Obscenity and Student Borrowing

I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [“hard-core pornography”]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that. [Emphasis added.]

—Justice Potter Stewart, concurring opinion in Jacobellis v. Ohio 378 U.S. 184 (1964), regarding possible obscenity in The Lovers.
Source: http://en.wikipedia.org/wiki/I_know_it_when_I_see_it

As I said in my last entry, I don’t know what the right amount of student borrowing is, but I do know too much when I see it.

The problem with even thinking about what the “right amount” of student debt is that it is going to go up. And keep going up. American colleges and universities do not seem to have found the magic formula constrain the growth of in the total cost of attendance. Institutions have made progress in some areas, but they remain basically expensive, and the rise in part-time adjunct faculty as a cost control measure is probably not serving us well. It was once explained to me very slowly by a member of the Governor’s Cabinet, “But Tod, college costs are always going to go up.” 

I don’t feel compelled to believe that, but I do see the evidence  each year. This also includes evidence that not all cost increases are within institutional control. If not annually, at least on a semi-regular basis, well-intentioned laws are passed that increase the cost of doing the business of higher education. State legislators attempt to solve the problems of constituents through bills to address admission policies, transfer policies, access, affordability, efficiency, effectiveness, economic impact, K-12 involvement and improvement, campus safety, student health, student mental health, and the list goes on. To be fair, institutions bring a lot of this on this on themselves with policies or behaviors that create a news story that upsets people. Sometimes these events are really valid drivers of change, other times they are just the embarrassing reflection of what happens with human-run enterprises. They are called mistakes and they happen. Get over it.

I continue to be amazed at how college presidents continue think that big bills to change the institutional relationship to the state will work out in their favor. More and more they lead to greater intrusion of measurement, control, and direction. Good advice has always been, “Don’t poke the sleeping bear.” Better advice is, “Don’t push a big bill about yourself that hundreds of other people can involve themselves, many of which will do so without your knowledge.” Laws to affect institutional behavior rarely seem to reduce costs. Perhaps never.

Yesterday, Secretary Duncan defended the proposed rating system to congress. He and others continue to maintain this a way to improve and maintain affordability. Here’s a suggestion: quit pushing proposals that require institutional staff and leadership to respond. Quit doing things that require institutions to have federal lobbyists and pay membership dues to lobbying organizations. Just set clear and defensible standards for Title IV participation. The proposed Gainful Employment rules do that, although a lot of lobbying and institutional engagement has been in play there, as documented by David Halperin’s fascinating new book.

Returning to the today’s theme: obscenity is material where the “dominant theme taken as a whole appeals to the prurient interest”, and that the “average person, applying contemporary community standards” would disapprove.”  I think we have reached that point with student debt. Or, at least, based on the way student debt is being reported based on horror stories and loose rhetoric. The Vox Cards on student debt by Libby Nelson provide a nice overview on the topic, but I think perhaps they indicate that the discussion on student debt has reached the level of prurient interest – it seems to be as hot a topic as sex.  

Unfortunately, I don’t think we have quite reached the point where we know what the community standards are…let alone what they should be. If the average debt for 70% of bachelor degree graduates is $29,400, is that too much, too little, or just right? Or is the concept of community standards more important than we realize here? Should the average debt in Virginia be higher than the average in Mississippi but lower than that of New York?

What is the right amount of debt?

It is a good question, but it is the wrong one.

The right question is this. “Who are the parties responsible for paying for postsecondary education and making it accessible to all Americans, and what level of responsibility does each party have?” It seems to me that it has been too long since we have had this conversation, if we ever did.

  • What is the role of the federal government?
  • What is the role of the state?
  • What is the role of the family?
  • What is the role of the student?

Until we answer these questions, and agree to live the by the answers, I don’t think we can do any more than limp along and let the debt increase. That’s the real obscenity.


Student Debt and the Informed Consumer

It is hard to consume any media from a broad range of sources without encountering stories about student debt. I think. Maybe it is just because of my job I tend to notice the coverage of student debt. This is probably much the same way that I notice all the new generation Ford Escapes that have popped up since I bought mine in 2012. (However, those have been hugely successful for Ford and they have sold a lot of them.)

The Atlantic had an article earlier in the week about The Myth of Working Your Way Through College highlighting the differences in buying power of minimum wage employment in terms of a per credit basis over time. I’ve seen such analyses before, in fact, I’ve done some in the past for discussions considering new state financial aid models. I love articles like this because of the reader comments. Those are often pure gold.

After reading those for awhile tonight, I clicked onto this Daniel Greenstein commentary which I believe is prep for his speech tomorrow at the AERA conference. I’m always interested in articles about how to measure college performance. (I hope we can start doing that some day – once we have firmly established that we know how to measure what it is actually happening. Then we can measure performance.)  He starts  with a well-known metric “Because nearly 40 percent of students who start at a four-year college won’t earn a degree in six years.” It’s absolutely true – because it is all we have absolutely measured nationally. In Virginia, we know that 75% of all students who start at a public four-year institution, whether fall or spring, full-or part-time, first-time in college or new transfer complete a degree somewhere in Virginia within 10 years. It is 76% for just first-time college. Adding in data from the National Student Clearinghouse we get to almost 80%. It’s not perfect, it can be improved, but more importantly, it is a full measure. (Yes, I am bragging about my work).

Greenstein goes on to say those “who do complete a college degree increasingly carry significant debt, even as employer surveys and international comparisons suggest they lack certain skills. The trends are exacerbated by a steep drop in government funding for higher education and increased costs. Parents and students are questioning whether college is ‘worth it.'” Which is all true.The problem with the discussion of student debt, to my tumored mind, is that there seems to underlying assumption that students are entitled to not have a cost investment in their higher education. I’m not against that idea since I do believe postsecondary education is a tremendous public good, as well as a private good, however, as a nation we have not agreed upon the concept of completely free education beyond K12.

Folks that know me and have participated in meetings with me, know that I am not the least bit shy about pointing out that higher education is the only aspect of American society where parents are expected to pay for the pursuits of their adult children. An 18 year-old has complete freedom to join the military, marry, enter into contracts, and essentially pursue any legal activity except consume alcohol. If an 18 year-old attempts to attend college and ask for financial aid, all of a sudden the world changes and that legal adult must ask their parents for all kinds of personal finance information to complete the FAFSA and perhaps the CSS Profile. Parents can refuse, in which case the student can borrow their way to attendance through private lenders or they can try to prove they are actually independent of their parents (fat chance, but possible).

They are completely free to pay for college themselves – if they have the money.

Again, fat chance.

However you believe it happened, however it actually happened, whatever is going to happen in the future, we have an industry selling a product/experience to a market audience completely unable to afford it. This leaves only three options: getting somebody else to pay for it, student debt, or self-financing through work. For about 60% of undergraduates, it is a mix of the first two or all three.

When we put out the student debt reports to the institutions last fall for review prior to publication, one of the institutions questioned the maximum loan we reported for a five-year period.  The email from the financial aid officer went along the lines of, “Can you verify your data? You show us with a graduate with $171,000 in student debt, and I think that is kind of high for an art major.” Really? Kind of high? My reply was along those lines since I have an art degree as well. Unfortunately, the data were accurate and the school was able to figure out who it was and verify the amount through their own records.

What bothered me most about the entire exchange was that they did not know off-hand they had a relatively recent graduate with that much debt.

It is also bothered that that was the only discussion about such an extreme example…there were others across the Commonwealth.

In conversations about this story, at least one college president made a comment along the lines, “That’s insane! No one should pay that much for a college degree!”

Again, really? Those loans simply represented the total cost of five years of attendance at a private, residential institution. It is simply what it costs to attend…well, that and take some of the tuition money and give it to other students. But, that’s another story.

I am still troubled by this comment as it seems to call into question the perception of the product of the university that president represents. It is also an indictment of the student for not finding someone else to pay for their education. That strikes me as wrong.

I wonder if student debt is like pornography – I don’t know what the right amount is, but I know too much when I see it.

What I do know is that until the cost structure of postsecondary education changes, this discussion won’t change. There does not seem to be public and political appetite to make the current model free, especially with the current cost structure, and so a mix of student debt and having other people pay will continue. How much is the right amount of debt should be an informed decision made by the student. It is difficult to make an informed decision without adequate information about cost of attendance, graduation rates for discrete cohorts of students, likely debt amount, and historic ranges of earnings by program. These things are becoming available, thanks to the work we are doing Virginia and what is taking in other states.

More than knowing what their likelihood of graduation is, students need to know how to graduate. They need clear guidance on what it takes to graduate on time, what it costs for each additional year, and the cost of failure. These are where we should be going. If we are not going to solve the college cost problem, perhaps we can improve the college financial literacy problem.

To some degree, student debt is a choice. Certainly extreme debt is a choice, one that can be mitigated by knowing more about the wide range of options of postsecondary education available.

Wasn’t Men’s Wearhouse whose motto was, “An informed consumer is our best customer”? Might that not be an appropriate goal here?