Study: College beats 4 years chained to radiator

Despite rising college costs, a four-year college education is a better investment of time and money than being chained to a radiator in a dank, unlit basement, concludes a new study reported in The Onion.

“Compared to the intellectual stimulation and personal growth achieved in a university setting, there is less to be gained from 48 months in which one is tightly shackled about the ankle and connected by a short length of chain to a leaking, immovable cast-iron radiator,” read the report. 

However, the prisoner who’s freed after four years will not owe any money.

Default penalties worry community colleges

Community colleges could be penalized for high default rates on student loans — even if few students are borrowing. Colleges could lose eligibility for all federal student aid programs if the default rate exceeds 30 percent for three consecutive years.

After college, parents still pay

Most college graduates aren’t financially independent — at least not right away — reports a survey by Sallie Mae. Nearly 85 percent of parents plan to offer their children monetary aid after graduation.

Almost one-in-three parents plan to provide their grad with financial assistance for up to six months, and around 50 percent plan to foot bills anywhere from six months to more than five years.

Tough love will help young adults grow up — and protect Mom and Dad’s retirement, advises Dennis Miller on MarketWatch.

Nothing can screw up retirement plans like supporting adult children after you’ve shelled out tens of thousands of dollars in college tuition, shuttled them back and forth for Thanksgiving and Christmas breaks, and maybe purchased a new computer for all that research and writing they did (or maybe didn’t do) over four-plus years.

It’s not just the lousy job market, writes Miller. “Social norms have shifted so that accepting help from Mom and Dad well into your 20s is ‘OK’.”

Parents, do not borrow to pay for your child’s college education, advises Robert Farrington on Forbes. If it’s necessary to take out loans, the student should do the borrowing.

Via Cost of College.

No federal loans for 1 million students

Nearly one million community college students nationwide — about 8.5 percent of the total —can’t take out federal student loans because their college doesn’t participate in the program, according to a report by The Institute For College Access and Success (TICAS).

Colleges complain they’re not allowed to limit “overborrowing” and risk losing eligibility for all federal aid — including Pell Grants — if default rates go too high.

Home again: The boomerang grads

Annie Kasinecz, 27, lives with her mother in Downers Grove, Illinois. She borrowed $75,000 to earn a degree in advertising and public relations at Loyola University in Chicago. Now working as a project coordinator, she’s lived at home rent-free for four years.  Credit Damon Casarez for The New York Times

The Boomerang Kids Won’t Leave home, predicts the New York Times Magazine. With college loans and low-paying jobs, they can’t afford to pay rent.

One in five people in their 20s and early 30s is currently living with his or her parents. And 60 percent of all young adults receive financial support from them. That’s a significant increase from a generation ago, when only one in 10 young adults moved back home and few received financial support.

. . . Those who graduated college as the housing market and financial system were imploding faced the highest debt burden of any graduating class in history. Nearly 45 percent of 25-year-olds, for instance, have outstanding loans, with an average debt above $20,000. . . . And more than half of recent college graduates are unemployed or underemployed, meaning they make substandard wages in jobs that don’t require a college degree.

The photographer, who lives at home and freelances, was graduated from an art college with $120,000 in debt. 

Alexandria Romo, 28, also a Loyola graduate, earned an economics degree but says she “had no idea what I was doing when I took out those loans” at the age of 18. She borrowed $90,000. Romo wishes she’d been taught about student loans, math and finance before borrowing at 12.5 percent interest. Romo lives at home in Austin and works at a security-guard company. Her dream is to be an environmentalist.

Ed Trust: Cut aid to low-quality colleges

Cut federal grants, loans and tax benefits to “college dropout factories,” “diploma mills” and “engines of inequality,” argues Education Trust in a new report. The “engines” are institutions — including some state universities — that admit few low- and moderate-income students eligible for Pell Grants.

Borrowing trouble

President Obama’s expansion of income-based repayment offers short-term relief, but will encourage reckless borrowing, enable colleges to keep raising tuition and promote the idea that everyone needs a four-year degree.

As long as college loans aren’t linked to the degree’s value — which varies depending on the major — young people will borrow too much.

The high-priced Ivory Tower

Ivory Tower, a new documentary, blames soaring college costs on decreased state funding for higher education and increased spending on campuses. Colleges are competing for student loan dollars, says filmmaker Andrew Rossi.

Obama extends 10% cap on loan repayment

Using an executive order, President Obama extended generous income-based repayment terms to an estimated five million more student loan debtors. People with student loans will be able to limit payments to 10 percent of their discretionary incomes. Loans will be forgiven in 20 years — or 10 years if they take public-service (government) jobs.

The big winners are people who borrowed for graduate school and private colleges, which can keep raising tuition without fear of scaring away students.

Feds will make college pay — or else

For now, proposed “gainful employment” regulations are aimed at for-profit colleges and career programs at nonprofits. If too many students in a program default on loans or pile up too much debt relative to income, the feds will cut off student aid. Once the bills start coming in for income-based repayment of student loans, “the government is just going to have to shut down the free money fountain” for all of higher ed, predicts EduBubble.