An open door to debt?

Community colleges provide easy access — to failure and debt, argues a new book by remedial English instructors. Poorly prepared students have little hope of success, they write. Raising admissions requirements would strengthen academic classes for prepared students and redirect the unprepared to short-term job training that might help them improve their lives.

Home again: The boomerang grads

Annie Kasinecz, 27, lives with her mother in Downers Grove, Illinois. She borrowed $75,000 to earn a degree in advertising and public relations at Loyola University in Chicago. Now working as a project coordinator, she’s lived at home rent-free for four years.  Credit Damon Casarez for The New York Times

The Boomerang Kids Won’t Leave home, predicts the New York Times Magazine. With college loans and low-paying jobs, they can’t afford to pay rent.

One in five people in their 20s and early 30s is currently living with his or her parents. And 60 percent of all young adults receive financial support from them. That’s a significant increase from a generation ago, when only one in 10 young adults moved back home and few received financial support.

. . . Those who graduated college as the housing market and financial system were imploding faced the highest debt burden of any graduating class in history. Nearly 45 percent of 25-year-olds, for instance, have outstanding loans, with an average debt above $20,000. . . . And more than half of recent college graduates are unemployed or underemployed, meaning they make substandard wages in jobs that don’t require a college degree.

The photographer, who lives at home and freelances, was graduated from an art college with $120,000 in debt. 

Alexandria Romo, 28, also a Loyola graduate, earned an economics degree but says she “had no idea what I was doing when I took out those loans” at the age of 18. She borrowed $90,000. Romo wishes she’d been taught about student loans, math and finance before borrowing at 12.5 percent interest. Romo lives at home in Austin and works at a security-guard company. Her dream is to be an environmentalist.

Borrowing trouble

President Obama’s expansion of income-based repayment offers short-term relief, but will encourage reckless borrowing, enable colleges to keep raising tuition and promote the idea that everyone needs a four-year degree.

As long as college loans aren’t linked to the degree’s value — which varies depending on the major — young people will borrow too much.

The high-priced Ivory Tower

Ivory Tower, a new documentary, blames soaring college costs on decreased state funding for higher education and increased spending on campuses. Colleges are competing for student loan dollars, says filmmaker Andrew Rossi.

Obama extends 10% cap on loan repayment

Using an executive order, President Obama extended generous income-based repayment terms to an estimated five million more student loan debtors. People with student loans will be able to limit payments to 10 percent of their discretionary incomes. Loans will be forgiven in 20 years — or 10 years if they take public-service (government) jobs.

The big winners are people who borrowed for graduate school and private colleges, which can keep raising tuition without fear of scaring away students.

Is college worth it for everyone?

Is college worth it for everyone? The college premium is increasing, but only for those who earn a degree. And not every degree is a ticket on the gravy train.

Colleges rattled by Obama’s rating plans

President Obama’s college rating proposal has “rattled” college presidents, who fear it will be simplistic and misleading. It didn’t help when a top education official said it would be “like rating a blender.”

Obama wants Congress to link student loans and grants to college ratings, which will be based on graduation rates, student debt, graduates’ earnings and other factors. Highly selective universities are likely to do very well, but most students can go to college only if they can afford a not-very-selective or open-admissions college or university.

Pension debt will ‘eat everything in its path’

California’s teacher “pension debt will eat everything in its path,” writes Chad Aldeman on Education Next.

California discovered a $2.4 billion budget surplus from what it projected in January, but that money won’t be going to any new, exciting program. It won’t support the state’s transition to new academic standards. It won’t be going to expand kindergarten or offer pre-k to 4-year-olds. Governor Jerry Brown has other plans. He wants the money to go toward paying down the state’s debt, especially the $74 billion unfunded liability from the state’s teacher pension plan (CalSTRS).

In order to pay off the full debt over 30 years, Brown’s plan calls for teachers to pay more, school districts to pay much more and the state to pay more. “By 2021, nearly 40 percent of California teachers’ total compensation will go toward paying down the pension plan’s liabilities.”

Yet, due to high mobility, only one in five young teachers will receive a full pension, according to a Bellwether analysis. Half won’t qualify for a minimal pension benefit.

Illinois’ early retirement incentives didn’t lower student achievement, even though experienced retirees were replaced by less-experienced or brand-new teachers, concludes another study in Education Next. The state’s two-year program seems to have raised test scores in reading with the strongest positive effects in “schools that serve a more disadvantaged student population.”

It’s possible less-effective, less-energetic teachers were the most likely to take advantage of the early retirement offer, researchers speculated.

The state’s two-year program saved school districts $550.5 million in salaries, but the state paid all of that and more in pensions. However, a well-designed program could save money for taxpayers too, researchers concluded.

Early transfers risk debt but no degree

Most community college students who transfer to a four-year college or university haven’t completed a two-year degree. That lowers their chances of completing a bachelor’s degree, a new study finds. Early transfers often find many of their credits won’t count — or won’t help them complete a major. Often they end up with debt but no degree.

New teachers owe $429 a month for loans

New teachers owe $429 a month in student loans on average, write Jill Barshay on Hechinger’s Education By The Numbers. That’s increased 66 percent in the last 10 years.
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Borrowing for graduate school accounts for as much as 40 percent of the $1 trillion in student debt, reports the New America Foundation.

Most grad school borrowers are pursuing degrees in less lucrative fields, such as teaching.

“The average graduate of a master’s in education degree finished with more than $50,000 in debt — $8,000 more than the debt of a typical MBA graduate,” writes Barshay.

“The report’s authors predict that these teachers and other indebted graduates won’t be able to earn enough money to afford to pay back their loans. That will leave taxpayers holding the bag, effectively subsidizing schools of education.”