Published on Friday, September 28, 2007 by The Boston Globe



[3 short articles on colleges—count as 1 for RDPs]

College, the Great Unleveler

By SUZANNE METTLER

New York Times



March 1, 2014

When the G.I. Bill of Rights of 1944 made colleges accessible to veterans regardless of socioeconomic background, Robert Maynard Hutchins, the president of the University of Chicago, worried that it would transform elite institutions into “educational hobo jungles.” But the G.I. Bill was only the first of several federal student aid laws that, along with increasing state investment in public universities and colleges, transformed American higher education over the course of three decades from a bastion of privilege into a path toward the American dream.

Something else began to happen around 1980. College graduation rates kept soaring for the affluent, but for those in the bottom half, a four-year degree is scarcely more attainable today than it was in the 1970s. And because some colleges actually hinder social mobility, what increasingly matters is not just whether you go to college but where.

The demise of opportunity through higher education is, fundamentally, a political failure. Our landmark higher education policies have ceased to function effectively, and lawmakers — consumed by partisan polarization and plutocracy — have neglected to maintain and update them.

More Americans than ever enroll in college, but the graduates who emerge a few years later indicate that instead of reducing inequality, our system of higher education reinforces it. Three out of four adults who grow up in the top quarter of the income spectrum earn baccalaureate degrees by age 24, but it’s only one out of three in the next quarter down. In the bottom half of the economic distribution, it’s less than one out of five for those in the third bracket and fewer than one out of 10 in the poorest.

That’s before we even begin differentiating by type of college. Higher education is becoming a caste system, separate and unequal for students with different family incomes. Where students attend college affects their chances of graduating and how indebted they will become in the process.

Private nonprofits, schools like Stanford or Vassar, list the highest “sticker prices,” but the average student pays less than half of full fare. Some nonprofits provide generous need-based aid to low- and middle-income students, supplementing their federal aid. Others devote their resources instead to merit-based aid, courting students with high SAT scores, typically from higher-income backgrounds. These colleges rise in the rankings, but they also provide a disadvantage to poorer students who would benefit from more need-based aid, who struggle financially to stay enrolled and who take out more student loans to do so.

Nearly three-quarters of American college students attend public universities and colleges, historically the nation’s primary channels to educational opportunity. These institutions still offer the best bargain around, yet even there, tuition increases have bred inequality. For those from the richest fifth, the annual cost of attending a public four-year college has inched up from 6 percent of family income in 1971 to 9 percent in 2011. For everyone else, the change is formidable. For those in the poorest fifth, costs at State U have skyrocketed from 42 percent of family income to 114 percent.

The worst problems, though, occur at for-profit schools like those run by the Apollo Group (which owns the University of Phoenix), the Education Management Corporation or Corinthian Colleges. These schools cater to low-income students and veterans, but too often they turn hopes for a better life into the despair of financial ruin.

Nearly all of their students take out loans to attend, and the amounts are staggering. Among holders of bachelor’s degrees, 94 percent borrow. They take on median debt of $33,000 per student, compared with just $18,000 at the nonprofits and $22,000 at the publics. The for-profit graduates have trouble finding jobs that pay enough to afford their debts, and 23 percent of borrowers default within three years, compared with just 7 percent from nonprofits and 8 percent from publics.

Just when having a highly educated citizenry is more important than ever, how could we be failing so miserably at achieving it? It’s not as simple as politicians’ terminating laws or gutting funding. Federal student aid has actually increased considerably since 2007. But government has abdicated its leadership role.

First, federal student aid has become less effective in promoting opportunity. In the 1970s, the maximum Pell grants for low-income students covered nearly 80 percent of costs at the average four-year public university, but by 2013-14 they covered just 31 percent. Presidents beginning with Bill Clinton introduced costly new tax policies to help with tuition, but these have failed to improve access for the less well off.

Second, state governments, burdened by the growing cost of Medicaid, K-12 education and prisons, let higher education funding dwindle. Spending per full-time public student fell by an average of 26 percent in real terms between 1990-91 and 2009-10. Besides raising tuition, public colleges have had to squeeze resources at the schools themselves. For poorer students, graduating becomes all the harder as class sizes grow, online courses proliferate and support services are cut.

Third, Congress, by loosening regulations, permitted for-profit colleges to thrive on the government’s dime. These schools, which enroll nearly a tenth of college students, use nearly a quarter of federal student aid dollars allocated through Title IV of the Higher Education Act of 1965, and they account for nearly half of all student loan defaults. A 1998 rule allows them to gain up to 90 percent of their revenues from Title IV alone — a figure that does not include their substantial use of military education money. Even during the 2008 financial downturn, the top publicly traded for-profits enjoyed growth. Their upper management and shareholders benefit at the expense of American taxpayers and students... [Dunn cut some for space reasons]

That’s not the whole story, either. Plutocratic governance intensifies the dysfunction, as powerful industries still have the strength to bring politicians together across the aisle in a parody of true bipartisanship.

The effect of polarized plutocracy is epitomized by Congress’s support for the for-profit colleges. Already in the late 1940s, one senator was criticizing them for “milking the system,” providing inferior training to veterans as a means to siphon off G.I. Bill funds. At that time and as recently as the early 1990s, lawmakers from both parties came together to investigate and regulate them. Fiscal conservatives in the Reagan administration, the Republican senators Bob Dole and Phil Gramm, and some Democrats of all stripes sought to rein in the industry’s use of federal funds.

But by the late 1990s, Republican leaders championed the for-profits as the “private sector,” never mind that 15 of the large publicly traded for-profits receive on average 86 percent of their revenues from federal student aid. Plutocracy helped bring House Democrats onboard, as the industry wooed them through strategic lobbying and campaign contributions. The result? In the House of Representatives, where Democrats and Republicans agree on almost nothing, they have united to protect $32 billion taxpayer dollars for the for-profit college industry.

Is this who we are as a nation? Is this what we aspire to? The federal government must step up and lead. Tougher regulations of the for-profits, long overdue, are the quickest way to help the poorest Americans who seek college degrees. States, too, should be held accountable; a perverse incentive permits them to gain more in federal student aid if they commit less of their own resources to helping poorer students. Nonprofit schools must also be responsible partners with government in furthering opportunity. Lawmakers should curtail the money we spend on tuition tax policies and for-profits, and invest more in Pell grants and community colleges.

Most of us were raised to believe that going to college was the surest path to a better life, but for many today that belief can be perilous. Unless we can claw back polarization and plutocracy enough to restore opportunity in higher education, the United States will become a society in which rank is fixed and our ideal of upward mobility but a memory.

Suzanne Mettler, a professor of government at Cornell University, is the author of “Degrees of Inequality: How the Politics of Higher Education Sabotaged the American Dream.”A version of this article appears in print on 03/02/2014, on page SR5 of the NewYork edition with the headline: College, the Great Unleveler.

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Recession Has Lit the Fuse on Explosive Student Debt

by Bryce Covert, assistant editor at New Deal 2.0. Cross posted from New Deal 2.0



08/24/2011

Troubling long-term trends have gotten even worse as schools, government, and families cut back and student loans skyrocket.

It’s no great secret that student loan debt is exploding. The total amount is set to top $1 trillion, more than total credit card debt. But accompanying that post-recession surge in student debt (as all other consumer debt is being paid down) is a surge in delinquencies. As The Wall Street Journal reports, “In the second quarter, 11.2% of student loans were more than 90 days past due and the rate was steadily rising, according to data from the Federal Reserve Bank of New York. Only credit cards had a higher rate of delinquency — 12.2% — but those numbers have been on a steady decline for the past four quarters.”

The rise in student borrowing is a longtime trend, but things have clearly gotten worse in the recession. A lot of it is because of decisions schools are making. In a recent Atlantic Monthly article, Andrew Hacker and Claudia Dreifus explain that higher tuition — paid for by student loans — “keeps most colleges going.” Private colleges Loyola University and Franklin Pierce see 77 and 85 percent of students enroll with loans, respectively. Historically black colleges, which tend to have lower endowments and a poorer population, are closer to 90 percent. Part of this, they report, is not because the actual education is more costly, but because “room and board charges have doubled in actual dollars since 1982 to enhance campus life.” That’s a long-term trend. But part of it is unique to the recession: As endowments tanked, priorities changed… [Dunn cut some for space reasons]

The government has taken much the same tack in looking at its own shrunken budget post-recession. Back in March, President Obama proposed a budget that ended an experiment that gave Pell Grants for summer courses and eliminated a subsidy for paying interest on student loans for grad students. His plan was better than the GOP’s, which wanted to cut the maximum Pell Grant payment by $845, end funding to other aid programs, and kill AmeriCorps. This comes on top of a longtime trend in which student debt has come to replace grants. As Roosevelt Institute Fellow Dorian Warren reminded his host Melissa Harris-Perry on MSNBC, “When we were in college, Melissa, Pell Grants paid almost half our college in the 90s. Now Pell Grants barely cover a quarter. It’s all student loans.” Grants used to cover two-thirds of financing an education; now two-thirds comes from loans. Post-recession, the government is looking to shrink that even more.

Families have also reacted to the recession by, understandably, socking less away for college and pitching in less for tuition. As Hacker and Dreifus note, “Fully two-thirds of our undergraduates have gone into debt, many from middle class families, who in the past paid for much of college from savings.” Those savings have likely dried up. A typical family spent only about $2,055 on education last year. Only half of freshmen entering college said their parents had put anything aside for their education, and of those who had, half had saved less than $20,000.

With so many sources of aid pulling away either out of necessity or stupidity, students are left hanging at just the time they need more help. The College Board puts average debt at $27,650, but that figure can spiral up to $100,000 due to interest and late payment penalties, which are even more likely in a recession. This is on top of the bleak job market graduating students face. The New York Times writes, “The median starting salary for students graduating from four-year colleges in 2009 and 2010 was $27,000, down from $30,000 for those who entered the work force in 2006 to 2008… Among the members of the class of 2010, just 56 percent had held at least one job by this spring, when the survey was conducted. That compares with 90 percent of graduates from the classes of 2006 and 2007.” It’s hard to pay student loans when you don’t have a job.

And don’t forget, this debt isn’t going anywhere, no matter how little students are able to pay it back. Unlike almost all other forms of consumer debt, student loans can’t be discharged. Barmak Nassirian of the American Association of College Registrars and Admissions Officers told Hacker and Dreifus, “You will be hounded for life… They will garnish your wages. They will intercept your tax refunds. You become ineligible for federal employment.”

College May Become Unaffordable for Most in U.S.

By TAMAR LEWIN

New York Times

December 3, 2008



The rising cost of college — even before the recession — threatens to put higher education out of reach for most Americans, according to the biennial report from the National Center for Public Policy and Higher Education.

Over all, the report found, published college tuition and fees increased 439 percent from 1982 to 2007, adjusted for inflation, while median family income rose 147 percent. Student borrowing has more than doubled in the last decade, and students from lower-income families, on average, get smaller grants from the colleges they attend than students from more affluent families.

“If we go on this way for another 25 years, we won’t have an affordable system of higher education,” said Patrick M. Callan, president of the center, a nonpartisan organization that promotes access to higher education.

“When we come out of the recession,” Mr. Callan added, “we’re really going to be in jeopardy, because the educational gap between our work force and the rest of the world will make it very hard to be competitive. Already, we’re one of the few countries where 25- to 34-year-olds are less educated than older workers.”

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Although college enrollment has continued to rise in recent years, Mr. Callan said, it is not clear how long that can continue.

“The middle class has been financing it through debt,” he said. “The scenario has been that families that have a history of sending kids to college will do whatever if takes, even if that means a huge amount of debt.” But low-income students, he said, will be less able to afford college. Already, he said, the strains are clear.

The report, “Measuring Up 2008,” is one of the few to compare net college costs — that is, a year’s tuition, fees, room and board, minus financial aid — against median family income. Those findings are stark. Last year, the net cost at a four-year public university amounted to 28 percent of the median family income, while a four-year private university cost 76 percent of the median family income. … [cut rest for space reasons]

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