College costs are a major issue for Democratic candidates for governor and U.S. Senate, writes Rick Hess. Few Republicans are talking about college costs in their campaigns.
Democrats running for U.S. Senate are talking a lot about student loans. Again, most GOP candidates are not raising the issue.
For all the attention to career readiness and workforce issues, community colleges and apprenticeship programs aren’t getting much love. Just seven out of 70 gubernatorial candidates mention community college and just six out of 69 Senate candidates do. Just 10 gubernatorial candidates mention internship or apprenticeship programs (still more than mention community college!), while seven Senate candidates do. There are no obvious partisan differences on any of this.
Just five out of 139 candidates — in both parties — mention graduation rates.
Lauren Bizzaro owes $40,000 for three years of college. (Caleb Kenna for The Wall Street Journal)
College dropouts are the “untouchables” of higher education, writes Richard Vedder, director of the Center for College Affordability and Productivity, in Forbes.
Looking at those 25 to 34 years of age, the median earnings in 2013 were $27,339, about 10 percent higher than those who stopped their education with a high school diploma ($24,835), writes Vedder. And most dropouts who enrolled in four-year institutions took out student loans.
One approach is to spend more money — more financial aid for low-income students, better remedial education — to “alleviate some causes of dropping out.”
The alternative, writes Vedder, is for four-year colleges and universities to stop accepting students with weak academic records and little chance of success. That would include students in the bottom half of their high school class or with low SAT or ACT scores.
Those failing to meet the admissions thresholds should be allowed to attend community colleges or non-degree schools offering certificated vocational training and, if they succeed there, be allowed to proceed to four-year schools. This approach should not only reduce the dropout rate, it should save a good deal of money, both for students and taxpayers. It should reduce student loan repayment problems a bit, and lower loan delinquency rates.
Above all, a more restrictive admissions approach would in the long run reduce the mismatch between the availability of relatively high paying jobs and the numbers of college graduates seeking those jobs. We have too many college graduates, not too few.
Colleges would lose enrollments and revenue, Vedder writes. That would force “some needed creative destruction upon higher education.”
A Bit of College Can Be Worse than None at All, according to the Wall Street Journal. For one thing, employers don’t like quitters.
Candidates with degrees or certificates have “shown perseverance and persistence to obtain that credential,” says Kevin Brinegar, president and chief executive of the Indiana Chamber of Commerce. Dropping out after a few courses makes managers wonder “‘Is that what they’re going to do when they come to work for me? They’ll work for three weeks or three days and say, ‘I’m out of here?’ ”
A majority of students at four-year institutions who didn’t complete college took out federal loans, with average borrowings of $9,300 to $10,400 depending on the type of school, according to the National Center for Education Statistics.
“More than three quarters of college freshmen who finished in the bottom 40 percent of their high school class will not graduate in eight years,” writes Bill McMorris in American Spectator.
Broward students attend a debt management workshop. John O’Connor/WLRN
“Neither a borrower nor a lender be,” Polonius advised Hamlet. At Florida’s Broward College, financial aid officer Kent Dunston tells would-be borrowers not to borrow more than they need. The two-hour money-management workshop is required. “You’ll be offered more,” says Dunston. “You don’t need it.”
Starting this year, Broward will not accept unsubsidized federal loans that require students to begin making interest payments immediately, reports NPR. Twenty-eight other community, four-year and online colleges around the country take subsidized loans only to prevent defaults. Broward has gone farther: The college no longer accepts private loans.
About 75 students were in (Dunston’s) class on a recent day, listening as he tells them the story of a young woman concerned about how her $137,000 student debt might affect her chances of getting married.
“That can throw a lot of cold water on a relationship, unless the guy can say, ‘Well, that’s OK baby, I owe $87,000 myself,’ ” Dunston says.
Broward student George Aleman thinks he owes about $60,000 in student loans. The middle-school dropout, who went on to complete his GED, came to Broward already owing that much in debt from a previous attempt at trade school.
The Broward College admissions and financial aid staff “couldn’t believe that I owed so much, and I only have an associate’s degree,” he says.
Aleman is eligible for one more year of loans. After that, he’ll have to pay Broward’s tuition of $2,400 a year and cover his living expenses.
Debbie Cochrane with The Institute for College Access and Success “fears that rejecting unsubsidized loans may force some students to turn to credit cards or other high-interest loans to pay for school and living expenses,” reports NPR.
Broward’s default rate has fallen to 12 percent, lower than the national rate of 13.7 percent.
Tennessee workers with associate degrees and long- term certificates often start at higher wages than four-year graduates, according to a new College Measures study. It takes five years for graduates with bachelor’s degrees to catch up.
“You don’t need to go to a flagship university to get a good job. There are many successful paths into the labor market,” said Mark Schneider, author of the report. “Students have the right to know before they go and know before they owe.”
The EduTrendsTN website, a joint venture of the American Institutes for Research (AIR) and the Matrix Knowledge Group, has detailed data on labor market returns in Tennessee.
At the end of the first year in the workforce, long-term certificate holders earned more than $40,000, those with associate degrees, $37,000 and those with a bachelor’s, $34,262. After five years, the median wages of bachelor’s graduates were similar to two-year graduates’ earnings ($41,888 versus $41,699), and slightly trailed certificate holders ($42,250).
“Many sub-baccalaureate credentials can be entryways to the middle class,” Schneider said.
Learning how to fix things or fix people pays off, writes Schneider on The Quick and the Ed. For associate degree graduates, electric engineering technicians earned the most ($61,000) after five years. Graduates in nursing and allied health fields also did well.
Graduates in business, liberal arts and management and information systems earned less than the state median. Human Development and Family Studies graduates earned much less.
After five years, associate degree graduates average $41,699, a few dollars more than Tennessee’s median household income.
“Five years after graduation, the 15 Tennesseans who got bachelor’s degrees in ethnic, cultural minority, or gender studies were making an average annual wage of $26,000, actually about $2,000 per year less than they were making one year after graduation,” notes Fawn Johnson on National Journal.
In a recent survey, 99 percent of parents with children in college said that college is “an important investment in one’s future.” Yet, “only about half of students, graduates, and parents of college students had engaged in an ‘in-depth’ conversation about how student loans would be managed or paid for after graduation.”
Only 21 colleges with high default rates — 20 for-profits and one public adult education program — are set to lose access to student aid this year. Many more were at risk. At the last minute, the U.S. Department of Education decided to omit some defaulted loans when calculating default rates.
The rate is based on the percentage of borrowers who defaulted three years after entering repayment. Tuesday, the department announced it wouldn’t count borrowers who defaulted on one loan but not on a second loan. In some cases, borrowers must repay different loan-servicing companies, which can cause confusion. The adjustment was made only for colleges that risked losing eligibility for student aid.
It’s a Get-Out-of-Jail-Free Card applied selectively with no transparency, writes Clare McCann on EdCentral. Cherry-picked colleges now have lower default rates than colleges that weren’t at risk of sanctions. “There’s no indication of which institutions benefited, in which sectors, or by exactly how much.”
Federal regulations already provide opportunities for colleges to appeal their default rates based on a variety of factors, including poor-quality servicing. Why not simply run this process before finalizing the rates, rather than oddly offering up this upfront assistance?
High-default colleges get a break, but students don’t, adds McCann. Borrowers still are considered in default, even if it isn’t counted against their college.
Community colleges and historically black colleges and universities — both with low-income students and high default rates — had lobbied for relief, notes Inside Higher Ed. “On Tuesday, Education Secretary Arne Duncan said he was pleased that no historically black colleges and universities would face penalties for their default rates this year. Fourteen historically black institutions had default rates above the 30-percent threshold last year.”
Default rates fell slightly for community colleges, the Education Department announced. No community colleges face sanctions.
Critics said the last-minute adjustment undercuts accountability.
“If a school isn’t held accountable for a default, then the borrower shouldn’t be either,” said Debbie Cochrane, a researcher at the Institute for College Access and Success.
Representative George Miller of California, the top Democrat on the House education committee, was one lawmaker who pushed for the expanded three-year default rates. He questioned the department’s adjustment to the loan rates on Tuesday.
“Any changes in the student loan system that reduce transparency and consistency may compromise our ability to hold poor-performing colleges accountable,” Miller said in a statement. “The department should be doing everything it can to ensure student borrowers who have defaulted have every opportunity for redress.”
Community college advocates praised the adjustment. “We believe that the department has acted responsibly by not holding financially needy students hostage to the shortcomings of servicers and other parties involved in loan administration,” said David Baime, senior vice president for government relations and policy analysis at the American Association of Community Colleges.
Colleges should be rewarding for educating students, not for selecting only the best, said Andrew P. Kelly, who directs the American Enterprise Institute’s Center on Higher Education Reform, at hearings on the president’s proposed college ratings system.
Unfortunately, our ability to measure the “value-added” by a college program is almost nonexistent, and the measures that the Department of Education has proposed are woefully insufficient as an approximation of that quantity.
It is much easier for colleges to change the students that they enroll than it is to change the quality of education that they provide.
If the ratings system does not account for this, it will likely set up a scenario in which selective colleges are provided with even more resources, while open-access institutions work to become more selective in an effort to improve their outcomes
Federal ratings should not be linked to federal student aid, argued Kelly. Instead, the ratings should be designed to help prospective students evaluate different programs at different colleges.
Outcomes measures will be based on flawed graduation data, said Kelly. “We need some validation that the diplomas colleges award are worth something,” such as whether graduates earn enough to pay off their loans. In addition, those developing PIRS should include “rigorous pre- and post- measures of success, or at least identify relevant control groups to compare results.”
Smaller, more selective schools could raise their access ratings and lower their net price easily by admitting more low-income students, Kelly said. That would help a small number of students.
Large, less selective schools with low rates of student success have a tougher choice. “They can embark on the hard, uncertain work of improving teaching and learning to boost student success. Or they can take the easier route and admit fewer low-income students.”
All of this is to say that if improvement is quicker and easier for low access/high success schools than it is for high access/low success schools, then rewards will accrue to the former. That will simply reinforce their place atop the higher education system and, frankly, waste taxpayer dollars on schools that don’t need them.
Selectivity is the key to U.S. News’ prestigious “best colleges” rankings, Kelly wrote in an earlier Forbes column. “Those measures often have everything to do with who colleges admit and less to do with what colleges actually teach them while they’re there.”
For-profit college students borrow more than community college students, but don’t earn more, concludes a Center for Analysis of Postsecondary Education and Employment (CAPSEE) working paper.
Six years after enrollment, for-profit students are more likely than community college students to have earned a certificate or associate degree.
They have lower employment rates and earnings compared to all college-going students, but those disadvantages are “linked to their prior academic record and disappear when compared to community college students.”
However, in comparison with similar community college students, for-profit students borrowed about $13,300 more for their higher education. “This borrowing most likely reflects the higher tuition at for-profit colleges, which in turn may be driven by the students’ greater access to federal student loans.”
If too many students default on their loans, colleges risk losing access to federal student aid, writes Heather Boerner in Community College Journal. As open-access institutions, community colleges enroll many low-income, first-generation and underprepared students. So community colleges are developing default management plans.
If students can’t get Pell Grants, “You might as well close your doors,” says Anthony Zeiss, president of Central Piedmont Community College (CPCC) in North Carolina.
Kathy Blau, director of financial aid at Garden City Community College (GCCC) in Kansas, starts the year with a game of financial Jeopardy. Students know Justin Beiber’s ex-girlfriend, but not their credit score, she says. Then she asks how student loan debt can be discharged.
Bankruptcy? Nope. Only permanent disability, death or loan forgiveness through public service apply. And if you don’t pay, the government can garnish your wages.
“That usually hushes the room a little,” she says.
Only about 17 percent of community college students borrow money to attend college, but they’re more likely to default than borrowers who start at four-year colleges and universities. Twenty percent of community college borrowers default estimates the Education Department, compared with 14.7 percent of all student loan borrowers, and that number is rising.
Default isn’t the only problem, says Zeiss at CPCC. “If a student leaves before the end of the semester, the college has to reimburse the Department of Education for the loan.”
CPCC and other North Carolina colleges left the federal Direct Loan program in March to avoid federal penalties for defaults. CPCC hopes to replace federal loans with grants from its foundation’s endowment fund.
“Default rates aren’t destiny,” says Debbie Cochrane, research director at The Institute for College Access and Success (TICAS). “There’s a lot you can do to bring them down.” A new report by the Association of Community College Trustees and TICAS, Protecting Colleges and Students, looks at how nine colleges are reducing defaults.
College students get more information than they can handle, concludes a report by the National Association of Student Financial Aid Administrators. Streamlining consumer information regulations — and eliminating some requirements — would help students focus on what they really need to know, advises NASFAA.
“The number of disclosures students receive from their institutions is overwhelming,” said NASFAA’s President and CEO Justin Draeger. “Today’s disclosures aren’t just unhelpful, they may actually hinder students from deciphering what is truly important when making college-going and financial aid decisions.” The report recommends:
Enhancing the U.S. Department of Education’s (ED) College Navigator to make it the primary tool for disseminating college information,
Making ED and loan servicers responsible for developing and distributing loan-related consumer information, including debt management, and
Repealing the ban on a federal-level student unit record, to develop a limited student unit record that collects more accurate and comprehensive data on contemporary student behavior.
Required information includes a Campus Security Report, Fire Safety Report and the Fire Log, Drug and Alcohol Prevention Information, notices about Constitution Day and Voter Registration and Athletic Disclosures, the report notes. It suggests studying whether these reports are useful to students or could be eliminated.
Parents are spending more to send their children to college, reports Sallie Mae’s How America Pays for College 2014. Ninety-eight percent of families agree that college is a worthwhile investment.
Families spent more out of pocket (42 percent of college costs) while overall borrowing (22 percent of college costs) was at the lowest level in five years. Low-income students, in particular, reduced their reliance on borrowed funds when paying for college last year.
Average percentage of total cost of attendance paid from each source
To make college affordable, more students seeking bachelor’s degrees are starting at community colleges, the survey found. They’re also more likely to choose a college or university in their own state. More than half live at home or with relatives to cut costs.