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Articles: Financial Services

Driving college loan defaults down

The coming change in how student loan default rates are calculated may mean bad news for some colleges and universities.

With the new calculations, the rate at which a group of students later defaults on loan payments will increase for most institutions, and schools with a particular default rate for three consecutive years will lose the ability to give Pell Grants. That’s why many are seeing this as the ideal time to look at how default prevention services are managed.

“We include in our emails a link to a brief video that explains that we are counselors, not collectors, working on behalf of the college the borrower attended, and that we work with borrowers and their loan servicers to resolve their loan payment issues. The video invites the borrower to call us.”

—Craig P. Anderson, senior vice president, business development, USA Funds

Tough economic times are forcing campus CFOs to expand their roles.

Rising operating costs, unstable revenue streams and continued tough economic times are forcing the campus CFO’s role to grow, say higher ed presidents surveyed by executive search firm Witt/Kieffer.

In the report, 14 presidents from a mix of public and private institutions of all sizes commented on today’s financial pressures.

Shirley Mullen is president of Houghton College (N.Y.).

Higher education is in the dock in 2014. The questions are flying:

Why does it cost so much? Why does it cost more each year?

Why do so many students not finish? Why can’t they get good jobs? Why is it not equally accessible to all?

Why is it not doing a better job training teachers for K12?

What do we have to show for the trillion dollars in student loan debt? Who will repay it?

There’s value in treating noncredit courses as more than just an add-on to degree programs.

Georgetown University officials had a bit of an epiphany recently about the impact of their noncredit courses. While the offerings had been around since the 1990s, administrators hadn’t realized the big benefits they could bring to the institution.

A transcript highlighting the full student experience at Elon University—including study abroad, research and service learning participation—is offered. When an e-transcript request is made, both the traditional one and the Elon Experiences Transcript can be combined into a single PDF file.

Rather than dealing with the intensive labor involved in sending and receiving paper transcripts—and frustration from students and graduates accustomed to automation—most colleges and universities have implemented electronic transcript capabilities.

Colleges and universities that have not yet implemented electronic transcripts may be selling their students short.

Not only do e-transcripts require less staff time and ensure better results through trackability and online security, but they also can be delivered almost instantly.

William M. Courson is president of Lancaster Pollard Investment Advisory Group.

Monetary policy in the United States took a dramatic turn with the introduction of quantitative easing after the financial crisis of 2008.

Although it achieved its primary objective by forcing down long-term interest rates, it also increased the supply of money in the economy, which has contributed to inflationary pressures in the past.

While we are fortunate to have witnessed a lengthy and very low inflationary environment, as money supply increases, the probability of higher inflation also increases.

Cougar Corporate Partners, a new University of Houston giving program, lets companies invest directly in programs that will have an immediate impact on students who make up the future workforce.

Half of each donation is funneled into scholarships, the first $5,000 of which are being awarded in August. The other half of the donation is split between the M.D. Anderson Library and the University Career Services Center.

42 states increased higher education funding in the past year by an average of $449, or 7.2 percent, per student. Yet, per-student funding still remains below pre-recession levels in 48 states

As the long-lasting effects of the Great Recession slowly fade, most states have begun rescinding cuts made to public higher education since 2008. 

Eight states, however, have continued reducing funds, according to a report by the Center on Budget and Policy Priorities (CBPP). Those that continued to cut per-student funding in the past year are:

Exploring the shore: Roger Williams University has found a new source of revenue in tapping its scenic waterfront campus to  expand its once tiny summer programs. (Photo: Peter Silvia)<p>

Five years after the Great Recession’s official end, higher ed endowments and fundraising are finally recovering, but there is no rising financial tide that’s lifting all boats—especially smaller ones that depend heavily on tuition.

Along with enrollment, public funding and debt, providing health care to employees will be among the top financial pressures on higher education in the coming years, say several campus administrators.

One proven way to improve retention is by supplementing traditional academic advising with student success coaching. Student success coaching helps students fit school into life and life into school while building up the skills they need to be successful, including study skills, time management, and stress management. As institutions explore the possibility of starting coaching programs to improve student outcomes, there are several challenges they will face.

Fair trade is a model in which producers are paid above market, “fair trade” prices provided they meet specific labor, environmental and production standards. (Photo:  Photograph by James Rodriguez, 2013, Fair Trade USA. All rights reserved)

Last fall Cabrini College (Pa.) became one of only 17 colleges and universities in the United States to be recognized as a “Fair Trade College.” (The University of Wisconsin-Oshkosh was the first in 2008.)

U.S. law school enrollment has dropped by 36 percent the past three years—and some schools are freezing or reducing tuition in response.

The drop is due to both “job contraction and an overreaction to that contraction,” says Judith Areen, executive director and CEO of The Association of American Law Schools. “The projected number of jobs available is higher than law school enrollment is reflecting.”

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