tuition

Some interesting reads for you as we prepare to move into another week.

• With all the economic strife Millennials are experiencing these days, perhaps we need a National Youth Administration to help dig our way out?
• Democratic political strategist Donna Brazile outlines the extent to which Republicans plan to suppress votes in future elections.
• NPR explores how young people can improve their financial literacy; this article is one of a series of articles on the topic.
• Did you know? The largest number of American hate groups are located in Idaho and Mississippi.
• A Huffington Post piece discusses the importance of young people starting businesses and how we can enhance youth entrepreneurship in the future.
• Montana college students will be hit with a 10 percent tuition increase over two years. Why? State budget cuts.
• Allowing concealed guns on college campuses appeared to be sure to pass in Texas. However, some Democratic tactics appear to have dealt the bill a fatal blow.

Jack Hough of the New York Post wrote the provocatively titled “Don't Get That College Degree!” last week, where he argues that the increase in lifetime wages for graduates no longer makes up for the financial burden of university education and the ensuing student loan burden.

Hough's hypothetical model showing the greater financial position of a non-graduate is seriously flawed and leaves out many intangibles such as lower unemployment for graduates, social education, and market fluctuations, but the article does raise an important question about college affordability.

In 2003 when I was lobbying against tuition increases in Arizona, a Republican state legislator argued that a college degree is a personal investment that the students are paying for their own future financial prosperity. This argument has been used by Republicans across the country as an excuse to cut higher education funding and increase the financial burden on students. Former Congressman (D-RI) and current Vice President for Administration and Finance at the University of Rhode Island Robert Weygand makes the counterargument:

Public colleges need to promote and publicize the work they do for the community and their contributions to economic development. Well-publicized proof that they make a difference to the state, and not just the earning potential of individual graduates, is meaningful to lawmakers, even in tough times.

(…)
We need to renew the idea that economic development is based on a quality higher-education system.

While a college degree is not yet a bad investment, the Republican attitude toward higher education is certainly decreasing the value of that investment, as well as pricing out many potential students at the onset. Students are now less inclined to attend 'prestigious' schools in favor local public universities and many families are struggling to keep their kids in college in the wake of the current recession.

The costs facing students entering college will put them in debt for decades, even though the investment will eventually pay off, and future increases could actually lead to a college degree actually becoming a bad individual investment.

Some changes need to be made to stop this trend:

1. State legislatures need to stop balancing their budgets on the backs of students and realize that funding higher education is an investment in the state, not just a personal investment. Wygand: “If you really want economic development in your state, don’t disinvest in the very engine that drives that economic development.”
2. Colleges need to focus less on rankings and more on education. Grade inflation is a result of dumbing down courses, which increases graduation rates (and rankings) but leaves students less prepared for post-college life and frustrates the brightest students. People should be encouraged to rise to the challenge, not rest at the lowest common denominator. When students graduate with more knowledge, skills, and experience, their future salaries will reflect it.
3. Increase grants to students seeking careers in critical yet underpaid professions. The biggest example is students studying to become teachers. Dismal teaching salaries make it difficult to pay back massive student loans.

The United States needs to produce highly educated scientists, engineers, and researchers in order to create the innovative new technologies that will enable it to maintain its status as the leader of the global economy. Funding higher education to keep college costs manageable is a real stimulus plan that will pay dividends for generations. If a college education becomes a bad individual investment, the country as a whole will pay the price.

UPDATE: Below please find the President's remarks about higher education:
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Via the AP

President Barack Obama will be underscoring his concern for middle-class families strained by rising tuition costs.

The White House says the president will meet Friday with a family struggling to afford the cost of college. Obama is proposing to cut wasteful spending from the federal student loan program by ending taxpayer subsidies to banks.

YAY for someone talking about college affordability in these tough economic times. Below I wrote about the Credit Card Bill of Rights and the extent to which young people are being singled out and targeted on campuses, you add that to the tuition costs and difficulty of obtaining grants and scholarships and you've got a recipe for impossible higher ed.

"THE PRESIDENT: Thank you. That was excellent -- we might have to run her for something some day. (Laughter.) That was terrific. Thank you, Stephanie. I want to also introduce Yvonne Thomas, who is Stephanie's proud mother. And we appreciate everything that you've done. And Stephanie's father, Albert, is around here as well.

There are few things as fundamental to the American Dream or as essential for America's success as a good education. This has never been more true than it is today. At a time when our children are competing with kids in China and India, the best job qualification you can have is a college degree or advanced training. If you do have that kind of education, then you're well prepared for the future -- because half of the fastest growing jobs in America require a Bachelor's degree or more. And if you don't have a college degree, you're more than twice as likely to be unemployed as somebody who does. So the stakes could not be higher for young people like Stephanie.

And yet, in a paradox of American life, at the very moment it's never been more important to have a quality higher education, the cost of that kind of that kind of education has never been higher. Over the past few decades, the cost of tuition at private colleges has more than doubled, while costs at public institutions have nearly tripled. Compounding the problem, tuition has grown ten times faster than a typical family's income, putting new pressure on families that are already strained and pricing far too many students out of college altogether. Yet, we have a student loan system where we're giving lenders billions of dollars in wasteful subsidies that could be used to make college more affordable for all Americans."

See the rest by clicking the "read more" section.

Lots of new stuff in today's Quick Hits - from social media strategies, to training programs and service legislation:

• Yesterday the Washington Post threw-down the gauntlet, claiming that Facebook Causes was a disappointment because it had failed to open the spigot of small dollar donations hoped for by nonprofits. Allison Fine immediately rose to the defense of the Causes Application, noting that the Washington Post piece misses the true nature of fundraising on the web, and the true purpose and value of Causes to non profits.
• Campus Progress notes that 1/3 of all unemployed Americans and call for the creation of a New Deal for Young Workers.
• USA Today notes that public universities are about to see hefty tuition hikes.
• At the Politics Online Conference, Nancy Scola reports on an interesting conversation about how mobile activism differs from traditional online activism.
• Over at his other blog, FM contributor Kevin Bondelli explains how the Young Democrats rapidly grew their membership on Facebook in the last month.
• PolitiCorps, the political boot camp operated by the Bus Project, is accepting applications for their summer program.
• James Carville is fully on the youth bandwagon. In his new book, he notes that the GOP has become the Grand OLD Party.
• Peter Levine reports that the size of Americorps is about to triple. He's also got some very interesting thoughts on how Obama has developed a deeper than usual conception of service.
• On a related note, the Huffington Post reports on service as a new kind of patriotism.

In a time where advanced education is critical to the United States' standing in the global economy, students are finding that getting that education is becoming far more difficult, especially students who do not come from wealthy backgrounds.

Most Americans believe that access to higher education should be based on ability and merit, yet in the wake of university budget shortfalls some schools are creating a pay-to-play policy with their admissions.

Facing fallen endowments and needier students, many colleges are looking more favorably on wealthier applicants as they make their admissions decisions this year.

Once again, our higher education system is contributing to the socioeconomic status quo.

“There’s going to be a cascading of talented lower-income kids down the social hierarchy of American higher education, and some cascading up of affluent kids,” said Morton Owen Schapiro, the president of Williams College and an economist who studies higher education.

(...)
This year, many of these colleges say they are more inclined to accept students who do not apply for aid, or whom they judge to be less needy based on other factors, like zip code or parents’ background.

Many of these schools are opting to admit a higher percentage of wealthy foreign students than in the past, since they are not eligible for public scholarships and pay the highest tuition rates. This means that fewer admission spots will be available to American students, further contributing to the United States' comparative education decline.

The economy has also severely affected admittance into Ph.D. programs, leaving the United States in danger of losing even more ground in the information economy.

Several colleges have recently announced that, regardless of application quality, they plan to admit fewer Ph.D. students for this coming fall than were admitted a year ago. The economics of doctoral education are different enough from those of other programs that some universities' doctoral classes will be taking a significant hit, with potential ramifications down the road for the academic job market, the availability of teaching assistants, and the education of new professors.

The reduction of Ph.D. students admitted into programs will have negative consequences down the road when we look to a new generation of academics and researchers to make the innovations and form the ideas that will lead the country forward.

Charles B. Reed and F. King Alexander have a proposal in Inside Higher Ed calling for a “new kind of institutional aid” that would support colleges and universities that admit lower-income students.

To attempt to change this ominous direction to focus on the new generation of students with the greatest educational needs, it is imperative that we revisit the “cost of education allowances” program and develop a federal Title I type program for higher education institutions. This policy would provide a specific flat “capitation” institutional grant per lower-income student to every college and university that meets a minimal enrollment threshold of 20 percent.

Reed and Alexander argue that the current “individualistic and market-oriented approach to funding higher education by simply putting resources in the hands of students” has resulted in “perverse fiscal and institutional incentives,” despite being worthwhile. They believe that their proposal could reduce the challenges facing universities and low-income students that have led to the return of pay-to-play admissions mentioned earlier.

Part of the problem is that many short-sighted Republican state legislatures have been attempting to balance their state budgets on the backs of students, leaving universities no choice but to raise tuition rates and cater to the wealthiest applicants.

The United States needs a strategic plan; one that focuses on long-term investment in infrastructure, research, and human capital. We need more ideas on how to improve and progress like those posed by Reed and Alexander, and most important, we need the courage and values to implement them.

Update: Also please note that Sam Stein, a HuffPost blogger was allowed a question. Great to have a President who brings bloggers in as part of the press pool.
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Tonight in President Barack Obama's press conference televised on all major networks, it was mentioned that part of stimulting the economy was helping young people pay for college.

"We will also provide a $2,500 tax credit to folks who are struggling to pay the cost of their college tuition, and $1000 worth of badly-needed tax relief to working and middle-class families."

I will post the video when available but here are the initial remarks the President made before taking questions.

Good evening. Before I take your questions tonight, I’d like to speak briefly about the state of our economy and why I believe we need to put this recovery plan in motion as soon as possible.

I took a trip to Elkhart, Indiana today. Elkhart is a place that has lost jobs faster than anywhere else in America. In one year, the unemployment rate went from 4.7% to 15.3%. Companies that have sustained this community for years are shedding jobs at an alarming speed, and the people who’ve lost them have no idea what to do or who to turn to. They can’t pay their bills and they’ve stopped spending money. And because they’ve stopped spending money, more businesses have been forced to lay off more workers. Local TV stations have started running public service announcements that tell people where to find food banks, even as the food banks don’t have enough to meet the demand.

As we speak, similar scenes are playing out in cities and towns across the country. Last Monday, more than 1,000 men and women stood in line for 35 firefighter jobs in Miami. Last month, our economy lost 598,000 jobs, which is nearly the equivalent of losing every single job in the state of Maine. And if there’s anyone out there who still doesn’t believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans whose lives have been turned upside down because they don’t know where their next paycheck is coming from.

That is why the single most important part of this Economic Recovery and Reinvestment Plan is the fact that it will save or create up to 4 million jobs. Because that is what America needs most right now.

It is absolutely true that we cannot depend on government alone to create jobs or economic growth. That is and must be the role of the private sector. But at this particular moment, with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back to life. It is only government that can break the vicious cycle where lost jobs lead to people spending less money which leads to even more layoffs. And breaking that cycle is exactly what the plan that’s moving through Congress is designed to do.

When passed, this plan will ensure that Americans who have lost their jobs through no fault of their own can receive greater unemployment benefits and continue their health care coverage. We will also provide a $2,500 tax credit to folks who are struggling to pay the cost of their college tuition, and $1000 worth of badly-needed tax relief to working and middle-class families. These steps will put more money in the pockets of those Americans who are most likely to spend it, and that will help break the cycle and get our economy moving."

Rest on the flip

cross posted on College Dems of NY blog: http://www.collegedemsny.com/blog

A loan package of as much as $200 billion could be going to private loan companies of student loans, according to the Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2008/11/27/AR2008112702570.html?wpisrc=newsletter

Student advocacy are alarmed that Treasury Secretary Hank Paulson would approve of such a move without better consideration as to how the money would benefit students in the long run.

According to WaPo:

"A bailout for the providers of usurious private student loans will not solve the college affordability crisis caused by the failing economy, and would actually be detrimental to many students and consumers," nine advocacy groups wrote in a letter sent last week to Treasury secretary Henry M. Paulson Jr., after he signaled that the department was developing the program. "However, if you continue to pursue any form of rescue for private student loans, it would be unconscionable to do so without also providing better consumer protections."

The biggest concern is that the taxpayer money to student loan companies won't decrease the loan rates. Furthermore, the money would be better spent by the government taking on more responsibility in issuing Federal Direct Loans.

Currently the federal government issues the following loans:

1. Federal Direct Subsidized Loan: 6% interest rate (no interest accumulates while student is in school)
2. Federal Direct Unsubsidized Loan: 6.8% interest rate (payment not due until student finishes school but interest accrues)
3. Federal Direct Parent Loan: 7.8% interest rate (parents pay loan)

Often loans from private insurers, Sallie Mae being the biggest, is that interest rates are twice the amount, between 11-13%.

More from WaPo:

The student and consumer advocacy groups who wrote Paulson say that far too many students unnecessarily take on private student loans. One out of five undergraduate private student loan borrowers did not first take out federal loans, according to a study by the American Council on Education, which represents college and university presidents. Experts and government officials say students should always exhaust federal student loans before they turn to private ones.

The estimated 8 percent of undergraduates who take out private loans often are swayed by misleading and deceptive advertising, then saddled with interest rates two or three times as high as federal loans, according to the Nov. 19 letter to Paulson, also signed by the U.S. Public Interest Research Groups, U.S. Student Association, National Consumer Law Center and the Project on Student Debt.

We can only hope that Congress will take a better look at how this can better student aid. Decisions about the bailout money have yet to be finalized.

DMI Blog has a great post up about inequality and higher education costs:

In a nut shell: a person's access to higher education is becoming more and more unequal as a new report by the Education Trust points out. They are right when they say "That is bad for low-income and minority families and bad for America."

The report, Promise Abandoned: How Policy Choices and Institutional Practices Restrict College Opportunites, highlights two huge problems in achieving equality of access to higher education: college costs and student retention. The cost of four-year college has increased over the last twenty years faster than inflation or the family income. Funding impacts the number of low-income students going to college. If you are from a high-income family you have a 75% chance of getting a bachelor's degree by age 24; low-income fewer than 9% chance of a bachelor's by 24.

There's a lot of fantastic stuff coming out about student debt, predatory lending, and other financial/educational issues facing people in their 20's. I'm hoping to have a policy post up about it later this week.

Also hope to have a report from RootsCampDC as well.