Average Debt for Class of 2016 Varies Enormously by State and College
States Sue Education Department for Failing to Enforce Key Student and Taxpayer Protections
The Promise of California’s “Free College” Bill
Federal Student Loan Default Rate Rises for the First Time in 4 Years
TICAS and 40 Other Groups Comment on the Department’s Regulatory Review
Congress May Increase Pell Grants by $100, but Pell Reserve Fund Are in Jeopardy
The CFPB and its Arbitration Rule Under Attack
Are You a Passionate Policy Analyst? Come Work With Us!
TICAS’ twelfth annual report on debt for bachelor’s degree graduates of public and nonprofit colleges revealed wide variations in debt levels across states as well as colleges. Student Debt and the Class of 2016 found average student debt at graduation in 2016 ranged from $20,000 in Utah to $36,350 in New Hampshire, and new graduates’ likelihood of having debt ranged from 43 percent in Utah to 77 percent in West Virginia. Average debt varies even more across colleges, from a low of $4,600 to a high of $59,100, and the share of students graduating with loans ranges from six to 98 percent.
Read coverage of the report in the Wall Street Journal.
Read the report and press release
View interactive map with debt levels for all 50 states and more than 1,000 individual colleges
Earlier this year, the U.S. Department of Education took multiple steps to delay and dismantle the gainful employment and borrower defense regulations. In August, the Department further gutted the gainful employment rule, using a narrow court ruling as a pretext to open the floodgates for unscrupulous for-profit colleges to reinstate their worst programs and practices. The state attorneys general from 18 states have filed two lawsuits challenging the Department’s actions. They rightly argue that current regulations must be implemented and enforced until new regulations are finalized and in effect. The Department has initiated the process of rewriting both rules through negotiated rulemaking, beginning next month, but new regulations are not expected to go into effect before 2019.
Click here for our statement on the lawsuit filed this week on the gainful employment regulation and here for a table detailing the current administration’s actions on the gainful employment regulation.
Last Friday, California Governor Jerry Brown signed legislation that is widely reported to make community college tuition-free for Californians. If fully funded by the legislature, the bill would provide dollars sufficient to cover tuition for first-time, full-time students who do not qualify for the California College Promise Grant (known until last month as the Board of Governors Fee Waiver), which has long fully covered community college tuition for students with demonstrated financial need.
But the bill actually provides much broader and more meaningful flexibility to colleges than is widely understood. The bill does not require colleges to eliminate tuition for these additional students, but instead allocates money to colleges to spend in ways that will increase college access and success and decrease inequities in which students get to and through college. Community colleges “may” use funds to cover tuition for those students who don’t already benefit from the fee waiver, but they don’t have to, and these details are important, because a meaningful promise to increase college access, affordability, and success for California’s students has to address more than just tuition.
Read our newly published blog that explains some of the important ways that colleges can choose to spend funds appropriated for the bill.
Newly released cohort default rates (CDRs) show that the share of new federal student loan borrowers defaulting rose for the first time in four years. Despite the availability of income-driven repayment plans that are helping millions of borrowers stay on top of their payments, a record 8.5 million federal student borrowers were in default as of June 30, 2017, including over 500,000 who defaulted in the first six months of 2017. More than one in ten outstanding federal student loan dollars – $140 billion – is in default.
While cohort default rates are not a perfect metric, they are longstanding, well-defined, and capture the unequivocally worst outcome for student loan borrowers: default. As TICAS executive vice president Pauline Abernathy stated “Now is the time to be improving student loan policies and increasing oversight and accountability. But the Education Department is doing the opposite. The rollback of critical protections and enforcement will only lead to more student loan defaults, higher debt burdens, and wasted taxpayer dollars.”
Last month, TICAS and 40 other organizations that advocate for students, consumers, veterans, service members, faculty and staff, civil rights, and college access urged the Department to place the interests of students front and center as it explores potential changes to other regulations. TICAS also submitted our own comments on regulatory reform, pointing out that many of the regulations that schools find most burdensome are required by legislation, and urging the Department to work with Congress on a bipartisan basis to address burdensome provisions with an eye toward protecting students and taxpayers.
Both the House and Senate appropriations committees have reported education spending bills for fiscal year 2018, but what ends up in the final agreement to fund the federal government through September 2018 is still unclear as Congress heads toward its December 8 deadline. As TICAS and our allies have advocated, the Senate’s bipartisan bill raises the maximum Pell Grant by $100 (from $5,920 to $6,020), the first increase using discretionary funds in six years, and re-sets Pell eligibility for defrauded students. However, both the House and Senate appropriations bills raid the Pell Grant reserve to pay for unrelated programs (by $3.3 billion and $2.6 billion, respectively).
While we commend the Senate for proposing a $100 increase for Pell Grants, the maximum grant will still cover the smallest share of the cost of attending a 4-year public college in over 40 years (less than 30%). As Congress and the Administration negotiate a final spending agreement for fiscal year 2018 over the next couple of months, TICAS and our coalition partners will work to ensure that the final agreement includes an increase for Pell Grants, and to minimize or eliminate any cuts to the Pell Grant reserve.
This summer, the House passed harmful legislation that would replace the 2010 Dodd–Frank law and cripple the Consumer Financial Protection Bureau. TICAS and many others have urged the Senate to oppose the legislation. The CFPB has been an immensely effective advocate for students and borrowers, and this legislation would severely undermine its authority and ability to protect consumers and the economy from the power and profits of Wall Street.
Meanwhile, the CFPB continues its good work, including finalizing a regulation banning financial companies from using mandatory arbitration clauses to prohibit consumers from engaging in class-action lawsuits. This rule is an important step to protect people from predatory student lending and hold financial giants like Equifax or Wells Fargo accountable for their actions. The Senate may vote soon to block this important regulation. Click here to urge your senators to support the CFPB’s rule protecting consumers’ right to join to together to challenge companies in court (courtesy of our partner Americans for Financial Reform).
TICAS is seeking talented policy analysts to join our team! With openings in both the California and Washington, DC offices, we’re looking to hire team players with experience analyzing data and state or federal policy, strong communication skills, and attention to detail.