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Walter Russell Mead introduces us to today’s topic; student debt and the folks in academia who allowed this coming disaster to take place.
It’s pretty clear that federal housing policy not only helped inflate the housing bubble, but wrecked the prospects of exactly the low income, marginal, first time home buyers well intentioned people were trying to help. The same thing seems to be happening in the world of higher ed: low income students who are struggling in higher ed are getting the royal shaft as the result of poorly thought through policies intended to help them.
The Wall Street Journal recently ran a good piece that illustrates how things have gone wrong. …
… Twice in a row, well intentioned federal policies aimed at helping low income people make it into the middle class have spectacularly backfired and imposed ruinous losses on exactly the people in our society who can least afford them. The answer isn’t to stop thinking about how to help low income people do better in life, but it’s clear that some of our basic policy assumptions need to be rethought.
We need to find a better way.
WSJ has the story of the burden of student debt for those who never graduated.
The rising cost of a college education is hitting one group especially hard: the millions of students who drop out without earning a degree.
A bachelor’s degree remains by far the clearest path to the American middle class. Even today, amid mounting concerns about the rising cost of higher education and questions about the relevance of many college degrees, recent graduates have lower rates of unemployment, higher earnings and better career prospects than their less educated peers.
But as more Americans than ever before attend college, more too are dropping out before they ever don a cap and gown. That means millions of Americans are taking on the debt of college without getting the earnings boost that comes from a degree. Dropouts are more than four times as likely as graduates to default on their student loans.
“Graduating with a lot of debt can be daunting,” says Lauren Asher, president of the Institute for College Access and Success, an advocacy organization promoting access to higher education. “Having a lot of debt and not graduating is even more daunting.”
The complexity of the student-loan system—a web of public, private and subsidized loans that together add up to more than $1 trillion—makes it difficult to know exactly how much debt is held by dropouts. But the scale is massive. According to a 2011 study by the Institute for Higher Education Policy, a Washington, D.C.-based research firm, 58% of the 1.8 million borrowers whose student loans began to be due in 2005 hadn’t received a degree. Some 59% of them were delinquent on their loans or had already defaulted, compared with 38% of college graduates. The problem has almost certainly worsened since, as the recession wiped out job opportunities for less-educated workers. …
Zero Hedge posts on the large increases in both student loans and delinquencies.
We have already discussed the student loan bubble, and its popping previously, most extensively in this article. Today, we get the Q3 consumer credit breakdown update courtesy of the NY Fed’s quarterly credit breakdown. And it is quite ghastly. As of September 30, Federal (not total, just Federal) student loan debt rose to a gargantuan $956 billion, an increase of $42 billion in the quarter – the biggest quarterly update since 2006
But this is no surprise to anyone who read our latest piece on the topic. What also shouldn’t be a surprise, at least to our readers who read about it here first, but what will stun the general public are the two charts below, the first of which shows the amount of 90+ day student loan delinquencies, and the second shows the amount of newly delinquent 30+ day student loan balances. The charts speak for themselves. …
The above shows what college administrators have wrought. Since college faculties now run our government, how’s that working out? Orange County Register editors take a look at the secrecy of the obama administration.
The public’s business should be conducted in public. When it can’t be viewed as it occurs, such as the countless day-to-day dealings of the vast federal administrative bureaucracy, at least records of what transpired should be made available to the public.
President Barack Obama nobly promised that his would be an unprecedentedly transparent presidency. But from the shrouded Fast and Furious debacle to the administration’s apparent reluctance to be candid from Day 1 about the deadly events in Benghazi, Libya, the president has failed to live up to his promise of transparency.
The unavoidable question is, “Why the hesitancy to disclose, promptly and fully?”
Now the Obama administration is suspected of withholding thousands of emails from public scrutiny, including many allegedly sent through private, rather than government, accounts, expressly to keep them secret.
A House committee investigation recently opened concerning whether EPA Administrator Lisa Jackson used an email alias to hide correspondence from open-government requests and from her agency’s own internal watchdog, something Republicans say may run afoul of the law, reported the Washington Times. …
Since these liberals worship diversity, what do they do in their hiring decisions? Volokh Conspiracy post has some answers.
The Des Moines Register has an interesting article following up on the lawsuit against the University of Iowa law school alleging ideological discrimination in hiring. The judge declared a mistrial because the jury was deadlocked. According to interviews with jurors, however, there was genuine agreement that Teresa Wagner was denied a position because of her conservative views and political activism, but disagreement over whether the Dean could be held responsible. Given the nature of the claim, the Dean was the named defendant, rather than the university (or the faculty, who largely control academic hiring decisions).
… jurors said they felt conflicted about holding a former dean personally responsible for the bias. They wanted to hold the school itself accountable, but federal law does not recognize political discrimination by institutions.
“I will say that everyone in that jury room believed that she had been discriminated against,” said Davenport resident Carol Tracy, the jury forewoman.
Meanwhile, attorneys for Teresa Wagner on Tuesday filed a motion for a new trial in the case that scholars agree could have national implications in what some argue is the liberally slanted world of academia.
The jury’s belief that Wagner was a victim of discrimination is significant as the case heads toward a retrial that will cost the state thousands of dollars to litigate and could cost the university hundreds of thousands of dollars should it lose or settle out of court, scholars following the case said. …
Paul Caron has more here. …
Even though propped up by the federal student loan program, some law schools are getting the message. TaxProf posts on VermontLawSchool.
Vermont Law School is offering voluntary buyouts to staff and may do so soon with faculty as it prepares for what its president and dean says are revolutions about to sweep both the legal profession and higher education.
A sharp drop in the numbers of Americans applying to law schools — triggered by a drop in the number of legal jobs open — already is being felt at the independent law school’s bucolic campus on the south bank of the White River.
The class due to graduate in the spring with juris doctor degrees numbers just over 200. The class that will follow it in 2014 numbers about 150. …
TaxProf also posts on how one college is reacting to obamacare.
Community College of Allegheny County will cut the hours some instructors to avoid paying for their health insurance coverage under new Affordable Care Act rules.
CCAC President Alex Johnson announced in an email to employees last week that the school would cut course loads and hours for some 200 adjunct faculty members and 200 additional employees. The Affordable Care Act — nicknamed Obamacare — classifies employees who work 30 hours or more per week as full-time, and CCAC would be required under the new law to provide employer-assisted health insurance to those employees. Instead, temporary part-time employees, such as clerical, computer, seasonal and other positions, will be limited to working 25 hours per week, and adjunct instructors will only be able to teach 10 credits per semester. Permanent part-time employees, already eligible for health care coverage, will be unaffected. The Pittsburgh-based college estimates the move will save it from spending an additional $6 million.
The Atlantic reports on an effort to make college more affordable. The effort is in Texas, not in the northeast where colleges are content to continue to live well while impoverishing their customers.
Texas is experimenting with an initiative to help students and families struggling with sky-high college costs: a bachelor’s degree for $10,000, including tuition fees and even textbooks. Under a plan he unveiled in 2011, Republican Gov. Rick Perry has called on institutions in his state to develop options for low-cost undergraduate degrees. The idea was greeted with skepticism at first, but lately, it seems to be gaining traction. If it yields success, it could prompt other states to explore similar, more-innovative ways to cut the cost of education.
Limiting the price tag for a degree to $10,000 is no easy feat. In the 2012-13 academic year, the average annual cost of tuition in Texas at a public four-year institution was $8,354, just slightly lower than the national average of $8,655. The high costs are saddling students with huge debt burdens. Nationally, 57 percent of students who earned bachelor’s degrees in 2011 from public four-year colleges graduated with debt, and the average debt per borrower was $23,800–up from $20,100 a decade earlier. By Sept. 30, 2011, 9.1 percent of borrowers who entered repayment in 2009-10 defaulted on their federal student loans, the highest default rate since 1996.
In the Lone Star State, 10 institutions have so far responded to the governor’s call with unique approaches, ranging from a five-year general-degree pipeline that combines high school, community college, and four-year university credits to a program that relies on competency-based assessments to enable students to complete a degree in organizational leadership in as little as 18 months. …