Obama just announced a set of reforms for higher education. I’m still processing the info, so no comment here yet. Dylan Matthews has an excellent post on the topic.
UPDATE1: OK, here’s one quick point. I think that reforms need to address the problem of certain majors, not just the colleges themselves. For example, we have trained twice as many teachers as there are openings. A college that is excellent in other ways may not be properly informing students that their degree (which is entirely targeted towards to one particular profession) will give them a 50/50 shot at finding employment.
UPDATE2: Of course, student loans should be dischargable in the case of bankrupcy. Why aren’t we doing that?
UPDATE3: There clearly needs to be a better ranking system than the silly ones that currently exist, but I’m not confident that the US gov’t can accurately create a system that clearly show which schools are rip offs and student loan stealers. I would prepare to see this coming from the Gates Foundation or another outside group, but we can’t be picky.
UPDATE4: I would like to see more teeth in these proposals. Student loan money should not go towards low-performing schools.
UPDATE5: The goal of pressuring schools to provide more spots to people of low income while admirable is going to run headlong into the goal of pressuring schools to get kids done in four years and with good grades. In general, lower income people have a worse track record getting through college quickly for a variety of reasons.
Apt. 11d 
It will be really hard to accurately identify low-performing schools on a national level. A school in the lowest 10% might have a very important degree program that successfully serves community needs (something like criminal justice, social work, nursing). It looks like this plan will account for differences between schools but not within schools. Determining school success should be limited in location (by state, or by region of state, not nationally) and down to the level of the degree. The plan doesn’t seem to support this type of place-based, degree-specific ranking, instead using a blunt nationwide school by school comparison. I’m skeptical about the usefulness of that type of ranking.
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“The plan doesn’t seem to support this type of place-based, degree-specific ranking, instead using a blunt nationwide school by school comparison.”
Right. It may not matter much if ABCU has much higher scores than XYZU if XYZU is in my very own community and I would not incur extra transportation, room or board expenses to go there and if the employers I am interested in recruit at XYZU, rather than ABCU, which is on the other side of the country.
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I can speak to why student loans are not dischargeable in bankruptcy. At one time, the greatest amount of student loans went to students in professional programs, some of whom filed for bankruptcy promptly at the conclusion of their programs, just before they landed big jobs. Allowing high-earning professionals to have their debts discharged was perceived to be unfair, so Congress made all student loans pretty much non-dischargeable. And now because an entire industry has grown up around these non-dischargeable loans, any attempt to change the current non-dischargeability status will be heavily lobbied against.
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“And now because an entire industry has grown up around these non-dischargeable loans, any attempt to change the current non-dischargeability status will be heavily lobbied against.”
Also, because they are federally guaranteed, creditors have no incentive to make settlement deals with debtors, which is standard practice with normal debt. Normal consumer debt or medical debt is often settled at a substantial discount, as creditors understand that if the debtor goes into bankruptcy, they will get nothing. Settling does harm credit and may harm employment prospects, but not as badly as bankruptcy.
Ideally, the federal government would get out of the student loan business and lenders would carry the entire risk of lending five and six figures to people who can’t buy legally buy liquor yet. I would also like colleges themselves to lend 20% of whatever loans are taken out, but I want a lot of things.
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Here’s one reason why ranking systems are tricky. Unprepared students who are also poor – and this is a common combination – are the audience middle-tier state universities like mine should serve. Last year half our entering class was getting some kind of academic advising, akin to being on academic probation, because of low reading, writing, and/or math skills. We are working hard to put together programs that get them up to speed and help them succeed, and we are trying to do it for basically no cost. These students also can’t afford our college, because the state has radically reduced our funding over the last 10 years and – almost dollar for dollar – we have raised our tuition to make up for it (while also making other cuts). How is our 65 percent retention rate going to be assessed? Shouldn’t our students get more federal aid, not less, than kids who go to expensive, excellent private or public schools?
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Yeah, totally agree, af. The goal of increasing the number of low income students (a great goal) is directly at odds with the other goal of increasing the 4 year grad rate and other worthy goals. It very hard to create a ranking system that sorts of the schools like af’s which is doing the right thing for that population and the schools like Phoenix, which takes their money without any quality control.
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I had the same thought — schools with huge endowments will continue to be rewarded for holding back that endowment money and not spending it on students or financial aid — if the number one thing that assessors are going to be looking at is the financial stability of the university. It appears that the new procedures will make it easier to get student loans to go to prestigious, expensive schools — when often it is the local schools that truly fill the need.
I’m also concerned at looking at return on investment based only the salaries which grads make — if someone goes into teaching in an inner=city school, works for a nonprofit, becomes a missionary, etc. it’s going to appear that the university failed because their grads aren’t getting wealthy even if those grads are the ones changing a community.
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I’m not worried about the students who graduate and make a low income, because they’re doing something noble. I’m worried about the kid who spend five years and thousands of dollars in school, but never graduates. I’m worried about the kid who spends thousands of dollars on a degree in early childhood education, but can’t find work and ends up as a check out girl at Target.
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