Now What?

I’m big on weekly to-do lists, there’s always one on my desk, typically on a white legal pad, and as I think of things that have to be done 2-3 weeks out, I scribble them down on a subsequent page. Included in the week of November 7 to-do list is “EASFAA blog – PSLF? DTR?”  I’m a loudmouth champion of PSLF, and DTR – Defense to Repayment – has been generating lots of chatter lately, and as I was on the Negotiated Rulemaking committee that worked with ED to create it, I figured either of those would be good topics to write on.

Yeah, maybe some other time.

Chances are that most of my colleagues who will read this are as stunned by the results of the Presidential election as I am; the ramifications are many and far-reaching, and there’s no point in discussing all of them in this forum (meet me at a bar and we can talk all night). But what will it mean for families who need financial aid?

Trump the candidate did not make college affordability a major theme of his campaign. There was a brief chat about returning student loans to the private sector (although whether he meant the FFEL model or removing the federal government from the student loan business completely was unclear) and tweaking existing income-driven repayment plans.  As is often the case with Republicans, there was talk of dismantling or shrinking the scope of the Department of Education and detail-free discourse about lowering college costs.  A little-known surrogate supposedly advising him on education policy made comments about how nonsensical it is to give students financial aid to study such silly things as English or History or Psychology or anything else that isn’t specifically designed as job training (I’ve always figured that if those fields were called Conservative Arts instead of Liberal Arts, the right would be far more supportive).

As I write this, Trump trails Clinton in the popular vote and can’t really be said to have a sweeping mandate, especially in a campaign in which “policy” was discussed at only the most superficial level. That said, I can’t be dishonest and say that I’m not worried about how the ugliest parts of his campaign seemed to swing the election.  The forces that Trump rode into town on hardly seem friendly towards helping those less fortunate, they have demonstrated no concern about social justice, and they view American higher education as a bunch of liberal elitist eggheads at best.  It’s not a stretch to predict that the years coming up will not be easy for students and families who need our help.

Those of us who have been in the business for, well, a long time, remember the Reagan years. They weren’t rosy.  Aggregate undergraduate loan limits were lowered midstream, forcing many students to leave school because their senior year loan was eliminated during their junior year.  We were introduced to verification and origination fees, two banes of both students’ and aid administrators’ existence 30 years later.  Costs rose and the Secretary of Education foolishly said that they were rising thanks to Pell Grants, even though there were years in which Pell awards were reduced.

Yet students kept going to college, and we were able to continue to help them. Innovations emerged, many of us found new ways to do things.  Wiser men than I have said that necessity is the mother of invention (cue “Peaches En Regalia,” and bonus points to anyone who gets that reference).  As a man much less wise than Plato (that would be me) has said, 2+2=4, but so does 3+1.  Maybe the blessing in disguise is that our profession will be forced to muster up new creativity and find new ways to help students.

In the meantime, traffic is probably getting busy along the I-95 corridor northbound through Maine. New Brunswick, Nova Scotia, Prince Edward Island…all lovely places.  You might be able to beat some of the traffic by taking Route 1, or try Route 3 through New Hampshire into Quebec.

2+2=4, But So Does 3+1

I once had a letter to the editor published in the Chronicle about how punishing schools for loan defaults is misdirected policy.  No matter what counseling we provide, we can’t make borrowers pay that student loan bill on time every month.  Washington was abuzz with suggestions on how to hold schools’ feet to the fire as an effective means of reducing student loan default.

Except when I wrote that letter, Ronald Reagan was President, women wore big hair and men wore Members Only jackets, Madonna was young and shocking, and my New York Mets were the best team in baseball.  Because it was the mid-80’s.  So how far have we come, as all reliable sources tell me it’s almost 2014?  Suggestions on how to hold schools’ feet to the fire as an effective means of reducing student loan default.  Or as Senator Jack Reed of Rhode Island (a one-time EASFAA Conference keynote speaker, I’ll have you know) said, colleges “will have to have skin in the game.”  Maybe Senator Reed would benefit from checking how much skin we have left.  Institutes of higher education can already face penalties up to and including removal from Title IV participation for high loan default rates, which has caused some to close up shop.  Schools have dealt with – and paid penalties for – audit findings for not just failing to provide proper entrance and exit counseling for borrowers, but even just failing to properly document doing so.  Attempts to convince lawmakers that financial aid professionals should have the authority to deny or reduce a loan they feel is excessive or unnecessary fall on deaf ears.  Numerous products and services to teach students about financial literacy (because many have absolutely zero) may be very high quality products and services, but have you had success getting students to pay attention to them?  What else can we do on our campuses to prevent loan defaults?

I wish I were a Senator.  In my job, when I see a problem, I need to a) make sure that it is a real problem, b) determine what the real cause of the problem is, and c) identify and implement a solution.  How well I do this is my skin in the game.  If I were a Senator (or a Congressmen, they work the same way), it would be much easier.  Then I could a) misinterpret the root of the problem, b) propose punishments on those who my limited knowledge and research tell me are responsible for the problem, and c) offer no solution whatsoever…even say “no” when experts offer real solutions.  No skin in the game for Senators.

So what is the solution, according to Senators Reed, Durbin and Warren (and that one really hurts…I see Elizabeth Warren as Presidential timber…)?  Financial penalties to schools based on their default rate.  Money would be used for, uh, student loan “delinquency and default prevention or rehabilitation.”  So give money to the federal government, and they’ll fix it.  Except if they know how to fix it, why haven’t they already fixed it?  Will they only be able to fix it if they collect money from colleges?  And how will the colleges get the money to pay these fines?  Uh, by raising tuition?  Which will lead to more borrowing?  Which will lead to…gosh, how ironic.

You want fewer student loan defaults?  Have you considered stronger grant programs, less confusing repayment options, more uniform and effective servicing procedures, and (I know this is a reach) a healthy economy for all Americans (not just the 1%) with real job growth?

2+2=4, But So Does 3+1

There’s a joke that goes something like this.  A guy walks into a shoe repair shop and says to the guy behind the counter, “You’re not going to believe this, but I found this ticket you gave me when I dropped off a pair of shoes to be fixed here, must be 10 years ago.  Is there any chance you still have them here?”  Guy looks at the ticket and says, “Yeah, they’ll be ready next Thursday.”

So imagine how our colleagues at Yale and the University of Colorado at Boulder must feel.  According to this morning’s Inside Higher Ed, both of these schools had program reviews and liabilities were discovered.  The schools appealed, as is their right, and the Department of Ed told them to wait until they reviewed other similar cases.

And the schools never heard back, until now.  The Department of Ed bill collectors have sent them each a PAST DUE notice and would like their money, thank you.

And oh yeah, these program reviews happened in the mid-90’s.  Nearly 20 years ago.

Spoiler alert for future posts, I’m an unapologetic, dyed-in-the-wool liberal.  I believe that government, when working correctly, is citizens collaborating to accomplish what they cannot as individuals.  I think that paying taxes is the least we can do to live in a great country, and I cringe when I hear Republicans say that government has no place in education and that the Department of Ed should be eliminated.  No anti-government bureaucracy tirades from me.  Usually.

But this is absurd and calls the very nature of program reviews into question (state agencies, you too).  I’m all for accountability, but at what point do program reviews stop serving as training opportunities to improve compliance and become a means of leaving no stone unturned to recover some of the costs of the program?  These were piddling amounts of money, the fiscal management equivalent of digging for coins in the sofa cushions.  What other office on campus is subject to this level of scrutiny and punishment?  Even NASFAA President Justin Draeger – who has elevated play-nice diplomacy to an art form – called this “outrageous” and asked whether the point of a program review is to fix things or to be punitive.  Justin’s not from my home state, but dude, get your Jersey on.

Was going to use my first entry to explain why I call this blog 2+2=4, But So Does 3+1, but that will have to wait.  Had to seethe about this first.