Beth Akers & Matthew Chingos: Does the public narrative about student debt reflect reality?

Are we headed for a major student loan crisis with borrowers defaulting in unprecedented numbers? In Game of LoansBeth Akers and Matthew Chingos draw on new evidence to explain why such fears are misplaced—and how the popular myth distracts from what they say are the real problems facing student lending in America. The authors recently took the time to answer some questions about the book.


In Game of Loans you argue that the public narrative about student debt has become disconnected from the reality. How do you suppose this has happened?

It’s tough to say precisely, but it’s clear that the media coverage of this issue has played a role. The typical borrower we hear about in news stories about student loan debt tends to have an enormous balance, is unemployed or working a low-paying job, and lives with his or her parents to save money on living expenses. These struggling borrowers are real, and their problems are troubling, but they are outliers in the broader picture of student borrowing in the United States. A 2014 analysis of 100 recent news stories about student debt found that the borrowers profiled had an average debt in excess of $85,000, nearly three times the average borrowing of college graduates with debt. Given the prevailing media coverage, it’s unsurprising that many people are confused.

The public narrative about this issue commonly refers to the state of student lending as a crisis. You argue that this is a mischaracterization of the issue. Why is that?

There is no evidence of a widespread, systemic student loan crisis, in which the typical borrower is buried in debt for a college education that did not pay off. The crisis that permeates public discussion is a manufactured narrative based largely on anecdotes, speculation, shoddy research, and inappropriate framing of the issue. The reality is that large debt balances are exceedingly rare; typical borrowers face modest monthly payments (4 percent of monthly income at the median); the government provides a system of safety nets; and borrowers with the largest balances are typically the best-off because of high earnings.

There is not a single student loan crisis, but there are many crises, ranging from the fact that most students have no more than a vague idea of how much they’ve borrowed, to the hundreds of thousands of borrowers needlessly defaulting on their student loans, to the pockets of students who are making decisions that lead to predictably bad completion and repayment outcomes.

Critics of your argument might suggest that you’re doing more harm than good by dismissing the notion of a crisis. Even if the language used to describe the situation in student lending is exaggerated, isn’t a good thing if it draws public attention to an issue in need of policy reform?

The problem with allowing an inaccurate narrative to persist is that it prompts policy solutions that solve the fictional problems and do little or nothing to help borrowers who really are in need of assistance. A good example of this is the prominent efforts to reduce the interest rates on existing loans under the guise of “refinancing.” The idea has been vigorously promoted by Senator Elizabeth Warren and endorsed by Hillary Clinton. But reducing interest rates on existing loans would provide a big handout to affluent borrowers and do close to nothing for truly struggling borrowers, who tend to have small balances.

It seems that the crux of your argument is that the notion of a macro level crisis in student lending obscures the real problems. So, what are the real problems?

The real problems can be seen in the stories of borrowers struggling to pay back their loans or suffering the consequences of default. Generally, crises occur when students are “underwater” on their educational investment. They’ve paid the price, aren’t seeing the benefit they’ve anticipated, and are stuck with the bill.

One reason students get into this position is because historically we’ve had a dearth of information available on college cost and quality for students to use when shopping for college. This has gotten better recently, but we’ve still got a ways to go in helping students make savvy choices regarding college.

But even with perfect information and rigorous decision making, some students will inevitably find themselves with difficulty repaying their debt. In the existing system, the government offers a pretty robust system of repayment safety nets that exist to ensure that borrowers will never have to face an unaffordable loan payment. Unfortunately, the system of safety nets is incredibly complex for consumers to navigate. And it’s very likely that this complexity has meant that many borrowers in need of assistance did not receive it. In the book, we propose simplifying the system of both borrowing for and repayment of federal loans to alleviate this problem.

LoansBeth Akers is a senior fellow at the Manhattan Institute. Matthew M. Chingos is a senior fellow at the Urban Institute and the coauthor of Crossing the Finish Line: Completing College at America’s Public Universities (Princeton). Together, they are the authors of Game of Loans: The Rhetoric and Reality of Student Debt.

Christopher Loss: Will higher education be free?

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By Christopher P. Loss

Higher education will figure more than ever in the coming presidential battle between Hillary Clinton and Donald Trump. Once a political afterthought, higher education has become a major policy problem of great consequence in recent elections. This one will be no different.

The candidates have their choice of issues from which to choose, from state disinvestment and affordability to access and free speech. But the only one that’s going to matter come November will be Clinton’s vow to make public college free for families who earn less than $125,000 and Trump’s determined opposition to it.

The idea of “free college” is not new. In 1947 President Truman favored it. The recent discussion of it, however, was sparked by President Obama in 2015 when he proposed America’s College Promise—at $60 billion plan modeled on Tennessee’s free community college program of the same name. Late in his second term, Obama’s proposal flamed out in Congress but became a touchstone of Senator Bernie Sanders’ upstart presidential bid and, ultimately, part of the Democratic Party’s platform.

The “free college” issue will be central to both campaigns. Trump, who has yet to put forth a higher education platform, has the easier task. He will do what he can to portray Clinton’s plan as just another big ticket, big government giveaway that the country cannot possibly afford—a wasteful bailout for the under-performing, outmoded higher education sector. Among fiscal conservatives and the “poorly educated” whom Trump has actively courted, this will be all they need to hear.

For her part, Clinton will press hard on the Trump University debacle for as long as she can, though at some point she will have to make her case for government action in what would be a colossally complicated and hugely expensive undertaking. The specter of Clinton’s failed effort at healthcare reform in the 1990s also looms large. For years that failure was used by her opponents as exhibit A of big government run amuck.

In the aftermath, if not afterglow, of the Affordable Care Act, however, Clinton has been partially redeemed as a politician ahead of her time. Will the American people get behind Clinton on the free college issue? Is she a sage or just another political opportunist willing to say and do anything to win over the college-educated voters who abandoned her in the spring but that she needs in the fall? This is the question heading into November.

Which begs a series of other related questions: First, is the college cost crunch the big issue that Clinton and others in the media have made it out to be?

The answer to this question is a qualified yes: the cost of college is a daunting burden for many students, but especially for poor students. Yet it’s also true that there is an enormous amount of misinformation about the “real” cost of college, as William Bowen and Michael S. McPherson detail well in their new book, Lesson Plan: An Agenda for Change in American Higher Education (Princeton University Press, 2016). Using data from the College Board, they put college costs in perspective, noting that 61 percent of college students graduate with some debt and that the average debt per graduate is around $26,000. They dig deeper to make sense of exactly what it means, since 39 percent of indebted graduates owe less than $10,000 and another 28 percent owe between $10,000 and $25,000. Only four percent of students owe more than $100,000. These data may surprise readers who have relied on anecdotal news articles and misleading documentaries for their information; for Bowen and McPherson, these data suggest that the affordability problem might well be “overblown” and that there are bigger issues like college completion that need to be addressed.

For the sake of argument, let’s agree that rising tuition and fees and associated debt represents a problem of some magnitude. This leads to the second question: if Clinton is elected—and most prognosticators seem to think she will be—is the wholesale reconstruction of the federal-higher education student aid model politically feasible? I wouldn’t count on it. Although it is clear that we long ago entered an era where a college diploma is necessary for upward mobility and global competitiveness—when the social and economic benefits of education beyond high school are beyond doubt—a total overhaul the federal aid model seems farfetched. Not only are there real issues with the associated costs and administrative challenges of implementation, as Kevin Carey noted recently in the New York Times, the likelihood of continued Republican control of the House as well as the Senate would make it difficult if not impossible to pass such a law.

Where does this leave us? More than likely it leaves the higher education system in exactly the place that it is today, with students left to navigate the existing aid system in order to go to school.

LossChristopher P. Loss is associate professor of public policy and Higher Education and associate professor of history at Vanderbilt University. He is the author of Between Citizens and State: The Politics of of American Higher Education in the 20th Century (Princeton University Press, 2012), which won the  2013 American Educational Research Association Outstanding Book Award.

College Decision Day Book List

Happy May Day! Or, if you’re a high school senior, good luck with one of the biggest decisions of your academic career. Many high school seniors across the country are likely deciding what college they will attend today, and a number of books Princeton has published in higher education happen to be perfect reading to accompany their journey. College, by Andrew Delbanco looks at how college has evolved and where it’s heading. Higher Education in the Digital Age by William Bowen describes higher education’s transformation with technology, while Privilege by Shamus Khan and Pedigree by Lauren Rivera analyze elite culture in higher education and how it translates to the job market respectively. Happy reading & congratulations to high school seniors!

The History of American Higher Education Privilege
Higher Education in the Digital Age Pedigree
College Higher Education in America

Andrew Delbanco in Ivory Tower


Andrew Delbanco, author of College: What It Was, Is, and Should Be, is one of several interviewees in Andrew Rossi and Kate Novack’s movie Ivory Tower. The movie, which made its debut at the 2014 Sundance Film Festival, will make its global television premiere on CNN/U.S. on Thursday, Nov. 20 at 9:00pm and 11:00pm Eastern.

“As tuition rates spiral beyond reach for many students, and student loan debt passes $1 trillion (more than credit card debt), the film asks: Is college worth the cost?  From the halls of Harvard, to public colleges in financial crisis, to new models for accessing higher education influenced by Silicon Valley, the filmmakers assemble an urgent portrait of a great American institution at a transformational breaking point.”

Source: CNN, http://cnnpressroom.blogs.cnn.com/2014/11/07/ivory-tower-asks-is-college-worth-the-cost/

For more information on the documentary that is sure to spark conversations about the state of higher education in America, click here.


 

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College:
What It Was, Is, and Should Be
Andrew Delbanco 

 

New documentary Ivory Tower explores the challenges of higher education in the 21st century

Watch this:

Then read this:

Delbanco_College

Andrew Delbanco recently attended Sundance Film Festival where he participated in a screening of Ivory Tower, a new documentary on the spiraling costs of higher education and the impact this has on students and their families. The director of the documentary is Andrew Rossi, who rose to prominence thanks to his earlier work Page One: Inside the New York Times. Delbanco is featured quite a bit in the movie which hopefully will have a greater distribution soon. In the meantime, to bone up on the challenges universities and colleges face, please check out College: What It Was, Is, and Should Be.

Andrew Delbanco Wins the 2013 O.L. David, Jr. Book Award

Andrew Delbanco – College: What It Was, Is, and Should Be
Winner of the 2013 O.L. Davis, Jr. Book Award, American Association for Teaching and Curriculum

Each year, the American Association for Teaching and Curriculum (AATC) acknowledges an Outstanding Book in Education.  AATC, as a recognized major society in the common fields of curriculum and teaching, selects a book that merits high praise and recognition. The award is given in recognition of scholarship that adds substantively to the body of knowledge about the practices and theories of curriculum and teaching.

“At a time when vast changes in higher education are happening, author Andrew Delbanco of Columbia University calls attention to the purpose of college education (historic origins to the present). It is a very good read.”- Chara Bohan, Committee Chair

 
College: What It Was, Is, and Should BeAs the commercialization of American higher education accelerates, more and more students are coming to college with the narrow aim of obtaining a preprofessional credential. The traditional four-year college experience–an exploratory time for students to discover their passions and test ideas and values with the help of teachers and peers–is in danger of becoming a thing of the past.

In College, prominent cultural critic Andrew Delbanco offers a trenchant defense of such an education, and warns that it is becoming a privilege reserved for the relatively rich. In arguing for what a true college education should be, he demonstrates why making it available to as many young people as possible remains central to America’s democratic promise.

In a brisk and vivid historical narrative, Delbanco explains how the idea of college arose in the colonial period from the Puritan idea of the gathered church, how it struggled to survive in the nineteenth century in the shadow of the new research universities, and how, in the twentieth century, it slowly opened its doors to women, minorities, and students from low-income families. He describes the unique strengths of America’s colleges in our era of globalization and, while recognizing the growing centrality of science, technology, and vocational subjects in the curriculum, he mounts a vigorous defense of a broadly humanistic education for all. Acknowledging the serious financial, intellectual, and ethical challenges that all colleges face today, Delbanco considers what is at stake in the urgent effort to protect these venerable institutions for future generations.

In a new preface, Delbanco addresses recent events that threaten the future of the institution.

Andrew Delbanco is the Mendelson Family Chair of American Studies and the Julian Clarence Levi Professor in the Humanities at Columbia University. His many books include Melville: His World and Work (Vintage), which won the Lionel Trilling Award and was a finalist for the Los Angeles Times book prize in biography. He is a recipient of the 2011 National Humanities Medal for his writing that spans the literature of Melville and Emerson to contemporary issues in higher education.

What The Pros Have To Say About Higher Education

It seems as though having a college education is becoming more and more necessary in today’s job search, and with the high price of getting that degree and the constant changes in our modern higher education system, something’s got to give. With some wisdom on exactly what is giving and who is being affected, here is a list of some of our top books on higher education:

Higher Education in America1) Higher Education in America
By: Derek Bok

This book is an analysis of the current condition of our colleges and universities and the strengths and weaknesses of modern American higher education.  At a time when colleges and universities have never been more important to its students or to our nation as a whole, Bok provides a thorough examination of the entire system and determines which criticisms of higher education are unfounded or exaggerated, which are issues of genuine concern, and what can be done to improve matters.
College2) College: What it Was, Is and Should Be
By: Andrew Delbanco

As the commercialization of American higher education accelerates, more and more students are coming to college with the narrow aim of obtaining a preprofessional credential. The traditional four-year college experience–an exploratory time for students to discover their passions and test ideas and values with the help of teachers and peers–is in danger of becoming a thing of the past. College demonstrates why making education available to as many young people as possible remains central to America’s democratic promise.
3) HighHigher Education in the Digital Ageer Education in the Digital Age
By: William G. Bowen

Two of the most visible and important trends in higher education today are its exploding costs and the rapid expansion of online learning. Could the growth in online courses slow the rising cost of college and help solve the crisis of affordability? In this short and incisive book, Bowen explains why he believes technology has the potential to help rein in costs without negatively affecting student learning.
4) The Great BThe Great Brain Racerain Race: How Global Universities Are Reshaping the World
By: Ben Wildavsky

This book presents the first popular account of how international competition for the brightest minds is transforming the world of higher education–and why this revolution should be welcomed, not feared. Every year, nearly three million international students study outside of their home countries, a 40 percent increase since 1999. Wildavsky shows that as international universities strive to become world-class, the new global education marketplace is providing more opportunities to more people than ever before.

PUP Best Sellers for the Past Week

These are the best-selling books for the past week.

 

jacket College: What It Was, Is, and Should Be by Andrew Delbanco
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No Joke: Making Jewish Humor
by Ruth R. Wisse
Tesla: Inventor of the Electrical Age by W. Bernard Carlson
j9925[1] The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order by Benn Steil
jacket Nine Algorithms That Changed the Future: The Ingenious Ideas That Drive Today’s Computers by John MacCormick
On Bullshit by Harry G. Frankfurt
Italo Calvino: Letters, 1941-1985 by Italo Calvino

Selected and with an introduction by Michael Wood

Translated by Martin McLaughlin
Picasso and Truth: From Cubism to Guernica by T.J. Clark
jacket Kafka: The Years of Insight by Reiner Stach

Translated by Shelley Frisch
The 5 Elements of Effective Thinking by Edward B. Burger & Michael Starbird