Category Archives: Student Debt

Private Loans, Public Complaints: The CFPB’s Consumer Complaints Database Gets Real Results for Student Consumers

Source: Tony Dutzik, Miles Unterreiner, Christine Lindstrom, Ed Mierzwinski, Laura Murray, U.S. PIRG Education Fund, Fall 2013

From the press release:
Thousands of American students are using the Consumer Financial Protection Bureau’s (CFPB) public Consumer Complaints Database to settle disputes about private student loans, according to a new report from the U.S. PIRG Education Fund. Sallie Mae, the student lending giant, generated the most private student loan complaints nationally, and ranked first or tied for first in every single state. Student loan borrowers in the U.S. carry $24,803 on average in total student loan debt….
Annual Report of the CFPB Student Loan Ombudsman
Source: Consumer Financial Protection Bureau, October 16, 2013

The High Price Of College Tuition

Source: Diane Rehm Show, July 15, 2013

Getting a four-year college degree can cost a small fortune — even at public institutions. Annual tuition hikes at public and private universities often outpace the rate of inflation. With state funding for higher education decreasing and federal student loans rates rising, many students will be saddled with ever greater debt. For some, high tuition will make the American dream of getting a college degree unattainable. Diane and guests talk about why college is so expensive and what can be done about it.
Kevin Carey – director of the education policy program at the New America Foundation.
Kim Clark – senior writer for “Money” magazine.
Terry Hartle – senior vice president of American Council on Education, a trade association representing 1,800 public and private universities.
Brian Rosenberg – president of Macalester College.

Creating a New Compact Between States and Public Higher Education

Source: American Association of State Colleges and Universities (AASCU) Task Force on Making Public Higher Education a State Priority, June 2013

2013 Task Force coverEnsuring affordable access to high quality and productive U.S. public colleges and universities is critical to bolstering states’ and the nation’s economic competitiveness. Yet, current trends involving state higher education funding reductions, increasing college prices, growing student debt and insufficient institutional outcomes are constraining the ability for states to meet vital educational, workforce and economic goals.

Charting a path to economic prosperity requires the establishment of a new partnership between state government and public higher education. The partnership will require the forging of a strategic and shared state agenda that fully leverages the capacity of public colleges and universities to meet state needs and objectives.

In calling for a new compact between states and public higher education, the AASCU Task Force on Making Public Higher Education a State Priority presents in this report a contextual assessment of the state political environment affecting higher education and offers a set of values, commitments and strategies higher education leaders can embrace as part of a comprehensive effort and urgent need to establish a new partnership with state political leaders.
See also:
Media Release
Executive Summary

Resetting the Relationship Between States and Public Higher Education

Source: Daniel J. Hurley, huffington Post, July 2, 2013

Forever in Your Debt: Who Has Student Loan Debt, and Who’s Worried?

Source: Caroline Ratcliffe, Signe-Mary McKernan, Urban Institute, June 2013

From the abstract:
Outstanding student loan balances in the United States total roughly $1 trillion, with student loan debt following one of every five adults. People across the income, age, and educational attainment spectrums have student loan debt, but it is particularly concentrated in some groups. African Americans and Hispanics are about twice as likely to have student loan debt as whites. Fifty-seven percent of people with student loans are concerned that they may be unable to repay that debt. This concern cuts across demographic and economic groups but is more prevalent among people with children, with lower household incomes, and women.
See also:
Searching for Relief: Desperate Borrowers and the Growing Student Loan “Debt Relief” Industry
Source: National Consumer Law Center, June 19, 2013

A student loan “debt relief” industry has sprung up in response to the demand for student loan borrower assistance and this report documents multiple problems as well as potential violations of consumer federal and state laws. Given the many misrepresentations uncovered, it is unlikely that these companies are providing quality services in return for the money they are charging. Such practices severely compound the pain of vulnerable consumers seeking to find resolutions to difficult student debt problems. The U.S. Department of Education should make it easier for student loan borrowers to access its borrower assistance programs, and federal and state authorities should ensure that these companies comply with the law so that consumers truly understand what services they are buying.

College Funding In Context: Understanding The Difference In Higher Education Appropriations Across The States

Source: David Weerts, Thomas Sanford, Leah Reinert, Dēmos, December 2012

From the summary:
…State appropriations have historically been the most important source of funding for higher education, but over the past two decades that support has waned. Between 1990 and 2010, real appropriations per full time equivalent student (FTE) declined by 26.1 percent, putting funding today at its lowest level since 1990. As real state spending per full time student decreased, institutions made up the difference by raising the price of attendance, shifting costs that were once a social investment onto students and their families instead. Over the same 20 year period, tuition costs have increased by 112 percent at 4-year public universities and by 71 percent at 2-year colleges. In many cases states attempted to mitigate the burgeoning cost of attendance by expanding financial aid programs, but the increasing reliance on merit-based aid means that assistance often fails to reach those low-income households who need it most. As tuition costs grew by 112 percent between 1990 and 2010, the median household income stagnated, growing by just 2.1 percent. With rising tuition and stagnating incomes, students and their families are taking on record levels of debt in order to pay for the opportunity to attend a college or university. In 2011, the total student debt held by American households outstripped credit card debt for the first time, a burden of more than $1 trillion.

Recessions put even more pressure on the higher education system by causing a shortfall in state revenues that tightens budgets and makes state investments more tenuous. These budgetary pressures can affect appropriations for years after the recession ends, and over the past generation the length of time that it has taken higher education funding to return to normalcy following a recession has increased….

…We analyzed patterns in state appropriations for higher education across all 50 states for the 20 year period from 1988 to 2009, looking at a broad array of factors that influence budgetary decisions. This study evaluates the importance of those factors, grouping them into three categories of influence on the outcome of state funding for higher education: economic, political, and cultural….

The Great Cost Shift: How Higher Education Cuts Undermine The Future Middle Class

Source: John Quinterno, Dēmos, March 2012

From the summary:
This report examines how state disinvestment in public higher education over the past two decades has shifted costs to students and their families. Such disinvestment has occurred alongside rapidly rising enrollments and demographic shifts that are yielding more economically, racially, and ethnically diverse student bodies. As a result students and their families now pay–or borrow–a lot more for a college degree or are getting priced out of an education that has become a requirement for getting a decent job and entering the middle class.

This study traces trends in the size and composition of the young adult population and analyzes patterns in state support for public higher education over the past two decades. Trends in tuition and financial aid are also examined and policy recommendations are presented for ways to renew America’s commitment to nurturing a strong and inclusive middle class through investments in public higher education.

Key highlights of the report include:
State Investment in Higher Education
– A review of financial data from 1990 onwards suggests that a structural change in state support for higher education is underway.

– While state spending on higher education increased by $10.5 billion in absolute terms from 1990 to 2010, in relative terms, state funding for higher education declined. Real funding per public full-time equivalent student dropped by 26.1 percent from 1990-1991 to 2009-2010.

– Over the past 20 years there has been a breakdown in the historical funding pattern of recessionary cuts and expansionary rebounds. The length of time for higher education funding to recover following recessions has lengthened for every downturn since 1979 with early evidence suggesting that the recovery from the Great Recession will be no different.

Challenges for Students, Families, and States
– The steady escalation in college prices has occurred alongside stagnant incomes for most American households. Median household income in the United States in 2010 was just 2.1 percent higher than in 1990.
See also:
Simple Math: Cuts to Higher Education Lead to Rise in Student Debt
Source: Viany Orozco, Dēmos, Policy Shop blog, April 19, 2012
Wall Street-Inflated Student Debt Bubble Hits $1 Trillion; Debtors Rally for Relief / The collective weight of American student debt is a drag not just on those paying the debt, but on our entire economy
Source: Sarah Jaffe, Alternet, April 24, 2012
I Went to School for This?
Source: Catherine Ruetschlin, American Prospect, April 25, 2012

SREB Fact Book on Higher Education, 2009

Source: Southern Regional Education Board, 2009

The latest edition of the SREB Fact Book on Higher Education continues a SREB tradition dating back to 1956 of providing comparative national, regional and state-specific data highlighting trends that affect colleges and universities in the SREB member states.

Databases from the biennial SREB Fact Book on Higher Education include national, regional and state profiles — many containing graphs, multiyear trends and breakdowns by type of college or university — plus the latest updates from the annual SREB-State Data Exchange. The Fact Book includes information on the following topics:

* Population and Economy: state-by-state profiles of population changes and projections, age distribution and race/ethnic background, school enrollments and graduates, wealth, employment and unemployment, and state/local government revenues and expenditures
* Enrollments: state-by-state profiles of full-time-equivalent students by type of college or university, college participation rates, and head counts of students by sex, age, race/ethnic group, level of institution, student level and student attendance status
* Degrees Earned: state-by-state profiles of associate’s, bachelor’s, master’s, doctoral and first-professional degrees awarded by sex, race/ethnic group and broad field of study, student persistence and progression rates, and patents issued to colleges and universities
* Tuition and Student Financial Aid: state-by-state profiles of median annual tuition and fees by type of college or university, Pell Grants, campus-based and Guaranteed Student Loan allocations and recipients, and state scholarship and grant funds
* Faculty and Administrators: state-by-state profiles of all staff (full-time and part-time) and of full-time instructional faculty and administrators by sex, race/ethnic group, and type of college or university, plus average salaries and fringe benefits for administrators by type of college or university or by teaching field
* College Budgets: state-by-state profiles of state/local government and tuitions and fees funding per full-time-equivalent student by type of college or university, state tax funds for higher education-related expenses, revenue and expenditure distributions, and federal funds to colleges and universities, including research and development

Student Debt and the Spirit of Indenture

Source: Jeffrey J. Williams, Dissent, Vol. 55 no. 4, Fall 2008

College student loan debt has revived the spirit of indenture for a sizable proportion of contemporary Americans. It is not a minor threshold that young people entering adult society and work, or those returning to college seeking enhanced credentials, might pass through easily. Because of its unprecedented and escalating amounts, it is a major constraint that looms over the lives of those so contracted, binding individuals for a significant part of their future work lives. Although it has more varied application, less direct effects, and less severe conditions than colonial indenture did (some have less and some greater debt, some attain better incomes) and it does not bind one to a particular job, student debt permeates everyday experience with concern over the monthly chit and encumbers job and life choices. It also takes a page from indenture in the extensive brokerage system it has bred, from which more than four thousand banks take profit. At core, student debt is a labor issue, as colonial indenture was, subsisting off the desire of those less privileged to gain better opportunities and enforcing a control on their future labor. One of the goals of the planners of the modern U.S. university system after the Second World War was to displace what they saw as an aristocracy that had become entrenched at elite schools; instead they promoted equal opportunity in order to build America through its best talent. The rising tide of student debt reinforces rather than dissolves the discriminations of class, counteracting the meritocracy. Finally, I believe that the current system of college debt violates the spirit of American freedom in leading those less privileged to bind their futures.

Helping Families Finance College: Improved Student Loan Disclosures and Counseling

Source: Michael Wroblewski, Consumers Union, July 2007

From the press release:
As Congress debates legislation to overhaul student loan programs, Consumers Union, the nonprofit publisher of Consumer Reports, released a report finding that many students and parents don’t have access to the information they need to determine the best way to pay for college. The report, funded by The Pew Charitable Trusts, offers policy recommendations to help families find the most affordable options for paying for college.