Posts tagged ‘Obama administration’

January 14, 2015

‘Free’ community college for all?

by Grace

The Obama administration thinks taxpayers should fund “free” community college for everyone.

President Barack Obama on Thursday proposed offering free community college nationwide, in effect extending government-funded education from kindergarten through a two-year degree.

Federal costs are estimated to be about $6 billion per year, with states picking up some of the tab.

Federal funds for the plan would go only to community-college programs the White House deems effective as determined by whether most students graduate and find employment or transfer to four-year schools. Students also would be required to attend at least half time, maintain a 2.5 grade-point average and “make steady progress” to remain eligible.

It would be for anyone, of any age, and of any income level.  Politically speaking, spreading benefits across the entire population improves chances of widespread support.

Community college, in effect, would be universal the way high school is. This approach could make the program more popular, as Social Security and Medicare have strong political constituencies in part because all elderly Americans receive them.

According to the pundits I’ve read, this proposal is going nowhere.  Besides the fact that there is no appetite to spend this kind of money on a new program, there is a basic question of how effective this proposal would be in improving student outcomes.

Will “Free tuition” automatically improve community colleges’ often dismal rates of student success?

Federal data show that at two-year colleges, 31 percent of first-time, full-time students graduate within three years. The implicit assumption of free-tuition plans is that the main reason students don’t finish community college is the cost of tuition. Not, say, the fact that somewhere around 50-60 percent of community college students are not college-ready, or that many community colleges are not designed with student success in mind.

Color me skeptical that a federally-funded free option will solve all of these problems. To be clear: research shows that tuition prices and grant aid do influence enrollment rates, and we’re learning more about how they influence student success.

But the notion that making college free will mechanically improve student outcomes is naïve. Take community colleges in California, where students pay the lowest published tuition in the nation ($1,429 this year). Attendance is essentially free to many students who qualify for Pell Grants. In a 2012 analysis, I found that retention and completion rates across California’s community colleges were above the national average. But completion rates were even higher at two-year colleges in Wisconsin and North Dakota, where tuition is two to three times as high and Pell Grant recipients make up a larger percentage of enrollments than in California.

A free option would almost certainly boost enrollment rates. But these cross-state outcomes do suggest that pushing tuition to zero may not be a silver-bullet solution to lackluster student success.

Approximately one-half of all community college students take remedial courses.

… Even if students pass such remedial classes, research shows they’re less likely to graduate than their peers who start directly in college-level classes.

Instead of paying for remedial classes that won’t improve the odds of graduating from college, maybe it would be better to focus more effective efforts on finding ways to produce more high school graduates who are college and career ready.

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Douglas Belkin, Byron Tau, & Colleen McCain Nelson, “Obama Calls for Two Years of Free Community College for All Students”, Wall Street Journal, January 8, 2015.

Perry Bacon Jr., “Inside Obama’s Proposal to Make Community College Free and Universal”, NBC News, January 9, 2015.

Andrew P. Kelly, “Four reasons to be skeptical about Obama’s free community college proposal”, Forbes, January 9, 2015.

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July 17, 2013

Quick Links — New York average college debt; black families denied student loans; summer intern fails big

by Grace

The average New York state college student debt load for a 2011 graduate is about $26,400.

That compares to a 2011 nationwide average student debt of $27,200, which includes loans for both state and private colleges.  The New York average seems high since their state schools are considered among the nation’s best values in public colleges.

* * * * *

… the Obama administration has begun denying student loans to disproportionately large numbers of black parents because of blemished credit histories.

 United Negro College Fund President Michael Lomax calls  this a “a nasty surprise”.

In the past year, for historically black colleges and universities (HCBU), the Obama administration’s policies have led to a 36 percent drop in the volume of parent loans. That translated into an annual cut of more than $150 million. The reason, according to Education Secretary Arne Duncan, is to prevent parents from taking on too much debt — which is as patronizing as it is hypocritical. In April, Obama announced that he was pushing to make more home loans available to people with weak credit.

…  from Howard University in the District to Morehouse and Spelman colleges in Atlanta, enrollment at HBCUs is declining as the realities of Obama’s revamped loan policies make a mockery of his high-flung rhetoric.

“It is particularly ironic that at a time when this administration has set a goal to increase the nation’s college graduation rate to 60 percent by 2020, this policy shift occurs that will make reaching the goal impossible,” said Cheryl Smith, senior vice president for public policy and government at the United Negro College Fund. “The tougher credit criteria are having a disparate impact on underrepresented minority students, the very ones that stand to benefit the most from a college education.”

Stricter underwriting standards were added for Parent Plus loans in October 2011, but federal loans continue to have easier qualification requirements than private loans do.

According to Education Department standards, prospective borrowers can’t have any current accounts more than 90 days delinquent, or any foreclosures, bankruptcies, tax liens, wage garnishments or defaults within the past five years. But the department doesn’t look at prospective borrowers’ incomes or their current debt load, meaning that poor borrowers with little or no credit history can be approved.

* * * * *

NTSB summer intern blamed for racist names

A NTSB summer intern “erroneously” confirmed bogus names of the pilots manning the Asiana flight that crashed in San Francisco last week.  The names, which included “Captain Sum Ting Wong”, were read on the air by a local news anchor.

I’m waiting to see if this intern’s name is released, and if he goes on to get his 15 minutes of “fame”.

One of the fake names provided was “Ho Lee Fuk”, which reminded me of the time my husband worked with a client whose name included Fuk.  Unsurprisingly, it caused a few laughs around the office.

June 11, 2012

Trying to improve transparency in college financial aid offers

by Grace

Last week the Obama administration announced an agreement by ten colleges and universities to provide better financial transparency, including a “financial aid shopping sheet” that will be sent to admitted students.

The sheet would simplify the current process of comparing colleges. It would clearly state the cost of a year of classes, the student’s net cost after grants and scholarships, financial aid options to pay that cost and estimated monthly payments for federal loans. It would also provide information about the colleges’ retention and graduation rates and the share of graduates who default on their student loans. 

The State University System of New York (composed of 64 colleges, universities, and community colleges) and the University of Texas System (composed of 9 universities) are among the schools participating in the new transparency initiative.

Additionally, the administration is seeking feedback for the final version of its model financial aid award letter that will be part of a planned fall rollout.  The hope is that more schools will commit to using a version of this model letter as a way to improve transparency.

Vice President Biden, Secretary Duncan, CFPB Director Cordray and College Presidents Meet About Transparency of College Costs

Related:  How to improve college financial-aid award letters

May 10, 2012

Weak economic recovery has been a ‘boom for the grannies and a bust for the kids’

by Grace

An analysis of recent jobs figures at Investor.com reveals a disturbing development: the biggest beneficiaries from the economic recovery are Boomers, while everyone else is getting the shaft.

Among those 55-and-up, the employment-to-population ratio barely dipped even in the depth of recession and is now higher than at the end of 2007. The ratio among those 25-54 remains about 4 percentage points lower than before the recession started.

Older workers are staying on the job longer, in part to counter lackluster performance of retirement accounts and housing values.  Meanwhile, the high unemployment rates of Generation X and Millennials could help explain the rise of  young adults living with their parents.

Long-Term Trend

The trend of falling employment as a share of the 54-and-under population and rising employment among those 55 and up has been in force for more than a decade.

See this chart for the labor participation rates going back to 1948.

Walter Russell Mead on the politics of this generational job divide

… it’s ironic to say the least that a president swept into power on a tsunami of young voter support has presided over a boom for the grannies and a bust for the kids. Logically, President Obama should expect to do somewhat better among senior citizens and worse among young people than in his first campaign — but logic often goes one way and politics another.

October 26, 2011

Obama administration offers student loan relief

by Grace

President Obama is expected to announce two initiatives aimed at easing the burden of paying back student loans.

1.  Earlier start date for enhanced Income-Based Repayment Plan

The way it works now is that graduates who enroll get charged 15% of their monthly discretionary income to pay off loans, with debt forgiven after 25 years.

Congress passed a law set to go into effect in 2014 that would drop the monthly payment to 10% of discretionary income and would forgive all debt after 20 years. The Obama administration would improve on the law by fast-forwarding the new terms to take effect in 2012, sources say.

The bright spot for the unemployed is that the monthly payments are based on any income above 150% of the poverty line. For a graduate living alone, the payments would be on 15% of any dollars made above $16,335, based on the 2011 poverty line.

And unemployed graduates with no income would owe no monthly payments on their student loans, education experts say.

2.  New provision to allow loan consolidation 

The proposal would impact students with both direct loans and federally backed loans, allowing students to consolidate loans held by private banks into direct loans.

Both kinds of loans are offered at the same interest rate. But having all federal loans consolidated into direct loans could give graduates a chance at forgiveness programs if they work in public service or at nonprofits for a decade.

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