SUMMARY: Morehouse College's class of 2019 was stunned on Sunday when their commencement speaker, Robert F. Smith, promised to eliminate all of the graduates' student debt. But the generous pledge also highlights the distinct wealth gap for recent African American graduates. Amna Nawaz talks with Scott Jaschik of Inside Higher Ed and Mehrsa Baradaran of the University of Georgia School of Law.
SUMMARY: Maine, land of lobsters and lighthouses, is also the nation’s oldest state. With a median age of 43, roughly a third of its population is in or approaching retirement. To counter its aging workforce, the state is attempting to attract more recent college graduates by helping to repay their student loans. Hari Sreenivasan reports as part of our weekly education series, Rethinking College.
SUMMARY: The Trump administration has held up the implementation of Obama-era rules that would have allowed student borrowers to have their debt erased if they had been victims of fraud by for-profit schools. Now 18 states and the District of Columbia have responded with a lawsuit challenging the Education Department. Jeffrey Brown learns more from Anya Kamenetz of NPR.
SUMMARY: Students who attend for-profit college and training programs are more likely to borrow, borrow more and struggle to repay their loans. Not only that, but the overall graduation rate at for-profit institutions is just 27 percent. Meanwhile, a number of schools have shuttered, leaving former attendees with debt and no way to pay it back. Special correspondent Lizzie O'Leary reports.
JUDY WOODRUFF (NewsHour): Student loan debt is an issue facing many Americans, and can take years to pay off.
In particular, the problems some students face at for-profit schools are getting closer scrutiny.
Marketplace's Lizzie O'Leary has the story. It's part of our series 'How the Deck Is Stacked.' It's in partnership with Frontline and Marketplace, and funded by the Corporation for Public Broadcasting.
LIZZIE O'LEARY, Special correspondent: Before she became a mother, New Yorker Danielle Adorno (ph) dreamed of working as a pastry chef. When she came across ads for the 'Art Institute of New York,' it seemed like a great fit. And she says school administrators promised her a lot.
DANIELLE LOPEZ, Student Loan Borrower: They were very adamant on like their job placement rates, boasting over like 90 percent job placement, boasting about their chef instructors working at Nobu and all these high-end restaurants. You would think, oh, OK, I'm going to get the quality education that I'm looking for, because that's what it's about, quality.
You know, I figure, if I'm going to pay that much — that amount of money for such a short program, I'm going to be getting something out of it. And that wasn't what happened.
LIZZIE O'LEARY: She claims the school never helped her get work in her field. And she says employers don't value the degree in the way she thought they would. She's no longer paying her loan company her $25,000 debt.
DANIELLE LOPEZ: They don't deserve a single penny out of me, because I didn't get the education I paid for.
LIZZIE O'LEARY: You did sign a contract when you took out that money.
DANIELLE LOPEZ: I did. And I also thought if — I feel like it stopped being about education and started becoming about consumerism. I'm paying you for a service. I paid you for an education. I paid you to train me. I paid you to give me this 90 percent job placement rate that you boasted about. You told me you were going to place me in a job.
And, instead, I got a program that was shutting down.
LIZZIE O'LEARY: The Art Institute's parent company, Education Management Corporation, was the target of a federal investigation. Department of Justice officials say the company acted as a recruitment mill. It reached a $95.5 million false claims settlement. But there was no determination of liability.
LORETTA LYNCH, U.S. Attorney General: This kind of abuse hurts not only taxpayers, but also the students.
LIZZIE O'LEARY: The Art Institute of New York's Web site says it is no longer accepting students. And the campus has been put on probation by their accreditor.
In the last few years, the Obama administration put many new regulations in place to address aggressive marketing and job placement claims by several for-profit schools.
SUMMARY: The biggest challenge for these college students may not be exams or papers, but finding the means to survive. While the University of California system has worked to bring in more first-generation and “non-traditional” students, helping them stay, succeed and meet basic needs like getting enough food requires greater investment. Jeffrey Brown reports from Berkeley, California.
JUDY WOODRUFF (NewsHour): You will probably be surprised to hear that hunger and homelessness is a growing problem for thousands of college students across the country, particularly among those who are the first in their families to pursue a degree.
This is forcing some universities to figure out new ways of keeping low-income students in school.
Jeffrey Brown has the story from the University of California, Berkeley, as part of our weekly education series 'Making the Grade.'
ANTHONY CARRASCO, Student, University of California, Berkeley: Oh, darn. These tortillas are not very good.
JEFFREY BROWN (NewsHour): Every Sunday night, Anthony Carrasco prepares the food he will eat for the week ahead, setting himself a quota of one meal a day.
ANTHONY CARRASCO: I can skip breakfast, skip lunch, and even skip dinner. And I have just saved myself close to $30 or $40. I, like many folks, come to college to get out of poverty. I really thought that was the end of the line when we got the admission letter. Unfortunately, it wasn't.
JEFFREY BROWN: Anthony is a junior at the University of California, Berkeley, one of the nation's leading public universities. And he's the first in his family to attend college. It was hard to get in, and now hard to stay in, but maybe not for a reason many people have considered.
ANTHONY CARRASCO: We were expecting long nights in the libraries and tough exams; but what we're really facing is, you know, just, you know, sleepless nights worried about rent, and really distracting lecture halls when you just cannot stop thinking about food.
JEFFREY BROWN: Today, almost a third of all students entering two- and four-year colleges are first-generation. They're more likely to be minorities and come from low-income families. And by the estimate of one advocacy group, more than half of them lack reliable access to food. And that contributes to their lower graduation rates.
Many years ago, I myself was a student here at Berkeley. I was fortunate enough to have the means so I could concentrate on my studies, my grades, and, yes, the fun side of college life. But more and more these days, many students find they have to worry about more basic needs, including food and shelter.
A beautiful campus, world-class academics and now a new reality.
WOMAN: Is there any stock on Friday?
MAN: We're going to restock on Friday, so everything is going to be here on Friday.
JEFFREY BROWN: A campus food pantry, where twice a month students can stock up on staples. The University of California system has worked hard to bring in first-generation, low-income and what are called nontraditional students, such as veterans and those with families. But more work is required to help these students survive and graduate.
RUBEN CANEDO, University of California Global Food Initiative: Twenty-five bags today.
JEFFREY BROWN: Ruben Canedo is a first-generation graduate from Berkeley. He's now a leading advocate for student food security, and oversees the campus food pantry.
RUBEN CANEDO: What we're doing on our campus is making sure that campus becomes basic need secure. You have the recession, you have the increasing cost of living, and students are caught in the middle of that.
SUMMARY: Student debt has been a prominent topic during this year's presidential campaign, with several candidates touting plans for tuition-free college. Indeed, more than 40 million Americans carry debt from student loans, totaling around $1.3 trillion nationally. While the median debt is about $27,000, people who owe less than $10,000 are the most likely to default. Marketplace's Lizzie O'Leary reports.
JUDY WOODRUFF (NewsHour): Student debt has been a big talking point on the 2016 campaign trail. Hillary Clinton proposes making tuition free for many students at public colleges. Donald Trump would expand limits on how much borrowers have to pay back each month.
But what about those already holding debt?
We take a look as part of our series How the Deck Is Stacked, funded by the Corporation for Public Broadcasting, in partnership with Frontline and Marketplace.
Marketplace's Lizzie O'Leary has the first of two stories.
LIZZIE O'LEARY, Marketplace: If everything had gone according to plan, Chris Savelle would be on Wall Street right now, not biking through downtown Detroit in a free weekly community ride.
Savelle, who is 31, graduated into the teeth of the recession. He's got $100,000 in student loan debt on his mind.
What does $100,000 feel like?
CHRIS SAVELLE, Student Borrower: It sucks.
LIZZIE O'LEARY: Jessica Love Jordan is in a similar situation. She started college late and is now working on finishing her master's in addiction counseling. She juggles school, work and being a single parent. Sometimes, the debt feels too much.
JESSICA LOVE JORDAN, Student Borrower: Now and again, when I look at the statement, and see how much I actually have to pay back, it's almost suffocating. I have those fleeing thoughts, you know what, let me just stop now, and go work, so I can be able to live later on in life.
LIZZIE O'LEARY: When she graduates, she can expect to make about $33,000 annually as an addiction counselor. Her debt will be about $90,000.
The median student debt is much lower than Savelle or Love Jordan's, about $27,000. But their experiences are similar to those of many students who attended state universities at a time when their budgets were being cut, and as the great recession hit. The money for school had to come from somewhere, in most cases, students.
Where did you think you would be in your life at 31?
CHRIS SAVELLE: Go work for an investment firm or hedge fund, Chicago, New York, something like that.
LIZZIE O'LEARY: But when Savelle graduated in 2008, the best job he could find was at a local Wal-Mart. He's recovered somewhat now. He works as a supply chain engineer, and supports his mother and sister.
Temple University Professor Sara Goldrick-Rab has been researching the rising price of college for years.
SUMMARY: College affordability has become a major issue in the election because it's a major issue in our lives -- Americans currently hold $1.3 trillion in student debt, and it's on a staggering rise. Frontline and Marketplace collaborated on this video with Marketplace host Kai Ryssdal on the state of student loans.
SUMMARY: This time of year, high school seniors and their families are thinking about where they’ll be headed to college in the fall. In “There Is Life After College,” author Jeffrey Selingo examines how one’s post-college years are influenced by crucial choices made before students even enroll. Selingo sits down with William Brangham for a conversation.
FIRST LADY MICHELLE OBAMA: No matter what path any of us on the stage took to our success, we all know that completing your education past high school is the most important thing you can do to reach your dreams. That’s why we’re here. So, while you all might be in awe of us, let me tell you, we are in awe of you.
WILLIAM BRANGHAM (NewsHour): High schoolers and their parents are obviously focused on what school they will go to, but a new book argues there are more important things to consider.
The book is called “There Is Life After College.” Jeffrey Selingo is the author. I talked with him yesterday.
Jeff, if I can discern a basic thesis from you book, it’s not so much where you go to college, but it’s what you do while you’re in college. Is that right?
JEFFREY SELINGO, Author, “There Is Life After College”: That’s right.
It used to be as long that, as you had a bachelor’s degree from a college, any college, really, you would be golden in the job market. It was really the way that you got jobs years ago.
But now the fact of the matter is that there’s a lot of noise around the signal of a bachelor’s degree. So it’s really important what you do while you’re there, the experiential learning that you get, internships, projects, study abroad, and activities like that, cocurricular activities, whether it’s athletics or clubs.
And, most importantly, you don’t take on too much debt. The more debt that you take on in college, the fewer options you have after college to take essentially any job you want anywhere in the country, which would be good for your career, and instead you’re basing your career decisions on how much money you’re going to make.
WILLIAM BRANGHAM: In one of the early chapters of your book, you categorize graduates after college into three categories.
You have the sprinters, the wanderers, and the stragglers. What do those delineations tell us about post-college life today?
The move comes after a ProPublica investigation that documented how the government was making it hard for disabled borrowers to get their loans forgiven.
The federal Department of Education said on Tuesday it would offer to write off $7.7 billion of student debt owed by disabled individuals, taking a big step to streamline a loan forgiveness program long plagued by bureaucratic delay and inefficiency.
Starting April 18, loan forgiveness letters will go out to approximately 387,000 borrowers who have been identified as totally and permanently disabled by the Social Security Administration, allowing them to sign and file a simplified application form to have their debt forgiven.
The move was enabled by changes in the department's regulations governing the loan forgiveness program, which resulted from a 2011 ProPublica investigation published in partnership with Columbia's Stabile Center for Investigative Journalism and the Center for Public Integrity.
Under federal law, borrowers who develop severe and lasting disabilities after taking out federal student loans are entitled to have their debts forgiven. As we noted in our investigation, the purpose of the rule was to spare former students who become disabled from a lifetime of ruined credit, garnished Social Security benefits, and spiraling debt.
But the investigation found that borrowers who become disabled faced such a high hurdle for proving their disability to the department — and obstacles such as unclear rejection letters and lack of medical standards for proving disability — that many simply gave up.
In one case, a borrower in a vegetative state was placed into default for failing to provide the department with income verification, according to an internal Department of Education Ombudsman Report that outlined problems with the program.
In another case documented in our February 2011 story, Tina Brooks, a former policewoman who had been severely injured during a training accident, could not get her $43,000 of student debt forgiven despite the fact that a Social Security judge had ruled she was fully disabled.
Internal reports showed the ombudsman had twice warned that the loan forgiveness program was flawed and needed to be reformed. But the Department of Education had ignored calls for reform from within and outside the agency.
That began to change after the story ran. Within a few weeks, the department forgave Brooks' student debt. The following year it proposed reforms which took effect in 2013 and allowed the Department to use the Social Security Administration's disability designation to qualify applicants for loan discharge.
That key reform is now enabling what the department hopes will be a “streamlined and more accurate process” for proactively identifying applicants who are eligible for student loan discharge, according to a statement.
“Too many eligible borrowers were falling through the cracks, unaware they were eligible for relief,” said Education Undersecretary Ted Mitchell in a statement regarding the decision.
"Under the new process, we will notify potentially eligible borrowers about the benefit and guide them through steps needed to discharge their loans, helping thousands of borrowers. Americans with disabilities have a right to student loan relief,” Mitchell said.
SUMMARY: More than ever, the challenge for low-income students is not getting into college, but finishing. Last year, employees of the coffee chain Starbucks were given the chance to benefit from a unique financial aid: If they work at least 20 hours a week, they are eligible for a four-year free education. Judy Woodruff reports as part of a collaboration between The Atlantic and the PBS NewsHour.
Correction: This video includes narration reporting that U.S. student debt totals $1.3 billion. The correct figure is 1.3 trillion. This has been corrected in the transcript. The PBS NewsHour regrets the error.
JUDY WOODRUFF (NewsHour): Now from coffee to college.
In our latest story in partnership with The Atlantic magazine, we look at unusual push by Starbucks to give their employees access to higher education.
It’s 6:00 a.m., and 23 year-old Markelle Collum-Herbison is already at the computer, getting in a little studying before she’s off to her full-time job.
WOMAN: I’m so proud of her.
MARKELLE COLLUM-HERBISON: I knew that the only way out was to have an education.
JUDY WOODRUFF: The plan had always been that mom and dad would help Markelle pay for some of that education.
MARKELLE COLLUM-HERBISON: They lived in a five-bedroom home, three bathrooms, two-story. It was beautiful.
JUDY WOODRUFF: That all changed overnight in 2008, when the economic crash hit Markelle’s family brutally.
MARCELLE COLLUM-HERBISON: I remember signing up for food stamps. It was that bad.
JUDY WOODRUFF: Today, Markelle is still living at home to help make ends meet. She is one of 21 million people enrolled in U.S. colleges this year. Now, more than ever, the challenge for low-income students and others is not getting into college, but finishing.
AMANDA RIPLEY, “The Atlantic”: American colleges are not really historically designed to make sure students finish. They are designed to enroll students.
JUDY WOODRUFF: Writer and author Amanda Ripley has specialized in higher education.
AMANDA RIPLEY: We have one of the highest college dropout rates in the developed world. We have 35 million people now who have started college and not gotten a degree.
JUDY WOODRUFF: For Markelle, a scholarship to community college got her through two years, but she had no idea how to afford the two more years it would take to earn a degree while working 40-hour weeks at Starbucks.
She is one of the first Starbucks employees to benefit from a unique financial aid program started last year by an unusual duo, the man who introduced Americans to the grande latte, Starbucks CEO Howard Schultz, and the president of Arizona State University, Michael Crow; announced the expansion of a program that will have the company pay for the college education of its employees.
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HOWARD SCHULTZ, CEO, Starbucks: The role and responsibility of a for-profit public company can’t be just about making money. It has to be about giving back, and it has to be about achieving the balance between profit and social impact.
SUMMARY: As Baby Boomers approach retirement, the Millennial generation is getting its foothold in the workforce, and facing financial challenges making it hard to save for later years. Judy Woodruff talks to Jen Mishory of Young Invincibles and David John of AARP about the different factors that have shaped each generation’s saving habits and how young Americans can meet their retirement goals.
JUDY WOODRUFF (NewsHour): This year, millennials, the group roughly 18 to 34 years old, will overtake baby boomers as the largest living generation in the country. And even at the dawn of their careers, it turns out they are more worried about retirement than previous generations. And perhaps they should be.
Here to help fill in the picture, Jen Mishory. She is executive director of Young Invincibles. It’s a research and advocacy group for young adults. And David John, he’s a senior policy adviser with AARP. He also works on retirement issues at the Brookings Institution.
And we welcome both of you to the NewsHour.
DAVID JOHN, AARP: Thank you.
JEN MISHORY, Young Invincibles: Thanks so much for having us.
JUDY WOODRUFF: So we know today the average retirement age for men is 64. For women, it’s 62. And we also know that studies are showing that most millennials expect to retire, they say, by age 65, but they plan to keep on working while they’re in retirement.
Jen Mishory, how much are they thinking about retirement, this generation?
JEN MISHORY: Yes, absolutely.
Young people are thinking about retirement today. When young people, for example, have access to a retirement account, they are actually saving at relatively consistent rates. The problem is we’re actually not seeing young people accessing things like retirement accounts at the same rate.
So only about half of workers have access to that kind of traditional retirement account. Young people, 25 percent of young people are part-time workers, so you’re seeing just fewer and fewer young workers having access to those kinds of mechanisms to actually save and at the same time struggling with things like student debt, struggling coming out of this recession.
So we’re looking at a problem also around wealth accumulation.
SUMMARY: Student loan balances climbed to $1.2 trillion at the end of 2014, and delinquencies are rising even as they fall for most other types of debt. In fact, students with the smallest balances are most likely to default. Judy Woodruff learns more from Megan McClean of the National Association of Student Financial Aid Administrators and William Elliott of the University of Kansas.
JUDY WOODRUFF (NewsHour): Even as the U.S. economy is picking up steam, there’s new research finding student loan debt is growing, and its burden lingers even longer than we realized.
Data from the New York Federal Reserve shows student loan balances climbed to almost $1.2 trillion at the end of last year. In fact, delinquencies are rising on student loans, even as they fall for most other types of debt, including mortgages and credit cards.
New research also finds that it is borrowers with the lowest balances, of $5,000 dollars or less, who are most likely to default.
Two experts join me now.
Megan McClean is director of public policy and advocacy at the National Association of Student Financial Aid Administrators. And William Elliott is an associate professor at the University of Kansas, where he studies asset building and education.
And we welcome you both.
MEGAN MCCLEAN, National Association of Student Financial Aid Administrators: Thank you.
JUDY WOODRUFF: So, Megan McClean, first of all, why is this happening?
MEGAN MCCLEAN: Thanks so much for having us this evening.
I think, generally speaking, what we’re seeing with the default situation is the aftermath of the economic downturn in 2008. There are a couple of things there from a broad standpoint. First and foremost, we always see more students going back to school during an economic downturn. So the borrower pool to begin with is broader.
And then you’re seeing I think folks still struggling in a job market, which can also contribute to defaults, and certainly a very troubling problem.
JUDY WOODRUFF (NewsHour): ..... A new television documentary tackles the growing worries and criticism over college costs and student debt.
Jeffrey Brown taped this conversation last week.
JEFFREY BROWN (NewsHour): The American higher education system has long been regarded as a crowning achievement. But these days, the focus has been more on its problems, rising tuition bills that stoke ballooning debt, too many students who never graduate, misplaced and overly lavish expenditures on facilities and housing and much more.
A new documentary, “Ivory Tower,” looks at a range of such issues. It opens in many U.S. cities this month.
Here’s a short clip that features one of its main themes.
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ANDREW ROSSI, Director, “Ivory Tower”: But we also see a shift in the ’70s, when conservative governors like Ronald Reagan suggested that the state shouldn’t be subsidizing intellectual curiosity. And that is really the world we live in now.
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ANDREW ROSSI: Well, we really emphasize that metrics such as completion rates at schools, average amounts of student debt and employability at a particular institution once someone graduates should be the priority in choosing a school, and not, again, which university has the more popular football team or the more lush student center.
I think, if we can reorient to those metrics, many people might be able to avoid going into an amount of debt that is crushing.
Some call it the Edifice Complex. Others have named it the Law of More, or the Taj Mahal syndrome.
A decade-long spending binge to build academic buildings, dormitories and recreational facilities — some of them inordinately lavish to attract students — has left colleges and universities saddled with large amounts of debt. Oftentimes, students are stuck picking up the bill.
Overall debt levels more than doubled from 2000 to 2011 at the more than 500 institutions rated by Moody’s, according to inflation-adjusted data compiled for The New York Times by the credit rating agency. In the same time, the amount of cash, pledged gifts and investments that colleges maintain declined more than 40 percent relative to the amount they owe.
With revenue pinched at institutions big and small, financial experts and college officials are sounding alarms about the consequences of the spending and borrowing. Last month, Harvard University officials warned of “rapid, disorienting change” at colleges and universities.
“The need for change in higher education is clear given the emerging disconnect between ever-increasing aspirations and universities’ ability to generate the new resources to finance them,” said an unusually sobering introduction to Harvard’s annual report for the fiscal year ended in June.
The debate about indebtedness has focused on students and graduates who have borrowed tens of thousands of dollars and are struggling to keep up with their payments. Nearly one in every six borrowers with a student loan balance is in default.
But some colleges and universities have also borrowed heavily, spending money on vast expansions and amenities aimed at luring better students: student unions with movie theaters and wine bars; workout facilities with climbing walls and “lazy rivers”; and dormitories with single rooms and private baths. Spending on instruction has grown at a much slower pace, studies have shown. Students end up covering some, if not most, of the debt payments in the form of higher tuition, room and board and special assessments, while in some instances state taxpayers pick up the costs.
Debt has ballooned at colleges across the board — public and private, elite and obscure. While Harvard is the wealthiest university in the country, it also has $6 billion in debt, the most of any private college, the data compiled by Moody’s shows.
At the Juilliard School, which completed a major renovation a few years ago, debt climbed to $195 million last year, from $6 million in inflation-adjusted dollars in 2002. At Miami University, a public institution in Ohio that is overhauling its dormitories and student union, debt rose to $326 million in 2011, from $66 million in 2002, and at New York University, which has embarked on an ambitious expansion, debt was $2.8 billion in 2011, up from $1.2 billion in 2002, according to the Moody’s data.
The pile of debt — $205 billion outstanding in 2011 at the colleges rated by Moody’s — comes at a time of increasing uncertainty in academia. After years of robust growth, enrollment is flat or declining at many institutions, particularly in the Northeast and Midwest. With outstanding student debt exceeding $1 trillion, students and their parents are questioning the cost and value of college. And online courses threaten to upend the traditional collegiate experience and payment model.
At the same time, the financial crisis and recession created a new and sometimes harrowing financial calculus. Traditional sources of revenue like tuition, state appropriations and endowment returns continue to be squeezed, even as the costs of labor, health care for employees, technology and interest on debt have generally increased.
