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.
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? The college premium is increasing, but only for those who earn a degree. And not every degree is a ticket on the gravy train.
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.
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 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.
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.”
“Some Americans caught in the weak job market are lining up for federal student aid, not for education that boosts their employment prospects but for the chance to take out low-cost loans,” reports Josh Mitchell of the Wall Street Journal. They use the loans to pay living costs or to avoid paying back previous student loans. An unemployed retail clerk with an unmarketable bachelor’s in communications has gone deeper into debt to take theater classes. He hopes to find work as an actor. Meanwhile, it pays his bills.