $159,658
9) Hamilton College NY 101 90% $187,252
10) Amherst College MA 17 89% $161,350
11) Boston College MA 122 89% $207,603
12) College of the Holy Cross MA 101 89% $191,814
13) Colby College ME 86 89% $195,668
14) Swarthmore College PA 32 89% $180,033
15) Georgetown University DC 37 88% $210,612
16) University of Chicago IL 101 88% $194,477
17) Bowdoin College ME 44 88% $185,213
18) Bates College ME 150 88% $199,275
19) Washington University in St Louis MO 62 88% $218,216
20) Princeton University NJ 4 88% $150,602
21) University of Pennsylvania PA 11 88% $207,659
22) Harvard University MA 6 87% $186,658
23) Tufts University MA 72 87% $207,047
24) Johns Hopkins University MD 107 87% $216,263
25) Duke University NC 32 87% $198,588
26) Dartmouth College NH 24 87% $194,752
27) Cornell University NY 24 87% $200,157
28) Colgate University NY 27 87% $192,119
29) Bucknell University PA 45 87% $204,082
30) Vanderbilt University TN 50 87% $165,615
31) Middlebury College VT 47 87% $208,897
32) Harvey Mudd College CA 7 86% $193,324
33) Wesleyan University CT 169 86% $199,874
34) Northwestern University IL 129 86% $206,162
35) Brandeis University MA 248 86% $197,555
36) Columbia University in the City of New York NY 22 86% $212,954
37) Kenyon College OH 94 86% $196,119
38) Villanova University PA 114 86% $202,283
39) Washington and Lee University VA 39 86% $153,859
40) Macalester College MN 214 85% $143,259
41) Lafayette College PA 28 85% $183,806
42) Claremont McKenna College CA 47 84% $202,642
43) Emory University GA 156 84% $217,059
44) Babson College MA 1 84% $204,884
45) Massachusetts Institute of Technology MA 3 84% $159,316
46) Wellesley College MA 95 84% $170,844
47) Franklin and Marshall College PA 248 84% $196,727
48) Brown University RI 19 84% $197,789
49) Occidental College CA 285 83% $191,630
50) St Olaf College MN 359 83% $139,836
MONEY College

The 10 Colleges With the Most Generous Financial Aid

Vanderbilt University
courtesy of Vanderbilt University At Vanderbilt University, the average merit award tops $20,000.

These top schools offer enough money to cover students' financial needs—and hand out award ample merit grants to high achievers too.

If you need a lot of financial help to pay for college, you’ll have much better odds at a schools that has a generous aid budget.

Unfortunately, these days that’s a small group. The average college provides only enough scholarships or grants to meet 70% of what low- and moderate-income students need to pay the bills, according to data provided by the colleges to Peterson’s.

In all, only 64 colleges in the country say they hand out enough aid to meet the full demonstrated financial need of every regularly admitted undergraduate, according to Peterson’s data. And many members of that elite group, including schools in the Ivy League, don’t provide a penny in merit scholarships. That means no scholarships to students who don’t qualify for need-based aid, no matter their academic achievements.

So Money crunched financial-aid data to find the 10 schools on our Best College Values list that not only provide 100% of the scholarship money they think you need, but also have large merit-aid budgets to help high-achieving, wealthier students.

It’s important, however, to be realistic about what’s “generous.” When colleges say they “meet full demonstrated need,” that doesn’t mean they give everybody full-tuition scholarships. Colleges first calculate how much they think your family can afford to pay (also known as the “expected family contribution”), using the financial information you provide on the FAFSA or the College Board’s CSS/Financial Aid Profile.

On top of that number, many colleges add an expectation that students will take out loans and earn a few thousand dollars a year. The difference between the total expected student and parent contribution and the cost of the college is your “need.” That’s the amount that the most generous colleges will provide in need-based scholarships. Merit scholarships are awarded without regard to your family’s financial situation. (For tips on how to appeal for additional aid, click here.)

School Money rank Avg. est. total family education-related debt Est. average net price of a degree % of students who get merit awards Average merit grant
Vanderbilt University 49 $6,649 $160,791 10% $23,789
Rice University 20 $8,447 $149,851 15% $11,833
Duke University 32 $9,694 $192,804 12% $19,823
Davidson College 72 $10,842 $165,141 6% $22,246
Grinnell College 144 $11,325 $123,981 15% $15,093
University of Chicago 106 $12,986 $188,813 17% $10,205
Kenyon College 94 $13,313 $190,407 13% $13,040
University of Richmond 120 $14,317 $157,221 16% $23,300
Washington and Lee University 39 $15,270 $149,377 8% $35,060
Harvey Mudd College 7 $17,736 $187,694 20% $9,743

Notes: Average total estimated debt is federal student debt and parent Plus loan borrowing per graduating senior; net price for freshman starting in the fall of 2014.

Sources: Peterson’s, U.S. Department of Education, Money calculations.

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