Is College Worth It? Clearly, New Data Say

Some newly minted college graduates struggle to find work. Others accept jobs for which they feel overqualified. Student debt, meanwhile, has topped $1 trillion.

It’s enough to create a wave of questions about whether a college education is still worth it.

A new set of income statistics answers those questions quite clearly: Yes, college is worth it, and it’s not even close. For all the struggles that many young college graduates face, a four-year degree has probably never been more valuable.

The pay gap between college graduates and everyone else reached a record high last year, according to the new data, which is based on an analysis of Labor Department statistics by the Economic Policy Institute in Washington. Americans with four-year college degrees made 98 percent more an hour on average in 2013 than people without a degree. That’s up from 89 percent five years earlier, 85 percent a decade earlier and 64 percent in the early 1980s. Συνέχεια

Why the Student Loan Problem Is Even Worse Than You Think

March 19, 2014 by Comments 1 Comment

 

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. In fact, of the approximately $1.2 trillion of education debt that’s currently on the books, only about half that amount is actually amortizing (the other half pertains to loans for students who are still in school).

 

So the 11.5% is really closer to 23% because the total amount of delinquent loans should be divided by $600 billion instead of $1.2 trillion. What’s more, these are just the loans that are 90-plus days past due. What of the debts that are 30 or 60 days late? Curiously, that data is nowhere to be found, except for a strong clue in the back of the report.

 

 

A Closer Look at the Numbers

 

One of the graphs in the report is entitled “New Delinquency Balances by Loan Type.” It depicts contract balances that became 30 or more days past due during the preceding quarter. For the period ending Dec. 31, $29.36 billion worth of student loans migrated into the past-due column, which, when divided by the approximately $600 billion of loans that are currently being repaid, amounts to an additional 5% of delinquency.

 

There is also another category that doesn’t get nearly enough attention: the loans that have been granted temporary relief in the form of payment deferments and other forbearance arrangements. These contracts are troubled, and accommodations of this type mask the extent to which the debts may be only temporarily relocated to “current” status from “past due.”

 

All considered, it would not be surprising to learn that one-third or more of all education debts that are in repayment mode are troubled, particularly when—per the FRBNY’s spreadsheet—more than $100 billion of student loan balances migrated into delinquency in each of the past few years.

 

How We Got Here

 

Anyone with reasonable experience in this field should rightly ask— “Why are so many loans deteriorating and why aren’t the servicers preventing that from happening?”

 

I can think of four possible answers.

 

  1. At least one-third of all the loans that were made should not have been approved in the first place.
  2. The servicers’ goals are at cross-purposes with those of the borrowers and their benefactors (the government, in the case of FFEL loans, and co-signers in the case of private student loans).
  3. The servicers are grossly incompetent.
  4. Some combination of the above.

 

My money’s on number 4, for a couple reasons.

 

The first has to do with the Federal Student Aid department’s recently released First Quarter Customer Service Performance Results. The FSA evaluated 11 nonprofit and four for-profit loan servicers for overall customer satisfaction, and the efficacy of their default prevention efforts. No servicer attained the recommended customer satisfaction score of higher than 80 (out of a possible 100), and only one scored the national average of 76. Interestingly, there were no industry benchmarks against which these particular servicers’ default prevention efforts could be measured. The data is instead compared within that 15-member pool, which undermines the metric’s usefulness.

 

The second reason for my bet has to do with the extent to which the servicers are beholden to others. Several for- and not-for-profit loan servicing companies have successfully securitized portions of the government-backed and private student loans they currently administer. So when seriously troubled loans require restructuring (extensions of repayment terms) or modification (reduction in principal balance, abatement of interest rate), it would be fair to speculate that the servicers are reticent to take actions that run contrary to their investors’ interests.

 

This situation is likely to deteriorate even further as new firms stream into the so-called servicing-rights marketplace, which is all the more reason for a national standard to govern the administration of these debts.

 

Student-loan borrowers are suffering through substandard customer service, half-baked solutions that are crammed down their throats and one-sided contracts that limit their recourse. Their plight is real, the problem is growing and the need for action is urgent.

 

A good starting point would be to capture and properly analyze all the pertinent data so that everyone can see how bad this state of affairs really is.

 

More on Student Loans:

 

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates

Student fees policy likely to cost more than the system it replaced

The proportion of unpaid loans is approaching a critical level as write-offs are on track to pass the gains from tripling of fees
The Guardian, Friday 21 March 2014

Students Protest Over The Government's Proposed Changes To Tuition Fees

Students protest against tuition fees increases in 2010. Photograph: Matthew Lloyd/Getty Images

The proportion of graduates failing to pay back student loans is increasing at such a rate that the Treasury is approaching the point at which it will get zero financial reward from the government’s policy of tripling tuition fees to £9,000 a year.

New official forecasts suggest the write-off costs have reached 45% of the £10bn in student loans made each year, all but nullifying any savings to the public purse made following the introduction of the new fee system. Συνέχεια

Are Students ‘Customers’? Let’s Hope Not.

To the Editor:

David M. Perry’s article on consumer lingo in academe (Faculty Members Are Not Cashiers,” The Chronicle, March 17) is completely correct, but his argument about what is wrong with this lingo misses a key point: it’s not just that people who use this language devalue or misvalue education, but also that they completely misunderstand what a customer is. They to get both sides of the metaphor wrong. When students, faculty, or administrators use the student-as-consumer metaphor, they typically make two fatal mistakes in how they picture a customer. Συνέχεια

‘We Do Not Believe in Degrees’

By Surya Venu – KOCHI

Published: 07th January 2014 11:33 AM

An university where one does not require a certificate, or do an entrance exam or get whopping marks to join. An institute where one is not judged or evaluated by the marks one scores but by honest feedback. Is that possible? Well, it is possible says Manish Jain. He is a leader in Alternative Education and co-founder of Swaraj University, based at Udaipur, Rajastan. He was in Kochi to attend the GIFTIVAL 2014.

Excerpts from an interview:

What are the objectives of Swaraj University? Συνέχεια

10 Fun Facts About the Student Debt Crisis

Student Loans

1.) Bigger than Most Countries
Currently, more than 40 million Americans hold student debt. The population with student loans is actually greater than the entire population of Canada, Poland, North Korea, Australia and more than 200 other countries. It’s also about four times greater than the population of Sweden.

2.) Giant Corporations can File for Bankruptcy, but Bankruptcy is Not an Option for Student Borrowers
Let freedom ring! Last Friday, Freedom Industries, the chemical company responsible for the chemical leak which contaminated drinking water in West Virginia, filed for Chapter 11 bankruptcy protection. The company faces 25 lawsuits, but by filing for bankruptcy protection, Freedom Industries is able to halt most litigation. Unfortunately, if Americans with student loan debt find themselves owing money on their student loans, it is nearly impossible to file for bankruptcy. In fact, debts from gambling and other consumer debts can be erased, but not education debt. These debts can continue to grow when a borrower is unable to pay, and can even follow a borrower to the grave. Removing bankruptcy protection from student loans has only benefited the lenders. In a leaked memo, Sallie Mae officials have listed preserving the inability to discharge education debt in bankruptcy as their second-most important goal. Συνέχεια

How A Private Company Stacked The Deck Against Student Loan Debtors

By Alan Pyke on January 2, 2014 at 4:08 pm

«How A Private Company Stacked The Deck Against Student Loan Debtors»

campos_student_loans

After two decades of work, the company tasked with collecting payments on government-financed student loans from borrowers who declare bankruptcy has helped create a system that treats student debt far more harshly than other borrowing. The company’s zeal for the task has led it to hound cancer survivors and other unfortunate, hard-working souls, and has reshaped the relationship between student loans and bankruptcy law in ways that exacerbate the country’s trillion-dollar student loan problem.

Congress created the Educational Credit Management Corporation (ECMC) indirectly in the early 1990s when it sought to tackle the high rate of default on student debt by giving the Department of Education (DOE) “a set of unprecedented collection tools” such as garnishing wages and tax rebates, the New York Times explains. ECMC, founded in 1994, is the largest of the private companies that the DOE uses to exercise those collection tools during bankruptcy proceedings. Συνέχεια

The Humanities, Declining? Not According to the Numbers.

July 1, 2013

By Michael Bérubé

In recent years, enrollments in the humanities have plummeted. The evidence is everywhere: Last month, in The New York Times, Verlyn Klinkenborg noted «the recent shift away from the humanities» in an essay titled «The Decline and Fall of the English Major.» In his 2009 American Scholar essay, «The Decline of the English Department,» William M. Chace noted that English accounted for 7.6 percent of all bachelor’s degrees in 1970-71, but only 3.9 percent in 2003-4. «If nothing is done to put an end to the process of disintegration, the numbers will continue in a steady downward spiral,» he warned. A few weeks ago in these pages, Mark Bauerlein cited similar numbers, concluding, «English has gone from a major unit in the university to a minor one.» In November 2010, the MSNBC anchor Tamron Hall remarked with alarm that «students wanting to take up majors like art history and literature are now making the jump to more-specialized fields like business and economics, and it’s getting worse.» A chart appeared on-screen. «Just look at this,» she said. «In 2007 just 8 percent of bachelor’s degrees were given to disciplines in the humanities.» In 1966 that figure had been 17.4 percent.

So you can understand why tenure-track jobs are disappearing and funds are drying up for the humanities: Undergraduates have voted with their feet. Humanities professors have killed interest in their own disciplines, and students have responded accordingly. As David Brooks recently wrote in The Times, «The humanities turned from an inward to an outward focus. They were less about the old notions of truth, beauty and goodness and more about political and social categories like race, class and gender. … To the earnest 19-year-old with lofty dreams of self-understanding and moral greatness, the humanities in this guise were bound to seem less consequential and more boring.»

There’s only one problem with those insistent accounts of the decline of the humanities in undergraduate education: They are wrong. Factually, stubbornly, determinedly wrong.

I have been trying to point this out for years, using «numbers» and «arithmetic,» but it appears that the decline in humanities enrollments is universally acknowledged. Everyone simply knows that it has happened, just as everyone knows about that feminist who burned her bra while spitting on the soldier returning from Vietnam.

Now, as it happens, there was a decline in bachelor’s degrees in English, just as there was a drop-off in humanities enrollments more generally. But it happened almost entirely between 1970 and 1980. It is old news. Students are not «now making the jump» to other fields, and it is not «getting worse.» It is not a «recent shift.» There is no «steady downward spiral.» It is more like the sales of Beatles records—huge in the 60s, then dropping off sharply in the 70s.

And why does that matter? Because many of the accounts of the decline of the humanities are tendentious. Even when they are couched as defenses of study in the humanities, as Brooks’s column was, they are attacks on current practices in the humanities—like the study of race, class, gender, and other boring things. Or the rise of «theory.» Or the study of popular culture. Or the preponderance of jargon. Or the fragmentation of the curriculum. Or my colleague down the hall, whose work I never liked and who is probably undermining the English major as I type.

But most of the things blamed for the decline in enrollments happened after the decline in enrollments had stopped. Theory, race/gender/class/sexuality, jargon, popular culture … those things were hard to find in humanities departments in the 1970s. They became part of the fabric of the material in our end of campus in the 1980s and 1990s.

And a funny thing happened in the 1980s and 1990s: Enrollments crept back up a bit. Weirdly, no one at the time seemed to have taken any solace in this. All through those decades, people kept churning out essays about the decline and fall of English and the humanities. The essays all started the same way: «In 1970 we were the biggest thing on campus,» they insisted. «We earned our swagger. Everybody stepped back when a humanist walked by.» Seven point six percent of all degrees! Bliss was it in that dawn to be alive, but to be an English professor was very heaven. Nobody stopped and looked at the numbers more closely. No one took 1980 as a starting point instead of 1970. No one pointed out that 1970 was a blip, an anomaly, a high-water mark that culminated a swift and unprecedented boom in humanities enrollments.

Today, even when people acknowledge that blip, they still tell a story of constant decline. Thus Chace admits that from the late 1940s to early 1970s, English majors climbed from 17,000 to 64,000, «but by 1985-86,» he concludes, «the number of undergraduate English majors had fallen back to 34,000, despite a hefty increase in total nationwide undergraduate enrollment.» Quite true. But by 2003-4, when, as Chace lamented, English accounted for only 3.9 percent of bachelor’s degrees, that number was almost 54,000. Why was no one writing about how the number of English majors had grown by 20,000 over 20 years—almost a 60-percent increase?

Because the real lament is almost always about recent intellectual and curricular developments in the humanities, and the enrollment numbers are little more than a pretext for jeremiads. Thus in his 1999 New York Review of Books essay, titled (what else?) «The Decline and Fall of Literature,» Andrew Delbanco wrote: «Lately it has become impossible to say with confidence whether such topics as ‘Eat Me; Captain Cook and the Ingestion of the Other’ or ‘The Semiotics of Sinatra’ are parodies of what goes on there [at the annual MLA convention] or serious presentations by credentialed scholars.»

Really? Impossible? It looks pretty easy on the face of it. The first title is from a work of fiction by James Hynes (Publish and Perish: Three Tales of Tenure and Terror). It is very silly. The second title is real—and it is not silly at all. On the contrary, «the semiotics of Sinatra» sounds like an entirely plausible topic. To me, anyway. But then, in the 1990s, I never could figure out why so many distinguished critics had such trouble with topics I found wholly unobjectionable—as when Frank Kermode complained, in a 1997 essay, of papers on such outlandish subjects as «the gendering of popular morality in certain nineteenth-century novels, the cultural politics of domesticity in a novel by Harriet Beecher Stowe, Mother in the Holocaust, Toni Morrison’s feminized historical epic, and so forth.» The horrors perpetrated by the «race-gender-class ideologues» were horrible horrors, so horrible in their horribleness that they reduced one of the 20th century’s greatest literary critics to the plaintive question, «Do you want these people to teach your children?» (Yes, Kermode really asked the won’t-anybody-think-of-the-children question made famous by The Simpsons.) 

 

 Recently, Nate Silver, the statistician who has become famous for the accuracy of his analyses of polling data, has weighed in on the inexorable decline of the humanities, and has found, using «numbers» and «arithmetic,» that «the relative decline of majors like English is modest when accounting for the increased propensity of Americans to go to college.»

«In fact, the number of new degrees in English is fairly similar to what it has been for most of the last 20 years as a share of the college-age population,» Silver said. «In 2011, 1.1 out of every 100 21-year-olds graduated with a bachelor’s degree in English, down only incrementally from 1.2 in 2001 and 1.3 in 1991. And the percentage of English majors as a share of the population is actually higher than it was in 1981, when only 0.7 out of every 100 21-year-olds received a degree in English.»

I suspect that this is good news for my attempts to make a similar case, because, as the editors of Politico have repeatedly discovered to their infinite vexation, Nate Silver is correct approximately 100.000 percent of the time. But there’s another way to crunch the numbers as well—and it involves checking the Digest of Education Statistics, published by the National Center for Education Statistics.

The most recent edition of the digest goes up to 2010. Table 289 lists all degrees by field of study, and it reveals a most curious thing: In 1970 the humanities accounted for 17.1 of all bachelor’s degrees (143,549 out of 839,730). In 2010 the humanities had indeed fallen—to 17.0 of all bachelor’s degrees (280,993 out of 1,650,014).

How can that be? Here’s what the NCES considers to be humanities disciplines: «area, ethnic, cultural, and gender studies; English language and literature/letters; foreign languages, literatures, and linguistics; liberal arts and sciences, general studies, and humanities; multi/interdisciplinary studies; philosophy and religious studies; theology and religious vocations; and visual and performing arts.» The huge (and also underacknowledged) increase in enrollments in the visual and performing arts—from 30,394 in 1970 to 91,802 in 2010­—is covering for declines in English and foreign languages. And, of course, not everyone would consider the visual and performing arts to be part of the humanities. But they are certainly part of that important category «useless degree programs that won’t get you a job and that you will have to explain to your parents.»

And that, I think, is the really remarkable story. Despite skyrocketing tuition rates and the rise of the predatory student-loan industry, despite all the ritual handwringing by disgruntled professors and the occasional op-ed hit man, despite three decades’ worth of rhetoric about how either (a) fields like art history and literature are elite, niche-market affairs that will render students unemployable; or (b) students are abandoning the humanities because they are callow, market-driven careerists … despite all of that, undergraduate enrollments in the humanities have held steady since 1980 (in relation to all degree holders, and in relation to the larger age cohort), and undergraduate enrollments in the arts and humanities combined are almost precisely where they were in 1970.

There is indeed a crisis in the humanities. I have said as much in this very space: It is a crisis in graduate education, in prestige, in funds, and most broadly, in legitimation. But it is not a crisis of undergraduate enrollment. And one of the reasons for the crisis of legitimation, surely, is the constant parade of people, especially among humanists themselves, who continue to talk about enrollment declines in ways that are factually, stubbornly, determinedly wrong.

Michael Bérubé is a professor of literature at Pennsylvania State University, where he is also director of the Institute for the Arts and Humanities. He is a past pres

http://chronicle.com/article/The-Humanities-Declining-Not/140093/

Change the Tenure System

January 13, 2014/KerryAnn O’Meara

For the last 15 years, I have been involved in the study and reform of academic reward systems. Academic reward systems are fascinating to study because they reflect assumptions, values, goals and aspirations held by institutions and fields.

I have studied academic reward system change in such areas as redefining scholarship, post-tenure review, stopping the tenure clock, and efforts to include ways to appraise new and diverse approaches to scholarly dissemination in the tenure process. My work has caused me reflect on the current state of dominant academic reward systems, the assumptions that guide them, and the specific things I would like to see colleges and universities NOT do anymore, and start changing. Συνέχεια

America’s lost generation and Piketty’s rise in capital’s share

Friday’s US jobs figures were a shock to the optimists about an accelerating recovery in the US economy.  Yes, the unemployment rate fell to 6.7%, but for the wrong reason.

Unemployment rate

The percent of employed workers is rising because there are fewer and fewer workers in the labour force. Labour force dropouts are boosting the employed share percentage of a smaller labor force. The stats work like this: if 1000 are in the labour force with 70 counted as unemployed with 300 having given up looking for work, the unemployment rate is 7%. If the labour force stays at 1000, but 60 are now counted as unemployed because the number that has given up looking for work has risen to 310, the unemployment rate drops to 6%, yet the labour market gets worse. The participation rate, the labour force as a percent of the whole population, dropped to 62.8% in December, matching the October level that was the lowest since 1978 when large numbers of women were entering the work force for the first time.  Against total population, the participation rate is stuck below 59%. Συνέχεια

How Should Graduate School Change?

A dean discusses the future of doctoral-education reform

Careers - Grand Summer Goals Illustration

Brian Taylor for The Chronicle

Enlarge Image

By Leonard Cassuto

I talk a lot in this column about how graduate programs might be run differently. The graduate enterprise faces a lot of problems, so there’s plenty to talk about. But I don’t run a graduate program, and we don’t hear enough from the people who do.

There’s a reason for that. Administrators can’t dissociate themselves from their institutions when they speak. As any administrator will tell you, even the most casual remark can become the object of Kremlinological scrutiny and speculation. Συνέχεια

How The Government Could Make Public College Free For All Students

yBryce Covert on January 12, 2014 at 12:42 pm

Student DebtCREDIT: AP

Tuition at public colleges came to $62.6 billion in 2012, according to the latest government data. That’s less than what the government already spends to subsidize the cost of college through grants, tax breaks, and work-study funds, which comes to about $69 billion. It spends another $107.4 billion on student loans. Συνέχεια

How The Government Could Make Public College Free For All Students

By Bryce Covert on January 12, 2014 at 12:42 pm

«How The Government Could Make Public College Free For All Students«

Student Debt

CREDIT: AP

Tuition at public colleges came to $62.6 billion in 2012, according to the latest government data. That’s less than what the government already spends to subsidize the cost of college through grants, tax breaks, and work-study funds, which comes to about $69 billion. It spends another $107.4 billion on student loans.

That means that with the money it already spends to make college affordable, the government could instead subsidize public college tuition, thereby making it free for all students. This would not just mean anyone could attend a higher education institution without worrying about cost, but it could incentivize private ones to reduce their costs in order to compete with the free option. Συνέχεια

Ripping Off Young America: The College-Loan Scandal

August 15, 2013 10:45 AM ET
student loans
Illustration by Victor Juhasz

On May 31st, president Barack Obama strolled into the bright sunlight of the Rose Garden, covered from head to toe in the slime and ooze of the Benghazi and IRS scandals. In a Karl Rove-ian masterstroke, he simply pretended they weren’t there and changed the subject.

More Taibbi: The Last Mystery of the Financial Crisis

The topic? Student loans. Unless Congress took action soon, he warned, the relatively low 3.4 percent interest rates on key federal student loans would double. Obama knew the Republicans would make a scene over extending the subsidized loan program, and that he could corner them into looking like obstructionist meanies out to snatch the lollipop of higher education from America’s youth. «We cannot price the middle class or folks who are willing to work hard to get into the middle class,» he said sternly, «out of a college education.» Συνέχεια

Dumbing America Down, Conservative Style

 

The Right wants us to think higher education has no value.

Photo Credit: Shutterstock.com/Tom Wang

January 4, 2014  |

Among the many visionary goals of our nation’s right wing—impoverish older people, starve the poor, deny climate change, outlaw abortion and contraception, eliminate healthcare for millions—few are more foundational than defunding education in general and higher education in particular. Public colleges and universities nationwide have seen significant funding cuts over the past five years, and while the recession is usually blamed, the Right keeps the fiscal screws tight by cutting taxes on the wealthy and corporations. Here in Michigan, in Republican Gov. Rick Snyder’s first budget, there was a 15 percent cut in state aid to universities and a $1.8 billion tax cut for businesses. This equals a win-win for the Right: Keep the fat cats in your corner, and constrain the opportunity for young people to learn a host of things that might, well, make them interrogate right-wing policies. The Pew Research Center and others have found that lower income and less-educated whites arebecoming more likely to vote Republican than Democrat, with 54 percent of those without a college degree identifying as Republican in 2012; only 37 percent identified as Democratic, so the gap is, well, quite wide. Συνέχεια