Over the next several weeks, we’re regularly going to identify an education goal and put forth in brief at least one new idea and a short, pro-con analysis. Most of the time, we’ll put forth a series of ideas to consider.
Make College “Cheaper” for Families, Debtors, and Taxpayers.
Almost all 2020 college affordability proposals are directed at the price families pay during and after enrollment rather than the cost of education services. Up-front price reduction proposals (i.e. free college) tend to focus only on community college tuition and fee costs and are regressively designed to help mainly middle and upper-middle income households. Post-enrollment debt relief plans tend to be broad brush, but similarly regressive as well as extremely expensive for taxpayers and with in dollar terms relatively little impact on the neediest households.
Idea #1: Want to make college cheaper? Reduce time-to-degree. Imagine if we could have students complete high school and college in seven years as opposed to eight or eight as opposed to nine as is now the norm for those who complete a bachelor’s degree. Based on ACT data, 25% of high school seniors are academically ready for college-level work before 12th grade begins. One-third of them come from low-income households. Let’s rethink 12th grade and create a “Freshman Year for Free” fast track to and through college for those ready and willing. It would take about $100 million to expand AP, dual enrollment, and EdX on-line college course options sufficiently and equitably to all fast track able students.
Critically for fast track 12th graders and regular higher ed students, we should accompany any early college-level coursework opportunity expansion with a guarantee that introductory college course credits transfer among all in-state public colleges. Econ 101 is not that different from one school to the next. Yet currently, transfer students lose approximately 40% of all college credits accumulated regardless of level and provider.
Idea #2: Debt Swap. Those most hurting with student loans are those with extraordinarily high private loan debt levels and those with very low-income levels. So, we suggest debt swap refinancing of outstanding high interest private student loans into low interest and better repayment term federal student loans. Extend bankruptcy protection beyond credit card and other consumer debt to student loans as well.
Pros: The fast track idea addresses “senioritis,” represents innovative thinking, and reduces the cost of college for families and taxpayers by speeding time-to-degree. Of the one-third of academically ready for college 12th graders that come from low-income families, nearly 30% are racial minorities. Like fast track implementation, our debt swap idea is similarly low cost and has been supported by both Sen. Sherrod Brown (D-OH) and the Congressional Black Caucus. In fact as per government accounting rules, it would generate revenue (i.e. savings) for the federal budget, because the government makes money on student loans.
Cons: The fast track idea is complex and despite being voluntary conflicts with traditional notions and fond memories of high school senior year. Although states like Florida have done it successfully, colleges will hate the idea of guaranteed introductory course credit transfer and fight it on academic freedom and quality grounds. Extension of bankruptcy protection seems unfair to those who repaid and a downer for those who didn’t; the latter group wants all student debt wiped away.
Want to learn more about these ideas? Check out this report we did with the Alliance for Excellent Education on Fast Track.
Not aggressive enough for you? Well, then consider —
Idea #3: Pair a debt-free public college proposal covering all postsecondary education expenses (tuition, fees, room, board, etc..) for students who work or serve no more than 10 hours a week, inclusive of summers and current paid and volunteer work with: (i) direct aid to public institutions of higher education to upgrade academic programs, including developmental (i.e. remedial) education, in exchange for schools guaranteeing full course availability for on-time graduation; (ii) direct aid to community-based organizations working in partnership with either public high schools or community colleges in supporting on-time college completion; and (iii) a state maintenance of effort to guard against supplanting and erosion in state support for public higher education.
Idea #4: Debt relief for victims of predatory lending by the federal government and those with low-earnings. Wipe clean: (i) all federal student loan debt of anyone who attended a high-risk for-profit, non-profit, or public postsecondary institution fueled by federal loan assumption; and (ii) up to $5,000 in student loan debt of others who are low-income earners regardless of where they attended college. Moral hazard addressed through resuscitated Obama administration for-profit gainful employment and other consumer protection regulations extended to non-profit private and public institutions as well as for-profit trade schools.
Pros: Extension of debt-free college to four-year schools, total cost of attendance, institution support, guarantee course availability, and community-based organization partnerships all are likely to boost on-time graduation rates and reduce costs to students and families. The general debt-free college idea polls well among primary voters and better with general election voters when coupled with a personal responsibility element. Debt relief acknowledges past federal government action as predatory lender and focuses on those most likely to default. Approximately half of all student loan defaulters owe less $5,000.
Cons: Expensive at $20 billion a year. Governors will very much dislike a state higher ed maintenance of effort. The debt relief plan requires identifying high risk colleges (e.g. college dropout factories) in the non-profit and public space. Minority serving institutions may object. Extension of Obama for-profit regulations to non-profit & public space expands opposition constituency to the effort.
Want to learn more? Check out this report we did laying out a comprehensive college affordability plan for Massachusetts complete with cost estimate.
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