To believe some young voters — especially those who showed up at Bernie Sanders rallies earlier this year — America is in the midst of a student debt crisis. In 2010, student loans overtook credit cards to become the biggest source of American household debt other than mortgages. Today, they total about 7 percent of GDP.
Of those who borrowed from the federal government and began repayments in 2011, 10 percent defaulted within two years, up from 4.5 percent in 2003. The problem animates the Left: whereas Donald Trump has talked about the subject only fleetingly, Hillary Clinton has detailed policies for helping penniless scholars. Who could oppose such a worthy aim?
Defaults on student debt are highest among so-called ‘non-traditional’ students. They attend community colleges, which provide short, typically two-year courses, or profit-making universities, which offer heavily marketed and pricey degrees, sometimes of dubious merit. According to Adam Looney of the treasury department and Constantine Yannelis of New York University, non-traditional students constituted more than half of all new borrowers from the federal government between 2004-2014. They accounted for fully 70 percent of those who defaulted within two years of starting repayments in 2011.
The problem non-traditional students face on graduation is more often low incomes rather than high debts. In 2014, the median graduating borrower from a community college owed $11,700 (Rs.7.8 lakh), compared with $26,500 among those who had attended a selective, four-year course. Yet while 25 to 34-year-olds with bachelor’s degrees or more earned an average of $59,000 (Rs.39 lakh) in 2015, those with two-year degrees made only $38,500. Just as those with large mortgages typically have big houses, those with huge student debts usually have a graduate degree in, say, business or medicine, and can expect a bumper salary as a result. The average aspiring medic borrows $138,000 (Rs.92 lakh) for her graduate education; lawyers-to-be, $107,000. Yet the three-year default rate among graduate students is only 3 percent.
At first, during the primaries, Ms Clinton promised to make community college free. She also said she would make public colleges “debt-free” — i.e, cheap — for low and middle-income students who study in their home states. This makes some sense. But a need to appeal to Sanders’ fans led her to expand her plan in July. Clinton now pledges that by 2021, no American from a household earning less than $125,000 (Rs.83.4 lakh) per year will need to pay any tuition fees at all to in-state public universities.
Ms Clinton’s refreshed plan will cost anywhere between $350-800 billion (Rs.23.4-53.4 lakh crore) over a decade, according to the Committee for a Responsible Federal Budget, a think-tank. Much of that cash will flow to students who will go on to become affluent. The returns on college education have never been higher (a fact which helps to explain Trump’s success with voters who have spent less time studying). Over a career college graduates can expect to earn twice what high school graduates make, according to one estimate.
Reforms during Barack Obama’s presidency have already made student debt much more manageable. Congress and the Obama administration have expanded income-linked repayment programmes for those with federal loans. Today, any student who faces repayments exceeding 10 percent of her income can cap her repayments at that fraction of her earnings. After 20 years, the government will write off any remaining balance. This makes student debt resemble a tax more than conventional borrowing.
Ms Clinton should concentrate on funding community colleges, regulating for-profit universities and improving income-linked repayment. But whatever she does, it’s not hard for her ideas to beat Trump’s, which amount to doing “something with extensions, and lower interest-rates, and a lot of good things”.
Sexual restraint training
At the University of Minnesota, some 5,700 new students arrived on campus for orientation in early September. Each one of them had taken a course on campus sexual assaults. A new law, which came into effect on August 1, makes it mandatory for all university freshmen (new entrants) in the state of Minnesota to be given training within the first ten days of the school year. Minnesota is unusual for the breadth of its decree, but students, parents and university administrators countrywide are asking the same questions about how widespread is campus rape and what to do about it.
California was the first state in the country to pass a law colloquially referred to as ‘Yes means yes’, which requires affirmative consent for sex to be considered legal. New York followed suit in 2015. Last year, George Washington University became the first to make training on sexual assault compulsory for new students. The White House has its own task force on protecting students from sexual assault.
Statistics on sexual assault are notoriously hard to compile, but the best attempt from the Association of American Universities found 23 percent of female undergraduates reported some form of sexual assault. An internal poll at Harvard suggested almost a third had. Victims of sexual assault rarely speak up; even when they do, sexual assault can be devilishly hard to prove.
Many such assaults happen during the ‘red zone’, the time between the start of the school year and Thanksgiving (end November), says Kathryn Nash, co-founder of TrainED, a company that counsels colleges on legal compliance. “A high percentage” of these cases involve freshmen. Nash attributes this to freshmen being on their own and having access to alcohol for the first time. She says that in 75 percent of cases, one or both parties have been drinking. Various public-health studies link sexual assault and binge-drinking, though some students think this is blaming the victim.
Ann Olivarius, a lawyer for victims of sexual assault, believes the problem has been exacerbated by the availability of pornography. The internet has made sexually explicit images and videos accessible to anyone with a smartphone. This, she says, has engendered a sense of sexual entitlement among men. On the other hand, the web has focused attention on the problem. News of sexual assault spreads much more quickly and widely than it did before the era of digital media, which may encourage more people to come forward.
Time for the purblind administrations of India’s 37,000 colleges and 800 universities where sexual harassment is dismissed as innocuous “eve-teasing” to follow suit.