WASHINGTON -- Eight days after the interest rate on new, federally subsidized student loans increased to 6.8 percent, the two parties in Congress seemed further away than ever on a compromise that could retroactively undo the increase. A bipartisan coalition of Senate Republicans, Independents and Democrats have put forward a bill for market-based interest rates that has much in common with President Obama's plan, but the Senate Democratic leadership would rather extend the current 3.4 percent interest rate for another year -- a proposal that's a nonstarter with Republicans in the House and Senate.
The Senate will vote on the one-year extension bill today.
Students whose parents have university degrees but are working in jobs that don't typically require such a degree were likelier than their peers to question the value of applying to college, a new study of British college-aged youth finds. The study, conducted by Britain's Strategies Society Centre and funded by Universities UK and Pearson, compares the college-going aspirations and behavior of a group of academically qualified and interested British students who considered not applying to a university and those who never had any such hesitation. It is published in the wake of the British government's decision to significantly increase tuition levels.
The report provides a wealth of information about which factors are likeliest to deter students from considering enrolling and from ultimately doing so. In general, the data back up the conventional wisdom that students from economically disadvantaged families are more likely than their peers to consider not applying to attend a university. But while having a parent with a university education generally made students less likely to express concern about applying to college, that pattern did not hold true for those at lower socioeconomic levels.
“It seems that when young people weigh up the costs and benefits of higher education, the experience of their parents is paramount,” said James Lloyd, director of the Strategic Society Centre.
The University of California has abandoned plans for large, widespread increases in graduate and professional school tuition, The Los Angeles Times reported. The original plan would have resulted in major increases for about 14,000 students. Now only about 800 students, primarily in nursing, will be affected. And those who still face an increase would see costs go up by about $619 a year, not the $2,700 originally planned. Governor Jerry Brown had strongly opposed the originally planned increases.
WASHINGTON — After protests from historically black colleges that new underwriting standards for Parent PLUS loans have hurt their institutions, the Education Department has told colleges it will simplify the appeals process for students who are denied loans but stands by its new criteria. In a notice sent to institutions, the department announced it would create lists of applicants who are eligible to appeal loan denials and inform applicants by e-mail if they qualify.
Since the department tightened underwriting standards in 2011, 400,000 parents have been denied loans. The denials have fallen disproportionately on historically black colleges, leaders of those institutions have argued in asking the Obama administration to reconsider.
Lawmakers in Oregon have passed legislation authorizing a study and pilot of the idea of replacing tuition at public colleges and universities with commitments by students to repay a small percentage of future income to the state, The New York Times reported. In Oregon, a class at Portland State University did extensive research on the idea. The idea has also been much discussed (but without legislative action comparable to Oregon's) in California.
A report issued Tuesday by Education Sector, a Washington, D.C. think tank, examines the federal government's three-year cohort default rate for federal student loans as well as alternative ways to measure how many students fail to repay their debt. The report, "In Debt and In the Dark," argues that current publicly available information on loan defaults is incomplete and doesn't represent students' total risk of default. The author, Andrew Gillen, research director of Education Sector, calls for combining default rates with graduation rates — saying that graduation rates that exceed default rates, found at 514 colleges, the majority of which are community colleges, are a "red flag" for prospective students.
Arizona has sued the Maricopa Community College District, seeking to block it from granting in-state tuition rates to students who lack the legal authority to live permanently in the United States who qualify under President Obama's executive order for work permits, the Associated Press reported. The suit claims that the district is violating Arizona law barring any benefits for immigrants who are not legally entitled to stay in the United States. But Maricopa officials said that President Obama's executive order in fact does give these immigrants legal status.
More than half of all student loan borrowers are concerned they will be unable to repay their debt, according to a paper released today by the Urban Institute, a Washington think tank, using data from the 2012 National Financial Capability survey. The report found that 57 percent of all student loan debtors are concerned about repayment, and 9 percent of student loan borrowers never attended college at all — either because they borrowed for vocational certificates or because they borrowed on behalf of family members.