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Student Stories from Gainful Employment Programs UPDATED

  • By
  • Ben Miller
June 17, 2013

Last week, Higher Ed Watch took a look at some of the gainful employment policy questions raised in the over 900 public comments submitted to the Department of Education. While policy discussions will ultimately be the most important considerations as the regulatory process moves forward, it's also important to remember that these issues do affect real people. So today we're looking at what some current and former students at these programs had to say in their comments.

Ambition and hope do not pan out in Wisconsin

For many low-income and non-traditional students, going to college can be a source of hope and a chance for a better life, even in spite of fears about not having succeeded academically in the past. That sense of opportunity is prevalent in a combined set of 13 comments from students who now appear to be enrolled in courses at Milwaukee Area Technical College. These comments almost all start on a hopeful note with a sense of excitement for a better life. Many detail previously unachieved academic successes in these programs--high grade point averages, scholarship-winning essays--the type of accomplishment that shows they are college-caliber material. But then the reversal--a degree with no return, a dispute over further debts, no change in status--that leaves them arguably worse off and in debt. (The original comments have been temporarily taken down from Regulations.gov with a request to remove personally identifiable information, so I created a redacted version here.) 

A story from one woman who enrolled at Sanford Brown to become a probation officer encapsulates this emotional roller coaster:

I was so excited about going to Sanford Brown College. I was sold because I was told I could get small class sizes and get extra help if I needed and graduate faster because the courses were 5 weeks long and you went to school year round until you graduated. 
...
I went ahead and took the admissions test and paid $50.00 for it. I was told by the financial aid personnel that I could also write a 500 word paper on why higher education was important and win a $1,500 scholarship. I won the scholarship because of the paper I wrote. I was so excited and proud of myself. I was looking forward to the wonderful future my 3 kids and I were going to have. I was going to finish college and finally have a career which I loved which was helping people. I was assured by all the admissions people at Sanford Brown College that I had made the right choice to attend that college. They all were so friendly and seemed to want this as much as I did.
 
But it was not to be. After attending from August 2006 to September 2008, the woman believed she had graduated but ended up not being able to do so after a dispute with the institution over whether she still had an outstanding balance on her account. She never ended up finding a job in the criminal justice field and owes $25,000 in student loans and cannot transfer her credits. Now the campus she attended, which had a 27.5 percent student loan default rate in the last year and charged the lowest income students a net price of nearly $18,000, is shutting down. 
 
Those who went from the highs of success to the disappointing workforce reality pulled no punches on their sentiments. For example, one student in the Milwaukee area who graduated from a dental assisting program at Everest College in 2011 wrote: "My intentions were to give my children a better future by bettering myself through education. Everest ripped that dream away from me and is the reason I am struggling today with a $12,000 loan." A student who finished at Everest with a 4.0 grade point average in the same program had the same reaction, calling her experience the "beginning of a long unfinished nightmare."
 
[UPDATE: On Twitter, Robert Kelchen notes that the Milwaukee branch of Everest College closed after placing only 95 out of its 1,585 students in jobs since opening in October 2010. An Inside Higher Ed article from February also notes that Milwaukee is increasing scrutiny of for-profit colleges.]

Confusion rules the day

Given all the work that's been done to raise questions about some gainful employment programs, it's fair to ask why students are still choosing to enroll in certain ones that already have bad outcomes (see 27 percent default rate at Sanford Brown). The answer, at least partially, appears to be confusion. Lack of clarity around costs, expected return, likelihood of finishing, transfer opportunities, and ability to pass licensing tests whether credits would transfer, and whether they will even be able to sit for the necessary licensing tests pop up again and again in a host of comments. (See for example, this comment about trying to get an animation degree or page 4 of the document labeled "student complaints.")

Confusion can be one way to shift personal responsibility away from the individual and to the program, but it also seems to be a symptom of our opaque higher education system and false quality assurance provided by accreditation. In a working transparent market, concerns about cost, transfer, etc. should not be happening. The fact that they are again reiterates the importance of efforts like the College Scorecard and Financial Aid Shopping Sheet, which try to standardize information to help with comparisons may be some assistance, but are struggling to get widespread adoption.

But better information is not enough unless either: 1) consumers change their behavior and take a more skeptical and less trusting approach to choosing colleges or 2) they have a better quality assurance that the institutions where they can take their aid have been sufficiently vetted to merit a more trusting relationship. Right now, students face the worst of both worlds thanks to accreditation. With the imprimatur of accrediting agencies (and thus by implication the Department of Education), accreditation provides a false sense of security for students that breeds an implicit level of trust toward the institution that may not be warranted. Unlike a mechanic you've never used before, a student trusts her accredited college will charge her a reasonable price and give her a service that works. And she does that because some other group of people have reviewed the college to check its quality. Experts in higher education have signed off on it, so why shouldn't she trust that seal? And so students trust that their accredited institution will offer accredited law degrees in their state--but that's not always true, as a student from Iowa found out when he tried to get a law degree from a program whose lack of recognition from the American Bar Association meant California was the only state in which he could become a lawyer. Or they might assume that their credits could be used at colleges beyond the one they are currently attending., which was not the case for many students who tried to take their coursework from proprietary institutions to Milwaukee Area Technical College.

Solving this issue of trust can be done one of two ways. First, Congress could change the requirements around accreditation to compel these agencies to actually set clear standards for outcomes and results--including things like having necessary programmatic accreditation--which would likely result in closing some institutions and accreditors for poor performance. Or, we could go the opposite way and acknowledge that accreditation is not a meaningful indicator of anything and students should not assume that just because a college gets federal student aid that means they should assume it's any good. The former is extremely difficult politically. The latter is not only hard to accomplish but would make the path into college even more confusing for low-income students that currently have to trust and rely on their financial aid office for help navigating Federal grants and loans. Either way this issue indicates more must be done to think about not just what information consumers use for their decisions, but also how they interact with the colleges they are considering attending.

Does this really require a college credential?

Also implicit in the trusting attitude of students is the assurance that program will be what it says it is--training that will provide them access to a job. Now in any system, some programs will be better than others and there will always be a few duds.  And commenters did identify some that appeared to be not very good--students discussed outdated or insufficient equipment (imagine learning how to work with braces on half a mouth) or instructors without sufficient content knowledge. But assumed in all of those comments is the idea that the program would have been better had those deficiencies just been corrected. Never would a student assume that the degree itself is fundamentally not reflective of how the fields they are preparing for actually operate. Yes one student who attended  Sanford Brown in the Milwaukee area found out that misalignment problem was exactly what her program suffered from:
 
The majority of companies hiring for Billing have on the job training for people who have been hired by the company including Aurora Healthcare. ... The HIPPAA, JCAHO and Medical Terminology courses are being given as on the job training as free computer based learning courses. Positions in Coding for hospitals are impossible to get into without years of experience. The Certificate I received has not been useful to me and is not worth the $17,000 I now owe. 
 
The commenter raises a point that goes beyond the idea of whether a program merits the price charged and debt incurred to instead ask is it even aligned with fields or occupations where postsecondary education really provides an advantage for entry and advancement? In the case of the coding program, she suggests that even an extremely good program would not have been worth it because that is not how the coding industry works. This isn't a derivative of the "bachelor's degree holders working in restaurants" argument, but rather the idea  that even someone who gets employment in the relevant field may not actually need that credential. It's a challenge to the idea that if a college or university offers a program it is by definition "postsecondary." 
 

Signs some schools are taking steps to improve--is it enough?

To be sure, there's a lot of comments that do no paint a flattering light of the programs and the institutions that offer them. But there are some rays of light suggested in the comments. Some institutions have shut down poor-performing programs, while others have closed entire branches that did not appear to be succeeding. Outside the comments, the University of Phoenix and Kaplan University have been among the large institutions to get noticed for offering trial periods and experimenting with new curricula to boost quality. In these cases, schools do appear to be responding to market forces in positive ways. The task ahead then is to figure out how to keep driving those kinds of changes so that stories of future students can focus only on the hope and not the disappointment and regret that followed. 
Issues:

Syllabus: Week of June 10, 2013

  • By
  • Honey Ghods
June 14, 2013
Publication Image

Welcome to the Syllabus, a guide that provides insight into what’s happening in higher education.

Read:

Going to College is Worth it – Even if You Drop Out, Dylan Matthews
The Washington Post

There was a time when high school was rare and college was reserved for the elite. In today’s world, the value of education is vastly different. Some sort of postsecondary education is an expectation for most. It seems that one must attend and graduate college for entrée into the middle class. Due to stagnating wages and rising college prices, however, many have questioned whether attending college is a financially sound decision. According to researchers at The Hamilton Project the answer is “yes.” Their recent study shows that only 58 percent of college students enrolled in 2004 received a degree by 2010. Nevertheless, those students who did not graduate still earned more income than those who never enrolled in college. In addition, college dropouts make $8,000 more than high school graduates. This figure includes factoring in the cost of the student’s additional education. Matthews concludes by stating, “Dropping out of college is unquestionably a worse economic bet than finishing it. But the evidence suggests that starting and not finishing is much better than never starting at all.”

Listen:

Are There Jobs Out There for Recent Grads?
NPR Tell Me More

One of the biggest concerns for recent college graduates is whether or not they will obtain a fair paying job after spending countless hours and thousands of dollars on higher education. Recent numbers indicate 175,000 new jobs were obtained last month. However, the number of unemployed individuals increased by 7.6 percent. This is because more people entered the labor force. If you’re a recent college grad, you’re still in better shape than those who do not hold a college degree. Surveys show that the salaries of offers for new graduates are up about 5 percent. Additionally, college grads have an unemployment rate of 3.8 percent as compared with high school dropouts who have an unemployment rate of over 11 percent.

Discuss:

Minn. Program Will Offer a Tuition Break Based on Scores on a Standardized Test, Dan Berrett
The Chronicle of Higher Education

In order to motivate students Minnesota State University at Moorhead created a program called “Up2U” that encourages their students to academically achieve and complete college by providing financial incentives through a transfer tuition reduction. In order to receive this deduction the following conditions must be met: 1) The student must enroll full-time in the fall at the college and maintain a GPA of 2.0 for their first four semesters; and 2) During their fourth semester the student will take the new version of the Collegiate Learning Assessment or CLA, which is a standardized test of critical thinking. If students have the same GPA and score well on the assessments they will see their tuition reduced by three-quarters of the full cost. Those opposed to “Up2U” are concerned the program will encourage “teaching to the test” and will alter the current curriculum.

Higher Ed Watch readers, what do you think? Is one test a good predictor of a student’s understanding of the material and critical thinking abilities? Given that the Collegiate Learning Assessment is a test of critical thinking, how could it alter curriculum? Would it even be possible to teach to this test?

Issues:

What Reading 900+ Comments Tells Us About the Coming Gainful Employment Re-Regulation

  • By
  • Ben Miller
June 13, 2013

Circle September 9 on your calendars. That's the date according to a Federal Register notice published yesterday that the Department of Education will bring together a committee to develop new regulations defining gainful employment. While it had been clear since a notice published in mid-May that the Department was going to be considering gainful employment in its next round of rulemaking, yesterday's announcement provides exact timing for negotiations, as well as the types of negotiators to be considered. 

With the first negotiating session still not for several months, it is going to be some time before the Department puts forth any public proposal, but with more than 900 public comments already submitted in response to initial thoughts on the regulatory agenda, there's already some clear indications of what we can expect to see from a policy standpoint. In a separate post I'll put up some of the more interesting comments received from students. (New America also submitted its own comments on the regulations, which can be found here.)

Arguments in favor--stronger, more comprehensive

By far the largest number of comments came similar short submissions calling for a stronger rule and protections for students and taxpayers (see here for an example). On the more substantive side, a few themes emerged:

The gainful employment rule should be stronger: Multiple comments cited the 2011 rule's "nine strikes and you're out" policy whereby a program had to fail each of three measures for three years straight as being overly generous. Several comments called for initiating penalties for programs that failed two out of the three measures. Others, such as those from The Institute for College Access and Success argued for a higher threshold on the repayment rate based upon prior studies of delinquency and default as well as how Congress set thresholds for cohort default rates. Not surprisingly, among the most thoughtful and creative comments were those from Robert Shireman, the former Department official who helped craft the initial set of regulation. Shireman's comments suggested a new structure that would draw distinctions between institutional and program eligibility depending on repayment rates, with debt to earnings tests used if repayment rates fell below a certain level.

Accountability in this space is about more than just gainful employment: Many comments touched on the idea that gainful employment is only one piece of an accountability framework that also includes cohort default rates and the 90/10 rule. Given that, many commenters stressed the need for the Department to address the use of deferments and forbearances by some institutions to keep their default rates low by limiting the number of students that could default during the measurement window. Similarly, commenters also stressed the need to consider tactics like delaying the disbursement of student aid funds so some dollars would not count as part of the 90/10 calculation for a given year.

Relief for borrowers at failing programs: The final gainful employment regulation never included any relief for borrowers that had debt from a program that eventually lost eligibility on the grounds that discharge requirements were statutory and could not be changed. This time, several comments, such as those from the National Consumer Law Center, stressed that borrowers in programs that lose eligibility should be given relief much the same way that those who attend institutions that shut down receive assistance.

Job placement matters: The comments also included several submissions from attorneys general from states such as Colorado, Illinois, and Kentucky. One issue these focused on is the importance of greater clarity in definitions of successful job placement. Inaccurate, misleading, and outright fraudulent have been an ongoing problem at some proprietary institutions for many years, but the lack of a clear definition can make enforcement of the issue more complicated (the Department's National Center for Education Statistics did hold a technical review panel on creating a definition a few years ago, but did not end up putting together a definition).

Arguments against--wait for reauthorization 

Not surprisingly, there was a pretty clear divide on whether the Department should approach the gainful employment rule again, and what to do so if it does. In general, proprietary colleges and their lobby groups argued that the Department should delay action on the grounds that Congress would be scheduled to reauthorize the Higher Education Act in short order (see page 2 of the comments from the industry's main lobby group, the Association of Private Sector Colleges and Universities for a typical form of this argument). Since reauthorizations these days have a cicada-like periodicity  that's effectively calling for a delay of many years.

In a similar vein, several institutions also brought forward the idea that the gainful employment rule should be applied to all types of institutions, not just a subset of programs at public and private nonprofit institutions and essentially all programs at proprietary colleges. DeVry and LIM College had the clearest forms of this argument, while Strayer University took a slightly different approach, arguing why it resembles other institutions that are not subject to the gainful employment requirement and should thus be excluded. (Whether including more programs is legally allowable, a good policy idea, or just something that would be designed to get other sectors of higher education opposed is debatable.) 

By far the two most thoughtful and interesting comments from those opposed to gainful employment came from Strayer University and Champion College Services, which provides default management and would have provided gainful employment support if the rule were still in effect. Strayer's comments suggests relying on the cohort default rate to set thresholds and penalties, while Champion put forth an argument for creating a repayment rate that is based on the number of borrowers, not dollars, and define "repayment" as not being in default or more than 120 days delinquent. Other ideas more commonly raised included allowing institutions to limit the amount of debt a student can take on and risk-adjusting the measures based upon the characteristics of students enrolled. 

Not surprisingly then, we're already clearly headed for a pretty significant divide on the policy questions in gainful employment. In a subsequent post I'll pull out some of the more interesting submissions from former students and faculty at proprietary institutions. 

Issues:

Five Key Points on Student Loan Interest Rates from the CBO

  • By
  • Jason Delisle
June 11, 2013

Yesterday, the Congressional Budget Office (CBO) released a brief on student loan interest rates. It’s a treasure trove of information, and it adds new information to the debate in Congress over how to set interest rates on student loans. Here are five key points from the report.

1.      The Government Won’t Make Money on Student Loans

Student advocates and left-leaning think tanks say that the federal government makes money on federal student loans and therefore Congress should cut interest rates. The CBO has repeatedly warned lawmakers that those figures are wildly out of whack and it reports them only because it has no choice – the law requires it. According to both the CBO and many financial economists, a more accurate measure would better account for risk that taxpayers bear in making the loans. From the latest CBO report:

FCRA accounting [the official rules] does not consider some costs borne by the government. In particular, it omits the risk taxpayers face because federal receipts from interest and principal payments on student loans tend to be low when economic and financial condition are poor and resources therefore are more valuable. Fair-value accounting methods account for such risk and, as a result, the program’s savings are less (or its costs are greater) under fair-value accounting than they are under FCRA’s rules. On a fair-value basis, CBO projects that the student loan program will yield $6 billion in savings in 2013 and will have a cost of $95 billion for the 2013–2023 period as a whole…

To be sure, on a fair-value basis the loans make money for the government – but only for the next three years. And that is a good argument for reducing rates on loans issued in those years. But then the loan program flips to a large cost of $13 billion per year, on average, starting in 2016, more than erasing any gains. Why the big change from gains to losses?  It’s because the government charges the same interest rate on student loans no matter what is happening to interest rates in the economy. As a result, when rates are low, the loan program generates small profits; when rates are higher, as they are projected to be in the near future, and the economy is doing better, it provides relatively larger subsidies to borrowers at a cost to the government.

fcra_fairvalue_CBO.png

2.      Current Interest Rates Poorly Target Benefits

The best way to fix what the CBO calls subsidy rate variation is to peg interest rates on student loans to interest rates in the market – though the rates can still be held below-market. Such a plan would keep the size of the subsidy provided to students relatively equivalent, rather than providing a much smaller subsidy to students in a struggling economy. It would also reduce or eliminate any profits the government makes in low-rate years. According to the CBO:

There would be less yearly variability in subsidy rates under options that linked student loan interest rates to market rates than there is under current law.

Senate Republicans have a proposal to do that. President Obama does, too. House Republicans are on board. But both Republican plans only partially peg loans to market rates because they would cap interest rates at 8.25 percent. (The Senate Republican plan has a "hidden" cap that borrowers can trigger when they consolidate their loans once they leave school.) Both plans fall short of stabilizing the size of the subsidy in that regard. From the CBO report:

Imposing interest rate caps would increase the yearly variation in subsidy rates relative to options without caps. If a cap is binding—as would occur when rates on Treasury notes are high—interest rates on loans would be lower and the loans would receive a higher subsidy than they would without a cap.

3.      Senator Warren, Call Your Office: You’ve Been Outspent

Here is another revealing point in the new paper. It includes a hidden estimate of the cost of Senator Jack Reed’s proposal to reduce interest rates on student loans such that the program generates no “profit” for the government. Look at the estimated costs of the program under current law as show on the last line of Table 5 (and remember, these are under Federal Credit Reform Act accounting, not fair-value, so they’re not showing the true costs of the program). It shows savings of $184 billion over 10 years. The Reed proposal would effectively set the number to zero, meaning his proposal would cost $184 billion. And that’s not even the entire cost. That figure is for newly issued loans only. The Reed proposal would also let borrowers with old loans “refinance” into the new, lower rates his plan would set. That could easily add $50 billion, or even $100 billion, to the $184 billion figure.

Senator Warren, call your office. Senator Reed has sponsored the most expensive and most generous student loan proposal in Congress. You’ve been outspent by hundreds of billions of dollars.

4.      Option to Lock in Rates is Valuable

The CBO paper makes an important point about a provision in the House-passed plan, which provides borrowers with variable rate loans while in school, but allows them to lock in a fixed interest rate at any point during repayment.

The option to convert variable-rate to fixed-rate loans is valuable for borrowers and costly to the government because borrowers tend to convert when they believe interest rates will increase in the future. By contrast, when all loans carry fixed rates, there is no such timing incentive for consolidation.

Critics of the House-passed plan seem to have completely missed this point, as have the media. Providing borrowers with variable rate loans and an indefinite option to lock in a fix rate is a big benefit, albeit one that requires much more financial literacy on the part of students and borrowers.

5.      Interest Cap or Pell Grant? Take Your Pick

Also on the issue of interest rate caps, the CBO shows how much it costs to add them to various proposals. Capping rates at 8.25 percent adds a cool $40 billion to the cost of the fixed rate plans, like the one the President proposed. That is nearly enough to stave off the benefit cuts scheduled for the Pell Grant program in the coming years. All of the advocates and policymakers who insist that any proposal must have a cap should consider this:

Would you rather spend $40 billion arbitrarily capping interest rates for low-, middle-, and high-income borrowers, or shoring up the Pell Grant program for low-income college students?

Issues:

Still think that college degree doesn't matter?

  • By
  • Ben Miller
June 7, 2013

The monthly unemployment data from the Bureau of Labor Statistics is out today and the findings are largely  unsurprising--the unemployment rate is largely unchanged and those with increasing levels of postsecondary education are much less likely to be unemployed. For example, the unemployment rate for someone with a bachelor's degree is 3.8%; for a high school graduate who never went to college, it is 7.4 percent. But if anything this is dramatically understating the very different labor market individuals with some college are facing compared to those who don't. Just consider this chart:

Simply put, 99 percent of the increase in employed persons seen in the last year was for individuals who had attended at least some college (this removes the negative change in employment for high school grads with no college to not produce a number above 100 percent). Among those who didn't go to college, we actually lost 284,000 employed persons from May of 2012 to May of 2013. Within the college-going categories, about 60 percent of the increase went to those with a bachelor's degree and 40 percent to those with an associate's degree. 

In fact, the only thing holding the unemployment rate down for the less educated categories is that the number of people looking for work in these categories* has declined:

As the data show, jobs are slowly coming back. But basically only fo those with at least some college education.

(Hat tip to David Leonhardt of the New York Times, who I saw tweet this idea about a jobs report a year or so ago.)

* Individuals with a bachelor's degree are the largest group in the civilian labor force at just over 49 million people. Some college or an associate degree represents about 37 million people; high school graduates with no college is 36 million; and high school dropouts is 11 million.

Issues:

Ready or Not, Here They Come: Social Promotion Comes to FL CCs

  • By
  • Lindsey Tepe
June 6, 2013
In the transition between high school and college, remediation policy is arguably the most difficult piece of the puzzle. Students are often placed into remedial courses at community colleges by inferior standardized tests with arbitrary cut scores, and less than one-third of students placed into remediation are likely to graduate from college.
 
Well, in Florida, they have found what has been referred to as a “weirdly brilliant” strategy for dealing with remediation; with a wave of their legislative wand, the Florida legislature has made all of the students that would have placed into remediation disappear.
 
How did they do it? The answer is so simple it’s surprising no one had thought of it before: simply call all high school graduates “college-ready.” Once you say they’re college ready, they can go straight into credit-bearing courses.
Issues:

MOOCs, Robots, and the Secret of Life

  • By
  • Kevin Carey
June 5, 2013
Publication Image

For the last two years, MOOCs have dominated the national conversation on technology and the economics of higher education. But for all the talk of whether they’ll usher in a new age of democratized global learning or destroy higher learning as we know it (or possibly both at the same time), it’s been hard to get a handle on MOOCs are, and what they can be. A lot of MOOC journalism has been like this, wherein a general-interest magazine writer signed up for 11 courses, finished one of them (the easiest, apparently), and formed his opinions accordingly. On the theory that to understand an educational experience you should actually experience it, I’ve spent the last four months taking two MOOCs. Now I’m done, and this is what I learned.

The first was Introduction to Philosophy, from Coursera (also the one class MOOC dropout guy finished, coincidentally.) It’s a nice, friendly, seven-week overview of major philosophical concepts, with each week’s lecture led by a different professor from the University of Edinburgh’s philosophy department. It was fun, and I learned some things. It was not, however, the equivalent of a legitimate college course. And to be clear, it didn’t pretend to be. The expected to workload was listed as “1-2 hours/week” and even granting the many problems with equating time and learning, that’s a clear signal the class isn’t something people should be getting three college credits for.

And beyond the brevity, Introduction to Philosophy was missing important things. Grossly simplified, there are two main components of an educational process. One involves making choices about knowledge, ideas, and skills. What do we want students to learn? How do we present that information? There are many ways to go about this, and Introduction to Philosophy chose two time-honored methods: lectures, presented on video, and supplemental reading. But the course was mostly missing the second component: creating a process and environment in which students make meaning out of the information you’ve presented, integrating it into prior knowledge and larger concepts in a way that allows for applications to problem-solving and transfer to other domains. There are plenty of well-known ways to do this, too, and they took a stab at one of them, assigning an optional peer-graded essay at the end of the class. But for the most part, the education was passive.

My second MOOC experience was very different. Having sampled Coursera (and a Udacity statistics class last year), I wanted to try something from the third major MOOC player, edX. I asked edX president Anant Agarwal to recommend one, and he suggested MIT 7.00x, an introductory biology course that was starting in a few weeks. It would show the cool things the edX learning platform can do, he said, plus the professor is great. So I logged on and in roughly two minutes I was enrolled.

Issues:

Is $1 trillion a number we should fear?

  • By
  • Ben Miller
June 4, 2013

The most popular number in higher education today is $1 trillion—the total amount of outstanding student loan debt, according to the Federal Reserve Bank of New York. It’s big and scary; the size of figure we're more used to seeing attached to wars and national budgets, and easily encapsulates a broadly held sense that college is unaffordable for all but the wealthiest families. Not surprisingly, the figure is ubiquitous in the media,  producing alarming charts, such as this one from a piece in Mother Jones about different plans to deal with student loan interest rates: 

There’s just one problem—the number isn’t necessarily the boogeyman it’s made out to be. That’s because the $1 trillion loan balance is an aggregate number.

Issues:

Fact Checking the Student Loan Interest Rate Debate

  • By
  • Jason Delisle
May 31, 2013

The White House and House Republicans are arguing over two competing proposals to reform how the government sets interest rates on federal student loans. As we wrote two weeks ago, this is a good sign and a big improvement over the debate on the exact same issue from a year ago.

But if you are scratching your head trying to understand how the House plan and the president’s plan are different, it is because they are in fact very similar. Both tie rates to the market. The president’s plan only offers borrowers fixed rates, but the rate offered changes every year. The House plan requires different rates on the same loan while the borrower is in school, but then gives them the option to elect a fixed rate, which, like the president’s plan, is different depending on the year. Under the House plan, borrowers wouldn’t know unless they consolidate their loans exactly how much they owe.

Unfortunately, incomplete and inaccurate information about the pending proposals abounds. In this Ed Money Watch post, we publish an incomplete list of such information along with additional facts to bring more clarity to the debate.

Issues:

Does Your Favorite Private College Serve Low-Income Students Well? Find Out Here.

  • By
  • Stephen Burd
  • Alex Holt
May 30, 2013

[The New America Foundation's Education Policy Program recently released "Undermining Pell: How Colleges Compete for Wealthy Students and Leave the Low-Income Behind," a report that presents a new analysis of little-examined U.S. Department of Education data showing the "net price" – the amount students pay after all grant aid has been exhausted – for low-income students at individual colleges. This is the seventh and final post in a series related to the report's findings. Read earlier parts of the series here, here, here, here, here, and here.]

How do individual private colleges stack up in terms of their commitment to serving low-income students? To answer that question, it is important to look at both the proportion of low-income students they serve and how much those students are asked to pay. As this graphic shows, some institutions are authentically committed to enrolling low-income students and charging them affordable prices, while others -- including some that are extremely wealthy (those with the largest circles) -- are stingy with their admissions slots, their aid dollars, or both. Click on the graphic below for an interactive dataset that allows you to compare colleges.

Pell Screenshot 3.jpg

This graphic has been updated from an earlier version to reflect changes that some private colleges have recently made to their net price data.

Issues:
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