college affordability

Here's a hodgepodge of news on Millennials, policy arcana, and a dark day for the blogosphere:

• Soapblox, the software that runs many blogs within the 50 State Blog Network, was hacked last night, causing a huge chunk of progressive on-line infrastructure to go dark. People are scrambling to see if the problem is at all fixable, and if not, to salvage what they can and move to new platforms. It is literally a dark day for the progressive blogosphere, and major sites like Swing State Project might have lost their entire archive.
• The folks at Millennial Makeover have two new pieces up. The first looks at how Millennials hold the keys to the auto industry's future. The second piece looks at Obama's transition and measures it against previous transitions during political realignments.
• I was lax last week in noting the passing of Sen. Clairborne Pell, the creator of the Pell Grant program. This NYT Obit pays fitting tribute to his legacy.
• Tragically, the NYT also ran a story that week about how universities are now forming partnerships with credit card companies, often to the financial detriment of students who rack up massive debt:
  

  Bank of America’s relationship with the university extends well beyond marketing at sports events. The bank has an $8.4 million, seven-year contract with Michigan State giving it access to students’ names and addresses and use of the university’s logo. The more students who take the banks’ credit cards, the more money the university gets. Under certain circumstances, Michigan State even stands to receive more money if students carry a balance on these cards.

  Hundreds of colleges have contracts with lenders. But at a time of rising concern about student debt — and overall consumer debt — the arrangements have sounded alarm bells, and some student groups are starting to push back.

  The relationships are reminiscent of those uncovered two years ago between student loan companies and universities. In those, some lenders offered universities an incentive to steer potential borrowers their way.

• Congress Matters alerts us to key personnel changes on some subcommittees within the Energy and Commerce committee. Those working on energy and climate issues should take note.

With the economy in a serious slump, state systems of higher education are on the chopping block again, as governors and state legislatures trim the "fat." Private schools have seen large chunks of their endowments vanish. Who is the biggest loser? Students. As endowments and costs are slashed, tuition rates and fees for incoming students increase.

Citing the strains on lower- and middle-class families who are trying to send sons and daughters to college, a coalition of higher education and consumer advocacy groups sent a letter Thursday to Speaker Pelosi arguing for some assistance for students in the upcoming stimulus package. Campus Progress, the U.S. PIRGs, and the Project on Student Debt were all involved in this effort. The letter proposed some actions Congress could take in the new stimulus bill to help college students:

• Raise the maximum Pell Grant to $7,000
• Increase funding for the Federal Work-Study Program by 25 percent.
• Improve access to Parent PLUS loans.
• Provide a limited “emergency access” student loan pool for colleges that commit to providing adequate need-based aid.

While there are those families too poor to realistically consider college right now who we should never forget, these lower- to middle-class prospective students should absolutely be remembered as Congress prepares to draft this legislation.

As the last point in the proposal indicates, one way to honor the blue-collar student is to substantially decrease merit-based aid in favor of need-based aid. Ben Miller, at Higher Ed Watch, explains why:

Every single public college contacted for a recent survey by the National Association for College Admission Counseling said it provided non-need based assistance, or "merit aid." The same survey found that merit aid made up 41.9 percent of public institutional funds, only slightly less than the 46.6 percent devoted to need-based institutional aid. This is troubling because "merit aid" is not targeted at low-income students, and is instead used to compete for the best (and sometimes the wealthiest) students to boost prestige and fundraising. Schools should not be allowed to continue to spend their limited financial aid budgets on non-needy students when low- and moderate-income students are being asked to shoulder ever-larger tuition burdens.

Miller's post as a whole is instructive. Too often institutions of higher education pass on their financial troubles, in the form of tuition increases and student fee hikes, to the students. Perhaps the institutions could look at possible cuts they could be making from within and examine opportunities for streamlining instead of erecting barriers to a college education, a critical piece of the American Dream for many families.

Congress could help my incorporating most, if not all, of this proposal into the new economic stimulus legislation.

(h/t to Pedro de la Torre at pushback)

Jim Slattery, candidate for the U.S. Senate in Kansas, unveiled a new $5,000 college tuition tax cut last week.

"Few investments are more important than ensuring every young person who aspires to attend college has the opportunity," Slattery said.

Slattery said the cost of attending college has skyrocketed.

"Tuition at Pittsburg State has increased 75 percent in the last five years," Slattery said.

In order to pay the increased tuition rates, more students are taking out student loans that are difficult to pay back in the current economy.

"Students are becoming increasingly burdened by student loan debt," Slattery said. "On average, a student owes nearly $20,000 when they graduate."

I was honored to receive unvetted access to follow Slattery along on his tour talking with him as well as other students interested in his plan as well as other important issues this election. Slattery spent time answering questions in townhall style meetings as well as a special candidate forum hosted by the popular site 18 in 08.

This is cross-posted from RTV and Wiretap but no one seems to want to approve it so I just posted it here

When the Dow dropped another 700 points yesterday I joked with my friends that I was lucky because I was already poor so it really couldn't get much worse.

The truth is, despite the impoverished life of a post-grad blogger, even students who don't yet have to pay their loans back are having a hard time making ends meet, getting student loans, and even grants and scholarships.

The federal government pledged a $700 billion bailout to help Wall Street recover with the hope that normal American's would receive a trickle of what they get at the top. It is no surprise that Millennials are also feeling the effects of the financial crisis and that those effects will continue to also trickle down.

Federal loans will still remain available, thanks in part to the new democratic congress, but private loans might be dwindling despite million dollar endowments.

"Across the country, such a fiscal nightmare has caused some banks to impose stricter requirements for lending, which can have the effect of excluding more students from loans. Such loans could soon have higher interest rates, economists say." says the Daily Iowan

Larger institutions are the safest particularly in states with higher economies that can support their own institutions.

"When asked whether these new developments might force Yale to reconsider its new financial-aid policy, Storlazzi responded emphatically that "Yale has budgeted far into the future, and the University will have absolutely no difficulty in continuing to offer one of the most comprehensive financial-aid programs in the country," says the Yale Daily News

However, Inside Higher Ed reports that such large institutions are also more likely to lose money with investments, because

"the restrictions placed on the availability of money from the Common Fund for Short Term Investments (pdf), in which about 900 colleges store some of their financial assets. As of Wednesday, Commonfund, which manages the fund, had ensured that colleges would have access to about a third of their money (pdf), and relatively few institutions are so dependent on the money they have invested in the short-term fund that the restrictions on it will dramatically hurt them."

In these times of uncertainty it is essential we question our leaders and those seeking office of their plans to continue to support funding for youth who seek an education. Following the election it is even more essential we begin efforts to communicate those demands to policy makers.

On a recent trip to Washington DC I decided to see if I could talk to a few of our notable Representatives in Congress. Rep. George Miller was not only available but eager to talk with me about the outreach the Committee had done in the first 100 days of the New Congress in 2007 to work with students on how we can make higher education easier and more manageable for students.

Some friends who work on the Hill told me that he was a great guy, and very forward thinking when it comes to technology and outreach, but I had no idea he would be as engaging and eager to talk about the needs of students and ways in which we can continue our work after Election Day. It was a true honor, and I certainly look forward to seeing what is possible in the 2009 Legislative Session.

Crossposted from Wiretap Magazine

We won. The amendment was destroyed 36-61. All Democrats (except Nelson) voted with us, so be sure to thank your representative for sticking up for students instead of filling the pockets of corporations. You can look at the vote breakdown here.

The Senate is voting on the full bill now, which should pass without any problems.

Thanks to everyone who helped in this fight, including US PIRG, College Affordabilty Now, Free Exchange on Campus, and Campus Progress.

Cross posted at MyDD and Daily Kos.

Another update on Nelson-Burr (aka the corporate lender welfare amendment). Word is that the vote is going to be around noon today and it is going to be tight. Yesterday, Rick Enzi, ranking Republican on the Senate Education committee declared that he would vote against the amendment, potentially bringing a number of Republicans over with him. A number of Senators s are on the fence - particularly Tester on the Democratic side and Smith on the Republican side - but many of the Senators listed below don't really know anything about the amendment or how it would impact students.

Give them a call before noon today. Tell them why they should vote yes on the bill and no on the Nelson-Burr amendment. The Capitol Switchboard can be reached at (202) 224-3121.

This is a response from Tony Cani, Political Director of the Young Democrats, to a blog I wrote earlier this week. --Mike

I am happy to clarify our involvement in College Affordability work. I believe that you will all find that Michael's concerns that YDA was just posturing instead of taking action are grossly unfounded. In fact, we are aggressively pursuing steps beyond his suggestions to "capitalize" on the GOP no votes.

Quick facts:

* YDA is an active member of the College Affordability coalition which works with other youth organizations to get legislation through Congress that helps students. (It is important to note that we are the only partisan organization actively involved).

* Over 2200 YDA members sent letters to congress pushing for this legislation over the last week from www.yda.org/writecongress. This type of lobbying is something House leaders DESPERATELY wanted support with.

* YDA pushed for phone calls directly to House members the day before and day of the vote, resulting in a few hundred calls coming from www.yda.org/callthehouse.

* This isn't the first time we've done this. Since HR5 was up during the first 100 hours, we have employed the tactics above, local chapter efforts, and a text messaging campaign. To "sign our mobile petition" for lower interest rates you can text "COLLEGE" to 3-5-3-2-8. We then send updates to your phone on when votes are happening etc.

From the beginning of the Democratic majority in Congress, we have seen college affordability work as an opportunity for us in three ways:

Today's New York Times looks at a disturbing practice within the student loan industry: setting loan rates for students based upon the default rate at the college they attend. Unbelievably, missing out on your first choice of University, or choosing to go to a "second-tier" school might make your education significantly more expensive.

Andrew M. Cuomo, the New York Attorney General, is leading the charge on this, and is exposing a shady College loan industry that really needs to be radically overhauled:

Andrew M. Cuomo, attorney general of New York, said yesterday in a letter to Congress that his investigation of the student loan business had found “a significant number of lenders” that determine eligibility for private loans and set interest rates based in large part on the colleges the students attend rather than the borrowers’ credit-worthiness.

“Just as lenders in the mortgage industry once made judgments about credit lending in entire neighborhoods as a whole,” Mr. Cuomo wrote, referring to a practice known as redlining, “so too are lenders making generalized judgments about student and parent risk based on a student’s school neighborhood.” He did not name any lenders that engaged in these practices.
...
Students at colleges with default rates of 3 percent or less, the letter said, were eligible for private loan interest rates of 8 percent to 9.25 percent. At schools with default rates of 3 percent to 5 percent, students could obtain loans at interest rates of 9 percent to 12 percent. And at colleges with default rates of 5 percent to 10 percent, students paid interest rates of 11 percent to 14 percent.

The article doesn't state which schools are being "red-lined", but I'd make a hefty wager that they are the institutions that have the students with the greatest financial needs. This is absolutely outrageous, and I really hope that our Democratic legislators do something about this asap. Given Chris Dodd's transparency in lending bill, he seems like the most likely person to push to make this practice illegal. I also am very encouraged by the fact that Cuomo seems to have picked up the "anti-corporate corruption" baton from Elliot Spitzer, the NY Attorney General's office has really become one of the most important watch guards around. Hopefully Cuomo and Dodd can bring a little sanity back to the student loan market.

Jennifer S. Pae is the president of the United States Student Association, the country’s oldest and largest national student association representing millions of students across the country in the Capitol, the White House, and the Department of Education. Jennifer recently ended her term as the primary student negotiator for the student loan committee for the Department of Education.

Right now, a corrupt college official and student loan lender may be purchasing a round of mojitos with your student loan check. Unfortunately, we have come to learn through Attorney General Cuomo’s recent investigations that this is not as absurd as it may sound.

Deceitful student loan practices have festered for years without federal oversight. Now that widespread corruption has been revealed, college students and their families must increase the pressure on Congress and the U.S. Department of Education to restore integrity to the nation’s higher education system.

Recently, Education Secretary Spellings testified before the House Education Committee and, once again, students are left behind in the debate over regulation and enforcement of the growing problems within the student loan industry. Chairman Miller grilled Secretary Spellings on the lack of enforcement by the Department with the student loan industry for unethical behaviors. While the Secretary explained that the “hurdle is too high” for enforcement due to unclear regulations and claimed that she was already taking large strides in oversight.