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.

Is There a Student Loan Crisis?

It’s become hard to pick up a newspaper (oops, age is showing) or go to a news site and not see an article about lives being destroyed by student loans or that they represent the new bubble that will soon burst. The citations are familiar: over a trillion dollars in student loans; low repayment rates among underemployed graduates; they’re responsible for tuition inflation (don’t get me started); Millennials who borrowed $250K to earn a PhD in 19th Century Greenlandic Philosophy and are now making pretty designs with the milk on cappuccinos at an artisan coffee shop in Bushwick.

That’s all much better click bait than “Student Loans Help People Continue Their Education and Lead Better Lives. And Most Borrowers Repay Them OK.”

Those who attended the NASFAA conference in 2015 will recall that when the question that gives this entry its title was put up for a vote and the “no” vote won, the backlash was swift; student loan activists who are struggling with their debt accused our profession of being some combination of oblivious, uncaring, greedy, and in general, the face of the problem. Many attendees voted yes, we do have a student loan crisis, but as the only response choices were yes and no, it perhaps obscured the thoughts of many that perhaps many individuals have their own student loan crises, but the nation does not.

Student loans have helped generations of students earn degrees that have led to higher paying careers and better lives. Even during periods of high default rates, most borrowers satisfactorily repay, and the current average debt of about $29,000 is only slightly more than I just spent on a Subaru. And no one has said the economy is going to collapse because of all of these Subarus.  A good education is a good thing to have, in our country it costs money, and student loans have been providing some of that money for decades.  Crisis?  Not if they’ve helped so many people.

So maybe yes/no is a matter of semantics, but that might be weak argument in an environment in which many have been promised a better life by continuing their education, only to see it all go wrong, with misrepresented claims, closed schools, no degree or career advancement, but plenty of student loan payments due. To someone who borrowed thousands of dollars for a bill of goods that turned out to be false but still carries burden of that debt, they’ve got a crisis on their hands no matter what meta-statistics anyone can cite.  Public opinion and public policy should both be formulated by facts and data, but we all know that they are too often informed instead by anecdotes and headlines.  If lots of people have very negative experiences with student loans, even if they’re in the minority, it can do irreparable harm to the program moving forward.

Where does the truth lie? What role do financial aid professionals play?  Are we subjecting a generation to too much debt?  What can we do to make sure that sensible borrowing remains – or becomes – the norm?