Vol. 20 No. 7 March 2006

The Federal Dollar
Interest to Increase
on Student Loans
BY A NARROW TWO-VOTE margin, the U.S. House of Representatives in February ratified the Deficit Reduction Act to cut $39.5 billion through 2010 from the federal budget in areas ranging from Medicaid and crop subsidies to student loans. That amounts to about 2.5 percent of the $1.6 trillion deficit that will accumulate over the next five years covered by the bill.

The Senate had approved the cuts earlier by a one-vote margin, with Vice President Dick Cheney casting the deciding ballot. The President then signed the legislation.

Partisan language was flying in the wake of the final vote. Democrats accused Republicans of unconscionable votes to "cut" vital human programs. Republicans were pleased that they had taken a small first step to regain control of domestic spending.

But when it comes to the Student Loan Program, the results are not easily pigeonholed into partisan positions. The Student Loan Program represents just one half of one percent of the federal budget. But $12.7 billion of the cuts in the Deficit Reduction Act come from student loans.

However, while the bill cuts money from student aid over the next half decade, it also increases the amount of money students and families can borrow. And the bill may end up generating as much as $14 billion over the next five years for student loan programs by closing windfall loopholes for student aid lenders.

INTEREST RATE JUMP
Starting July, the interest paid on PLUS loans taken out by parents (about 800,000 of them) will soar from the current 6.1 percent to 8.5 percent. Before the bill passed, the rate was scheduled to increase from 6.1 percent to 7.9 percent. The interest rate on Stafford Loans (taken out annually by nearly 10 million students) will rise in July from the current 5.3 percent to 6.9 percent.

STUDENTS SPARED CUTS
The total amount appropriated for Pell grants in the bill actually rose by 6.6 percent from $12,364,997 in 2005 to $13,177,000 in 2006. The maximum amount available to individual students through the Pell Grant will remain at $4,050, the same as for the past three years. The extra money will pay off the program's past shortfalls.

The 2006 budget bill also sustains the 2005 level for TRIO programs for disadvantaged students at $836.5 million; for Gear Up, which assists low-income elementary and secondary students prepare for and attend college, at the 2005 level of $306.5 million; and the 2005 level of $990.3 million for the federal Work-Study program.

Supplemental Grants, which received $778,720,000 in 2005, also will receive the same amount in 2006.

The Carl D. Perkins Vocational and Technical Education program, which directs funds to community colleges for career development, also was sustained at current levels. Congress granted an additional $125 million for a new community college/job-training program in health care and information technology. President Bush had requested twice as much.

Yet, there are restrictions. Current students will not be able to consolidate their loans and lock in at low-interest rates before the jump. Likewise, parents who have already consolidated student loans will not be able to do it again before the rate increase.

PREPAID COLLEGE PLANS
The new legislation also makes it easier for families with state prepaid college savings plans to qualify for financial aid, by changing the federal formula for financial aid that used to reduce eligibility dollar-for-dollar by the amount withdrawn from a prepaid plan. State plans will be treated in the same way as 529 plans that count the savings plan as the parents' assets, of which only 5.64 percent are expected to go toward college expenses.

IMPACT
"With this bill we were able to reduce spending through changes in the way lenders operate, but at the same time we shielded the direct impact to students and actually increased student opportunities," Senator Michael B. Enzi, Republican from Wyoming and chairman of the Senate Committee on Health, Education, Labor and Pensions, explained when the bill passed the Senate in December.

Democratic critics said it shifted too much of a repayment burden back on families and students who have to pay back loans at higher rates. For example, "Illinois students could have to pay $1,971 more for college loans," charged the Campaign for America's Future. (More on President Bush's 2007 budget proposals next month.)

PELL GRANT RECIPIENTS
Meanwhile, a recent report from The College Board reports that after three years of large increases, the number of Pell Grant recipients increased by only 3 percent in 2004-05, and the constant dollar value of the average Pell Grant declined for the second consecutive year. The maximum Pell Grant, which covered 35 percent of average public four-year tuition, fees and room and board in 1994-95, and 42 percent in 2001-02, covered only 36 percent in 2004-05, the report concluded.

Students in the upper half of the income distribution are benefiting more from changes in student aid policies than those in the lower half, the report indicated. Forty-three percent of the education tax credits and about 70 percent of the benefits of the federal tuition tax deduction go to taxpayers with incomes of $50,000 or higher. Some states and institutions have also increased the proportion of aid they allocate on the basis of academic credentials rather than financial need.

NO STATUE OF LIMITATIONS
And while student debt levels increase, the U. S. Supreme Court recently decided there is no statue of limitation on repayment of student loans. Since 1991, student loan default rates have fallen dramatically, in part because of aggressive collection techniques used by the U.S. Dept. of Ed, including deducting outstanding debt from Social Security checks.

One disabled S.S. recipient brought the issue to the highest court in the land, claiming that the withholdings cause hardship and the statute of limitations has expired on his case. The Justices decided that Congress did not intend for collections to be limited by time constraints.

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THE COUNSELOR'S CORNER
Listening to Student 2006 Application Concerns
AS A COUNSELOR, I've always believed that how I listen to students and their parents is equally important to anything I may have to tell them. We can so easily get caught up in the mechanics of the college application process-nagging students to meet deadlines, urging them not to leave essay writing to the last minute, keeping them on task with test registrations and making sure their list contains a range from stretch to comfort schools-that sometimes we forget how critical it is that we give students and their families time and space to vent their reactions to this pressured process.

Fresh from this season of counseling students and their parents are some topics that seem to be turning the application process into a burden rather than learning experience or journey of self-discovery.

Wither Cover Letters. Students talked this year about feeling pressured to include a cover letter with their applications. My advice has been not to do this as routine procedure, but only if there is a specific item that needs to be addressed before a committee approaches the application packet.

Students, for the most part, don't have anything particular to say that isn't already addressed in the application itself and in their essays. But they feel that if some applicants are doing this, maybe they should too, afraid that omission will be interpreted by college admissions as laziness. This is an example of the thoughtlessness that invades the process because of pressure, anxiety and fear.

Whether to Resume. Another example is the trend to include, in addition to the activity grid or section, a complete, fleshed out resume, painstakingly delineating every time a student has made his/her way to the auditorium stage to collect an award (or to make an announcement.) I have always urged students to expand on their one or two most important activities by attaching blurbs that state why that commitment has been significant or how it has changed them.

Don't we have to ask if admissions personnel, already under siege with increased numbers of applications, essays, supplements and letters of recommendation, really want yet more paper to sort?

One area more than any other that makes students feel resentful is the spin in the marketplace that urges them to pad their resumes, join a ton of clubs and go off on exotic summer expeditions to build roads in Third World countries. Development of activities needs to occur over time. Choices should make sense and stem from other interests; for instance, the student interested in becoming a teacher works with children in day camps.

No college wants a laundry list of meaningless activities strung together to impress by quantity and not quality. It is far, far better to have two or three areas where, over the years, a student has shown commitment and developed leadership or shown enterprise by creating an organization or club that grows out of demonstrated and proven interests.

Overloading Courses. More than ever, students feel compelled to overload their schedules with advanced, honors, Advanced Placement and IB courses. Guiding a student to make thoughtful and appropriate course selections is one of the most satisfying parts of a counselor's job. It puts people on an individualized path to learning that reflects their strengths and interests and their willingness to explore new areas.

However, of late, I think we have all felt pressure to advise students who will be realistic applicants to the most selective colleges to include such courses. We hear from colleges that one of the most important criteria used to evaluate a student's candidacy is whether or not they have taken the most challenging curriculum their high school offers. Too often, we forget the most important codicil to that point: "the most challenging curriculum their high school offers at which they can do well." Unprepared students who blindly follow the maxim that they must have four or five advanced courses in junior and senior year, more often than not, come to regret it.

Casting Too Wide a Net. It becomes more of a challenge each year to stop students from applying to too many colleges. They pile on highly-selective schools at the top of their list, believing that by casting the net wide, they increase their chances of getting one of these prestigious schools. I am not sure this is prudent or that it yields any magical acceptances.

For one thing, it increases the number of essays that have to be written, especially supplemental essays that ask why a student wants to attend a particular school. Often, they don't know why, only that it is one more possibility among selective schools. They haven't bothered to visit or be interviewed, so their responses are canned and unconvincing. By mid-December, they are simply churning out more essays to meet January 1 deadlines. Thoughtful, careful, strategic choices, of five to seven schools, seems so much more effective for most students if they are choosing schools within an appropriate range of possibilities.

Contacting Professors. It has become de rigueur to contact a professor in an academic area of interest by e-mail and to ask to meet in person on campus. By doing this, students hope to personalize the process and single themselves out to someone who may advocate for an acceptance. But I caution students that if they are going to do this, they had better have a focused reason for doing so.

In other words, if talking about specific research that they have been engaged in at a noteworthy lab or poems published warrant their taking this step with someone who is presumably an expert in the field, then go ahead. But students can be left feeling very awkward and embarrassed.

If we, as counselors, remind ourselves that listening to both text and subtext of what our students and their parents are saying is just as vital to the success of the process as all of the more concrete tasks we are expected to take on, I believe we can preserve one of the most important outcomes of the process-self-discovery-as well as the more satisfying roles we play in this rite of passage-those of informed guide and thoughtful listener.

Frank C. Leana, Ph.D. is a private counselor in New York City and in Cambridge, Massachusetts, and a College Bound Advisor.

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NEWS YOU CAN USE
More Doctorates. The number of doctoral degrees granted by U.S. universities rose by 3.4 percent in 2004, according to the National Opinion Research Center at the U. of Chicago. Some 42,155 graduate students earned their doctorates. Almost one third of them went to non-U.S. citizens. The largest increase, 9.4 percent, went to engineering students. The median time it took to earn a doctorate was eight years. Nearly 55 percent went to men, while 80 percent went to white students.

Who Governs? According to a recent survey by the Association of Governing Boards of Universities and Colleges, in 2004, the average public college board size was 10.5 members, who served 5.4 years. Some 77.7 percent of board members are white, 13.6 percent black, 3.9 percent Hispanic, 1.8 percent American Indian. Business was the profession of 47.8 of the board members, about 23 percent were professionals, 18.5 came from education. Private boards had an 88 percent white composition and 52 percent came from business.

Remedial Benefits. Two Harvard U. researchers studied 28,000 college students in Ohio in 1998 who took remedial courses at college and concluded: remedial courses apparently improve the odds that a student with low academic skills will graduate. Students who took remedial English graduated within four years at a 17 percent better rate than their similarly prepared peers. Find the report at the National Bureau of Economic Research, www.nber.org/papers/w11325.

The Eye of the Beholder. How do college admissions offices examine their applicant pool? Here's an example of what Purdue U. in the Big 10 says about how it proceeds. "In our individual review of each applicant, we consider the following factors: subject matter expectations, overall grades in academic coursework, grades in courses related to intended major, strength of student's overall high school curriculum, trends in achievement, class rank, overall grade-point average, core grade-point average (English, academic math, laboratory science, foreign language, speech), SAT and or ACT scores, ability to be successful in intended major, personal background and experiences, information provided by the high school counselor, time of year the student applies, and space availability in the intended major. All applicants must graduate from high school or have a GED." For more information, see www.purdue.edu/ Admissions/Undergrad.

Financial Resources. At this time of year, when parents are struggling to cope with the reality of paying for a college that accepts their child, it's worth remembering some helpful websites that can help with college cost calculations. These include: www.CollegeBoard.com, www.Finaid.com and www.fastweb.com.

And in comparing offers, syndicated financial writer Terry Savage urges middle-class parents to consider whether it is "worth it to pay top dollar for the most prestigious college" (multiplied by four years), when state institutions often provide "just as good an education at a less-expensive school."

People are Talking About. Creative Colleges: A Guide for Student Actors, Artists, Dancers, Musicians and Writers by Elaina Loveland (SuperCollege) ISBN 1-9326620-5-7; $19.95. Surprising Secrets for Success from the Country's Top Students by Cal Newport (Broadway Books) ISBN: 0-7679-1787-1; $11.95. Doing Honest Work in College by Charles Lipson (The University of Chicago Press); ISBN: 0-226-48472-6; $13. The Best 361 Colleges: The Smart Student's Guide to Colleges, 2006 Edition (The Princeton Review, Inc.); ISBN: 0-375-76483-6; $21.95.

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ENROLLMENT TRENDS
Women Account for 57 Percent of All College Students. That's clearly the result of decades of gains for young women, and portends well for their future, even though according to the Census Bureau, in 2004 women still earned, on average, just 77 cents to each dollar paid to male counterparts.

Another darker side of the picture is the continued drop in college participation by young men. The declines are seen in all races, income groups and fields of study, policy analyst Thomas Mortenson, publisher of the influential Postsecondary Education Opportunity newsletter in Oskaloosa, Iowa, told USA Today.

While there are more men than women ages 18-24 in the U. S.-15 million vs. 14.2 million, according to a Census Bureau estimate last year, the male/female ratio on campus is 43/57, a reversal from the late 1960s. By the mid-1970s, the balance had reached 50/50.

Some universities are trying to cope with the problem of the gender gap. The U. of Washington, for example, has started a college-prep program for boys. But administrator Thomas J. Calhoun Jr. told USA Today that the university also supports girls-only programs, including one aimed at increasing women in engineering. In last year's State of the Union address, President Bush unveiled a $150 million initiative to keep kids from joining gangs and from dropping out of high school.

The gender gap means that it may be easier for some boys to get into elite colleges than it is for girls. "We think there's value in having equal numbers," Jim Bock, admissions dean at Swarthmore C. in Pennsylvania, told USA Today. In 2004, the school admitted more women than men, but it admitted a greater percentage of the male applicants. The student body's male/female breakdown is about 48/52.

But several college administrators, including Bock, told the paper they would not admit a male over a better-qualified female.

Demographic Projections. The U.S. Department of Education predicts that the total number of full and part-time college students will increase by just under 2 million students by 2014. Total college enrollment in 2006 is 17,664,000; in 2014, it is expected to reach 19,470,000. The total number of full-time students will rise from 10,706,000 in 2006 to 11,902,000 in 2014.

A Million Students Now Home Schooled. According to the U.S. Department of Education, about 1.1 million children are home schooled, or about 2 percent of the nation's 53 million children ages 6-18. Researchers really don't know what's fueling the phenomena.

P.S. CORRECTION. Chatham College was not listed correctly in the February issue. Here is the corrected item: Chatham C., a selective institution for women in Pittsburgh, has dropped all standardized test score requirements for admissions. According to Michael Poll, vice president for admissions, applicants can now submit graded test papers, high school GPA and portfolios in lieu of ACT or SAT scores. "Standardized tests only reveal verbal and mathematical aptitude within a very controlled environment," Poll said, "but Chatham also considers qualities like creativity, ingenuity, leadership or reasoning that better indicate a successful college student. We often see no correlation between SAT scores alone and academic success" For more details on Chatham, see www.chatham.edu.

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COLLEGE BOUND's Publisher/Editor: R. Craig Sautter, DePaul University; Chief Operating Officer: Sally Reed; Circulation: Irma Gonzalez-Hider; Illustration: Louis Coronel; Board of Advisors: David Breeden, Edina High School, Minnesota; Claire D. Friedlander, Bedford (N.Y.) Central School District; Howard Greene, author, The Greenes' Guides to Educational Planning Series; Frank C. Leana, Ph.D., educational counselor; M. Fredric Volkmann, Washington University in St. Louis; Mary Ann Willis, Bayside Academy (Daphne, Ala.).

In This Issue

Feature Articles
Interest to Increase on Student Loans

-More CB Survey Results

COUNSELOR'S CORNER
-Listening to Student 2006 Application Concerns

NEWS YOU CAN USE
-More Doctorates
-Who Governs?
-Remedial Benefits
-The Eye of the Beholder
-Financial Resources
-People Are Talking About...

ENROLLMENT TRENDS
-Women Account for 57 Percent of All College Students
-Demographic Projections
-A Million Students Now Home Schooled

-P.S. Correction

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