Many of us mid-career workers are racing to update our skills. Beyond the immediate recession, we can see that companies are less and less interested in providing long-term employment. New technologies quickly render experience obsolete. And a lot of white-collar industries (finance, real estate, and, ahem, media) look like they'll be smaller and less lucrative even after the recovery comes. But going back to school is tough once you have a mortgage and kids.

In my MONEY magazine column this month, I spot a glimmer of hope in "open source" online education. Some of the world's best schools — Yale, Berkeley, Stanford, MIT, Carnegie Mellon and even the Indian Institutes of Technology — are posting free course materials and lectures online. They're not a bad way to get up to speed on certain subjects, but they don't yet help you get any credentials to signal to employers that you've really learned the stuff. My column speculates a bit on how that gap might be bridged, particularly for professionals who have already gone to college and don't need a full master's degree.

Since I wrote that, the The Chronicle of Higher Education has published a more extensive look at just this issue. And it reports some discouraging news: More

If you want to measure the impact of the recession, there’s no better place to look than college financial aid offices. According to a just-released survey by the National Association for College Admission Counseling, some 90% of colleges and universities reported a spike in financial aid applications during the last admissions cycle. To meet the surge in demand, schools provided financial assistance to a larger number of  students, as well as boosted the amount of grants, loans and work-study.

Another bullet dodged. But the scramble to meet the needs of last year’s freshman class raises a couple of urgent questions. Will the schools be able to provide adequate aid for students applying for next year’s freshman class? And over the long run, will colleges remain affordable for middle-class students? More

When you start searching for that perfect college for your child, you might think there's plenty of information to help you with your decision. Just for starters, every college has a website that will give you all the essentials.

Take Stephens College, a private, four-year women's school in Columbia, Missouri. A quick tour of its website will tell you that the college offers more than 50 major and minors, everything from English to event planning to equestrian science. Class sizes average just 13 students. Annual costs total $32,250, but nearly all students get some kind of financial aid. And the campus looks nice.

But what you  won't see without diligent searching is that half of Stephens students fail to graduate, even after six years. Not to pick on Stephens, which does mention that statistic deep in its website. Point is, little of the data that colleges provide really tell you much about the value of your investment: the quality of the education, the experience of the students, or how the graduates fare later in life. Instead parents have long accepted the value of the diploma on faith. And many assume that a college that charges $50,000 a year will give their child a better education than one that charges $25,000.

That may be about to change. As tapped-out families realize they can no longer borrow more and more for expensive colleges, they are increasingly focusing on lower-priced schools.  As two college officials recently warned, higher education may be the next bubble to burst. Many experts are even questioning the value of a college degree in an economy where B.A.s are competing, often unsuccessfully, with high school graduates and those with vocational training.

All of which may give momentum to long-standing efforts to improve higher education accountability, which is something that colleges have successfully resisted for years. (Ironically, these same schools have demanded increasing amounts of information about applicants and their parents' ability to pay.) As Kevin Carey, policy director at Education Sector, noted in a recent interview, "Families need more disclosure about value of the education their money is buying, and the federal government should encourage colleges to make this information transparent."

Truth is, many colleges do a poor job at graduating well-educated students. A recent study by the American Enterprise Institute found that on average four-year colleges graduate fewer than 60% of their students with six years. And there were wide differences among all categories of schools; even for the most competitive colleges, average graduation rates differed by 13 percentage points. (To find out the graduation rates for many four year colleges, go to collegeresults.org.) Other studies have found that good students who attended less prestigious colleges ended up earning the same as those who went to brand-name schools.

It wouldn't be that hard to provide data about educational quality, since schools compile most of it anyway. They just keep it private, which is curious considering that most colleges are public institutions or or least partially funded by taxpayers. The National Survey of Student Engagement gathers loads of data on how they spend their time in school and how they feel about their education.The College Learning Assessment tests students' ability to reason analytically and solve problems during their academic career. As for student outcomes after graduation, well, most colleges keep tabs on their alumni for fundraising purposes. So it's time that they shared some of that information with tuition-paying families.  And who knows? A little more disclosure might improve the quality of higher education and even slow the rate of tuition hikes.

Tell us, what information would you like colleges to provide?

The form used by millions of college students to apply for financial aid will soon be getting easier to complete. But the effect of this change on college attendance is a little harder to sort out.

Last month, the Department of Education unveiled a simplified version of the Free Application for Federal Student Aid, commonly known as the FAFSA. Scheduled to debut in time for the 2010-2011 school year, it features fewer questions than the current version, more straightforward questions and the option for applicants to automatically download IRS tax data to help fill out the form.

Along with President Obama's proposal of nearly $200 billion in new scholarships and tax credits for college tuition, the FAFSA redesign, the administration hopes, will help boost college enrollment among low- and middle-income students. And Secretary of Education Arne Duncan also wants Congress to simplify the form even further.

So will more students start applying for federal aid?  Not necessarily.

Many colleges already require all incoming students to complete the FAFSA regardless of their financial standing, in order for those schools to determine their own allocations of financial aid. At colleges where the FAFSA is not required, most students solicit the government for money after they realize how much that first bursar bill will read.

But the DOE estimates there are currently 1.5 million enrolled students who are most likely eligible for grants but have failed to apply. And Mark Kantrowitz, creator of the valuable financial-aid information site FinAid, thinks that the recent changes are a step in the right direction. The balky FAFSA application form, he says, has created a chilling effect keeping kids out of college. With a more accessible form, he says, applications will go up, as will enrollment, retention, and completion of college by low-income students.

Recent indicators have shown that fewer and fewer low-income students are applying to college to begin with in this economy.  Even with financial aid, many are still priced out of attending. However, for those whose ability to attend college relies on the likelihood of receiving federal aid, things are looking up.

But there is one caveat.  The elimination of some questions may make it easier for students to receive “undeserved” financial aid.  A simpler form with fewer questions to distinguish students may make the financially stable and the financially struggling appear similar in some circumstances, suggests Kantrowitz.

DOE Secretary Duncan stressed that the government isn’t looking at increased accessibility to financial aid as a cost, but rather as an investment in our children’s futures.  The question is which children’s futures we are funding.

Kantrowitz said that the balance should be tipped further towards this generous end so that financial aid no longer acts as a barrier to college admissions.  “It’s a worthwhile price to pay,” he said.  “You have to accept some slop.”

Strapped for cash? Want someone to pay for your way through college? These pitches made by military recruiters seem to be working, since each of the military service academies has seen a sharp rise in applications this year — ranging from a 9% increase at West Point to a 40% jump at the U.S. Naval Academy.

While I’d like to think that the sudden interest reflects a renewed pride in patriotism and interest in national defense, it’s more likely that the draw of free tuition is an increasingly powerful lure. Students at the academies receive an all-expenses-paid undergraduate education in return for the promise of serving in the military after graduation. And reducing college education expenses is high on everyone's mind these days, boosting enrollment in community colleges and spikes in applications for financial aid at four-year schools.

The military's financial support is particularly attractive at a time when the costs of higher education are skyrocketing, with no end in sight. The average college endowment — the main pool for funding financial aid at private institutions — dropped 25-30% in the last year. Although tuition fees have grown more slowly this year, the savings are still a pittance. Public colleges are no longer the affordable fallback plan either, as noted in the June issue of MONEY. As options for high education seem bleak, the newest crop of students seem willing to take risk of serving in the military in the return for the promise of some financial stability.

Even if a student's family can navigate through the expenses of an elite private or public college, after all, the prospect of economic payoff from a degree feels more at risk. Consider that the unemployment rate for new graduates, at 11%, is higher than the national average. After adding the burden of student debts to that mix, pursuing an undergraduate degree through the traditional path doesn't feel like an ideal investment. 

In addition to avoiding accrued debt, graduates of military academies may have another advantage in entering the workforce after service. An undergraduate education at a military academy is comparable to an education at an elite civilian university; the leadership skills, discipline and technical skills honed in the military’s core curriculum make these veterans unique candidates. General Electric, for one, offers veteran officers a special management training program with the explanation, “Your service made you a leader and a disciplined, strategic thinker with a level of loyalty that is unmatched.”

Obviously the volatility of the labor market still make job placement uncertain for veterans. Another downside may be that the years of required active duty fall during the prime career-building period when civilian peers are creating their early job history.  Returning veterans may find themselves behind in making connections that are crucial to long-term success — although they may have their own network of military colleagues to draw upon.

The financial stability provided by the government is a necessary payment for the unparalleled risks faced by members of the armed forces. Serving is no joke, but neither is managing student debt for decades after graduation.

Saving to pay your kid's college bills is beginning to look like a nonstop stint on Survivor: Tocantins. Tuition costs continue to outpace inflation. And public colleges, once considered the affordable fall-back choice, are no longer a sure-fire option, thanks to shrinking government support, tighter budgets and soaring applications. Add in plummeting real estate prices, which have limited home equity loans,  and the carnage in 529 college savings plans, and you would expect most parents  to be throwing up their hands in despair right now.

Not even close. In the first major survey of college savers since the market plunge, which was conducted in February by OppenheimerFunds, eight out of ten parents say that sending their kids to college is still an achievable goal—more achieveable than affording a comfortable retirement (62%).  A whopping 92%  intend to send their child to a four-year college. Nearly 80% say they want to pay 50% or more of their kids college expenses, and one out of four aim to cover 100%.

This confidence is admirable—but it's also unrealistic, if not outright delusional, given how little families have actually saved. Nearly half (43%) have stashed away less than $5,000.  Some 62% have saved less than $10,000, and nearly eight out of 10 have less than $20,000. (Parents of older kids are no more likely than those of younger children to have amassed larger amounts, the survey found.) That level of savings will barely put a dent in the average cost for four years of a public college ($60,000), much less private college ($140,000).

Despite the paltry dollars they have accumulated, parents intend to make up the gap somehow. Some 60% have continued to put away money in their college savings plans. Yet 60% also believe that scholarship money will pay a substantial portion of their kids' bills. (For a real-world take on scholarships, click here.) In a display of cognitive dissonance, eight out of 10 parents also say that it is likely they or their kids will end up borrowing—though half want to limit that debt to less than $10,000. (The average amount for graduates of four-year colleges is nearly $22,000.)

For the vast majority of families, belief in the value of a college education remains unshaken. Nine out of 10 parents agree college remains part of the American dream, and some 83% say the cost is worth it. Among the reasons: the ability to compete in the workforce (76%) and improved earnings power (64%). Some 77% of parents agreed that the election of President Barack Obama "proves that a good education makes anything possible."

All of which may be true. Still, you have to wonder: if tuition costs keep escalating and financial aid fails to keep up, in another 10 years will any middle-class family be able to save what they need to cover the costs of an Ivy-covered diploma, or even your flagship public university? Nearly one out of four parents surveyed believe that space travel will be more affordable than college by the time their youngest child graduates high school. Maybe they're not so delusional after all.

Right now about 80% of the federal Stafford (student) and PLUS (parent) loans for college are doled out through third-party lenders via the FFELP program, with the Federal Direct Loan Program handling just 20% or so of loan volume.

The FFELP program is now on the endangered species list.

President Obama’s new budget proposes for 100% of college loan shopping to come in-house. Under the administration proposal third-party FFELP lenders would be cut out of the mix and all Stafford and PLUS loans would be originated through Uncle Sam’s Federal Direct Loan Program.

The Obama bean-counters estimate that moving the entire program in-house would save about $4 billion a year, and $47.5 billion in the first 10 years. The bulk of the savings comes from the elimination of federal subsidies to FFELP lenders.

Mark Kantrowitz, publisher of the finaid.org website says this move would be “a death blow to the student lending industry.” If so, it’s just the final punch.

Let’s remember that this is the same student loan industry that was rocked in 2007 when New York attorney general Andrew Cuomo revealed kick-back schemes where lenders offered financial aid offices incentives for steering potential clients in their direction. That scandal no doubt played a role in Congress pushing through a big college lending reform bill later that year that severely cut back federal subsidies paid to the third-party lenders through FFELP.

Certainly not having to shop around various FFELP lenders for a Stafford or PLUS will be a boost to students and parents, but it will remain to be seen if the actual cost to borrowers will be lower (taxpayers are another matter.) Many FFELP lenders offered small rate-reductions and discounts to qualified borrowers, under the Federal Direct Loan Program those discounts may not be available.

Stay tuned as this budget item is sure to get plenty of air-time in Capitol Hill debates. That said, there’s still no official plan for fixing the really big headache in the college loan process: the insanely difficult FAFSA form that is required to obtain financial aid.

– Carla Fried