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<p>[Credit</a> Crunch or Echo Chamber? :: Inside Higher Ed :: Higher Education’s Source for News, Views and Jobs](<a href=“http://www.insidehighered.com/news/2008/08/12/crunch]Credit”>http://www.insidehighered.com/news/2008/08/12/crunch)</p>
<p>I think SF Chron article falls into the category of alarmist journalism cited in the InsideHigherEd article, albeit focusing on student aid, rather than just student loans. The Chronicle seems particularly anxious to conclude a weakening economy is the culprit. There are a number of reasons, other than the economy, that contribute to the rise in requests for assistance. In fact, the chronicle fails to establish a cause and effect relationship between the economy and increased requests for assistance.</p>
<p>1) College costs have been increasing at about twice the rate of general inflation. That would account for an increase in requests.</p>
<p>2) As the article states, “California and other states facing budget problems are contributing less to public colleges and universities.” In the case of CA, the budget problems are exacerbated by out-of-control spending. Even in good economic times CA over committed its spending.</p>
<p>3) “Some of the increase in federal aid applications at individual schools could be connected to a rise in applications…” I wish the Chronicle would exercise the same restraint in drawing a conclusion with respect to the slumping economy as a cause of the increase in requests for aid. A weaker economy “could be” one among several factors.</p>
<p>4) Requests for aid may be over counted. The article doesn’t make clear how it counts aid requests from first-year applicants. Does an applicant that applies to 2 schools get counted as an aid requestor at both schools? With an increase in the average number of application per HS senior, this would falsely inflate the number of requests for aid.</p>
<p>5) More lenient aid policies, such as are cited for Stanford, would increase requests for aid by students who didn’t qualify previously, (or who didn’t think they would qualify previously.)</p>
<p>standrews, you have well thought out excellent comments. All of your points make complete sense, IMO. Thanks for posting.</p>
<p>Perhaps the issue is defined by problems much deeper than indicated by the ‘photo-op’ students used to put an individual face on the problem. </p>
<p>Congress recently decided to extend certain grant programs, in part to relieve the pressures on students and to mitigate for the corporate people who’ve pulled out of the student financing/loan debacle. But unilaterally the USDOE secretary of education is already acting to obstruct these new (or refunded) student aid programs. But Secretary Spellings agenda is so closely meshed with that of the large loan companies as to be virtually indistinguishable (and sometimes outright scandalous). </p>
<p>[url=<a href=“http://www.insidehighered.com/index.php/views/2008/01/03/vogel]What”>http://www.insidehighered.com/index.php/views/2008/01/03/vogel]What</a></p>
<p>Perhaps this is simplistic thinking…but honestly, any school with a 1 billion or more endowment ought to provide free tuition to all students. Research aside…</p>
<p>I didn’t bother to read the article because ( I am a smart a$$) the cost of college has been blown way out of proportion for at least the last twenty years. We are already at the point where people have to take out loans just to attend community college. The current economic situation does not matter as this trend has been happening for a long while now.</p>
<p>@brendanww: yes that is too simplistic… 160K x 5,000 = 800M, and that’s assuming it’s a school with that small of a student body.</p>
<p>Our paper recently ran an article on page one about parents who are working two and three jobs and eating rice and beans in order to scrimp and save to pay for college – and then 3 pages later, a whole spread about how “dorms are getting nicer and valet laundry service is the standard because kids today are used to living well and just won’t accept anything less.” </p>
<p>It’s that disconnect that gets to me – colleges that charge 40-50,000 a year and brag about their landscaping, the new fitness center, the new dorm that they just did over with new furrniture and curtains, the fact that they’re building another parking lot for all the cars the students are bringing – and meanwhile, costs just keep going up and up and up. It struck me as strange that the standard of living is so high for all these kids – and their parents meanwhile are driving ten year old cars and eating rice and beans in order to pay for it all. Parents long ago gave up their gym memberships so that their kids could attend a college with a shiny new fitness center. I wish there was some way as parents we could just the colleges we’d like the education without the wretched excess – not hot tub for junior, just books and a good library. Am I the only one who feels this way?</p>
<p>No, you are not alone, Momzie, I feel the same way.</p>
<p>That disconnect really began about 15 years ago. In part it was due to philosophical changes in college marketing and persona. The ‘lifelong learner’ tags and the concept that students were no different than customers. Both implied that students were a class of people who needed to be kept dependent on academia, rather than educated and moved on to the reason they’d gone to college in the first place. The problem is that from a business model, academia has done a very poor job providing for its customers insofar as the product is over priced and under qaulity. </p>
<p>The other reason for the disconnect is the seminal change in how colleges and students were funded. When for profit companies established agendas within the government the ultimate end was to move student funding away from what had been a grant based model to a loan premised model. Colleges had to seek other base funding sources once the proportion of grants were cut and that became the student loan. </p>
<p>Once that occurred any tendencies for financial restraint were ripped out of the college conceptual paradigm. The old model of state support and federal grants required some financial discipline because only so much was provided.
But essentially the loan model required no such restraint because the burden of funding education was largely transferred directly onto students and their families. </p>
<p>And that indirectly caused the problems with suanas and unnecessary trophy buildings. Simply because students and families could be redirected away from the resentments of high education costs and debt loads by some shiny trinkets. Not that the qaulity of education is any better as a result. </p>
<p>And yes the CC population is now having to take out loans to pay for college. Which will eventually kill the CC concept because most of the jobs attainable with CC training pay nothing close to what is necessary to pay back the overtly excessive costs of these loans. </p>
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<p>Momzie, I agree. To add to that, I recently took my son to a college that has the $50,000 sticker price tag. It was a LAC that did not have the latest upgrades that you talk about. Some classsrooms looked like they had not been upgraded in decades. One can take classes at 2 other colleges and when I inquired about shuttles to get to those schools, I was told that they were not available, but a student could bring his/her car (my kid does not have his own car and won’t, and I won’t pay NJ auto insurance when he is in college either- that package adds a bunch more money to the already pricey bill). I am wondering where all of the money is going. Even with some discounting going on, and after income redistribution (meaning that the richer kid is paying 30,000 so the much less affluent kid’s family is paying 12,000) I still wonder where all of the money is going. </p>
<p>Oh, and when I see garden sculptures, climbing walls, bleachers that were installed yesterday, manicured lawns and landscaping as nice as at any country club that I have seen ( and I do understand some of this was was donated), knowing that much of this put there with tuition dollars that parents really cannot afford, it does get me very upset. I do see it as excessive luxury. Oh, and one might say to go to a public U., but I see these excesses at the public U. as well. </p>
<p>I would like to see a balance between what I described at the LAC I saw in my first paragraph, and schools that look more like country clubs.</p>
<p>“Congress recently decided to extend certain grant programs, in part to relieve the pressures on students and to mitigate for the corporate people who’ve pulled out of the student financing/loan debacle.”</p>
<p>You’ve got this backwards. Ted Kennedy and Nancy Pelosi wanted to have more grants for college students and they also want to get rid of the private student loan lenders, so they decided to pay for the grants by taking away the lenders profit margins (eliminating subsidies and thus eliminating profits). They then used what used to be the lenders profits to increase the availability of grants. Without profits the lenders had no choice but to exit the student loan business, which is what Kennedy and Pelosi want. What Kennedy/Pelosi didn’t count on was their little scheme to collide with the subprime mtge mess and create a financial crisis in college aid. Now they are scrambling to CYA a disaster of their own making.</p>
<p>"The old model of state support and federal grants required some financial discipline because only so much was provided.
But essentially the loan model required no such restraint because the burden of funding education was largely transferred directly onto students and their families. "</p>
<p>This is bogus too, esplly as a reason for colleges tricking themselves out with saunas and fancy rec centers. There is only a limited amount of money you can borrow for an ug education with federal student loans. Roughly about $16,000 over the course of 4 years. Hardly a dent in a fancy school whose COA can run upwards of $200k over 4 years. Where families are running into problems is going to the bank down the street for a college loan that is really just a bank loan that you could just as easily use the $$ to remodel your house with.</p>
<p>Plus, the sort of things that are skyrocketing the cost of running a university are things like air conditioning, computers, internet, wireless internet, cable, and repairing bldgs that were originally built eons ago. Not to mention salaries and benefits for the employees and professors. Most rec centers and athletic facilities get paid for by donations and fund raising by alumni and/or endowments. Not student loans. You can’t blame student loans for that. Or maybe you can, but you’d be wrong.</p>
<p>I think that there may well be a college loan default crisis in the future with kids and parents borrowing these huge amounts without payback possibilities corresponding to the amounts borrowed. When I see some loan amounts that kids are taking, it makes me gasp, well knowing what they will be making those first years out of school and if their family cannot help with loan repayment, the chances are good that they will start out, not only with a huge loan burden but will ruin their credit and financial sector job possibilities of they are late on those loans. My son cannot pay rent, car, insurance and other expenses in this area on the pay he gets without our help. He lived at home for years. He is finally venturing out on his own, and it is going to be very tight, and he has no school loans. If he had a $100K monkey on his back, it would be nigh impossible.</p>
<p>Lol. What kind of spoiled brat kids are you raising that they expect valet laundry? I’m going to be happy as long as my dorm has a mirror and air conditioning.</p>
<p>Air conditioning? What kind of a spoiled brat are you? Many dorms out there without air conditioning. That is a luxury.</p>
<p>Yeah, I’m pretty sure mine won’t have air conditioning.</p>
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<p>Cptofthehouse, I have seen this coming for the last few years. The writing is on the wall. You just can’t squeeze someone who does not have it.</p>
<p>The salaries are just not keeping up with the loan amounts for new graduates. In fact, they may be going down with the number internships that are now becoming big factors in getting into jobs. That means more time at little or no pay.</p>
<p>I’ll admit that when I was looking at colleges, I paid close attention to the dorms. I wanted apartment style dorm with a bathroom and a kitchenette, at the very least a kitchen on the floor.</p>
<p>But you’re absolutely right that some of it is ridiculous: luxury apartment dorms, trophy buildings, souped-up study centers, expansive computer labs (which few use for anything but to print from or check facebook), brand new offices. And new bureaucracy in departments, financial aid, advising, etc. calling for new administrators and support staff.</p>
<p>Whatever happened to the blackboard? Every classroom has a “smart station” now. Might as well call us the Power Point generation.</p>