Think before you go to college

Think before you go to college, says blogger/professor Glenn Reynolds in a Reason TV interview. What are you going to study? Will you be able to repay student loans? His book, The New School, predicts “the information age will save American education from itself.”

A country of credentials

The U.S. has become a “country of credentials” because of the U.S. Supreme Court’s 1971 “disparate impact” ruling, argues Bill McMorris in The American Spectator.  Griggs v. Duke Power Company changed how companies hire, pay and promote workers, he writes.

Matt Damon played an MIT janitor who was a  math genius in Good Will Hunting

Matt Damon played an MIT janitor who was a math genius in Good Will Hunting

Black workers complained they had to be high school graduates and pass two aptitude tests to be promoted at their North Carolina plant. Blacks were less likely to pass than whites and less likely to have finished high school.

The court agreed that was racist. “What is required by Congress is the removal of artificial, arbitrary, and unnecessary barriers to employment when the barriers operate invidiously to discriminate on the basis of racial or other impermissible classification,” Chief Justice Warren Burger wrote.

The military used aptitude testing heavily in World War II and businesses followed suit in the post-war era, writes McMorris. Blue-collar workers could rise through the ranks.

“Despite their imperfections, tests and criteria such as those at issue in Griggs (which are heavily…dependent on cognitive ability) remain the best predictors of performance for jobs at all levels of complexity,” University of Pennsylvania Professor Amy Wax has found.

. . . “Most legitimate job selection practices, including those that predict productivity better than alternatives, will routinely trigger liability under the current rule,” Wax wrote in a 2011 paper titled “Disparate Impact Realism.”

The solution for businesses post-Griggs was obvious: outsource screening to colleges, which are allowed to weed out poor candidates based on test scores. The bachelor’s degree, previously reserved for academics, doctors, and lawyers, became the de facto credential required for any white-collar job.

That’s pushed more people to go to college and into debt, McMorris writes. “One out of every four bartenders has a diploma, and though they listen to moping for a living, few majored in psychology.”

How to prevent college dropouts

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.

Colleges limit borrowing, cut defaults

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.

Some colleges get break on default penalties

Fourteen historically black colleges were at risk of losing access to federal student aid because of high default rates on student loans. At the last minute, the U.S. Education Department changed the method used to calculate default rates: 20 for-profit colleges and one public adult education program remain on the list of colleges facing sanctions.

Loan forgiveness rewards big spenders

The public service loan forgiveness  (PSLF) program offers big benefits and bad incentives, writes New America’s Jason Delisle in Zero Marginal Cost. For graduate students planning careers in teaching, social work and government, it’s likely “the federal government will finance the entire cost, without limit, including all living expenses.”

Combining PSLF with Income-Based Repayment encourages graduate and professional students to borrow more and sign up for degree programs of questionable value. Colleges will be able to raise tuition once borrowers realize they’re not going to have to pay back their loans.

At a minimum, lawmakers should cap loan forgiveness under PSLF at $30,000, aligning it with the limit for Pell Grants to low-income undergraduate students. (There is currently no limit.) The federal government should not provide more in loan forgiveness to graduate students than it is willing to provide in grant aid for a low-income student to pursue an undergraduate education.

There is also a case for eliminating PSLF altogether. Because IBR makes any loan size affordable, PSLF isn’t a necessary component of the insurance IBR provides. Rather, it makes IBR do double duty as generous graduate school tuition assistance for those who want to work in non-profit or government jobs—even high-paying ones.

Teachers can use several, overlapping loan forgiveness programs, if they can navigate the complex, confusing federal aid system.

When students default, colleges pay

If too many students default on their loans, colleges risk losing access to federal student aid. That’s motivated community colleges to develop default management plans. But denying federal loans to high-risk students isn’t an option.

Trained, jobless and in debt

Millions of laid-off Americans have used federal aid to train for new jobs, yet found themselves unemployed and in debt.

It’s not clear the $3.1 billion Workforce Investment Act (WIA), which was reauthorized last month, improves trainees’ odds of finding a job or raising their earnings. Nobody keeps track.

Bad credit? Proposal eases student loan rules

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.

Higher ed a la carte

To qualify for federal aid, students must enroll in accredited, degree-granting programs. Utah Sen. Mike Lee proposes letting states accredit alternative postsecondary programs, such as job training, apprenticeships and distance-learning options. People seeking skills — but not necessarily a degree — could assemble the education they need, a la carte, using federal grants and loans to pay their costs.