A Wall Street Journal article on Monday exclaimed that the recession has led to the closing of “The Bank of Mom and Dad” for many young Americans. While I have always found the term to be condescending, and somehow only applied to middle-class families and not the ultra-rich, students do seem to be more on-their-own today in their increasingly uphill struggle to improve their lives. However, these challenges haven’t stopped politicians from continuing the under-reported trend of making larger and larger withdrawals from the bank of students.

What do I mean by the bank of students? It refers to attempts to use funding cuts and fees to backhandedly make up for budget shortfalls at student expense, and it seems a tax by any other name would not smell just as sweet to these politicians.

Last Friday there was an article about New Jersey college towns seeking a $100 fee per student to cover the “free municipal services” provided by those towns. It is amazing how the economic benefits of a college or university to a town so quickly become invisible to those in charge.

“If you look at it from our standpoint, Montclair State has more than 18,000 students. At $100 per student it could mean $1.8 million,” said Little Falls Mayor Michael DeFrancisci, adding his state aid has been cut more than $500,000 in the past three years.

“Getting the money from college students is not something we’d take pleasure in doing,” DeFrancisci said.

18,000 students. That is 18,000 people who are most likely spending the majority of their income in Little Falls and paying sales taxes on those purchases. The university has a faculty, which not only provides jobs but additional taxpayers of income, sales, and property taxes. How many businesses in Little Falls exists because of the customer base that 18,000 students provides? How many students that are forced to work part time jobs to pay for school are paying income taxes as well? Without the university, Little Falls would be just another small town with no draw, and I guarantee it would have been hit much harder by the recession. But how soon is all that forgotten, as local politicians lick their chops at the prospect of digging their teeth into the hand that feeds them.

This is not just a New Jersey issue. Skyrocketing tuition has largely been the result of state legislatures cutting funding to the colleges and universities, forcing them to make up the difference out of student pockets. I’ve heard Republican legislators say that this is not a tax in disguise, but an investment that the student is making in their own life. It may be an investment in their own life, but it is also an investment in the community, state, and country. There is a world of difference in the economic well-being of a college graduate and someone without a degree, and today potential and current students are being priced out of their dreams and relegated to a second-class life from which they will never make up for the disadvantage.

Even those tuition dollars often end up benefiting the local community more than the students themselves. Take for example athletic budgets. Only 14 athletic programs broke even last year, with every other program costing the university, hence the students, money. However, the local communities are certainly profiting more than the schools. Football and basketball games bring a lot of money into local businesses as fans come to attend.

Through fees and tuition increases politicians are using the weapon of funding cuts to pull more money out of the bank of students as their districts benefit from their presence, but the bank is about to dry up. As we witnessed last month during the student protests, this exploitation is reaching its limit. In the past politicians were comfortable balancing budgets on the backs of students because they assumed they would not vote; that the young were the safest to indirectly raise taxes on. These politicians now face students that are more aware of their political power, have learned to organize, and are fighting for the economic security of their lives. Students will fight this exploitation because their quality of life is at stake, and those stakes create a powerful and committed opponent.

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Last Monday I wrote about how increased tuition and student debt have drastically lowered the return on investment of college degrees. In the last week two new reports have been published specifically dealing with student loans and the resulting debt burden.

The first report was produced by Education Sector, entitled Drowning in Debt: The Emerging Student Loan Crisis.

Students are taking on more of the riskiest debt: unregulated private student loans. Here, students have the least protection and pay the highest rates. For-profit colleges are leading the way in this trend, and minority college students appear to be borrowing a disproportionate share. If this continues, the consequences will be severe: reduced access to higher education, diminished life choices, and increasing rates of catastrophic loan default.

There are many culprits to this emerging student loan crisis: out-of-control tuition increases, lack of commitment to need-based financial aid, and states and universities increasingly spending scarce financial aid dollars on wealthy students. President Obama recently proposed reforming the federal student loan program by having all students borrow directly from the government. The money saved from this change would go to making Pell grants, which are targeted to the neediest students, an entitlement. The new plan would also tie annual increases in Pell grants to inflation. This is a good start to solving the problem of rapidly growing student debt, but much more needs to be done—from reforming state and institutional aid policies to creating better incentives for colleges to restrain prices.

Inside Higher Ed has a write-up of the report, where they quote Patricia Steele from the College Board:

Patricia Steele, a research associate at the College Board, said that “nowhere in the report” do the authors point out that half of all students don’t borrow for college at all, and that that and other oversights contribute to the report’s overall “sense of hype.”

“It’s important to point out because it scares the hell out of low-income students, who are nervous enough about whether they can afford college,” Steele said. “They might read about this and think everybody’s out there borrowing $35,000, and that’s just not true…. This does not represent the core of what’s happening in student debt.”

Steele’s line of argument just pisses me off. If the unemployment rate was at 50%, would we say that concern about it is overblown because half the country has jobs? What about health insurance? Just because 50% of college students are fortunate enough to not need to take out loans (most because of family wealth) it does not mean that the other 50% are not worth being concerned about. Not to mention that the 50% figure does not include those potential students that chose not to attend college in the first place because of the price tag.

I am not impressed by her concern trolling, either. Low-income students are nervous about whether they can afford college because it is expensive, not because people are reporting on the problem. Steele’s solution is to just not talk about the student debt burden because it is an unpleasant and scary reality. The real solution is to lower the cost of higher education.

The New America Foundation released their new report today on the student loan industry infrastructure. Rethinking the Middleman: Federal Student Loan Guaranty Agencies goes into the history of these guaranty agencies and explain why the dated system is hurting both taxpayers and students. The report is definitely worth a read, but here are some of the recommendations:

• Eliminate the Guaranty Agency Insurance Role
• Prohibit Guaranty Agency and Lender Partnerships
• Eliminate Guaranty Agencies’ FFEL Program Oversight Role
• Balance Incentives for Borrower Assistance versus Loan Collection
• Improve the Default Aversion Role
• Make the U.S. Department of Education the Lender of Last Resort
• Demand Accountability and Results for Other Activities

If you are unsure what some of these recommendations mean, their blog post about the report does an excellent job explaining them.

It is clear that there is a problem with our student lending system, and these reports do an excellent job of showing why and what must be done. Changes need to be made if we are going to preserve the opportunity of higher education.

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Jack Hough of the New York Post wrote the provocatively titled “Don’t Get That College Degree!” last week, where he argues that the increase in lifetime wages for graduates no longer makes up for the financial burden of university education and the ensuing student loan burden.

Hough’s hypothetical model showing the greater financial position of a non-graduate is seriously flawed and leaves out many intangibles such as lower unemployment for graduates, social education, and market fluctuations, but the article does raise an important question about college affordability.

In 2003 when I was lobbying against tuition increases in Arizona, a Republican state legislator argued that a college degree is a personal investment that the students are paying for their own future financial prosperity. This argument has been used by Republicans across the country as an excuse to cut higher education funding and increase the financial burden on students. Former Congressman (D-RI) and current Vice President for Administration and Finance at the University of Rhode Island Robert Weygand makes the counterargument:

Public colleges need to promote and publicize the work they do for the community and their contributions to economic development. Well-publicized proof that they make a difference to the state, and not just the earning potential of individual graduates, is meaningful to lawmakers, even in tough times.

(…)
We need to renew the idea that economic development is based on a quality higher-education system.

While a college degree is not yet a bad investment, the Republican attitude toward higher education is certainly decreasing the value of that investment, as well as pricing out many potential students at the onset. Students are now less inclined to attend ‘prestigious’ schools in favor local public universities and many families are struggling to keep their kids in college in the wake of the current recession.

The costs facing students entering college will put them in debt for decades, even though the investment will eventually pay off, and future increases could actually lead to a college degree actually becoming a bad individual investment.

Some changes need to be made to stop this trend:

1. State legislatures need to stop balancing their budgets on the backs of students and realize that funding higher education is an investment in the state, not just a personal investment. Wygand: “If you really want economic development in your state, don’t disinvest in the very engine that drives that economic development.”
2. Colleges need to focus less on rankings and more on education. Grade inflation is a result of dumbing down courses, which increases graduation rates (and rankings) but leaves students less prepared for post-college life and frustrates the brightest students. People should be encouraged to rise to the challenge, not rest at the lowest common denominator. When students graduate with more knowledge, skills, and experience, their future salaries will reflect it.
3. Increase grants to students seeking careers in critical yet underpaid professions. The biggest example is students studying to become teachers. Dismal teaching salaries make it difficult to pay back massive student loans.

The United States needs to produce highly educated scientists, engineers, and researchers in order to create the innovative new technologies that will enable it to maintain its status as the leader of the global economy. Funding higher education to keep college costs manageable is a real stimulus plan that will pay dividends for generations. If a college education becomes a bad individual investment, the country as a whole will pay the price.

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This Saturday, April 18, Campus Pride hosts its second annual West Coast LGBT-Friendly College Fair at the San Diego LGBT Community Center, 3909 Centre Street in San Diego, CA. Nearly thirty colleges and universities from across the country will be in attendance from 1 p.m.to 4 p.m. to recruit lesbian, gay, bisexual, transgender (LGBT) and ally prospective students. Free of charge, any interested students and their families are welcome.

“Finally, colleges are coming out of the closet and being visible in the recruitment process to seek LGBT students,” said Shane Windmeyer, Executive Director of Campus Pride, the leading national nonprofit for LGBT students and campus groups and author of The Advocate College Guide for LGBT Students. “Today campuses want to be considered LGBT-friendly. It is not only in the best interest of enrollment figures but also a necessity to prepare for a smaller, more diverse student population in the future.”

According to Windmeyer, an increasing number of colleges and universities are openly recruiting LGBT students and are doing so for the first time ever. Nearly thirty colleges have registered to date for the upcoming LGBT-friendly college fair sponsored by Campus Pride. In addition, over 185 colleges and universities are reaching out to LGBT students through the LGBT-Friendly Campus Climate Index. The national index, the only resource of its kind, is a dynamic online tool which rates LGBT-friendliness at colleges and universities as well as sets a national benchmark for campuses to become safer, more welcoming for LGBT and ally people. Any campus may take part in the college fair program or the index at anytime.

Campus Pride developed the college fairs and the online LGBT-Friendly Campus Climate Index as active ways for campuses to be out and proud in attracting LGBT student populations. The efforts also provide an outlet for campuses to increase enrollment with a seemingly “untapped” population.

Colleges and universities registered to be in attendance include Alliant International University; Arizona State University; Bryant University; California State Polytechnic University, Pomona; Claremont McKenna College; Columbia College Chicago; Drexel University; Emory College (of Emory University); Gustavus Adolphus College; Kalamazoo College; Linfield College; McNally Smith College of Music; Penn State University; Princeton University; Point Foundation; Rochester Institute of Technology; San Diego State University; Sarah Lawrence College; UC San Diego; University of Colorado at Boulder; University of the Pacific; University of Utah; Washington and Lee University; Whittier College and Yale.

Organizing partners and supporters for the upcoming fair include national and local chapters of the Western Association for College Admissions Counseling, the Gay, Lesbian, & Straight Education Network (GLSEN), Parents, Families, Friends of Lesbians and Gays (PFLAG), the Gay & Lesbian Alliance Against Defamation (GLAAD) and Point Foundation. For more details, please visit http://www.campusclimateindex.org/events or contact Campus Pride at 704-277-6710 or info@campuspride.org.

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When it comes to affording college in the economic crisis, College Democrats are taking it personal. As this crisis begins to affect students’ everyday lives, we’re kicking off our “No Desk Left Open” campaign for college affordability with the story of one of our own national officers – Aarti Sheth, a junior at SUNY Stony Brook. We produced a video about Aarti and her family’s tough choices about affording college in the face of the recession. You can watch it here:

Aarti also writes about her story and our campaign on the Huffington Post. Read it here:

No Desk Left Open: My Story of the Economic Recession’s Impact on My Education

When you have a minute today, spread the word – share the video and article with your friends on campus and at home.

After listening to Aarti’s story, tell us yours. If you’re having difficulties affording college in this economy and want us to hear about it, email us at yourstory@collegedems.com. With your permission, we’ll put together stories from across the country and feature them at CollegeDems.com.

Your voices make this problem real to everyone. Stories like Aarti’s are taking place across the country. Parents are having tough talks at the kitchen table while kids are having to pack up their dorm rooms and commute to school, or not come back to school at all. Let’s get the conversation going and start making sure that Republican lawmakers support more funding for higher education.

Thanks,

Katie Naranjo

National President
College Democrats of America
www.CollegeDems.com

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In a time where advanced education is critical to the United States’ standing in the global economy, students are finding that getting that education is becoming far more difficult, especially students who do not come from wealthy backgrounds.

Most Americans believe that access to higher education should be based on ability and merit, yet in the wake of university budget shortfalls some schools are creating a pay-to-play policy with their admissions.

Facing fallen endowments and needier students, many colleges are looking more favorably on wealthier applicants as they make their admissions decisions this year.

Once again, our higher education system is contributing to the socioeconomic status quo.

“There’s going to be a cascading of talented lower-income kids down the social hierarchy of American higher education, and some cascading up of affluent kids,” said Morton Owen Schapiro, the president of Williams College and an economist who studies higher education.

(…)
This year, many of these colleges say they are more inclined to accept students who do not apply for aid, or whom they judge to be less needy based on other factors, like zip code or parents’ background.

Many of these schools are opting to admit a higher percentage of wealthy foreign students than in the past, since they are not eligible for public scholarships and pay the highest tuition rates. This means that fewer admission spots will be available to American students, further contributing to the United States’ comparative education decline.

The economy has also severely affected admittance into Ph.D. programs, leaving the United States in danger of losing even more ground in the information economy.

Several colleges have recently announced that, regardless of application quality, they plan to admit fewer Ph.D. students for this coming fall than were admitted a year ago. The economics of doctoral education are different enough from those of other programs that some universities’ doctoral classes will be taking a significant hit, with potential ramifications down the road for the academic job market, the availability of teaching assistants, and the education of new professors.

The reduction of Ph.D. students admitted into programs will have negative consequences down the road when we look to a new generation of academics and researchers to make the innovations and form the ideas that will lead the country forward.

Charles B. Reed and F. King Alexander have a proposal in Inside Higher Ed calling for a “new kind of institutional aid” that would support colleges and universities that admit lower-income students.

To attempt to change this ominous direction to focus on the new generation of students with the greatest educational needs, it is imperative that we revisit the “cost of education allowances” program and develop a federal Title I type program for higher education institutions. This policy would provide a specific flat “capitation” institutional grant per lower-income student to every college and university that meets a minimal enrollment threshold of 20 percent.

Reed and Alexander argue that the current “individualistic and market-oriented approach to funding higher education by simply putting resources in the hands of students” has resulted in “perverse fiscal and institutional incentives,” despite being worthwhile. They believe that their proposal could reduce the challenges facing universities and low-income students that have led to the return of pay-to-play admissions mentioned earlier.

Part of the problem is that many short-sighted Republican state legislatures have been attempting to balance their state budgets on the backs of students, leaving universities no choice but to raise tuition rates and cater to the wealthiest applicants.

The United States needs a strategic plan; one that focuses on long-term investment in infrastructure, research, and human capital. We need more ideas on how to improve and progress like those posed by Reed and Alexander, and most important, we need the courage and values to implement them.

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As I was going through some old notebooks that I used at Arizona State University I stumbled upon some notes I jotted down about my ideas on advocating for college affordability. I thought that they might be interesting or useful to some of you. I decided to post them here in more-or-less the way I found them.

College Affordability Advocacy

Have comprehensive statistics and data pertaining to college affordability:

• Student debt
• Loan and credit card interest rates
• Financial aid
• Inflation

Pay attention to and involve smaller schools and satellite campuses. Too often advocacy organizations only focus on the largest universities and campuses, ignoring those with smaller enrollments. Within those campuses there is untapped potential.

Media report for every city with a College/University and where there is a large concentration of students’ parents.

• Name of media
• Contacts
• Filing deadline/cycle
• Readership
• frequency of publication
• editorial board structure
• LTE policy and process

As a student advocacy organization it is important to not be an organization that solely creates a slogan and some shirts every year hoping that they will be clever enough to forestall a tuition increase or cuts in education funding. If you have a lobbying organization, it needs to be a lobbying organization.

The primary strategy of a student lobbying organization should be to affect the elections of state legislators. When a legislator decides that they are going to vote to cut financial aid or university funding, they will be targeted. In order to successfully do this, you must have in-depth profiles of their legislative districts and the legislator’s election history:

• Demographic information for the district: age, high schools, voter registration numbers, income levels, etc.
• Legislators election history: How many terms served? Margin of victory in past elections. Legislator’s party ID vs. party registration numbers and performance.

It is important that there are people in your organization who have the responsibility of tracking pertinent legislation and the state budget so you know what is coming down the pipeline and how legislators voted on student issues. You can set up a legislator rating system similar to those used by other advocacy organizations.

The organization should not only focus on organizing the students, but also the families of those students. It should work with high school students in the state and reach out to their families as well, for they will shortly be faced with putting themselves or their daughter/son through college. It should work to build a coalition of supporters from across the state that believe in the importance of higher education; everyone who believes that a student should not have to base their decision to go to college on whether they can afford it; everyone who believes that higher education is critical to the well-being of the people of your state and its economy.

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