Marian Wang

Racist Georgia Policies Are Segregating Kids into Old Trashed Schools

Georgia has been illegally and unnecessarily segregating thousands of students with behavioral issues and disabilities, isolating them in run-down facilities and providing them with subpar education, according to an investigation by the U.S. Department of Justice.

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Why Is a Wildlife Rehab Center Authorizing Charter Schools? Inside the Wild World of Charter Regulation

Update, Feb. 24, 2015: Here's a further response from the Audubon Center of the North Woods.

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When Charter Schools Are Nonprofit in Name Only

This originally appeared on ProPublica.

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North Carolina to Charter School Chain: Administrator Salaries Cannot Be Kept Secret

The North Carolina State Board of Education has issued a warning to a charter-school chain for failing to comply with an agency order to disclose the salaries of school administrators. The schools have been put on "financial probationary status," which could lead to sanctions if their board does not comply within 10 business days.

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Koch-Backed Charter School Founder Makes Millions From Public Education

Versions of this story were co-published with the Daily BeastRaleigh News & Observer and Charlotte Observer.

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We're All Paying for Student Loan Defaults and the Incredible Cost of U.S. Higher Education

Parents are increasingly struggling to repay federal loans they've taken out to help cover their children's college costs, according to newly released federal data.

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How Exactly Do Colleges Allocate Their Financial Aid? They Won’t Say

At the center of the admissions and financial-aid process is a massive information imbalance: Schools make their decisions with detailed data about each applicant that goes well beyond test scores and transcripts. Many universities have access to comprehensive financial profiles, sometimes down to the type of cars a family drives. Some analyze patterns and interpret even the most subtle indicators from students, such as the order in which schools are listed on the federal financial-aid application, or even how long a student stays on the phone with an admissions officer.

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How College Pricing Is Like Holiday Retail Sales

You know all those seemingly great sales during the holidays? It turns out, they are often a “carefully engineered illusion.”  A recent piece in the Wall Street Journal defines what it calls “retail theater,” noting that often the discounts being offered to bargain-conscious consumers are carefully planned out by retailers from the start:

The red cardigan sweater with the ruffled neck on sale for more than 40% off at $39.99 was never meant to sell at its $68 starting price. It was designed with the discount built in.

Some retailers that sell online even set their discounts depending on user information, as the Journal reported last year:

The Staples Inc. website displays different prices to people after estimating their locations. More than that, Staples appeared to consider the person's distance from a rival brick-and-mortar store, either OfficeMax Inc. or Office Depot Inc. If rival stores were within 20 miles or so, usually showed a discounted price.

Higher education may seem like a different world, but universities in many ways have been working from the same playbook.

Savvier college-bound consumers know that the so-called “sticker price” of tuition and fees at a given college or university isn’t what many – or even most  – students pay.

Take American University, where 74 percent of full-time freshmen got a grant or scholarship – essentially, a discount off the list price – for the 2011-2012 school year. Or Drexel University, where that figure was 98 percent.

At nearly 200 schools, 100 percent of full-time freshmen got a scholarship, as DePaul University’s Jon Boeckenstedt points out.

A recent study of discounting at private non-profit colleges found that the average institutional grant has grown as a percentage of sticker price, hitting an all-time high of roughly 53 percent. But the report, released in May by the National Association of College and University Business Officers, also pointed out that while larger discounts are generally a good thing, students could still end up paying more depending on how much the sticker price is going up at the same time.

Like retailers, colleges and universities are increasingly getting more sophisticated about how they give out discounts, offering so-called “merit aid” to students they especially want to enroll. 

Private universities have led the way in discounting, but as we’ve detailed, the practice has spread to public universities as well. Many state schools have moved toward the “high-tuition, high-aid” model by discounting for students with high test scores or for out-of-state students who will ultimately pay more than residents, even with a small discount.

Some colleges  – mostly private colleges – will even price-match if students know to ask. (It’s not unlike your local Best Buy, really.)

The growing discount rates and the lack of transparency in the pricing of higher education have prompted some schools to try another approach. A few colleges and universities have opted for “tuition resets,” announcing they’re slashing sticker prices by as much as $10,000 – while oftenreducing aid.

Call it the J.C. Penney strategy. The retailer tried to move away from high-low pricing and move to “everyday low prices,” only to find out the hard way that customers really, really love a discount.

Yet at least initially, some colleges such as Concordia University have gone the “tuition reset” route and have found that the lower rates (and the accompanyingPRboost about the lower rates) got more student applications in the door, raising enrollments and ultimately, net tuition revenue. Whether that interest from consumers will keep up after the headlines fade remains to be seen. 

It’s worth mentioning that one big difference between the pricing of higher education and other consumer goods is the ease of comparison shopping: When you’re shopping for a new TV set, it’s relatively easy to compare prices with a little research. It’s much harder to do that with colleges, especially when you have to narrow down your options to a manageable number and submit applications before knowing for sure how much each option will end up costing.

There are, of course, tools out there intended to make college costs more transparent. Colleges are required to post net price calculators to give prospective students – or, at least, those who put in the time to find the calculators online and enter in their personal information  – a better sense of what a given school might cost them after discounts. But the calculators have their limitations: Some estimates are more accurate than others, depending on the complexity of the colleges’ calculators, which are not standardized. (In more recent news, lawmakers have introduced a law aimed at making the calculators more user-friendly.)

As it stands, it’s not always clear whether consumers actually win when colleges  – or retailers – tinker with their pricing and discounts. What is clear is that when the system isn’t especially transparent, discounts can get people overexcited, whether they’re real savings or not.

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As Universities Cut State Strings, Some Fear 'Privatization' of Public Schools

The chancellor of Oregon’s higher-education system currently oversees all seven of the state’s public colleges and universities. But as of July next year, she’ll be chancellor of four.

The move, long pushed by some university leaders in the system, will give the University of Oregon, Portland State University and Oregon State University more freedom to hire and fire presidents, issue revenue bonds, and raise tuition.

Across the country, a small but growing number of public universities are making similar pushes, looking to cut deals with state lawmakers that scale back direct oversight, often in return for less funding or for meeting certain performance targets. Over the past few years, schools in Texas, Virginia and Florida have all gotten more flexibility to raise tuition. Other plans have recently been broached, though with less success, in Wisconsin, California and Louisiana.  

The proposals vary in scope, but their proponents generally argue that more autonomy allows public universities to operate with less red tape and with greater freedom to raise revenue as state funding has fallen.  

But many within higher education point to the potential downsides. They worry that these universities -- often the better-known and wealthier public universities -- could end up sidelining broader state goals such as access and affordability in pursuit of their own agendas, such as moving up in college rankings.

“My fear is that if public flagships become so focused on revenue and prestige, and so focused on autonomy, they will minimize their commitment to the public agenda,” said Richard Novak, who was previously director of public-sector programs at the Association of Governing Boards. “They should be leading the public agenda. If they privatize too much, they’re not going to be doing it for much longer.”

Others have similar concerns.

“I think there’s a potential for confusion, unhealthy competition and misuse of resources,” said Robert O’Neil, who headed the statewide University of Wisconsin system and was also president of the University of Virginia. In O’Neil’s experience, centralized oversight helps keep in check ambitions that might lead colleges to pursue wasteful projects or duplicative programs.

There’s relatively little research on the overall benefits or drawbacks of schools gaining autonomy, but it does appear that such universities often end up resembling private colleges, moving toward a “high tuition, high aid” model in which schools hike sticker prices significantly while offering big discounts to students schools are trying to attract.  (As ProPublica has detailed, state schools have been giving a growing portion of grants to wealthier students and a shrinking portion to the neediest.) 

State and university officials pushing for more autonomy often balk at the term “privatization,” noting that the universities aren’t severing all ties with the state.

As one planning group at the University of Virginia wrote last month, “Autonomous is not the opposite of public.”

The University of Virginia, along with two other state universities, struck deals in 2005 that won it significant autonomy from the Commonwealth. Those agreements mandated that the schools still meet various benchmarks -- but they also gave the universities wiggle room.

Three years after the deal, a state audit report concluded that while the schools were meeting their “access” goals, the number of low-income students at each of the universities -- as measured by federal Pell grants -- was actually decreasing. (A university spokesman said enrollment of low-income students has gone up since then.)   

Even some supporters of moving toward privatization have begun to have second thoughts. 

James Garland, former president of Miami University, a public university in Ohio, was once a strong proponent of what he calls “semi-privatization” of American public universities, having headed a university that he describes as “public in name only.” In 2009, he wrote a book arguing that public universities should be autonomous and deregulated by their states.

In the years since, Garland said, his views on the autonomy question have “mellowed.” Though he still believes autonomy can make sense for some schools, he’s also concerned about the potential pitfalls.

“Some of these flagships would like to make decisions that benefit their own financial future and give them the ability to build posh dining halls or giant stadiums or create new nanotechnology centers,” Garland said, “when what really may be more needed than that is simply providing a high-quality rigorous college education for legions of students in the state who can’t afford that now and have no place to go and get it.”

“It’s not an accident that you see this happening among big, well-funded publics,” Garland added.

At the University of Virginia, internal discussion of further steps toward privatization has continued. As the Washington Post recently reported, a draft report from a university planning committee recommended “another major restructuring of the relationship between the University and the Commonwealth.” The document notes that the change “would not mean complete privatization.”

University of Virginia spokesman McGregor McCance said the draft report was part of early discussions about possible models for public higher education, and that there are no plans for the university to ask for additional autonomy.

Colleges and universities that do seek to move in this direction need to have candid conversations about their goals, said Garland: “As more and more schools argue successfully for some kind of autonomy from their states, there has to be a real understanding about what the mission of those schools is going to be in the future and there has to be some way of evaluating their conformity to that mission.”

In Oregon, they’re still feeling their way through. All of the state’s public colleges will still be overseen in some way by a coordinating commission. That includes the three largest schools, which, even with their new freedoms, will still need the commission to approve certain items, such as tuition hikes beyond 5 percent. The details of how that system of checks and balances will work -- and how the change will affect the smaller universities still part of the system -- remain to be seen.

“It’s such a turbulent time for higher education, there’s a lot to be said for helping to position institutions to be much more nimble when it comes to shaping the business and delivery of higher education,” said Ben Cannon, the governor of Oregon’s education policy advisor, who was recently appointed head of the commission.

As to whether the new autonomy will actually help schools become more nimble, Cannon acknowledged, “It’s kind of unproven.”

Asked what they will call the new structure and whether the “Oregon University System” will nominally continue to refer to all seven universities, Cannon said that was still being decided.

“That’s a complicated question. The labels are still up for grabs,” Cannon said. “The structure really isn’t. That’s done.”

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New Data Reveals Public Universities Are Giving More Aid to Wealthy Students - Leaving the Poor Behind

The following was originally published on This story was co-published with The Chronicle of Higher Education.

She was a high achiever, graduating from high school with a 3.8 GPA and ranking among the top students in her class. She served as secretary, then president, of the student government. She played varsity basketball and softball. Her high-school guidance counselor, in a letter of recommendation, wrote that Epps was “an unusual young lady” with “both drive and determination.”

Epps, 19, was also needy.

Her family lives in subsidized housing in South Philadelphia, and her father died when she was in third grade. Her mother is on Social Security disability, which provides the family $698 a month, records show. Neither of her parents finished high school.

Epps, who is African-American, made it her goal to be the first in her family to attend college.

“I did volunteering. I did internships. I did great in school. I was always good with people,” said Epps, who has a broad smile and a cheerful manner. “I thought everything was going to go my way.”

At first, it looked that way.

Epps was admitted to three colleges, all public institutions in Pennsylvania. She was awarded the maximum Pell grant, federal funds intended for needy students. She also qualified for the maximum state grant for needy Pennsylvania students.

None of the three schools Epps was admitted to gave her a single dollar of aid.

To attend her dream school, Lincoln University, Epps would have had to come up with about $4,000 per year, after maxing out on federal loans — close to half of what her mother receives from Social Security. It was money her family didn’t have, she said.

Public colleges and universities were generally founded and funded to give students in their states access to an affordable college education. They have long served as a vital pathway for students from modest means and those who are the first in their families to attend college.

But many public universities, faced with their own financial shortfalls, are increasingly leaving low-income students behind — including strivers like Epps.

It’s not just that colleges are continuously pushing up sticker prices. Public universities have also been shifting their aid, giving less to the poorest students and more to the wealthiest.

A ProPublica analysis of new data from the U.S. Department of Education shows that from 1996 through 2012, public colleges and universities gave a declining portion of grants — as measured by both the number of grants and the dollar amounts — to students in the lowest quartile of family income. That trend has continued even though the recession hit those in lower income brackets the hardest.


Portion of institutional grants given to students in the lowest and highest income quartiles.


 Students in the lowest quartile of income
 Students in the highest quartile of incomeSource: ProPublica analysis of data from the U.S. Department of Education National Postsecondary Student Aid Study

Attention has long been focused on the lack of economic diversity at private colleges, especially at the most elite schools. What has been little discussed, by contrast, is how public universities, which enroll far more students, have gradually shifted their priorities — and a growing portion of their aid dollars — away from low-income students.

State schools are typically considered to offer the most affordable, accessible four-year education students can get. When those schools raise tuition and don’t offer more aid, low-income students are often forced to decide not just which college to attend but whether they can afford to attend college at all.

“The most needy students are getting squeezed out,” said Charles Reed, a former chancellor of the California State University system and of the State University System of Florida. “Need-based aid is extremely important to these students and their parents.”

There’s no data on the number of needy but qualified students who are “squeezed out” and don’t make it onto four-year college campuses. But what is clear is that while the number of needy students has been growing, state schools have not kept up.

Over roughly two decades, four-year state schools have been educating a shrinking portion of the nation’s lowest-income students, according to an analysis of Pell-grant data by Tom Mortenson, a senior scholar at the nonprofit Pell Institute. The task of educating low-income students has increasingly fallen to community colleges and for-profit schools.

Epps’ top choice, officially known as The Lincoln University, is about an hour’s drive from Philadelphia, and was one of the nation’s first historically black colleges. Founded in 1854 to serve African-Americans excluded from other colleges, the school became a public institution in the early 1970s, when the state legislature deemed its mission to be “completely compatible with the needs of the Commonwealth.”

All of the school’s own aid typically goes toward athletic or merit-based scholarships, regardless of students’ needs. In the 2009-10 budget, for instance, most of the roughly $3 million in institutional aid went to four specific “merit-based” scholarships — and the rest to athletics, international students, and study abroad, according to data supplied by Lincoln. The only need-based aid available to students is through separate donor-supported scholarships, some of which are earmarked for needy students, said university spokesman Eric Webb.

Aid given based on merit or other factors could still go to needy students, but that doesn’t appear to be happening much at Lincoln.

Data made available by the nonprofit Institute for College Access & Success show that 84 percent of the school’s grant dollars in the 2009-10 school year did not go to meeting students’ needs. (The data does not include athletic scholarships and certain other forms of aid.)

At Epps’ second choice, Millersville University of Pennsylvania, two-thirds of aid dollars in 2010-11 went to students who had no documented need for it, according to the latest data available. (East Stroudsburg University of Pennsylvania, the third school that accepted Epps, did not provide a breakdown of institutional grant aid.)

Why have public universities across the nation shifted their aid?

“For some schools, they’re trying to climb to the top of the rankings. For other schools, it’s more about revenue generation,” said Don Hossler, a professor of educational leadership and policy studies at Indiana University at Bloomington.

To achieve these goals, schools use their aid to draw wealthier students — especially those from out of state, who will pay more in tuition — or higher-achieving students, whose scores will give the colleges a boost in the rankings.

Private colleges have been using such tactics aggressively for some time. But in recent years, many public colleges have sought to catch up, doing what the industry calls “financial-aid leveraging.”

The math can work like this: Instead of offering, say, $12,000 to an especially needy student, a school might choose to leverage its aid by giving $3,000 discounts to four students with less need, each of whom scored high on the SAT, who together will bring in more tuition dollars than the needier student.

Those discounts are often offered to prospective students as “merit aid.”

Despite its name, “merit aid isn’t always going to the very best students,” Hossler said. “It’s an intentional strategy to help offset the loss of state support.”

Hossler knows this world firsthand. For years, he carried out such strategies as vice chancellor for enrollment services at Indiana University.

“One of my charges was to go after what I would call pretty good out-of-state students,” he said. “Not valedictorians, not the top of the class. Students who you didn’t have to give thousands and thousands of dollars to in order to get them to enroll.”

Indiana University is not alone in thinking about financial aid this way. Consultants who work with schools on financial-aid strategies said they’ve seen an uptick in interest from public universities in recent years, with many focused on generating more revenue.

“When public [universities] come to us individually now, they won’t admit it, but they’re all looking for the same thing — smart students who can pay,” said an industry consultant who asked not to be named.

Another industry consultant, Mary Piccioli of Scannell & Kurz, said many of her firm’s public-school clients are looking to use financial aid “to positively impact the bottom line.”

College officials often argue that attracting students with more resources means they’ll have more aid to redistribute to those in need.

“There’s certainly some truth to that,” said Donald Heller, dean of Michigan State University’s College of Education, who has researched institutional-aid patterns extensively. “But I don’t think that’s really the motivating behavior for many institutions. The more dominant motivating behavior is interest in high-achieving students, which will help them with institutional prestige.”

Epps, apparently, didn’t generate that sort of interest.

She was in her high school’s computer lab, checking her email, when she saw the message from Lincoln University laying out her financial aid package: a mix of state and federal money but nothing from Lincoln.

“Once I saw it, I knew it wasn’t the amount that I needed,” Epps said. “Right away I knew it.”

Epps had been getting guidance from Philadelphia Futures, an organization that helps low-income high-school students get into and complete college. When she went through the cost calculations with a coordinator there, it became clear: The money simply didn't add up.

At first, Epps said, she blamed herself for not qualifying for aid. She felt like a failure.

“I was kind of upset because I felt as though I worked so hard,” she said. “I kept thinking how I’m not a good test taker.”

Epps had scored a combined SAT score of 820 on math and critical reading. In fact, that’s solidly in the middle of Lincoln’s score distributions for many years, according to data reported to the U.S. Department of Education.

But what Epps didn’t know is that the school had committed to “continuously improving its SAT and GPA averages for incoming cohorts” — as language found in a strategic planning document put it. She also didn’t know that the school had been spending the majority of its financial aid on students who would help bring up those averages — regardless of whether they needed the money.

“To attract top students to your institution, you have to be able to offer them a competitive scholarship package,” said Lincoln University President Robert Jennings. “That’s usually a full-tuition scholarship, that’s a private room sometimes or laptop computer, or a whole bunch of other perks. That’s what schools do. All schools do it.”

Rather than giving small discounts to many students, as many colleges do, Lincoln focuses on giving free rides to top scorers – as a Lincoln admissions flyer lays out.

The strategy seems to have worked. Lincoln University has raised its scores in recent years. In 2002, half of Lincoln’s incoming freshmen scored between a 360 and 460 on the math section of the SAT. In 2012, half of students scored between 410 and 490.

The boost in scores has been no accident, according to Jennings. He said it was a mandate from the Board of Trustees.

“They wanted to increase the SAT averages of students coming to Lincoln,” Jennings said.

And what about students who may have once been a natural fit but aren’t hitting the higher scores? The school still wants to serve some of them — “because of our historical mission,” explained Jennings. But Lincoln has also increasingly been “trying to steer that lower tier of students — students who need much more help — into community colleges,” he said.

Jennings doesn’t see this as a departure from the school’s mission to provide public access. “Absolutely not,” he said. “That’s why you have community colleges. They, too, are public institutions, and we have built collaborative relationships with them.” He added that the school recently launched a campaign to raise more money for scholarships, some of which will go to providing more need-based aid.

Like Lincoln, both Millersville University and East Stroudsburg University — the two other colleges that accepted Epps — have created strategic planning documents that include language reflecting a desire to move up academically.

In a 2010-15 strategic planning document, East Stroudsburg University outlined the goals of becoming “more selective in each new year” as well as fostering “strategic alignment of financial aid” to better attract top students.

“High-achieving and access are not mutually exclusive,” said spokeswoman Brenda Friday. “As such, we look for and recruit students who present both. We also recruit these groups separately. There are funding possibilities available for both groups of students.”

East Stroudsburg and other regional public colleges are in a tough spot. Many don’t have very much aid to give, and most serve a higher percentage of needy students than more prestigious public flagship universities, which have more money from endowments, research and fundraising. It’s a common phenomenon in higher education – students with less money relegated to institutions with less money.

In Pennsylvania, as in most states, public higher education has faced steep cuts, especially since the most recent recession. Over the last five years, the state has cut funds for higher education by 18 percent. At public institutions, that’s worked out to about $2,000 less in state and local support per student — a 32 percentage-point drop, according to data from the State Higher Education Executive Officers.

“All the arrows point in a direction that shows what we are out doing now is raising revenue. The old business model has sort of broken down,” said Patrick Callan, president of the Higher Education Policy Institute and formerly the head of state higher-education boards and commissions in Montana, Washington and California.

“There have probably been no winners from all of this,” Callan said. “But the biggest losers were those who were disadvantaged on the front end.”

In high school, Epps went by the nickname “Neeks” with most of her friends. They were a mixed group. Some, like her, fostered hopes of attending college. Others just wanted to finish school and get a job.

Though she loved high school, Epps said that looking back she realizes that despite her own efforts, she didn’t get the best education.

About a third of the students at her high school didn’t graduate. After she left, the school was among roughly two dozen shuttered by the chronically underfunded School District of Philadelphia.

“On a couple of levels, systems are failing these students,” said Ann-Therese Ortiz, who worked with Epps as director of pre-college programs at Philadelphia Futures. Low-income high-school students could put in the same effort as their better-resourced counterparts, but “even with the same effort, it simply doesn’t yield the same fruit. And then there’s limited access to the same opportunities, because they’re not receiving the same educational foundation that really opens those doors.”

Those disadvantages can also show up in test scores. A substantial body of research shows that SAT scores are strongly correlated with family income.

“How do you separate merit from privilege?” asked Jerome Lucido, a professor and executive director of the University of Southern California’s Center for Enrollment Research, Policy, and Practice. “Merit needs to be tied to mission, not just who got a higher test score. We already know that has a direct correlation with family income.”

But the SAT and other tests are still crucial to how publications such as U.S. News & World Report and Barron’s formulate college rankings, which are widely regarded as measures of prestige.

Not surprisingly, colleges are constantly working to move up the lists. A prospective student flipping through Barron’s 1995 college-rankings guide would have found about 90 public institutions in the top three tiers of competitiveness and more than 170 in the less competitive or non-competitive tiers. In the 2013 guide, that top tier has grown by more than 40 colleges — about 46 percent — and the bottom tier has shrunk by 60.

“The whole system is constantly moving up, going upstream to get better and better students, and get students who can pay,” said Anthony Carnevale, director of Georgetown University’s Center on Education and the Workforce. “It all looks great for the press release. But you’re systematically leaving people behind.”

Carnevale, who has authored many studies analyzing this shift, likens the state of higher education to “hospitals for healthy people,” competing for the easiest to treat, most lucrative patients, rather than taking on the cases of those who stand to benefit the most. “The question is, are you trying to reach down or not?”

Schools might argue they are — in a way.

Many state schools have in recent years struck what are called “articulation agreements” — partnerships with community colleges that make it easier for community-college students to transfer to a four-year school. In the last two years, Lincoln University has established such agreements with 11 community colleges.

But even with improved transfer pathways, there’s still an inherent risk for students like Epps who “undermatch,” or don’t attend the most selective school they can get into. Low-income, minority and first-generation students frequently undermatch, research shows, and in doing so, they often end up at institutions with less support and far lower graduation rates.

Without any aid from Lincoln or the other colleges that accepted her, Epps weighed her options and chose a different route. She recently completed her first year at the Community College of Philadelphia — a school where about half of full-time freshmen don’t return for a second year.

“In a way, four-year colleges are asking two-year colleges to do the dirty work of selecting who’s worthy of a four-year college,” the Pell Institute’s Tom Mortenson said. In doing so, four-year colleges are not “taking on the responsibility from the beginning when they’re freshmen and making a real commitment to these students.”

But colleges — even those with an explicit public mission — have mounting incentives to avoid students like Epps. Carnevale points to the dawning of what’s known as the “accountability movement” — an effort by states to reform higher education by tying funding for public colleges to student outcomes and graduation rates. Last month, President Barack Obama announced that the federal government would also be moving in a similar direction — and hopes to eventually tie federal aid to certain performance measures.

Unless policymakers build in some incentives to take on more students at the margins, the accountability movement could drive schools further away from low-income and minority populations, which have lower graduation rates overall, Carnevale said. “The whole logic of this industry — and the reform of it as well — excludes low-income and minority students.”

While colleges strive to enroll wealthier and better-performing students, the demographics of the nation’s high-school graduates are moving in a different direction: As a group, tomorrow’s high-school graduates will be more racially diverse and more low-income than today’s.

“There is a significant misalignment. And I think the misalignment’s going to continue to grow,” said David Tandberg, an assistant professor of higher education at Florida State University who previously worked in the Pennsylvania Department of Education.

“The public really, really benefits from a first-generation student going to college. All sorts of wonderful outcomes come from that,” Tandberg said.

A more educated workforce has widespread benefits: It leads to more earning power for those who graduate, a stronger tax base for the state, and greater potential for economic growth in the future.

Public universities have the task of “balancing institutional striving with the public’s needs,” Tandberg said, which “are often two very different things.”

Epps still remembers going out and buying a new button-down shirt, slacks and dress shoes the night before her high-school graduation. She remembers the nervousness she felt the next morning, and the tinge of sadness.

“I was going to miss my friends. We had been together for four years, and we were all going in different directions,” she said. “I didn’t know how life was going to turn out.”

At graduation, in her white cap and gown, she was the mistress of ceremonies, introducing each of the speakers and making sure the ceremony flowed. She read out the theme of the year’s graduation, a rephrasing of a Thoreau quote: “Go confidently in the direction of your dreams. Live the life you have imagined.”

She’s certainly trying. Community college started up again last week. Epps has already signed up for a full schedule of six classes.

A year from now, she hopes to transfer, finally, to a four-year state school and eventually to get a bachelor’s degree. She’s thinking she might want to study accounting.

Jonathan Lin contributed research to this article.

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"Undergraduate Entering Fee"? How College Students Are Paying Ridiculous, Hidden Student Fees

This article was produced by and originally appeared at ProPublica.

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The Cruelty of Making a Grieving Father Wait Four Years to Settle His Dead Son's Debts

It's been four long years for Francisco Reynoso. The California gardener whose son died in a car accident in 2008 was left buried in grief — and in student debt. At last, the bereaved father is getting some resolution.

ProPublica traced the complex loan trail of Freddy Reynoso's student loans, which broke down into two main parts. For the first, Reynoso had borrowed from a bank with a household name — Bank of America. That debt changed hands and was ultimately sold to investors through a company neither he nor his father had ever heard of: First Marblehead, once one of the biggest securitizers of private student loans.

Through the bankruptcy process, that portion of Reynoso's debt has now been discharged. Court filings show that First Marblehead's National Collegiate Trust — its name for its student loan securities — decided not to dispute the discharge attempt.

But the other set of loans — the larger portion of Reynoso's debt — took an even stranger path. Originated by a company later accused of paying schools to steer students toward its loans products, his loans passed through Swiss bank UBS and landed in a portfolio of assets that were acquired by the Swiss central bank to stabilize UBS during the financial crisis.

That fund, known as the StabFund, has reached a settlement agreement with Reynoso's attorney. It's not known whether the settlement, which binds all parties to a confidentiality agreement, will still require Reynoso to pay on his debts.

Andrew Bao, an attorney representing the StabFund, declined comment and promptly hung up on a ProPublica reporter. Erik Clark, Reynoso's attorney, also declined to discuss the case because of the confidentiality agreement.

Speaking generally about the challenges of cases involving opaque private student loans that have been sold and resold, Clark said: "From an attorney's perspective, when you try to settle or negotiate, the real problem is figuring out who you're supposed to be talking to. If someone is calling the client and harassing them, you're not sure that's who you're supposed to deal with." That's partly because the holder of the loan often contracts with third-party servicers or debt collectors that don't have authority over the debt. And, Clark says, sometimes such companies won't divulge who holds the debt.

The current legal standard for discharging a student loan through bankruptcy is "unreasonably high as interpreted," he said, rendering most student loans generally non-dischargeable.

"What I tell people — almost everyone who comes to me — is this is going to require a political solution," said Clark. "People in this situation should be getting politically active and talking about this issue to congressmen. Someone has to be ringing the fire bell."

As for Reynoso — the man who has now suffered for four long years — his financial future remains hazy. He's aware that one of his debts has been discharged. But even now, he's not sure about what's happened with the rest because the final paperwork remains to be signed. Asked whether he knows if he will end up having to pay in the end, Reynoso replied that he didn't.

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How Financial Aid Letters Often Leave Students Confused and Misinformed

The financial aid award letters that colleges send to prospective students can be confusing: Many mix grants, scholarships and loans all under the heading of "Award," "Financial Assistance," or "Offered Financial Aid." Some schools also suggest loans in amounts that families can't afford.

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How the Gov’t Is Saddling Parents with College Loans They Can’t Possibly Afford

This story was co-published with The Chronicle of Higher Education.

Almendral had been accepted to New York University in 1998, but even after adding up scholarships, grants, and the max she could take out in federal student loans, the private university — among nation's costliest — still seemed out of reach. One program filled the gap: Aurora's mother, Gemma Nemenzo, was eligible for a different federal loan meant to help parents finance their children's college costs. Despite her mother's modest income at the time — about $25,000 a year as a freelance writer, she estimates — the government quickly approved her for the loan. There was a simple credit check, but no check of income or whether Nemenzo, a single mom, could afford to repay the loans.

Nemenzo took out $17,000 in federal parent loans for the first two years her daughter attended NYU. But the burden soon became too much. With financial strains mounting, Almendral — who had promised to repay the loans herself —withdrew after her sophomore year. She later finished her degree at the far less expensive Hunter College, part of the public City University of New York, and went on to earn a Fulbright scholarship.

Today, a dozen years on, Nemenzo's debt not only remains, it's also nearly doubled with fees and interest to $33,000. Though Almendral is paying on the loans herself, her mother continues to pay the price for loans she couldn't afford: Falling into delinquency on the loans had damaged her credit, making her ineligible to borrow more when it came time for Aurora's sister to go to college.

Total Disbursements in Millions of Plus Loans

While the number of parents taking out Plus loans has nearly doubled since 2000, loan volume has grown much faster. All values are adjusted for inflation.

Source: U.S. Education Department

Source: U.S. Department of Education

Nemenzo is not alone. As the cost of college has spiraled ever upward and median family income has fallen, the loan program, called Parent Plus, has become indispensable for increasing numbers of parents desperate to make their children's college plans work. Last year the government disbursed $10.6 billion in Parent Plus loans to just under a million families. Even adjusted for inflation, that's $6.3 billion more than it disbursed back in 2000, and to nearly twice as many borrowers.

A joint examination by ProPublica and The Chronicle of Higher Education has found that Plus loans can sometimes hurt the very families they are intended to help: The loans are both remarkably easy to get and nearly impossible to get out from under for families who've overreached. When a parent applies for a Plus loan, the government checks credit history, but it doesn't assess whether the borrower has the ability to repay the loan. It doesn't check income. It doesn't check employment status. It doesn't check how much other debt — like a mortgage, or other student-loan debt — the borrower is already on the hook for.

"Right now, the government runs the program by the seat of its pants," says Mark Kantrowitz, publisher of two authoritative financial-aid websites. "You do have some parents who are borrowing $100,000 or more for their children's college education who are getting in completely over their heads. Those parents are going to default, and their lives are going to be ruined, because they were allowed to borrow far more than is rational."

Much attention has been focused on students burdened with loans throughout their lives. The recent growth in the Plus program highlights another way the societal burden of paying for college has shifted to families. It means some parents are now saddled with children's college debt even as they approach retirement.

Unlike other federal student loans, Plus loans don't have a set cap on borrowing. Parents can take out as much as they need to cover the gap between other financial aid and the full cost of attendance. Colleges, eager to boost enrollment and help families find financing, often steer parents toward the loans, recommending that they take out thousands of dollars with no consideration to whether they can afford it.

When it comes to paying the money back, the government takes a hard line. Plus loans, like all student loans, are all-but-impossible to discharge in bankruptcy. If a borrower is in default, the government can seize tax refunds and garnish wages or Social Security. What is more, repayment options are actually more limited for Parent Plus borrowers compared with other federal loans. Struggling borrowers can put their loans in deferment or forbearance, but except under certain conditions Parent Plus loans aren't eligible for either of the two main income-based repayment programs to help borrowers with federal loans get more affordable monthly payments.

The U.S. Department of Education doesn't know how many parents have defaulted on the loans. It doesn't analyze or publish default rates for the Plus program with the same detail that it does for other federal education loans. It doesn't calculate, for instance, what percentage of borrowers defaulted in the first few years of their repayment period— a figure that the department analyzes for other federal student loans. (Schools with high default rates over time can be penalized and become ineligible for federal aid.) For parent loans, the department has projections only for budgetary — and not accountability — purposes: It estimates that of all Parent Plus loans originated in the 2011 fiscal year, about 9.4 percent will default over the next 20 years.

But according to an outside analysis of federal survey data, many low-income borrowers appear to be overburdening themselves.

Total Recipients of Plus Loans

The number of parents taking out Plus loans has nearly doubled since 2000.

Source: U.S. Education Department

Source: U.S. Department of Education

The analysis, by financial-aid expert Kantrowitz, uses survey data from 2007-08, the latest year for which information is available. Among Parent Plus borrowers in the bottom 10th of income, monthly payments made up 38 percent of their monthly income, on average. (By way of contrast, a federal program aimed at helping struggling graduates keeps monthly payments much lower, to a small share of discretionary income.) The survey data does not reflect the full Plus loan debt for parents who borrowed through the program for more than one child, as many do.

The data also show that one in five Parent Plus borrowers took out a loan for a student who received a federal Pell Grant — need-based aid that typically corresponds to a household income of $50,000 or less.

When Victoria Stillman's son got in to Berklee College of Music, she couldn't believe how simple the loan process was. Within minutes of completing an application online, she was approved. "The fact that the Plus loan program is willing to provide me with $50,000 a year is nuts," says Stillman, an accountant. "It was the least-involved loan paperwork I ever filled out and required no attachments or proof."

She decided against taking the loan, partly because of the 7.9-percent interest rate. Although it was a fixed rate, she found it too high.

Of course, Parent Plus can be an important financial lifeline — especially for those who can't qualify for loans in the private market. An iffy credit score, high debt-to-income ratio, or lack of a credit history won't necessarily disqualify anyone for a Plus loan. Applicants are approved so long as they don't have an "adverse credit history," such as a recent foreclosure, defaulted loan, or bankruptcy discharge. (As of last fall, the government also began disqualifying prospective borrowers with unpaid debts that were sent to collection agencies or charged off in the last five years.)

The Education Department says its priority is making sure college choice isn't just for the wealthy. Families have to make tough decisions about their own finances, says Justin Hamilton, a spokesman for the department. We "want folks to have access to capital to allow them to make smart investments and improve their lives," Hamilton says. In the years after the credit crisis, department officials point out, other means of financing college — such as home-equity loans and private student loans — have become harder for families to get.

The department says it's trying to pressure colleges to contain costs, and working to inform students and families of their financing options. "Our focus is transparency," says Hamilton. "We want to make sure we're arming folks with all the information they need."

Colleges' Tricky Role

Colleges rarely advise families on how much is too much. After a student's own federal borrowing is maxed out, financial-aid offices often recommend large Plus loans for parents.

Using Education Department data, The Chronicle and ProPublica took a closer look at colleges where borrowers took out the highest average Plus loan amounts per year. (See a breakdown of the top schools.) NYU ranked 11th, with an average annual loan of $27,305. The university generally gives students less financial aid than many of its peers. Last year, parents of NYU students borrowed more than $116 million through the Plus program, the second-largest sum taken on for a single university, trailing only Penn State University's $160 million.

"Our first suggestion is the Plus loan," says Randall Deike, vice president for enrollment management at NYU. Yet he has misgivings about the program. "Getting a Plus loan shouldn't be so easy," he says.

David Palmer (Mark Abramson for The Chronicle)

David Palmer is chief executive at the for-profit New York Conservatory for Dramatic Arts, where parents who borrowed through the Plus program took out an average of $27,432 in loans last year. (Mark Abramson for The Chronicle)

Among the top 25 institutions with the largest average Plus loans, more than a third focus on the arts. Tenth on the list is New York Conservatory for Dramatic Arts, a for-profit acting school. The school's sticker price for the current year adds up to nearly $53,000 for a year's worth of tuition, fees, room, board, and other expenses. Without an endowment, says David Palmer, the conservatory's chief executive, the school can't provide much financial aid — so families are often left to make difficult decisions about how borrowing is too much. Ideally, families would have saved for college, according to Palmer, but often tuition payments come in the form of Plus loans.

"It doesn't make me feel great, truthfully," Palmer says. "But then again, what can I do? We have to pay our bills."

Last year, 150 parents borrowed for their children to attend the institution of 330 undergraduate students. Palmer knows that sometimes families borrow too much, and students have to drop out. "It makes me sick to my stomach," he says. "Because they've got half an education and a mountain of debt."

Still, he says, "I don't know that it's the institution's responsibility to say we'll take a glimpse of what your individual situation is and say maybe this isn't a good idea."

To the dismay of consumer advocates, some universities lay out offers of tens of thousands of dollars in Parent Plus loans directly in the financial-aid packages of prospective students — often in the exact amount needed to cover the gap between other aid and the full cost of attendance. That can make it look like a family won't have to pay anything at all for college, at least until they read the fine print. The offers are often included in financial-aid packages even for families who clearly can't afford it.

"It is deceptive," says Greg Johnson, chief executive of Bottom Line, a college access program in Boston and New York. His organization's counselors have seen firsthand how students and families can get confused: When Agostinha Depina first got her financial aid award letter from New York's St. John's University, her first choice, she was excited. But upon taking a closer look at the package with her counselor at Bottom Line, she realized that a $32,000 gap was being covered by a Parent Plus loan that her parents would struggle to afford.

"It made it seem like they gave me a lot of money," says Depina. In reality, "it was more loans in the financial-aid package than scholarship money." Depina, 19, opted to go to Clark University, where she had a smaller gap that she covered with a one-year outside scholarship. A spokeswoman for St. John's did not respond to requests for comment.

There's considerable debate among financial-aid officials about whether and how to include Plus loans in students' financial-aid award letters. Some universities opt not to package in a loan that families might not qualify for or be able to afford. Instead, they simply provide families with information about the program.

"We inform them about the different options they have, but we wouldn't go in and package in a credit-based loan for any family," says Frank Mullen, director of financial aid at Berklee College of Music. "To put a loan as part of someone's package without knowing whether they'd be approved? I just wouldn't feel comfortable with it."

Others say it isn't so simple. "This is one of those knives that cuts both ways," says Craig Munier, director of scholarships and financial aid at the University of Nebraska at Lincoln.

"If we leave a huge gap in the financial-aid package, families could reach the wrong conclusion that they cannot afford to send their children to this institution," says Munier, who is also chair-elect of the National Association of Student Financial Aid Administrators. "The other side," he says, "is we package in a loan they can't afford, and they make a bad judgment and put themselves into debt they can't manage. You can second-guess either decision."

For parents in exceptional circumstances, colleges have some discretion to bypass the Plus application process and give a student the additional amount of federal student loans that would be available in the case of a Plus denial — up to $5,000. Those are judgment calls, says Justin Draeger, president of the aid administrators' group. Cases of a parent who is incarcerated or whose only income is public assistance are more straightforward, but the prospect of evaluating a parent's ability to pay is fraught. Deciding to tell them what they can afford "leaves the schools in sort of a moral dilemma," Draeger says.

But encouraging Plus loans for parents who would struggle to repay them lets colleges shirk their own responsibility to help families with limited means, says Simon Moore, executive director of College Visions, a college-access program based in Rhode Island. "Colleges can say, 'We want to enroll more low-income students,' but don't really need to step up and offer students good aid packages," he says. Plus loans "offer colleges an easy way to opt out."

The Middle Class Struggles to Repay

Some parents who have borrowed through Plus have found themselves working when they could be retired, and contemplating whether to pay off the debt by raiding their retirement nest eggs.

Galen Walter, a pharmacist, has put three sons through college. All told, the family racked up roughly $150,000 in loans, about $70,000, he estimates, in the Parent Plus program.

Average Plus Loan Amount

Even when inflation is taken into account, the average Plus loan has increased by roughly a third, to almost $12,000. All values are adjusted for inflation.

Source: U.S. Education Department

Source: U.S. Department of Education

Walter is 65. His wife is already collecting Social Security. "I could have retired a couple years ago," he says, "but with these loans, I can't afford to stop." His sons want to help with the Plus payments, but none are in the position to do so: One son is making only $24,000. Another is unemployed. The youngest is considering grad school.

Before the downturn, Walter says, he might have been able to sell his house and use the profit to pay off the loans. But given what his house is worth now, selling it wouldn't cover the loan. With his sons in a challenging job market, he thinks he may be repaying the loans for at least a decade.

Many parents are more than willing to take on the burden. Steve Lance, 58, is determined to pay for the education of his two sons, whose time at private universities has left him saddled with $133,000 in Parent Plus loans. (He also says he's committed to paying for his sons' federal and private student loans, which bring the total to $317,000 in debt.)

"The best thing I thought I can do as a parent is support them in having their dreams come true," says Lance, a creative director who writes and speaks on advertising and marketing. "There's no price tag on that." Out of necessity, he has put some loans in deferment.

Often, students and families set their hearts on a specific college and will do whatever it takes to make it work, betting that the rewards will outweigh the financial strain.

That's what happened with J.C., who asked that her name not be used. J.C. took out about $41,000 to help her daughter, an aspiring actress, attend NYU. A high-school valedictorian, her daughter could have gone to a public university in their home state of Texas debt-free, J.C. says. But the opportunities in theater wouldn't have been the same. It had to be NYU.

"The night she got there she said: Mom, this is the air I was meant to breathe," J.C. says of her daughter.

J.C., 58, is divorced and makes about $50,000 a year. She anticipates Plus loan payments between $400 and $500 a month, which she says she can handle. "I'll never retire. I'll work forever, that's OK," she says. Still, the hope is that her daughter makes it to the big time in her acting career: "If she's really, really successful I'll retire sooner rather than later," J.C. says.

Recent Changes to Parent Plus, and Uncertain Results

The Education Department's recent change in how it defines adverse credit history — adding unpaid collections accounts or charged-off debt as grounds for denial — is meant to "prevent people from taking on debt they may not be able to afford while protecting taxpayer dollars," Hamilton, the department spokesman, wrote in an email message.

The change may result in significantly more Parent Plus loan denials, according to Kantrowitz — and some financial-aid officers' recent observations seem to bear that out. But new denials may actually target the wrong people. After all, the tightened underwriting still examines aspects of credit history, not ability to repay.

"It's not going to make much of a difference for people who overborrow. It's not going to prevent people from overborrowing," Kantrowitz says. Instead, the new policy may preclude borrowers who once fell behind on a debt, he says, but now pose little credit risk.

Borrowers who are denied can appeal the decision and still get the loans if they convince the Education Department that they have extenuating circumstances. Or they can reapply with somebody cosigning on the loan.

It's not yet clear how much the change to the credit check will alter the scope of the Parent Plus program. Early tallies for the 2011-12 year show a modest dip in borrowing over the previous year, but the data is incomplete and won't be fully updated for months.

For now, the Parent Plus program is part of a stopgap solution to the complex problem of college affordability. And the factors that drive parents to borrow too much won't be changing anytime soon.

Kantrowitz believes that the student-loan system is in need of much broader solutions. The current federal loan limits for undergraduates are arbitrary, he says, and not based on the type of program or a student's estimated future earnings. More grant money could also help alleviate overborrowing, especially for low-income families.

"We need a complete overhaul of the student-loan system so there's a more rational set of limits" to curb the debt problem, says Kantrowitz. The government can't keep "magically sweeping it under the parent rug."

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