Archive for April, 2014

April 30, 2014

Student loans ‘Voxplained’

by Grace

Vox Cards explain student loans.  Here’s the first card.

What is a student loan?

A student loan is money that banks or the federal government lend to students or parents to pay for higher education. Student loans can be used to pay tuition, fees and room and board, and they can also be used for living expenses and books. Student debt refers to the total amount of outstanding student loans from students, graduates, and dropouts.

The majority of students — more than 70 percent of all bachelor’s degree recipients — now borrow money to pay for college, a higher proportion than ever. Those students owe $29,400 on average at graduation. Student debt drew public attention and concern as the recession hit and graduates fell behind on their loans. There’s now agrowing consensus among economists that student debt is a drag on the economy, too, because indebted graduates and dropouts have less money to spend on other things.

The federal government has by far the largest share of the student loan market. Until 2010, the federal government lent money to students by guaranteeing and subsidizing loans from banks like Sallie Mae. In 2010, the Education Department cut out the middleman and became the sole student lender.

Here is their explanation on how student loans are treated in bankruptcy.

Why can’t student loans be discharged in bankruptcy?

Student loans are almost never dischargeable in bankruptcy, unlike credit card debt, mortgages, car loans, and most other forms of consumer debt. As lending to students has grown, so has the difficulty of discharging federal loans through bankruptcy. Getting rid of student loans now entails suing the lender (often, the federal government) and proving to a judge that circumstances are so dire there’s no way the loans will ever be repaid. Fewer than 1,000 people, out of more than 32 million student loan borrowers, try this each year.

There are a couple of reasons for this: some people are concerned that college graduates could decide it’s better to declare bankruptcy while they’re young and take the hit to their credit for several years, rather than repay tens of thousands of dollars of student debt. Federal student loans also offer consumer protections and repayment flexibilitythat credit card bills and auto loans generally do not.

Until 1998, federal student loans could be discharged or restructured in bankruptcy after a waiting period of several years. Private student loans were dischargeable in bankruptcy until 2005. Some people think these restrictions should be relaxed: Senate Democrats have proposed legislation that would make private loans dischargeable in bankruptcy again, and the Center for American Progress has called for a two-tier student loan system that would make some loans dischargeable.

In case you’re not yet familiar with Vox Media’s recently introduced Vox Cards, Margaret Hartmann at New York Magazine offers an explanation.

“Vox Cards,” which explain complex topics in a format that’s a mix between Q & A and a slideshow. The editors say:

They’re inspired by the highlighters and index cards that some of us used in school to remember important information. You’ll find them attached to articles, where they add crucial context; behind highlighted words, where they allow us to offer deeper explanations of key concepts; and in their stacks, where they combine into detailed — and continuously updated — guides to ongoing news stories. We’re incredibly excited about them.

Basically, it’s like a more attractive Wikipedia page written by one well-informed nerd on the internet rather than many nerds on the internet.

Too much spoon-fed information?

I’m not completely sold on the Vox Cards format, but they do seem to offer some utility.  Will this spoon-feeding of information in the media become more widespread?  It seems to have become more common in our schools, where prefabricated study notes are frequently distributed to students in advance of exams.

The entire student debt card stack can be accessed on the Vox Media site:  Everything you need to know about student debt,  By Libby Nelson, April 21 2014

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April 29, 2014

How is higher education like the travel business?

by Grace

Is higher education going the way of travel agents?  This question arises from an Inside Higher Ed post by Joshua Kim, Dartmouth Director of Digital Learning Initiatives. 

The Web has put lots of travel agents out of business.

The Web has made lots of things about traveling easier, and probably cheaper.

But in displacing all those travel agents we may have lost something important.  We may have traded convenience and costs for quality.  

The cautionary lesson for higher ed may be that we should always be weary of any technologies that replace people.  We are a people driven business.  A relationship drive enterprise.  Relationships are things that technology does very poorly.

My guess is that the travel agents that are still thriving are the specialists.  The professionals that can combine their knowledge and experience with available technologies to create new opportunities to find and plan great trips.

I see his point, although there are many areas where replacing people makes good sense.

While personal relationships are still valued among the few travel agencies catering to elite travel, for most of us Google has replaced the human touch in planning trips.  In some ways this parallels the path that higher education has taken.  The most selective colleges offer the highest level of  personalized attention, ushering students through a learning experience that rewards them with impressive credentials at the end of four years.  Most other schools provide less, ranging from personalized attention with questionable learning at a high price to online learning that is a scaled-down version of a typical classroom setting.

I believe that we will leverage technology to tackle challenges around costs, access,and quality.

Most people probably agree with Kim that technology has the potential to improve higher education, as it has improved many other aspects of modern life.  But it seems that technology is often viewed as a blanket solution to many problems, including the very serious issue of skyrocketing costs.  In taking this approach, colleges are trading costs for a much diminished level of quality in higher education.

Related:  More on the ‘bifurcation’ of higher education (Cost of College)

April 28, 2014

Pay for college every time you gas up the car

by Grace

College rewards programs are used by one in five families to help pay for college.  The dollar amounts may not be huge, but these programs are easy to use.

FinAid gives us an overview of college rewards programs, also known as loyalty programs.

Loyalty programs, also known as affinity programs, provide a rebate to the consumer in exchange for shopping at particular retailers or purchasing particular products or services. This section of FinAid provides information about loyalty programs that provide a reward in the form of tuition benefits, such as credits to a section 529 plan for your children. They are similar in nature to airline frequent flyer programs.

Typically, such programs do not require you to show a membership card to get the rebates. Instead, you register your credit cards with them and they track the purchases you make at participating merchants using the cards. You can also earn rebates by shopping online through the company web sites. This makes the programs a painless way to earn a little extra money for college.

Affinity programs with a college savings emphasis include:

Upromise is probably the most widely used program.

… The Upromise credit card enables people to earn cash back for everyday purchases. With the credit card, members get 5% cash back on all purchases and 10% cash back when they buy things in the Upromise shopping portal, explains Condon. Members can have the cash earned deposited directly in a Upromise 529 college savings account, in a Sallie Mae savings account or request a check whenever they are ready to cash in.

Small amounts can add up.

The amount saved is a small percentage of the amount spent, but with the magic of compound interest, small amounts grow exponentially larger over the years. For instance, if you spend $1,500 a month for 30 years and receive 1 percent back on your purchases, you would have more than $18,000 if you averaged a 7 percent return per year.

“I wouldn’t use this as a substitute for having a good investment strategy, but it might be a substitute for having to transfer $100 to your investment account every month,” says financial adviser Will Ertel, president of Tassel Capital Management in Matthews, N.C. “It can be a way to supplement or create some savings you aren’t otherwise building.”

Cash generated by any rewards program can also be designated to pay for college costs.  It seems like a no-brainer,  unless you rely on credit card reward points to defray the cost of vacations or other purchases.

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Donna Fuscaldo, “Last-Minute College Savings Tips”, FOXBusiness, March 20, 2014.

April 25, 2014

Decline in teen birth rate

by Grace

The teen birth rate in the U.S. is at a record low, dropping below 30 births per 1,000 teen females for the first time since the government began collecting consistent data on births to teens ages 15-19, according to National Center for Health Statistics data.

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Why is the teen birth rate falling?

In addition to the correlation between declining birth rates and a distressed economy, other reasons have emerged.

 … Less sex, more contraception and more information.

For one thing, there has been a significant decline in the percentage of never-married teenage females who ever had sex, from 51% in 1988 to 43% in 2006-2010, according to National Survey of Family Growth data. Furthermore, among never-married teens who have had sex, 78% used a contraceptive method the first time they had sex, 86% used contraception during their most recent sex and 20% used dual methods (e.g., a hormonal method and a condom) during their most recent sex, all significant increases since 1988.

Pregnancy prevention programs and messages directed to teens may also have played a role. A recent Brookings report found that the MTV programs 16 and Pregnant and Teen Mom, reality TV shows that follow the struggles of teen mothers, may have contributed to up to a third of the decline in teen births since they began airing in 2009.

Teen abortion rate has also dropped.

But teen pregnancy rates have fallen, too, over the past 20 years. Looking at data reaching back to 1976, the pregnancy rate peaked among teens ages 15-19 in 1990, at 116.8, and has fallen 44% since then. The abortion rate among females ages 15-19 has also fallen over roughly the same time period—from 43.5 per 1,000 teens in 1988 to 16.3 in 2009. Of the roughly 700,000 pregnancies among teens in 2009, about 58% are estimated to have ended in live births, 25% in abortions and 17% in miscarriages or stillbirths.

The marriage status of teen mothers has changed dramatically since 1960.

… Back in 1960, most teen mothers were married—an estimated 15% of births to mothers ages 15-19 were to unmarried teens. Today, it has flipped:  89% of births are to unmarried mothers in that age group.

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Eileen Patten, “Why is the teen birth rate falling?”, Pew Research Center, April 21, 2014.

April 24, 2014

‘Reading ability is very topic dependent’

by Grace

E.D. Hirsch explains why “reading scores on standardized tests flatten out in 12th grade”.

… “Reading ability is very topic dependent.”  Given two passages of equal difficulty in syntax and vocabulary, the same reader will comprehend one better than the other if the reader knows something about the subject matter of the one and little about that of the other.  The idea of a general reading ability that functions independently of what is read is “a misleading abstraction,” Hirsch says.  If a reading test has ten passages with 8-10 questions on each, the same student will perform variably from one to the next depending on background knowledge.  It’s an arbitrary system.  If, by chance, you did volunteer clean-up work one summer and one of the passages concerns how cities and towns dispose of their trash, you will fly through it.  A passage on a sport you never played, though, will slow you down, even though passage difficulty is the same.

Here is the explanation for divergent trends among 4th– and 12th-graders.  Passages for older students are more knowledge-intensive than those for younger students.

Schools changed from a “knowledge intensive” curriculum to a “test-prep” curriculum.

… A cumulative, knowledge-oriented curriculum will, over time, produce higher verbal abilities than a test-prep curriculum.  Over 13 years of knowledge-intensive schooling, students, including disadvantaged ones, can learn quite a lot about a lot of topics, greatly increasing their ability to make high scores on a reading test, and making them ready for college or a career.

Will Common Core Standards make a difference?

The solution is simple, yet far-reaching.  We need the reading curriculum to be more knowledge-aimed and less skill-based.  Hirsch: “A cumulative knowledge-oriented curriculum will, over time, produce higher verbal abilities than a test-prep curriculum.”  That means more set content and common readings in English, history, and civics, a sharper determination of “cultural literacy” (to use the title that made Hirsch famous), a narrower and more coherent curriculum.

Botched implementation?

The biggest question seems to be how well CCS will be implemented.  Among the many problematic issues surrounding CCS so far, there seems to be general agreement of a “botched” implementation.

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Mark Bauerlein, “The Test Score Solution”, Minding the Campus, October 15, 2013.

April 23, 2014

Most families are not taking advantage of 529 plans for college savings

by Grace

Only 29% of families choose 529 plans for college savings.

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A 529 plan is the “best college savings vehicle”.

… By far the most popular college savings vehicle is the general savings account (nearly half of families with children under 18 use this to save for college). But Foss says that the best college savings vehicle is the 529 plan (less than one-third of parents are using this to save). “There aren’t many reasons not to use it,” she says. One of the major reasons these plans are better than general savings accounts is that your investments in 529 plans grow tax-deferred and distributions come out tax-free on the federal level; plus 34 states and Washington, D.C. offer state income-tax deductions, so there’s a “double tax advantage” in these cases.

Furthermore, you can transfer the funds in these accounts to another child if one of your kids opts out of school and 529 plans are treated favorably with colleges’ financial aid offices. General savings accounts can’t compete with the benefits of the 529 when it comes to saving for college, Foss says. However, if you do not use the 529 plan for college expenses, you will likely have to pay a 10% penalty and income tax on the earnings when you withdraw the money.

Related: What you may not know about 529 plans (Cost of College)

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Catey Hill, Parents: “You’re saving for college all wrong”, MarketWatch, April 12, 2014.

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April 22, 2014

College IDs offer discounts, sometimes indefinitely . . .

by Grace

Apparently some college student IDs can be used long after graduation.

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I’m not endorsing this, but using old IDs may be fairly common.  Sometimes a cashier does not notice expiration dates, or in some cases the college IDs do not even have expiration dates.  Movies, public transportation, museums, clothing stores, and ski resorts are a few examples of places that offer students discounted prices.  Every little bit helps when making those student loan payments.

One Redditor imagines a future where he can enjoy double-dip discounts.

Imagine the savings when you’re in your 70’s. Student AND senior discounts. You can see a movie for only $49,99!

April 21, 2014

Downsizing trend hits higher education

by Grace

20140419.COCSorryClosed3Half of all universities and colleges may close within 15 years.

Harvard Business School professor Clayton Christensen has predicted that as many as half of the more than 4,000 universities and colleges in the U.S. may fail in the next 15 years. The growing acceptance of online learning means higher education is ripe for technological upheaval, he has said.

With budget problems “particularly acute at small, mid-tier private’ colleges“,  Moody’s anticipates a “death spiral” in failing institutions.

“What we’re concerned about is the death spiral — this continuing downward momentum for some institutions,” said Susan Fitzgerald, an analyst at Moody’s Investors Service in New York. “We will see more closures than in the past.”

Moody’s, which rates more than 500 public and private nonprofit colleges and universities, downgraded an average of 28 institutions annually in the five years through 2013, more than double the average of 12 in the prior five-year period.

Falling enrollments are a problem.

Dozens of schools have seen drops of more than 10 percent in enrollment, according to Moody’s. As faculty and staff have been cut and programs closed, some students have faced a choice between transferring or finishing degrees that may have diminished value.

At Dowling College in New York a “dormitory is shuttered, as are a cafeteria, bookstore and some classrooms in the main academic building”.

Dowling, which got a failing grade for its financial resources from accreditors last month, epitomizes the growing plight of many small private colleges that depend almost entirely on tuition for revenue. It’s been five years since the recession ended and yet their finances are worsening. Soaring student debt, competition from online programs and poor job prospects for graduates are shrinking their applicant pools.

Franklin Pierce University in New Hampshire will drop six majors.

Net tuition revenue fell 14 percent to $30.3 million last year from 2009 as Franklin Pierce boosted financial aid to attract freshmen and keep students from transferring. Standard & Poor’s cut the Rindge, New Hampshire-based school’s credit rating last year to B, five steps below investment grade, from BB. Moody’s reduced its rating to B3 from B1 the year prior.

Ashland University in Ohio cut its tuition.

Ashland University, a 136-year-old college in Ohio, reduced tuition by about $11,000 — and direct aid commensurately — for the coming school year, with the goal that a lower-tuition/lower-discount model will eliminate sticker shock and lure students. In November, Moody’s downgraded Ashland’s rating to Caa2, eight levels below investment grade, saying the probability it will default has increased after three years of enrollment declines.

As a strategy for survival, diversifying takes on a new meaning.

Some colleges are looking beyond belt-tightening for more permanent solutions. Morgan State University in Baltimore, a historically black college, is targeting more Hispanic applicants and those of other ethnicities, according to Moody’s. Chatham University in Pittsburgh, whose undergraduate program is women-only, said in February it was considering going co-ed to boost enrollment.

This just in:

Mid-Continent University, a private institution in Kentucky, will close June 30, KFVS 12 News reported….

Related:  Private colleges see declining enrollment (Cost of College)

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Michael McDonald, “Small U.S. Colleges Battle Death Spiral as Enrollment Drops”, Yahoo Finance, April 14, 2014.

April 18, 2014

The trend of less talk and more medication for patients with mental disorders

by Grace

Clinical psychologist Brandon A. Gaudiano wrote in the New York Times that psychotherapy is in decline while the use of medication is on the rise for the treatment of mental disorders.

…  In the United States, from 1998 to 2007, the number of patients in outpatient mental health facilities receiving psychotherapy alone fell by 34 percent, while the number receiving medication alone increased by 23 percent. This is not necessarily for a lack of interest. A recent analysis of 33 studies found that patients expressed a three-times-greater preference for psychotherapy over medications.

Yet psychotherapy for the most common conditions is considered the best treatment “of first choice”.  What is going on? The benefits of psychotherapy seem fuzzy to many potential patients, but pharmacological treatment enjoys “clearer, better marketed evidence” of its efficacy.  Some of this comes from the failure of psychotherapists to take a scientific approach to patient treatment.

But psychotherapy’s problems come as much from within as from without. Many therapists are contributing to the problem by failing to recognize and use evidence-based psychotherapies (and by sometimes proffering patently outlandish ideas). There has been a disappointing reluctance among psychotherapists to make the hard choices about which therapies are effective and which — like some old-fashioned Freudian therapies — should be abandoned.

Psychologists need better, well-defined treatment guidelines.

There is a lot of organizational catching up to do. Groups like the American Psychiatric Association, which typically promote medications as treatments of first choice, have been publishing practice guidelines for more than two decades, providing recommendations for which treatments to use under what circumstances. The American Psychological Association, which promotes psychotherapeutic approaches, only recently formed a committee to begin developing treatment guidelines.

Lack of clarity is also a problem in diagnosis. Gary Greenberg, a practicing psychotherapist and author of of The Book of Woe: The Making of the DSM-5 and the Unmaking of Psychiatry, argues that another problem is the method used to diagnose mental disorders, which “is not scientific, but political and bureaucratic”.

Psychiatry and psychology just seems fuzzy all around, more art than science.

Related:  ‘Every 20-something I know is in therapy for something’ (Cost of College)

April 17, 2014

Teenage boys lag behind girls in developing ‘critical social skills’

by Grace

According to a six-year Dutch study, teenage boys are slower to develop two social skills.

Cognitive empathy — “the mental ability to take others’ perspective”

Affective empathy — “the ability to recognize and respond to others’ feelings”

In adolescence, critical social skills that are needed to feel concern for other people and understand how they think are undergoing major changes. Adolescence has long been known as prime time for developing cognitive skills for self-control, or executive function.

“Cognitive empathy,” or the mental ability to take others’ perspective, begins rising steadily in girls at age 13, according to a six-year study published recently in Developmental Psychology. But boys don’t begin until age 15 to show gains in perspective-taking, which helps in problem-solving and avoiding conflict.

Adolescent males actually show a temporary decline, between ages 13 and 16, in a related skill—affective empathy, or the ability to recognize and respond to others’ feelings, according to the study, co-authored by Jolien van der Graaff, a doctoral candidate in the Research Centre Adolescent Development at Utrecht University in the Netherlands. Fortunately, the boys’ sensitivity recovers in the late teens. Girls’ affective empathy remains relatively high and stable through adolescence.

Affective and cognitive empathy are valuable skills in the school setting, and these gender differences could help explain why boys score as well as or better than girls on most standardized tests, yet they are far less likely to get good grades, take advanced classes or attend college”.

The scholars attributed this “misalignment” to differences in “noncognitive skills”: attentiveness, persistence, eagerness to learn, the ability to sit still and work independently. As most parents know, girls tend to develop these skills earlier and more naturally than boys.

Testosterone and social pressure may both be determining factors.

The decline in affective empathy among young teenage boys may spring at least partly from a spurt during puberty in testosterone, sparking a desire for dominance and power …

Boys also feel pressure from peers and some adults to “act like a man,” which they often define as being detached, tough, funny and strong …

How much do fathers matter?

Fathers seem to play a special role. Teens whose fathers are supportive, who say they feel better after talking over their worries with their dads, are more skilled at perspective-taking, says a 2011 study of 15- to 18-year-old boys in Developmental Psychology.

Ambiguous terminology in the use of “cognitive” and “noncognitive” can be confusing.  The term”noncognitive” seems to vary in meaning depending on context.  Daniel Willingham helps explain how it is sometimes used as shorthand for what many people consider “non-academic” skills.

“Non-cognitive factors” is a misleading but entrenched catch-all term for factors such as motivation, grit, self-regulation, social skills. . . in short, mental constructs that we think contribute to student success, but that don’t contribute directly to the sorts of academic outcomes we measure, in the way that, say, vocabulary or working memory do.

Boys can try to catch up to girls.

I keep hearing that boys tend to shape up and mature after freshman year in high school.  That has not been my observation, but even if they do this just means they have to catch up to girls in a few short years or else suffer long-term consequences from getting off track in their early teen years.

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Sue Shellenbarger, “Teens Are Still Developing Empathy Skills”, Wall Street Journal, Oct. 15, 2013.

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