COLLEGIAN INTERNATIONAL presents a WALL STREET JOURNAL  (March 21, 2009)   article written by  Steve & Isaac Yoder

ISAAC: A week ago Friday was “Pink Friday” in California, the day when teachers across the state received pink slips as a result of the budget crisis. My high school was lit up with talk of teacher layoffs and which programs are going on the cutting block. I couldn’t stop thinking about what these budget cuts would mean for my high school next year after I’ve graduated.

Then I realized: With colleges getting hit hard by the recession, I may experience the same kinds of cutbacks next year — to programs that I consider essential.

Alison Seiffer

The ailing economy, it seems, has added a whole new dimension to my college search, threatening to change the nature of the education I had been counting on.

When I was searching for colleges in the fall, all the colleges would have pamphlets and admission officers pitching why they were the best choice. They flaunted their study-abroad programs, their broad range of courses, their small class sizes and their well-funded student organizations.

But times have changed since then. Many of the qualities that schools advertised when I was putting together my short list may be reduced significantly or cut altogether. Will some of the very things that made a school appeal to me in the first place be gone? What if they cut funding for their radio stations, for example? What if they cut back the English department?

Recently, for instance, I found out that the endowment of one of my top college prospects has been cut by about a quarter. But this is where it gets tricky. It’s a mystery to me, and I assume to all other applicants, how exactly this will change the quality of the school in the years to come. While some schools may choose to cut their building projects and research programs, others will cut professors or financial-aid funds — and some will have no choice but to cut all of the above.

Trying to make sense of it all, I’ve spent hours scouring colleges’ Web sites for clues as to their financial condition — and if they aren’t doing very well, what they’re going to cut.

Most of what I find is pretty predictable and not very helpful. Schools talk about how there will be sacrifices — without saying what precisely those sacrifices will be. They talk about how they will remain true to their core principles.

The only place I’ve been able to find consistently useful information is in the online databases of colleges’ newspapers, where students feel free to report what’s happening, without sugarcoating.

It can be painful reading. The newspaper of one of my top schools reports that the college is planning to lay off professors in the near future, not to mention the some 50 staffers who have already voluntarily quit. Ouch. What holes will those people leave behind?

Still, even after snooping around college Web sites for hours, there’s really no way to tell for sure what will be phased out when I get there and what will change during the course of my freshman year.

With college being as expensive an investment as it is, it’s scary that we don’t know what we’re paying for.

STEVE: I’ve been worried over the news about college endowments, too. But I have to admit that my concern has been more selfish: What does this mess mean to the parental pocketbook?

It’s certainly a bigger question than when we wrote about college costs last fall. Isaac decided that a small, academically rigorous liberal-arts college was the place for him. Karen and I did not discourage him, although that meant annual costs upward of $45,000. I told him to make his short list without considering costs just yet. “We’ll talk about how to pay for it after you get acceptances,” I said at the time.

That was then. Now, some of the money we had set aside for Isaac’s college costs went, imprudently, into a stock-and-bond fund that has shrunk by an amount I’d really rather not talk about. And my job security, given the condition of the news business, may not be what it was six months ago.

I’m thinking it’s time we started having that talk.

This doesn’t mean we won’t let Isaac choose a college he wants to go to. But should it be the college he wants to go to? What if the school he’s most passionate about offers less financial aid than another good college on his list? On the other hand — and to Isaac’s point — what if the college offering lower costs is one that has cut back on programs that are important to him?

Then there’s the question of fairness. Isaac’s older brother got a nice scholarship offer from a school in the middle of his list; he also he got into his top-choice college, but with no aid offer. He agonized over what the top choice would cost us, deferring his decision until I told him to just choose where he could see himself doing best. (He went for his top choice.) It was easier to make that high-minded call back then at Dow 13000, but still: I hate not to give Isaac the same opportunities.

We have a little time yet. Come spring break, Isaac should have received all his letters. Then we’ll go on an epic road trip to visit campuses and see for ourselves whether colleges have cut back in noticeable ways — and whether these colleges look to be the right place for Isaac at any price.

Meanwhile, when the mail arrives, I’ll continue to be as ecstatic as Isaac is when the salutations begin: “Welcome to the class of 2013!” Then, I’ll be digging through the envelope looking for the other congratulations letter: the one from the financial-aid office.

Steve Yoder is chief of The Wall Street Journal’s San Francisco bureau. His son, Isaac, is 18 years old and a senior in high school. Email: yoder&son@wsj.com

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Just as anxious investors are flocking to federally insured bank products, more are shifting college savings into 529 certificates of deposit and guaranteed investment plans.

The 529 CDs don’t offer the same potential returns as mutual-fund investments, but the guaranteed returns are appealing, especially in the current market. They also provide tax benefits because 529 college savings plans can grow and be used for higher education expenses free of federal income tax. Many states also offer additional tax benefits.

“I think the volatility in the market has hit home for many people,” says Andrea Feirstein, managing member of AKF Consulting in New York, which advises 529 plans. “You need to take a hard look at what you’re invested in, even in the [529] age-based products.”

While many states offer money market mutual funds as an a 529 investment option, fewer than a dozen have CDs or guaranteed options. In recent weeks, these insured investments have seen a significant uptick in new deposits, especially from investors with older children.

Indicative of the flight to safety, the College Savings Bank, which is offered through the Arizona and Montana 529 plans, “has seen a double digit increase in deposits in the last three to four weeks, primarily in the rollover traffic,” says Dan Davenport, a spokesman for the College Savings Bank.

The CollegeSure CD pre-dates 529 plans and has been offered directly to consumers or through brokers since 1987. The CollegeSure CDs are available through the College Savings Bank to residents of any state.

The CDs are FDIC-insured for up to $250,000 per depositor and have maturities of from one to 22 years. There are currently $250 million in CollegeSure CD deposits.

Davenport says rollovers from 529 plans in other states are up 200% through the third quarter of 2008, which ended Sept. 30. Rollovers currently being processed for October are up 1,000%.

He says the trend is expected to continue, and several more states are negotiating with the bank about offering the CDs in their 529 plans.

There has already been a strong response to Wisconsin’s EdVest College Savings Plan, which this month added a Bank CD Portfolio and Credit Union CD Portfolio. Since Oct. 1, each fund has received about $1 million, says Sarah Henriksen, vice president at Wells Fargo Funds Management, which manages the Wisconsin 529.

More than 90% of the $2 million has come from other investments in the program.

Launched in 2005, the Ohio 529 CD now has more than $128 million in deposits.

“Ever since we started offering it, we’ve seen people using it as a diversification strategy for older kids,” says Jackie Williams, executive director of the Ohio Tuition Trust Authority. “In recent weeks, we’ve had a lot of inquiries from outside Ohio.”

States like Ohio started offering the CD 529s as an option for investors who aren’t comfortable with mutual funds or who had a much shorter time to invest.

The Ohio accounts are available through Fifth Third Bancorp (FITB) at a tiered interest rate. The CDs are FDIC insured for up to $250,000 and are available for three months to 12 years with a promotional rate of $4.3% on a minimum $500 deposit.

Williams says that market research found that even when the market is rising, some investors “want no risk whatsoever for the money they have set aside for college.”

While not a CD, TIAA-CREF offers a “guaranteed option” in its eight 529 plans. TIAA-CREF Life guarantees the principal and a minimum interest rate on the investments, which differ in each state. TIAA-CREF has about $5 billion in 529 assets in eight states including about $700 to $800 million in the guaranteed options.

“This option was designed for those who have children in college or for those who paying tuition will be a reality shortly,” says Doug Chittenden, vice president of individual wealth management for TIAA-CREF.

He says demand is increasing. TIAA-CREF typically receives this time of year about 20 to 25 calls a week from investors who want to shift assets. In recent weeks, it has been getting 750 calls a week from consumers who want to move more investments into the guaranteed assets.

“You have some people who are just risk averse,” he says. “Even with this market volatility, we believe the longer your investment horizon, the more risk you can take.”

Joe Hurley, founder of www.savingforcollege.com, an independent Web site that provides information about 529 plans, says that while the CDs are good for some investors, those with a young children should keep in mind that long term they’ll see more growth with equities, and the market likely will return long before their children head to college.

—Dow Jones Newswires

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More affordable colleges on student, parent minds

By Peter Schworm, Globe Staff  |  October 21, 2008

ARLINGTON – One of Tom Woodbury’s sisters went to Vanderbilt University, the other to Boston College. But they didn’t choose those pricey private colleges during a financial market meltdown that took a sizeable chunk of the family’s college savings.

So the younger Woodbury, a senior at Arlington High School, is leaning toward the University of Massachusetts at Amherst, which costs less than half as much as many of its private counterparts. The more the Dow Jones industrial average declines, the more the state’s flagship university seems to come up in conversation, he said.

“I’ve been hearing ‘UMass, UMass’ around the house for a while now,” he said dryly, after attending a UMass recruiting visit Thursday afternoon with 30 classmates. “I’m getting the hint.”

Cost, always a major factor in choosing a college, has taken on paramount importance this fall as high school seniors decide where to apply.

Many parents, gun-shy over plummeting retirement funds and home values, are recoiling at the prospect of a high-priced college, and urging their children toward more affordable alternatives in what higher education specialists refer to as a “flight to price.”

They predict public universities will see a surge in interest, while some pricier private colleges, especially those with relatively small endowments and modest financial aid budgets, will receive fewer applications.

While application figures won’t be available until next year, recruiters at the state’s public colleges report unusually high turnouts at college fairs and campus open houses this month. Amid turbulence in the stock market, which coincided with the start of the college selection process, students are peppering admissions officers with questions about financial aid and loans.

“This year is going to be all about economics,” said Tom Parker, dean of admission and financial aid at Amherst College.

Just as parents have watched in horror as their investments went up in smoke, colleges have seen their endowments decline. Their losses could limit their financial aid budgets at a time when demand for reduced tuition will probably escalate.

“As families suffer through the meltdown, so are the schools,” said Stephen Michaud, a college consultant in Norwell. “It’s definitely going to have an impact on what schools can provide in financial aid.”

Michaud, who advises one family whose six-figure college fund lost 65 percent in one week, said parents are taking a keen interest in the University of Massachusetts system and the state’s public colleges, which cost an average of $6,400 a year. Enrollment at state public colleges rose sharply this fall, an increase that administrators attributed to the slumping economy.

The projected rise in families seeking financial aid is not expected to have a major effect at the wealthiest schools, such as Harvard, MIT, Dartmouth, and Wellesley, which admit students without considering their ability to pay and meet families’ full demonstrated need.

But the vast majority of colleges, from small schools such as Simmons to large universities like Northeastern, lack such resources and must carefully consider finances as they assemble their incoming class. Some educators fear that a sustained economic downturn will make colleges, particularly smaller schools that depend heavily on tuition, more dependent on students who can pay full freight, and less able to meet full financial need.

“I can imagine that’s only going to increase, and that has obvious implications for access,” said David Hawkins, director of public policy and research at the National Association for College Admission Counseling.

Colleges say they hope to expand financial aid to avoid pricing families out, and that they do not believe the economy will force major changes in their admissions and financial aid practices.

“A lot depends on how quickly and if this all settles down,” said Laurie Pohl, vice president for enrollment and student affairs at Boston University, which costs about $50,000 a year. BU recently imposed a hiring freeze and a moratorium on new construction projects in anticipation of increased demand for financial assistance.

“If the external environment remains as chaotic as it has been, I think it’s going to be very difficult,” Pohl said.

Surveys prompted by the recent economic troubles suggest that families are adjusting their college plans. Half say they are limiting their child’s college choices to less expensive options and more than half are considering in-state, public colleges, according to ApplyWise.com, an online college admissions counseling service.

Nearly 90 percent of families reported cutting back on spending to set more aside for college. A separate survey, conducted by MeritAid.com, found that more than half of students are considering a less prestigious college because of cost.

“I’m definitely seeing more families put a financial ‘safety school’ on their list,” said Mindy Popp, a college consultant in Newton.

Still, some college administrators say families will be willing to sacrifice for a college degree.

“With a doubt, price will be on families’ minds,” said Philomena Mantella, vice president for enrollment management at Northeastern University. “But they are sophisticated consumers. They will look beyond the price. Value is what really drives decisions.”

But this fall, students seem particularly motivated by the bottom line. Shayna Bailey, associate director of admissions at Framingham State College, said a recent visit to Waltham High School drew nearly 70 students, well over twice as many students as usual. And UMass-Amherst’s fall open house, which brought more than 5,000 prospective students to campus on Saturday, filled up earlier than in previous years, officials said.

At Arlington High School, students crammed into the library to hear Danny Barr, a 26-year-old assistant admissions director at UMass-Amherst. Right off the bat, Barr stressed to the seniors the bottom line – $18,000 annually for students from Massachusetts.

For price-conscious students like Alex Uteshev, that figure drowned out the rest of Barr’s pitch.

“So many schools are $50,000 a year now,” he said. “It’s ridiculous. Personally, this isn’t just my first choice, this is where I have to get in.”

But many students said they were applying to a range of colleges with little regard to cost, and would worry about paying for it later. As Barr told the students, the average grade point average (3.5) and SAT score (1,155) for entering UMass freshmen, many sighed in regret.

“Right now, they are far more worried about where they can get in,” said guidance counselor Lynna Williams.

But the two are related, some note. With applications surging at UMass-Amherst in recent years, only about 63 percent of students are accepted, far less than in the past.

Catherine Leger, the head of the guidance department at Brockton High School, said she is pushing her son, a senior, to attend UMass next year. Whether he can get in is another question.

“We’re tapped. We’re pushing him to the state schools,” she said. “But they are only going to get more competitive.”

Peter Schworm can be reached at schworm@globe.com. 

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New Survey Indicates that College Bound Teens  Will be Particularly Hard Hit

By Economic CrisisFamilies Polled by ApplyWise.com and Next Step Magazine

Are Cutting Spending and Seeking Less Expensive Education Options

NEW YORK and ROCHESTER, NY (October 13, 2008)—As the largest class of graduating high school seniors in America is completing college applications, a new study indicates their college plans are likely to change in response to the economic downturn.   The survey, conducted jointly by ApplyWise.com an online college admissions counseling service and Next Step Magazine , a publication for high school students and their parents, shows that 50% of families polled are now limiting their child’s college choices to less expensive options and 54% of families are considering in-state, public colleges, in response to the economic downturn.

 Among those polled, 88% of parents say their families have reduced discretionary spending within the past six months specifically to save more toward their child’s education, and 43% of those have cut spending significantly.  

“The results confirm what we’re seeing on nextSTEPmag.com “, said Next Step Magazine editor and publisher Laura Hammond.  “The number of visitors seeking scholarship information has tripled in recent weeks, advertising by college loan sources has become light and we are receiving a large number of emails from students whose families have fallen on hard times and they are looking for outside help.”

According to the ApplyWise and Next Step survey, 32% of families report their financial situation has changed in the past six months and so they are seeking more economical education options for their child.   Another 38% say they are concerned about the economy and are now seeking more affordable college options.   Interestingly, less than one-third of those polled say their college selection criteria have not been influenced by economic factors.  

The cost of tuition and fees was cited as the factor having the greatest overall influence in college decisions by 27% of the respondents.   The academic programs offered by colleges is the number one criteria for college selection among 35% of the families responding to the Next Step and ApplyWise survey.

“Academic offerings have always been the number one reason students select a college, but clearly now, the cost of attending college is equally important”, said Katherine Cohen, PhD., president and co-founder of ApplyWise.com.   “We counsel families that a college education is actually one of the best financial investments you can make, with college graduates earning an average of $800,000 more during their professional years than non-college graduates.”  

Dr. Cohen noted that the reputation of the college or university was ranked as the most important factor by only 17% of families.

How will they pay?

Fifty-four percent of parents report that recent economic events have changed the way they plan to pay for their child’s college education.   When asked to select which financial resources they plan to access, they responded as follows:

·        67% will apply for more need based scholarships

·        62% of parents say they will require their child to work while attending college

·        53% plan to get more student loans, including non-government loans

·        30% of families will send a stay-at-home spouse back to work

·        27% of families plan to take out a home equity loan

·        11% plan to liquidate a retirement fund

·        8% will borrow money from a relative

·        7% will sell a home or other real estate

“Interestingly, 66% of parents polled have at least a bachelor’s degree, and 30% of them reported that their parents paid for their entire college education.   It’s clear that economic times have changed and that parents and children are working together to come up with the financial resources necessary to pay for college”, said Ms. Hammond of Next Step Magazine .

The survey shows that parents and children are working together on the college application process, too, with 48% of parents reporting they are somewhat involved and 37% of parents saying they are very involved and actually manage their child’s application process.

At present, current economic conditions are having little impact on what students plan to study in college, with only 7% of parents reporting their child has changed their area of study to one they think is in greater demand or has more earning potential, 6% of students plan to add a double major as a back-up plan, and 35% of families have had discussions about alternative academic programs.

“Getting into college has become more competitive over the years and now paying for it will be a bigger challenge for many families”, said Dr. Cohen.  “As families are forced to look for more economical options, it pays to consult experts who can help them identify potential financial resources and the schools that would be a good fit for the student.   Families need to be determined, not discouraged, at a time like this.”

The ApplyWise and Next Step survey was conducted online between September 25 and October 7, 2008.   

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How Will the Economy Affect Your Financial Aid?

Lauren Bayne Anderson

The stock market’s plummeting. Congress is bailing out Fannie Mae and Freddie Mac. And student loans are getting tougher to come by.

But you’re not sure how — or if— any of it affects you. Chances are it will. And while you may not be feeling the effects of it yet, that’s simply because it hasn’t trickled down yet.

When it comes to financial aid, some know the scope of the industry better than others. Mark Kantrowitz is one of those people. The author of our own, FastWeb College Gold, A Step-by-Step Guide to Paying for College, and a slew of other financial aid resources including FinAid.org , Kantrowitz sheds light on what today’s economy means for you.

Who is affected most by the credit crunch?
Kantrowitz says: Students at community and technical colleges, especially institutions that are for-profit, are having the toughest time because they are more likely to receive private loans. Also, lenders under profit pressure are less willing to write loans for shorter, one- and two-year programs -especially at schools with historically high default rates. —Time

I’m leaving for college next year, is it worth it to start saving just now?
Kantrowitz says: Save whatever you can. Something is better than nothing. If you wind up having to borrow the cash, you’ll pay for it in interest. Either you could save a certain amount of money before college, or pay back twice as much after college. —First 30 Days

Is it worth it to going back to school in lieu of the tough job market?
Kantrowitz says: Prospective students should keep in mind that student loans may be more difficult to come by these days. “Lenders have tightened criteria,” he said. “If you have a bad or marginal credit score, you are going to have a harder time obtaining a student loan.” —Red Orbit

How will the financial crisis affect my ability to pay my student loans?
Kantrowitz says: Interest rates on many loans are likely to jump by 2 percent within the next month. “Interest rates on these loans will increase as the lenders pass on their increased cost of funds,” he said. —New York Times

How do I select the best student loan for me?
Kantrowitz says: Choosing a loan comes down to who offers the cheapest interest rates and fees. The Perkins loan is the most beneficial federal loan, followed by the Stafford loan. Families of undergraduate students can take advantage of a current phased-in interest rate reduction that Congress passed. But only for a while! “As in everything Congress does, it has five years and then it reverts to the status quo because of federal budgetary constraints.” —Chronogram

For more advice from Kantrowitz, check out FinAid.com !

There are certain organizations and individuals that use the promise of scholarships and/or financial aid for students to sell financial services and products to unsuspecting families.  These financial services and products may be inappropriate for families. 

The National Institute of Certified College Planners (niccp.com) warns families to perform due diligence when dealing with the following two types of organizations or individuals:

1) “Scholarship Search Organizations”

Their Pitch:  They promise a family that they can get scholarships for their student in exchange for a fee. 

The Problem:  In most cases, the family can apply for the same scholarships from the local high school guidance counselor or from free websites such as Finaid.org or Fastweb.com.

(Note:  There are legitimate scholarship search organizations that provide a valuable scholarship service for a fee.)

2) “Life Insurance Commission Driven Organizations or Individuals”

Their Pitch:  They promote the strategy of pulling out a family’s home equity and putting the home loan proceeds into a life insurance policy to hide the home equity asset from the college financial aid formulas.  The family would then withdraw from the life insurance policy to pay for college. 

The Problem:  The problem with this strategy is that most colleges don’t count home equity in their financial aid formulas.  Also, some of the colleges that do count home equity will cap the amount that they count.  In addition, the withdrawal from the life insurance policy, except for loans, will be assessed in the financial aid eligibility formulas at up to a 47% assessment rate regardless of the fact that all or part of the withdrawal may be tax-free.  Therefore, there may be little or no benefit of this strategy, while costing the family thousands of dollars in insurance commissions.

(Note:  Depending on a family’s financial circumstances and goals, a life insurance product may be appropriate for the family)

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HELPING FAMILIES MAKE COLLEGE AFFORDABLE

How the most expensive colleges are becoming some of the most affordable

Thanks in large part to massive trust funds, many ivy league colleges are greatly expanding their financial aid programs – especially for middle and lower income students.For years, these top-tier universities have collected massive donations from alumni, charitable organizations, corporate trusts, and public tax breaks. Not to mention the significant tuition bills they send their students every semester.

Anyway, since they’ve stored up so much cash, they’ve actually decided to spend it on the students who need it. Not a bad idea, I’d say!

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HELPING FAMILIES MAKE COLLEGE AFFORDABLE !!!!!

The Jefferson County system is typical this school year.

As 50 million children return to classes across the nation, crippling increases in the price of fuel and food, coupled with the economic downturn, have left schools from California to Florida to Maine cutting costs. Some are trimming bus service, others are restricting travel, and a few are shortening the school week. And as many districts are forced to cut back, the number of poor and homeless students is rising.

”The big national picture is that food and fuel costs are going up and school revenues are not,” said Anne L. Bryant, executive director of the National School Boards Association. ”We’re in a recession, and it’s having a dramatic impact on schools.”

Louisville’s pain is minor compared with the woes of some cities. Detroit has laid off at least 700 teachers, Los Angeles 500 administrators and Miami-Dade County hundreds of school psychologists, maintenance workers and custodians.

Schools in many states have cut bus stops to save diesel. Districts in California and Ohio have gone further and eliminated bus service either completely or for high schools, leaving thousands of students to find their own way to school.

In Maine, officials worried about the cost of heating their classrooms this winter have restricted travel for field trips to save money. Districts in Louisiana, Minnesota and elsewhere have taken a more radical measure and adopted four-day school weeks. Hundreds of districts, responding to higher food prices, are charging more for cafeteria meals.

In interviews, educators in many states said they were seeing more needy families than at any time in memory. Two charities in suburban Detroit announced in August that they would hand out student backpacks, attracting hundreds of families.

”They went through all 300 backpacks in three hours, boom, and that was that,” said Kathleen M. Kropf, an official in the Macomb Intermediate School District. ”We’re seeing a lot of desperate people.”

There were no giveaways for Jacci Murray, 28, a single mother in West Palm Beach, Fla., who said she lost her job six months ago. Ms. Murray bought pencils and crayons for her son, Cameron, who is in the second grade, from a discount bin at Office Depot. Saying she felt ”cheap and broke,” she pored fretfully over her school supplies list, afraid to waste gas by making more than one shopping trip.

”It’s been tough this year,” Ms. Murray said. ”I’m depressed about school.”

And so are many educators.

West Virginia officials issued a memorandum recently to local districts titled ”Tips to Deal With the Skyrocketing Cost of Fuel.” Last week, David Pauley, the transportation supervisor for the Kanawha County school system, based in Charleston, met with drivers of the district’s 196 buses to outline those policies. Mr. Pauley told them to stay 5 miles per hour below the limit, to check the tire pressure every day and to avoid jackrabbit starts.

The Caldwell Parish School District, in northern Louisiana, took a more sweeping approach to saving fuel by eliminating Monday classes. The district joined about 100 systems nationwide, most of them rural, that in recent years have adopted a four-day schedule.

The district’s superintendent, John Sartin, said the move should save $145,000 in a $15 million budget. The decision, made in June, came after crude oil prices had risen for 29 consecutive days, Mr. Sartin said.

”People here worry that they won’t have enough money to last through the month,” he said.

Similar concerns in the Southern Aroostook Community School District in Maine have delayed adoption of the budget.

”We’ve tried to pass it twice, and we’re trying a third,” said Terry Comeau, the superintendent, who has restricted field trips and taken a bus off the road.

”People are saying, ‘I don’t want my taxes to go higher; I need the money to pay my bills,’ ” said Mr. Comeau, adding that one worry is that heating costs will soar this winter.

The problems in many districts can be traced to battered state budgets. According to a July report by the National Conference of State Legislatures, 31 states had budget gaps totaling $40 billion, and many had cut school financing.

California still has a $15.2 billion budget gap, although many districts there have made cuts, including Los Angeles Unified, which sliced $400 million from its $6 billion budget in June partly by laying off 500 administrators and secretaries, though no teachers.

Many districts are serving increasing numbers of needy students. In Mobile, Ala., the number of homeless students tripled to about 2,500 at the end of the last school year from 850 in the 2006-7 term.

”And our numbers are going to be a whole lot higher this year,” said Larissa Dickinson, a school social worker there. ”We’ve had phone call after phone call from families evicted over the summer.”

Officials in districts in a half-dozen states reported similar surges.

In Louisville, 7,600 homeless students were enrolled when the term ended in June, up from 7,300 the year before. But Anne Malone, who coordinates efforts to help homeless students, said the figure would be ”way up over that this year.” Ms. Malone cited foreclosure statistics from the Metropolitan Housing Coalition in Louisville that about 10 families were evicted every day here.

The number of students whose family’s income qualifies them for subsidized meals is up, too.

Under the National School Lunch Program, children in a family of four whose parents earn no more than $39,220 a year qualify for a subsidized 30-cent breakfast and 40-cent lunch. If the parents earn no more than $27,560, the children qualify for free meals.

Last year, about 58,000 Jefferson County students were eligible for free or reduced-price meals. This year, the number is likely to reach 62,000, said Mary R. Owens, who coordinates the program here. In interviews, officials in California, the District of Columbia, Florida and Wisconsin also projected increases in the number of students who would qualify for free or reduced-price meals.

Nationally, 14.9 million students qualified for free lunches last year, according to data from the Agriculture Department; the Bush administration’s budget estimates that an additional 283,000 students will be eligible this year.

A department spokeswoman, Jean Daniel, said that subsidized meals were an entitlement and that no students would be turned away if participation exceeded estimates.

The office here where parents fill out forms to qualify for subsidized meals has seen a stream of anxious parents this year, often in tears, pleading for the free meals for their children because they do not have 70 cents a day to pay for the reduced-price meals, Ms. Owens said.

”We’ve had a lot of daddies coming in to say their check doesn’t cover like it used to,” she said.
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