Are student loans at a turning point?
Defaulted student loans now surpass all other types of “severely delinquent” household debt including credit card and mortgage debt, according to a recent report. New York Federal Reserve researchers define “severely derogatory” as a kind of past-due loan that results in “repossession, foreclosure or charge off.” While auto loans are the only other delinquent debt to have a similar level of growth in recent years, they still trail behind student loans within the severely delinquent category. This trend can be attributed to differences in how these loans are awarded, as well as what happens once delinquency occurs. For example, other types of debt, such as auto and household debt, are underwritten. That means lenders assess the creditworthiness of borrowers before making a loan and may be able to repossess property to satisfy the debt if the borrower stops making payments. This is not the case for student loans. When students become delinquent they still continue to accrue interest and their loan balance increases. To combat this, a growing number of states have passed legislation “adding new oversight of student loan companies” in hopes of decreasing future student debt.
Source: Inside Higher Ed
Off-campus housing costs and its hidden risks
Over the past two decades, the price of off-campus room and board has risen 24% for students at public four-year universities. The universities themselves have no control over these prices but data suggests this issue will only grow worse, adding to the crippling amount of student loan debt. This increase has, in turn, caused many students to be “rent-burdened,” which is defined as “paying more than 30% of household income toward rent.” This seems to be more common among ZIP codes with at least one four-year college. In those areas, the five-year median rent increased by 5.8% in 2017, versus an increase of 4.5% in areas without a four-year college. As a result, students may be faced with the choice of either paying more rent in order to stay close to classes or commuting from less expensive areas. Ideas for keeping off-campus housing affordable include creating federal programs to help fund new construction and removing “onerous regulations” that prevent developers from building affordable middle-market housing.
Source: The Hechinger Report
Higher ed associations are calling on colleges to use data analytics
Although many colleges are using predictive analytics in order to better recruit and advise their students, a 2016 study revealed that “fewer than half of institutions see it as a priority.” To address that shortcoming, three well-known higher education associations — The Association for Institutional Research, EDUCAUSE and the National Association of College and University Business Officers — issued a joint statement urging colleges to commit to using data and analytics in order “to make better strategic decisions.” These associations say that data can be used to improve student recruitment and outcomes as well as cut costs. However, some caution against the use of big data and worry that “predictive analytics may reinforce inequalities in STEM fields by pushing out low-income and minority students.” To avoid such issues the three associations recommend using an “institution-wide program of awareness, transparency and training” in tandem with predictive analytics technology.
Source: Education Dive
A different type of recruitment for online graduate programs
Many colleges with online graduate programs offer experiences that are seemingly similar to traditional college programs, such as live seminars, collaboration with classmates and of course, the promise of a degree. However, recruitment for online programs versus traditional in-person programs can differ drastically. Instead of the classic mailed print brochures, students who inquire about information for graduate programs are often bombarded with phone calls from third-party, for-profit partners or online program managers (OPMs). In the past decade “dozens of the nation’s most selective institutions have turned to OPMs to launch a wide variety of online programs — MBAs, nursing degrees, master’s degrees in education and social work, even select doctoral degrees.” With many millennials having an aversion to speaking on the phone, this aggressive recruitment style can scare away potential students. Instead of receiving such calls, students prefer to “rely upon are the publication websites, recommendations from co-workers or employers and word of mouth.”
Source: The Atlantic