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Vol.16 No.1
August/September 2001
Late Summer News Round-Up...
Financial Aid Developments
WELCOME BACK to another school year and another college admissions
go around. While you were gone, CB kept track of several significant
stories that could have an impact on financial aid and admissions
in the years to come. Here's what we found for this year's summer
round-up:
Tax Reform Education Benefits
The Economic Growth & Tax Reform Reconciliation Act of 2001
was signed into law by President Bush this summer as the highlight
of his first six months in office, and a fulfillment of a key
campaign promise. Lost in much of the hoopla about tax rebates
were several tax benefits for families working to send their
children to college. The main provisions?
EDUCATION
IRAs
EIRAs are still a viable option for many families. Single parents
with gross incomes up to $95,000 and married couples with incomes
up to $190,000 can contribute $2,000 a year for each child under
18 years of age to an EIRA, an increase over the old limit of
$500. While contributors receive no tax breaks for contributions,
all subsequent market gains are tax free if used for educational
purposes at any level, including elementary or secondary school.
529 COLLEGE
SAVINGS PLAN
The other savings devices addressed by the tax reform act are
called "529" programs, and derive their name from the
section of federal tax law which regulates them. These state-run
plans, such as pre-tuition aid or state savings options, and
their state tax benefits, are now covered under federal law which
protects all gains from federal taxes if the money is spent on
higher education.
One advantage of the 529s is that a parent
can contribute much more money, up to $250,000 per child. And
unlike the EIRAs, only the gains in the account versus the full
EIRA distribution, is counted as part of a student's income when
financial aid is calculated.
INVESTMENTS
CAN FALL
The down side of these 529s, and all investment programs, is
that when the market goes down, plans can lose money as they
did last year with the "tech wreck" and college dreams
can be wrecked along the way. Also, "accumulated amount"
can be used in the calculation against how much financial aid
a student deserves.
STEADY GROWTH
College saving plans have grown 30 percent over the past year
and now enroll 1.5 million children. In fact, 36 states sponsor,
and 14 more are enacting, these tuition options. According to
the College Savings Plan Network, the state of Florida has made
good on prepaid tuition for 56,000 students, while Ohio has paid
tuition for 10,000 and Alabama 8,000 students.
The Tuition Plan Consortium, made up of
colleges from the Ivy League to Notre Dame and Southern California,
is about to launch its own prepaid-tuition program. Whether or
not participation in such a program will be considered by admissions
committees in the future will be well worth watching. To track
these various programs in detail, visit: www.savingforcollege.com.
[back
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Top
Schools Reaffirm Need-Based Aid
THIS SUMMER, 28 of the nation's top colleges and universities,
including Duke, MIT, Stanford and Yale, signed a pack to reinforce
policies of "need-blind admissions" and to increase
scholarship money for their neediest students.
Such a commitment is intended to make financial
aid standards more consistent from college to college. It also
attempts to make clear to aspiring high school students that
if they make the grade at these academically selective schools,
the scholarship money will be there to help them meet the high
tuition and costs that often total more than $30,000 per year.
The reemphasis on need-based scholarship
by the colleges themselves contrasts with recent efforts by states
to award more aid based on merit. "There has been a gradual
and accelerating erosion in the commitment to need-based aid,"
Hunter R. Rawlings III, president of Cornell University and a
spokesman for the coalition of colleges, told The New York Times.
CORE AGREEMENT
Among the points of agreement of the core group of selective
colleges: To take into account the higher cost of living in metropolitan
areas in aid formulae; reduce the expected family contributions;
only consider home equity up to 2.4 times income; consider financial
complications of divorced families; consider the retirement status
of unprotected parents.
PARTICIPANTS
Other colleges and universities that have signed on to the financial
aid principles are: Amherst, Boston College, Bowdoin, Claremont
McKenna, Columbia University, Davidson, Emory, Georgetown, Haverford,
Macalester, Middlebury and Northwestern.
Also, Pomona, Rice, Swarthmore, Chicago,
Notre Dame, Pennsylvania, Vanderbilt, Wake Forest, Wellesley
College, Wesleyan University and Williams. Others are expected
to sign on to the prestigious list that means more clarity and
more aid for worthy students.
Neither Princeton, which led the reexamination
of student aid formulae in recent years, nor Harvard, the nation's
wealthiest university, have signed onto the agreement, presumably
because they are satisfied with their already generous scholarship
programs. [back
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Knight
Commission Calls for Athletic Reform-Now
BIG TIME COLLEGE sports are seriously eroding the mission of higher
education and university presidents must reassert control before
it's too late, charges a report released this summer by the Knight
Foundation Commission on Intercollegiate Athletics.
TOO COMMERCIALIZED
Confirming people's worst fears, the commission charged that
college sports have become too commercialized and expensive;
far too many athletes are segregated from the rest of the academy;
graduation rates of athletes at some high-powered institutions
are more than troubling; and the NCAA, charged with regulating
such matters, is unable to do the job.
The commission, co-chaired by the Rev.
Theodore M. Hesburgh, president emeritus of the University of
Notre Dame, called for a new coalition of college presidents
and others committed to recapturing the ideal of the student-athlete
to take immediate action.
RECOMMENDATIONS
Among the commission's many recommendations:
- "Mainstream" athletes into the
university. That means requiring athletes to go through the normal
admissions process, to use the academic counseling resources
available to other students, and to meet the academic requirements
and progress standards of other students;
- Require that universities graduate at
least 50 percent of their athletes on any team competing for
conference or national championships, with a 2007 deadline for
compliance. (One recent Division 1-A champion, for example, posted
only a 35 percent graduation rate);
- Shorten the playing and playoff seasons;
- Provide four-year scholarships for athletes
instead of the current one-year grants;
- Encourage the National Basketball Association
and the National Football League to create minor leagues to prepare
those athletes who are not interested in college for professional
careers;
- Reduce university expenditures in football
and basketball by reducing the number of scholarships;
- Ensure that federal gender-equity standards
are met, and not blamed for escalating costs of college sports;
- Distribute revenue from the NCAA's $6-billion
television contract based on academic achievement and gender
equity of universities, rather than on victories in the Division
I men's basketball tournament;
- Reduce the commercialization of college
sports by removing corporate logos from uniforms, and minimize
corporate intrusion in arenas and stadiums.
SECOND TRY
The Knight Commission made similar recommendations a decade ago
without much impact. But it said the situation has deteriorated
since then. Many of the nation's college presidents are sympathetic
to the message, but are faced by other powerful constituencies
which seek further commercialization of college sports. Time
will tell whether the current trends can be reversed. For a copy
of the report see www.knightfdn.org.
[back
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 THE
COUNSELOR'S CORNER
HIGH SCHOOL FRESHMAN enter school
with an almost unique opportunity: the chance to begin anew.
This doesn't happen often in life, so freshmen ought to take
advantage of it. They shouldn't think of their freshman experience
as a transition time or a year to find the ground and get their
feet wet. If so, they can quickly slip into quicksand and find
themselves playing catch up not only for high school, but for
the rest of their lives.
Here, then, are 10 tips I give freshmen as they begin their
journey to college.
1. Take Control of Your Education. Think of the facets
of high school that you can control: What subjects can you take?
What grades can you earn? What activities can you participate
in? And, what service can you provide for your school and community?
These are the things that a college admissions office will evaluate
to see if you will be a contributor to their campus.
2. Enroll in Strong Academic Courses. The subjects
you take and the grades you earn will have an impact on the quality
of college you can get in. What you take in comparison to what
was available tells the college admissions office how hard you
are willing to work and what kind of challenges you are willing
to accept. For example, if you are a great artist, certainly
you will want to feature those skills, but you can't avoid "the
Big Five."
3. Complete the Big 5. The Big Five are the courses
universally accepted as preparation for college study. The courses
include: academic math (Algebra, Geometry, Algebra II/Trigonometry,
and so forth); English (standard college prep, advanced, Honors);
Foreign Language; Science (Biology, Chemistry, Physics and other
courses); Social Studies (History, Psychology, Sociology, Government).
4. Pursue AP/IB. Find out which AP (Advanced Placement)
and/or IB (International Baccalaureate) programs are available
to you and plan to take them. These advanced programs allow you
to challenge yourself and perhaps earn college credit while you
are in high school. They may save you time and money down the
road.
5. Get Test Ready. Frankly, the best preparation for
all of those standardized tests you must take is everyday work
in the classroom. That's why the best advice your counselor can
give you is to tell you to challenge yourself to work hard at
what you are doing in class. Those students who work the hardest
in the toughest classes by and large are the best prepared for
the tests that can significantly impact college admissions decisions.
On average, those who have taken the light load academically
and who have been less than serious students don't do well on
these tests.
6. Reveal Your Extra Dimension. Focusing on academics
alone won't win you a selective college admissions spot if you
have nothing to go with the brain power. If all you do is study,
you won't be a contributor to college campus life in general,
just like you have been nothing but a brain wave in high school.
Seek out extracurricular activities in areas that interest you
and that can help you become more well-rounded. But, don't be
just a gadfly, joining eight clubs at once and never being a
meaningful participant in any. Get involved meaningfully.
7. Show Leadership Potential. Do things that interest
you and in which you can excel. Demonstrate leadership, and a
breadth and depth to your commitments. Not everyone is cut out
to be an elected student government leader. But everyone can
demonstrate leadership in the activities of his or her choice
and interest. Leadership is a skill that you can develop. Maybe
for you it will be extreme dedication to the school yearbook
or newspaper. Maybe your band will win a competition based on
a program you suggest. Maybe you will take the Model U.N. program
at your school to a regional or national competition. Maybe you
will initiate a successful drive to refurbish the theater at
your school. Concentrate on those things that are meaningful
to you. If you do, you are more likely to be successful and make
a real mark that you can emphasize in your college applications.
8. Contribute to Your Community. Many high schools
now have service requirements. The notion is that no matter where
you are in life, there is someone or some group that you can
assist and help. Most schools have formal service organizations:
Key Clubs, Habitat for Humanity groups and so forth. Get involved.
If your school doesn't offer these choices, look in your community
or to your church to find already established organizations.
Or, start a group at your school. Find something that interests
you and then work at making something better for someone else.
Not only will it help your college applications, it will give
you a feeling of accomplishment.
9. Have a Plan and Stick to It. If you start all this
during your freshman year, remember each year to check how you
are doing in each of these areas. By the time you are a high
school senior, you'll have plenty of appeal for a good college
or university. Your sound academic record, solid extracurricular
achievements and meaningful contributions to school or community
will show those in the college admissions offices that you have
much to offer their school.
10. Think Success. The competition is stiff these days.
Your accomplishments won't guarantee admission to any college
of your choice. But, they will go a long way in advancing your
cause in the admissions process. And, you will have learned much
about yourself and others along the way. They also will allow
you to travel far on the road to becoming the best you can be.
You will have opened important doors for yourself that will help
you reach your goals.
Mary Ann Willis is college counselor at Bayside Academy
in Daphne, Alabama, and a member of CB's Board of Advisors.
[back
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BOOKSHELF
A wide variety of books crossed our path this summer.
Here is a sampling of what people were talking about this summer.
Making the Most of College: Students Speak Their Minds,
Richard J. Light, Harvard University Press (800-448-2242); $24.95.
Rebel with a Cause: The Entrepreneur who Created the University
of Phoenix and the For-Profit Revolution in Higher Education,
John Sperling, Wiley Publishers; ISBN 0-471-32604-6; $27.95.
The States and Public Higher Education Policy: Affordability,
Access, and Accountability, edited by Donald E. Heller, The
Johns Hopkins University Press (800-537-5487), $38.
Student's Guide to Evaluating Libraries in Colleges and
Universities, The Association of Colleges and Research Libraries;
available on the Web at www.ala.org/acrl/ evalguide.html; counselors
and admissions officers can also order copies from 312-280-2515.
[back
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NEWS YOU CAN USE
Colleges Cause Senior Slump? According to a recent
report from the Institute for Educational Leadership and the
National Center for Public Policy and Higher Education, the college
admissions process itself is to blame for student slacking and
the "senior slump."
In the report, colleges are blamed for basing their admissions
decisions on work completed through the junior year of high school,
creating a disincentive for students to remain focused on the
senior year curricula.
The year could be put to better use, the researchers contend.
For example, this is a year that could be used to reduce the
cost of remedial education. According to one estimate, two thirds
of students in the California State University System were required
to take at least one remedial course upon entry to college.
The report urges high schools to link their senior year curricula
to college general education requirements. It also encourages
colleges to take a more active role in setting standards for
the senior year and withdrawing offers of admission for students
whose performance is not up to par.
The complete report is available from the Institute for Educational
Leadership in Washington, DC (e-mail iel@iel.org).
International Comparisons.
According to the United Nations Educational, Scientific and Cultural
Organization (UNESCO), seven percent of young people in Asia,
and just three percent of youngsters in sub-Saharan Africa receive
some form of postsecondary education. This compares with 81 percent
in the United States and 58 percent in all other industrialized
nations. [back
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ADMISSIONS WATCH
Top State Programs Filling First. In recent years,
more and more students are applying early to highly selective
liberal arts colleges in hopes of resolving their college choice
as soon as possible.
But what's the situation at the big state universities? If Purdue
University in West Lafayette, Indiana, is any indication, the
advice to apply early may be equally good, but for different
reasons.
Apply Early
According to Douglas Christiansen, Purdue's director of admissions,
students who apply early have a better chance at getting into
some of the very popular programs that fill up before others.
Programs whose graduates are particularly in demand in the workplace
attract more students, Christiansen pointed out in a recent issue
of Purdue Reports. These include programs such as building
construction management, computer graphics technology, computer
sciences, computer technology, engineering, nursing and flight.
"These programs could be overrun with students,"
Christiansen said. "But due to our limitations in physical
space, lab space, housing space and faculty resources, we have
to limit class sizes to ensure that our students receive the
quality education that we are telling them about."
Students who hope to get into one of these or other popular programs
at Purdue, and at other big state universities as well, should
apply during the first semester of their senior year, certainly
by early January.
Who Does Purdue Want?
The first man to walk on the moon was a Purdue graduate.
But applicants only need earthly achievements to get into this
high-tech university. Overall, Christiansen explained that Purdue
is looking for students "who have enough tools in their
academic tool kit to be successful and meet the challenges of
pursing a Purdue degree. We look at students' high school record
to see how well they did in key academic subjects, particularly
math, lab science and English.
"We look at their class rank to see how they did in comparison
to their classmates, and we always pay attention to the Purdue
school or program that students want," Christiansen added.
"How did they perform in classes that relate directly to
their intended major? Finally, we look at trends and standardized
test scores. We put all of these factors together to determine
if each student can be successful in his or her major.
Finally, Christiansen said, "We're also trying to recruit
a diverse student body in order to enrich our students' learning
process and to prepare them for a global working environment.
The classroom dynamics are much richer if our students come from
different racial/ethnic groups, genders, states, countries and
from all over Indiana."
[back
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FINANCIAL AID FLASH
PLUS vs. Home Equity Loans. Who should use PLUS
(Parent Loans for Undergraduate Students) and who should use
home equity loans to finance their children's education? In recent
years, a new rule of thumb has emerged: Lower- and middle-income
families who are not running up huge student loan debts are being
advised to turn to the low-interest PLUS program. High-income
families who are paying high tuition or have several children
in college at once should rely upon home equity since all interest
costs are deductible at tax time.
PLUS loans are set at 3 percent higher than the 90-day Treasury
rate. So, in today's low-interest market, PLUS loans are pegged
at an attractive 6.79 percent, a rate that will hold until June
30, 2002. Compare that to a year ago, when PLUS loans were set
at 8.99 percent, right up against the 9 percent upper limit set
by Congress.
Additionally, middle-income families, with adjusted income
of $100,000 or less, can deduct up to $2,500 of the PLUS loan
from their taxes.
On the other hand, homeowners, no matter how high their income,
can deduct the interest on their home equity loans. A tough choice?
Remember, college financial aid officers are a good source of
information when trying to sort out difficult loan decisions.
Parent Fraud Prosecuted.
Honesty is the best policy, even when filling out financial aid
statements for college. Recently, scores of parents in Illinois
were indicted for "blatant fraud" in an attempt to
gain more than their share of student aid for their children.
One U.S. Attorney recently settled 100 civil cases for a total
of $825,676 in fines, costing each parent an average of double
the amount they cheated from the government. The biggest cheats
were also hit with criminal charges. The prosecutor said the
worst part of these crimes is that it takes aid money away from
eligible students and families.
Credit Card Debtors. Almost
80 percent of college students have credit cards, according to
Nellie Mae, a student loan provider. In 2000, 32 percent had
four or more, although the average number has fallen from 3.5
to 3 cards since 1998. Yet, in 2000, the average credit card
debt reached $2,748, up from $1,879 in 1998. Student debt on
graduation is twice what it was in 1993. One in ten students
will graduate with a credit card debt of $7,000 or more. As many
as 120,000 people under age 25 filed for bankruptcy in 2000.
And they will be hit hard by new bankruptcy reform.
Part of the problem is the ease with which new students sign
up for credit cards when they first hit campus. A decade ago,
they had to be 21 years old with a parent as cosigner. Those
restrictions disappeared in the 1990s as card companies aggressively
recruited students, who often pay the minimum monthly payment
incurring even greater debt.
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Tuition Blues
The vast majority of parents, 87 percent, worry about the high
cost of college, according to a new survey conducted by the American
Council on Education (ACE) in Washington, D.C.
In 1998, 65 percent of parents were very worried about college
costs. That number seems to have fallen to 54 percent in 2001.
But nine out of ten in the ACE survey said the value of a college
degree was essentially worth the price tag, which at some of
the most exclusive private colleges and universities can run
$140,000 for four years. But that's at one extreme.
At four-year private colleges, tuition has risen from an average
of $7,202 in 1981 to $16,332 in 2001, which means it's less in
some places. At four-year public universities, tuition has soared
from about $800 a year in 1981 to $3,510 in 2001.
This accelerated growth has moderated slightly as the national
economy has simmered. During the late 1980s and early 1990s,
tuition often leaped by 10 or more percent a year. That rate
slowed to 4 or 5 percent in the late 1990s, still above the rate
of inflation (3.3 percent), but nowhere near the "peer pricing"
of a decade ago. But large and unexpected cost increases in both
health care and, especially in California, energy, could drive
tuition up again next year. The report also noted that tuition
usually accounts for about 49 percent of a college's annual budget.
Meanwhile, USA Today reported in July that the economic
downturn "is rippling through state budgets to public colleges
which are in turn increasing tuition in double-digit percentages.
In-state undergraduate tuition in Tennessee, for example, is
rising 15 percent; Ohio State is increasing undergraduate tuition
9.3 percent and Minnesota 10.9 percent statewide; and 13.3 percent
at the University of Minnesota's four main campuses.
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COLLEGE BOUND's Publisher/Editor: R. Craig
Sautter, DePaul University; Chief Operating Officer: Sally
Reed; Contributor: Marc Davis; Circulation: Irma
Gonzalez-Hider; Illustration: Louis Coronel; Board
of Advisors: Claire D. Friedlander, Bedford (NY) Central
School District; Howard Greene, author, The Greenes'
Guides to Educational Planning Series; Terence Giffin,
Choate-Rosemary Hall; Frank C. Leana, Ph.D., educational
counselor; Virginia Vogel, Educational Guidance Services;
M. Fredric Volkmann, Washington University in St. Louis,
Mary Ann Willis, Bayside Academy (Daphne, Ala.).
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In This Issue
Feature Articles
Financial Aid
Developments
-Tax
Reform Education Benefits
-Top Schools
Reaffirm
Need-Based Aid
-Knight
Commission Calls for Athletic Reform-Now
THE COUNSELOR'S
CORNER
Avoiding
High School
Quicksand
BOOKSHELF
Sampling
of Books
NEWS YOU CAN USE
-Colleges
Cause Senior Slump?
-International
Comparisons
ADMISSIONS WATCH
-Top
State Programs Filling First
-Apply
Early
-Who
Does Purdue Want?
FINANCIAL AID FLASH
-PLUS
vs. Home Equity Loans.
-Parent
Fraud Prosecuted
-Credit
Card Debtors
Other Articles
Tuition
Blues
Coming Next Month...
A CB Update on Early Decision/Early Action
Publisher's Note
Welcome Back. With this first issue of Volume 16,
CB is pleased to announce the return of our founding editor Sally
Reed, after her long sabbatical to work with former U.S. Commissioner
of Education, Ernest L. Boyer, at the Carnegie Foundation for
the Advancement of Teaching, and then as associate vice president
of Loyola University Chicago. Sally now serves as Chief Operating
Officer for COLLEGE BOUND, the monthly printed newsletter, and
our new web publication, collegeboundnews.com.
Also, CB is proud to have won a 2001 "Award for Publishing
Excellence" from Communications Concepts.
And, finally, welcome back to all our loyal readers. We hope
you have a great school year!
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