Federal judge sides with Education Department in firing of debt collectors

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Judge dismisses lawsuit stemming from U.S. Department of Education's firing of several debt collectors over allegations they misled struggling borrowers.

Rand Paul: All College Expenses Should Be Deductible

Senator Rand Paul of Kentucky, who is seeking the Republican presidential nomination, on Friday called for all college expenses to be tax deductible, The Los Angeles Times reported. He did so while criticizing President Obama's proposal to make community college free. "The president says, 'I want to give you free college.' It sounds good at first, but think about it? How could it be free?"

Paul added, "I have a better idea. Let’s let college students deduct the entire cost of their educations over their working careers. Let’s make college tuition entirely deductible." He did not provide details in the speech, given to students at the University of Iowa. There currently are federal tax deductions for some college expenses, but in many cases they would not cover the entire cost of college, as Paul suggested they should.

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Corinthian Colleges goes on the offensive in California as state AGs push for loan forgiveness

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As the campaign for debt relief for its students mounts, for-profit Corinthian Colleges tries to pressure California's attorney general to ease her scrutiny as the chain seeks buyers for its campuses in the state.

Helping students make better decisions can improve higher ed equality (essay)

The federal government has made significant investments over the last several decades toward reducing socioeconomic inequalities in college access and success: hundreds of billions of dollars in financial aid; a host of informational tools to provide students and families with better information about college quality and costs; prominent attention from the White House, including not one but two presidential summits in 2014 on expanding college opportunity for economically disadvantaged students.

Yet as we all know, gaps in college completion by family income have actually widened over time. How can this be?

Simply creating a financial aid system and college search tool kit isn’t enough. We have to make sure students and families know about these resources and can easily access them.

Think about Apple products for a minute. Why do we buy iPhones, iPads and MacBook Pros? First and foremost, they are durable, high-quality devices. We imagine some readers may be able to rattle off the technical specifications that make these devices superior to their competitors.

But there are four characteristics that really hooked us on Apple products: (1) They are easy and intuitive to use. It’s unlikely the iPhone would have gone viral if the average user needed to spend an hour reading through an instruction manual before getting started; (2) The devices have a sheer stylistic appeal -- sleek metallic casings, glossy touch screens; (3) Apple has been incredibly savvy in its marketing and advertisements -- Steve Jobs’s legendary launch events, crisp Apple television and print ads; (4) The social atmosphere of the Apple stores and skill of the Genius Bar technicians make getting help when problems arise an enjoyable experience.

Now think about the Pell Grant, or the College Navigator search tool, or federal loan entrance counseling. The maximum Pell Grant is worth over $5,000 a year, so one could argue that the product quality is in place. But the Pell Grant falls short on other dimensions that make Apple products so successful. The grant is not nearly as well marketed, so some students and families aren’t aware that it exists or that the money doesn’t need to be paid back.

And to access the money, students and families need to complete a cumbersome and confusing financial aid application. Imagine if, to get your iPhone, you had to first fill out a complicated rebate form, send it in and wait for a few months for the device to arrive.

College Navigator has literally hundreds of data points on every college and university in the country, but this is as much a problem as a benefit -- too much information overwhelms the average user. There are also design limitations -- the site is set up for people who know what to look for and how to interpret all the information they see.

There’s little guidance for students about how to structure a college search, or which data points to prioritize over others. And College Navigator has an even bigger name-recognition problem than the Pell Grant. Our guess is that a small fraction of first-generation college students in the country has even heard of the tool.

We can learn a great deal from companies like Apple. We’ve also learned a lot from the burgeoning science of decision making over the last several years. In the face of complex decisions and complicated choices -- like deciding where to apply to college or navigating the financial aid process -- people have a common set of responses.

One common behavior is to put off making any decision at all. Another common response is to use a simplifying strategy to make a decision, like choosing which college to attend based on where your friends have gone to school or a connection with a particularly charismatic tour guide. And in some cases, people don’t make any decision at all -- they just follow the path of least resistance. For middle-income students, this might mean enrolling in the nearby public university. For students whose parents did not go to college, it might be looking for a local job after high school graduation.

Research from fields like behavioral economics, psychology and neuroscience has helped us recognize what private sector companies like Apple have known and exploited for decades: just having a good product or policy isn’t enough. For policies to achieve their desired aims, we need to do what Apple does -- develop high-quality products, and then devote just as much attention to publicity, consumer engagement and customer service as we do to policy development.     

What does this mean in practice?

Nudging students about important tasks. Especially in this day and age, adolescents often balance a multitude of academic, social, work and family commitments. These responsibilities, on top of the fact that adolescents frequently struggle with organization and long-term planning, mean that even students with clear intentions to start or stay in college may miss important deadlines. Simple strategies like sending students text message reminders to renew their federal financial aid can help students translate their intentions into concrete actions.

Improving the design of publicity materials. There’s a reason Apple print ads rely on striking visuals and minimal content: people tend to glaze over dense text. Yet much student-facing communication is incredibly text heavy. By simplifying the content of letters, emails and websites and incorporating behavioral cues for students to take action, we can more effectively help students take advantage of the opportunities and resources that are available to them.  

Simplifying enrollment processes. Researchers and advocates have devoted considerable attention over the last decade to how complexities in the federal financial aid application process can deter college-ready and financially eligible students from receiving aid. Reducing hassles associated with completing the Free Application for Federal Student Aid (FAFSA) -- either by simplifying the form itself or by making it easier for students to get assistance -- can lead to substantial increases in the share of students who receive aid and enroll in college.

The student loan origination process is another important decision-making bottleneck where highly complex information may inhibit students from making informed choices about how much to borrow. Simplifying information about borrowing and increasing access to loan counseling can help students make more informed choices about borrowing levels that are a good fit for their personal circumstances.

Changing default options. Several important stages in the college-going process -- taking college entrance exams, choosing courses once in college -- require active steps on the student’s part. Failure to take action can lead students to miss important opportunities, like getting into key prerequisite courses for their intended majors.

We can change the default option so that, for example, the curriculum is laid out for students unless they actively make different choices. Several states have shifted to mandatory college entrance exam testing to increase the number of students who take the S.A.T. or A.C.T. Several colleges have employed active course mapping that provides students with a scripted set of courses to take that will help them complete their intended majors in the least amount of time possible. Students can opt out of these course maps, but only by taking active steps to meet with an adviser to discuss alternative course options.

The greatest appeals of these approaches include their relative ease of implementation, low cost and scalability. A rapidly growing number of academic, public and private-sector ventures are applying behavioral insights to improve postsecondary access and success. Some of these initiatives have been rigorously evaluated through randomized controlled trials and have generated substantial improvements in students’ outcomes. We bring together insightful essays on many of these innovative approaches in our forthcoming volume, Decision Making for Student Success.

Behavioral solutions alone won’t eliminate socioeconomic inequalities in postsecondary access and success. But for a relatively small investment in these strategies, we can meaningfully improve the efficacy of existing programs and policies and expand college opportunity for hardworking but economically disadvantaged students.

Ben Castleman is an assistant professor of education and public policy at the University of Virginia. Saul Schwartz is a professor in Carleton University's School of Public Policy and Administration. Sandy Baum is a senior fellow at the Urban Institute.

Falling Through the Cracks

An article in The Washington Post explores how a student who is eligible for state and federal student aid can fall through the cracks. The student was ordered to move out of Towson University and go home because he hadn't turned in what he owed and a state agency had failed to provide the funds to which he was entitled. The story documents how no one at Towson or the state agency found a way to get the matter settled before he was sent home.



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Audit: Education Dept. hasn't enforced incentive compensation rules well

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Education Department's inspector general concludes that agency has not sufficiently adapted policies and procedures to enforce 2010 rules restricting pay to recruiters based on enrollment.

Report Faults Education Dept. Management of Grants for Teachers

The U.S. Department of Education needs to do a better job of managing the federal grant program for teachers, according to a report by the Government Accountability Office.

The TEACH Grant program provides up to $4,000 a year for students who commit to teaching low-income school districts for at least four out of eight years after graduation.

Recipients who don’t follow through on that commitment have their grants converted into loans. About 36,000 of the TEACH Grant’s more than 112,000 recipients have fallen into that category, the G.A.O. found.

In some cases, though, those conversions were the result of the government's or its contractors’ error.

G.A.O. investigators found that between August 2013 and September 2014, 2,252 TEACH Grant recipients had their grants erroneously converted into loans by the company hired by the Education Department to manage the program.

The department said that it mostly agreed with the G.A.O.’s recommendations, which included establishing performance measures for the program and studying why so many TEACH Grant recipients fail to fulfill their service commitment.

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Two fired federal debt collectors may still get government business, as they sue Education Department

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Some debt collectors fired by the Department of Education last month may continue to operate under a different contract -- as the companies mount a legal response to the administration’s crackdown.

Student Loans Viewed Differently Than Other Debt, Study Finds

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."


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Rising price of Virginia public universities disproportionately hurts low-income students

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An “extraordinarily” detailed analysis of student-level data in Virginia shows low-income students were hit hardest as public colleges and universities raised tuition during Great Recession.


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