New rule could deny up to 7.5m US students access to college education

[hlat]

New rule could deny up to 7.5m US students access to college education
http://www.sott.net/article/279780-New-rule-could-deny-up-to-7-5m-US-students-access-to-college-education

I'm not quick to agree that it would be a bad thing that the supposed 7.5 million students would not be able to attend poor performing for profit colleges.

Federal student loans have an income based repayment option where the borrowers repay $0 if their income is below the threshold. It should be easy to demonstrate that "the estimated annual loan payment of an average graduate does not surpass 20 percent of their discretionary income."

Private non-federal student loans are a different story, and a real danger to borrowers. If borrowers make the mistake of getting these, there is no way of fixing the mistake. This mistake will attach to them for the rest of their lives.

Also, I do think the school is part of the problem if they cannot show that "the default rate for graduates doesn't exceed 30 percent." Almost one third of the graduates can't pay? What kind of sorry school is this?

Student loans, especially private non-federal student loans, are a trap if borrowers can't repay. High tuition is a ripoff against unsuspecting students who somehow think an "education" will give them a job.

 

[Renaissance]

New rule could deny up to 7.5m US students access to college education
http://www.sott.net/article/279780-New-rule-could-deny-up-to-7-5m-US-students-access-to-college-education

I'm not quick to agree that it would be a bad thing that the supposed 7.5 million students would not be able to attend poor performing for profit colleges.

In a way yes, but there is a larger picture to consider. I think the main trust of the article is to show how dismal the state of education is for Americans (and by extension the amount of concern the US government has for the people).

 

[Hildegarda]

Also, I do think the school is part of the problem if they cannot show that "the default rate for graduates doesn't exceed 30 percent." Almost one third of the graduates can't pay? What kind of sorry school is this?

I've seen these default rates stats in our states. They are all available, even for private schools I think.

The ONLY school on the list that had a default rate approaching 30% was a beauty school. The total amount of the loan was also relatively small, less than 10K, but apparently the graduates had trouble paying even that. Not what you would expect, but it makes sense when you think about it. How much can an esthetician or a hair dresser earn in a tiny midwestern town? How does that compare to the cost of starting up the business, and when does it begin to earn money? If you move to a bigger city, you have more options to work for someone else at first, but the cost of living is higher as well. That initial slump, I imagine, is what does those poor people in.

The other few high-default schools and programs on the list also were vocational programs, and this meshes very well with what the article says: "The Obama Administration originally aimed the rule at slicing federal aid to under-performing vocational programs at for-profit institutions." This is a well-known problem.

I think the main trust of the article is to show how dismal the state of education is for Americans.

The article really doesn't go into it, but the above does illustrate one unique problem of American education that other countries do not have: vocational training is all but decimated. It is simply not a good choice, financially and in terms of job placement.

And it's very unfortunate. A lot of people have no aptitude for 4+ year college education, nor do they need it for the kinds of job they want to do, like office work or skilled manual work. Yet, to compete, one is now expected to have a degree, which contributes all sort of other educational inflations (grades, costs, etc).

In other countries, vocational track begins after 8th or 10th grade, where kids who don't plan to go to college are trained in specific skills, rather than being entertained in a high school classroom with a hope that they don't riot out of boredom and ransack the whole place. I always thought it was a better choice.

 

[TheLostBoy]

In other countries, vocational track begins after 8th or 10th grade, where kids who don't plan to go to college are trained in specific skills, rather than being entertained in a high school classroom with a hope that they don't riot out of boredom and ransack the whole place. I always thought it was a better choice.

That seems like a smart idea to me. I haven't heard or looked into that, but I think vocational training starting earlier for kids who don't plan on going to college or only need a specific skill set would definitely trump a 4 year university and its accompanying debt, unneeded classes and so on.

 

[Mr. Premise]

New rule could deny up to 7.5m US students access to college education
http://www.sott.net/article/279780-New-rule-could-deny-up-to-7-5m-US-students-access-to-college-education

I'm not quick to agree that it would be a bad thing that the supposed 7.5 million students would not be able to attend poor performing for profit colleges.

Federal student loans have an income based repayment option where the borrowers repay $0 if their income is below the threshold. It should be easy to demonstrate that "the estimated annual loan payment of an average graduate does not surpass 20 percent of their discretionary income."

Private non-federal student loans are a different story, and a real danger to borrowers. If borrowers make the mistake of getting these, there is no way of fixing the mistake. This mistake will attach to them for the rest of their lives.

Also, I do think the school is part of the problem if they cannot show that "the default rate for graduates doesn't exceed 30 percent." Almost one third of the graduates can't pay? What kind of sorry school is this?

Student loans, especially private non-federal student loans, are a trap if borrowers can't repay. High tuition is a ripoff against unsuspecting students who somehow think an "education" will give them a job.

I agree with this rule. Most of the for-profit schools are scams designed to siphon student aid funds for shareholder profits. Most of the students are recruited by these for profit schools who tell them, don't worry about the cost, you are eligible for aid and loans. Since they are for profit, they do this without regard to whether or not the student is ready or a good fit. Most of them drop out soon, but the school gets to keep the federal aid. Better to cut these schools off and focus the aid on traditional colleges.