Showing posts with label federal student loan program. Show all posts
Showing posts with label federal student loan program. Show all posts

Wednesday, March 4, 2015

For Want of a Starbucks, a College Was Lost: Sweet Briar College is Closing Its Doors

Sweet Briar College announced yesterday that it is closing its doors at the end of the academic year.

Sweet Briar is one of those obscure but vaguely elite colleges that average Americans have heard about but are totally clueless about where they are located. Bowdoin? Colgate? Williams? Amherst? Where in the hell are these places?

Sweet Briar College: Too Far From a Starbucks
Well, Sweet Briar is a small liberal arts college for women located in the foothills of the Blue Ridge Mountains of Virginia. It is quite small--less than 600 undergraduates, but it is a lovely place. The college has a horse-riding program, a Study Abroad program, and several notable alumni.

But Sweet Briar is expensive. The sticker price to attend Sweet Briar for a year is just under $35,000 in tuition and fees.  And that doesn't include the cost of oats for your horse or the artisan cheese you will eat when you are studying abroad in France.

According to an article written by Scott Jaschik for Inside Higher Ed, Sweet Briar is closing for several reasons. First, students are less and less enamored with rural colleges. Even though Sweet Briar's campus--located on 3200 rural Virginia acres--is stunningly beautiful, most young people want to be where the action is, which is in the cities.

As Sweet Briar's President James F. Jones Jr. put it, "We are 30 minutes from a Starbucks."

Second, single-sex colleges have fallen out of fashion. Single-sex institutions have been totally wiped out in the public sector after the Supreme Court ruled that Mississippi University for Women and the Virginia Military Institute had discriminated on the basis of sex due to their single-sex admission policies. And most private colleges that started out as single-sex institutions now admit both women and men.

And of course, it is getting harder and harder to determine a student's gender, which makes single-sex admissions policies a bit awkward. The New York Times Magazine ran a story about transgender students at Wellesley that identified some of the complexity of gender issues at a private women's liberal arts college.

Third, it is harder and harder for private colleges that are not in the top tier to make a go of it. As Jaschik's article noted, only about one out of five women who were admitted to Sweet Briar chose to enroll there.

Sweet Briar and most private colleges try to sweeten the deal for potential students by discounting their tuition fees.  At Sweet Briar, the so-called discount rate for attractive first-year students was 62.8 percent in 2014.  That's right--the real cost for selected first-year students was only about one third of the sticker price.

So who pays the sticker price? Only suckers like you, Mom and Pop.

I say good riddance to Sweet Briar and all the overpriced private liberal arts colleges that failed to offer a product that students wanted at a price that families could afford. They have brought their demise on themselves by jacking up the sticker price of tuition and then giving discounts to special students who are selected based on criteria that are less than transparent. These schools have been operating more like used-car dealers than academics in the way they have sought to attract students, and now the jig is up.

Moreover, in my opinion, the vaunted value of a liberal arts education at one of these joints is vastly overrated. Many of the professors at these elite institutions are peddling postmodernism under the guise of a liberal arts education. And you don't need to attend an expensive private college to achieve the wry, edgy cynicism of a postmodernist.  Just watch Jon Stewart on television.

The crucial fact is this: the non-elite private liberal arts colleges are surviving almost totally on the federal student aid program; and students are having to borrow too much money to receive a non-spectacular education from these places.

What will replace Sweet Briar and the other overpriced, private liberal arts colleges as the purveyors of quality post-secondary education? I don't know. But I think it is likely that a great many private liberal arts colleges will close their doors before we figure it out.

References

Scott Jaschik. (2015, March 4). Sweet Briar College will shut down. Inside Higher Ed. Available at: https://www.insidehighered.com/news/2015/03/04/sweet-briar-college-will-shut-down

Mississippi University for Women v. Hogan, 478 U.S. 718 (1982).

Ruth Padawer. (2014, October 15). When Women Become Men at Wellesley. New York Times Magazine. Available at: http://www.nytimes.com/2014/10/19/magazine/when-women-become-men-at-wellesley-college.html?_r=0

Ry Rivard. (2014, July 2). Discount Escalation. Inside Higher Ed. Available at: https://www.insidehighered.com/news/2014/07/02/prices-rise-colleges-are-offering-students-steeper-discounts-again

United States v. Virginia, 518 U.S. 515 (1996).







Saturday, April 26, 2014

Elitist Colleges Give Admissions Preferences to Children of Alumni: Let's Kick Them Out of the Federal Student Aid Program

Evan Mandery wrote an op ed essay in the New York Times recently decrying the preferential
admissions polices of our elitist colleges.  No--Mandery was not talking about affirmative action, whereby colleges give preference to minority applicants when making admissions decisions. He was talking about the special preferences many elitist colleges give to the children of alumni--often called legacies.

According to Mandery, the children of alumni have a 45 percent greater chance of admissions at 30 of our nation's most elite colleges than non-legacies. Mandery thinks it is wrong for colleges to favor the children of alumni when making admissions decisions, and I agree. The legacy preferences of our elitists colleges stink.

Almost in passing, Mandery acknowledged that our elitist institutions also give admission preferences to racial minorities.  In fact, Mandery noted that being a legacy is "the equivalent of 160 additional points on an applicant’s SAT, nearly as much as being a star athlete or African-American or Hispanic."  

So here is the bottom line. If you want to attend Harvard, Yale, or a couple of dozen other elitist universities, it will help enormously  if you are Hispanic, African American, or the child of an alumnus.


Like most New York Times essayists, Mandery probably thinks he is a liberal progressive. But his suggestions for ending legacy preferences are about as radical as 1950s era Reader's Digest article.  Here are  his suggestions: "a huge reform" of the nation's tax structure and "improved access to higher education."  My God, Mandery's an anarchist!


Such twaddle.


Mandery's suggested reforms have nothing to do with the rotten and corrupt way our nation's elitist colleges are admitting students.  As Mandery admits--these slimy institutions give preferences to their rich alums and to racial minorities.   What's more, they brag about it!


 I suppose laws could be passed to ban these practices, but as Justice  Ruth Ginsburg said in her dissenting opinion in Gratz v. Bollinger, our nation's colleges would probably continue giving racial preferences when admitting students even if it were illegal; they would just lie about it. 

Evan J. Mandery
photo credit: Amazon.com

As for me, I think we should kick the elitist colleges and universities out of the federal student loan program and invest this money solely in public universities and public community colleges.  I favor letting Harvard, Yale, Dartmouth, Brown, Wesleyan, Smith and all the other private elitist institutions stew in their own postmodern and often racist juices.  Let them admit  students however they want; just don't give them access to federal student loan money or  Pell Grants. 

Moreover, just as our elitist colleges give special preferences to minorities and the children of their alumni when making admissions decisions, I think the American public should give a special preference to anyone who did not graduate from one of these sleazeball institutions when choosing our nation's leaders.

In other words, people who graduate from Harvard or Yale should be penalized in the public mind if they run for president, seek a federal judgeship, or apply for a cabinet post .  As everyone knows, our government is now run almost entirely by elitist college graduates, and the Russians are showing them up to be fools.

References

Evan J. Mandery. End College Legacy Preferances. New York Times, April 24, 1014.  Accessible  at: http://www.nytimes.com/2014/04/25/opinion/end-college-legacy-preferences.html?_r=0

Thursday, July 18, 2013

Like Rock and Roll, The Federal Student Loan Program Will Never Die. But's Let Try to Make It Smaller

Rock and Roll is here to stay.
It will never die.
It was meant to be that way.
Though I don't know why.
                                                                                 Danny & the Juniors
As Danny and the Juniors so eloquently reminded us, some American phenomena are perpetual and will never die. Rock and Roll falls in this category, and so does the Federal Student Loan Program.
 According to Rohit Chopra, the Student Loan Ombudsman for the Consumer Financial Protection Bureau, total student-loan indebtedness under the  Federal Student Loan Program grew by 20 percent in just 18 months!   Total indebtedness now tops out at $ 1.01 trillion.   In addition, total student-loan indebtedness to private lenders is $165 billion.  So--total student-loan debt now approaches $1.2 trillion. 
 
By the way, how would you like to have Rohit Chopra's job--Student Loan Ombudsman for the Consumer Financial Protection Bureau?  It must be something like a medic's position in a World War II concentration camp--handing out aspirins to inmates slated for oblivion.
Turn out the lights. The party's over.
I'm a realist. I know the federal student loan program cannot be dismantled.  The American higher education community absolutely depends on it, and most for-profit colleges could not exist without it.  The for-profit colleges have powerful lobbyists, and we will never get the for-profit colleges out of the feeding trough.
 
Nevertheless, let's at least try to impose some level of decency on this train wreck of public policy.
First of all, let's treat the wounded.   Let's stop garnishing the Social Security checks of elderly student-loan debtors who  defaulted on their loans.  Let's give student-loan debtors reasonable access to the bankruptcy courts.  Let's make all student loans subject to state consumer-protection laws so injured students can sue college and universities who entice people to take out student loans through fraud or misrepresentation.
 
Second, let's try to stop the growth rate in student-loan indebtedness by encouraging low-income students to attend community colleges that have low tuition rates instead of borrowing money to attend more prestigious institutions. Because you know what? If you are poor you shouldn't be borrowing money to attend Harvard; and besides you probably wouldn't like it anyway.
 
Third, let's crack down on colleges and universities that raise their tuition every year because they can't control their costs.  It is a scandal that university presidents like Ohio State University's Gordon Gee and New York University's John Sexton make more than $1 million dollars a year (far more actually) while college students across the country are borrowing more and more money every year to attend college.
 
American college students are tapped out.  According to Ombudsman Chopra's remarks, people with student-loan debt are now less likely than other people to have home mortgages or outstanding auto loans.  Why?  Because many people are now so burdened with college-loan debt that they can't participate in the consumer economy--they can't buy homes or purchase cars.
 
For years now, colleges and universities have been singing a variation of Rock and Roll is Here to Stay; they think the student loan program was meant to be this way and will never die. But if we don't reform this program soon, higher education will be singing a different tune, this one by Willie Nelson.
"Turn out the lights. The party's over."
 
 
References
Rohit Chopra. Student debt swells, federal loans now top a trillion. Excerpted remarks from speech given on July 17, 2013.  Accessible at: http://www.consumerfinance.gov/speeches/student-debt-swells-federal-loans-now-top-a-trillion/


Monday, July 15, 2013

Feed Me, Seymour: New York University and Ohio State University Should Be Kicked Out of the Federal Student Loan Program

American colleges and universities love the Federal Student Loan Program.  Many of them wouldn't last a week if their students couldn't borrow money to pay their tuition bills.  And universities could



Feed me, Seymour!
not raise their tuition and fees every year were it not for the fact that student can absorb these increased costs simply by borrowing more money.

Does participation in the Federal Student Loan Program impose a moral obligation on universities to prudently manage their affairs? In particular, are they obligated to put some limits on their executive compensation packages and to disclose the terms of those packages to the public?
 
Apparently not.  Some universities--both public and private--pay their presidents and senior executives obscene salaries and lavish benefits like bonuses, travel and entertainment allowances, and luxury housing.  And they don't want the public to know about it.
 
Here are a couple of examples. Recently, the press reported that John Sexton, president of New York University, receives a salary of $1.5 million, and NYU gave him a loan on favorable terms to purchase a second home.  When he retires, Sexton's pension will be $800,000, and he will get a "length of service" bonus of $2.5 million if he stays on the job until 2015. 

And Jacob Lew, our new Secretary of the Treasury, received a $685,000 parting bonus when he stepped down as Executive Vice President of NYU to take the Treasury post.  That's right. In addition to a generous salary and other perks, NYU gave Lew two-thirds of a million dollars as a going away present.

Senator Charles Grassley decided to look into NYU's executive compensation practices to see if they were in keeping with the university's tax status as a non-profit organization.  Did NYU cooperate with Senator Grassley's investigation?
 
Not really. According to a New York Times story, Senator Grassley accused NYU of impeding his inquiry. For example, NYU representatives allowed Senator Grassley's staffers to view some

John Sexton
documents but would not allow them to be copied. On the date of the NY Times story, Senator Grassley still had not received all the information he asked for.

 
Would you like another example? In 2012, Gorden Gee was the highest paid president of a public university in the United States. In the fiscal year ending 2012, Gee made $1.9 million, including base salary, bonus, deferred compensation, and supplemental retirement contributions. In addition, he lived in a 9,6000 square foot mansion stocked with antiques, art work, and Persian rugs.  And according to Dayton Daily News, Gee spent an average of $23,000 a month on entertainment.
 
A guy pulling down that kind of money obviously has tax issues--big tax issues.  Not to worry. Under his university contract, OSU provides Gee with up to $20,000 a year in tax preparation and financial planning services!
 
Did OSU make the terms of  President Gee's entire compensation package available to the public? No, it did not.  The Dayton Daily News pried the information out of OSU through an open records request. And it took OSU eleven months to turn over all the documents the newspaper requested.
 
This, then, is the status of higher education in the current age. College costs go up every year and students have to borrow more and more money to pay for it. Many can't find decent jobs when they graduate and many default on their loans. How many? We don't know because the Department of Education won't tell us.  Meanwhile, our universities pay avaricious  oligarchs like OSU's Gorden Gee and NYU's John Sexton ridiculous amounts of money.

Does anyone believe our universities need to pay their leaders unseemly amounts of money and provide them with regal benefits in order to get good leaders? I certainly do not. 


Gordon Gee
In fact, the emergence of the imperial university president is a core reason our public universities are in the mess they are in. We've appointed people to run our colleges who want to become wealthy, and indeed some of them have become wealthy.

We should have university presidents who see themselves as first among equals in a community of scholars--people who will turn all their energies into making sure students get an education that will fit them for a 21st century economy and who will work night and day to keep tuition costs down.

We need federal legislation to regulate all the colleges and universities that receive federal loans.  First, all institutions that participate in the student loan program should be required to post their senior executives' compensation on their web sites--with a direct link from the university's home page.

And by compensation, I mean ALL executive compensation: salary, bonuses, enhanced retirement benefits, housing, travel and entertainment allowances, financial services, speaking fees, etc. And senior executives should be required to report compensation they get from any source, including nonprofit foundations.

And we also need federal legislation to require all universities that participate in the federal student loan program to cap salaries and compensation for their senior executives at some reasonable level--say $300,000.

If Ohio State University and New York University want to pay their presidents outrageous salaries, they are free to do so. But they should be kicked out of the federal student loan program until such time as they bring their executive compensation packages down to some level of decency. 

References

Laura Bischoff. OSU president expenses in the millions. Dayton Daily News, September 22, 2012. Accessible at: http://www.daytondailynews.com/news/news/state-regional-govt-politics/expenses-of-osu-president-run-into-millions-for-tr/nSGkK/

David Haglund. NYU Neatly Embodies Everything Wrong With Higher Education in America. Slate,, June 18, 2013. Accessible at: http://www.slate.com/blogs/browbeat/2013/06/18/nyu_loans_for_summer_homes_ny_times_story_about_university_pay_for_john.html

Ariel Kaminer.  N.Y.U. Impeding Compensation Inquiry, Senator Says. New York Times, July 10,2013.  Accessible at: http://www.nytimes.com/2013/07/11/nyregion/nyu-accused-of-impeding-compensation-inquiry.html?_r=0