Borrowers of federal student loans have a "fundamentally different" relationship to their debt than other financial obligations, according to a new report by the New America think tank.
The report, written by Jason Delisle and Alexander Holt, is based on an analysis of several focus groups of student loan borrowers across the country.
It finds, among other things, that well-intentioned features of the federal loan program -- like making it easier for borrowers to delay payments -- sometimes work not as a fail-safe for borrowers who absolutely cannot pay but as a procrastination tool. Borrowers then end up with larger loan balances to pay.
Some borrowers also reported feeling that the "money wasn't real" when their college distributed federal loans to them, especially when the loans came in the form of refund checks.
"The solution," Delisle and Holt write, "is not to admonish borrowers for laziness or irresponsibility, but to reexamine what makes federal student loans different, and what processes and incentives can be put in place to correct for those differences."
Wyoming Catholic College announced last week that it will not participate in federal student aid or loan programs. The college, founded in 2005, achieved candidate status for accreditation last year, making it eligible to apply to participate in federal student aid programs. But the college's board voted not to participate, citing concerns about federal regulations that are attached to student aid programs. While many private colleges complain about federal regulations, very few opt out of aid programs. The college said it would step up fund-raising efforts so that it could offer more assistance directly to students. A statement from President Kevin Roberts said: “By abstaining from federal funding programs, we will safeguard our mission from unwarranted federal involvement — an involvement increasingly at odds with our Catholic beliefs, the content of our curriculum, and our institutional practices.”
The Center for American Progress is today releasing a new paper on how to provide, as the paper's title says, "College for All." The paper says that a variety of changes in policies should enable all high school graduates to receive support up to the level of tuition at a public college or university in the state. Students who attend private colleges would receive the equivalent amount toward their expenses. Students at community colleges would receive support sufficient to cover the full costs of attendance.
U.S. Representative Dave Brat, a Virginia Republican, is in his first term in Congress and is best known for having defeated Eric Cantor, who at the time was the House majority leader, in the Republican primary in their district last year. Brat, an economist, taught at Randolph-Macon College before entering Congress, and he cited that experience last week during committee debate on programs to support elementary schools. Brat's theme was that education funding isn't needed.
“The greatest thinkers in Western civ were not products of education policy,” he said. “Socrates trained Plato on a rock and then Plato trained in Aristotle roughly speaking on a rock. So, huge funding is not necessary to achieve the greatest minds and the greatest intellects in history.” (In the video below, Brat's comments start at around 45:45.)
On Friday, the National Bureau of Economic Research released a study (abstract available here) on the impact of increases in state spending on public schools. The study found that significant increases can be linked not only to an increase in the number of years of education that students receive, but to higher adult wages and lower adult poverty.
The California Student Aid Commission has suspended state student aid for those enrolled at the 10 California campuses of the for-profit Heald College chain, The Sacramento Bee reported. The commission said that Heald had failed to submit documents required to show that it is financially stable. The move by the commission halted about $1 million in payments to Heald, a figure that could reach $14 million by June. Heald officials criticized the move and said that they had hired a new accountant. Heald officials also said the move could endanger the sale of Heald, which is part of the Corinthian Colleges group, which has faced severe financial and regulatory difficulties and has been selling off some parts of its operations. Heald has been considered one of the more attractive assets that Corinthian might sell off.
Submitted by Paul Fain on February 13, 2015 - 3:00am
Tennessee's governor, Bill Haslam, this week unveiled several higher education proposals as part of his budget plan. He included $1.5 million for a pilot program to offer a version of the state's free community college scholarship to adult students. Qualifying adults will be more than halfway to an associate degree in previously earned credits, said Mike Krause, the executive director of the Tennessee Promise program. Like traditional-aged students, they would get two years of free tuition at community colleges. Haslam, a Republican, called for another $1.5 million for adult students to receive similar scholarships to attend one of Tennessee's 27 colleges of technology.
Krause said the governor's budget plan would include $2.5 million to expand a successful remedial education program, which brings community college faculty members into public high schools. The program, which is dubbed Seamless Alignment and Integrated Learning Support (SAILS), would reach 18,000 students this year. Krause said the state had seen a 4 percent decline in students with remedial needs in recent years.