This USA Today cover story brings welcome attention to the important issue of student debt. At College Parents of America, we hear every day from parents whose sons and daughters are ’suffocating under tens of thousands in loans’ as they try to pay back the constantly rising tuitions of college and graduate school.

Colleges just can’t expect to continue charging more, leading students to borrow more. These institutions of learning must learn something very fundamental themselves: how to hold down costs.

One interesting development toward that goal is the emerging trend of schools outsourcing non-academic functions. I am not talking about sending thousands of university jobs overseas. I am suggesting that some non-academic functions could be much better and more efficiently accomplished by outside specialists.

Parents are fed up with cost increases and their sons and daughters graduating with a mound of debt; they insist that campuses operate more efficiently. In order to hold down costs without sacrificing academic quality, why not outsource non-academic functions?

Information technology, for example, is one function that could easily be outsourced. Human resources is another. Universities don’t exist to perform payroll services, workplace training or back-office financial aid functions. They are there to teach ”” that is, if anyone will be left who can afford to attend.

James A. Boyle, president

College Parents of America

Arlington, Va. Š

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Student Aid Cuts: The President’s FY 2007 budget cuts student aid by $734 million – eliminating three entire programs, and two of the TRIO programs. Further, the appropriations bill left low-income students with no Pell Grant increase for the fourth year in a row.

Federal Student Loan Program Changes/Cuts: Interest rates on some of these loans will increase up to 2 percentage points. And that’s on top of steadily rising college costs, which have already gone up 46 percent over the past five years.

Although this is a significant negative for students and parents, 401kid can help families as they should proactively saving more. 401kid provides the only education savings vehicle ’supermarket’ with objective asset allocation and financial aid advice.

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I am one of seven children. I grew up in a time and a town where kids roamed freely. There was no such thing as a play-date. Selfishness and entitlement were not accepted in my home. We were a team. (I wish my own home were like this.)

I grew up inherently knowing that I would need to contribute to my own college education. Two of my brothers received full athletic scholarships. Two of my brothers went to college on the seven-year program and never graduated (very expensive). Three of us went on the four-year program and graduated.

Had my parents had 529 and Coverdell Plans, they could have transferred the saved money to the two kids in the seven-year program, helped the kids in the four-year programs, or paid for the three who went on to receive their MBA’s, with no tax penalty! Mom may not have had to go back to work the mid-night shift as a nurse.

I paid for my entire education with no loans and no financial aide.

I attended Northeastern University, Boston, MA. Northeastern has a cooperative education program. These are also called work-study programs. Cooperative education colleges are five-year programs.

Freshman year, we went to school from September through May like everybody else. Then we got a job. The school had numerous corporations come to the campus to interview the students.

I worked for the FDIC. My Guidance Councilor prepped me that this was the best job in the Business College. Not because of prestige or knowledge building or even networking. It paid the best. That was all I needed to know.

Working for the Federal Deposit Insurance Corporation made me a Federal employee. I was considered to be working in Washington, DC. I actually lived with my family in New Jersey and covered that area as a Bank Examiner. I received a per-diem of $16.00 per day and a salary of $750.00 a month. Bingo! It paid for school.

The FDIC required a six-month work commitment. I went to school for six months, then worked six months. While at school I always had a part time job. I worked in a pizza parlor and as a fraternity cook.

My best part time job was within the University. These jobs are very hard to come by. It came to me through the friend of a friend. I worked in the University Library as a “book stasher”. We put the returned books away, hid among the shelves, and looked at all the yucky pictures in the medical section. The best part of being a book stasher was that not only was I getting paid, based on the hours worked I received a tuition credit.

There are over 300 cooperative education Colleges and Universities in the US. Start with your guidance councilor, they have the most complete resources.

Donna LaMuraglia

Marketing Team

dlamuraglia@401kid.com Where your dreams are our dreams.

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This years 10.5% increase in average tuition and fees at four-year public institutions is a welcoming sign that students and families will get a little financial respite from the state budgeting offices. This lower rate compares to 14.1% in the previous year, which represented the highest rate increase in thirty years.

Many analysts believe that the economic cycle has come to a full circle and that spending on higher education can make up for the years of budget cuts, which has been increasingly squeezed out by state spending on healthcare, K-12, and prison. But others are not so sure. They contend that the damage has been done and, increasingly, public college and university presidents wish to increase their financial independence from state oversight by seeking charter status.

The critics point to the fact that at many institutions, tuition and fees continue to increase at a rate higher than historic figures. At the University of Hawaii at Manoa, for instance, it plans to increase its tuition and fees by as much as 50 percent over the next five years; in Colorado, where state fiscal conditions still have not rebounded substantially, tuition and fees are expected to increase by over 20% on some campuses in one year. Though the average tuition increase is lower than a year before, the burden of payment on students and families is still very high inasmuch as tuition and fees do not uniformly moderate as from the year’s past.

Author: Young Kim – 401kid, Education Advisor

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