Image for post
Image for post

It is no secret that the COVID-19 pandemic has many American families struggling financially right now, from making mortgage or rent payments to covering car payments and credit cards. But this time we can’t blame student loans; in March, Congress moved quickly to freeze payments.

Most agree it was the right move at the right time. But it can’t last forever; there’s a $1.3-trillion portfolio that must be repaid. …


Part three in a 3-part series originally presented as a report written for the Manhattan Institute

Image for post
Image for post

This is the third and final part in a series of ideas proposed in a report that I wrote for the Manhattan Institute last year around how small shifts in the way cost and pricing data gets conveyed to students and families can produce better enrollment and completion outcomes. (You can find Part 1 and Part 2 here)

In this piece, I propose that we can help students and families make better decisions around college affordability by taking current data around debt and earnings and just repackage it in ways that are more understandable given how they think about paying for other things in their lives.


Part two in a 3-part series originally presented as a report written for the Manhattan Institute

Image for post
Image for post

One of the biggest hurdles to completing a college degree in America today is simply figuring out how to pay for it. Last year I wrote a report for the Manhattan Institute around how small shifts alone in the way cost and pricing data gets conveyed to students and families can produce better enrollment and completion outcomes. I’m revisiting these ideas now, updating them, and posting them one at a time here on Medium.

Two weeks ago, I published the first piece on why students would benefit from institutions charging a one-time, all-in upfront fee for a degree, rather than repeatedly financing an uncertain number of yearly increments.


Part one in a 3-part series originally presented as a report written for the Manhattan Institute

Image for post
Image for post

One of the biggest hurdles to completing a college degree in America today is simply figuring out how to pay for it. Unlike other major investments people make in things like homes or cars — where you start by figuring out what you can afford and then back into what you eventually buy — getting a college degree means starting with a dream, getting in the door and really only then worrying about, or working through, how to pay for it.

This seemingly backwards approach creates what feels like a never-ending list of headaches for students and families that crop up in vague shopping metrics, a confusing financial aid application process and an inability to just get simple questions answered. …


Image for post
Image for post
Source: https://www.flickr.com/photos/donkeyhotey/16572095095

The political and economic worlds are still reeling from last week’s election results and frankly they should be. Donald Trump was a candidate remarkably few expected to win and as such most were wholly caught off-guard about what would happen next if he did. Higher education experts were no exception though they can be forgiven somewhat given how little and how vaguely the President-elect spent discussing it.

That the fiction’s become reality has pundits and the press scrambling to say something, anything really, that helps put what a Trump presidency means into perspective when it comes to a higher education infrastructure that manages thousands of institutions, millions of students and billions of state and federal taxpayer dollars. …


Image for post
Image for post
Source: http://www.readygrad.com.au/blog/2014/06/no-graduate-job-offer-now-what/

Millions of families struggle to find ways to pay for college today. To help, the federal government offers those covering the cost with student loans the option to enroll in one of several income-based repayment (IBR) plans that cap monthly payments and eventually forgive any outstanding balances.

For some these plans are seen as the best and last hope for keeping college affordable. For others their $20 billion-per-year price tag is not only prohibitively expensive to taxpayers but also end up helping those who need it the least.

Higher education isn’t the only market where consumers typically buy things by going into debt. Millions of people finance new and used cars every year at levels similar to what typical undergraduates borrow, and most homebuyers end up with six-figure mortgages. Both are arguably as important to families as education, yet consumers still manage to successfully pay for these things without all of the repayment options and economic hardship plans that student loans have. …


Image for post
Image for post
SOURCE: HTTPS://WWW.FLICKR.COM/PHOTOS/DONKEYHOTEY/24564574914

For months the Trump campaign promised a response to Hillary Clinton’s proposal to make college more affordable. That “plan” got released a couple weeks ago and as most pundits would agree it was overwhelmingly underwhelming.

His proposal? Basically just capping student loan payments at 12.5 percent of a borrower’s income and forgiving any outstanding balance after only 15 years.

That’s hardly inspiring and less a platform than it is a previously walked plank considering income-based repayment has been the cornerstone of President Obama’s higher education policy for eight years now. …


Image for post
Image for post
SOURCE: HTTPS://WWW.FLICKR.COM/PHOTOS/AFAGEN/6994942657

Both presidential candidates have made student loan repayment a priority and there’s growing frustration within Congress and the Department of Education over how many borrowers are either delinquent or in default on their student loans.

With repayment options more generous than ever, blame for the student loan crisis has increasingly been laid at the feet of federal and private loan servicers as well as private collection agencies (PCAs) — the folks in the unenviable position of trying to contact and persuade non-payers to get current on their obligation.

The self-appointed sheriff has been the Consumer Financial Protection Bureau (CFPB), whose push into student loans has, to-date, included penalties levied against private student loan providers (i.e. Discover and Wells Fargo) and institutional loan programs (i.e. Bridgepoint Education), as well as efforts to bring the U.S. …


Last week the U.S. Department of Education released its most recent Cohort Default Rate (CDR) statistics for U.S. colleges and universities. As federal stats go, they’re practically catnip to pundits and the press because students at institutions where rates are too high risk losing access to federal grant and student loan aid. Given how much people borrow to pay for college today, revoking an institution’s eligibility ends being nothing short of a death sentence as we saw recently with ITT.

This year’s numbers (the FY2013 cohort) show the national 3-year CDR now stands at 11.3 percent, which is down from 11.8 …


Last week the Obama administration announced an update to the U.S. Department of Education’s College Scorecard, its signature resource for helping consumers shop for a higher education.

Tucked into that announcement was a small, but pretty significant change that’s largely escaped public notice: a move beyond just giving people information about colleges like how much they cost or how much graduates eventually earn. They also want to, as they say, “consider other cautionary indicators that consumers should be aware of before deciding to enroll in an institution.”

In a sector that has an over-zealous fascination with nudges, this is anything but a small shift. To this point the scorecard’s represented yet one more iteration of federally-collected data repackaged in a consumer-friendly manner. …

About

Carlo Salerno

PhD. Education economist. VP of Research @CampusLogic. Title is theirs, opinions are mine.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store