The best way to prevent college dropouts is to stop admitting unprepared students to four-year colleges and universities, argues Richard Vedder. People with “some college, no degree” earn little more than high school-only workers, but most have student loans to repay. If they’d started at community college, they might have job skills without the debt.
Under pressure to cut student loan defaults, colleges are refusing to accept unsubsidized federal loans that require students to begin making interest payments immediately. Florida’s Broward College won’t accept private loans. Would-be borrowers have to attend a money-management workshop. Defaults are down.
People who’ve fallen behind on their debts will be able to take out federal Parent PLUS college loans under a proposed regulation relaxing credit requirements. Borrowers don’t have to show their income, employment status or ability to repay the loan.
Despite rising college costs, a four-year college education is a better investment of time and money than being chained to a radiator in a dank, unlit basement, concludes a new study reported in The Onion.
“Compared to the intellectual stimulation and personal growth achieved in a university setting, there is less to be gained from 48 months in which one is tightly shackled about the ankle and connected by a short length of chain to a leaking, immovable cast-iron radiator,” read the report.
However, the prisoner who’s freed after four years will not owe any money.
Nearly one million community college students nationwide — about 8.5 percent of the total —can’t take out federal student loans because their college doesn’t participate in the program, according to a report by The Institute For College Access and Success (TICAS).
Colleges complain they’re not allowed to limit “overborrowing” and risk losing eligibility for all federal aid — including Pell Grants — if default rates go too high.
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.
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.
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.
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.