Financial Aid Provided by Online Institutes Responsible for Increase in National Student Debt for America

NEW ORLEANS, Sept. 22 /PRNewswire/ -- Since costs are towering, students' tuition fees are rising, increasing debt nationwide. With the reported decrease in federal assistance, the current financial model for online education in America will lose the ability to function normally.

However, the study also reveals that cost savings using high-end technology are not being transferred to the students, and more often than not, the students end up bearing the brunt in terms of debt. Ten years ago a fresh graduate would have had a debt of less than $10,000. Today, the same student owes more than $15,000 in loans upon graduation. For schools nationwide, this rise in student debt in the past 25 years has been calculated to be approximately 400%.

In many cases, online institutes do not have a traditional campus or classroom environment, which means students can access study materials from any location at any time as long as they have a computer and an Internet connection. Objective examinations and tests (based on multiple-choice questions or MCQs) are mostly held virtually as well. Furthermore, a few feature "mobile classrooms" that allow remote access to learning materials for students. Innovations such as these incur a high cost for the institute but at the same time result in immense cost savings.

The study also reported that these for-profit institutes spend nearly 31% of their annual budget on television, magazine, billboard and newspaper advertisements, along with phone solicitation and Web marketing.

Mark Johnson, an educator working in the online sector for eleven years, led the study for MUST University. "Ideally these savings should go to the students," said Johnson. "Instead, they go towards giant advertisement budgets."

Johnson explained that the "Long Tail effect" as described by Chris Anderson in the book The Long Tail means it is possible to have unlimited resources simply by an increase in server capacity.

"For example," said Johnson, "you can have a million students viewing a webcast for a lecture on Taxonomy at the same time -- as long as your server has the capacity. Compared to the huge number (of people) potentially consuming the content, the upgrade costs for the server are very less, almost negligible."

When these cost savings are not transferred to the students and spent on expensive advertisement campaigns, needy students are often forced into taking loans, decreasing their chances of success after graduation as they spend most of their salary paying back loans.

Brian Reeves, MUST University Communications Director, compared MUST University to other universities' offerings. "MUST University students graduate with zero debt due to MUST University's Financial Aid program. It consists of various scholarships and financial aid schemes, plus a 'no loans' policy, which benefits qualified students.

"This way they are able to receive an education while avoiding debt." Reeves added that MUST University was also trying to play a small role in reducing the national student debt with its "no loans" policy. Freeing the student from all kinds of tuition fee payment after graduation enables them to establish themselves as they enter the job market.

"We don't need to teach students responsible borrowing practices," quipped Johnson. "What we need is; we need to ensure more people are enlightened by receiving higher education -- especially if we can afford it."

About MUST University

MUST University is an online university, offering self-paced and self-study, degree, diploma and certificate programs from 16 specialized schools.

To learn more, visit: http://www.mustuniversity.com/must/scholarship.aspx

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SOURCE MUST University