The presidential campaign has raised visibility on the heavy loads of debt carried by college students, but researchers just discovered something that people haven’t been talking about: the racial gap in college debt.
A new study in Children and Youth Services Review concludes that even when controlling for differences in socioeconomic status, black and Hispanic students face the prospect of more debt than white students do.
Recently I experienced a wave of frustration related to my student loan debt. This happens from time to time, and really anything can set it off. Debt is stressful, as most of us are aware. Before I dive in, though, I’ve got to say that I’m more fortunate than many; I’ve been able to steadily pay on my debt for a while now. It’s still sizable enough to haunt me, but at least it isn’t a Poltergeist-style terror. That’s not insignificant.
Nothing so far is unique. Thousands of former students are dealing with the exact same thing, though in varying levels of distress or ease. What makes it slightly different is what degree I went into debt for.
I received a Master of Theological Studies degree from Vanderbilt Divinity School. So we’re talking about 1) a graduate degree, as opposed to a bachelor’s, which is widely regarded as necessary in this country to participate in the job market; and 2) a professional degree, meant to lead to practical ministerial work for the social good.
The Department of Education will forgive the federal loans of thousands of students who attended Corinthian Colleges, Secretary of Education Arne Duncan announced Monday.
Corinthian, a large for-profit education company, last month filed for bankruptcy amid multiple charges of fraud.
Duncan explained the move as an attempt to counter "the ethics of payday lending," according to the New York Times.
But the announcement is proving divisive, with critics citing the potentially huge taxpayer burden — the cost to the government could amount to as much as $3.5 billion if every former Corinthian student applies for relief.
Supporters, on the other hand, are hailing the move as a compassionate stance for students in unexpected need.
The New York Times reports:
“A lot of men and women have been hurt by this unfortunate situation, including low-income and minority students,” said a joint statement from Representative John Kline, the Minnesota Republican who is head of the Education and Workforce Committee, and Representative Robert C. Scott, Democrat of Virginia, the ranking minority member.
“Helping those eligible students who have been harmed is the right thing to do,” the statement said.
Mr. Duncan also said the department planned to develop a process to allow any student — whether from Corinthian or elsewhere — to be forgiven their loans if they had been defrauded by their colleges.
Read more here.
“The higher education industry is facing a multi-pronged and existential threat composed of successive waves of disruptive innovation” (Butler, “Tottering Ivory Towers,” American Interest (Sept/Oct). It seems higher education, including seminary education, is going the way of the music and media industries! Our 2,000-year-old business model of “sage on stage” could be truly doomed. The appearance of “massive open online courses” (MOOCs) over the past few years has thrown many higher education institutions for a loop, and more innovations are on the way.
In response to these new innovations higher-ed institutions, including seminaries, have tweaked their business models with a few technological modifications such as PowerPoint, email, electronic research, and online courses. But, will it be enough? Butler says “no” and so do the trends. The reality is graduates of today’s higher-ed institutions are not evidencing the competencies expected and/or hoped for by their future employers. Consequently, accreditation standards, at an all-time high in complexity, are now beginning to be challenged. Simultaneously, tuitions are costly, the economy is tough, and the job market is even tougher. The end result is that students are graduating with large amounts of student loan debt and potential students are opting out of the education market.
We began the 21st century with denominations and churches that no longer fit the needs of a shifting society, a Congress that votes against the poor and the middle class, and seminaries that face multi-pronged threats to their existence. It’s time for an overhaul!
Irresponsible. Foolish. Impulsive. Recent college graduates with substantial student loans are sometimes regarded in these terms. Those who attended college decades ago, with a $15 per credit hour, may assume that these graduates are spoiled Millennials who “should have known better” than to agree to the loan terms.
According to an aide connected to the Democratic Party, bipartisan senators reached a deal Wednesday that would offer undergraduate students a lower interest rate of 3.85 percent on student loans, up until the year 2015. Revealing this information to USA Today prior to the official vote, sources confirmed that both parties are working towards lowering students costs. USA Today reports:
The bipartisan agreement is likely to be the final in a string of efforts that have emerged from near constant work to undo a rate hike that took hold for subsidized Stafford loans on July 1. Rates for new subsidized Stafford loans doubled from 3.4% to 6.8%, adding roughly $2,600 to students' education costs.
Read more here.
The month of July stands as an important time for Congress as members of the House and Senate attempt to make decisions about six major U.S. issues. Some vital decisions that need to be agreed upon before next month’s recess involve: immigration reform, student loan debates, budget planning, and fiscal issues. The Washington Post reports:
Significant debates await the House and Senate in the coming weeks over a new budget, a new farm bill, federally-subsidized student loans, several key Obama administration nominees and an overhaul of the nation’s immigration laws, which remains the year’s biggest political fight.
Read more here.
Debt, multitudes think, is bad. It could be good, by helping more people manage the energy of money. The Lord’s Prayer helps the confusion along: some pray to be forgiven debts, others to be forgiven trespasses. Good debt does not trespass. Bad debt is most often done by banks, and trespasses inside people, insidiously, and shames them. Religious institutions help the shame along by mispraying the Lord’s Prayer.
Debt might be good. In his book on Debt: The First 5000 years, David Graeber opens with a story. The story is paradigmatic. A woman tells a man the story about a person who is “under water.” “But, shouldn’t she have to pay her debt?” Should. Have. Pay. Debt. Those four words go together. They mispray the Lord’s prayer. Instead we might pray, “forgive the banks their trespasses into our souls first and then our pocketbooks.”
In January, I received a phone message from a friend of ours. She needed to talk with me, she said. About something.
Not long after, I got an e-mail from Cordera (not her real name), our friend’s daughter:
“I am writing to you because my family and I have run into a problem. This summer President Obama passed the Deferred Action for Childhood Arrivals [of undocumented immigrants]. Over a long course of paperwork and appointments with the USCIS, I was able to receive a work authorized social security card and employment card. [But] without a student visa, I was not able to file for a loan. A few weeks after my first attempt, I found a bank that would be able to grant me a student loan with a US citizen or permanent resident as the co-signer. My father's uncle offered to help but . . . he was denied the credit.”
She wanted us to co-sign for a private loan in the amount of $35,000 to cover her first year of college. My heart sank. We couldn’t co-sign. Or we wouldn’t. I wanted to discourage her because of unfavorable and variable rates, immediate repayment, and long-term consequences of excessive indebtedness. I spoke with her university’s financial aid officer who intoned piously that the cost of the university experience was but one factor to consider: Cordera needed to hold onto her dreams, despite the crippling price tag of those dreams.
Maybe someone pursuing a Ph.D. in Liturgical Theology and Ethnomusicology is shouldn't be the one to offer this reflection.
Heck, maybe a Ph.D. in Mechanical Engineering or in Astrophysics would be a wise economic choice. I can't say.
I've been mulling over some of the news stories out there hyping either end of the (political?) reality of spending more money (and time, let's not forget time) on higher education. It leads me to a couple of questions:
Does the present rate of student debt have a snowball's chance in Tartarus in being repaid? Will the students, especially the so-called "nontradtional student" like myself, actually see a return in their investment?
If you believe NPR, the answer may be "no."
Marcel Pohl, a student at The School of Economics and Management in Essen, Germany, says he couldn't believe it when he found out the university was suing him for graduating with a master's degree after just three semesters.
"When I got the lawsuit, I thought it couldn't be true," the 22-year-old told Bild. "Performance is supposed to be worth something."
Yesterday, as Congress battled over the future of interest rates on student loans, I was invited to the East Room of the White House to hear President Obama call on Congress to keep college affordable. Upon arrival, I found that most of the invitees were college students 20 years old and younger—at 36, I felt pretty old.
It was like being at a rally at on a college campus. What made it interesting was that Obama was directly speaking to those most affected by this pending Congressional action – college students.
College students who need to borrow for school, on average graduate with more than $25,000 in debt.
On July 1, the federal interest rate for student loans is scheduled to double from 3.4 percent to 6.8 percent unless Congress intervenes. The new rate would affect federally subsidized Stafford loans, which are provided to almost 7.5 million low- and moderate-income students nationwide each year.
Are we subjecting our children to a perpetually overstimulating environment? Quite possibly. Are we expecting superhuman results from them at critical points in their development when they may lack the critical judgment skills to resist such monumental pressure? Based on the epidemic now rampant in our high schools and colleges, I’d say yes.
I wrote recently about the moral questionability of the student loan system, and further, the culture of pressuring kids into college straight from high school as a necessary rite of passage, regardless of capacity to pay for it or understanding of what they need from it. But beyond urging them to mortgage a large chunk of their futures away, it seems we’re compromising their health and perhaps mental well-being for the sake of some horse race that may or may not actually be real or necessary.
What’s worse, it seems we’re harvesting a generation of addicts, placing results ahead of happiness, and certainly ahead of service, community or God.
There have been lots of news stories lately about student loan forgiveness and the like, and as the holder of serious five-figure graduate student loans, you’d think I’d follow the discussion closely.
But to be honest, I haven’t paid much attention for one, possibly cynical, reason; the systems isn’t going to change.
I joke sometimes that my dream is to pay off my student loans before I retire, but to be honest, that probably won’t happen. It wouldn’t surprise me if I have them with me the rest of my life.
I know, typical twenty-first-century young adult nihilism, right? Maybe. But my monthly payments are already the second largest bill we have next to our mortgage. Still, the payback time line spans many, many decades. I’d like to believe that those in power have the necessary motivation to change things, but here’s why I hold little, if any, hope they ever will.
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