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Articles: Tuition

For the first time, students are paying, on average, half or more of their tuition’s cost. (Click to enlarge graphic)

Subsidies for public higher ed institutions are the lowest in a decade—and for the first time, students are paying, on average, half or more of their tuition’s cost. Those are a few of the financial trends substantiated by a recent American Institutes for Research (AIR) study.

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

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?

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.

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.”

Michigan legislators have introduced a plan that would allow in-state college-bound students to attend college for free and then, as graduates, pay a percentage of their income back. Known as a “pay it forward” model, the money paid back would go into a special fund to help other students attend college using the same plan.

Western Governors University’s 43,000 online students make for the nation’s largest all-you-can-learn program.

Adult students are treating themselves to a higher ed buffet through a handful of programs where all-you-can-learn tuition lets them move as quickly as they can toward a degree and advancement in the workforce.

Instrumental in implementing the new online payments system were  (left to right) Allison Foltz, Mike Boolukos and Melody Baker from the  information technology office.

Cash flow is as important to nonprofits as it is to corporate entities. That’s something officials at Salisbury University in Maryland had in mind when they engaged outside help several years ago to provide students with online payment gateways, tuition payment plans and electronic bills.

The steps resulted in increased efficiencies and more timely payment. But with enrollment up a third over the last decade—and no increase in accounts receivable staffing—officials knew it was time to take the next step.

The University of Wisconsin’s all-you-can-learn, competency-based flex program—designed for adult students—started in January. Students can pay $2,250 for a three-month, all-you-can-learn subscription, or just $900 to work on a single set of competencies, says Vice Chancellor Aaron Brower, the interim provost of the UW Extension School.

Tuition covers assessments and faculty mentoring, and students’ get help organizing their studies from an academic coach—a new role that combines duties of an advisor and tutor. All work is graded by University of Wisconsin faculty.

Gene Wade is CEO of University Now, parent company of Patten University.

Since last June, students at the for-profit Patten University have been able to take all-you-can-learn, competency-based programs online and at the institution’s campus in Oakland, Calif.

Undergraduate tuition is $1,316 for a four-month term or $350 for a month. Students can take as many classes as they can fit into their schedule. The average student takes three classes per term, says Gene Wade, CEO of Patten’s parent company, UniversityNow.

A high-demand winter course at Long Beach City College will cost residents $225.

California has been experimenting with charging higher tuition rates for high-demand courses offered during the winter and summer. The accompanying infographic breaks down what students are paying.

Oregon State is one of three universities to be governed by an independent board.

In a climate of declining state funding, Oregon higher ed policy leaders needed to bring in more resources while taking some of the burden off students. That’s why three of the state’s universities are breaking off from the Oregon University System. Effective July 1, Oregon State University, Portland State University and the University of Oregon will have their own boards.

Despite jarring news headlines depicting students with six-figure debt levels, the average student borrower’s debt burden is not necessarily devastating.

Among graduates in 2011 who borrowed to pay for higher education, the average loan debt at graduation was $26,600, according to the Project on Student Debt. Only 1.5 percent of borrowers owed $100,000 or more in 2007-2008, according to an analysis by Mark Kantrowitz, publisher of Edvisors Network.

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