Monday, November 24, 2014

Tuition Trends

There's some good news out this week for college students - and the parents who are paying their tuition. Big banks have been reluctant to lower interest rates for student loans, but Wells Fargo just announced it would modify some existing loans, as well as extend some repayment periods starting next year. Similarly, Discover Financial Services said it would begin modifying some loans early next year.

There might be some relation between that decision and the news that college revenues are increasingly unable to keep up with inflation.  More than half of all public colleges said their fiscal 2015 revenue increases wouldn't be able to keep up with even a modest 2 percent inflation. All told, universities said this year would be their weakest year of revenue growth in more than a decade.

The connection between those two stories is that both lenders and colleges are starting to feel like they need to be more competitive to attract students' money. Those could be good signs for parents with kids headed for college in the near future.

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