Monday, May 27, 2013

Student Loan Problems: One Third Of Millennials Regret Going To College

Here’s an indication of how burdensome student loans have become: About one-third of millennials say they would have been better off working, instead of going to college and paying tuition.

That’s a according to a new Wells Fargo WFC +0.57% study which surveyed 1,414 millennials between the ages of 22 and 32. More than half of them financed their education through student loans, and many say the if they had $10,000 the “first thing” they’d do is pay down their student loan or credit card debt.

That’s no surprise when you consider student borrowing topped the $100 billion threshold for the first time in 2010, and total outstanding loans exceeded $1 trillion for the first time in 2011.  Student loan debt now exceeds credit card debt in the U.S. which stands at about $798 billion.

Delinquencies are also on the rise. The number of borrowers who are at least 90 days late on student loan payments has jumped from 8.5% in 2011 to 11.7% today, according to a study by the New York Federal Reserve.

The problem sometimes is that not all college educations are worth their cost since they can’t guarantee a high-paying job to help pay off that student debt. A report from the National Association of Consumer Bankruptcy Attorneys says the rising student debt problem can have a bad impact on the economy. Even in the best of economic times when jobs are plentiful, young people with considerable debt burdens end up delaying life-cycle events such as buying a car, purchasing a home, getting married and having children.

The other problem on student debt is a lack of financial education. The first major financial decision many students are making is with their college loans. It’s a major decision and often times there’s been little financial education, if any, that’s been taught. The Wells Fargo survey found that 79% of millennials think personal finance should be taught in high school; basic investing, how to save for retirement and how loans work were the top three topics they “wished” they’d learned more about.

The Consumer Financial Protection Bureau found student debt has also affected home ownership in the country. Census data reveals that nearly 6 million Americans ages 25 to 34 lived with their parents in 2011, a sharp increase from 4.7 million in 2007.

The CFPB cited The National Association of Home Builders (NAHB) saying higher student debt burdens “impair the ability of recent college graduates to qualify for a loan.” According to NAHB, high student loan debt has an impact on consumers’ debt-to-income (DTI) ratio– an important metric for decisions about creditworthiness in mortgage origination.

It’s no wonder then that more than half (54%) of millennials from the Wells survey say debt is their biggest financial concern with 42% calling it “overwhelming.”


School league tables: privately-educated British pupils 'better prepared for top universities'

The extent to which private school pupils are being prepared for places at elite universities was laid bare today in new-style league tables showing how they dominate top grades in core academic subjects.

For the first time, data shows how many teenagers are leaving schools and colleges in England with good A-levels in a range of core disciplines seen as a vital stepping stone to sought-after Russell Group institutions.

It emerged that 150 out of the top 200 schools in the new table are from the fee-paying sector.

St Paul’s Girls’ School in west London and Magdalen College School in Oxford saw 70 per cent of 18-year-olds reach the standard – the highest proportion in the country.

At the same time, around a quarter of sixth-forms – almost all from the state sector – failed to produce a single pupil with good A-levels in a range of academic subjects such as maths, English, science and foreign languages.

The results are likely to tighten private school pupils’ grip in places at leading universities such as Oxford, Cambridge and University College London which demand a string of top grades as a basic entry requirement.

It also appears to reinforce universities’ claims that the dominance of independently-educated students is a reflection of academic standards in schools – and not discrimination by admissions tutors.

The disclosure comes after universities were told to set tough targets to increase the proportion of pupils admitted from “under-represented groups” including poorly-performing state schools. Around half of members of the Russell Group set themselves a state school admissions target.

Tim Hands, the master of Magdalen College School, welcomed the figures but warned against the use of narrow performance measures.

“Of course it’s right to ensure the right pupils get access to the right subjects and then on to the right university destinations,” he said.

“Independent schools, not least because they are less subject to Government interference, have a greater chance of doing this, as the table makes very clear.

“However, suddenly inventing this new competitive measure is yet another unnecessary political initiative and a further misuse of league tables. There is a danger of making many pupils who want artistic, vocational or practical qualifications feel further undervalued.”

Wendy Piatt, director-general of the Russell Group, said: “We agree A-level choices really matter. Too few students realise that some subjects and subject combinations can keep open wider degree course options at leading universities.

“However, it would be wrong to use this simple indicator as a measure of the number of pupils in a school who are qualified to apply successfully to a Russell Group university."

Today’s performance tables show how many students get two As and a B at A-level in key subjects – maths and further maths, English literature, physics, biology, chemistry, geography, history and modern and classical languages. Data relates to more than 2,500 schools teaching A-levels in England.

It follows the publication of research by the Russell Group showing that students taking academic disciplines are much more likely to win places.

But figures show that 600 – one-in-four – did not produce a single pupil with good A-level grades in these subjects. Just 60 were from the independent sector.

Three-quarters of the 200 leading schools were from the independent sector, including seven in the top 10.

Aside from St Paul’s Girls’ School and Magdalen College School, the other fee-paying schools in the top 10 were: Concord College in Shrewsbury, the Stephen Perse Foundation in Cambridge, St Paul’s Boys’ School in west London, Wycombe Abbey School in High Wycombe, the Lady Eleanor Holles School in Hampton and St Swithun’s School in Winchester.

Queen Elizabeth’s grammar school in Barnet was the top performing state school with 65 per cent of pupils hitting the A-level target. Colchester Royal Grammar School in Essex and the Henrietta Barnett School, north London, were also listed in the top 10.

Figures also show a drop in the overall A-level pass-rate nationally.

The percentage of students who achieved passes equivalent to at least two A-levels decreased from 94.1 to 93.6 per cent in 12 months. The proportion of teenagers with three or more A*/A passes was down from 13.1 to 12.8 per cent, it emerged.

Stephen Twigg, the Shadow Education Secretary, said: "The decline in results at A-level and the fact that many pupils do not get the top grades for university is worrying.

"With 10,000 teachers having left the profession, and leading universities warning that the Government’s exam changes will jeopardise fair access to universities, David Cameron is putting social mobility is at risk."


Australia: Blue-collar blues as university equality fails by degrees

Michael Thompson points out below  the lower participation by working class people in higher education but omits to make a case for that being a bad thing.  With tradesmen making a mint and graduates flipping hamburgers, I suspect it is a good thing

WHY has the participation rate in higher education of people from low socioeconomic status backgrounds - in effect the working class - changed so little during the past 40 or 50 years?

The Whitlam government's abolition of university fees from 1974 ushered in "free" education. However, "equal" education proved more elusive. According to Gough Whitlam's private secretary, Peter Wilenski, the effect of abolishing fees was "found to have had no impact on the socioeconomic distribution of the origins of university students, and was in effect a direct handout to the better off".

Several government discussion papers and the like have reviewed higher education, including the 1996 report by the then Higher Education Council and the 2008 Bradley report. They tell of little change in the participation of low SES students in higher education, with their overall proportion of enrolment having remained static at about 15 per cent across the past two decades. The latest statistics show their proportion at only 16.7 per cent of total commencements last year. And, even if more working class students attend university in the 2010s, their numbers will likely be far exceeded by increases in students coming from better-off families.

Women made up 51 per cent of all students by 1989, with those from middle-class backgrounds now over-represented by 10-15 per cent. Although women's participation is skewed towards arts-humanities, health and education, they are underrepresented in higher-degree research programs.

As for the future, the government supported the Bradley report's recommendation that by 2020 "20 per cent of undergraduate enrolments in higher education should be students from low socioeconomic backgrounds".

But people of low SES make up 25 per cent of the population (to this day they participate at only a little more than half their proportion of the population). Further, their target date of 2020 falls 12 years after it was recommended, and 46 years after Whitlam abolished fees.

The government's target for the low SES evinces a certain lack of urgency on its part. What's been going on?

In 1996, the HEC's chairman, Gordon Stanley, was adamant that the reason for the under-representation in higher education of people from low SES backgrounds is not "barriers to access"; rather, it is their "individual and family attitudes and values about higher education".

Coming from an Anglo-Celtic working-class family, and growing up in the 1950s and 60s, I naturally thought of getting a good job, an apprenticeship. Like most of those of my age around me, my horizons were narrow. No one among my immediate family or relatives had ever finished high school. And there were few visible examples of working-class success. I lacked confidence in my intellectual ability. I never dreamed of going to university.

More insidiously, the working class almost invariably is portrayed by the progressive entertainment industry and media as at best buffoons and at worst proto-Nazis. Lately it is spoken of sneeringly as "bogan". Lindsay Tanner writes that "bogan is the new word for working class", and says calling someone bogan "has become an all-purpose put-down. If you want to label someone crass, crude and stupid, bogan is the word for you."

If people are told often enough that they're dummies with nasty little prejudices, they come to believe it; they internalise it. This stereotyping of the working class as unfit serves to mask the progressives' own class interest.

The HEC warned in its report that if "the desired results to have student population more representative of the groups in the community are to be achieved, the over-representation of other groups will have to be reduced". It's a zero-sum game (in which the losses exactly equal the winnings); an increase in students from the working class means fewer from professional families, many of whom are progressives, whose main asset is knowledge: their university degrees.

The government supported the Bradley report's recommendation that institutions determine how many students to enrol; on the face of it, then, no more zero-sum game.

However, those from low SES backgrounds are likelier to have attended disadvantaged schools. They are typically ill-prepared for university and so do not satisfy the higher entry requirements for so-called professional degrees such as medicine and law, enrolling instead in business (economics and accounting) and arts-humanities.

The abolition of student quotas has seen universities lower entry requirements; now almost anyone is accepted into business and arts-humanities degrees at non-sandstone universities.

Students enrolled in business are often forced to pay the same HECS fees as those in professional degrees (although students in arts-humanities pay less). The money paid by these students has been used to cross-subsidise those in medicine and law. In effect, low SES students are subsidising wealthier students who have attended selective and non-parish Catholic schools where they have been groomed for university studies. A perverse outcome - reminding one of Wilenski's observation.

Where to begin anew?

Why not broaden working-class youths' horizons, and put an end to the undermining of their confidence?

The government supported outreach activities in communities with poor higher education participation rates, along with institutions and schools raising the aspirations of people from low SES backgrounds to attend university.

They may help broaden horizons, but as the figures quoted earlier indicate governments' track record with programs is not encouraging.

Governments could review their advertisements that reinforce the stereotyping of working-class families as dysfunctional, such as those censuring violence against women and the irresponsible behaviour by parents that can lead to underage drinking, as they almost invariably show working-class husbands, boyfriends and fathers as the perpetrators.

The government also may want to consider a prominent and ongoing national advertising campaign encouraging participation in higher education, featuring working-class male and female success stories as role models. Use of the media in this way could go a long way towards broadening working-class youths' horizons and boosting their confidence.


No comments: