NEW YORK, Feb 10 (Reuters) – Crystal Morello’s family pleaded for months with their lender for a cheaper mortgage on their family home in Belleville, Michigan. But time ran out last summer, and they left before they were evicted.

“The bank was reassuring us that it was helping us out,” says Morello, 26. “While we were getting a loan modification in one department, we were getting foreclosed in another.”

Nothing will get Morello back to the house she lived in since she was three, certainly not the small part her family might receive of a record $25 billion settlement announced Thursday between the government and five big U.S. banks accused of abusive mortgage practices.

Checks of up to $2,000 each are expected to reach 750,000 households who lost homes through the foreclosure process between 2008 and 2011.

As part of the deal, the banks also agreed to cut the amount of principal owed by homeowners and provide lower-interest rate loans to the tune of $17 billion for borrowers who are behind on their payments and who are at risk of foreclosure.

A further $3 billion is on tap to help homeowners who are current on their mortgages but are unable to refinance because they owe more than their homes are worth.

Critics of Thursday’s agreement, like Margaret Becker, director of the homeowner defense project at Staten Island Legal Services in New York, say the deal is “paltry”, at best.

By Jilian Mincer and Stephanie Simon

(Reuters) – Even before President Barack Obama announced plans last month to push colleges to improve affordability, a number of schools beat him to the punch by lowering tuition and helping students graduate in fewer semesters.

These schools — typically small private colleges like University of Charleston, Cabrini College and Midland University that lack the cachet of top-tier colleges and compete with less expensive state schools — are bucking the widespread trend of increasing costs. In the last year, a few have cut tuition by as much as 20 percent. Others promise that students will earn their degree in four years or the college will pick up the cost of additional coursework.

While there’s no hard data, dozens of schools already have cut costs or implemented graduation guarantees. More such initiatives are expected to be announced this spring.

Such programs have clearly intrigued students and parents, but skeptics fear they may have a negative impact on the quality of education.

Promising a cheaper, quicker education will “invite institutions to take shortcuts,” says Richard Arum, a sociology and education professor at New York University. The temptation, he said, would be to make courses less rigorous, hire fewer top-notch faculty and pack more students into each class. “If you don’t also focus on quality, you risk contributing to this downward spiral in the quality of undergraduate education,” Arum says.

Arum adds that the most elite private schools are not rolling back tuition, for fear of cheapening their brands. Even in this rough economy, plenty of students are willing to pay for the cachet of prestigious degrees. “The Harvard, the Yale, the New York University brands … they don’t need to do that, and they’re not doing that,” Arum says.

NEW YORK, Jan 25 (Reuters) – With worries about the debt crisis in Europe and high unemployment in the United States drawing the public’s attention, the sliding value of corporate pension funds has largely gone unnoticed.

The problem came into stark relief on Wednesday, when Boeing Co (BA.N: Quote, Profile, Research) joined a raft of U.S. companies that have announced hefty cash injections into underfunded pension plans, including General Electric Co (GE.N: Quote, Profile, Research), DuPont (DD.N: Quote, Profile, Research), Alcoa Inc (AA.N: Quote, Profile, Research), Honeywell International Inc (HON.N: Quote, Profile, Research) and Raytheon Co (RTN.N: Quote, Profile, Research).

Boeing said it would add $1.5 billion in cash to its pension plan in 2012, nearly triple the amount it injected in 2011. The huge jump caused the aircraft maker’s full-year earnings forecast to miss Wall Street estimates. [ID:nL2E8COAWH]

Analysts say pension top-ups will take a big bite out of corporate earnings this year, due to more rigorous funding requirements and an erosion of investment returns caused by weak stock markets and low interest rates.

Of the 341 companies in the S&P 500 index .SPX with defined benefit pension plans, 97 percent are underfunded, according to a Credit Suisse analysis. Despite generous contributions last year, Credit Suisse estimated the plans’ liabilities at $458 billion at the end of 2011, an 86 percent increase from a year earlier.

“This level of underfunding is something, at least in the time that we’ve been following the issue, that we haven’t seen,” said Credit Suisse analyst David Zion, noting that the 2011 estimate is nearly three times larger than underfunding in 2002, after another U.S. recession.

Large pension contributions are an immediate hit on cash flow, diverting money from shareholder dividends, stock buybacks and capital investments. (Click here to see a graphic that compares a selection of pension obligations against cash positions: r.reuters.com/zyd36s)

NEW YORK (Reuters) – With worries about the debt crisis in Europe and high unemployment in the United States drawing the public’s attention, the sliding value of corporate pension funds has largely gone unnoticed.

The problem came into stark relief on Wednesday, when Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) joined a raft of U.S. companies that have announced hefty cash injections into underfunded pension plans, including General Electric Co (GE.N: Quote, Profile, Research, Stock Buzz), DuPont (DD.N: Quote, Profile, Research, Stock Buzz), Alcoa Inc (AA.N: Quote, Profile, Research, Stock Buzz), Honeywell International Inc (HON.N: Quote, Profile, Research, Stock Buzz) and Raytheon Co (RTN.N: Quote, Profile, Research, Stock Buzz).

Boeing said it would add $1.5 billion in cash to its pension plan in 2012, nearly triple the amount it injected in 2011. The huge jump caused the aircraft maker’s full-year earnings forecast to miss Wall Street estimates.

Analysts say pension top-ups will take a big bite out of corporate earnings this year, due to more rigorous funding requirements and an erosion of investment returns caused by weak stock markets and low interest rates.

An estimated 97 percent of the pension plans operated by companies in the S&P 500 .SPX have underfunded pensions despite generous contributions last year, according to a Credit Suisse analysis, which estimated unfunded pension liabilities at $458 billion at the end of 2011, an 86 percent increase from a year earlier.

“This level of underfunding is something, at least in the time that we’ve been following the issue, that we haven’t seen,” said Credit Suisse analyst David Zion, noting that the 2011 estimate is nearly three times larger than underfunding in 2002, after another U.S. recession.

Large pension contributions are an immediate hit on cash flow, diverting money from shareholder dividends, stock buybacks and capital investments. (Click here to see a graphic that compares a selection of pension obligations against cash positions: r.reuters.com/zyd36s)

NEW YORK (Reuters) – More than four years after the United States fell into recession, many Americans have resorted to raiding their savings to get them through the stop-start economic recovery.

In an ominous sign for America’s economic growth prospects, workers are paring back contributions to college funds and growing numbers are borrowing from their retirement accounts.

Some policymakers worry that a recent spike in credit card usage could mean that people, many of whom are struggling on incomes that have lagged inflation, are taking out new debt just to meet the costs of day-to-day living.

American households “have been spending recently in a way that did not seem in line with income growth. So somehow they’ve been doing that through perhaps additional credit card usage,” Chicago Federal Reserve President Charles Evans said on Friday.

“If they saw future income and employment increasing strongly then that would be reasonable. But I don’t see that. So I’ve been puzzled by this,” he said.

After a few years of relative frugality, the amount of money that Americans are saving has fallen back to its lowest level since December 2007 when the recession began. The personal saving rate dipped in November to 3.5 percent, down from 5.1 percent a year earlier, according to the U.S. Commerce Department.

Jeff Fielkow, an executive vice president at a recycling company in Milwaukee, Wisconsin, contributed less to retirement savings and significantly cut back on dining in restaurants and taking vacations in order to keep college savings on track for his two children. “We would love to save more,” he said, “but we’re doing the best we can.”

NEW YORK (Reuters) – More than four years after the United States fell into recession, many Americans have resorted to raiding their savings to get them through the stop-start economic recovery.

In an ominous sign for America’s economic growth prospects, workers are paring back contributions to college funds and growing numbers are borrowing from their retirement accounts.

Some policymakers worry that a recent spike in credit card usage could mean that people, many of whom are struggling on incomes that have lagged inflation, are taking out new debt just to meet the costs of day-to-day living.

American households “have been spending recently in a way that did not seem in line with income growth. So somehow they’ve been doing that through perhaps additional credit card usage,” Chicago Federal Reserve President Charles Evans said on Friday.

“If they saw future income and employment increasing strongly then that would be reasonable. But I don’t see that. So I’ve been puzzled by this,” he said.

After a few years of relative frugality, the amount of money that Americans are saving has fallen back to its lowest level since December 2007 when the recession began. The personal saving rate dipped in November to 3.5 percent, down from 5.1 percent a year earlier, according to the U.S. Commerce Department.

Jeff Fielkow, an executive vice president at a recycling company in Milwaukee, Wisconsin, contributed less to retirement savings and significantly cut back on dining in restaurants and taking vacations in order to keep college savings on track for his two children. “We would love to save more,” he said, “but we’re doing the best we can.”

NEW YORK (Reuters) – More than four years after the United States fell into recession, many Americans have resorted to raiding their savings to get them through the stop-start economic recovery.

In an ominous sign for America’s economic growth prospects, workers are paring back contributions to college funds and growing numbers are borrowing from their retirement accounts.

Some policymakers worry that a recent spike in credit card usage could mean that people, many of whom are struggling on incomes that have lagged inflation, are taking out new debt just to meet the costs of day-to-day living.

American households “have been spending recently in a way that did not seem in line with income growth. So somehow they’ve been doing that through perhaps additional credit card usage,” Chicago Federal Reserve President Charles Evans said on Friday.

“If they saw future income and employment increasing strongly then that would be reasonable. But I don’t see that. So I’ve been puzzled by this,” he said.

After a few years of relative frugality, the amount of money that Americans are saving has fallen back to its lowest level since December 2007 when the recession began. The personal saving rate dipped in November to 3.5 percent, down from 5.1 percent a year earlier, according to the U.S. Commerce Department.

Jeff Fielkow, an executive vice president at a recycling company in Milwaukee, Wisconsin, contributed less to retirement savings and significantly cut back on dining in restaurants and taking vacations in order to keep college savings on track for his two children. “We would love to save more,” he said, “but we’re doing the best we can.”

By Jessica Toonkel and Jilian Mincer

(Reuters) – Jim and Celeste Durkin thought when they began investing six years ago in Illinois state’s prepaid college savings plan that they were locking in a bargain price if their daughter Caroline, who is now 10, eventually attended the University of Illinois.

That might not be the case. The plan took some risky bets on private equity and hedge funds and is now 30 percent underfunded and temporarily closed to new investments.

“It was highly recommended by investment professionals and people we knew, and with all of the uncertainty in the markets we thought it was a safe investment,” Durkin said.

An Illinois state representative, Durkin is determined to do something about it: He expects to introduce legislation this month to make the plans more transparent.

The Illinois plan is in worse shape than most prepaid plans, but it isn’t unusual in facing problems. Prepaid plans, popular college savings vehicles offered at one time in about 20 U.S. states, are increasingly running on empty.

About half of them have stopped taking new money, according to Savingforcollege.com, and many of the rest are struggling. It means that the majority of Americans, including those in places such as Illinois and Tennessee, don’t have access to a state plan, and the minority who do need to be very wary.

CHICAGO/NEW YORK (Reuters) – On a recent shift at a Chicago emergency department, Dr. William Sullivan treated a newly homeless patient who was threatening to kill himself.

“He had been homeless for about two weeks. He hadn’t showered or eaten a lot. He asked if we had a meal tray,” said Sullivan, a physician at the University of Illinois Medical Center at Chicago and a past president of the Illinois College of Emergency Physicians.

Sullivan said the man kept repeating that he wanted to kill himself. “It seemed almost as if he was interested in being admitted.”

Across the country, doctors like Sullivan are facing a spike in psychiatric emergencies – attempted suicide, severe depression, psychosis – as states slash mental health services and the country’s worst economic crisis since the Great Depression takes its toll.

This trend is taxing emergency rooms already overburdened by uninsured patients who wait until ailments become acute before seeking treatment.

“These are people without a previous psychiatric history who are coming in and telling us they’ve lost their jobs, they’ve lost sometimes their homes, they can’t provide for their families, and they are becoming severely depressed,” said Dr. Felicia Smith, director of the acute psychiatric service at Massachusetts General Hospital in Boston.

Increased demand in mental health services

NEW YORK (Reuters) – Like most families, Susan Colpitts has many holiday traditions, but she particularly values one that she started several years ago. At Christmas she gives each of her children a blank check for $25. Her three daughters – now 23, 21 and 17 – have a week to decide what charity will receive the money.

It’s one of the ways Colpitts, a financial adviser in Norfolk, Virginia, teaches her children about philanthropy, something she thinks parents need to encourage on a daily basis through discussions, donations and volunteering. “So many of the values we teach our children happen across the dinner table,” she says. “It’s not just giving, it’s also about volunteering.”

Colpitts has a lot of company, according to philanthropy experts. Many families use the holidays as a time to have multi-generational discussions about giving, reports Bruce Boyd, a principal at Arabella Philanthropic Investments Advisors, a firm which helps families manage their giving programs. Some families even schedule volunteer activities, retreats and guest speakers.

Boyd himself has volunteered with his children. Why? “We are incredibly fortunate,” he says. He wants them to know “they won the lottery” being born to a lucky family.

My husband and I have used many of the same strategies and traditions with our own children. We’ve cooked at soup kitchens, cleaned playgrounds and read at shelters. It wasn’t easy to schedule with competing soccer games and swim meets, debate tournaments and birthday parties, but those experiences were invaluable.

It was time together that enabled us to help others but also to learn that those in need have much to offer.

But other than the typical charity race or school fundraiser, we didn’t involve our children in our charitable giving decisions until a few years ago, and that was accidental. We had, over the years, collected thousands of coins, and the bank only wanted them if they were wrapped and counted.