Guest Posts

A case in point is the absolute god damned mess that unfettered access to student loans has created in this country.  Whether it’s $10K, $50K or some other amount of loan that’s forgiven, somebody’s going to be getting money that someone else thinks is undeserved.  Yet far too little attention will be paid to the forty or so years during which our higher ed system gradually fucked the poor and middle class.

I totally agree with this.  It is a disgrace that we have the student loan debt situation that we have today and a total abdication of responsibility for post-secondary education and training on the state level.  In PA, it’s led to an almost bankrupt state university system, a state-related university system that is not a whole lot less expensive than a private non-profit university and a state grant system that is totally inadequate to make up for the funding cuts and resulting tuition increases made to the state and state-related universities.

My state-related, major four-year research university almost invariably vies each year with Michigan as the most expensive public university in the nation.  About 8-12% of our balance sheet comes from direct state funding.  The rest is paid for by tuition, athletic broadcast revenue and state, federal and private research grants and any profits that may accrue to the university from them.  We have three tuition tiers depending on which campus a student attends.  The highest is at our main campus, which has a population of about 48-50K undergrads (not including any grad figures in any of this as it is a totally different animal and I am not an expert in it).  Then there are four medium campuses scattered throughout the state which have anywhere from 2-5K.  Their tuition rates are several thousand less than the main campus’.  Then there are the smaller campuses, of which there are 14, and they enroll anywhere from 600-2000 students.  I work at a smaller campus.  Our tuition is several thousand less than both the main campus and medium campuses.  With the exception of the main campus, our in-state tuition rates have been frozen for the past five years because of fears we were getting too unaffordable and financially exclusive for a public university.  And even at the main campus, in-state tuition increases were 1% or less over the same time period.  So my own institution has made some significant sacrifices recently in order to keep student costs down and keep this economically important public institution inclusive. We have also significantly increased our endowments for student scholarships exponentially over the last ten years, almost all of it aimed at helping students to complete their degrees and complete them on time, providing more university based funding for financially struggling students and providing those students with opportunities such as study abroad and travel to professional conferences.  We are also providing in-state tuition rates at the smaller campuses to students who live in several border states in order to make it affordable for them, especially if they live within commuting distance from one of our campuses.  My campus is one of those campuses who has students who can easily drive to it from West Virginia or Ohio every day.  

I worked in a small rural state college financial aid office in the late 80’s/early 90’s, so I was there just when loans were getting out of control.  Here are some of the things that we could see happening that just have gotten much, much worse:

• The Pell Grant program, which was supposed to let poor kids go to school for basically free, was starting to be outstripped by inflation and tuition that rose faster than inflation.  So, kids who had no idea about the kind of commitment they were making were getting thousands of dollars of debt as part of their financial aid package.  Yet, from the point of view of the school, it didn’t matter because loan money and grant money paid tuition.

I also agree that the Pell Grant program is totally inadequate to the challenge of the intent of the grant.  Based on what I know about the tuition rates here in PA at all the public universities, a doubling of the current maximum Pell Grant ($6345 per year) would pay for all or most of a student’s in-state tuition.  Students here in PA who qualify for the Pell also will qualify for the PA State Grant, which fluctuates in value depending on what the state budget is, but is usually around $4K.  Then there is the Federal SEOG Grant, which many Pell eligible students may receive.  Lastly, my institution has numerous institutional grants and scholarships aimed at low income students.  So a student can, if they live close enough to a campus to commute from home, get a four-year degree here without any loans at all if we just adjusted the Pell Grant to be something resembling the reality of higher education costs.  If they qualify for all of these things, without even taking into account any outside scholarships they may receive, and commute from home, tuition will be covered and so will other incidentals such as books and gas for the commute.

There are also some tweaks that could be done to the formula for determining EFC that would expand Pell beyond the very, very low income ceiling it currently has, but I know there are some big changes being considered in this area and am reluctant to talk about that until I see what is being contemplated and its chances of being implemented are.

As for schools not caring as long as the bill is paid, that would be only some schools.  Of course we want the bill to be paid, but I have never worked anywhere that gave me this impression.  I hated the community college when I worked there, but they were very compassionate to their students’ financial situations.  

At my current institution, we provide very detailed but easy to read financial aid award notifications, require parents/guardians to attend a parent/guardian session heavily focused on costs, billing and financing during summer freshman orientation and, at my campus, every student who is moving into campus housing and their parent/guardian must meet with me to discuss their aid, their bill and financing options and have a plan in writing before they can move in.  I am sometimes forced to tell a family that it would be to their detriment for their student to attend.  Sometimes those students and their families decide I am right and sometimes they decide they can figure it out.  All I can do is provide every bit of information I can, give them all the options available and allow them to make their own decisions.  I am not ever taken to task when a student decides not to enroll or move in.  We don’t want students to have bad debt any more than they do.  I realize that other schools may not do this, but it is not fair to assume that every school is just all about the Benjamins.

• The Perkins Loan program, which was essentially a federal loan fund administered by the school, was grossly underfunded after the Guaranteed Student Loan (Stafford Loan) program, administered by banks and passed by Congress after heavy bank lobbying.  But the Perkins Loan program was so much more healthy for the school, because if the school had good collections, they could loan more money.  With Perkins loans, the school had an positive incentive to make good loans.  GSLs (and their follow-ons) had no such positive incentive – the school just had to keep its default rate down.

Can’t disagree with any of this, but, sadly, the Perkins Loan is no more.  We do have an institutional loan that we lend at what the old Perkins rates and terms were, but we have such limited funding for it every year as be able to only offer it to seniors who have exhausted all other options.

• Single moms from rural towns would use financial aid as an adjunct to all the other programs they were receiving, making barely OK progress towards some kind of degree, but incurring (for them) staggering debt as they did.

I don’t see much of this, but it does happen sometimes.  I am guessing it is a real problem at the community college level.  Most of those students wouldn’t pay a cent in tuition there because they would qualify for all the free aid and community college tuition is so low and accept all of their loan funding to supplement whatever income they have.  And creating a huge amount of debt they didn’t need to accrue.

• Kids from little towns would come down for a semester or a year, unprepared for college, flunk out, and go home a few thousand dollars poorer.  The debt wasn’t crippling, as it is now, but it sure didn’t help them start out in life.

This is generally not a problem for our in-state students.  But it is a huge problem with our out-of-state students.  We lose an awful lot of them every year simply because they aren’t prepared, whether that is financially, socially, academically or all of the above.  And I foresee more of it as admission requirements continue to be in flux.  There are all kinds of things that are causing issues here that are sometimes the fault of the admissions people trying to increase applications and some of them are beyond our control.  Some issues that are currently creating havoc are self-reported high school records (a final transcript will be required long after admission offers go out), not requiring any standardized tests due to their biases, limited pre-enrollment placement testing and massive secondary school grade inflation.  I’m not an admissions expert, though, so I can’t really explain or come up with any solutions to any of this.

• We were starting to see a few transfers from private for-profit schools and it was clear those kids were absolutely worked over by those schools.

I cannot agree enough with this.  Totally ripoffs in every way.  Most of their degrees can be achieved at a community college or public university.  Students who transfer to public or non-profit privates often find that very few of their credits actually transfer, so it takes them longer to complete and costs them vastly more to do so.  And they almost all are less than transparent when it comes to financial aid and have some shady practices when it comes to private loans.  I’ve had students come to us with 60 credits and tens of thousands in federal and private loans and only have a few credits transfer in.  It’s infuriating and sad.

The government has an obvious interest in a higher ed system that is somewhat efficient, that allows students to fail without ruining them, and where four-year and community colleges stay in their lanes.  The rocket fuel of financial aid, from what I saw, fucks with each of those goals.  Colleges had “free money” that made them less efficient. Student failure led to burden, and there was duplication of effort between two-year and four-year schools.  Private for-profit schools probably shouldn’t be allowed access to federal financial aid — it’s just too much of an incentive for them to screw kids.

I agree with your first and last sentence, but everything in the middle is up for a lot of debate.

So, this whole fucking mess needs to be unfucked.  The first step is to try to address the inequity of giving kids massive loans.  It is fundamentally unjust to allow kids who can’t even drink legally to commit themselves to a lifetime of debt.  Free community college is a good next step.  But the real answer is affordable public higher education, just like the least-great generation, the boomers, had.  Unfortunately, around the mid-90s, we just decided that couldn’t happen.  Now, Democrats are stuck with yet another unfuck that will make a lot of people unhappy.

To be fair here, it is mostly parents at my institution who are taking the most risk and debt on in my experience.  Students can only receive enough federal loan funding as allowed by the federal loan system.  The maximum a dependent student can borrow in the Direct Loan program (used to be called the Stafford Loan) over his/her college career is about $31K.  Anything over and above that would be paid either by the parent through a Federal Direct Parent PLUS Loan or a private educational loan.  The PLUS is purely parent debt and cannot be put off on the student at a future date.  Private loans cannot be obtained by the student unless he/she has a credit worthy co-signer.  One thing I would love to see is in regard to private educational loans and it should be a fairly simple fix.  Currently, they are treated exactly the same as federal loan debt if a borrower files for bankruptcy in that they cannot be discharged like other consumer debts.  They are forever.  Stop that and it will make many people’s lives better.  It’s small step that will give relief to a lot of people.

I am perfectly willing to answer questions (hopefully, I can answer them!) or discuss anything above or any other topic regarding financial aid, such as FAFSA questions.  Also, if anyone has questions or wonders about what the VA educational benefit programs are these days, I’m happy to answer those questions, too.