College Financial Aid

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  • Review-Journal Drums Up College Debt Myths To Blame Borrowers For Student Debt Crisis

    ››› ››› JARED HOLT

    An editorial published by the Las Vegas Review-Journal insisted that student debt is “manageable for most students” and recycled previously debunked conservative talking points to fault student loan forgiveness programs and federal aid for America’s college debt crisis. The paper also echoed right-wing myths to argue that tuition “costs inevitably go up” in response to low-interest federal loans and dismiss progressive concerns about for-profit schools.

  • Wash. Post: College Debt Forces Students To Take Jobs “Without Long-Term Prospects”

    Research Shows Economic Difficulties Are Still A Major Concern For Recent Graduates, Especially Women And African-Americans

    Blog ››› ››› ALEX MORASH

    The Washington Post reported on the economic prospects of the Class of 2016, saying that while the economy has improved, wages are still down for recent graduates, and the mounting debt thrust onto students forces many to take jobs with poor advancement opportunities.

    In a May 2 article for The Washington Post’s Grade Point education news blog, reporter Danielle Douglas-Gabriel reported that while hiring continues to improve for recent college graduates, job prospects are still poor, and the increasing debt burden faced by graduates forces them to take jobs -- if they can find one -- that may have no chance of wage growth or career development. The Post highlighted findings from the Economic Policy Institute (EPI) showing that nearly seven years after the end of the Great Recession, recent graduates still face many employment hurdles, namely lower pay and higher amounts of student debt.

    While the unemployment rate for recent graduates is “only a tenth of a percentage point” above pre-recession levels, the Post wrote, “nearly 13 percent of young college graduates are currently underemployed, compared to 9.6 percent nine years ago.” As wages are still low for recent graduates, student debt burdens continue to climb and the Post reported that it is likely “the average Class of 2016 graduate will leave school with five-figure debt.” The piece said student debt burdens “likely will force graduates to accept jobs without long-term prospects for career or wage growth.” These and other factors spurred EPI to conclude that new graduates likely will earn less in the next decade than those who graduated before the recession.

    EPI also found that prospects for recent graduates are bleaker for women and African-Americans, a point Media Matters has also highlighted. According to the Post, the national average unemployment rate for college graduates is 5.6 percent, nearly double the 9.4 percent unemployment rate EPI found for black college graduates. Since 2000, the gender gap for recent graduates has widened; female graduates today make 6.8 percent less than their counterparts did in 2000 compared to male college graduates, who now earn 8 percent more than male graduates did 16 years ago.

    From The Washington Post:

    If the last few years are any indication, the average Class of 2016 graduate will leave school with five-figure debt. That albatross likely will force graduates to accept jobs without long-term prospects for career or wage growth, according to a new study from the Economic Policy Institute. Analysts at the think tank say that despite the rosy overall employment picture, graduates actually face a tougher labor market than they would have before the 2008 recession. Degree-holders, they say, still contend with elevated levels of unemployment and underemployment, and a large share are neither employed nor pursuing advanced degrees — in other words, they are idling.

    “Although there have been small improvements, there is still a lot that’s problematic about this economy for young college grads,” said Teresa Kroeger, a research assistant at EPI who co-authored the study. “Wages are still performing poorly. And we see still disparities between genders and racial groups.”

    […]

    Analysts at EPI say unemployment for young black college graduates hovers at 9.4 percent, higher than the peak unemployment rate for young white college grads during the recession. And gender wage inequality has grown, with male college grads earning 8 percent more this year than in 2000, while young women with degrees earned 6.8 percent less than in 2000.

    Perhaps the most troubling prediction from the institute posits that newly minted grads as a whole likely will earn less and have more spells of unemployment during the next 10 to 15 years than if they had graduated before the downturn.

  • Here’s What To Avoid When Reporting On Student Debt

    Blog ››› ››› PAM VOGEL

    April 25 marked the fourth anniversary of outstanding student loan debt topping $1 trillion in the United States, yet media still aren’t always telling the full story on college affordability and student debt. If the public thinks the student debt crisis only affects white, upper middle class borrowers enrolled in impractical programs at four-year colleges and universities, the media aren't​ doing their​ jobs.​

    It’s time for media to recognize the realities of the nation’s student debt burden. Outlets should stop ignoring the voices of students and borrowers, and stop reinforcing unrealistic assumptions about how​ higher education can be paid for ​today. Here are some of the reporting tactics they ought to leave behind.

    Framing Student Debt In The Narrow Context Of Traditional, Four-Year Colleges And Universities

    Media often focus their reporting on six-figure student debt balances from prestigious and expensive four-year colleges and universities. But focusing on the experience of this narrow segment of student borrowers ignores those who are most deeply affected by student loan debt: students who take loans to pursue higher education but are unable to complete their programs, and students borrowing to attend non-traditional or for-profit programs with fewer federal grant and loan options.

    As the Center for American Progress’ (CAP) Ben Miller explained in June, “the link between debt and educational attainment is too frequently missing from national discussions on student loans.” Miller’s study found that a recent graduate with a higher debt burden was financially better off than a non-graduate who owed a smaller amount, because the graduate was more able to boost their income and pay off their balance​, resulting in fewer defaults for graduates​.

    A comprehensive report from the Brookings Institution in September highlighted the outsized student debt burden of another non-traditional group of borrowers: those who attended for-profit schools. The report concluded that “most of the increase in default [on federal student loans] is associated with the rise in the number of borrowers at for-profit schools and, to a lesser extent, 2-year institutions and certain other non-selective institutions, whose students historically composed only a small share of borrowers.” The report also demonstrated that “These non-traditional borrowers were drawn from lower income families, attended institutions with relatively weak educational outcomes, and experienced​ poor labor market outcomes after leaving school.”

    It’s clear that four-year college graduates are not the majority of borrowers in default or struggling to make payments, and it should be just as clear in media coverage of the issue.

    Ignoring How Student Loan Debt Perpetuates Economic Inequality For Women, Black, And Hispanic Borrowers

    Reporting on the nation's student debt crisis without acknowledging how the debt burden disproportionately affects women and people of color is irresponsible, and it leaves out important details about how student loan debt ripples across the economy.

    Here are the facts: women are more likely to have outstanding student loan debt, and dedicate a higher percentage of their earnings ​toward paying off that debt. The gender pay gap also makes getting out of debt all the more difficult for women, in particular for black and Hispanic women. In February, the American Association of University Women (AAUW) found that “more women than men… are contributing more money to their student debt payments than a typical individual can reasonably afford,” and ​are ​still making a less significant dent in their outstanding loan balances. “The gap in student loan repayment is even larger for black and Hispanic women with college degrees,” the report noted.

    Black and Hispanic borrowers generally have more debt than their peers, regardless of the type of degree they pursued or the type of institution they attend. In fact, black and Hispanic students are far more likely to enroll in cheaper two-year, open-access schools, but also often have access to fewer family resources than white students and therefore must rely on student loans in greater numbers. Black and Hispanic graduates are also afforded less financial security from having a college degree.

    The nation's student debt burden feeds off of, and perpetuates, existing economic inequality. Media that ignore this phenomenon are ignoring the experiences of the majority of student loan borrowers, and are obscuring the true costs of the national student loan debt burden.

    Using Outdated Economics To Suggest Student Debt Is Avoidable With Part-Time Work And Better Decision Making

    Right-wing media figures, in particular, frequently pair discussions of student debt and college affordability with outdated anecdotes to suggest borrowers struggling to pay off student loan debt could have simply worked harder or made smarter decisions to avoid incurring debt. Here’s the reality: A​ny media figure who suggests students or recent graduates could have avoided taking out student loans not only ignores that many students do not have the resources to find alternatives, but relies on completely outdated assumptions about how much college costs in the first place.

    The fact is that college costs are rising across the board, for all types of higher education. Non-traditional programs often end up being more expensive for students, and some for-profit programs in particular, underserve students and leave them more likely to default on loans. Finding “a cheaper school” is not a real option, and making a living wage without a college degree is increasingly not an option either.

    Economists agree that higher education credentials, and in particular a bachelor’s degree, continue to have outsized positive economic benefits and are an undoubtedly “sound investment.” So pundits citing cheaper, alternative higher education programs are, at best, blindly promoting the nonexistent and, at worst, knowingly perpetuating a two-tier system of higher education where low-income students ought not to pursue the types of degrees proven to be most beneficial.

    And those anecdotes about how conservative media figures were able to pay for college with some elbow grease and a part-time job? Researchers have repeatedly found that’s just not possible anymore. An October study from Georgetown University found that while “over the last 25 years, more than 70 percent of college students have been working while enrolled,” it’s just not enough to offset the costs of school or avoid loans. “A student working full-time at the federal minimum wage would earn $15,080 annually before taxes,” the report concluded. “That isn’t enough to pay tuition at most colleges, much less room and board and other expenses.”

    Painting All College Affordability And Student Debt Policy Solutions As Equally Comprehensive

    Media coverage of student loan and college affordability policies in the 2016 presidential election is inaccurate if it attempts to frame policy solutions from both parties as equally comprehensive. Both Democratic candidates, former Secretary of State Hillary Clinton and Vermont Sen. Bernie Sanders ​have released comprehensive policy plans designed to bring down college costs for new students and to ease the burden of student loan debt for borrowers and recent graduates. Both plans have price tags and​ detail concrete actions on the issue. Regardless of where voters stand substantively, it is undeniable that both plans exist and are comprehensive.

    On the other hand, none of the three remaining Republican presidential candidates have released policy proposals on higher education affordability or college debt ​--​ in fact, front-​runner Donald Trump and Texas Sen. Ted Cruz have not even dedicated website space to the issue. Gov. John Kasich (OH) includes a paragraph on college costs in his larger education platform​​, but doesn't explain what policies he'd pursue on a national scale. ​

    Recognizing that student debt is a major concern for young voters with vague public statements is not the same as offering concrete policy solutions that might help alleviate the problem. Reporting that frames policy proposals from all of the presidential candidates as equally comprehensive or equally viable in order to appear balanced is just misleading the public.

  • VIDEO: Stop Blaming Students For America's Student Debt Crisis

    Blog ››› ››› CARLOS MAZA, JOHN KERR, LEANNE NARAMORE & PAM VOGEL

    Student loan debt in America has reached a staggering $1.3 trillion, surpassing even credit card debt. But right-wing media figures have criticized efforts to combat student loan debt by pushing misinformation and blaming students for pursuing higher education.

    Conservative media have labeled higher education as a "privilege" and suggested students ought to choose fictional cheaper colleges. Some outlets have even defended schools that take advantage of students and leave them with significant debt. But research shows college matters now more than ever, and the cost to attend is rising across the board. The student debt crisis is especially damaging for poor students and students of color, who more frequently attend cheaper open-access and community colleges and are still forced to borrow in higher numbers to pay for their education.

    Blaming students for the student loan debt crisis ignores the facts and distracts from finding real solutions to America's skyrocketing student debt burden.

    Previously:

    Myths And Facts About The College Debt Crisis

  • The Wall Street Journal Praises For-Profit Colleges That Prey On Veterans

    ››› ››› PAM VOGEL

    Federal law allows for-profit colleges to access more federal funding by enrolling large numbers of military veterans, despite evidence that many of these schools do not prepare their students for the job market. In recent years, predatory recruitment of service members by several for-profit college chains has been exposed by congressional and media investigations, yet the Wall Street Journal editorial board continues to defend the schools' recruiting practices and advocates for fewer student protections at for-profit institutions. In honor of Veterans Day, here are some of the Journal's most misleading and inflammatory arguments defending failing for-profits that take advantage of veterans.

  • The WSJ's Editorial Board Celebrates Arne Duncan's Resignation By Promoting Anti-Public Education Myths

    ››› ››› PAM VOGEL

    An October 5 editorial by the Wall Street Journal used anti-union rhetoric and pro-privatization arguments to celebrate Secretary of Education Arne Duncan's resignation and replacement by Acting Deputy Education Secretary John King. The editorial perpetuated several well-worn education policy myths, and mischaracterized the economic outcomes of for-profit colleges and the effects of voucher programs for low-income students of color. 

  • Myths And Facts About The College Debt Crisis

    ››› ››› PAM VOGEL

    As the nation's student loan debt burden continues to grow and voters look to 2016 presidential candidates for solutions, right-wing media continue to perpetuate debunked myths about college costs, financial aid, and student loans. Here are the facts that conservative media outlets ignore.

  • WSJ Editorial Blames Progressives For Student Debt, Claims Government Loans Send "Deadbeats" To College

    Blog ››› ››› PAM VOGEL

    Wall Street Journal editorial on student debt takes aim at Democratic presidential candidate Hillary Clinton's New College Compact college affordability plan, arguing that Democrats have "encouraged student debt" in order to win over young voters with debt relief proposals. In addition to favoring fewer opportunities for low-income students, the board's argument ignores the flawed and sometimes corrupt private lending system that led the government to reform the student loan process, and the recession-driven policies supported by both parties that have sent higher-ed costs skyrocketing.

    The August 21 WSJ editorial characterized Clinton's recently-announced student debt relief proposal as part of a larger "arc of progressive politics" that first causes problems, and then presents voters with solutions. The short editorial - which is also short on facts - is worth quoting in its entirety (emphasis added):

    The arc of progressive politics these days seems to be hoping to benefit from proposing policies to solve the problems their previous policies have created--and hoping nobody notices the cause and effect.

    Hillary Clinton and the other Democratic presidential candidates have been proposing new ways for college students to reduce or write-off their student loans. The goal is to win over millennial voters with more taxpayer largesse, while slowly turning higher education into one more universal federal entitlement. Mrs. Clinton's proposal would cost a hefty $350 billion over 10 years, by her own no doubt conservative estimate.

    What Democrats don't say is that such taxpayer generosity wouldn't be necessary if they hadn't done so much to encourage students to load up on taxpayer-guaranteed debt. The Education Department reported this week that some 6.9 million Americans with student loans hadn't made a single payment in at least 360 days. That's up 6%, or 400,000 borrowers, in a year.

    The Obama Administration took over the student loan market in 2010, easing terms and expanding benefits. Now that the bills are coming due in (sic) more deadbeats, Democrats hope to benefit again by handing the tab to taxpayers. They nail you coming and going. [Wall Street Journal8/21/15]

    The editorial lays the blame for the national student debt crisis at the feet of the Obama Administration, which it says "took over the student loan market" in 2010. That's a reference to The Health Care and Education Reconciliation Act of 2010, which eliminated the Federal Family Education Loan (FFEL) program, a lending system that dates back to 1965 and offered government-guaranteed student loans through private and nonprofit lenders. In its place, the government created the present-day Direct Loan program, which cuts out private lenders and issues loans directly to students (private lending continued without the government's backing).

    Among other things, the 2010 education loan overhaul lowered interest rates for certain borrowers, upped maximum award amounts for Pell grants, expanded access to both income-based repayment and the Public Service Loan Forgiveness plan by allowing borrowers to consolidate into loans eligible for these programs, and made income-based repayment significantly more affordable. The Congressional Budget Office projected that the new, simplified loan program would save the government $68 billion over 11 years.

    The WSJ editorial made no mention of the 2010 law's cost savings for the government or students, or the circumstances that laid the groundwork for the reform. Before 2010, the government was paying millions to private lenders to subsidize interest rates on federally-backed loans. In 2004, it was discovered that private lenders were exploiting a legal loophole and overcharging the government for those subsidies. In 2007, several lenders also admitted to engaging in illegal deals with colleges to encourage students to borrow from them.

    Those revelations shook public and policymakers' confidence in the whole system of privately-issued, taxpayer-backed student loans and helped set the stage for the 2010 reforms.

    In August, 2012 -- two years after the Direct Loan program began -- the Consumer Financial Protection Bureau issued a report that showed how private student loans, which often come with variable interest rates and limited repayment options, expose borrowers to greater credit risk and higher costs. Despite that damning finding, the Republican Party's 2012 party platform called for an end to direct lending and a return to the FFEL-style lending system that had allowed private lenders to overcharge taxpayers and exposed student borrowers to higher debt costs.

    Another of The Journal's claims -- that progressive policies have created a cycle of "entitlement" -- is undermined by the fact that bipartisan measures have increased pressure on students to borrow ever-higher amounts of money to pay for college. State-level budget cuts to higher education in the wake of the 2007 recession, for example, have been a proven cause of higher college costs across the board, especially at community colleges. An in-depth analysis of state higher education disinvestment from 2007-2012 by the Center for American Progress found that 29 of 50 states had lowered their direct funding of public institutions. By Media Matters' count,  legislative leadership in those 29 states was almost evenly divided between Democrats and Republicans, proving the fallacy of the Journal's claim that progressive policies are responsible for driving up higher-ed costs.

    Finally, the Journal's claim that expanding access to student loans leads to more "deadbeats" looking to taxpayers to foot their loan bills echoes a common conservative talking point that says expanding access to higher education through accessible student loan programs results in unqualified (read: undeserving) students going off to college.

    That argument ignores the reality that taking on some measure of student debt is inevitable for most Americans, regardless of what kind of school they attend. In 2013, the most recent year for which data is available, nearly 70 percent of graduates of public or private nonprofit schools had loan debt. Tuition costs are rising quickly at every type of higher education institution, according to figures from the National Center for Education Statistics: private colleges, state universities, vocational schools, community colleges, even professional certification programs. And the growing debt burden is shouldered disproportionately by low-income, black and Hispanic borrowers, many of whom lack the adequate financial resources to avoid borrowing.

    The bottom line is that any argument against the loan simplification measures and expanded student aid established in 2010 is an argument to limit college opportunities, which will inevitably hit low-income, minority students hardest. The Wall Street Journal's elitist dismissal of the serious problem of student debt, and its partisan argument against worthwhile policy solutions, reinforces a stratified system of higher education that limits opportunities for deserving Americans.