College students have particular reason to be concerned about the hostility toward the CFPB, given how effective the agency has been in solving their problems with debt. But taxpayers should be alarmed, too.
One of the vulnerable populations receiving special attention at the agency, college students over the past several decades have experienced increasing financial barriers to their educational paths, despite our intent to remove those barriers. To ensure that all qualified students get the education that we want them to pursue, we, the taxpayers, support the federal financial aid programs by spending $128 billion on them in 2015, not to mention spending billions more to fund public institutions in every state.
Despite that support, student debt remains a huge obstacle for graduates. Sixty-nine percent of college students are graduating with an average of $28,950 in debt. This debt is a drag on individual borrowers, who will see a decrease in their lifetime savings as their money is spent paying down educational debt. It has also become a drag on the economy as a whole, as borrowers put off purchasing a home and starting a family until they achieve the firmer footing we hoped they’d have at graduation.
These problems stem from shrinking state budgets for education and grant programs that don’t keep pace. But they are exacerbated when students lose even more money to tricky financial products and predatory lending schemes that are marketed right on campuses.
During the financial crisis, 67 percent of students reported being stopped on campus to be offered a credit card application. Often, these offers were accompanied by freebies -- pizza, a tee shirt or even a chance to get an iPod -- if the student just applied. Unfortunately, the rates paid by those with the worst credit, such as traditional-aged students with their spotty to non-existent credit histories, were upward of 20 percent, plus an additional 23 percent in fees on their balances. Now, the CFPB is the leading watchdog of the campus credit card marketplace, conducting a bi-annual survey of the trends on campuses.
Students, as the captive audience they are, have become targets for higher-priced private loans than what they can get on the open market. In 2007, then-Attorney General Andrew Cuomo found that students and families were assuming pricey private loans because their college aid offices, enticed by banks hoping to gain more federal loan customers at the institutions, were pushing them over other products, sometimes even including loan offers in aid awards. CFPB generates an annual report on the private loan marketplace to Congress, highlight the troubling developments.
Also, in 2009 the for-profit chain Corinthian Colleges revealed to investors that it would issue $130 million in private loans for the year to its students, even as it admitted its students wouldn’t be able to repay them. Now, CFPB has specific authority to investigate deceptive lending practices on campuses, which has led to lawsuits against prominent for-profit college chains such as ITT Tech, Bridgepoint, and Corinthian. For instance, it won $480 million in relief for borrowers at Corinthian schools, who were tricked into assuming private loans that carried interest at almost 10 percent.
And recently the agency announced a lawsuit against Navient, the student loan servicing giant formerly known as Sallie Mae, which services 12 million borrowers. The lawsuit alleges that the firm cheated borrowers out of their right to lower monthly payments and lower interest accrual by downplaying enrollment and renewal deadlines for those programs.
These problems are especially outrageous on two fronts. First, they undermine the ability of students to get an education. Second, they devalue the investment that taxpayers have made in our college students, as our financial aid dollars end up flowing away from the students we aim to help, and toward predatory lenders that are breaking the law.
As over 50 student and consumer and educational groups declared in a recent letter to Congress, neither students nor taxpayers should have to tolerate these problems. Now is not the time to render ineffective the agency that is stepping in on our behalf.
Christine Lindstrom is the higher education program director for U.S. Public Interest Research Group student chapters.
Millions of community college students started the new school year with big plans: study for a couple of years before transferring and earning a bachelor’s degree. Meet with students on any comprehensive community college campus and you can hear the determination in their voices as they talk about their focus on getting to graduation so they can make a good life after college.
The odds are against them.
As many as 80 percent of entering community college students aspire to earn a bachelor’s degree. But research by our colleagues Davis Jenkins and John Fink of the Community College Research Center at Columbia University’s Teachers College tells us that only 14 percent do so within six years of entering community college. What can be done to close the gap between community college student aspirations and the reality of their incredibly low transfer and bachelor’s attainment rates?
When answering this question, many tend to look for state policy solutions. State efforts to strengthen transfer outcomes by, for example, creating articulation agreements, establishing common course numbering and guaranteeing community college students’ admissions to a state university may be promising. But there is evidence that those policies alone are not capable of helping significantly more students attain a bachelor's degree. In other words, state policy matters, but something else is needed.
In the end, institutional action can and does make a big difference regardless of the policy context. And the approach of individual institutions to helping students is also much more important than the student characteristics, like socioeconomic status, that so often are assumed to drive completion rates.
CCRC’s January 2016 report published with the Aspen Institute and the National Student Clearinghouse Research Center shows that variations in transfer outcomes among two- and four-year institutions cannot be explained by institutional characteristics such as location in a city, suburb or rural area and the relative wealth of the student population. Similar groups of students at similar community colleges have very different transfer rates and levels of bachelor’s attainment. Transfer outcomes vary by state, but within states outcomes among institutions vary enormously. We cannot pin transfer outcomes to the category of institution, the type of students they serve or the state in which they are located.
This strongly suggests that what individual two- and four-year colleges and universities do matters a lot to student outcomes. It was with this research in mind that the Aspen Institute and CCRC published a Transfer Playbook, which summarizes research into the practices of highly effective two- and four-year transfer partnerships. What the research behind the playbook tells us is that achieving better transfer outcomes requires action at multiple levels both within institutions and among partners.
Within institutions, achieving exceptional outcomes necessitates action at three different levels.
Institutional leaders at all levels, but starting with the president, must make clear within the institution that transfer student success is a priority, reflected in guiding strategic documents, oral communications, data summaries, the college website and budgets.
Faculty and department heads need the tools and time to work alongside their two-year and four-year counterparts to develop clear bachelor’s degree program maps and to establish communications channels to allow consistent updates and additions to those maps as disciplines and workplaces change.
Student advisers, both academic and others, must have the ability to access, translate and use data on student success, knowledge of transfer pathways and requirements, and training on how to accelerate student decisions on major and four-year destination (and why that matters so much).
Success for all students who aspire to transfer requires deep change not just within institutions but in the ways institutions partner across sectors. A host of disincentives, real and perceived, impede those partnerships. And yet, the best transfer outcomes nationally are often the result of community college and four-year partners that have overcome these barriers and set common goals, established common measures of success, examined student outcome data together and crafted joint solutions to challenges their students experience while transitioning between them in ways that facilitate -- rather than impede --bachelor’s degree attainment. Ultimately, these partners understand their interdependence in accomplishing bachelor’s degree attainment goals for students who begin in community colleges.
Improving transfer outcomes can and should be a central goal of state policy. But doing so will also require engaging college professionals in changing the day-to-day practices of their colleges and universities to ensure that they prioritize transfer students’ success as a key to fulfillment of their institutions’ missions. Doing that will in turn require a redefinition of student success. Just as many higher education institutions have come to understand that access without completion is inadequate, so too must they now come to accept that -- for many students -- completion that stops short of a bachelor’s degree may fail to deliver what they came to college to achieve.
Josh Wyner is founder and executive director of the college excellence program at the Aspen Institute. Alison Kadlec is senior vice president and director of higher education and work force programs at Public Agenda.