Students are leaving college with bigger debts than ever. Why? Because they can.

Here's the Federal Reserve Bank report.

Here's breaking news you should consider.

Ned Vizzini writes:

But while private colleges pile on to the idea of expanded scholarships and grants, state schools increasingly exclude students in the middle class who they were intended to support.

They do so through student loans. Across the country, states provide state loans to students through non-profit corporations that are accountable to no one and increasingly corrupt. In Iowa, the Iowa Student Loan Liquidity Corp. is one of the worst offenders, under investigation by the attorney general for pursuing aggressive loan tactics and giving colleges incentives to steer business their way.

Meanwhile, students attending the private University of Iowa graduate with an average of $20,234 in debt, below both the national and state averages. The idea that public colleges leave middle-income graduates better off financially than public ones is simply wrong.

The solution is to do away with government student loans completely. What makes Harvard's plan so lauded is that it is a "no loan" policy, like Princeton's, Amherst's, and Williams'. It relies on straight grants and scholarships. A student from a household earning $120,000 to $180,000 will pay 10 percent of their income per year. A student from a household earning $60,000 per year will pay nothing at all.

From the AP:

The University of Pennsylvania on Monday joined Harvard and other elite private colleges in announcing loan-free financial aid programs aimed at middle- and upper-middle class students.

Penn officials said they will begin giving loan-free packages to eligible undergraduates in those income categories starting in the fall of 2009. The school will phase in the changes by eliminating loans for students with family incomes under $100,000 (68,920), replacing them with grants.

At the same time, the Ivy League school will reduce need-based loans by 10 percent for students whose families make more than $100,000 (68,920). Penn already covers full tuition and room and board for students whose families earn $60,000 or less. Penn costs about $46,000 (31,700) a year for tuition and room and board.

From PE.com:

As college costs continue to climb, more students and parents are borrowing money to pay for education. And it's only going to get worse.

Tuition and fees at public four-year universities nationwide rose 54 percent over the decade from 1997-98 to 2007-08, and 33 percent at private four-year universities, after adjusting for inflation, according to the College Board. Fees at California's public four-year universities have nearly doubled since 2000. Increases are imminent next year unless the state's budget situation improves. The average fee for a UC undergraduate has risen from $3,964 a year in 2000-01 to $7,347 in 2007-08. Similarly, fees for Cal State students have increased from an average of $1,839 a year in 2000-01 to $3,521 this year.

Housing, food, textbooks and transportation can add another $15,000 a year to the equation. Even among low-income students, subsidized loans typically make up a larger proportion of financial-aid packages than grants and scholarships, which don't need to be repaid.

For those who don't qualify for low-interest federal loans, borrowing from private sources has skyrocketed in the past decade and now equals about 24 percent of total education loan volume. Robert Shireman, executive director of Project on Student Debt, a nonprofit policy research group, said the problem with private loans is that they often have variable interest rates and lack protections for borrowers in case of unemployment or disability.

From report:

Decreasing life insurance premiums, innovative product enhancements and upcoming changes in underwriting make it an ideal time to put financial security at the top of your New Year's to-do list. "As costs continue to go down and the number of product options available increase, there is no longer an excuse for not having adequate life insurance coverage," says David F. Woods, CLU, ChFC, president of the Life and Health Insurance for Education. "In the New Year, Americans should really look to take advantage of these trends and work with a qualified insurance professional to ensure they are selecting the best possible coverage to fit their specific needs."

To help consumers start the New Year off right, the non-profit LIFE Foundation reviews four key trends it hopes will encourage more Americans to get the life insurance coverage they need in 2008: Life insurance premiums continue to decrease -- "About three-fourths of Americans think life insurance is too expensive to fit into their family budget, but the reality is that that's no longer the case," says Woods. Industry experts say that term life insurance premiums have reached an all-time low, in part due to people living longer and increased competition among companies.

Permanent insurance has also seen a slight decrease in cost. However, Woods notes that Stranger Originated Life Insurance products (STOLIs) could have an adverse effect on pricing if companies decide to raise premiums for older insured's in an effort to offset the potential influx of guaranteed payouts happening around the industry. Consumers should take advantage of these current low rates, whether to purchase more coverage or even qualify for lower rates on the coverage they already have.

LIFE's online calculator (http://www.lifehappens.org/howmuch) can help people get started evaluating how much life insurance they need. Term life insurance maintains popularity, with whole life close behind -- Because of its affordability, term life insurance continues to be the product of choice for many Americans, especially young families.

According to LIMRA International, industry-wide sales for term life insurance policies increased eight percent from 2006 to 2007. The current volatility in the stock market means that Americans are seeking more stable, guaranteed products. Whole life policies have gained traction among those who are looking for something permanent and predictable over products such as variable life, whose benefits vary depending on the stock market's performance. In 2008, consumers will continue to have a multitude of choices for finding the right life insurance policy to fit their needs and can access LIFE's online decision guide at http://www.lifehappens.org/whatkind to get started.

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