Some scholars released a report today outlining the changes they’d like to see in the complicated, expensive world of college costs. One of those involved is former MacalesterCollege President Michael McPherson, now president of the Spencer Foundation.
Here’s what the Rethinking Student Aid Study Group report suggests in a nutshell:

Get rid of the FAFSA, the cumbersome federal financial aid form that one must fill out to receive aid and get the information from the IRS instead.

Simplify the Pell Grant so it’s only based only on family size and adjusted gross income. Also, index the Pell Grant to the Consumer Price Index instead of going to Congress for increasees.

Create federally funded savings accounts for kids whose families qualify for the Pell Grant.  Age 12 was mentioned as an affordable date.

Combine the education tax credits into one single credit to eliminate weighing which credit or deduction is most beneficial, and allow the tax credit to cover non-tuition expenses. That way if you get a grant for tuition, you could get a tax break for the cost you paid for room and board.

Eliminate the subsidized loan during school and help students in repayment instead.

Discourage private loans by making money available for parents at low interest rates.

Little data was included in the report about the cost and savings that would result from such measures, but it’s interesting food for thought.

Finally, a study that confirms why I’m not concerned about paying for college:

Daycare now costs more than tuition at a public university in 44 states, including Minnesota, according to the The National Association of Childcare Resource and Referral Agencies. Here’s a study the group conducted on the high cost of child care that pegged MN as second in the nation for least affordable child care (although if quality and cost go hand-in-hand, this is a good thing in a way).

For example, the average cost of full-time preschool care in MN is $8,832. For infants it’s $11,796. So that’s where the mortgage payment for our bigger, nicer home is going.

If you can keep your lifestyle the same as your earnings rise and your kids grow, you can save that day care money, or at least some of it, once the kid enters grade school (assuming you don’t send them to private school or pay a lot for after-care programs).

I’m hoping we can manage to save at least half of our kid’s day care tab each year to pay for a combo of college and retirement.

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As if paying for college isn’t stressful enough. The lack of demand for student loans packaged for investors to buy is driving up the cost of funding for lenders, if they can raise the money to make the loans in the first place. Add that to lenders requiring higher credit scores for alternative loans and the fact that some families who are strapped were hoping to use now-dwindling home equity and collecting the cash for college is becoming an ever the more impossible endeavor.

This isn’t just hitting new students. Today, Student Loan Corp, owned by Citibank, announced it was no longer going to consolidate loans. Behemoth Sallie Mae made the same announcement last week. And that company is no longer paying the 1.5 percent origination fee for students.

Yikes! This is all stuff that higher education reporter Jeff Shelman and I wrote about in our student loan story that ran on the front page Saturday.

The New York Times had a similar story the same day.

How is this affecting you? Is this changing your paying for college strategy? For parents far from college, are you trying to save more now to ensure that your kid can go to school, even if it’s 100 percent financed by you?