The federal college lending system is desperately in need of an overhaul. Congress took a first step when it made it a crime for lenders to solicit business by offering college officials kickbacks and other advantages — an all-too-common practice. President Obama’s new budget gets to the heart of the matter.

The value of college-savings plans fell 21 percent last year, a loss of $23.4 billion, as the bear market left American families with less money for tuition and put pressure on schools to increase financial aid.

Assets in the savings accounts, called 529 plans, declined to $88.5 billion from $111.9 billion at the end of 2007, according to data compiled by Financial Research Corp. in Boston and the Washington-based College Savings Foundation. The drop was mostly driven by the selloff in stocks, which lost 38 percent as measured by the Standard & Poor’s 500 Index.

Davenport, Iowa is one of a number of cities along the Mississippi River that brands itself as a gateway to the West. After a special election Tuesday, some of the city’s leaders hope it will be known throughout the region as a gateway to free college tuition.

The city’s voters decide today whether to approve Davenport Promise, a program which would provide college tuition to all local high school graduates starting this spring. To qualify, students would need only be Davenport residents and complete 400 hours of approved community service in the area. Private, parochial and home-schooled students would also qualify.

One way to get an edge in this job market is to earn an advanced degree. Just don’t assume doing it online will be easy.

Online masters programs are often cheaper and more convenient than traditional ones, but they also present challenges.

“You’re home alone and have to motivate yourself. It’s not the same as sitting in a classroom where you have a social support group,” said Michael Lambert, executive director of the Distance Education and Training Council.
Click Here!

As the economy sours, ITT Educational Services is reaping sweet rewards with spikes in enrollment and revenue spurred by the increasing numbers of unemployed workers going back to school for training.

The Carmel-headquartered company, which runs 114 schools under the name ITT Technical Institute, saw revenues jump 21 percent to $279.8 million in the final quarter of 2008.

New student enrollment during that same period rose 29 percent to 14,911. And ITT's stock hit a 52-week high of $133.75 on Feb. 3. That's a 46 percent jump from a year ago when shares were trading at $91.52.

It's a rare bright spot in a market that last week saw the Dow Jones industrial average and the Standard & Poor's 500 index reach their lowest levels in 11 years.

Even before the economic collapse, colleges have been going through intense debates about how they should be financed and what missions they should hold onto -- and which they should revamp. A new book from Cambridge University Press, Mission and Money: Understanding the University, explores these issues. The authors are Burton A. Weisbrod, the John Evans Professor of Economics at Northwestern University; Jeffrey P. Ballou, an economist at Mathematica Policy Research; and Evelyn D. Asch, research coordinator at the Institute for Policy Research at Northwestern. Weisbrod responded to questions about the new book.

For-profit colleges and trade schools stumbled on Thursday after President Barack Obama proposed shifting federal student loans into a 'direct-loan program' administered by the U.S. Department of Education.

Career Education Corp tumbled 8.8 percent to $23.84 while ITT Education slumped 8 percent to $107.94 and Corinthian Colleges Inc fell 6 percent to $19.

The S&P 500 index of education companies fell 2.3 percent. The index overall has fallen 3.4 percent in 2009.   (Rueters)

President Obama's proposal for direct government funding of student loans -- cutting out private industry -- sent shares of Sallie Mae, Student Loan Corp., Nelnet Inc. and other college loan companies plunging Thursday.

For-profit vocational schools, such as Corinthian Colleges Inc., DeVry Inc. and ITT Educational Services Inc., also saw their stock prices drop. Their students often rely on government-backed loans from private lenders.

Currently, students needing funds typically borrow money directly from the government or from banks and other lenders such as Sallie Mae that issue loans subsidized or backed by the government.

Christina Christopher was two classes shy of an MBA when DeVry University told her she'd run out of financial aid. She had relied on federal loans, but she hit her limit. With no cosigner for a private loan, she was open to any option she could find.

Someone suggested the website GreenNote, which helps students appeal to family and friends for college loans. Within three weeks, she had $2,500 in loans.

She thought GreenNote's 2 percent fee was worth it because the loan process was formalized. "I couldn't just call up [friends] and say, 'Hey, look, this is what I need,' " Ms. Christopher says.

WASHINGTON -- Is it feasible for every American to have at least one year of postsecondary education or training? What would have to happen to make that possible? Would federal financial aid and other policies need to change? Would the distribution of students among different kinds of colleges have to change?