Tuesday, January 17, 2023

Need Student Debtors to Provide Information about Low-Financial-Value Postsecondary Programs (Updated February 1, 2023)

 

The US Department of Education is accepting public comments as a Request for Information (RFI) about "Public Transparency for Low-Financial-Value Postsecondary Programs."  The announcement is available at the US Federal Register.  

As with most US government rules and policies, industry insiders have great influence in these decisions--and concerned citizens are often shut out of the process. When consumers do have a chance to speak, they may not even know of those opportunities.  That's why the Higher Education Inquirer is asking student loan debtors to contribute to this RFI while they can.   

Tell DC policymakers and technocrats about your unique struggles (and your family's struggles) tied to student debt--and what could be done to better inform consumers like you. 

The comment period ends February 10, 2023.  

The actual URL to make these comments is at 

https://www.regulations.gov/document/ED-2022-OUS-0140-0001 

There you can find public comments that have already been made.  As of February 1, only 13 comments have been posted. 

According to the announcement: 

"a misalignment of prices charged to financial benefits received may cause particularly acute harm for student loan borrowers who may struggle to repay their debts after discovering too late that their postsecondary programs did not adequately prepare them for the workforce. Taxpayers also shoulder the costs when a substantial number and share of borrowers are unable to successfully repay their loans. The number of borrowers facing challenges related to the repayment of their student loans is significant."  

The Request for Information continues...

"Programs that result in students taking on excessive amounts of debt can make it challenging for students to reach significant life milestones like purchasing a home, starting a family, or saving enough for retirement, ultimately undermining their ability to climb the economic mobility ladder. Especially for borrowers who attended graduate programs, debt-to-income ratios often rise well above sustainable levels. IDR (Income-Driven Repayment) plans also cannot fully protect borrowers from the consequences of low financial-value programs. For instance, IDR plans cannot give students back the time they invested in such programs. For many programs, the cost of students' time may be at least as significant as direct program costs such as tuition, fees, and supplies. Loans will also still show up on borrowers' credit reports, including any periods of delinquency or default prior to enrollment in IDR."

"The Biden-Harris Administration is committed to improving accountability for institutions of higher education. One component of that work is to increase transparency and public accountability by drawing attention to the postsecondary programs that are most likely to leave students with unaffordable loans and provide the lowest financial returns for students and taxpayers."

CECU, an group representing for-profit colleges, has an organized effort to protect its interests. 
 
Meanwhile, Robert Kelchen has provided an EXCEL spreadsheet that provides many answers. The dataset covers 45,971 programs at 5,033 institutions with data on both student debt and earnings for those same cohorts. We found more than 12,200 programs where debt exceeds income. And more than 7200 programs resulted in median incomes of less than $25,000 a year with debt greater than $10,000.

While some of these high-debt programs in medicine and law may eventually be profitable, many more paint a picture of struggle with a lifetime of debt peonage. Cosmetology schools had a large number of low-income programs.  But the fine arts, humanities, social sciences, and education also produced low-value programs in terms of debt to income ratio. 

Some of subprime schools HEI has been investigating (Purdue University Global, University of Arizona Global, The Art Institutes) had a number of low-value majors. But elite and brand name schools like Duke, Drexel, Emory, Syracuse, Baylor, DePaul, New School, and University of Rochester even have high debt and low-income programs. 

Related link:  I Went on Strike to Cancel My Student Debt and Won. Every Debtor Deserves the Same. (Ann Bowers)

Related link: More Transparency About the Student Debt Portfolio Is Needed: Student Debt By Institution

Related link: The College Dream is Over (Gary Roth)

Related link: Even Elite Schools Have Subprime Majors (Keil Dumsch and Dahn Shaulis)

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