State and National Higher Ed Policy Updates — August 2018
As colleges gear up for their fall semesters, we saw an uptick in August coverage on college rankings. A dozen schools in Massachusetts claimed spots in Forbes top 100 rankings and UMass Amherst dining services was named the country’s best for the third year in a row by Princeton Review.
But as yet another high school senior class begins to pursue their various applications, another ranking we need to pay attention to is how our state fairs on student debt. Massachusetts is one of the states listed where the student loan crisis hits the hardest. New Hampshire, Pennsylvania, Connecticut, Delaware, Minnesota and Massachusetts are the top six states with the highest average amount of undergraduate student debt: with an average of $34,156 of debt. According to the Institute for College Access and Success’ 12th Annual Student Debt report, 60% of Massachusetts graduates borrowed an average of $31,536 in 2016.
It is time to set our priorities right and focus on the burden that plagues the economy of our state! Join our fight, demand #ZeroDebt, sign our petition!
Other MA news:
UMass Boston students protesting increase in parking fees (Read about this protest and HI’s involvement in our “In The Field” update.)
Student Loans Watchdog Quits!
You know there is real trouble when the federal official in charge of protecting student borrowers from predatory lending practices quits. In a powerful letter, Frotman resigned as the Student Loan Ombudsman at the Consumer Financial Protection Bureau (CFPB), accusing the bureau and Trump/DeVos administration for turning their “back on young people and their financial futures [to] serve the wishes of the most powerful financial companies in America.”
Bob Hildreth, founder and President of Hildreth Institute released the following statement:“We applaud Seth Frotman for sounding the alarm on the Bureau’s abandonment of struggling student loan borrowers. The current leadership of the bureau is actively failing to protect borrowers, while satisfying President Trump and the DeVos administration’s misguided desire to shield bad actors from scrutiny. Seth Fortman had the courage to resign from a duty that has now become a sham and had the decency to speak up and stand up for what is right. We demand the reinstatement of a strong and independent student loan watchdog. Without it, American families will continue to be saddled with loans they cannot repay, while being harassed by bad actors that will drive them to financial ruin.”
The Big Scam — Public Service Loan Forgiveness
If you haven’t yet listen to Mother Jones Podcast “the rage-inducing inside story of America’s student debt machine: how the nation’s flagship loan forgiveness program is failing the very people it’s meant to help”, we urge you to! Ryann Liebenthal interviewed several young graduates for Mother Jones‘ latest magazine cover story showcasing how they are not only burdened by the actual debt they accrued, but scammed by deceitful and predatory actors. Unfortunately, mounting evidence indicate that no one should count on the availability of the student debt forgiveness programs, as the system is laden with bureaucratic mess and fraud (see table below). What’s more alarming is that this scam happened when we had a student loan watchdog — Imagine what kind of free reign these scammers will have now that the CFPB has lost his will and power to protect student borrowers!
A popular new benefit: student loan repayment assistance
Did you know? College graduates with student debt accumulate 50% less retirement wealth in their 401(k) by age 30 than those without.
Companies are witnessing first-hand how their young employees are burdened under heavy student debt and as a result, are unable to save for their futures. In response, an increasing numbers of progressive companies now offer assistance in repaying student loans as a benefit. However, administering such program is difficult and expensive. A legislation pending before Congress would extend the existing tax exemption for employer-provided educational assistance to employer payments of qualified education loans.This would not only simplify administration of the program, but also make it more appealing to companies as the contributions would be tax-free.
At Hildreth Institute, we are proud to offer our employees and campus leaders student loan assistance benefits, and we are committed to support and apply pressure so that the path to providing such benefits is cleared for all companies.