Blog

Three disturbing stories about the rise of private student loans: When a borrower defaults on a federal loan, it affects the school's overall default rate, which the federal government uses as an indicator of school quality. Willis Hulings, CEO of TERI, a nonprofit guarantor of private loans, told an industry conference recently that some schools are turning to private loans in order to dodge the federal default triggers. The way I heard it from another source, some schools with borderline high default rates in the federal loan program steer particular students -- those they fear will default -- to private loans so that a default won't show up in the federal numbers. If, in fact, the student is a default risk, then it is likely that the lender is charging a very high interest rate (unless the borrower has a creditworthy cosigner). I would bet this second situation is more common: private loans being used for students who don't qualify for federal loans because they are not making "satisfactory academic progress." A student task force at the University of Nevada, Reno, reported that as true there. Schools decide what is "satisfactory," and in UNR's case it's a 2.0 GPA. So, essentially, students who are at a high risk of flunking out and not ultimately earning the salaries that will allow them to pay off student loans are getting high-rate private loans. Yikes. I hope their parents are the cosigners. A third story from a reliable source. Private colleges encourage low-income students to enroll. Instead of putting together a full financial aid package, college officials suggest they go ahead and attend, paying tuition on an installment plan, which is commonly offered at many colleges. The students complete the coursework, but cannot pay the tuition, and ultimately determine that they cannot afford to continue at the college. So they decide to transfer to a lower-tution option. But they can't transfer, because the college won't release the transcripts until they've paid the tuition. They're stuck. To some degree, these types of problems can be reduced through vigilant oversight by regulators and the media. One good example is the private loan scandal at Lehigh Valley College in Pennsylvania last year.

Posted in

| Tagged

"Working Class Students Feel the Pinch" in the Chronicle of Higher Education on June 9. This article is about how the financial aid formula can work against working-class students who work hard to pay for school. Here's an excerpt until we get a free link (the Chronicle is subscription only):
While there is no formal definition of working-class students, experts commonly use those from lower-middle-income families with incomes between $30,000 and $50,000 a year, as a substitute. The proportion of bachelor's degrees going to students from those families has declined over the past 25 years, from about 15 percent of all B.A. degrees earned in 1980 to about 11 percent in 2004. Comparatively, the share of the degrees going to students from more affluent families has risen to 79 percent from 72 percent over that period.
Working-class students are not well served, financial-aid experts say, by a student-aid system created by the federal government in the 1960s and 70s to help make college more affordable for students from low- and middle-income backgrounds. When the formula the government uses to assess a student's need was put into place, most students came from traditional two-parent families who could pay at least a portion of their children's college bills, and fewer students worked full time while enrolled in college. Those expectations were written into the formula, and, as a result, students are essentially penalized for working long hours to pay their way through college.
The only place to find comparative data on students with family incomes between $30,000 and $60,000 is at EconomicDiversity.org. "Working-Class Students Increasingly End Up at Community Colleges, Giving Up on a 4-Year Degree" in the Chronicle of Higher Education on June 9 looks at how finances and socio-economic status are increasing factors in college choice. Just as Tally Hart and Ken Redd warned, some students are choosing community colleges for economic reasons and not pursuing four-year degrees. "Opening Up the Elites" in Inside Higher Ed on June 2 focuses on discussions from a conference put on by the Education Testing Service and the Carnegie Foundation for the Advancement of Teaching. The article talks about different strategies to increase low-income access to higher ed, the role of assessment, and the disproportionate focus on elite private institutions when it comes to economic diversity. Lots of lively comments at the end of the article. "Class Matters" in the Boston Globe on May 13. Now that some elite institutions are making an effort to enroll more lower income students, those students encounter social challenges as they try to fit in with a dominant culture of affluence and privilege. Students at Yale have formed a support group and are profiled in this story. "Elite Colleges Lag in Serving the Needy" in the Chronicle of Higher Education on May 12 examines the numbers of low income students at elite colleges. The article is a good survey of the state of economic diversity in higher education today.

Posted in

| Tagged

Private student loans are not just an asterisk in the loan data anymore. And they're not just for law and med students, either. According to our Project on Student Debt, the numbers in 2003-4 stood at: --5% of students in public four-year colleges took out private loans (compared to 43% federal); --11% of students in private four-year colleges (compared to 54% federal); and, --15% of students at for-profit colleges had private loans (compared to 80% federal). Are those numbers going to continue to rise? At an industry conference a few days ago, more than one expert predicted that private student loans could overtake federally-backed loans in six or seven years' time. Getting accurate, up-to-date data on private loans is tricky. Those 2003-4 figures are from a survey conducted by the National Center for Education Statistics -- but the surveys are conducted only every few years. What has happened with private loans in 2005 and 2006? For 2005, the College Board estimated, based on a survey of loan companies, a one-year increase of 30 percent in private loans. Colleges continue to report (and sometimes facilitate) the growth in private loans. According to a student task force report posted on Student Debt Alert, UMass Boston had a 56% increase in the number of private loans between 2003-4 and 2004-5 (from 368 to 576). At the lender conference I attended, the financial aid director from Michigan State University reported an increase in private loans from $12.7 million in 2004, to $20.6 million in 2006, a 63% increase. Schools do not necessarily know whether their students have taken out alternative student loans. Some loans are made through the financial aid office. But a number of lenders are direct-to-consumer ("DTC" in the lender world). They require some proof of enrollment, but in some cases that can be a copy of paid tuition bill, or just an electronic data match with the National Student Clearinghouse. In those cases, the loans won't show up in schools' tallies of loans to their students.

Posted in

| Tagged

The Education Writers Association just had their national conference in New Orleans. One of the sessions was called "How the Game is Played in Enrollment Management -- is richer always better?" Panelists included Tally Hart, outgoing Director of Financial Aid at Ohio State University; Ken Redd, Director of Research and Policy Analysis at NASFAA; and Matthew Quirk, a reporter-researcher at the Atlantic Monthly. Quirk has written an in-depth article about enrollment management, an important piece of the financial aid and admissions puzzle that increasingly influences economic diversity at colleges across the country. The discussion focused on the effect of enrollment management techniques on economic diversity and access for low-income students. All three panelists agreed that financial aid is increasingly used as a carrot to attract certain types of students to an institution, rather than simply a way to help lower income students afford college. Nationally, only 2/3 of financial aid dollars go to financially needy students. Enrollment managers can engineer the admissions and financial aid processes to increase tuition revenue, raise a school's US News ranking, attract more academically high-performing students, or increase ethnic and/or economic diversity. Panelists agreed that good enrollment management should also be about retention, success, and persistence. Quirk said it is three times more expensive to recruit a student than to retain one. Redd and Hart spoke about the problem of qualified students passing up competitive institutions for cheaper, less challenging ones due to financial concerns. When students downsize their aspirations, they are less successful, Hart said. The panel discussed the elite colleges' competing programs to attract low-income students. They expressed some concern that intense media coverage of these efforts may overshadow other (often more affordable) methods of increasing economic diversity.

Posted in

| Tagged

Another source of useful data on college students' family income is the CIRP Freshman Survey, developed by the Higher Education Research Institute (HERI) at UCLA. Each year, colleges across the country administer the CIRP survey to their incoming freshmen, asking them about a range of topics, including family income. HERI compiles the responses into a national report. Each participating campus receives its own results along with comparisons to peer institutions. Campuses decide whether to make their own reports available, and some have done so. For example, Emory University has made selected findings from its 2005 survey available online. The report indicates that a majority of the students have parents with graduate degrees, and 39% report family incomes of more than $200,000, a larger proportion than peer institutions. In comparison, Northwestern University's report shows 30% of freshmen with family incomes above $200,000, and 63% above $100,000. Compare those figures with Census data showing that only 3.5% of families in the U.S. earn more than $200,000, and only 20% earn more than $100,000. Other campuses that have posted some or all of their Freshman Survey results are listed below. A note and link also appear on these campuses' institutional profiles at economicdiversity.org. Full reports Berea College, 2004 Cornell University, multiple years Hampden-Sydney College, 2000 Indiana University of Pennsylvania, 2001 Iowa State University, 2003 Northwestern University, 2005 Purdue University, multiple years University of Minnesota, multiple years Executive summaries/partial data: Bryn Mawr College, 2004 (Full data for selected categories, not socio-economic) Calvin College, 2002 (executive summary, some socio-economic data) Case Western Reserve University, 2000 (one-page summary, no socio-economic data) Central Washington University, 1998 (summary, includes socio-economic data) Dartmouth College, 2003 (selected findings, summary of socio-economic data) East Texas Baptist University, 2002 (executive summary, sparse socio-economic details) Emory University, 2003 (selected findings, includes socio-economic data) Florida International University, 2000 (executive summary, some socio-economic data) Massachussets Institute of Technology, 1998 (selected findings, summary of socio-economic data) Montclair State Unversity, 1991 and 2001 (executive summary, some socio-economic data) Morningside College, 2004 (highlights in powerpoint presentation) Oklahoma State University, multiple years (selected findings, some socio-economic data) Oregon State University, 2002 (executive summary, sparse socio-economic data) Roanoke College, 2002 (some socio-economic data, all in percentages) Southwest Minnesota State University, 2003 (executive summary, some socio-economic data) Sweet Briar College, 2004 (summary, no socio-economic data) Texas State University at San Marcos, 2000 (summary, some socio-economic data) Texas Tech University, 2003 (executive summary, some socio-economic data) University of California at Santa Cruz, 2002 (executive summary, sparse socio-economic data) University of Idaho, 2002 (executive summary, some socio-economic data) University of North Carolina at Chapel Hill, 1999-2004 (summary graphs, some socio-economic data) University of North Dakota, 2002 (summary, no socio-economic data) University of South Carolina, 1999 (selected findings, includes socio-economic data) University of Wisconsin at Milwaukee, 2004 (executive summary, some socio-economic data) Want to know whether a particular campus has participated in the CIRP survey? See the list of CIRP participating campuses. If you know of a school not listed here whose CIRP data is public, please comment on this thread and post a link.

Posted in

| Tagged

The new Carnegie Classification system of higher education institutions is now in use on economicdiversity.org. The new classifications were released in February 2006, and increased the total number of classifications from 18 to 33. Thirteen of these additions are for Associate's colleges. One addition was made to the Research category, one addition was made to the Master's category, and Other Technology replaced Teachers College in the Special Focus category. One significant change is that the new Basic Carnegie Classification is based on a single year of data instead of three-year averages. The most current data available for all institutions through 2004 was used. The update cycle has yet to be decided, but it is expected to be more frequent than in the past. The Basic Classifications will be used in the 2007 publication of U.S. News & World Report's rankings of "America's Best Colleges." On economicdiversity.org, we have created shorter labels for the Basic Classifications so that they can be displayed more easily on institutional profiles and data tables. We have also added "Carnegie" as a criteria when choosing institutions for comparison.

Posted in

| Tagged

There is now a variable called "Fall Term International Students" for every school in the database. On institutional profiles, the variable is in the "Students" section under the heading "Total Undergraduate Enrollment."

International students are not eligible for federal Pell Grants, Stafford Loans, PLUS loans, or work study programs. Researchers may want to subtract the number of international students from the overall enrollment number before calculating the percentage of students who receive Pell Grants or other federal financial aid. One reason we added this variable was to make that calculation possible.

How do international students fund their US education? Possible sources include a student's home country, the US institution they attend, and international organizations such as the Fulbright program, the United Nations, and the World Health Organization. There is no centralized source of data on the incomes of international students in the US.

The most comprehensive online resource for international students who want to study in the US is here.

Posted in

| Tagged

This blog is a place to discuss issues related to the role of income in higher education and the Economic Diversity of Colleges database. The database is the first publicly-available source of college-level information on student income, race and ethnicity, loan and grant usage, and over 128 other variables. The goals of both economicdiversity.org and economicdiversity.info are:
  • To make public the extent to which American colleges and universities enroll undergraduates from various economic, ethnic and racial backgrounds;
  • To encourage discussion and examination of economic diversity and related issues; and,
  • To identify ways to improve the quality and use of data related to access and success in higher education.
Readers can learn about new updates to Economicdiversity.org, issues and questions raised by the data, economic diversity in the news, and more. We encourage you to comment on and link to our posts in order to foster more dialogue and awareness about economic diversity and related data issues. This blog is maintained by TICAS staff.

Posted in

| Tagged

Pages

Subscribe to Blog