How to Choose A College: Advice Originally Posted on WalletHub

Jacob Sanders, a journalist with WalletHub, kindly asked me to share my advice on the various roles of college towns for an upcoming WalletHub article.

Titled 2022's Best College Towns and Cities in America, WalletHub posted the article yesterday, including my commentary. The article was authored by Adam McCann and contains advice from several higher education policy experts, including Mark Haynel, Alexander Jun, Herman Walston, and Joseph Paris.

Here are my answers to five WalletHub questions about college towns:

1. In deciding which university to attend, how important is the surrounding city/town?

A college's surrounding city or town is a crucial element to weigh when choosing a college.

At one time, small liberal arts colleges in rural areas and small towns were very attractive to college students. There are many small private colleges, especially in New England and the mid-Atlantic states. Some are affiliated with religious denominations or were started by philanthropists in the nineteenth century. Sweetbriar in Virginia is an example of such a school. Rural charm and a lovely campus were once very appealing.

These small schools are less attractive now. First, most college students now prefer to attend college in a big city with a more exciting social scene and more opportunities to make connections that lead to jobs.

Second, the small private colleges are pretty expensive. Tuition alone can be north of $50,0000 a year.

Finally, enrollment declines have hit the small private colleges very hard, especially the more obscure schools. Some of these small colleges are having trouble attracting students. Several have closed or are teetering on the brink of closure. No one wants to get a degree from a college that may not exist ten years after the student graduates.

In my opinion, students should not take out student loans to study at an expensive liberal arts college, particularly one with no nationwide visibility. 

On the other hand, colleges and universities in large cities have drawbacks as well. Crime is a growing problem in urban America, and violent crime is on the rise. Many urban schools are located near dangerous neighborhoods. For example, Tigerland, a once-popular area near LSU, with many student-oriented apartments, has become a slum with frequent incidents of violent crime, including murder. It would be a grave mistake for a young person to rent an apartment in a neighborhood like Tigerland. And many urban universities are located near dicey neighborhoods that are similar to Tigerland.

2. Are college cities/towns a good option for retirees? What about families?

College towns are attractive to retirees because they offer many activities for the larger community, like athletics, theater, performing arts events, book fairs, etc. But the cost of living in urban college towns can be pretty high. When I attended law school at the University of Texas, Austin was known as a mellow town with a low cost of living. It was once a great place to live for students, retirees, and families. (I once bought a one-dollar ticket to hear Willie Nelson perform.)

Today, the cost of living in Austin, TX, is out of sight, and traffic is choking the freeways and streets. It is still a lovely place to live, but housing is quite expensive -- took expensive for most retirees.

Some college towns have good public schools that attract families, but some do not have good schools. The public schools in Texas are generally good in the college towns: College Station (Texas A & M), Denton (University of North Texas), etc. But the urban schools in Louisiana are failing, and few people would move to the college town of Baton Rouge for the public schools. 

3. How can parents prepare their children for managing finances in college (student loans, credit cards, etc.)?

Parents need to be vigilant about how their children finance their education. On no account should a parent or grandparent take out a Parent PLUS loan to help a young relative pay for college. Parent PLUS loans are just as hard to discharge in bankruptcy as regular student loans, and a parent who suffers an illness or a job loss and has Parent PLUS loan obligations will face a financial nightmare.

In my opinion, parents should steer their children away from expensive, so-called "luxury" student housing and encourage them to live in a dorm for at least a couple of years. Students should not take out loans to finance an unsustainable luxury lifestyle while they are in college. And parents do their children no favors by giving their kids fancy cars and unlimited access to credit cards. College students need to live on a budget while in school because they will undoubtedly be constrained by a budget after they graduate. Loading a debit card with a fixed monthly spending limit will teach students to manage their budget.

Parents should resist the allure of elite colleges that are expensive and may not benefit their children in the long run. I got a doctorate from Harvard Graduate School of Education because I was dazzled by its reputation. But the graduate education program at Harvard was no better than the programs at many public universities, and Harvard was very expensive. I admit I made a mistake.

4. What are the advantages and disadvantages of going to college in-state vs. out-of-state?

Going to college out of state is often a good idea. Going to another state to study exposes the student to a larger world. For example, kids from small midwestern towns can benefit from living in a more lively urban environment. I grew up in a small town in Oklahoma, but I did my doctorate at Harvard. (But I wish I had gone to school somewhere else besides Harvard.)

Out-of-state tuition is higher than in-state tuition at public universities, which is a drawback. But public colleges across America are recruiting out-of-state students aggressively, and young people with good academic credentials (high ACT scores, good grades, etc.) have a very good chance of getting a scholarship. I know of a Louisiana family who sent a child to the University of Alabama rather than LSU because it was cheaper to go out of state due to the scholarship aid.

5. How can local authorities make their cities/towns more appealing to both new students and potential residents?

Crime, crime, crime. College towns must invest sufficient resources in law enforcement to keep students and residents safe. College professors and their students tend to be more progressive than the general population and may think defunding the police is a good idea. But it is not a good idea. Universities must make sure their campus police forces are trained not to use unnecessary force and to be sensitive to a diverse student population. Still, in my experience, campus police forces are very mindful of the needs of their students and remarkably tolerant of students who do boneheaded things. Protecting students from sexual assaults and alcohol-related injuries depends in part on having a professional local police force.

College towns also need to keep real estate development under control, which many college towns are not doing. Real estate developers have built thousands of apartments in the flood plain south of LSU in my community. Many are touted as luxury student housing. LSU and Baton Rouge do not have the infrastructure to support all this development, and the rental housing is overbuilt. The city does not recognize what is happening, but outside investors are building too much housing that will one day become slums.

After a Long Pause, 30 Million Student Borrowers Will Begin Repaying Their Student Loans in February. Most Say They're Not Ready.

 Last year, in response to the COVID pandemic, the Department of Education pressed the pause button on the federal student-loan program. 

In March 2020, DOE allowed 30 million student borrowers to stop making payments on their student loans with no penalty and no accumulation of interest. DOE also stopped collection actions during this moratorium and stopped garnishing wages of student-loan defaulters.

That was nearly two years ago, and the party's almost over. Beginning on February 1, 2022, all these borrowers will be required to start making monthly payments on their student loans. 

And guess what? Almost 90 percent of fully-employed student debtors who responded to a survey said they are not financially secure enough to resume making loan payments. If they are forced to begin making payments on their student loans, they say, they will not have enough money to pay other bills--like rent, car loans, and medical expenses.

And the loan processors are sending signals that they aren't equipped to reboot the student-loan system for 30 million borrowers all at once. Scott Buchanan, a spokesperson for the loan servicers, said this:

From a resource perspective, from a system perspective and from a staffing perspective, this is going to put a lot of strain on the system.

Poor babies! Somehow I don't think the student-loan servicers are going to miss any meals.

 Nevertheless, three loan servicers are getting out of the business. As reported by Inside Higher Ed, the Pennsylvania Higher Education Assistance Agency, Granite State Management & Resources, and Navient announced that they will not be servicing loans when their federal contract expires.

Navient is turning over its loan servicing business to Maximus, a for-profit company that trades on the New York Stock Exchange.  (The current price is about $76 a share.) 

Maximus! The name sounds like one of the gladiators in that Russell Crow movie. Maximus was already in charge of collecting on defaulted student loans, a business that must be profitable. Bruce Caswell, Maximus's CEO, made $6.14 million in 2020. 

Some commentators say the job of jump-starting the student-loan collection process is so massive that DOE should extend the loan-payment holiday for a few more months. Others say DOE should forgive all student loan debt--now touching on $1.8 trillion. As Cody Hounanian, Executive Director of the Student Loan Crisis Center, put it:

We need to think diligently about what it means to start payments and if we're better off just extending this deadline and canceling student loan debt.

In my view, the federal government will not cancel all student debt, although DOE might extend the repayment holiday for a few more months. 

I think it is more likely that Congress and DOE will create more generous income-based repayment plans and make it easier for student borrowers to qualify for debt relief through the Public Service Loan Forgiveness Program.

Those reforms--if that is what one should call them--won't solve the student loan crisis. Tinkering with the system won't fix it. The only fair way to grant relief for distressed student-loan borrowers is to give them reasonable access to the bankruptcy courts.

Note: Quotations come from an article by Alexis Gravely published in Inside Higher Ed.

Willie Nelson: "Turn Out the Lights, The Party's Over"

Marchus v. Student Loans of North Dakota: Another Victory for Student-Loan Debtors in the Eighth Circuit

In 2020, Debra Jean Marchus filed an adversary proceeding in a North Dakota bankruptcy court, seeking to discharge about $38,000 in student-loan debt. After a trial, Bankruptcy Judge Shon Hastings wiped out the debt.

As summarized in Judge Hastings's decision, Ms. Marchus began her journey through higher education in 1975, forty-five years before she filed for bankruptcy. She first enrolled at North Dakota State University, then attended a couple of for-profit institutions, and finally obtained an associate degree in accounting from the University of Phoenix in 2013.

When Marchus appeared in Judge Hastings's courtroom, she only made $11.00 an hour working as a North Dakota grocery store stocker. Moreover, Marchus had never made a lot of money. Her average annual income over the previous fifteen years was only $14,493. 

As Judge Hastings noted, Marcus bought her clothing from second-hand stores, received health care from Medicaid, and supplemented her food budget with financial assistance from the federal government's SNAP program. She drove a 17-year-old car and lived in a one-bedroom apartment.

Ms. Marchus also suffered from serious health problems, which Judge Hastings summarized in some detail:

[Marchus's] physical conditions include arthritis, water retention, relaspes of colitis, chronic sinusitis . . . , no upper arm strength, weight gain, lack of blood flow in her legs, thyroid disease, hiatal hernia and kidney disease

After sifting through all the evidence (including more than 500 pages of medical records), Judge Hastings concluded Ms. Marchus's financial future did not look promising.

[Marchus] is almost 64 years old. She holds no pension or investment accounts and saved no money for retirement. Her employment and income opportunities are limited, and the prospect of [Marchus] increasing her income either through new employment or a promotion at her current job appears bleak.

Summarizing the evidence (which included more than 500 pages of medical records), Justice Hastings concluded that it was unlikely that Ms. Marchus would ever earn more than her current income. He discharged her debt to SLND in its entirety.

What are we to make of Marchus v. SLND? 

First, Debra Machus is one among millions of Americans who took out student loans to attend for-profit colleges but did not benefit financially. For more than forty years, Marchus attempted to improve her lot in life by enrolling at for-profit schools, and yet she wound up working at a job that paid only $11 an hour.

Second, Marchus's case shows how interest and penalties can cause a student-loan debt to balloon out of control. Debra Marchus borrowed $14,000 in 2007 to attend Aakers Business College, and she paid back more than half that amount with money she received from an inheritance. Nevertheless, by the time she filed for bankruptcy, her debt had grown to more than $38,000! 

Finally, Marchus v. SLND is another win for student-loan debtors who reside in the Eighth Circuit Court of Appeals. Like Diane Ashline's victory in Iowa and Michael Abney's success in Missouri, Marchus's victory in North Dakota is a sign that the bankruptcy judges in the Eighth Circuit are becoming more willing to grant student-loan debtors the relief to which they are clearly entitled.    

References

Abney v. U.S. Department of Education, 540 B.R. 681 (Bankr. W.D. Mo. 2015).

Ashline v. U.S. Department of Education, Adversary No. 16-09028 (Bankr. N.D. Iowa, Sept. 28, 2021).

Marchus v. Student Loans of North Dakota, 630 B.R. 91 (Bankr. D.N.D. 2021).

Elizabeth Lally, N.D. of Iowa Judge Collins Leads the Way On Discharge of Student Debt in the Eighth Circuit, Goosmann Law Firm (July 28, 2018).

Ashline v. Department of Education: Dental Assistant with Master's Degree from Kaplan U. discharges $230,000 in student loan debt

 Diane Ashline, a 47-year old single mother, worked for 20 years as a dental assistant. Hoping to increase her income, she took out student loans to get an undergraduate degree and a master’s degree from Kaplan University, a for-profit school. Unfortunately, these degrees did not help her financially.

Ashline never defaulted on her student loans. Instead, she put them in forbearance during the times she was unable to make payments. Nevertheless, by the time she filed for bankruptcy in 2016, she had accumulated  $230,000 in student debt. 

The U.S. Department of Education DOE) insisted that Ashline be put in an income-based repayment plan (IBR), which would only require her to pay $65 a month.  But Judge Thad Collins, who presided over Ashline’s bankruptcy proceedings, rebuffed DOE’s arguments and discharged all of Ashline’s federal student debt.

The judge pointed out that “no evidence [had been] produced to suggest that [Ashline] would ever be able to leverage her unused master’s degree to obtain a higher paying job in the future.” In fact, he ruled, there was “no suggestion that her income would increase in any meaningful way over the remainder of her working life.”

Judge Collins emphatically rejected DOE’s demand that Ms. Ashline sign up for an IBR, partly due to her age. At the time Judge Collins issued his decision last December, Ashline was 50 years old. “Upon completion of a hypothetical IBRplan,” the judge observed, “she would be between 69 and 74 years old.”

Under an  IBR, the judge explained, interest on Ashline’s student loans would outpace her payments, and she would never pay off her debt.  Although the unpaid debt would be forgiven if she completed her IBR, the forgiven debt would be taxable to her. Ashline would then face a “student loan forgiveness tax bomb”--a tax bill for the entire amount of the forgiven debt.

Judge Collins summarized his ruling in favor of Ms. Collins with these words:

[T]he Court finds that [Ashline] has proven, by a preponderance of the evidence, that not discharging her student loans would impose an undue hardship on her and her dependents. She has maximized her earnings potential. Her future financial condition is not likely to improve to any significant degree. . . . Her expenses are not extravagant. Debtor has made the good faith effort to make payments on her student loans . . . and has deferred those payments when she was unable to make them.

Judge Collins’s decision joins a growing body of case law that rejects the argument that student debtors should sign up for IBRs instead of seeking bankruptcy relief. Indeed, Judge Collins himself has issued two other important decisions in which he discharged student debt.

Gradually, I believe the tide is turning in favor of distressed student-loan debtors in the bankruptcy courts. Increasingly, federal bankruptcy judges are recognizing that forcing college borrowers into IBRs makes no sense.

I hope the Ashline decision and other bankruptcy court decisions in a similar vein will encourage “honest but unfortunate” student-loan debtors to shed their unpayable student loans in a federal bankruptcy court.

References

Ashline v. U.S. Department of Education, Adversary No. 16-09028 (Bankr. N.D. Iowa, Sept. 28, 2021).

Elizabeth Lally, N.D. of Iowa Judge Collins Leads the Way On Discharge of Student Debt in the Eighth Circuit, Goosmann Law Firm (July 28, 2018).

In re Martin, 16-9052 (Bankr. N.D. Iowa Feb. 16, 2018).

Fern v. FedLoan Servicing, 553 B.R. 362 (Bankr. N.D. Iowa 2016), aff’d 563 B.R. 1 (8th Cir. BAP 2017).

You Can Find Justice in the Bankruptcy Court of the NorthernDistrict of Iowa

Fern v. FedLoan Servicing, 553 B.R. 362 (Bankr. N.D. Iowa 2016), aff’d 563 B.R. 1 (8th Cir. BAP 2017).

 

Detour! Don't Choose a College Major That Won't Help You Get a Good Job

As Junior Brown reminded us in Detour, a class Country song, we can avoid a lot of trouble if we heed the warning signs all around us. "Oh, these bitter things I find," Brown sang. "Should have read that detour sign."

And this brings me to the topic of choosing a college major. Many 18-year-olds, maybe most, have only a foggy idea about what they want to do for a living. 

 In the service of transparency (don't you love that word?), I admit to switching majors twice while in college. I finally settled on a dismal major in sociology--sometimes described as the painful enumeration of the obvious. I learned nothing of any value.

So--how do you choose a major when you go to college? 

First, consider what you are good at and pay attention to what friends and mentors tell you about your skills and dispositions. When I was a first-year student, my freshman English instructor, a reporter at the local newspaper, told me I was a good technical writer, and she read one of my essays to my entire class.

I should have paid more attention to her compliment. It did not occur to me that I should focus on a career that would allow me to use my writing skills.  I should have switched my major to journalism. It wasn't until I got to law school many years later that I discovered that my aptitude for technical writing was valuable and could help me earn my living.

Second,  take note of the academic programs that are being shut down by the universities. For example, Youngstown State University announced this week that it is closing 26 academic programs. Programs being axed include Art History, Music History, Italian, Religious Studies, and Dance Management.

YSU said that only 87 students would be affected. In other words, on average, these 26 programs had only 3.3 students.  I wonder how many Youngstown students were majoring in Dance Management.

All over the United States, colleges and universities are closing academic offerings.  Many majors that are being shit-canned (a sociology term I learned in college) are in the humanities and social sciences. Literature, philosophy, anthropology, art history, and sociology are being thrown under the academic bus.  You should probably not devote your college years to taking classes in these fields. 

I regret having to give this advice. Our lives are enriched by an understanding of history and an appreciation for literature and culture. At the very least, every American should have a basic grasp of the causes of World War II and the catastrophe it unleashed all over the world. If it were up to me, no one could get a college degree without reading William Shirer's Rise and Fall of the Third Reich.

Unfortunately, a college education has become so expensive that the primary consideration in choosing a major should be to get a degree that leads to a good job. Thus, I think it would be best for young people to cultivate an appreciation for history and literature on their own time.

Junior Brown: "Should have read that detour sign."

Private Student-Loan Debt at an All-Time High: TICAS Releases Snoozer Report

 According to a recent report by the Institute for College Access and Success (TICAS), the 2020 class of college graduates has amassed $136 billion in private student debt.  When this amount is added to the total student debt from federal student loans--about $1.8 trillion, Americans are on the hook for almost $2 trillion in student debt.

Interestingly, students in the District of Columbia had the highest average private-debt level: $51,738. Eight states in the Northeast were in the top ten for high private student debt. The average private student debt in Delaware for the class of 2020 was over $50,000.

As Cody Hounanian, Executive Director of the Student Debt Crisis Center, aptly noted, the TICAS report shows that the costs of higher education have "skyrocketed and are out of control."

But are colleges doing anything to control their costs? Not much. Higher Education thinks it should be congratulated because tuition costs rose less than the inflation rate--the first time in decades that tuition increases didn't exceed inflation. I suppose that's good news of a sort, but the critical fact is that tuition costs go up every year.

TICAS's report concluded with a list of policy recommendations, but they're nothing to write home about.

TICAS recommends more federal grant money for low-income students, more oversight of the private student-loan industry, more loan counselors, and better advertising of income-based repayment plans.

Ho, hum!

TICAS did not recommend bankruptcy relief for student-loan debtors who are overwhelmed by the college debt. It said nothing about cracking down on the private-college industry, other than a vague recommendation to "Tighten Institutional Accountability."

I've been writing about the student-loan crisis for 25 years, and I've read dozens of reports and policy papers by think tanks and policy centers.  

Most of them recommend more money, more transparency, and more lenient income-based repayment programs.  TICAS's recommendations added nothing new.

Another snoozer report on the student-loan crisis!

The College Bookstore: Where Are the Friggin' Books?

 An LSU student, Kathryn Craddock, wrote a scathing critique of LSU's book store--operated, of course, by Barnes & Noble. 

"The colors are bland, the lighting is nauseating, and the inventory is full of tacky, overpriced LSU-themed junk," Craddock wrote in Reveille, the student newspaper. 

She said the bookstore's atmosphere shares more in common with a Walmart than an academic building. "I would even go far as to say that the building and its contents are creepy." 

Ms. Craddock's assessment of LSU's bookstore is absolutely correct. In fact, LSU's Barnes &Noble outlet doesn't even call itself a bookstore. The sign in front of the building simply says "Barnes & Noble at LSU."

Of course, the bookstore has a coffee shop where it sells Starbucks coffee--vile, overpriced stuff. But the store is really a souvenir and t-shirt shop. You can get an LSU t-shirt there for only $35 plus tax.  Or you can buy an LSU cap that will run you close to thirty bucks.

But books? Where are the friggin' books? As Ms.Craddock accurately described:

The LSU bookstore host shelves upon shelves of nightmares. There are the cheesy self-help books and celebrity memoirs with terrible attempts at relating to younger crowds.

I don't live far from LSU's Barnes & Noble, and I occasionally browse around the place. The store's textbook section is squeezed into a corner on the second floor--kinda hard to find.

The first floor is devoted to LSU-themed clothing, bric-a-brac, and--as Ms.Craddock attested, celebrity memoirs and self-help books. I recall seeing a self-help volume titled Taller, Slimmer, Younger--marked down to only a dollar.

I still remember the campus bookstore from my college days. Most of the store was devoted to textbooks, the ostensible purpose for being a college bookstore.

But the store also had a respectably-sized section devoted to fiction and literature. As a first-year college student from rural Oklahoma, I didn't know nothin' bout no literature, but I was attracted to a line of books with similar covers published by Scribner. I bought The Masters, a novel by C.P. Snow; Hemingway's Farewell to Arms; and F. Scott Fitzgerald's Tender is the Night.

I chose these books on my own; they were not assigned to me for a college class. And I read them uncritically. 

But I only knew about these books because I stumbled upon them at Oklahoma State University's campus book store. 

LSU's Barnes & Noble has a small stock of fiction, and you might find something by Hemingway or Steinbeck. But if you buy an LSU-branded water bottle first, you probably can't afford to buy a good novel.

And who needs to read works of fiction anyway when you can buy a self-help book that will make you look taller, slimmer, and younger for only a buck?