‘Paycheck’ aid shows promise

Disbursing student aid in smaller amounts every two weeks, “Aid Like a Paycheck,” encourages low-income college students to work harder in school and manage money better, a new study shows.

At a Hamilton Project forum today, participants presented new ideas for redesigning Pell Grants, income-based loan repayment and college cost calculators. 

Don’t worry. Keep borrowing

President Obama’s plan to rate colleges is “yet another mistaken attempt . . . to alleviate some of the symptoms of a problem without actually addressing the underlying disease,” writes Erika Johnsen. The other part of the plan — promoting income-based repayment — will make the disease worse.

The “easy, cheap and indiscriminate availability of student loans ” juices demand and helps universities raise their prices, writes Johnsen. The Obama administration keeps sending out “signals about how ‘easy’ it will be to repay these huge loans after you graduate with a little help from Your Friend, The Federal Government.”

Student loan defaults rise — again

Student loan default rates continue to rise. After two years, 10 percent of graduates and dropouts are in default; that rises to 14.7 percent after three years. That doesn’t count borrowers who aren’t paying the full amount but are in “forbearance” or income-based repayment programs.

Rating colleges by grads’ pay isn’t easy

If colleges and universities are judged by former students’ earnings, community colleges will look bad, a dean writes. When community college students go on to a bachelor’s degree, the two-year school gets no credit for their success.

Negotiators are trying to reach consensus on “gainful employment” regulations. The federal rules will deny student aid to job training programs whose graduates don’t earn enough to pay back their loans.

College debt hits $1.2 trillion

College debt has hit $1.2 trillion. Two-thirds of college students take out loans; the average borrower will graduate $26,600 in the red. One in 10 graduates owe more than $40,000.

57% of students get federal aid

For the first time,  a majority of undergraduates — 57 percent — are receiving Pell Grants and other federal student aid. Forty-one percent are taking out student loans, also a record.

College learning provides social mobility for disadvantaged students.

How to ‘shake up’ higher ed

If President Obama really wants to “shake up” higher education, he should start by scaling back student loans, writes economist Richard Vedder. In addition, colleges should share the costs of high default rates, discouraging them from enrolling students with little chance of success, argues Vedder.

Obama vows college cost controls

President Obama vowed to “shake up” higher education and “tackle rising costs,” in a speech on the economy that stressed college affordability for middle-class families.

A bipartisan student loan bill that will lower interest rates – at least for now — has passed the Senate and is expected to become law. The compromise ties interest rates to the government’s cost of borrowing.

Parents are spending less of their income on their children’s college costs and relying more on grants, scholarships, financial aid — and frugality — Sallie Mae reports.

Free college! 24 years to pay!

Under Oregon’s Pay It Forward, Pay It Back plan, students would pay no tuition at state universities – if they agree to pay the state 3 percent of their earnings for 24 years. It’s a gamble for students and taxpayers, say critics. Students who plan careers in medicine, law, business and engineering will do much better paying the tuition up front, leaving Pay It Forward for students who don’t anticipate earning very much.

Defaults exceed grad rates at 514 colleges

Loan default rates are higher than graduation rates at 514 colleges and universities nationwide, according to Education Sector. Nearly half of the “red flag” institutions are operated by for-profit colleges and about one-third are community colleges.

Skepticism is widening about projections of a widening job skills gap, but most think there’s a shortage of “middle-skills” workers with post-high school education and training but no bachelor’s degree.