HIGHER ED BUBBLE FINALLY BURSTING?: Belmont Abbey, a small private college located right in PFD’s backyard, is cutting its tuition. And they’re not just tinkering around, they’re slashing it from $27,622 to $18,500. And this comes despite, not because of, record enrollment. It’s hopefully a sign that our nation’s bloated higher ed sector may finally be ready to slim down. Financial reporter Tony Mecia gives an overview of the student debt bubble here, and Zero Hedge just pointed out that as the amount of student loans outstanding has risen to an all-time high of slightly less than $1 trillion, the delinquent rate has also jumped to an all-time high of 11 percent. (Need we remind you that student loans are not dischargeable in bankruptcy?) While we’re happy to see Belmont Abbey embrace the future, it seems their implementation is a little clunky. New students and transfers will pay the new lower rate, while returning students continue to pay the old rate. Which means that any of this year’s freshman (or, more likely, their parents) paying full tuition have a choice: (a) transfer out for a semester, then transfer back in, or (b) pay an extra $27,000 over three years. Perhaps the school will tweak the policy a bit?
SPEAKING OF COLLEGE COSTS: From Bogleheads via FWF, here’s a sneaky way to get 2% on your savings: Open a Virginia 529 at Union First Market Bank or at BB&T with an APR of 2.2-2.3%. When you take a distribution, the earnings will be subject to a 10% penalty, so you’ll cut the before-tax APR by 10%, but not the principal. It’ll take a little extra work on your taxes, but on the other hand it could potentially be less work that a high-yield rewards checking account.
AND FINALLY: If you’re into higher learning, we’re fans of The Great Courses. Through Dec 9, you can use priority code 72683 to get $10 off any audio download, which puts some of their courses at $25–a good value in our oponion. Friend of PFD Stan Ridgley has a strategy course on this site, and we’re also fans of Robert Greenberg’s music courses and Bart Ehrman’s religion courses. (We don’t get any money for the referrals, we just like the product.)
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