Credit Crunch Ups Price of College Loans

It's a four year—or more—waste of time, author says

(NEWSER) - College is a must if you want to have a real career, right? Nope, it’s “a scam, a self-perpetuating Ponzi scheme that needs to stop right now,” writes James Altucher for DailyFinance.com . Here are his seven reasons you shouldn’t send your kids:

• It’ll cost more than you think: Thanks to the fact that more than 60% of college students will take more than 4 years to wear that cap and gown.
• It doesn’t matter, money-wise: Yes, the difference in income between a college grad and a non-grad is approximately $800,000 over a 45-year career. But if you invest the $200,000 likely college cost in bonds yielding 3%, over those 45 years plus the 4 spent in college, you’ll end up with $851,000.

Students' fed loans jump 25% from previous year

(NEWSER) - Some two-thirds of students borrow for college today, and they’re borrowing more than ever: For the 2008-2009 school year, the federal government loaned students $75.1 billion—25% more than the year before. That’s the biggest increase on record, the Wall Street Journal reports. The trend has troubling implications for grads, as many see their life choices pinched by the cost of their diplomas. (Average debt load: $23,186). More»

(NEWSER) - College students in 2008 carried an average of $3,173 in credit card debt, a huge jump from 4 years earlier, USA Today reports. A Sallie Mae study, when conducted in 2004, revealed an average balance of just $2,169. When students “can’t get private loans, they turn to credit cards,” one expert said. And the lender thinks the recession means students will only turn more to plastic. More»

(NEWSER) - Sweet sixteen is the right time to leave high school and leap into higher education, New Hampshire education officials say. Following advice from a blue-ribbon panel that warned of America's educational decline 2 years ago, the state plans to test 10th graders with tough new exams. Those who pass can attend community or tech colleges instead of high school, Time reports. More»

As private funds dry up, families look to feds to pay for college tuition

(NEWSER) - The slump in the credit markets has shrunk capital available to brokers of student loans, complicating the already-difficult task of financing a college education. The Boston Globe relates the story of one Massachusetts family, the Ferragutos, who received word this year from the state’s education finance agency informing them that federal loans, including low-interest Stafford loans, were no longer available. More»