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State Mapy College seniors who graduated in 2009 carried an average of $24,000 in student loan debt, up 6% from the previous year. Meanwhile, unemployment for recent college graduates climbed from 5.8% in 2008 to 8.7% in 2009 – the highest annual rate on record for college graduates aged 20 to 24. The Project on Student Debt’s new report, Student Debt and the Class of 2009, and a companion interactive map include average debt levels for the 50 states and District of Columbia and more than 1,000 U.S. colleges and universities.

The report focuses on students who graduate from public and private nonprofit four-year colleges with loans. Students in the District of Columbia and New Hampshire graduated with the highest average debt levels: $30,033 and $29,443, respectively. Those in Utah and Georgia had the lowest average debt: $12,860 and $16,568 respectively. As detailed in the report, actual state averages for student debt are likely higher than these estimates, which are based on data reported voluntarily by public and private nonprofit four-year colleges.

The report also includes lists of high- and low-debt colleges, and new data on how much of the Class of 2009’s debt at graduation is made up of private (nonfederal) loans. Read the report

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The Higher Education Opportunity Act (PL 110-315) requires the Secretary of Education to publish recommendations for improving financial aid award offer forms (or award letters), including a model format for such forms, with the input of a group of stakeholders convened for this purpose. Over the past two years, we have closely reviewed existing proposals for improving award letters and identified several shared principles and goals. We also conducted our own analysis of more than 100 actual award letters from a variety of states and schools. We found considerable variation in both the quantity and quality of information provided to students and their families, and numerous challenges to making easy and meaningful comparisons. Based on this work, we offer the following recommendations.

First and foremost, all award letters should clearly and accurately answer one fundamental question: How much will it really cost me to go to this school? We call this the “bottom-line cost”. It is the amount of money that students and their families are expected to come up with -- both out-of-pocket and through student loans and work-study -- to cover the difference between the school’s full cost of attendance and any grants or scholarships the student receives. This crucial figure allows students and families to compare financial aid offers based on the true cost of attending each college. Specifically, we recommend that all award letters:

  • Prominently display the most important and useful information, including:
    (a) total cost of attendance
    (b) total grant aid
    (c) bottom-line cost: the difference between (a) and (b)
  • Group aid by type:
    (a) grants and other gift aid that does not have to be repaid
    (b) self-help, including loans and work-study
    (c) clearly distinguish federal loans from nonfederal loans
  • Break down the full cost of attendance by category (as applicable to the specific student):
    (a) tuition and fees
    (b) room and board or housing and living expenses
    (c) books and supplies
    (d) transportation and miscellaneous personal expenses
  • Present information in a consumer-friendly way, avoiding jargon and acronyms
  • Explain deadlines and the steps students must take to complete the process

These principles are generally consistent with the legislative requirements for the model award letter format. The legislation requires that certain information be included without restricting the model to only those elements. A model format that focuses on providing key pieces of information in an accessible way has real potential to inform and improve institutional practice. Because our country has many different types of colleges serving many different types of students, an emphasis on the consistency and clarity of core content, rather than a single formal structure or layout, will raise the odds of adoption in the field.

Read the full letter we sent to the U.S. Department of Education earlier this year here.

-Matt Reed Program Director 

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The White House released a Treasury Department report yesterday showing that the American Opportunity Tax Credit (AOTC) helped more than 8 million students and families cover college costs last year, and called on Congress to permanently extend this tax credit, which is currently scheduled to expire at the end of 2010. We agree that the AOTC should be made permanent, but it also needs to be improved. Because of the way the AOTC is currently structured, an estimated one million low- and moderate-income students are not eligible for the AOTC despite having financial need. Most of these students attend community colleges.

Here’s the issue in a nutshell: the AOTC covers up to $2,500 in college tuition, fees, textbooks and supplies, and it is 40% refundable so that students with low incomes can benefit. However, we estimate that one million low- to moderate-income students at low-cost schools are ineligible for the AOTC because their grant aid covers these specific expenses, even though they still have unmet financial need relative to their full cost of college attendance.

By better coordinating the AOTC and Pell Grants, many more students struggling to pay for college would be able to benefit from both the AOTC and Pell. We look forward to working with the Administration and Congress to both extend and integrate the AOTC to help make college more affordable for millions of Americans.

 

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On Friday, more than a month into the academic year and 100 days after the deadline, the California Legislature passed and the Governor signed a long overdue state budget. We are pleased that the enacted budget leaves the state’s vital Cal Grant program intact.

Cal Grants helped almost 300,000 Californians cover the costs of college last year, but the budget delay has left many of this year’s recipients in limbo. With the budget in place, we hope state agencies will move quickly to deliver the long overdue grants to the students who were promised them so they can stay and succeed in college. 

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Lauren Asher testified before the U.S. Senate Committee on Health, Education, Labor & Pensions for the hearing on the Federal Investment in For-Profit Education: Are Students Succeeding? Lauren Asher's testimony begins at 62:20.

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Today the Institute for College Access & Success joined with three national student groups (the United States Student Association, U.S. PIRG, and Campus Progress) in submitting public comments to the U.S. Department of Education regarding proposed regulations to define gainful employment. Federal law requires career education programs that receive federal student aid to “prepare students for gainful employment in a recognized occupation.” The proposed rule defines what this means so the law can be enforced, and it is urgently needed to protect students and taxpayers from career education programs that routinely saddle students with debts they cannot repay and degrees they cannot use. These comments express support for the Department’s efforts to define gainful employment and focus on strengthening the draft regulation in areas where the stakes for students and taxpayers are most pronounced. Read the comments

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As reported today in the Sacramento Bee, many of California’s college students are once again starting the school year without the grant funds they were promised would help cover their costs. Until the Governor signs a budget for 2010-11 no state funds can be distributed, including those going to the over 335,000 low-income students who have qualified for Cal Grants – the state’s need-based student financial aid program.

Some institutions, such as those in the public and private four-year sectors, are able to front the funds or allow students to enroll before they receive their grants, but most California community college (CCC) students do not have a similar safety net. While the majority of Cal Grant dollars received by students who attend four-year institutions go towards tuition and fees, CCC students’ grants help pay for education-related expenses like books, rent, and food. Without this critical source of funding, students may no longer be able to attend, be forced to incur more debt to stay in school, or have to find additional work to cover their basic needs.

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The Department of Education released a lot of new information today pertaining to its July 26 proposal to define “gainful employment.”

The data is extensive and eye-opening. One thing that jumped out at us right away was the difference in student loan “repayment rates” by type of college. At public colleges, 54% of borrowers were paying down the principal on their loans, compared to 56% of those from private non-profit colleges. But at for-profit colleges, only 36% were paying down their student loans – which means that almost two-thirds of them couldn’t. At the University of Phoenix alone, that amounts to almost $2.8 billion in federal student loan debt that isn’t being paid down.

Read the data and analysis 

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