There was some big news this week on the student loans front, for profit colleges dodge some stricter regulations, and athletics is not as large of a threat to academics as many people claim. Bam! That’s your one sentence summary of a small fraction of the news that’s fit to print regarding academia. Join me after the cut for a slightly more in-depth discussion.
Hooray Stafford Loans recipients – the interest rate on your loan will not double to 6.8%; instead, your rate will stay at 3.4% for one more year. The interest rate is, at least for now, set to double next year. While over 7 million student loans recipients are breathing a short sigh of relief right now, the structure of the student loans program is not unchanged. The new legislation will require students to have a high school diploma or a GED to be eligible for federal aid and professional and graduate students will no longer be eligible for subsidized student loans. On top of that, the six month grace period has been augmented: you still have six months before you start paying, but interest will be accruing during those six months. And lastly, Pell grants are only available for 12 semesters down from 18 in an attempt to motivate students to finish bachelor’s degrees in no more than six years and associate’s degrees in no more than three.
An attempt to regulate for-profit colleges was struck down by a federal judge earlier this week. The Education Department attempted to instate “gainful employment regulations,” which would have penalized colleges that produced graduates with high debts and few job prospects. For-profit colleges would have to meet one of three standards: at least 35% of graduates must be repaying loans, those loans cannot exceed 12% of the graduate’s total income, and the loan payments cannot exceed 30% of the graduate’s discretionary spending. The ruling judge found the 35% cut-off arbitrary. However, the ruling wasn’t a total loss – for-profit colleges must now inform students about graduation, placement, and median debt load. Reform in for-profit colleges is crucial: many of these for-profit colleges prey on low-income and first-generation college students.
Lastly, athletics and academics could go hand in hand at many schools. A new report published by the National Bureau for Economic Research suggests that winning games can lead to increases in donations (especially to the athletic department), applications to the university, academic reputation, and freshman SAT scores, among other metrics. Unlike previous work, which has been criticized for not parsing out the cause and effect between athletic success and the above mentioned metrics, this study uses a propensity score design, which should get a better look at causation. While this article claims that the benefits do not outweigh the costs of an athletic department, most successful Division 1 athletic departments are wholly self-sufficient, drawing from specific athletic program donations. Maybe it is time to stop pitting academic against athlete and start addressing the real funding issues facing colleges and universities: huge cuts in education spending at the state and national level.