President Obama’s Higher Education Agenda in a Nutshell

According to his White House statement on education, President Obama believes our nation’s economic competitiveness depends on the quality of our education, pledging to help the United States have the “highest proportion of students graduating from college in the world by 2020.”

According to the American Association of State Colleges and Universities, President Obama hopes to accomplish this goal through legislative reform addressing the following:

• College Affordability
• Access to Higher Education
• Fiscal Sustainability for Public Colleges and Universities
• College-Based Research Funding
• Support for Two-Year College Programs

Setting an ambitious goal is one thing; achieving it quite another. What has President Obama actually done to reform higher education to date?

Key Obama Legislation Affecting College Students

Though less than 2 years into his term, President Obama has enacted a number of changes to higher education. Here are the most significant.

1. The American Recovery and Reinvestment Act (ARRA) of 2009

Passed in February, 2009, this $787 billion stimulus package was designed to create jobs and boost consumer spending. It included the following provisions addressing President Obama’s overall goals for higher education reform:

Focus: College Affordability

The ARRA established The American Opportunity Tax Credit, a national tax credit allowing up to $2500 of college expenses, including tuition, fees, and course materials. Up to $1000 is refundable, so those who do not owe taxes will receive a rebate. This credit set through 2011, but is expected to become permanent. In his 2010 State of the Union address, President Obama also pledged to extend application of the credit from 2 years of college to 4 years, though legislation has not yet been proposed.

Focus: Fiscal Sustainability for Public Colleges and Universities

The ARRA also established State Fiscal Stabilization Fund, which provides funds to states in order to counteract education cuts tied to the poor economy.

Focus: College-Based Research Funding

The ARRA provided colleges and universities with billions in research funding, including:

• $10 billion for the National Institutes of Health
• $3 billion for the National Science Foundation
• $2 billion for the Department of Energy
• $580 million for the National Institute of Standards and Technology
• $280 million for the National Oceanic and Atmospheric Administration.

2. The Student Aid and Fiscal Responsibility Act (SAFRA)

Signed into law by in March, 2010, the Student Aid and Fiscal Responsibility Act (SAFRA) was a key part of the Health Care and Education Reconciliation Act of 2010. The SAFRA included a number of major provisions related to President Obama’s education goals.

Focus: College Affordability

The SAFRA eliminated the Federal Family Education Loan Program (FFELP), a program which allowed private banks to service student loans backed by the US government. These loans will now be serviced by government’s Direct Loan Program, a change the National Association for College Admission Counseling notes will save $61 billion over the next 10 years.

These funds will be redirected to students by increasing the Federal Pell Grant Award from $5550 to $5975 by 2017. Starting in 2013, the award will also be indexed at the Consumer Price index and increase with cost-of-living. The SAFRA also expands the Federal Perkins Loan Program to include more colleges and universities.

Focus: Access to Higher Education

The SAFRA provides $3 billion over 5 years to the College Access and Completion Initiative Program, which focuses on retraining and graduating more college and university students. An additional $750 million is slated to provide additional college access and completion support to students, including additional funds to the College Access Grant Program.

Focus: Supporting 2-Year College Programs

The SAFRA founded what’s known as the American Graduation Initiative, authorizing the program to assist low income and non-traditional college students in completing 2-year college degree programs. The Act also creates a grant program designed to expand online learning opportunities for students preparing for postsecondary education.

SAFRA also includes $2.5 billion in grant funds to states for the construction, modernization, renovation, or repair of community college facilities.

Budget Proposals for Fiscal Years 2010 and 2011

According to USA Today, President Obama dedicates a sizable portion of his national budget to higher education, distinguishing him from predecessors who focused primarily on K-12 education. Highlights include:

• Increasing the maximum Federal Perkins Loan award each year and a proposed $6 billion Perkins fund in 2011

• A 5-year, $2.5 billion fund to improve college success and completion among disadvantaged students; States could use a portion of the funds for college outreach programs.

The Bottom Line for College Students

It’s no secret that higher education or career training improves salary and advancement. President Obama’s higher education reforms to date improve college accessibility and affordability overall, an important note in a sluggish job market. While more than two years remain in his first term, the ongoing economic recession may limit future education initiatives, so consider investing in your education now rather than later.

Aimee Hosler

Aimee Hosler is a freelance journalist specializing in career- and education-focused topics. The self-described political junkie minored in political science and media law while studying journalism at California State Polytechnic University in San Luis Obispo.

Sources:
Youth vote may have been key in Obama’s win
Education | The White House
The Recovery Act
Obama aims high for higher education – USATODAY.com • Feb 26, 2009
President’s Budget – Overview

Community College – A Benefit to the Brain and Bank Account

Considering the average cost for a student to attend a private four-year college is $26,273 (up 4.4 percent from last year) and $7,020 annually to attend a public institution (up 6.5 percent from last year), it’s no wonder college trends show potential students and families are opting to take the two-year route to a degree. In fact, 31 percent of all full-time college students in the United States attend community colleges, and enrollment across the county has increased 24 percent for full-time participants and 17 percent in the part-time arena. With the average annual cost at about $2,544 (up 7.3%), the potential financial savings is astronomical, even when students opt to continue their education at a four-year university after completion of the two-year program.

Expanding Demographics

It’s not just the traditional recent high-school graduate signing up for courses. With the national unemployment rate hovering close to 10 percent, many out-of-work adults are contributing to college trends and heading to admission offices across the country to take advantage of opportunities at two-year community colleges. They are hoping to garner new skills or prepare to switch career paths and make themselves more marketable. Most cite affordability, a faster time to program completion versus the four-year approach, and minimal commuting time as reasons for their choice.

The White House Weighs In

President Obama has contributed to pushing college trends toward two-year programs even further. Last year he announced a $12 billion community college initiative to assist facilities in making physical plant improvements, expanding online curriculum offerings and developing programs to increase graduation rates and better prepare students to move into the workforce or to a four-year institution. The President also put a call out to community colleges to increase its number of graduates by an additional five million students by the year 2020 – an accomplishment that would help him achieve his goal of the United States being home to the highest proportion of college graduates in the world by 2020.

Lisa Tortorello

Lisa Tortorello has been a Director of Public Relations and Marketing within a large East Coast health care system for more than 11 years. She has an associate’s degree in Liberal Arts and a bachelor’s degree in Public Communication.

What’s the importance of attending college? A college education has replaced a high school diploma as the gateway to the middle class, according to an extensive public opinion survey completed by the non-profit group Public Agenda in 2000.

Even most young people who leave college before completing a degree acknowledge the importance of college, according to a December 2009 study by Public Agenda and the Bill & Melinda Gates Foundation. Of those who failed to complete a degree, 89 percent said they had thought about returning to college, and 97 percent said it would be important for their own children attend college.

The Importance of College to Financial Success

And if money does indeed talk, the importance of college is enormous. Consider the following average annual incomes compiled by the U.S. Census Bureau:

• High school dropouts: $18,900
• High school graduates: $25,900
• College graduates: $45,400
• Professional degree recipients: $99,300

Why is a college degree so beneficial to a person’s earnings power?

• More and better career choices. College graduates generally have more transferable skills, meaning they can perform a number of positions across different industries and companies. That means they’re more valuable to employers, who are then forced to pay more to attract and retain them.

• Technological skills. College students today are exposed to technology that’s driving the economy, making the importance of college an even bigger factor in employment. And because they’ve learned how to learn, they are better able to adapt to new technology and workplace changes.

In today’competitive job market, the importance of college can’t be overestimated. A college degree offers many workplace advantages, from increasing an employee’s chances of being promoted to making it easier and more likely that he or she is able to transition to a new job, industry or even an entirely new career.

• More money over a lifetime. Full-time college students generally forego a living wage while studying, but after graduation, they more than make up for that income shortfall by earning more over their lifetimes than those with only a high school diploma. Also something to consider in the college-value-to-college-cost equation: those who earn degrees in science- or math-related fields generally earn more as soon as they graduate than students in other majors, according to studies cited by The Wall Street Journal.

• Non-monetary value. According to studies cited by U.S. News & World Report, “College graduates are healthier, contribute more to their communities, and raise kids who are better prepared academically.”

• Living an inquisitive, well-rounded life. Value can be intrinsic, and it often is with a college degree. College introduces students to new ideas and can awaken interests and aptitudes people didn’t previously know they had.

• Zeroing in on work you enjoy. Especially at colleges that offer a wide range of programs and the flexibility to study across disciplines, higher education can help those unsure about a new career path decide upon the best one for them.

• Technological literacy. Especially for older adult learners, the speed with which technology has changed the workplace can be daunting. In most college programs, students are required to learn to effectively work with technology, experience that can serve them well post-graduation.

• A bootstrap out of poverty. College is a particularly good value for students from low-income families because receiving an education is the best chance of helping them break out of low-paying jobs.

College value versus college cost is often difficult to quantify: how do you place a value on learning? “Higher education is an investment in human capital,” former Gettysburg College President Katherine Haley Will told National Public Radio. College value outweighs “any simple calculation of costs.”

Reduced Earnings Still Higher for College Grads

Taking into account the increasing cost of college, student loan debt, and breaks in employment, Schneider estimated that college graduates earn about $280,000 more than high-school graduates. A researcher commissioned by The College Board in 2007 put the figure at about $450,000.

Most researchers agree that college is worth the money, because graduates, on average, do earn more than their counterparts with only high-school diplomas.

One way to make sure that college pays off for you is to take advantage of grants and scholarships when applying. Carefully read the terms of any student loans you apply for to make sure the terms are favorable. And research average salaries in your desired field so you can deicide how much debt, if any, you are comfortable taking on.

College offers more than just a path to a higher salary–it offers a change to learn and grow. A carefully thought out financial plan can help you achieve that.

Sources:
Jennifer Cheeseman Day and Eric C. Newburger • The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings
U.S. Census Bureau
Mary Pilon • What’s a Degree Really Worth? • Feb 02, 2010

Financial Aid Helps with the High Cost of College

Of all undergraduate students, 66 percent received some type of financial aid in 2007-08, with the average amount being $9,100, according to the National Center for Education Statistics.

• Scholarships and grants. More than half of 2007-08 undergraduates received grants. All students hoping to secure financial aid should complete the Free Application for Federal Student Aid (FAFSA) no later than February 1 of the year they intend to begin their studies.
• Loans. Two-thirds of four-year college graduates incurred some debt to pay the high cost of college, with the average being $23,186 in 2007-08. But think carefully before taking on debt, and apply first for government loans for students with favorable interest rates.
• Tax credits and deductions. The federal government has a variety of tax credits and deductions designed to minimize the high cost of college. These include allowing withdrawals from Individual Retirement Accounts tax-free to pay for college, hefty tax credits such as the Hope Scholarship and Lifetime Learning credits, and federal income tax deductions for student loan interest payments.
• Pay as you go. Working your way through school may not be your ideal way of dealing with the high cost of college, but it’s an option. Increasing numbers of students attend college part-time while also working. Even if you go to school full-time, the federal student work-study program pays you at least the minimum wage for 10-to-15 hours of work a week.

With careful thought about your post-college career aspirations and some advance preparation, the high cost of college can be made manageable.

Sources:
Fast Facts: Financial Aid for Undergraduate Students
National Center for Education Statistics
Free Application for Federal Student Aid
2009-10 College Prices
The College Board

How Some People Slash Their Tuition Prices and Go to School for Free

If you really do some digging around, you might be surprised what you find. It may take a little more time and energy upfront, but if you can avoid paying $24K a year in tuition prices, isn’t it worth it? Below are some of the more popular methods for reducing some or all of your college fees:

• Apply to a tuition-free college where prices are nonexistent. In exchange for a free education, these programs ask you to volunteer 15-30 hours every week in a work-study program.
• Apply for scholarships. There are hundreds upon thousands of scholarships, ranging from $50 to full rides. In most cases, the only real cost is effort. If you write the essays, obtain some recommendations, lick a few stamps, and stay on top of the deadlines, you could amass enough free money to cover all of your collegiate expenses.
• Join the armed forces. The Active Duty M.G.I. Bill provides up to $37K for tuition prices. Get an education, stay in peak physical shape, serve your country, and walk away with little or no college debt.
• Ask your employer for help. If you are going back to school to earn a degree that could somehow benefit your current company, your boss may be willing to help cover some or all of the expenses. In exchange, you might be expected to stay on the job a few extra years so that the company can earn a “return” on its investment.

Stanley Rubenti

Stanley Rubenti is a world traveling writer and editor who has lived in Japan, the US, Thailand, and France. He currently resides in Kuala Lumpur, Malaysia where he offers college admissions advice for international students interested in studying abroad.

Sources:
Alison Damast • Pssst! Wanna Go to College for Free? • Nov 14, 2007
Job Profiles • How to go to College for Free • Dec 31, 1969

Steps for Claiming Tax Deductions from College Loans and Interest Payments

1. First you must determine whether or not you are even eligible. If the loan is in your name and you are not a dependent, then you may qualify. It is important to remember that if you are currently married, you are not allowed to file your taxes separately.
2. Do you make over $70K a year as an individual or $145K together with your spouse? If so, then you may not qualify.
3. Next, calculate the amount of student loan interest that is eligible for deduction. This is the total government or bank interest you are required to pay within the given tax year. Loans from family members or 401(k)s do not account. You may deduct up to and including $2,500.
4. You must next determine whether or not you may make a full deduction or only a reduced deduction. If you are married and filing jointly with a combined income above $115K, you can only pay a reduced deduction, which is your combined income minus $115K all divided by $30K. If you are filing as an individual, and you make over $55K, then you can only pay a reduced deduction. This amount is your combined income minus $55K all divided by $15K. Subtract this deduction from your eligible student loan interest.
5. Enter the remaining student loan interest (reduced or non-reduced) on line 33 of Form 1040.
6. Voila. You are done.

Stanley Rubenti

Stanley Rubenti is a world traveling writer and editor who has lived in Japan, the US, Thailand, and France. He currently resides in Kuala Lumpur, Malaysia where he offers college admissions advice for international students interested in studying abroad.

Source:
Deborah Nelson • How to Deduct Student Loan Interest from Your Taxes • Dec 31, 1969

In the Beginning: The Age of Degree Mills

Those brave enough to test the waters of the birth of online education found a mixed bag. Most of the big-name schools offered only a few sparse courses online or snubbed the concept entirely. For example, the Washington Post reports that you can take business courses from Harvard Extension if you have online access. No one, however, can earn a Harvard MBA online.’ And because the Internet inevitably promotes commercialism, cardboard-fronted colleges began offering degrees based on life experiences (read: no academic rigor required). Degree mills allowed anyone to pay a small fee to receive a diploma that wasn’t worth much more than the card stock it was printed on.

Accreditation Arrives: More Schools, More Options

The notion that working students could earn a valid university education without compromising their professional or personal obligations was too valuable to die. The demand was too great, and colleges knew a good thing when they saw one. So distance learning followed the path of accreditation. Validation groups such as The Council for Higher Education Accreditation and The Higher Learning Commission began the arduous task of examining online degree programs and ensuring their applicability to learning and professionalism.

The Future of Online Education

With an economy that is unsure at best, students, recognize the potential of the online education. And so do investors. According to BloggingStocks, a slowing economy and corporate layoffs are sending the population of unemployed and mid-career changers back to online school. And AOL reveals that total degree enrollment in Apollo Group Inc., a player in the distance education industry, rose 11 percent to 345,300 students versus one year ago. The bottom line? The point where online learning meets meaningful accreditation has given distance education a renewed credibility.

Sources:
America
AOL money & finance
BloggingStocks
Washington Post

Accreditation Means Value

The definition of “accreditation,” offered in the leader of this article by Community Foundation, is only half the story. Ensuring the quality of the degree program you choose has implications in your profession and in your wallet. Degrees without national or regional accreditation are typically ignored in the real world, a fact that most students don’t realize until after graduation. They’re then passed over for promotions and pay increases due to a diploma that carries little to zero weight. Colleges and universities recognize this, so they pour a great deal of human and financial resources into accreditation. Schools that do flourish in enrollment; those that don’t will fall by the wayside.

Why Colleges Seek Accreditation

The Council for Higher Education Accreditation has been tracking the last century of accreditation efforts by US colleges and universities. Currently, there are 7,000 higher education institutions and 17,000 specific degree programs accredited by one or more of the national bodies. Some of the top reasons why colleges seek accreditation include:

• * Earning federal and state government funding, as well as private sector financial support

• * Protecting students and consumers from fraud and abuse

• * Encouraging major innovation while maintaining quality

• * Facilitating states that carry out licensure of the professions

• * Responding to the current climate of accountability

Accreditation is in the best interest of all stakeholders, including students, federal and state governments, and the college and universities themselves. And as accrediting standards and procedures continue to fine tune, the distance learning concept will grow in popularity and application.

Sources:
CHEA
Community Foundation