General
Role of Government in College Education The trends already discussed and the projected increase of student loan borrowers and aid applications will increase FSA’s responsibilities and workload; however, the workforce is not expected to increase at the same pace (As shown above).  For example, by the end of 2012, the number of borrowers serviced by FSA is expected to increase 246 percent from the FY 2006 baseline.  The number of aid applications is expected to grow by approximately 80 percent.  During FY 2012, FSA’s budget and on-board staff are projected to increase by approximately 53 percent and 23 percent respectively.  The increase in FSA’s budget is the result of transitions to 100 percent Direct Loans.  Even through there are increased costs for this program each year, the Congressional Budget Office estimated the shift to direct lending would save $67 billion over 10 years.

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Categories: General
Growth in Online Learning Proprietary and two-year institutions play an increasingly important role in addressing some of our country’s most pressing challenges – global workforce competition and an increased demand for a highly skilled labor force, to name a few.  The growth in enrollments at proprietary and two-year institutions has soared in recent years. This dramatic increase has produced its own unique set of challenges, including higher student loan default rates. Distance learning is creating a new trend in the way college students attend classes and earn their degrees because of the flexibility, convenience, and growing acceptance of online courses.  Besides the advantages for students, institutions use distance learning to address State budget cuts and space shortages.  During 2006-2007, there were more than 11,200 college-level programs designed to be completed exclusively online.  Sixty-six percent of these programs offered degrees and 34 percent offered certificates.  more recent data shows that in 2009, nearly 30 percent of students took at least one online course, nearly three times the percent in 2002.      

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Categories: General
Decline In Private Student Loans The need for student aid, from all sources, will continue to increase over the next five years.  The availability of non-federal aid and loans has decreased.  Private loan originations continue to decline because fewer lenders are willing to make unsecured loans (See Image Above).  In addition, State support for funding higher education has declined since 2008, reducing the resources post secondary institutions have to administer Title IV programs.  Finally, the American Recovery and Reinvestment Act (ARRA) funds that assisted with State shortfalls expire in 2012.  The overall effect of these factors will likely increase the demand for federal student aid in order to offset these reductions.

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Categories: College, General