Higher Education Costs and Challenges

• More than 5.3 million borrowers are at risk of wage garnishment as collections resume after a pandemic pause.
• Borrowers in default will soon receive notices about involuntary collection actions starting May 5
• Options remain for borrowers to rehabilitate loans or avoid collections, but time is running out.

The Education Department today (May 5) begins referring student loans that are in default to collections, ending a more than four-year pause that began during the COVID-19 pandemic.

The move affects roughly 5.3 million borrowers who have fallen into default on their federal student loans and now face severe consequences, including wage garnishment, tax refund interception, and seizure of Social Security payments. The pause on collections, first implemented in March 2020, was extended multiple times by the Biden administration but officially ended last October.

“I wanted to throw up because I already live paycheck to paycheck,” said Kat Hanchon, 33, who owes nearly $85,000 in student loans from undergraduate and graduate degrees, in an Associated Press report. Hanchon, who works in higher education IT, said she’s struggled even with an income-driven repayment plan and has not been able to make payments since late last year.

The department will soon begin sending out notices informing borrowers of upcoming collection efforts, which are scheduled to begin on May 5 through the Treasury Department’s offset program.

Understanding default and what happens next

Student loans become delinquent when payments are missed for 90 days, and after 270 days of nonpayment, loans officially go into default. Default can severely damage a borrower's credit and trigger aggressive collection actions.

The Education Department advises borrowers to check their loan status via studentaid.gov and to update their contact information to ensure they receive important notices.

Paths out of default

Options for borrowers include:

• Loan rehabilitation, where borrowers make nine consecutive monthly payments to restore their loans to good standing.

• Income-driven repayment plans, which adjust monthly payments based on income and family size.

• Forbearance for delinquent borrowers (not those already in default).

Experts emphasize acting quickly. “Loan rehabilitation is a strong option, but it can only be done once,” said Betsy Mayotte of The Institute for Student Loan Advisors.

Looking ahead

With collections set to resume imminently, millions face financial strain if they don’t take swift action. Borrowers are urged to explore their repayment and rehabilitation options to avoid the harshest penalties.

Newsletter

The COVID-19 pandemic has drawn more attention to disparities in internet access across the country. 

Now, researchers from Rice University have analyzed the benefits of schools investing more money into providing internet access to their students. Based on a survey of Texas public schools, the team found that expanding internet access was associated with improved classroom performance. 

“We are proud that Texas public schools can serve as a live learning case for understanding education policy,” said Vikas Mittal, one of the study’s authors. “Investments in internet access provide clear and meaningful academic benefits. Yet, schools need to implement policies to address increased disciplinary issues such as cyberbullying.” 

Kids are doing better in school

For the study, the researchers looked at data from more than 9,000 public schools throughout Texas. The team was interested in looking at how each school’s spending on internet access affected their students’ learning and behavioral outcomes between 2000 and 2014. 

From an academic standpoint, increasing internet access among student populations was a positive investment. Greater internet access was associated with higher SAT scores, better in-class performance, and higher graduation rates. 

The researchers also found that having greater internet access benefited students beyond their schooling years. They found that making the investment to provide more students with internet access led to a greater economic return long-term. 

Social repercussions

Though the academic outcomes were beneficial, the researchers also found that when more students had internet access, it negatively impacted their social dynamics. The study showed that disciplinary problems, including cyberbullying, increased as more students gained access to the internet. 

Though these findings are important, this study was conducted prior to the COVID-19 pandemic, and the researchers don’t believe these results will translate to virtual learning scenarios. 

“K-12 education has transformed into virtual learning due to COVID-19,” Mittal said. “Our research conclusions apply to a setting where physical learning is supplemented by internet access."

On top of the coronavirus-driven stimulus checks that the Biden administration is trying to push through, congressional Democrats are also asking for a $7.6 billion boost to help schools and libraries pay for students' distance learning costs as part of the relief package.

Frank Pallone (D-NJ), the Chairman of the House Energy & Commerce, announced the proposed allocation as part of the committee's package of recommendations for the COVI-19 budget reconciliation legislation.

If granted, the add-on would establish a $7.6 billion “Emergency Connectivity Fund” that would allow schools and public libraries to pay for internet service, Wi-Fi hotspots, modems, and routers, as well as digital devices for students and teachers to access the internet from their homes. The Federal Communications Commission would be tasked with implementing the fund.

Some regulators believe Pallone might be jumping the gun a bit. House Energy and Commerce Republican Leader Cathy McMorris Rodgers (R-WA) sent a letter urging him to pause what she called a “partisan sprint” towards a reconciliation package. She asked him to sit tight for one week so that “earnest, bipartisan negotiations” for coronavirus relief could be discussed.

Pandemic learning challenges continue to mount

The pandemic has created an untenable distance learning situation for millions of students. According to recent data from the Department of Education and other sources, the number of students without home internet ranges between 9 and 12 million, or about 14-16 percent of children ages 3-18.

Depending on parental education and family income, a good number of students’ only internet access is via a smartphone. Those numbers run as high as 17 percent for students whose parents never finished high school and 13 percent for students whose family income is in the lowest quarter.

If you’re going to borrow tens of thousands of dollars to secure a college degree, getting the best return on investment (ROI) takes on added importance.

Each year, The Princeton Review ranks 200 U.S. colleges for ROI, looking not only at costs but also salaries earned by graduates. In short, The Review is a guide for college-shoppers looking for an affordable, academically outstanding college that has a record of guiding students to rewarding careers.

Only 200 schools make the cut. They’re selected on an analysis of things like covered academics, cost, financial aid, career services, graduation rates, student debt, and alumni support.

Making the list doesn’t mean a school is among the least expensive to attend. It only means that, in the opinion of the editors, it’s worth the money.

"Only 7 percent of the nation's four-year colleges made it into this book," said Robert Franek, its lead author and The Princeton Review's editor-in-chief. "We salute them for their stellar academics and generous aid awards to students based on need and/or merit. They also provide their undergrads with career services from day one plus strong networks of alumni connections."

Several different lists

The book is not a single list but a number of them, with the editors ranking schools on different criteria. There is an overall main ranking list and it places the California Institute of Technology in the top spot. Stanford was second, followed by Princeton and MIT.

Internships have been proven to be an effective pathway to securing a good job after graduation, and The Princeton Review ranks colleges on their ability to help students become interns. Bentley University is number one, followed by Franklin W. Olin College, Wabash College, and the University of Richmond.

Just as important is assistance in getting jobs for graduates. Harvey Mudd College, in Claremont, Calif., ranks first, followed by the California Institute of Technology, Stanford, and MIT.

Best financial aid

If you are looking for a school with a generous financial aid package, there’s a list for that as well. Bowdoin College of Brunswick, Maine is at the top of the list for financial aid. It’s followed by Vassar, Princeton, and Yale.

Other categories include the best alumni network, where Pennsylvania State University ranks first; and best schools for making an impact -- a list led by Wesleyan University.

Of the 200 schools in the book, 137 are private and 63 are public institutions. The average cost of attending for in-state schools receiving need-based aid is $12,972 a year. The average admission rate is 54 percent, with 13 schools admitting over 70 percent who apply.

Along with tuition, the cost of textbooks has been a significant driver of skyrocketing higher education costs.

But in an unexpected turn of events, the average price of textbooks decreased by more than $10 from January 2017 to January 2018, according to CampusBooks.com, an online book price comparison site.

The cost of textbooks has risen four times faster than the rate of inflation in the last decade. According to a recent report from CBS News, the main reason for the skyrocketing cost is the decline in used book sales.

It's not that savvy students don't know they can save money by picking up a used textbook. Kaitlyn Vitez, a higher education advocate for U.S. Public Interest Research Group, told CBS News that students are increasingly required to obtain electronic versions of texts that expire at the end of the semester.

"Students might have been able to resell the textbook in the past, but because the access code expires, it renders the textbook worthless," she told the network.

Most students still buy physical books

CampusBooks is a site where students who are allowed to use physical textbooks can compare prices for new and used books. The company says used book sales represent an average of 45 percent of all sales from 2016 through 2018, compared to 30 percent for new books.

Renting textbooks is a growing option, with nearly 20 percent of books falling into that category. While electronic textbooks are the fastest-growing segment, it still makes up a very small percentage of the overall total. The slight drop in the average cost of books could be a hopeful sign.

"The sign of college textbook decreasing runs counter to the 20-year narrative of staggering price increases, which will be beneficial to those strapped with large student loans," said Alex Neal, CEO of CampusBooks. "Students may be completely digital these days -- growing up on tablets and smartphones -- but when it comes to the college classroom, hardback books still represent the best value and learning tool."

Renting vs. book buy-back programs

Neal said students might like the cashflow convenience of leasing textbooks, but they can actually put money back in their pockets by taking advantage of textbook buy-back programs.

"Rentals might be the cheapest but they don't help pay off student loans," he said.

According to the College Board, the average textbook costs for a year at a four-year public college is $1,250, making up 5 percent of a student's total college expenses.

There’s no discounting the importance of teachers when it comes to young students’ academic success, but new research finds that many elementary teachers are stressed to the point of being ineffective.

A new study from the University of Missouri found that 93 percent of teachers are affected by high levels of job-related stress. They say that this extremely high percentage may be leading to poorer grades and a higher prevalence of behavior problems.

“It’s no secret that teaching is a stressful profession. However, when stress interferes with personal and emotional well-being at such a severe level, the relationships teachers have with students are likely to suffer, much like any relationship would in a high stress environment,” said professor Keith Herman from the MU College of Education.

High stress and low coping ability

The researchers came to their conclusions after analyzing teacher profiles and measuring levels of stress, coping ability, and self-reported levels of “burnout.” Herman says that the results indicated that a miniscule number of teachers showed both low levels of stress and high coping ability.

"It's troubling that only 7 percent of teachers experience low stress and feel they are getting the support they need to adequately cope with the stressors of their job," he said.

"Even more concerning is that these patterns of teacher stress are related to students' success in school, both academically and behaviorally. For example, classrooms with highly stressed teachers have more instances of disruptive behaviors and lower levels of prosocial behaviors."

More support needed for teachers

While there may be no surefire solutions to this problem, the researchers say that it’s important that teachers have access to support to minimize negative outcomes.

"We as a society need to consider methods that create nurturing school environments not just for students, but for the adults who work there," Herman said.

"This could mean finding ways for administrators, peers and parents to have positive interactions with teachers, giving teachers the time and training to perform their jobs, and creating social networks of support so that teachers do not feel isolated."

The full study has been published in the Journal of Positive Behavior Interventions.