From the News You Can Use Archives 12/27/06
December News Digest
By Ian Crawford, Web Communications Editor
Washington Update Private Loans on the Rise Report Urges State legislators to Step Up for Higher Education Free EDFUND Videos Help Parents and Students Apply for College Financial Aid
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As reported in the EFC Exchange of December 20, President George W. Bush has signed into law the Tax Relief and Health Care Act of 2006 a package that extends through 2007 several popular tax incentives, including the deduction for college tuition deduction.
- $4,000 in higher education costs can be deducted for taxpayers with incomes of $65,000 or less ($130,000 for couples filing a joint return).
- $2,000 can be deducted for those earning up to $80,000 ($160,000 with joint returns).
Commenting specifically on the extension of the college tuition tax deduction, the president noted that To keep America competitive in the world economy, we must make sure our people have the skills they need for the jobs of the 21st century. Many of those jobs are going to require college, so we're extending the deductibility of tuition and higher education expenses to help more Americans go to college so we can compete.
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Private loans could exceed federal subsidized Stafford loans by the end of the decade. That is one conclusion of a report published this month that documents the boom in the private loan market.
The Future of Private Loans: Who Is Borrowing, and Why? by the Institute for Higher Education Policy notes that private loans have captured 19 percent of the student loan market, up from 4 percent a decade ago. Other findings include:
- 83 percent of students with private loans in 2003-04 are undergraduates
- 9 percent are graduate students
- 7 percent are professional students
Professional students are more likely to take out private loans:
- 24 percent of professional students had private loans in 2003-04
- Only 5 percent of graduate and undergraduate students had private loans
The report questions whether students are unaware of the choices available to them:
- 20 percent of traditional-age students with private loans had not taken out any federal loans
- 19 percent had federal loans but had not borrowed up to the federal limits
The Future of Private Loans: Who Is Borrowing, and Why? - The Institute for Higher Education Policy
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Report Urges State Legislators to Step Up for Higher Education
The National Conference of State Legislatures (NCSL) is urging state legislators to take a more active role in reforming higher education and making college more accessible.
Entitled Transforming Higher Education: National Imperative State Responsibility, the report from a 12-member special panel of the NCSL has some advice for legislators of more particular interest to the financial aid community:
- Rethink Funding: Over the years, states have reduced their share of overall higher education costs, and as a result, the share of costs for students, families and institutions has gone up. Some states may decide to spend more money. All states need to spend money more wisely.
- Rethink student aid: States should examine their merit- and need-based financial aid programs to ensure that they are well balanced, reward students who are efficient, and help adults and part-time students.
- Help reduce borrowing and debt: Two out of three students graduate with debt, and the average debt is $17,250. Ten years ago, it was $8,000, adjusted for inflation. Legislators must find a way to reduce this drain on the state economy.
- Recommit to access: States can make college more affordable. They can also see that courses are offered at varied hours, such as in the evenings. And they can make sure a variety of low-cost options like technical schools and community colleges are available.
- Recommit to success: Ensuring that students get into college is only half the battle. States should also ensure that students graduate.
Transforming Higher Education: National Imperative State Responsibility - National Conference of State Legislators
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Free EDFUND Videos Help Parents and Students Apply for College Financial Aid
EDFUND has released its latest free videos aimed at helping high school counselors and college financial aid administrators guide students and parents through the process of applying for college financial aid.
In a News You Can Use article this month, we reported that a DVD is also available with the four national versions of the videos. Both national English and Spanish versions of the videos for students and for parents are on one disc.
Complete Article Free EDFUND Videos Help Parents and Students Apply for College Financial Aid
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Story posted December 27, 2006.
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