To Get at College 'Value,' Report Looks at Student Debt and Degree Completion Together

The article To Get at College ‘Value,’ Report Looks at Student Debt and Degree Completion Together by Beckie Supiano discusses two hot topics regarding higher education. This article looks at the graduation rates along with the debt students acquire at public, private, and for-profit schools. The article looks at the value by examining the “borrowing-to-credential ratio.” The borrowing-to-credential ration is calculated by considering the amount of money borrowed in federal student loans by undergraduates and the student’s parents. That number is then divided by the number of credentials that the college has awarded in a particular year.
            I found this article interesting because it brought up some interesting facts. For-profit institutions had the highest borrowing-to-credential ratios followed by private four year institutions and finally public four year institutions. The surprising aspect of all this was how much higher the for profit schools numbers were. The average ratio that for-profit school had was $43,383 compared to $21,827 at private four year colleges. Public colleges had the lowest average ratio at $16,247. I had an idea that the for-profit schools were expensive, but these numbers are unacceptably larger considering these numbers are based on loans and credentials received. Students are going into debt without acquiring any sort of credentials. This is a drain on the economy and needs to be handled.  
            My favorite part of this article was the information regarding Princeton and other prestigious schools of their caliber. Princeton University had the lowest ratio at $2,385. What this number means is that the school has a high graduation rate, along with student most likely paying for tuition up-front or through scholarships. Princeton is a wealthy school which draws students from the upper class. These students are most likely able to pay for tuition without taking out any loans. Another way to see how the rich get richer and the people at a disadvantage are just that.

Why Do You Think They’re Called For-Profit Colleges?

The article Why Do You Think They’re Called For-Profit Colleges by Michael Morgenstern discusses a good topic. For-Profit schools have been implemented in some shady situations. This article highlights some of the main problems For-Profit schools have caused. From fraudulent recruiting to the 90/10 rule that had to be implemented, all these issues have been touched on from various perspectives.
            I feel the biggest issue at hand here is the value of a degree. If an individual earns a degree from a For-Profit school, that degree should be of some value. According to this article, the few students who actually earn their degrees from a For-Profit school are deemed worthless by the workforce. Something has to be done with the accreditation process. The most disconcerting part of this article has to do with the 90/10 rule. This number is just disgusting and it opens the door for fraudulent recruiting of students. Students are recruited, explained how financial aid works, fill out the paper work and then enroll in classes. The school gets paid immediately and the government takes a hit by either paying for a worthless degree or loaning out money that will most likely not be paid back.
            For-Profit schools most likely started out with the best of intentions of educating people and making their dream jobs a reality. Unfortunately, people got greedy and turned the industry into a dirty scam. Hopefully initiatives will be taken to help fix this sickening problem.

Division I Colleges Increase Athletics Spending at Far Faster Rate Than Academic Spending

This article by Libby Sander brings up a good discussion. Why is athletic spending increasing at a much faster rate? I would argue the answer to this question would have to do with what Americans value. Americans would much rather hand over money to watch a football game then to hand over money for educational purposes in my opinion. Most big time schools in FBS conferences get by on boosters donations. Each school most likely receives donations from thousands of individuals each year. This money will all go toward facilities, travel, scholarships, etc.
            According to this article, spending per athlete grew by 50 percent in a five year period while spending per student increased by 22 percent. Obviously expenses will rise during a five year period, however the spending per athlete is rising much faster than the spending per student. The conference with the greatest gap between athlete and student spending is the Southeastern Conference (SEC). This makes perfect sense because the SEC is the most popular conference with the biggest football stadiums, facilities, and future NFL players. With facilities and talent like this, it is no wonder why this conference spends so much on each athlete. These athletes bring in big revenue to the school. I feel that it is a shame that academia takes a back seat to athletics, but the numbers may be skewed. Running an athletic program is extremely expensive after purchasing equipment, uniforms, and travel expenses. However, there needs to be a compromise in some form to establish a value for both.  

Student-Loan Default-Rate Climbs as Economy Falters

It is probably no surprise that more and more people are defaulting on their student loans during these economically difficult times. Unemployment rates are rising and without a quality job, most people will not be able to pay back their student loans.  This article looks at the issues contributing to the defaults of student loans.
            In 2009, 8.8 percent of people defaulted on their student loans. This number is up 1 percent from the previous year. One interesting part about the defaulting of loans is that they are not consistent between non-profit and for-profit schools.  The for-profit school have a much higher default rate than non-profit institutions.  This could be for a variety of reasons. One big reason is the possibility of fraudulent recruiting practices in the for-profit sector. For profit schools have a proportionately high loan rate. These loans are taken out and must be paid back regardless if the student graduates or not. The school gets paid and the lender gets stiffed. The second reason is the current unemployment rate. If you don’t have a job, you’re probably not going to pay off your loans.
            Some schools are actually losing federal aid eligibility because of high default rates. In 2011,  five institutions will lose eligibility because their default rates exceeded 25% for over three years.
            The student loan default situation is definitely an issue that needs to be looked at more in-depth. The problem is not going to be a quick fix. The default rate stems down from other economic problems that should probably be dealt with first. Unemployment rates need to drop significantly in order for recent graduates to obtain a career that will actually allow them to pay back their loans.