Survey: Parents Say Hardest Part of Sending Child to College Is Figuring Out How to Pay for it

NEWARK, Del., August 24, 2012— The transition from high school to college evokes a range of emotions from parents according to a new survey from Sallie Mae, the nation’s No. 1 financial services company specializing in education. Most parents of this fall’s incoming college freshman class feel excited (75%) to send their child to college, and many express mixed emotions including feeling anxious (30%), nervous (28%) or stressed (20%).

For 60 percent of parents the most difficult aspect of sending a child to college is figuring out how to pay the costs of college. Nearly half have a pay as you go mentality with 31 percent expressing some concerns but feeling sure they’ll “figure something out.” Only one-third say they’re ready to pay for college this fall, while one-fifth express concern or misgivings.

“Entering your freshman year in college is a significant transition for the entire family,” said Joe DePaulo, executive vice president, Sallie Mae. “Getting ready to hit the books also means final financial deadlines are arriving. The good news is there are smart options to help make ends meet.”

Sallie Mae recommends the following last minute tips as freshmen and returning college students pursue their college careers:

Apply for federal aid. It’s not too late to complete the FAFSA, or Free Application for Federal Student Aid to apply for federal financial aid.

Pay as you go. Hundreds of colleges offer interest-free tuition payment plans that spread out payments over a number of months rather than one lump sum at the beginning of the semester.

Educate yourself on the best borrowing options. If you need to borrow, explore federal student loans first and fill the gap with responsible private education loans. Sallie Mae’s Smart Option Student Loan offers families the choice of fixed or variable rates and in-school payment plans, as well as zero origination fees and family-friendly rates and safeguards.

Use financial aid refunds wisely. If your college issues you a refund from grants or loans to cover your out-of-pocket educational expenses, choose the refund method—check, automatic deposit or debit card—that works for you and your banking habits. Be sure to understand any associated fees and steps you can take to avoid them. Keep careful track of your budget to use funds for their intended educational purpose, and, if you received more than you need, return the extra immediately to reduce your borrowing.

Safeguard your tuition investment. For many young adults and their families, college is the second-largest financial investment they’ll make. Families have the option to protect their investment with tuition insurance, yet 65 percent of students and parents say they are unaware of such an option. With Sallie Mae’s program, up to 100 percent of the lost cost of attendance is reimbursed if a student has to withdraw from his or her studies for medical or mental-health-related reasons.

Set expectations with your college-bound kid. More than half of parents have had frequent conversations with their child about keeping up with academics (59%). More than one-quarter of parents said they will contribute to college with “no strings attached,” but most parents have stipulations such as maintaining a minimum GPA (40%), staying out of trouble (28%) or working while in school (19%). Meanwhile, whether it is catching up or checking in, 40 percent of parents plan to stay in touch with their college student via daily text messaging.

Sallie Mae also released an infographic, “How Parents Feel About Their Children’s Transition to College.”

About the survey: Sallie Mae conducted an online survey of more than 500 parents of high school seniors graduating in spring 2012 and headed for college in fall 2012.

Five States Where College Tuition is Soaring!

For parents concerned about the rising cost of college, financial advisers have traditionally recommended public universities. After all, they almost always carry much smaller price tags than private universities.

But many state schools are now raising tuition at double-digit rates—sometimes with very little advance notice. Here are the five states where the cost of a public four-year college education has seen the steepest increases over the past few years.

California. Average tuition and fees for in-state student: $9,022 in 2011-12, up 20.5% from a year prior and 98.3% from five years ago.

And the worst could be yet to come. If state residents vote against state tax increases in the November elections, the school system will have to come up with money fast to fill the $375 million budget gap that would ensue, says Dianne Klein, a spokeswoman for the University of California's Office of the President. Under that scenario, tuition could rise 20.3% for the second semester of the upcoming academic year.

Arizona: Average tuition and fees for in-state student: $9,428 in 2011-12, up 16.8% from a year prior and 101.7% from five years ago.

This year, state funding will total $708 million, down from nearly $1.1 billion for the 2007-08 academic year, says Katie Paquet, spokeswoman for the Arizona Board of Regents.

Georgia. Average tuition and fees for in-state student: $6,808 in 2011-12, up 15.9% from a year prior and 74.2% from five years prior.

Last year, the state also reduced the amount of money it doled out through its merit-based Hope Scholarship.

And it's looking at cutting direct funding to higher education. Georgia Governor Nathan Deal recently proposed a $54 million cut through June 2014, which if enacted would reduce spending over that period to roughly $1.7 billion. A decision is expected early next year.

Washington. Average tuition and fees for in-state student: $9,484 in 2011-12, up 15.7% from a year prior and 67.3% from five years prior.

Income from sales taxes (the state doesn't have an individual income tax) slumped during the recession, leaving the state with less money to go around. So the state granted permissions to its public universities to raise tuition.

In June, the University of Washington announced a 16% increase in tuition and fees for the upcoming year.

Nevada. Average tuition and fees for in-state student: $6,044 in 2011-12, up 3.7% from a year prior and 65.8% from five years prior.

Over the past five academic years, Nevada raised tuition and fees at its community colleges by 48% on average, according to the College Board. Costs at four-year public colleges rose 66%. During the last academic year, the state approved an 8% tuition increase for all undergraduates, which kicks in this fall.

Source: Wall Street Journal

—AnnaMaria Andriotis 
SmartMoney.com

Countdown to College: Parenting hurting more than they're helping!

By Lee Bierer

Parents behaving badly – it happens all the time in the college admissions process. Moms and dads on both ends of the parental spectrum often make a mess of things.

Hovering parents try to control every step of the process, simultaneously sheltering and smothering their children. At the other extreme, you find the “You’re on your own, figure it out” parent. Plenty of evidence demonstrates the damage caused by helicopter parents (next week’s column), but what I’m seeing more frequently is a pendulum swing to the other side, with parents choosing not to be involved.

Here’s a fairly typical scenario: I receive a phone call from a parent who briefly describes the child’s academic standing. I’m told, “We haven’t done a thing about college. We’re lost. Please help us.”

But then they walk away, absolving themselves of any responsibility in their child’s college research and selection. The child, who hasn’t thought much about college, often feels overburdened and stressed. The parents think they’re empowering their children, but all too often their children aren’t ready to tackle this assignment on their own.

Parents need to understand the complexities of the college admissions process. There are colleges to research, campuses to visit, applications to complete, essays to write, letters of recommendation to request. And don’t forget the pressure of standardized tests. This is not the time to tell students who have been coddled since preschool to fly on their own. They need parental guidance, support and, most of all, encouragement.

Parents should evaluate where their child needs assistance. If you haven’t had this conversation with your child, ask what areas they’re anxious about and how they’d like you to help. Don’t assume your experience is irrelevant because it has been a few decades since you applied to college. It’s a learning process for everyone.

Bierer is an independent college adviser based in Charlotte. www.collegeadmissionsstrategies.com

Source: www.charlotteobserver.com

Colleges Pay Students to Graduate Faster

By STEVE YODER, The Fiscal Times

July 23, 2012

 

In Nina Kadjar’s sophomore year at the University of Texas, her mother ran across a webpage describing a new source of funds to pay for school. A little-known state program, called B-on-Time, could provide her daughter a zero-interest annual loan of between $6,000 and $7,000, with payments to start after graduation. That would make a significant dent in the $24,000 a year that Nina Kadjar needed for tuition and expenses. But the program had an even better twist—if she could get her degree in four years and maintain a B average, the loan would be completely forgiven. 

As the federal government and states look for ways to control rising tuition and student debt, they’re focusing increasingly on schools’ “degree productivity,” or how often and how quickly they move students to graduation. States are experimenting with how to help more students matriculate, and a few are trying something new—using the power of the purse to motivate them to get their bachelor’s degrees in four years.

Productivity is the new frontier in higher education. Back in the 1940s after the G.I. Bill passed, the focus was on ensuring access to college, says Stan Jones of Complete College America, nonprofit that advocates reforms designed to graduate more students. But with average tuition up 63 percent just since 2000, the conversation has turned from access to efficiency, with students in need of more financial aid than ever at a time when the federal and state budgets are in dire straits. “If we could get more folks to complete on time, we could make college much more affordable for families and lessen taxpayer costs,” says a source at the U.S. Department of Education.

Jones says universities and colleges need to do more than get people into school—they must turn out graduates, and quickly. In 1972, students took 4.3 years on average to get a bachelor’s degree; when a followup study was done in 1992, that had increased to 4.6 years. Today, the government uses a different metric to calculate graduation time, but data released earlier this year show that today’s four-year graduation rate across colleges is just 38 percent. “You always see [schools’] press releases about how many students they enrolled in the fall,” says Jones. “But they never tell you their graduation rates.”

There’s evidence that at least part of the increase in graduation times stems from students applying themselves less than in the past. A 2009 paper by two economists at the University of California found steep declines in the average weekly study time of full-time college students at four-year colleges—from about 24 hours per week in 1961 to about 14 hours per week in the 2000’s.

But many students are also working significant hours to pay for school and so find it hard to take a full load—45 percent of students at 4-year schools work more than 20 hours a week. Working that amount hurts their grades, according to one study. A 2010 report by the Southern Regional Education Board also documented schools’ failure to offer courses in a workable sequence. And students are taking too many credits—Complete College America’s data show that they’re graduating with 136.5 credits instead of the 120 they normally need for a four-year degree. That could be because at flagship schools like the University of Massachusetts, many students change majors or graduate with more than one.

Read more at http://www.thefiscaltimes.com/Articles/2012/07/24/Colleges-Pay-Students-to-Graduate-Faster.aspx#Ud2Mpw6o3KmWuQ12.99