New York Times Publishes Series on Student Debt and College Costs
House Hearing Looks at Veterans Education Executive Order
House Cuts Clery Expansion from Violence Against Women Reauthorization Bill
Judge Rules in Favor of Georgia State in Fair Use Case
It was relatively quiet on the higher education front in Washington this week, with no further work on efforts to freeze subsidized Stafford student loan interest rates at 3.4 percent for the coming year. The lull gives me the opportunity to discuss the series of articles on student debt and college costs featured this week in The New York Times.
For those of you who have not seen the articles published so far, click here and here. The Times appears to still be reporting, so there likely will be more stories in the future. The first piece, "A Generation Hobbled by the Soaring Cost of College," seems to have garnered the most attention. Although it contains some useful analysis, the students featured have exceptionally high levels of debt, a troubling but still relatively rare phenomenon.
I don't want to minimize the challenges families and students face financing a college education or the potential problems of a student going too deeply into debt, but neither do I want to overstate the extent of the problem. The reality is that about 65 percent of students borrow, and this percentage has held relatively stable for nearly a decade, according to the Education Department (ED). Average indebtedness is about $25,000, according to statistics from ED as well as the Federal Reserve Bank of New York and the Project on Student Debt. In addition, most students have little problem repaying their loans after they graduate.
While some students do take out more than $100,000 in loans to finance their college education, this group is a small fraction of student borrowers. Although the Times story puts the size of the group at 3 percent and said that 10 percent borrow more than $54,000, ED data actually show those percentages are even smaller (1 percent and 8 percent). In addition, students who get into trouble borrowing too much for college almost always do so by taking out non-federal loans. (The basic federal loan limit is $31,000 for undergraduates, though a few students can borrow up to $57,500.) Colleges and universities don't necessarily know about private loans their students take out—but we should.
Despite all of this, I do believe we are at a point where, if the higher education community and the federal government do not do more to address the problem of excessive student loan debt, it is likely to become significantly worse in the near future. Steps we should consider include:
Colleges and universities should provide more financial aid counseling to students—especially those who appear to be borrowing significant amounts in their first and second terms.
Banks should be required to inform colleges about private loans made to their students, especially those under age 21.
Student loans should be dischargeable in a bankruptcy. Right now, lenders have every incentive—and no disincentive—to make loans to anyone who applies, regardless of the prospect of repayment.
Colleges and universities should be allowed to deny the eligibility to borrow for broad groups of students who, in the opinion of the institution, should not be taking on student loan debt—for example, students who require remedial education.
This discussion will continue over the coming months. I would like to hear your thoughts and ideas on how we can better assist students considering taking on a heavy loan debt, especially if your institution has already implemented policies in this area.
The House Veterans' Affairs Subcommittee on Economic Opportunity held a hearing yesterday on the impact of President Obama's April 27 Executive Order that aims to protect veterans from aggressive and deceptive marketing by educational institutions.
As you know from our previous discussions, the order requires colleges and universities receiving military and veterans' education benefits to provide more transparent information about cost and financial aid options, track student-learning outcomes and establish a centralized complaint system for student veterans.
The hearing featured a wide range of veterans' organizations and higher education representatives, the majority of whom offered qualified support for the order while expressing concerns about implementation challenges and compliance costs. Singled out often were the difficulties of data collection and the proposed complaint system. Judith Flink of the University of Illinois urged the panel to consider using the negotiated rulemaking process and "actively consult with institutions and the organizations that represent them (like NACUBO, ACE, AASCU, and AACRAO) as they develop the necessary rules" to implement the order.
For more on the Executive Order, see the summary memo we shared last week.
The House on Wednesday voted 222-205 to approve its version of the Violence Against Women Act (VAWA) reauthorization bill (H.R. 4970). The House measure strips out several provisions included in the Senate version of the bill (S. 1925), including the proposed expansion of the Clery Act.
The main focus of VAWA—and both the House and Senate reauthorization bills—is on federal programs to prevent domestic violence and rape. However, the Senate measure also includes a provision that would require institutions to track and report claims of dating violence and stalking on campus, a significant expansion of the Clery Act, which requires colleges and universities to keep records and report annually on the nature, date, time and place of crimes occurring on campus.
As Congress prepares to reconcile the two bills in conference, we continue to believe the Clery expansion would make compliance more challenging while not meaningfully improving campus safety and advocate for its exclusion from the final measure. However, the White House issued a Statement of Administration Policy on Tuesday, threatening to veto the House version and calling on Congress to pass a final bill that looks more like the Senate measure.
I will keep you updated as the conference process moves forward.
A federal judge in Atlanta has ruled largely in favor of Georgia State University (GSU) policies in a copyright case, establishing principles that would allow professors to continue posting excerpts of published works online for their students.
In the lawsuit, publishers accused GSU officials of copyright violations for allowing professors to download and reproduce excerpts from published works for course materials without getting publishers' permission or paying licensing fees. U.S. District Judge Orinda Evans rejected 70 copyright infringement claims filed by Cambridge University Press, Oxford University Press and Sage Publications, finding that only five excerpts exceeded the court's analysis of statutory "fair use" factors.
The suit, filed in 2008, was the first of its kind in the country and examined a key element of the way college professors teach and students learn in the Internet age. It tested the application of the fair use doctrine, which allows use of published material without the consent of the copyright owner on a limited basis, following evaluation of four factors. The Association of Research Libraries has posted a helpful eight-page analysis of the court's 350-page opinion on its website. We will be watching the next steps in this case.
Molly Corbett Broad
President of ACE