States link financial aid to academic progress

Every year states hand out $11 billion in college aid — usually without tracking whether students earn a degree. That’s changing. Some states are linking financial aid to students’ academic progress.

To really improve college access and success, double or triple the average Pell Grant, recommends financial aid expert Mark Kantrowitz.

Selling Obama’s ‘preschool for all’

Education Secretary Arne Duncan is trying to persuade Republican governors to persuade Republicans in Congress to back $75 billion in new tobacco taxes to fund President Obama’s “preschool for all” initiative, reports the Washington Post.

“The average disadvantaged child comes to kindergarten a year to a year and a half behind other kids,” Duncan said. “And we spend all this time and money trying to catch them up. And we wonder why we have an achievement gap.”

The plan doesn’t really offer preschool to “all.”  States would get federal grants to fund preschool for 4-year-olds from low- and moderate-income families. The federal share would diminish from 91 percent to 25 percent after 10 years. Obama also is seeking $15 billion for programs for babies and toddlers.

Georgia has funded its own preschool program. Republican Gov. Nathan Deal wants some of the money spent on Head Start, the federal preschool program for poor children. “We could do a better job of it because, frankly, our program is better,” Deal said.

Without new taxes, there isn’t enough money, Duncan responded. “I’m talking about a massive influx of resources . . . Our goal is to dramatically expand access.”

If Duncan is serious about high-quality preschool, he’ll offer Republicans more than a new federal tax, writes Mike Petrilli.

Cut the TRIO programs, which (as a recent Brookings paper shows) don’t work at preparing disadvantaged high school students for college. That’s $1 billion a year.

Cut Title II of ESEA, which is a big slush fund for school districts to spend on “teacher stuff” and class-size reduction—with no evidence of results. $3 billion a year.

Cut Pell grants, many of which are flowing to remedial-education courses from which disadvantaged students never escape. Introduce some minimal standards so that only students who are college-ready—a very low bar for community colleges, it turns out—can receive the aid. I bet you could shave $5 billion a year easy—a big chunk of it currently landing in for-profit universities.

Cut $9 billion and then ask Republicans to pitch in $1 billion in new money, Petrilli suggests.

Head Start hasn’t produced lasting benefits for low-income children. I think Duncan’s first step is explaining why “preschool for some” will be more effective. And why not let states expand their preschools with Head Start funding?

Ready or not, students get college aid

Pell Grant recipients, who come from lower-income families, often start college in remedial classes and drop out before earning a degree. Requiring evidence of college readiness, such as SAT scores of at least 850 (verbal and math) and a 2.5 grade point average in high school, would boost success rates, but limit access.

California leads the nation in poorly educated adults and in low-income workers, not a coincidence. Should community colleges take over adult education? 

Not broke! Pell will run surplus till 2015

Pell isn’t broke! Changes designed to cut the cost of aid to low- and moderate-income students have turned a projected deficit into a surplus that will last till 2015.

Students must take more credits, use aid for fewer semesters and forego summer courses, unless they pay their own way.

Redesigning college aid — without spending more

A “more understandable effective and fair” student aid system doesn’t need to cost taxpayers more money, concludes a new report that calls for shifting funding and incentives to help needy students and encourage speedy completion of degrees.

Federal grants to college students should be replaced with grants to states, which would have to match the money, recommends another report.

37 million college dropouts

Some 37 million Americans have “some college” but no credential. What would help more reach their goals — and boost the economy?

Financial aid should be redesigned to help needy students, says the National College Access Network.  That means dumping subsidized loans and tax credits for families earning $100,000 or more. The savings could fund Pell Grants for low- and moderate-income students.

‘Repayment’ plan = loan forgiveness

President Obama’s more generous plan for income-based repayment of student loans means “typical undergraduate borrowers will not repay their loans,” writes Andrew Gillen, now research director at Education Sector.

Using the New America Foundation’s IBR calculator, Gillen looks at repayment for average student borrowers, who run up $26,600 in debt, and starts work at $27,000 with 3 percent salary growth per year.

To pay off the debt in the standard (10 year) plan, their monthly payment would be $307. But under IBR, their monthly payment in the first year drops to $63, which doesn’t even cover the interest on the loans (meaning their balance is growing over time). Over the 20 year life of the loan, they will repay less than what they borrowed (<$23,000), and will have over $40,000 of debt forgiven (paid by taxpayers).

Even if their starting salary is $35,000, they will still end up having $20,000 of debt forgiven. Moreover, borrowers who become parents during their loan repayment will find their monthly payments are reduced drastically. If the $35,000 starting salary graduate has children 5 and 7 years into repayment, they will repay much less than the principal of the loan (total payments <$18,000) and will have more than $45,000 of debt forgiven (paid by taxpayers).

Many borrowers won’t repay the principal, let alone the interest.

The priorities are skewed, Gillen writes. While low-income students will get $22,000 in Pell Grants to attend community college, upper-middle-class students will get a (delayed) grant of $40,000 or more, a gift from the taxpayers.

Big borrowers — those who’ve chosen a high-cost private college or earned a professional degree — get the best deal, notes the New America Foundation in Safety Net or Windfall?

. . .  contrary to benefitting low-income borrowers, the pending changes to IBR will actually provide generous benefits to borrowers with higher federal loan balances – those with graduate or professional degrees. A borrower with an MBA or a law degree can easily have a six-figure loan balance forgiven, even if his income exceeds $100,000 for much of his repayment term.

IBR treats the symptom (high college debt) rather than the disease (high college costs), Gillen writes on Minding the Campus. He favors income-contingent lending (ICL), which actually requires repaying loans.

College aid: Research, then reform

Pell Grants will go off a “funding cliff” in 2014. The federal college aid program needs to be reformed — but first research what’s working and what’s not, an analyst argues.

“Swirling” students who transfer multiple times may lose eligibility for Pell Grants under new time limits.

Aid tops tuition for community college students

While the “sticker price” at community colleges is up to $3,130, the average student receives more in grants, tax credits and other aid than tuition, leaving $1,220 for books, transportation and living expenses.

Community colleges are rethinking placement tests and looking for ways to start more students at the college level. About 60 percent of community college students are start in developmental education. Only 25 percent finish a credential in eight years, compared to 40 percent of students who start at the college level.

 

Obama, Romney vie for Hispanic college students

In an appeal to Hispanic voters, President Obama’s new campaign ad says Romney would cut Pell Grants, costing Hispanic students $1,000. In an interview with Univision, a Spanish-language network, the Republican challenger called for letting the maximum grant rise with inflation, a larger increase than the president’s proposed 1.5 percent boost.

Both candidates are running Spanish-language ads attacking the rise in college costs. Obama’s ad promises to decrease the  tuition growth rate by 50 percent over 10 years.

At the Univision event at the University of Miami, Romney told students that what they need is “good jobs,” not more loans. “I don’t want to overwhelm you with debts. I want to make sure you can pay back the debts you’ve already got and that will happen with good jobs.”