Low-Income Students

Why George Washington U. is Doing Low-Income Students a Favor

October 29, 2013
Over the last two weeks, George Washington University has been all over the news for lying to its students about its admissions policies. For years, GW has said that it is “need blind” when in fact it isn’t. Every year the university chooses not to admit a certain percentage of students not because of grades or test scores or what admissions officers see as being a “good fit.” Rather they don’t admit these students simply because their families are low-income.

Most of the news coverage has been critical of the school for doing financially needy students a disservice. But, in fact, the opposite is true. GW is actually doing these individuals a tremendous favor since the school does such a lousy job supporting the small share of low-income students that it does enroll.

GW does not come close to meeting the full financial need of the low-income students it admits. Instead, it leaves these students with substantial funding gaps – forcing them to take on hefty debt loads. In 2011-12, GW students from families making $30,000 or less faced a daunting average net price – the amount students pay after all grant aid has been exhausted – of nearly $21,000 per year. That means low-income families have to pony up the equivalent of 70% or more of their annual income for their children to attend GW.

Now it’s true that GW has a relatively small endowment for its size. But this isn’t just a question of money. It’s also one of priorities. The university is a very active participant in the “merit-aid” wars. According to data the school provided the College Board, 19 percent of freshmen had no financial need yet received “merit” scholarships from the university in 2011-12, with an average award of over $17,000. Meanwhile, only 12 percent of GW freshmen received Pell Grants, which go to the most financially needy students.

GW is clearly more interested in recruiting, enrolling, and funding wealthy students than financially needy ones. For that reason, the low income students that GW passes over should know that they dodged a bullet.

The Way We Talk: Choice

September 27, 2013
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This is the fourth in a series of posts reflecting on terminology pervading today’s polarizing debates about American education. In each post, we ask how various buzzwords—“professionalism,” “accountability,” “equity,” and the like—influence the conversations we have. What are the strengths, weaknesses, and blind spots that come with framing our arguments in each of these terms? The hope is that assessing the implications of the way we talk will prompt more productive discussions about improving PreK-12 education.

In the last “The Way We Talk” post, I argued that equity is the closest thing that American public education has to a sacred purpose. We expect our schools to be equal opportunity catalysts; once students complete their PreK–12 (or sometimes PreK–College) education, we generally act as though society has provided them an adequate platform for determining the course of their lives. Put another way, public schools are our community’s most tangible, most democratic commitment to sustaining the American Dream.

But democratic equity only covers part of the story. The United States is a liberaldemocracy. Its attitude towards education (and politics more generally) also stems from individualist liberals like Thomas Jefferson, Thomas Paine, and John Locke. If we care about equity for all, we also care about choice. We care about freedom.

Promoting College Match for Low-Income Students: Lessons for Practitioners

September 26, 2013

A recent brief from MDRC reviews lessons learned from an assessment of College Match, an innovative advising program in Chicago designed to provide relevant and timely information to a broad range of academically qualified students and parents to help them make the best decision about college.  Recent research has shown that many low-income and minority students who graduate from high school well-prepared for college often “undermatch,” or enroll at nonselective four-year institutions and two-year institutions. Often low-income, academically talented students are unaware of the postsecondary options available to them and do not realize that certain more selective institutions could increase their likelihood of graduating with a college degree.

The brief highlights the strategies College Match uses as interventions to better match low-income, academically prepared high school graduates with institutions of higher education. College Match uses a combination of classroom activities and one-on-one meetings with advisers:

  • Sharing information and building awareness with students and families on the application process, financial aid, and the concept of a good “match.” For an academically talented low-income or minority student, a good “match” would be a more selective college with a higher college graduation rate.
  • Individualized student advising that includes matching students with a college that fits their interests, academic abilities, and personal and financial situations.
  • Application support for students navigating the college application process.
  • Assistance with decision-making and planning ahead that includes sorting through college acceptances and financial aid packages to find the best match and helping to prepare students to transition to college and campus life.

New Report Shines Spotlight on Negative Effects of Pre-K Absenteeism

September 17, 2013
Allbriton PreK Classroom

This month is labeled the first-ever “Attendance Awareness Month” by the advocacy group Attendance Works, and there is plenty to which we ought to be paying attention. A 2008 study by the National Center for Children in Poverty (NCCP) estimated that one out of every 10 children nationally is chronically absent (meaning he misses at least 10 percent of scheduled days) in his first two years of school.

Aligning Investments in Parenting With Investments in Early Education

September 13, 2013

Alignment is critical in early education policy. That goes for curriculum, instruction, standards, and much more. To be highly effective, public early education programs need to be: 1) accessible to those who need them, 2) high-quality, and 3) aligned with the rest of the education system. The last part is certainly key; we know, for example, that pre-K programs work best when they are designed in tandem with the K–12 system into which they feed. However, it is a mistake to think of alignment as perfectly linear, running from pre-K straight through college admission. Students are also their parents’ children—and those parents’ influence can support or undermine educators’ work. Can targeted policies help align parenting with schooling? Should policymakers dare to try?

Event Series at the University of Kansas on Poverty, Assets, and the American Dream

September 6, 2013

The University of Kansas School of Social Welfare, the Assets and Education Initiative (AEDI), and the KU Social Work Administration and Advocacy Practice are convening a series of events over the next few months about the interplay of assets with upward economic and social mobility. Learn more about the series and RSVP for the first event here.

The first event kicks off next week on September 11 at the University of Kansas. Keynote speaker Dr. Mark Rank, a widely-recognized expert on poverty and inequality, will be discussing his research, including a finding that nearly 60 percent of Americans experience poverty at some point between the ages of 20 and 75. His talk, and the panel discussion to follow, will examine why poverty is portrayed as an individual failing despite its prevalence and structural origins, and how institutions can support (or stop hindering) upward economic mobility. 

Check out the details for Wednesday's event below and make a note of the dates of forthcoming events. In particular, note that our Senior Research Fellow, William Elliott, will be speaking at the November event about his work on improving children's educational outcomes through access to savings. The early 2014 events will feature Tom Shapiro, whose work with the Institute on Assets and Social Policy has greatly informed the national conversation on the causes of racial wealth disparities, and Michael Sherraden, whose work laid the earliest foundations of the asset building field.

The series will be available on livestream for those not able to travel to the Lawrence, Kansas area.

The Way We Talk: Equity

September 5, 2013
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This is the third in a series of posts reflecting on terminology pervading today’s polarizing debates about American education. In each post, we ask how various buzzwords—“professionalism,” “accountability,” and the like—influence the conversations we have. What are the strengths, weaknesses, and blind spots that come with framing our arguments in each of these terms? The hope is that assessing the implications of the way we talk will prompt more productive discussions about improving PreK-12 education.

"Professionalism" may be a newly fashionable alternative to the dominant hold "accountability" has on education debates today, but neither of these words makes sense without considering its relationship to "equity." When we talk of raising teachers' professional status or of dismissing ineffective instructors, it's almost always in the service of providing every American student a chance to succeed.

Pre-K Debates: Access and Quality

August 26, 2013

In the early education policy world, the research consensus supporting public investment in high-quality pre-K programs is overwhelming. We know that money spent on these programs leads to big savings in the long run.

The Ed Department Blinks on Parent PLUS Loans

August 16, 2013
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This blog post is the third part in a series that takes a look at recent changes to the credit criteria for Parent PLUS loans and the subsequent effect on colleges and universities. You can find the introductory post here and the second post here.

For nearly a year the Department of Education has been under a firestorm of criticism from the Historically Black College and University (HBCU) community and its advocates over changes to the PLUS loan program that they say reduced revenue and enrollment at these institutions.According to an article yesterday in the Chronicle of Higher Education, the Education Department finally relented and made further accommodations to help more applicants get approved, while promising to rethink the criteria as part of a rulemaking session next spring. But did loosening criteria really solve a national policy problem? Or was it a set of changes to benefit a small subset of institutions, the result of which will mean greater amounts of worse debt for families?

The Department’s changes were outlined in a letter to Rep. Marcia Fudge (D-Ohio), the Chair of the Congressional Black Caucus. In it Education Secretary Arne Duncan wrote that, the Department would more than double the size of debt it considers to be “de minimis,” allowing rejected borrowers with larger debts of any type to be approved through an appeals process. "We believe this may help families who have relatively small adverse credit events that negatively impact their credit histories, such as unpaid medical debt, parking tickets, or cell phone bills of greater than 90 days duration,” the letter says. 

This is a huge victory for many HBCUs and for-profits, which rely heavily on PLUS loans because they charge relatively high prices, enroll large numbers of low- and moderate-income students, and lack the resources to give out much institutional aid. The losers in this battle are the low- and moderate-income families who will be allowed to borrow up to the cost of attendance of a school, with no regard to whether they have any hope of paying it back. And remember, parent PLUS loans are not eligible for any of the income-based payment plans or forgiveness options nor are they dischargeable in bankruptcy. This means a family making $30,000 a year could borrow more than their salary to send their child to school.

Here are four reasons why it’s a big mistake for the Department to weaken the adverse credit standards for the Parent PLUS loan:

  1. This “patch” fixed a problem that appears to not have existed. According to Secretary Duncan’s letter, 95 percent of students whose parents were initially denied a PLUS loan to enroll in an HBCU ended up still attending an institution of higher education. Many did so with the assistance of the additional $4,000-$5,000 in unsubsidized Stafford loans that students whose parents are denied a PLUS loan are able to borrow.  For students this fall, that additional Stafford debt will carry an interest rate that is 2.55 percentage points lower than what their parents would have paid on a PLUS loan. Losing 5 percent of applicants is not good, but it is far different from the sky is falling outcry.
     
  2. This “fix” screams institutional capture. The Department’s letter provides a possible suggestion as to why it made the change even though this doesn’t appear to be a national problem. It notes that within the 95 percent of students whose parents were denied and still enrolled, 19 percent went somewhere besides the initial HBCU. From a national picture, the story is no different—only 5 percent of students never enrolled. But from the narrow institutional perspective, one-quarter disappeared. The change thus feels less like solving a national problem but rather addressing the concerns of a small subset of institutions.

    But is that even the responsibility of the Department of Education?  Its job is to oversee the broader national interest in education and to help more individuals earn postsecondary credentials. That’s exactly why they made changes to the adverse credit standards for the Parent PLUS loan—the only proxy the Department has to ensure they aren’t saddling parents with debt they won’t be able to pay back. This move makes it seem like the Department is ignoring the broader national interest over the interest of a handful of politically powerful institutions. And what about those students who chose to go elsewhere? Wouldn’t it be worth knowing whether they are actually taking on less debt now?
     
  3. Changes to “de mimimus” credit will allow parents to borrow even though they have financial risk factors. Although we do not know what the “de minimus” amount is, the letter is not clear whether it applies only to collections or charge off or whether all debts will get this tolerance. In the latter case, a parent who is 90 days late with a large credit card charge could borrow nearly unlimited amounts under the PLUS program, even though they’re struggling with debts that never would have been approved prior to the change.
     
  4. We should be concerned about people not paying their cell phone bills. In the letter to Rep. Fudge, Secretary Duncan alluded to the fact that the Education Department wants to help families obtain loans who have small adverse credit events related to things like medical debts or cell phone bills. It’s unclear if this means special treatment for these debts or they will just be covered under the larger de minimis amount, but these types of debt are not equivalent. Unpaid medical debt is a sensible thing to consider, since we don’t want to penalize families who have suffered a sudden financial hardship due to a medical emergency out of their control. But unpaid parking tickets and cellphone bills are arguably not in the same realm of sudden, medical debt and speak to someone who is struggling to pay their regular bills.

It is clear that HBCUs and for-profits have gained inroads in ensuring the Education Department reverts back to the old credit standards for Parent PLUS loans during negotiated rulemaking this spring. Part of the problem is that the Department only has proxy measures to gauge a family’s financial health. So all they can do to ensure families aren’t taking on too much debt is to patch the credit check.

Enough with proxy measures. Instead of small tweaks to a backward-looking credit check, the parent PLUS loan application process should include a forward-looking “Ability to Pay” measure. Adding “Ability to Pay” to the credit check would help protect parents from over-borrowing at whatever cost to send their child to school by looking at parents’ indebtedness (with or without PLUS loans) relative to their earnings. In designing this metric, the Education Department could include exemptions for families who have suffered a sudden and catastrophic financial hardship, such as a medical emergency, that may have affected a parent’s debt to income ratio.

Fortunately, there will be an opportunity to take a reasoned approach to PLUS criteria at the negotiated rulemaking session that is likely to take place next spring. As that process goes on, the Department must not bend to the will of politically strong institutions and go back to where we started. Instead it should make real changes that are transparent and capture the exact financial health of families so that we make sure the very students we are looking to give access to, don’t impoverish their parents just to do so.

Stay tuned to Higher Ed Watch for the continuing coverage of the Parent PLUS loan crisis.


1In order to receive a Parent PLUS loan, applicants cannot have been through certain significant financial conditions in the past five years, such as bankruptcy, foreclosure, or a tax lien. Nor can they have any debts that are more than 90 days past due. In the fall of 2011, the Department began counting accounts whose current status was in collections or charged off as evidence of a debt more than 90 days late and thus grounds for an application being denied. This resulted in a substantial uptick in the number of denied loans, typically at high-cost low-resource institutions like HBCUs and some for-profit colleges. Read more here.

IES Report: Early Interventions and Early Childhood Education

August 7, 2013
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On July 23rd the Institute of Education Sciences (IES) released a report on research pertaining to early childhood education. The report describes findings supported by IES early intervention and childhood education research grants, as well as how to use these to better support improvements in early childhood education in the United States. In particular, it spotlights instructional practices and curriculum that appear to enhance young children’s development and learning and approaches for improving teachers’ and other practitioners’ instruction.

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