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It's Not Just The Students Who Are Broke: Lsu Draws Up Bankruptcy Plan

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http://www.zerohedge.com/news/2015-04-26/its-not-just-students-who-are-broke-lsu-draws-bankruptcy-plan

We’ve spent quite a bit of time documenting the student loan bubble which has now ballooned to $1.3 trillion and has recently led The White House to reexamine how student debt is handled in bankruptcy. Further, we’ve taken an in-depth look at delinquency rates in an effor to determine just how dire the situation has become. As it turns out, nearly one in three students in repayment is 30 days or more past due and recent data out of the St. Louis Fed indicates that far more delinquent borrowers are becoming “seriously” delinquent (i.e. never going to pay) now than in the past. Meanwhile, Moody’s recently warned on some $3 billion in student loan-backed ABS noting that increased use of IBR combined with deferment and forbearance make it increasingly likely that some paper will not be fully paid down at maturity.

Now, it appears that it’s not just students that are in dire financial straits, but schools as well because as Bloomberg reports, Louisiana State University is now drawing up bankruptcy plans in the wake of funding cuts from the state:

Louisiana State University will draw up a financial exigency plan, equivalent to college bankruptcy, as budget cuts proposed by Governor Bobby Jindal threaten to cripple the higher-education system.

Exigency, declared when schools face insolvency, would allow the state’s flagship institution to restructure and fire tenured faculty.

“We know the worst-case scenario, we know the timeframe, and we know what’s at stake,” President F. King Alexander said in a statement. He said he wants legislators to “mitigate the devastation these budget cuts promise.”

State cuts to higher education have sent tuition soaring across the U.S., adding to the more than $1.2 trillion in student-loan debt. While public subsidies covered almost three-quarters of operating costs in the 1980s, the share is now closer to half and falling every year, according to the State Higher Education Executive Officers Association.

Louisiana faces a $1.6 billion budget shortfall in the coming fiscal year, a result of both plunging oil-tax revenue and the state’s failure to enact adequate tax increases or spending cuts after the economic downturn in 2009…

The latest plans would mean an 82 percent cut to the state’s public colleges and universities. Per-student funding would plummet from $3,500 to $660,
according to the New Orleans Times-Picayune, causing concern at Baton Rouge-based LSU. The school may be running out of time to find a solution, as the state’s legislative session ends June 11.

According to Alexander, those last figures are indeed as bad as they sound. “States around the country spend more than that on their community colleges,” he told the New Orleans Times-Picayun. The President went on to note that if the university opts for financial exigency it will “never get any more faculty.”

The school recently cut its planned new hire count by more than 50% from 125 to just 60 and says that in the event the worst case budget cut scenario plays out, it will have to cut 2,500 courses, an eventuality which the school says is simply not tenable.

Of course what all of this means is that tuition will rise, burying students under still more loans, a third of which will be delinquent once they go into repayment. Here’s NBC:

But without a rescue from lawmakers, Alexander said programs could be dropped or entire departments shuttered under a worst-case scenario. "Specifically, we don't know which programs or departments we're talking about [but] it would require us to utilize every tool possible," he said.

Even if the worst-case scenario doesn't come to pass, it's possible students could find themselves paying more
, through increases in tuition and fees or decreases in the state's TOPS scholarship program. Lawmakers have historically been reluctant to raise tuition -- currently $8,758 for tuition and fees for in-state students at LSU -- but there is discussion about giving schools themselves more freedom to do so…

"We've gone from being very state funded-intensive to being tuition-dependent, and we've got 40 percent of our students that are Pell [grant] eligible," said Sandra Woodley, president of the University of Louisiana system, which consists of nine universities throughout the state.
Since 2009, tuition and fees have climbed by 61 percent while state funding has dropped by 55 percent, a drop of $90 million.

"We've already shifted to mostly being funded by tuition revenue in a state that has a relatively low income population," Woodley said. Further cuts would just hurt the most vulnerable.

Meanwhile, Moody's has cut its outlook on the university from stable to positive (apparently being bankrupt counts as "stable") citing "limited prospects for sustained revenue growth due to potential reductions in state operating funding, tight state control of tuition pricing, and pricing sensitivity limiting out-of-state enrollment revenue growth." LSU then pulled a $114 million bond offering which would have financed the construction of a new residential hall, family housing and a student health center.

I'm sure the US doesn't have a higher education bubble....

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Can't they just import thousands of wealthy foreign students, like British universities do?

They do already. To be frank, the way it's going in the UK, it will turn out cheaper to send them to the states for their degrees. France is about 400 a year, most other EU Uni places are free.

I think kids here would be stupid to study here. I'd go abroad if I had my time again and have a hoot whilst there.

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Sweet Briar in Virginia is already closing down...

https://www.insidehighered.com/news/2015/03/04/sweet-briar-college-will-shut-down

They do already. To be frank, the way it's going in the UK, it will turn out cheaper to send them to the states for their degrees. France is about 400 a year, most other EU Uni places are free.

I think kids here would be stupid to study here. I'd go abroad if I had my time again and have a hoot whilst there.

I know of someone who looked into study in the US for their sprog. Would have cost $40,000 a year for tuition and just under $20,000 a year for living costs, and then on top health insurance, materials, books, entertainment money and flights home, and it was a four year course. The kid in question had won a scholarship - for around $7000 a year - and not everyone is likely to get a scholarship, as competition is fierce. Even with a scholarship, the rest of the money would have to be provided by the family.

As for Europe, though the fees at public universities are generally low, you have to pay your own living expenses and you can't get a UK student loan to study a full degree course abroad, so it's family money again. Remember, many courses are four years. Oh, and certainly in France, the class sizes are enormous - everyone who gets the Bac or follows a foundation course successfully can go to university.

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One day there might even be suitable jobs for all those hundreds of millions of higher education students studying all over the world - jobs other than burger flipping that is.

Edited by billybong

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Sweet Briar in Virginia is already closing down...

https://www.insidehighered.com/news/2015/03/04/sweet-briar-college-will-shut-down

I know of someone who looked into study in the US for their sprog. Would have cost $40,000 a year for tuition and just under $20,000 a year for living costs, and then on top health insurance, materials, books, entertainment money and flights home, and it was a four year course. The kid in question had won a scholarship - for around $7000 a year - and not everyone is likely to get a scholarship, as competition is fierce. Even with a scholarship, the rest of the money would have to be provided by the family.

As for Europe, though the fees at public universities are generally low, you have to pay your own living expenses and you can't get a UK student loan to study a full degree course abroad, so it's family money again. Remember, many courses are four years. Oh, and certainly in France, the class sizes are enormous - everyone who gets the Bac or follows a foundation course successfully can go to university.

We live in France, and there's lots of help for students; They can even get money for them being in Uni (€450 a month) if we plead poverty, which of course we'll do. Living costs aren't that high to be frank either, they're higher in the UK and there aren't the same fees. Germany, Austria is free, as is Denmark and the other Scandies. Health insurance is also free.

There are also around 5, 6 different bacs in France, which point to where you'll study at Uni or move on in profesional life. Not everyone can go to Uni, far from it, some bacs are vocational and lead straight into the world.

There are 2 million French students and there are 2.3m British students, from pretty much the same population. 91 English Uni's and over 120 French ones. I am sure you cna do the maths.

Edit: Just checked and you can go to a proper American Uni, including board, lodging and travel (inc insurance) for around $38k a year. The average grant given out to international students is $51k based on 4 years, so that comes out around $25k. Or around £17k all in. $60k+ is the prices charged by Ivy league uni's in the US. At MIT, 90% of students receive a grant.

If your kids are bright, Yale and Harvard will hand over $60k in grants. So it's not all bad. Fook me, if you get a degree from teeside Uni you pay £27k, the same £27k that gets you intto a Red Brick.

Edited by Hairy1305

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We live in France, and there's lots of help for students; They can even get money for them being in Uni (€450 a month) if we plead poverty, which of course we'll do. Living costs aren't that high to be frank either, they're higher in the UK and there aren't the same fees. Germany, Austria is free, as is Denmark and the other Scandies. Health insurance is also free.

There are also around 5, 6 different bacs in France, which point to where you'll study at Uni or move on in profesional life. Not everyone can go to Uni, far from it, some bacs are vocational and lead straight into the world.

There are 2 million French students and there are 2.3m British students, from pretty much the same population. 91 English Uni's and over 120 French ones. I am sure you cna do the maths.

Edit: Just checked and you can go to a proper American Uni, including board, lodging and travel (inc insurance) for around $38k a year. The average grant given out to international students is $51k based on 4 years, so that comes out around $25k. Or around £17k all in. $60k+ is the prices charged by Ivy league uni's in the US. At MIT, 90% of students receive a grant.

If your kids are bright, Yale and Harvard will hand over $60k in grants. So it's not all bad. Fook me, if you get a degree from teeside Uni you pay £27k, the same £27k that gets you intto a Red Brick.

If you live in France, I presume your kids will be treated the same as any other young person resident in France. That's not true of UK resident students. They or their families wouldn't get any help from the French government towards university, nor any grants or loans from the UK government or national administrations if they study outside the UK.

In Europe, there's also the matter of reading, writing and speaking the language well enough to study at tertiary level. There are some courses in English, mainly science, engineering, business and European law, with some in creative subjects. They still leave you with the problem of finding the money for fees and living expenses. We actually looked into this carefully for one of our offspring - we just couldn't finance it.

And there may be 91 universities in England, but there are 133 in the UK (source: Universities UK: the voice of UK universities)

If you can get a scholarship for study in the US, that's great. Not many people will.

Edited for more detail.

Edited by Snugglybear

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For-Profit College Closures: The Next Billion Dollar Taxpayer Bailout?

ForProfit.png

The sudden closure of Corinthian Colleges' remaining campuses has displaced some 16,000 students. If all of their student debt is canceled — which is possible — it will cost taxpayers more than $200 million. With the government cracking down on the for-profit education space and with nearly 90% of students at for profit-colleges dependent on loans, the demise of the for-profit model could end up costing taxpayers quite a pretty penny.

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If you live in France, I presume your kids will be treated the same as any other young person resident in France. That's not true of UK resident students. They or their families wouldn't get any help from the French government towards university, nor any grants or loans from the UK government or national administrations if they study outside the UK.

In Europe, there's also the matter of reading, writing and speaking the language well enough to study at tertiary level. There are some courses in English, mainly science, engineering, business and European law, with some in creative subjects. They still leave you with the problem of finding the money for fees and living expenses. We actually looked into this carefully for one of our offspring - we just couldn't finance it.

And there may be 91 universities in England, but there are 133 in the UK (source: Universities UK: the voice of UK universities)

If you can get a scholarship for study in the US, that's great. Not many people will.

Edited for more detail.

UK universities benefit enormously from simply teaching in English, overseas students are overwhelmingly from former colonies, i suspect the same is true in france and spain.

meanwhile the university of surrey are making 26% of staff redundant. the sector is becoming very competitive and cut-throat

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UK universities benefit enormously from simply teaching in English, overseas students are overwhelmingly from former colonies, i suspect the same is true in france and spain.

meanwhile the university of surrey are making 26% of staff redundant. the sector is becoming very competitive and cut-throat

You're undoubtedly right about former colonies - in 2010 there were well over 100,000 students from Africa in France.

There's also China, of course. An important cash cow for the UK, but there are reports of increasing numbers of Chinese students in France, due to China's presence in Francophone African countries.

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If you live in France, I presume your kids will be treated the same as any other young person resident in France. That's not true of UK resident students. They or their families wouldn't get any help from the French government towards university, nor any grants or loans from the UK government or national administrations if they study outside the UK.

In Europe, there's also the matter of reading, writing and speaking the language well enough to study at tertiary level. There are some courses in English, mainly science, engineering, business and European law, with some in creative subjects. They still leave you with the problem of finding the money for fees and living expenses. We actually looked into this carefully for one of our offspring - we just couldn't finance it.

And there may be 91 universities in England, but there are 133 in the UK (source: Universities UK: the voice of UK universities)

If you can get a scholarship for study in the US, that's great. Not many people will.

Edited for more detail.

If you're bright, you will get a scholarship. Simple.

In France, the fees are the same for french and EU peeps alike, it's law. You can also get grants from the Eu (ERASMUS) to study in EU countries. Germany, France, Denmark, Sweden all have courses in English in many subjects, but that's moot for us.

My point is, it's cheaper to be abroad to study, and it is. £9000 is almost €13k now. Take out the €600 for your course each year leaves you €12,400 for the rest of the things you need. I am sure with some simple part time work you can live very nicely. Rent is far cheaper in France and the cost of living not as high as the UK. My point is, if you stay in the UK to study, you have a baseline of £27k debt, before ANY other costs are added. Put in living costs and that will quickly get to £60k, much likely higher. I think you'd be able to self fund a course in any of the european countries I have mentioned.

As for language, any intelligent person could be fluent in 3-4 months with immersion. It's how I learned French and German, I simply went there and took jobs.

UK universities benefit enormously from simply teaching in English, overseas students are overwhelmingly from former colonies, i suspect the same is true in france and spain.

meanwhile the university of surrey are making 26% of staff redundant. the sector is becoming very competitive and cut-throat

My old Alumni

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If you live in France, I presume your kids will be treated the same as any other young person resident in France. That's not true of UK resident students. They or their families wouldn't get any help from the French government towards university, nor any grants or loans from the UK government or national administrations if they study outside the UK. ERASMUS, but yes, one of the reason we moved was for better social care and higher quality education.

In Europe, there's also the matter of reading, writing and speaking the language well enough to study at tertiary level. Not an issue if you prepare; you can be fluent with immersion inside 3 months. Some may take a little longer, but life's an adventure. I learned by immersion. didn't take long at all.

There are some courses in English, mainly science, engineering, business and European law, with some in creative subjects. They still leave you with the problem of finding the money for fees and living expenses. We actually looked into this carefully for one of our offspring - we just couldn't finance it. But you can finance £9k a year on fees alone, with living costs to come on top of this? That makes no sense at all.

And there may be 91 universities in England, but there are 133 in the UK (source: Universities UK: the voice of UK universities) There's 166 if you include the former polys. There's about the same amount in France, including all the academies, etc. The point was, you said French Uni's were massively oversubscribed, classes were massive, where the reality is it's about the same as the UK.

If you can get a scholarship for study in the US, that's great. Not many people will. As I said, if you have high scores, you will. Period.

Edited for more detail.

Added for clarity on some points.

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If you're bright, you will get a scholarship. Simple.

In France, the fees are the same for french and EU peeps alike, it's law. You can also get grants from the Eu (ERASMUS) to study in EU countries. Germany, France, Denmark, Sweden all have courses in English in many subjects, but that's moot for us.

My point is, it's cheaper to be abroad to study, and it is. £9000 is almost €13k now. Take out the €600 for your course each year leaves you €12,400 for the rest of the things you need. I am sure with some simple part time work you can live very nicely. Rent is far cheaper in France and the cost of living not as high as the UK. My point is, if you stay in the UK to study, you have a baseline of £27k debt, before ANY other costs are added. Put in living costs and that will quickly get to £60k, much likely higher. I think you'd be able to self fund a course in any of the european countries I have mentioned.

As for language, any intelligent person could be fluent in 3-4 months with immersion. It's how I learned French and German, I simply went there and took jobs.

My old Alumni

Well, we couldn't self-fund a degree for our child, despite her wanting to study in Europe. We couldn't get hold of the requisite thousands of pounds. Other people can, and do, but we couldn't.

The Erasmus scheme doesn't fund entire first degree courses. As it happens, said offspring has been at a UK university and spent 6 months in Europe funded by Erasmus, which is the most available in her subject. A friend's child got a year funded, as that was available in her subject (science, not language).

To study at university in Germany, in German, you have to have passed one of two tests, the "Deutsche Sprachprüfung für den Hochschulzugang ausländischer Studienbewerber" (DSH - German language test for admission to university for international applicants) or the German as a foreign language test (TestDaF). You can test your language level online. For France there are various possible tests - one is DELF B2.

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Well, we couldn't self-fund a degree for our child, despite her wanting to study in Europe. We couldn't get hold of the requisite thousands of pounds. Other people can, and do, but we couldn't.

The Erasmus scheme doesn't fund entire first degree courses. As it happens, said offspring has been at a UK university and spent 6 months in Europe funded by Erasmus, which is the most available in her subject. A friend's child got a year funded, as that was available in her subject (science, not language).

To study at university in Germany, in German, you have to have passed one of two tests, the "Deutsche Sprachprüfung für den Hochschulzugang ausländischer Studienbewerber" (DSH - German language test for admission to university for international applicants) or the German as a foreign language test (TestDaF). You can test your language level online. For France there are various possible tests - one is DELF B2.

So you can fund a more expensive UK degree?

I think we're walking all over the subject matter here. You said French uni's are more packed than UK ones, but they are not. My point stands. European further education is in the main free, with negligible fees. In the UK you have a baseline of €13500, before books, accomodation, food, travel, etc etc is added. In France, it is €600. If you can self fund a UK degree, you can self fund a French one, unless she's living at home and studying locally, with you paying for her food and everything. You have to understand that the starting points between the education in each country is €13k apart and €13k buys you a lot in France (my first years house rent for a 5 bed in Languedoc with swimming pool was €8k). I am sure my daughter could get a flat and all her food for the year for €13k, so she's already in the box seats as your child hasn't a think paid for apart from fees.

To study in a German Uni, yes, you need to speak German to a standard, unless it's an English based course, or it's in an 'international University'. The same goes for France and most other countries. I covered this, it's easy if immersed.

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