College-Savings Funds Drop $23.4 Billion as Market Squeezes U.S. Students

[marmar]

College-Savings Plans Shed $23.4 Billion in 2008, a 21% Decline
By Sree Vidya Bhaktavatsalam


March 3 (Bloomberg) -- The value of college-savings plans fell 21 percent last year, a loss of $23.4 billion, as the bear market left American families with less money for tuition and put pressure on schools to increase financial aid.

Assets in the savings accounts, called 529 plans, declined to $88.5 billion from $111.9 billion at the end of 2007, according to data compiled by Financial Research Corp. in Boston and the Washington-based College Savings Foundation. The drop was mostly driven by the selloff in stocks, which lost 38 percent as measured by the Standard & Poor’s 500 Index.

Students are being squeezed by rising tuitions and tougher loan requirements. The average tuition cost at a four-year public college rose 5.7 percent in the current academic year to $14,333, while the expense for a private college rose 5.6 percent to $34,132, according to The College Board, a New York-based nonprofit best known for administering college-admission tests such as the SAT.

“People in general are struggling with what the markets are doing,” Kevin McMullen, chairman of the College Savings Foundation, said in an interview. “Still, people are viewing college plans as a long-term plan,” resulting in fewer redemptions than he expected, McMullen said.

Withdrawals were $788 million in the fourth quarter of 2008, down from $1.02 billion a year earlier, according to the savings foundation, a nonprofit that provides information and compiles data on education plans. With job losses and fewer available loan programs, individuals are probably viewing college-savings plans as the best option, McMullen said. .........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601213&sid=abVlW3VLK_dI&refer=home

[Callalily]

1. At the rate we're going, students

won't have to worry about attending college.

College endowments (like our 401k - 403k) have taken a beating, and they too are tightening the belt, and in some cases taking extreme measures to just keep afloat.

Brandeis University has chosen to terminate its museum and sell its art collection; The University of Vermont is considering layoffs in faculty and staff, and has cut its varsity baseball and softball programs; The University of Northern Iowa has cut its baseball program and Stanford is considering elimination of staff and sports programs; Northwestern, Yale and Brown have cut their capital expenditures by delaying several large construction projects; Dartmouth College has laid off 60 staff members and cut 150 jobs; Kent State has eliminated faculty sabbaticals for next year; Harvard will offer buyouts to roughly 10%, or 1,600, of its non-faculty employees; and Johns Hopkins recently froze hiring and salaries, suspended faculty searches, and plans to cut administrators’ pay. Other budget adjustments that institutions are undertaking or considering include caps, cuts, or freezes in faculty and staff pay, shuttering student services and academic programs, and eliminating academic departments.

[bullimiami]

2. an entire generation has been scammed. they have bait and switched almost every

financial asset, retirement, college funding, life insurance, mortgages etc etc into the stock markets and other funds so the financial industry could make money off of it.
but even that wasnt good enough. they had to lie and cheat and game the system to take even more profits and now were all getting screwed.
their houses of cards may fall apart but individually the masters of the the collapse will all still be extraordinarily wealthy.