Massachusetts to Adopt A College Financial Stress Test.
With more colleges closing and merging, the Board of Higher Education is taking matters into its own hands. The board approved recommendations to create a new Office of Student Protection (OSP), which will confidentially assess and monitor colleges’ financial situation with the goal of protecting students by proactively putting in place a plan to avoid abrupt shutdowns such as Mount Ida College last fall.
Our founder and president, Bob Hildreth, has been working closely with Mount Ida parents and students, supporting their lawsuit against the colleges’ trustees. He, himself, a former trustee of Boston College, has a deep understanding of college finance. He testified at the hearing, commending the board for taking college closures seriously and for working on mechanisms that will protect students’ interests first. However, he warned that college finances are complicated and that educators are not financial experts. He urged the board to create a formal financial institution to provide the expertise that is essential to this task (see his full testimony here).
What became of Boston’s valedictorians?
Have you heard about Boston Magazine’s Valedictorian Project? It exposes a harsh reality that Boston’s brightest students are struggling to make a middle-class income more than a decade after graduation. A quarter failed to graduate college within six years, which partly explained their financial struggles. 94 percent of those who couldn’t finish college in 6 years earned less than $50,000. Once again, we see racial disparities
with white valedictorians were more than twice as likely to earn at least %50,00o compared to their minority counterparts. The study also exposes the great divide in earnings between valedictorians from the city’s elite schools (namely Boston Latin School, Boston Latin Academy, and the John D. O’Bryant School of Mathematics and Science) and everywhere else. Read some of the solutions highlighted by the project here.
Other MA news:
New Fed Research shows drop in homeownership is linked to Student Debt
While it was long suspected, new research from the Federal Reserve has linked two big shifts that have helped reshape the U.S. economy to rising student debt: a drop in homeownership among young Americans and the flight of college graduates from rural areas. Their estimation shows that roughly 20 percent of the decline in homeownership among young adults can be attributed to their increased student loan debts since 2005. Another interesting finding is that a $1,000 increase in student loan debt causes a 1 to 2 percentage point drop in the homeownership rate for student loan borrowers during their late 20s and early 30s. This is an unsustainable path for our youth and our economy. We need to address it now and fight for #ZeroDebt future!
Will deregulation bring innovation to higher education?
Earlier in January, DeVos released a sweeping list of proposed changes to the federal regulations that govern our higher education system. Pushing for major deregulation such as deferring more authority to accreditors, letting colleges outsource programs, removing protections, department of Education argues that they want to unleash innovation in higher education. But many higher ed experts are concerned. These changes will open the door for more potential abuse of student loan borrowers.
Other National News: