TIME Education

How Colleges are Squeezing Students on Financial Aid

Dalia Garcia breathed a sigh of relief when she found out that she had been given enough financial aid to nearly cover the cost of tuition for her first year at California State Polytechnic University at Pomona. Because her father earned less than $20,000 a year as a janitor, college would have been out of reach without the help. The aid meant “having a sense of security,” she recalled. And as a high school valedictorian with a high grade-point average, Garcia was able to add several scholarships to her bounty.

Then, heading into her junior year, the money stopped.

“I would go to the financial aid office, they would direct me to websites, and everything was for first- and second-year students,” Garcia said, explaining that college officials told her she would have to find work-study programs or loans to cover whatever her family couldn’t afford.

“I was shocked,” she said. “Especially being closer to graduating, I thought, ‘Why wouldn’t they want to help me?’ ”

Many parents exulting at the financial-aid offers their children have received from colleges this spring are in for a similar surprise, several experts warn. As colleges compete to attract new students, they often often dangle more aid in front of prospective students who are still deciding where to go, and reduce the flow later.

The practice is well-known to education policy analysts. Ben Miller, a senior policy analyst at the liberal think tank the New America Foundation, refers to it as “bait-and-switch pricing.” Mark Kantrowitz, senior vice president at Edvisors, an organization that researches and advises on financial aid, calls it “front-loading.” He says it’s the result of schools offering more aid to first-year students and their parents as a kind of “leveraging; they’re using financial aid as a recruiting tool.” Once the student has been recruited, the financial aid declines.

Such drop-offs can leave students particularly vulnerable, especially in this moment of rising tuition rates. Front-loading leaves many upperclassmen facing the difficult choice of going deep into debt to stay in school, transferring or dropping out. To make matters worse, many private scholarships are also restricted to freshmen, and end after the first year. Discovering the loss of funding as suddenly and unexpectedly as many students do is like “getting to the edge of a cliff,” said Amy Weinstein, executive director of the National Scholarship Providers Association, or NSPA.

Kantrowitz estimates that about half of all colleges and universities front-load in some form. Indeed, Federal data bear out that the practice is widespread. They show that a lower percentage of undergraduates in general receive financial aid from colleges and universities than freshmen alone do. The amount awarded to the typical freshman is higher, too, before it then declines. More than 46% of freshmen get tuition discounts, according to an annual survey by the National Association of College and University Business Officers —but fewer than 41% of all undergraduates do.

Not everyone in the field believes the practice is misleading or even deliberate.

“The numbers are what they are, but there are so many reasons why it might be happening,” said Megan McClean, managing director of policy and federal relations at the National Association of Student Financial Aid Administrators. She points to circumstantial changes that could lead to diminished aid, such as a family’s financial situation improving, and upperclassmen who transfer to another school and need less grant money.

“I don’t think it’s intentional,” McClean said.

A 2013 report by the NSPA urged that financial aid administrators disclose to families of students whether they practice front-loading or not, either in person or in financial aid award letters.

McClean said her organization “encourages parents and students to talk up front” with colleges about their financial aid packages. But Kantrowitz said they may not get an honest answer.

“Schools aren’t necessarily open about this,” he said. He has attended meetings, he said, at which parents ask school officials if they front-load their financial aid packages, and the “school acts dumb. They prevaricate.”

Earlier clarity would have helped Garcia. After scrambling to fill the gap left by her diminished aid, Garcia got financial help from Bright Prospect, a nonprofit that assists high-achieving, low-income students, and graduated in 2013. She now works for the organization, managing scholarships, and said she sees a lot of students in a similar position. “The first year looks amazing,” she said, “and then, from the second year on, the financial aid goes down, and the loans increase.”

This story was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education

TIME

These States Have the Most Jobs For College Grads

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You'll never guess which little states hold the biggest opportunities

New college grads looking for work online have the best shot at getting jobs in Massachusetts and Delaware, a new study finds.

Since as many as 90% of jobs that require a bachelor’s degree or higher are advertised online, Georgetown University’s Center on Education and the Workforce took a comprehensive look at online job listings around the country to figure out where the jobs are, along with what types of jobs they are.

As might be expected, large states with big populations — notably, California, Texas, and New York — have the most online job ads, but this doesn’t tell the whole story. Georgetown did a deeper dive into the data to see which states have the most online job ads relative to the number of working, college-educated residents, providing a more accurate measure of the labor market for bachelor’s degree-holders in each state. “Strong job growth doesn’t necessarily translate into good job prospects [because] job growth also tends to bring increased competition,” the report points out.

When the numbers are crunched in a way that takes into account the number of workers, a clearer picture of job opportunities emerges: Massachusetts, Delaware, Washington state, Colorado and Alaska have the highest number of ads seeking candidates with bachelor’s degrees or higher per worker, respectively. Higher still is the nation’s capital: Washington, D.C. has three times the national average of online job ads relative to workers with college degrees. “The college-educated job seeker who is willing to move to a state with a high concentration of job ads per worker has a greater likelihood of landing a job than remaining in or moving to states with fewer job ads per worker,” the report says.

West Virginia residents with college degrees, in particular, might want to think about relocating: This state has the weakest online job market, followed by (respectively) Rhode Island, South Carolina, Mississippi and Hawaii. The good news is that the states with markets higher than the national average are geographically disparate, with most regions represented.

When it comes to the kinds of jobs employers looking for college grads are trying hardest to fill, the story is the same as it’s been since the recovery in the labor market began. “We found that two large occupational clusters – managerial and professional office and science, technology, engineering, and mathematics (STEM) – dominate the online college labor market, accounting for three out of every five online job ads,” the report says. Employers in the industries of consulting, business, financial and healthcare services are responsible for more than half of all the online job postings seeking college-educated candidates, while STEM jobs have more than three available job postings for every worker, more than twice as many as any other field. The states that saw the biggest growth in STEM jobs between 2010 and 2013 are Wyoming, Missouri and Wisconsin, and relative to the number of college-educated workers, Georgetown says Delaware, Massachusetts, and New York offer the best job prospects for college grads with STEM degrees.

 

TIME Higher Education

This Graduate Is Refusing to Pay Back Her Student Loans

"By using our debt as leverage, we’re making our voices heard"

A recent graduate of a for-profit college’s nursing program is refusing to pay back her federal student loans, saying the school defrauded her.

Mallory Heiney says her 12-month nursing program at Everest Institute, a Grand Rapids, Mich. school owned by Corinthian Colleges, failed to adequately prepare her for the state nursing licensing exam and put her $24,000 in debt. In a column in the Washington Post, Heiney writes that thousands of students were caught in Everest’s “debt trap.” She and several other students who have dubbed themselves the Corinthian 15 are demanding that the Department of Education discharge their federal loans.

“By using our debt as leverage, we’re making our voices heard,” Heiney wrote. “We are not asking for a handout. We are demanding justice for students ensnared in a debt trap.”

Heiney said she was inspired by Susan B. Anthony’s advocacy for women’s suffrage and by Rosa Parks’ efforts to end racial discrimination.

Corinthian Colleges, which once operated more than 100 campuses across the country, began shutting down much of its operations and selling off its assets last summer following a Department of Education investigation into its educational and financial practices.

Joe Hixson, a spokesman for Corinthian, noted that the vast majority of the students from Heiney’s nursing program successfully graduated, including Heiney herself, and that most of these students successfully passed the nursing licensing exam. “Recent criticism of Corinthian Colleges wrongly disparage the career services assistance that we offer our graduates and mischaracterize both the purpose and practices of the ‘Genesis’ lending program,” he wrote in an email, referring to Corinthian’s private student loan program.

A Department of Education spokeswoman said the agency worked with the Consumer Financial Protection Bureau to provide $480 million in loan forgiveness for borrowers who took out loans through Corinthian. However, she also encouraged students to continue paying back their outstanding loans to avoid default.

TIME College

Penn State Frat Suspended Over Facebook Photos of Nude, Unconscious Women

Page featured images of nude, passed out women and drug sales

A fraternity at Pennsylvania State University has been suspended after police accused members of operating a secret Facebook page that featured photos of naked women apparently taken when they were unconscious.

According to WJAC, police in State College, Pa. were given a tip about two Facebook pages where members of the Kappa Delta Rho fraternity allegedly posted images of drug transactions, hazing, and partially nude women. The women in the images appeared to be “passed out or sleeping,” according to police.

The Facebook pages, titled “Covert Business Transactions” and “2.0,” were invite-only. After the “Covert” page was shut down, “2.0” appeared in its place. The page had at least 150 members, including current students and alumni.

The Penn State Interfraternity Council said in a statement it has suspended the full chapter and it will undergo a “conduct review session.”

[WJAC]

Read next: The Historical Roots of Fraternity Racism

Listen to the most important stories of the day.

TIME Innovation

Five Best Ideas of the Day: February 25

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. The U.S. wants to hack your phone because it doesn’t have the real spies it needs.

By Patrick G. Eddington at Reuters

2. Eight universities account for half of all history professors in the U.S. How did that happen?

By Joel Warner and Aaron Clauset in Slate

3. Bill Gates is investing in low-tech impact entrepreneurs in India.

By David Bank in Entrepreneur

4. “Liquid biopsy” can detect cancer from a few drops of blood.

By Michael Standaert in MIT Technology Review

5. Let’s build the infrastructure to make microfinance institutions into true innovation hubs.

By Jessica Collier in Medium

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Education

You Can Now Get College Credit Without Ever Taking a Class

Students being evaluated for competency-based credit at Lipscomb University in Tennessee
Lipscomb University Students being evaluated for competency-based credit at Lipscomb University in Tennessee

At 56, Linda McCampbell discovered she could get the college degree she always wanted.

A Nashville paralegal for 30 years, McCampbell last year attended an eight-hour workshop to judge how her life experience might be cashed in for academic credits at Lipscomb University. The promise was alluring: the possibility of knocking months off a college education McCampbell had long abandoned as out of reach.

It turns out she qualified for an entire academic year’s worth of credits, and at a fraction of what two semesters of tuition would have cost.

“It wiped out my freshman year,” says McCampbell, who earned those credits by proving she could deal with a full inbox of tasks and solve problems with a group. The boost was enough to cure her of the longtime belief a degree was out of reach.

This sort of result that has led hundreds of colleges and universities to develop similar so-called competency-based programs, which let older students get academic credit by demonstrating proficiency in such things as leadership and organization.

That means those students can earn degrees more quickly and at a lower cost — even lower now that the U.S. Department of Education has begun a pilot program under which students at 40 institutions will be able to use federal financial aid to pay for it, which was not previously allowed.

But critics fear that in the rush to compete for students by promising them credits for experience, some colleges and universities will make getting competency-based credits too easy. Accreditors are still scrambling to set up standards for the practice. And a new study by the American Enterprise Institute raises other questions that remain unresolved, including how students will earn credit in this way, how much they will be charged for it and whether they will really save money over the long term.

Competency-based programs “could very easily devolve into diploma mills,” says Amy Laitinen, a former White House and Department of Education advisor who is now deputy director for higher education at the New America Foundation and an advocate of the concept. “It could go south very quickly.”

Designers of competency-based programs say they measure whether what people have already learned in life is enough for them to forgo academic courses typically required as prerequisites toward a degree.

Nineteen early adopters of the competency model — including Lipscomb, Southern New Hampshire University, Capella University and the University of Wisconsin — are working together to design standards for such programs in a collaboration called the Competency-Based Education Network, or C-BEN. (C-BEN is supported by the Lumina Foundation, a funder of the Hechinger Report, which produced this story.)

But many of the institutions being allowed to use financial aid for competency-based education are not associated with the effort to establish standards.

“My worry is that you’re going to see schools that don’t do the hard work,” says Michael Offerman, an Arizona-based consultant who helps universities and colleges develop competency-based programs. “If you don’t do it right, you could threaten not only your own institution, but also the movement as a whole.”

The nation’s six regional accreditors, whose job it is to ensure the quality of colleges and universities, have also joined together to figure out how to judge competency programs. It hasn’t been easy, says Kevin Sightler, a member of the task force who represents the Georgia-based Southern Association of Colleges and Schools Commission on Colleges.

“There’s a lot of confusion, even among the accreditors,” he says. “Everyone’s just trying to get their hands around it right now. It’s completely different from historical approaches.”

There’s little question accreditors will have their hands full soon. Competency-based programs are cropping up rapidly nationwide, from community colleges and small liberal arts colleges to the largest universities. Nine of the most active institutions alone collectively enroll more than 140,000 undergraduate and 57,000 graduate students in competency programs, according to the American Enterprise Institute report.

At least 200 schools are developing or considering competency-based programs, says Brian Fleming, an analyst with the higher-education consulting firm Eduventures.

“We think it’s only going to get bigger,” he said. “It is quite a Wild West.”

Lipscomb’s program has assessed more than 120 students, including McCampbell, since it started last year. In October, California’s Brandman University launched a fully online, competency-based bachelor’s degree with 44 students.

As colleges and universities see competitors bringing in new students with such programs, they’ll be tempted to cut corners, says Laurie Dodge, a Brandman vice chancellor and vice provost.

“Competency-based education is popular, and everybody wants a piece of it,” Dodge says. “There may be shortcuts or window-dressing.”

At its best, the competency model could help colleges turn out graduates who are prepared for the working world rather than just adept at cramming for tests. It could also bring in students at a time when enrollment is flat or declining, and when higher education is trying to tap into the growing market of students who are older than traditional college age. In the American Enterprise Institute study, 90% of the people who cashed in life experience for credit were 25 and older.

“I think it’s being seen as something that can help institutions sustain themselves,” says Charla Long, Lipscomb’s dean of professional studies. “This might eventually be seen as the new face of higher education.”

Lipscomb’s eight-hour assessment — the one that let McCampbell skip her freshman year — starts by giving students various tasks to complete within 90 minutes. Later, the students participate in leaderless workplace discussions about, for example, hiring policies.

Evaluators want to see students prove their critical thinking and problem-solving skills, Long says — something employers want, and complain that too few traditional college graduates have.

About 1 million people in Tennessee have earned some college credits but no degree, Long says, and competency-based programs could make it easier for them to get one.

For McCampbell, who started looking at schools once her two children graduated from college themselves, the Lipscomb program opened doors that were closed when she was younger.

“I didn’t grow up in money. They even laughed at you if you brought up college,” says McCampbell, who is pursuing a bachelor’s degree in integrated studies. “Something was always missing.”

This story was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education

MONEY Ask the Expert

This Formula Can Help You Figure Out How Much to Save for College

Ask the Expert - Family Finance illustration
Robert A. Di Ieso, Jr.

Q: “My husband and I have been saving for our kids’ college since they were born. They are now 4 and 6. Our initial plan was to just throw what we could into a savings account, then we moved that money to a 529. We make small monthly contributions, and also contribute some money whenever we get a bonus or they get a birthday gift from grandparents. However, we still don’t have a number in mind for what we actually need by the time they start school. How much should we be saving for them each month?” —Ryan Phelan

A: Congratulations for starting the saving process early and taking full advantage of compounding in that 529 account. That’s less money you’ll have to borrow later.

Now for the bad news: By the time your eldest child enters college, four years at an in-state public school will cost an average $130,000 and a private-school education will run $235,000 if prices continue rising at the rate they have for the last five years.

Footing the full freight will be unrealistic for most folks, especially those like you who have more than one child to put through school. Besides, you should also be saving for your own retirement—since you can’t fund that stage of life with loans as you can your kid’s education.

Mark Kantrowitz, author of Filing the FAFSA and senior vice president of the Edvisors Network, offers a more reasonable goal: Try to save a third of your kids’ expected college costs by the time they’re on campus. The next third can come from income (plus grants and scholarships) at the time tuition needs to be paid, and the final third you or your kid can borrow.

The idea is to spread the cost out over time to make that staggering price tag more manageable, says Kantrowitz. You’re putting together past income (what you’ve saved), current income (while the child is in school), and future income (yours or your child’s to pay back the loans).

So in your situation, a good goal would be to put away at least $43,000 or $78,000 for your eldest child, depending on whether you’re aiming to pay for public or private school.

You can estimate a savings number for your younger child—and anyone else can figure it out for their own kid—by figuring out the full cost of an average college education the year the child was born, since college costs increase by about a factor of three over any 17-year period, says Kantrowitz.

For help translating the big number into what you need to save each month—based on your state, income, children’s ages, and current 529 savings—use this 529 college savings planner tool from Savingforcollege.com.

More from Money 101:

Where should I save for college?

How much should I save for college vs. retirement?

What’s the best 529 plan for me?

TIME Innovation

Five Best Ideas of the Day: February 20

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Hollywood’s diversity problem goes beyond “Selma.” Asian and Latino stories and faces are missing.

By Jose Antonio Vargas and Janet Yang in the Los Angeles Times

2. Shifting the narrative away from religion is key to defeating ISIS.

By Dean Obeidallah in the Daily Beast

3. Innovation alone won’t fix social problems.

By Amanda Moore McBride and Eric Mlyn in the Chronicle of Higher Education

4. When the Ebola epidemic closed schools in Sierra Leone, radio stepped in to fill the void.

By Linda Poon at National Public Radio

5. The racial wealth gap we hardly talk about? Retirement.

By Jonnelle Marte in the Washington Post

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Education

Princeton Receives $300M Rare Book Collection, University’s Largest Gift Ever

Blair Hall on the campus of Princeton University
John Greim—Getty Images Blair Hall on the campus of Princeton University on Aug. 5, 2012

Donation includes the earliest Bible prints, the original print of the Declaration of Independence and Beethoven's signed music sketchbook

Princeton University declared Monday that it received a donation of books and manuscripts worth approximately $300 million, amounting to the most generous gift in its history.

Class of 1936 alumnus William Scheide died last year at age 100, bequeathing a 2,500-volume rare book and manuscript collection to the Ivy League university. The haul includes historic treasures like the six earliest prints of the Bible and the original printing of the Declaration of Independence. He also gifted the 1746-founded seat of learning with Beethoven’s music sketchbook, signed by the composer himself.

It is “one of the greatest collections of rare books and manuscripts in the world today,” said Princeton President Christopher Eisgruber in a statement. “I cannot imagine a more marvelous collection to serve as the heart of our library.”

The collection will be fully digitized to increase its accessibility to the public, which can view it upon request. It will remain in Princeton’s Firestone Library.

MONEY College

The Most Important Thing to Know Before Applying to Grad School

two diplomas two graduation caps stacked
Wendell and Carolyn—Getty Images/iStockphoto

A record number of college students think they'll need a master's to land a job. They'd be smart to weigh the costs against the benefits before applying.

Four years of college is no longer enough to give you an edge in the job market—at least that’s what most of the nation’s college students seem to believe.

More than three-fourths of freshmen at four-year colleges plan to go to graduate school, according the latest in a 49-year long UCLA survey of the attitudes of college first-years. (More than 150,000 full-time students at 227 universities were polled.)

That’s up from 51% in 1974, and only slightly below the record sent in the depths of the recent recession, says Kevin Eagan, interim managing director of UCLA’s Higher Education Research Institute.

Usually, interest in grad school spikes during economic downturns. But with the economy healthy, there’s clearly something else going on.

“The percentage of freshmen who think it is important to be well-off financially is at its highest point ever—more than 82%,” explains Eagan, “and during the recession these students were hearing of all of these folks with bachelors’ degrees who were unemployed. So they are recognizing that in order to achieve their objective they need additional credentials.”

Higher Degrees = Higher Pay

Indeed, recent evidence indicates that those with more education have better job prospects. The unemployment rate for those with professional degrees is almost half of the 4% rate for those with just a bachelor’s, for example.

And an analysis by the Georgetown Center on Education and the Workforce found that while the average bachelor’s-degree holder earns about $2.3 million over a lifetime, a master’s degree holder typically earns about $2.7 million and a professional degree earner typically takes home $3.6 million.

Higher Pay ≠ Fast Payoff

But Eagan and other analysts who’ve crunched the numbers say that graduate degrees are also an expensive gamble—and in some cases, have low odds of a financial payoff.

Tuition and fees for a two-year master’s program exceed $20,000 at the average public college, and $45,000 at the average private school. The tuition and fees for a degree from an elite graduate program such as Harvard Business School totals more than $120,000. Living costs can another $12,000 to $24,000 per year, depending on location. All together, you’re looking at a considerable expense on top of the more than $28,000 in undergrad debt new grads who borrow are carrying.

Plus, many graduate programs don’t result in big salaries.

Besides, in some fields, those with advanced degrees aren’t immune to the challenges of finding a job: For example, Eagan says he cautions students pursuing PhDs in humanities about the low odds of finding full-time jobs as professors, as more colleges are replacing tenured instructors with part-time adjuncts.

When a Grad Degree Makes Sense

Wondering if continuing your education pay off for you? There are three situations in which going back to school will put you ahead, according to several recent studies:

  1. You are aiming for a job in a field that either requires a graduate degree or in which employers use graduate degrees as a hiring screen. Besides the traditional graduate-degree-requisite jobs of doctor, lawyer and professor, a growing number of jobs require graduate study, including as librarian, social worker and physical therapist.And, in a study of 19 major employers, Sean Gallagher, an administrator at Northeastern University, found that a growing number of human resources administrators are giving preference to job applicants with masters’ degrees, and that masters’ often helped in competitions for promotions.
  2. You need the degree to get the public service career you want anyway. Students who use the federal direct Stafford and PLUS loan programs to borrow the full cost (including living expenses) of their graduate study and then spend 10 years working for a government agency or a non-profit can have much of their graduate school expenses forgiven under the government’s Public Service Loan Forgiveness program.According to research by Jason Deslisle, director of the federal education budget project at the New America Foundation, a new veterinarian with the typical education debt load of $132,000 who gets a government job and signs up for Income-Based Repayment (which caps payments at 10% of disposable income) will likely pay a total of only $36,000 in debt payments over 10 years. After the 120th on-time payment, the government would forgive a total of $147,000, which is all of the original debt, plus some unpaid interest. But beware: if you don’t end up making 120 on-time payments while working at public service, you will likely either have to pay off your debt in full, or have to keep making on-time income-based payments for at least 20 years, after which you may be eligible to have any remaining debt forgiven.
  3. You are in a field in which graduate degrees tend to lead to higher earnings. The Georgetown study found that graduate degrees typically add about $1 million to the lifetime earnings of, for example, chemists and financial professionals. But graduate degrees appear to have little overall impact on the average earnings of writers, editors, architects and many kinds of health-related therapists, such as audiologists. You can see the affects of advanced degrees on other occupations by viewing the full report.

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