Cuomo's SUNY Legacy: 30% Higher Tuition And More Hikes Coming

From Joseph Spector at Gannett:

ALBANY – As students at the State University of New York head back to class, they will be doing so with fewer classmates and higher tuition.

Enrollment at the 64 SUNY campuses has dropped 3.5 percent over the past five years, with the biggest dropoff at its 30 community colleges, a review of records by Gannett's Albany Bureau showed.

At the same time, tuition has increased 30 percent since 2010 to $6,470 a year for incoming freshmen this fall.

Tuition hikes every year for the last five years?

You betcha!

And more coming:

SUNY officials, however, head into the new semester facing uncertainty over future tuition increases as a five-year agreement with the state Legislature to increase tuition $300 a year, called SUNY 2020, expires next year.

Zimpher said SUNY would ask for a five-year renewal of the $300-a-year tuition increase, but may try to limit the increases to less than $300 each year.

"We're still at the limit of $300. We don't think it has to go to $300 for every one of our sectors. So our primary theme will be: roll it over. We had a 2020 goal," she said.

When I first started teaching fifteen years ago, a student who was living in public housing could attend a SUNY school and receive a degree with a minimal amount of debt.

Pell, TAP and FSEOG would cover all of the tuition and almost all of the room/board expenses.

They would have to take out a small subsidized loan a year to cover the rest - usually no more than $2000.

If the financing stayed the same for all four years, they were graduating with loan debt of less than $10,000 - not optimal, but certainly not prohibitive to starting a career, having a family, going to grad school, etc.

These days, those same students are getting loaded up with the maximum in both subsidized/unsubsidized Stafford loans ($5500), they may be getting a Perkins loan as well, the parents are getting a PLUS loan and even then it's not enough to cover tuition/room/board/books.

Since the amount in loans a student can take out goes up from freshman year and some of their loans are unsubsidized, after four years they're graduating from a SUNY with over $25,000 in debt - and that's not including the PLUS loans the parents got nailed with (which have to be paid back immediately, plus inteterst.)

Take a look at Stony Brook this year:

The total cost of attendance - tuition, fees, room and board - is $20,811.

That's before any other expenses - books, living expenses, clothing allowance, etc.

Here's how the financing works for a student in need in my experience as a high school teacher of seniors.

The maximum Pell grant award $5,775 a year, the TAP award is usually about $5,000 a year.  So that's $10,575.

Some students receive the FSEOG grant (which can be as high as $4,000), but I've never seen it higher than $1,500.

Let's add $1,500 to our student's grant total - $12,075.

The DIRECT costs of attendance - the money Stony Brook takes right away at the beginning - is $20,811 (broken up by semester, but you get the idea.)

Our student is $8,736 in the hole for the DIRECT costs.

They've gotten some work-study aid, but that money has to be worked for, won't come until much later in the semester, so that's no help here.

Stony Brook gives our student the maximum Stafford loans for a freshman - $5,500 - and that takes the student down to $3,236 still needed to cover expenses.

Stony Brook doles out $2,500 to the parent with a PLUS loan and hands out another $1,500 in a Perkins loan to the student.

The student now has all DIRECT costs paid for, though there's no money left over because origination fees for the loans (over 1% per loan) take away the excess.

How do they buy books, pay for living expenses, etc?

Well, you hope they've got a little money saved from a summer job or the parents have a little money to give them when they head off to school.

They'll have to work during the school year - that's not so bad, they have work study money, so they can get a job on campus - but money's going to be tight and they're looking at an awful lot of debt when they graduate (on top of which, the parents are looking at some debt while they're in school.)

This is an imaginary scenario, but it's one I see with high school seniors who come to me for college advisement.

This same student, if attending a CUNY, would come out with little to no debt because there are no room/board costs (though tuition and fees at CUNY have skyrocketed the last few years as well), so I often say think long and hard about attending a CUNY school, at least for the first two years, then going away as an upperclassman, to minimize the loan debt to themselves and their parents.

But these are young adults and young adults will do (and should do) what young adults want to do - an important component of the college experience is for students to learn how to make judicious financial decisions or understand there may be consequences when those decisions are made less judiciously.

So many often sign up for the SUNY because they want the "college experience" - the going away from home, the dorm-living, etc.

Also, the CUNY schools have gotten much more competitive in terms of admissions over the past few years and I have seen some students get into four year SUNY schools but get locked out of the four year CUNY schools (City, Hunter, Baruch, Brooklyn) and have to attend the SUNY school.

The Gannett story says while enrollment at SUNY has dropped 3.5% over the past five years (mostly due to the improving economy that sees fewer go to community college for retraining and some a choose a private school over a SUNY), employment at SUNY is up 2%.

SUNY claims the tuition increases - and after five straight years of them, they promise they'll be more - are necessary to keep up with costs, infrastructure, etc.

I understand that costs go up over the years (though I'm not sure what they're spending that money on is worthwhile, that's a post for another day), but passing the costs on to students and their families DIRECTLY instead of helping out by getting more money from the state, is NOT the way to pay for them.

Governor Cuomo, ever happy to keep state costs low and pass the buck onto working and middle class people, is getting some pushback from the Heavy Hearts in the Legislature:

ALBANY -- A bill before Gov. Andrew M. Cuomo represents the opening punch in a fight that will determine how much tuition will increase for 700,000 public college students and their families in coming years.

The bill demands that the Cuomo administration keep increases in state aid in closer pace with annual tuition hikes, which have jumped 30 percent in the past five years at the State University of New York and City University of New York. While state aid increased far more in those years compared with the preceding era of flat and reduced funding, it still grew at less than half the rate of tuition.

 The bill overwhelmingly passed by the State Legislature would require the state to cover inflationary and mandated costs at the State University of New York and City University of New York, such as utility bills, building rentals and salaries and benefits. It also would require the state budget to cover mandated costs for programs and equipment at SUNY's three teaching hospitals in Stony Brook, Brooklyn and Syracuse.

Legislators seek to require a greater state commitment than is in the 2011 law that created the "rational tuition" plan of annual increases. The plan was created to better fund the systems, after state aid cuts, to hire and retain professors to raise academic performance, and to avoid unpredictable spikes in tuition forced by crises.

The public universities were hit with deeper cuts than many state programs in the state fiscal crisis of 2008-2011.

In that 2011 law, the Cuomo administration agreed to a "maintenance of effort" in state aid. That law only required that the state not cut SUNY and CUNY aid from 2011 to 2016.

"The maintenance of effort was maintenance-of-effort-light," said Assembly Higher Education Committee chairwoman Deborah Glick (D-Manhattan), the bill's co-sponsor.

That tuition plan, however, sunsets next year. Cuomo, SUNY and CUNY are expected to ask the legislature to extend it in what will be one of the major initiatives of the 2016 legislative session.

"We are looking at what is actually needed to maintain a level of support," Glick said, a level "that ensures that the promise to students that, if they pay more -- and it's a big jump -- that the state will ensure the promise of more full-time faculty and additional sections of course work to make it easier to complete your degree in four years."

We'll see how this all plays out - you can pretty much bet Cuomo will look to pass most of the increased costs onto students and the Legislature, not exactly the bravest of assemblies in standing up to Cuomo, will agree to some "compromise" that continues to screw students and their families.

New York State used to have an excellent state university system that was very affordable.

The state continues to have an excellent university system, but the affordability part of the equation is by the wayside.

SUNY officials point out that SUNY remains cheaper than private schools in New York and some other state university systems.

That's swell.

But the affordability factor has still be eroded away over the years, helped greatly by Governor Andrew Cuomo, and that certainly doesn't help students from low income families having to take out $25,000+ in loans or their families who may be taking on debt for them as well.

Cuomo's always worried about his "legacy" - how he will be thought about in the future.

One big part of his legacy is what he hasn't done to help SUNY students and their families.

His SUNY legacy is, 30% higher tuition (and more hikes coming), SUNY costs up, and state aid held flat. 

Race To The Top Comes To College

The tentacles of the federal government look to grow longer:

President Barack Obama begins a speaking tour in New York on Thursday to push his plan to make college more affordable at a university in Buffalo, N.Y., and a high school in Syracuse, N.Y.

The plan the president will propose focuses on tying funds for schools to performance, spurring innovation and competition and keeping student debt affordable, according to a fact sheet released by the White House on Thursday.

Obama will propose tying federal aid to universities to performance of students and affordability, as opposed to the number that enroll. To do this, the Department of Education will develop a rating system for college value by 2015, and that will be used to make aid decisions by 2018. He also will push a “Race to the Top” for states to reward better higher education with lower costs, the White House said.

The president will also propose a $260 million fund to spur schools to innovate, including with technology, and the administration will issue “regulatory waivers” to schools for experimentation.

Can VAM for college professors be far behind?

Look, college cost is a huge problem.

So is student loan debt.

Do you know how you solve those problems?

Increase the Pell Grant.

Curtail loan programs (which the feds make money, btw, - an estimated $184 billion over the next ten years.)

Incentivize states to fund their state university systems to keep costs low.

Raise taxes on rich people and put the money toward Pell Grants and state university systems.

If private colleges want to continue to raise costs beyond inflation, year after year, let them.

If there are viable state university system alternatives that are fully funded by state governments and provide quality educations comparable to private colleges for a fraction of the cost, you can bet the president of NYU is going to think twice about raising tuition another $100 a credit so that he can buy up more Greenwich Village real estate.

But there is too much money to be made from the loan programs, both for the banksters and for the government, for them to ever curtail those.

And the oligarchs and plutocrats who run the country are not interested in paying higher taxes for any reason - especially not to fund state university systems.

So instead we get Race to the Top Mach 3 - College and University Edition.

A neo-liberal dream.

Not going to solve what they say it's going to solve.

But there will be some money to be made by the "innovators," "entrepreneurs" and "disruptors" of the system - lots of it.

And isn't that what this is all really about anyway?

Using a self-manufactured "crisis" to make billions for the vulture class - that's what this is.

Gillibrand Wants To Let Students Refinance Loans At Lower Interest Rate

Doubtful this legislation will pass, but it's a good idea:

Sen. Kirsten Gillibrand is proposing new legislation to give students a bit of a break as they try to pay off their school loans.

The Federal Student Loan Refinancing Act would let current students and graduates refinance their federal student loans, known as Stafford loans, at a fixed 4-percent interest rate.

The interest rate on Stafford loans is set to double to 6.8 percent in July, if Congress does not act to prevent it.

Gillibrand says the average New York student owes more than $27,000.

She also says more than 10 percent of graduates are delinquent on repayments.

It used to be that students could consolidate loans at lower rates if the market rate had fallen.

But not after Bush and the Congress redid the laws and regulations.

Now you own the interest rate you took the loan out at until you pay it off or you die.

Of course, even if you die, your co-signer still owns the loan.

I have a hard time seeing the Obama administration or the GOP agreeing on the Gillibrand bill.

But it would be nice if they would. 

Obama Set To Screw College Students, Parents On Loan Rules

Oh yes he is:

The Obama administration has found itself at odds with a key voting block—college students and their advocates—as well as many of its Democratic allies in Congress, because of an important, if technical, budget proposal that could have significant implications for college access.

In a move intended to stave off a doubling of interest rates on federally backed Stafford Loans over the summer, the administration is seeking to shift those interest rates from the current predictable, fixed-rate system to a market-based rate at the time of the loan. Right now, interest rates on subsidized Stafford Loans are set at 3.4 percent, but they're slated to jump to 6.8 percent in July, unless Congress and the administration act.

The shift to a 6.8 percent fixed rate could cost a student with $20,000 in debt—roughly the national average—an additional $12,000 over the life of their loan, according to an analysis by the Institute for College Access and Success, a nonprofit organization in Oakland, Calif.

The administration and some Democrats in Congress have very different ideas about how to head off that potential rate increase. Advocates for students agree that under current interest rates, which are at historic lows—for instance, the rate was 1.73 on April 17—President Barack Obama's fiscal 2014 budget proposal offers a better deal for borrowers than they're getting right now.

But the proposal doesn't place any cap on the interest rate, leaving students open to much more expensive loans if interest rates soar in the future, critics argue.

Just hours after the Obama administration released its budget blueprint April 10, a coalition of student-advocacy groups including the National Campus Leadership Council, U.S. PIRG, Our Time, Rock the Vote, and the Young Invincibles put out a joint statement disparaging the loan plan.

 "Students have never taken out federal student loans without a cap on how high interest can go," they wrote. "The president stood with us by investing in higher education during his first term, and we're concerned that his budget does not deliver the same investment this time around."

 Nope - sounds like he's throwing college students and their parents overboard.

6.8% interest rates on student loans is high.

But leaving the Stafford Loan program without a cap means those rates can go much higher than that.

Sure, with the Federal Reserve printing press in overdrive these days, the loan rates are low right now.

But they won't remain low forever.

Not with all those extra Uncle Ben's Federal Reserve Chairman Bernanke threw into the system that eventually he (or his successor) will have to pull out of it.

I dunno, maybe we'll never see 17% interest rates the way we did back in the 70's.

But if we did, and there was no cap on Stafford Loans, that's where those interest rates would go.

Hey, Obama, how about extending the 3.4% rate on Stafford Loans by going on the TV and telling everybody Republicans want to double the loan rate to 6.8% so they can pay off their banker and Wall Street friends?

Federal Government Makes Money On Student Loans

Interesting - the federal government actually makes money on student loans.

No wonder those in power seem to want the interest rates to double:

The interest rate on many student loans is scheduled to double on July 1, to 6.8 percent from 3.4 percent — just as it was last year, when in the midst of an election campaign, Congress voted to extend the lower rate.

...

On Tuesday, the day before the White House plans to send its budget to Congress, student advocacy groups are releasing an issue brief charging that the federal government should not be profiting from student loans, while more and more students bear a crushing debt burden. 

The brief, citing a February report from the Congressional Budget Office, said the federal government makes 36 cents in profit on every student-loan dollar it puts out, and estimates that over all, student loans will bring in $34 billion next year.

“Higher education loans are meant to subsidize the cost of higher education, not profit from them, especially at a time when students are facing record debt,” said Ethan Senack, the higher education advocate at the United States Public Interest Research Group, which is issuing the brief with the United States Student Association and Young Invincibles, an organization for people 18 to 34.

“The revenue from student loans should be used to keep education affordable, and should never be used to pay down the deficit or for other federal programs,” Mr. Senack said. 

While it has long been known that the government makes money on student loans, the numbers in the issue brief are surprising, said Terry Hartle, senior vice president of the American Council on Education. 

“If the numbers are accurate, the government will make more money on student loans than Ford makes on automobiles,” he said. “Using student loans to create a profit center is not what anybody intended.

Seems like everybody is making money off the college students.

There's the College Board and the SAT prep companies and the colleges themselves and the companies that hire these students or graduates as interns and pay them nothing and now we see that the government makes more money off loans than Ford makes off cars.

Generation Debt really is screwed.

Interest Rates For Student Loans Set To Double

This is bad:

WASHINGTON — Congressional inaction could end up costing college students an extra $5,000 on their new loans.

The rate for subsidized Stafford loans is set to increase from 3.4 percent to 6.8 percent on July 1, just as millions of new college students start signing up for fall courses. The difference between the two rates adds up to $6 billion.

Just a year ago, lawmakers faced a similar deadline and dodged the rate increase amid the heated presidential campaign between President Barack Obama and Republican challenger Mitt Romney. But that was with the White House up for grabs and before Washington was consumed by budget standoffs that now seem routine.

“What is definitely clear, this time around, there doesn’t seem to be as much outcry,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “We’re advising our members to tell students that the interest rates are going to double on new student loans, to 6.8 percent.”

The rates do not count for subsidized loans previously taken out by students - just for future Stafford subsidized loans.

Unsubsidized and private student loan rates are not expected to change.

Let's see, the banks get money at 0% and lend it out at 3.4% -hmm, that's a pretty good deal for the banks.

Now they get money at 0% and lend it out at 6.8% - and the loans are "guaranteed".

Sure is good to be bankster.

Might say it's better to be a bankster than even a king.

And where is Obama in all of this?

So far, pretty silent.

Student Loan Debt Bomb

Three fair jobs reports have the Obama people doing high fives over the economy.

No high fives here, however:

Bankruptcy lawyers have a frightening message for America: They’re seeing the telltale signs of a student loan debt bubble that is placing increased financial pressure on families struggling with their children’s mounting debt. According to a recent survey by the National Association of Consumer Bankruptcy Attorneys, more than 80 percent of bankruptcy lawyers have seen a substantial increase in the number of clients seeking relief from student loans in recent years.

In most cases, those clients could not meet the federal hardship standards that are necessary to discharge a student loan through bankruptcy proceedings. Instead, many of these parents or guardians who co-signed the student loans face the prospect of losing their life savings, cars or homes to collection agencies for aggressive private lenders.

...

The amount of student borrowing skyrocketed from $100 billion in 2010 to $867 billion last year — or more than the $704 billion in outstanding U.S. credit card debt, according to the Federal Reserve Bank of New York. Of the 37 million borrowers who have outstanding student loan balances as of third-quarter 2011, 14.4 percent have at least one past-due student loan account. Together, these balances come to $85 billion, or roughly 10 percent of the total outstanding student loan balance.

College seniors who graduated with student loans individually owed an average of $25,250, up 5 percent from the previous year, according to a study by Brewer’s group. Parents are responsible, on average, for $34,000 in student loans, a figure that rises to about $50,000 over a standard 10-year repayment period. An estimated 17 percent of parents whose children graduated in 2010 took out loans, a 5.6 percent increase from 1992 and 1993.

A report last year by the Pew Research Center and the Chronicle of Higher Education warned that public anxiety over college costs is at an all-time high. Moreover, “low income college graduates or those burdened by student loan debt are questioning the value of their degrees,” saying the cost of college has delayed other life decisions, the report said.

But of course the people at the USDOE and the NYCDOE are going to begin tracking both schools and individual teachers on college attendance and readiness, so the point of whether college is good or not for individual students right out of high school is moot.

College For All is good for the bankers - and that's what matters these days

Until people start going belly-up on their students loans.

Not to worry, though - there's a government bailout waiting at the end of the line for the banksters.

As for the Millenium Generation, there's a shackle and chain waiting to be tied around their legs for the rest of their lives as they consistently have to go back to college to be "re-trained" for the latest technology advances and compete for employment in an economy that is increasingly rigged against them:

Stef Gray, a Hunter College graduate from New York who has paid $300 in forbearance fees to the company since May, organized the petition drive in hopes of persuading Sallie Mae to drop the fee, just as Bank of America and other financial institutions dropped unpopular fees in the face of Internet protests.

Gray, 23, who lives in Brooklyn, has become a symbol of the plight of young Americans saddled with debt. With both her parents deceased, Gray has put herself through school with part-time jobs and three private loans with Sallie Mae.

Since graduating in May with a master’s degree in geographic information systems, Gray has been unable to find full-time employment. Instead, she says, she has gotten by with temporary jobs and waitressing. Without a steady income, she says, it has been impossible to make the $700 monthly payments on her $40,000 in loans. Nor has she been able to consolidate the loans or negotiate more favorable terms with Sallie Mae.

Every time she deferred a payment on the three loans, Sallie Mae slapped her with a $50 forbearance fee for each loan — a total of $150.

“That may not sound like a lot of money to some,” she said. “But for me, with no parents, struggling to get by without a job and not receiving any unemployment, that’s a lot of money.” Because of the compounding effect of the interest rate on the unpaid portion of her loan and related penalties, Gray says, her original $40,000 loan has grown to $65,000. “The interest is snowballing,” she said.

Morning in Obama's America.

Going to be one bad day for a long time to come...

What's Wrong With For-Profit Colleges?

Plenty.

A Denver Post article about for-profit colleges examined graduation rates, loans, default rates and other federal Department of Education data and reported that "for-profit schools as a group underperform their public and nonprofit counterparts."

Here is a summary of their findings:

• For-profit students are defaulting on their loans at much higher rates than students enrolled in public or private nonprofit schools. Twenty-three percent of students who attended Colorado for-profit schools were in default in the first three years they are required to make payments, according to a Denver Post analysis of 2009 federal Department of Education data.

Adams State College in Alamosa had the state's highest default rate among four-year public schools at 15 percent.

• Tuition rates are high. Associate's degrees usually run $30,000 to $40,000, and bachelor's degrees usually cost between

$60,000 and $75,000 at for-profit colleges.

That compares with Metropolitan State College of Denver, where a three-year bachelor's degree runs about $12,900, and the University of Colorado at Boulder, where the cost is $29,000 for in-state students. At the private, nonprofit University of Denver, a three-year bachelor's degree costs $148,704.

• Taxpayers are paying for it. Last year, Colorado students received $1.6 billion in federal loans and Pell grants. Of that, $690 million went to for-profit schools, according to an analysis of federal loan data.

• Twenty-five percent of students seeking bachelor's degrees at for-profits receive their degrees within six years, compared with 55 percent at public colleges

and 64 percent at private nonprofit colleges, according to the National Center for Education Statistics.

For-profit schools say they serve a needier student population than most other colleges, which pulls down their graduation rates. Indeed, public schools that serve higher-risk populations, such as Metro State, do not perform any better. Its six-year graduation rate is 22 percent.

• Since 2006, the Colorado Department of Education has received 164 complaints against for-profit colleges — or one for every 214 students attending for-profit schools allowed to collect federal loan dollars. That compares with 178 complaints filed against public colleges — or one for every 1,224 students.

While the complaints themselves are not public, state officials told The Post the complaints against public schools are mostly academic in nature — disputes about grades or professors, for example. Complaints from students attending for-profit schools are consumer in nature, ranging from recruiting practices to lack of transparency about tuition costs and financial aid, according to John Karakoulakis at the state Department of Higher Education.

Now the Post article focused on Denver, but there is plenty of evidence nation-wide that for-profit schools do more harm than good.

94% of students who attend for-profit colleges take out federal student loans. The Wall Street Journal found that students who attend for-profit colleges have higher default rates on their student loans than students who attend public and nonprofit colleges and universities. Many students at for-profit schools are left with an overwhelming level of debt and scarce opportunities for gainful employment in their specific fields. The link between gainful employment and debt levels has led the Department of Education to review financial aid policies to all schools, but especially for-profits, though like much in Washington these days, it looks like any new proposals in the area are gridlocked and ultimately nothing will get done.

But something needs to be done about these schools.

I know that we live in a society these days that privileges "going to college" but it is very important that high school students be provided with good counseling about the process, especially with college costs so high.

A college degree only helps kids when it actually aids them in finding gainful long-term employment.

A college degree harms kids when it leaves them with tens of thousands of dollars of student loan debt and useless or less-than-useful credentials.

The NY Times reports this morning that 60% of Americans now see colleges "as businesses, concerned more with their bottom line than with the educational experience of students."

Nonprofit institutions with tuition prices as high as $50,000, $60,000 or $70,000 a year are part of the problem here, but for-profits are the most worrisome to me because as a University of Phoenix enrollment director told recruiters in 2003, "It's all about the numbers. It will always be about the numbers."

When you run a school as a business, the bottom line is always the most important thing.

And the bottom line for these for-profit schools is not educating their students.

The bottom line is money.