The Cost of Opportunity

commoditiesWe’ve all heard it so many times that we don’t even notice it anymore:  Education is a commodity.  College is an investment in your own human capital. Students are consumers, savvy individuals who bear the risks and rewards of their own investments.  Student loans are the cost of opportunity.

But this familiar “Education is a Commodity” refrain is not a benign turn of phrase.    Using the language of the market to describe higher education is driving the disastrous rise in student debt.

Why?  Because we can draw a direct line between Continue reading

Student Debt at the Intersection of Race, Class and Gender?

The vast majority of reports on student loan borrower and defaulter characteristics tend to focus on one trait– socioeconomic status, race, gender– at a time. While some authors flat-out state that they don’t intend to consider how characteristics relate to one another, for instance, socioeconomic status and race in calculating risk of student loan debt, the majority seem to simply fail to consider exactly how multiple factors might affect a student’s access to resources.

Much of the literature on student loan debt and default rates disaggregates data by single characteristics.  Nicholas Hillman’s College on Credit and the Urban Institute’s Forever In Your Debt take this approach.  Other reports and articles–like Mark Kantrowitz’s Calculating the Contribution of Demographic Differences to Default Rates, the AAUW’s Graduating to a Pay Gap, and Gross, et al.’s  What Matters in Student Loan Default?–mention intersections, but only in passing, and without sustained analysis.

Teasing out single factors is useful, but only up to a point.  If feminist theory has taught us anything over the past decades, it is that we cannot consider race, class, gender or other characteristics in isolation.  To do so is to fail to understand that people do not inhabit one identity at a time, and that the experience of multiple discrimination is the norm, not the exception.  For example, if having a child is is a “risk factor” for drop out and default, why do we not have better analysis of which students are the most likely to be the sole support for dependents?  How can we know the best way to ensure that these students benefit from higher education if we do not know who they are?

Defaults rise, by any measure

The Department of Education has released the most recent numbers for federal student loan default:  “The national two-year cohort default rate rose from 9.1 percent for FY 2010 to 10 percent for FY 2011. The three-year cohort default rate rose from 13.4 percent for FY 2009 to 14.7 percent for FY 2010.”

The Department is in the midst of changing the time frame in which it measures default, from a two- to a three-year window.  Under the new measure, 14.7% of the students whose loans entered repayment between October of 2009 and September of 2010 defaulted before the end of September of 2012.  This means that around 600,000 student loan borrowers (out of a cohort of 4 million) defaulted.  The consequences of default are severe and can be disastrous for students and their families.

The Huffington Post points out that these default numbers are only one component of an increasingly troubling picture, noting that “about $52 billion in student loans that had been current became delinquent in the first half of the year, the highest first-half total recorded since 2003.”

By the numbers: Almost $1.2 trillion and counting

In late July, the CFPB released new data indicating that total student debt has increased by 20% since the end of 2011.  As of May, 2013, the Bureau estimates that the combined total of federal and private loans approached $1.2 trillion.  For those keeping track at home, that’s $101 trillion in federal loans and $165 billion in private loans.