Reining In College Tuition. The federal government must do more to rein in tuition costs at the public colleges that educate more than 70 percent of the nation’s students. By one estimate, the cost of four-year public college tuition has tripled since the 1980s, outpacing both inflation and family income. The increase in the tuition burden is largely caused by declining state support for higher education in the past three decades.
In both good times and bad, state governments have pushed more of the costs onto students, forcing many to take out big loans or be priced out of once affordable public colleges at a time when a college education is critical in the new economy. While financial aid is available to some low-income students, many are driven away by tuition sticker shock. At the same time, many colleges have failed to find more cost-effective ways to deliver education and get the average student to graduation in four years. President Obama was on the mark when he said that this needs to change. How Washington Could Make College Tuition Free (Without Spending a Penny More on Education) - Jordan Weissmann. The federal government already spends enough on student aid to cover tuition for every public college student in America.
Maybe it's time to try. (Reuters) It's been a glum few weeks in the world of higher education. We officially learned that states kept slashing their funding for colleges and universities in 2012, and tuition in turn kept on rising. In other words, same as it ever was (same as it ever was). It might be more doable than you think. We Already Spend the Money Here's a little known fact: With what the federal government spent on its various and sundry student aid initiatives last year, it could have covered the tuition bill of every student at every public college in the country. Let's start with a quick survey of the numbers. That's our threshold: About $60 billion. To be sure, a good chunk of that funding already subsidizes state colleges. What We're Doing Now Is Crazy My instinct is that the answer to both those questions is yes. And a "Public Option" Could Work.
The New York Times - Breaking News, World News & Multimedia. By Mary K. Rawlings Published: July 4th, 2009 A bill to eliminate tuition at public universities is making its way through Congress and is expected to pass within days. As tuition has climbed in past decades, federal aid programs have been unable to keep up. The current bill, inspired by the City University of New York’s 1970s-era free-tuition policies for New York residents, is intended to help level the playing field.
“The United States has become a nation of educational haves and have-nots,” said Adolph Reed, Jr., Professor of Political Science at the New School for Social Research. One trend the bill will correct is the flocking of university graduates to jobs paying salaries needed to reimburse debts. Students have responded positively. “At least if I do get in, I’ll be able to afford it,” she added.
States Exploring Free Community College. Photo Credit: Kolett / Shutterstock April 10, 2014 | Like this article? Join our email list: Stay up to date with the latest headlines via email. Several states are considering offering free tuition at community colleges, as the cost of a college education continues to climb and as high school diplomas no longer guarantee a living wage.
“Higher education for kids should not break families down” and result in a lifetime burden of debt, said Oregon state Sen. In previous generations, Hass said, Oregonians could leave high school and easily find jobs in lumber mills, where they could earn a good living. Hass said his bill also would help middle-class families whose children might attend community college for two years and then transfer to four-year colleges to save money. Democratic Gov. Tennessee Gov. “This is a bold promise,” Haslam said in his State of the State address in February. However, in 2007 a similar proposal by former Democratic Gov. Other Efforts In Massachusetts, Democratic Gov. Cheap, Maybe Even Free, Higher Education - Innovations. Two recent happenings have me increasingly convinced that it is almost certainly impossible to effect important efficiency and cost-enhancing changes in existing colleges and universities. First, Kelly Field of The Chronicle interviewed me for a story on the fifth anniversary of the report of the Spellings Commission (on which I served).
I had to admit that, despite being pretty good, the report had at best a modest positive impact on higher education, largely because of institutional intransigence. Second, the recent ferocity of response of the University of Texas to the mere publishing of data and hints of attempts of increasing faculty productivity was breathtaking. In American higher education, outsiders are expected to be seen but not heard (except, of course, when they deliver the cash needed to run the schools). The way to low-cost higher education, then, lies largely outside the current establishment. We need new approaches, utilizing new technologies. Return to Top. Peter Thiel: We're in a Bubble and It's Not the Internet. It's Higher Education. Fair warning: This article will piss off a lot of you.
I can say that with confidence because it’s about Peter Thiel. And Thiel – the PayPal co-founder, hedge fund manager and venture capitalist – not only has a special talent for making money, he has a special talent for making people furious. Some people are contrarian for the sake of getting headlines or outsmarting the markets. For Thiel, it’s simply how he views the world. Consider the 2000 Nasdaq crash. And after the crash, Thiel insisted there hadn’t really been a crash: He argued the equity bubble had simply shifted onto the housing market. So Friday, as I sat with Thiel in his San Francisco home that he finally owns, I was curious what he thinks of the current Web frenzy.
Instead, for Thiel, the bubble that has taken the place of housing is the higher education bubble. Like the housing bubble, the education bubble is about security and insurance against the future. Making matters worse was a 2005 President George W. Why the Student Loan Problem Is Even Worse Than You Think. The Federal Reserve Bank of New York published its latest Quarterly Report on Household Debt and Credit recently, and, as usual, the real story about student loans is buried in its back pages. The report highlights the fact that loan-payment delinquency rates continue to improve (i.e. decline).
On average, a little over 7% of all outstanding consumer debt obligations are in some stage of delinquency (30 or more days past due), and roughly 70% of those are seriously so (90 or more days past due). The executive summary also notes that student loan balances that are 90 or more days past due represent 11.5% of the total outstanding. Sure, it’s a troubling metric. But when the FRBNY juxtaposes that amount with the 9.5% of comparably delinquent (and equally uncollateralized) credit card debt, it doesn’t seem so out of whack—until you dig a little deeper. Unlike credit card balances, not all outstanding student loans are due at any given moment in time.
A Closer Look at the Numbers. 020712 NACBA student loan debt report.pdf (application/pdf Object) Does A College Education Have To Cost So Much? Copyright © 2011 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required. This is TALK OF THE NATION. I'm Neal Conan in Washington. College tuition and fees rose over 400 percent between 1982 and 2007. Yet college costs spiral faster than anything except maybe health care. Our phone number is 800-989-8255.
RICHARD VEDDER: Glad to be with you, Neal. CONAN: And would not economic theory suggest with so many colleges out there, the prices should be driving down, down, down? VEDDER: Economic theory suggests that if we had free markets in higher education, that might well be the case. We define an hour as 50 minutes in higher ed. CONAN: Well, not psychiatrists, but that's another issue. VEDDER: Yeah, yeah, I know. CONAN: I wanted to ask, you wrote an op-ed for CNN.com, "Why Does College Cost So Much," you argued essentially that colleges have absolutely no incentive to reduce costs.
VEDDER: That's right. VEDDER: Yes, I think that's right. Shocking Chart on Tuition vs. Earnings for College Grads. Student debt levels have reached a new high – rising $42 billion in the last quarter to $956 billion, according to a report this week from the New York Fed. At the same time, tuition rates have seen a staggering 72 percent increase since 2000. As if those two upward trends weren’t hitting students hard enough – the average earnings for full-time workers ages 25-34 with Bachelor’s degrees has also dropped 14.7 percent since 2000. The chart below from Citi shows the striking contrast: The diverging trends are taking a toll on students and recent grads.
While President Obama has supported increasing the availability of student loans, others are questioning if student loans are becoming too easy to obtain, putting those who have no hope of paying off the loan into crushing life-long debt. Most student loans – 93 percent last year – are currently made by the government, and Stafford loans (which account for more than three-fourths of federal loans), impose no credit standards. The Importance of College: A Self-Fulfilling Prophecy - Daniel Indiviglio. As long as employers insist that a degree is necessary, it will continue to be These days, getting a college degree is a pretty good idea.
Indeed, if you're someone who can get into college, going is practically a no-brainer. Those who go to college make more money and have more opportunities than those who don't. This argument has been soundly and easily made a number of times, this week by New York Times columnist David Leonhardt and earlier today by my colleague Derek Thompson. But saying that college is important in practice is different from saying that it is important in theory. First, let's quickly summarize why college is important right now. These arguments are completely correct, but they're also completely irrelevant if a broader question is asked: should college degrees be important in the economy today? Demand Does Not Always Signify a Need Now replace that asset with education. Of course, the latter story has not yet come to an ugly end, like the housing bubble did. College Debt. As Parents Struggle to Repay College Loans for Their Children, Taxpayers Also Stand to Lose by Marian Wang ProPublica, April 4, 3:30 p.m.
New Department of Education data shows rising default rates on federal loans to parents. After Years of Troubles, Largest Student-Loan Servicers Get Stepped-up Oversight by Marian Wang ProPublica, Dec. 3, 2013, 5:39 p.m. The Consumer Financial Protection Bureau announced increased oversight of the companies that act as go-between for student borrowers and lenders. Discussion: How Can We Keep Public Universities Accessible? By Christie Thompson ProPublica, Sep. 17, 2013, 10:18 a.m.
Low-income students are being priced out of even public universities — due in part to how schools are using their financial aid. Public Universities Ramp Up Aid for the Wealthy, Leaving the Poor Behind by Marian Wang ProPublica, Sep. 11, 2013, Midnight Join Our Community On the Business of Higher Education by Blair Hickman ProPublica, Feb. 21, 2013, 6:39 p.m. No Income? The College Graduate as Collateral. ACADEMIC economists like to make fun of businesspeople: they want competition when they enter a new market but are quick to lobby for subsidies and barriers to competitors once they get in.
Yet scholars like me are no better. We work in the least competitive and most subsidized industry of all: higher education. We criticize predatory loans by mortgage brokers, when student loans can be just as abusive. To avoid the next credit bubble and debt crisis, we need to eliminate government subsidies and link tuition financing to the incomes of college graduates. Nearly eight million students received Pell grants in 2010, costing $28 billion. In addition, the federal direct loan program, which allows nonaffluent students to get government-guaranteed loans at low interest rates, cost taxpayers $13 billion in 2010-11.
Just as subsidies for homeownership have increased the price of houses, so have education subsidies contributed to the soaring price of college. The Myth of Working Your Way Through College - Svati Kirsten Narula. A lot of Internet ink has been spilled over how lazy and entitled Millennials are, but when it comes to paying for a college education, work ethic isn't the limiting factor. The economic cards are stacked such that today’s average college student, without support from financial aid and family resources, would need to complete 48 hours of minimum-wage work a week to pay for his courses—a feat that would require superhuman endurance, or maybe a time machine. To take a close look at the tuition history of almost any institution of higher education in America is to confront an unfair reality: Each year’s crop of college seniors paid a little bit more than the class that graduated before.
The tuition crunch never fails to provide new fodder for ongoing analysis of the myths and realities of The American Dream. Last week, a graduate student named Randy Olson listened to his grandfather extol the virtues of putting oneself through college without family support. This is interesting. Heavy Debt, but No Degree. A study published earlier this year by Education Sector, a research group based in Washington, shows that the borrowers who drop out are more than four times more likely than those who graduate to default on their college loans because they are more likely to be unemployed and earn less when they get a job. The study, based on Department of Education data, compares student borrowers who entered college in 1995 with those who entered in 2003 to see how each group fared six years later. Students who were not enrolled and did not earn degrees after six years were classified as dropouts.
The study found that the percentage of students who borrowed for college increased from 47 percent in the first group to 53 percent in second. At the same time, the proportion of borrowers who dropped out rose to nearly 30 percent for the 2003 enrollees, compared with 23 percent for the 1995 enrollees. The dropout rates rose across all kinds of colleges.
Poor Students Struggle as Class Plays a Greater Role in Success. By Kassie Bracken The Diploma Divide: Angelica Gonzales graduated at the top of her high school class and headed off to one of the nation’s top universities. Four years later she is back home, without a degree. Michael Stravato for The New York Times Melissa O'Neal is in her fifth year at Texas State University, San Marcos. “I don’t want to work at Walmart” like her mother, she wrote to a school counselor. Weekends and summers were devoted to a college-readiness program, where her best friends, Melissa O’Neal and Bianca Gonzalez, shared her drive to “get off the island” — escape the prospect of dead-end lives in luckless Galveston. Low-income strivers face uphill climbs, especially at Ball High School, where a third of the girls’ class failed to graduate on schedule.
Angelica, a daughter of a struggling Mexican immigrant, was headed to . “It felt like we were taking off, from one life to another,” Melissa said. Each showed the ability to do college work, even excel at it. How Students of Different Incomes Apply for College - Graphic. Harkin Report Condemns For-Profit Colleges. Alarming Research Shows the Sorry State of US Higher Ed - Andrew McAfee. The Myth of the Science and Engineering Shortage - Michael S. Teitelbaum. The Growth of College Grads in Dead-End Jobs (In 2 Graphs) - Jordan Weissmann.
Finding Life After Academia — and Not Feeling Bad About It. Academia's indentured servants - Opinion. Elizabeth Warren: Student Loans Should Have Same Rate Big Banks Get.