@gettingschooled DS goes to a charter and it only admits kids who score highly on an IQ test. We were not at the school when it was formed but understand that it was basically a collection of homeschooling parents that initially formed the school. The school is fine but I think they easily score well on standardized tests and do not really challenge the kids as much as they could, although this school is definitely better than our local school option. The local public school system now has a competing program for highly gifted kids and I understand this was primarily due to the charter school as it started taking away the top performers.
While I understand that it might not be fair as the charter school has an unfair advantage as it is dealing only with high-performing kids it is a much better option for DS and it has resulted in the public school system being forced to improve so I think overall it has been beneficial and demonstrates the power competition can have in education.
@lookingforward, I think you misspelled painfully short of time and cultural capital.
(Actually, from your post I couldn’t actually tell whether you were putting this forward as a claim or indirectly critiquing it. Thought it was worth pulling out on its own for highlighting either way, though.)
I am not sure that it is necessary for the federal government to regulate charter schools, I think the states should figure that one out…as far as private schools they are of course private, not public, and I do have mixed feelings about voucher programs which typically relate to private schools. My feeling is that private education is a privilege people should pay for and if private organizations want to subsidize certain students they can do it on their dime. I have no mixed feelings about charter schools at least how they are regulated in Michigan as they are open to all… If the new DOE wants to force states to regulate charters that is a whole 'nother can of worms since our public universities are not federal…I can’t imagine the DOE wants to get mixed up in that business but we’ll see as time marches on.
I agree Kelsmom that I prefer the feds to handle federal loans. I would not be happy if the new DOE decided to privatize that activity. Federal loans seems to be one thing that is working well.
rosered55 - if a parent of a child with a disability chooses to use a voucher to go to a private school then wouldn’t they be giving up some public school benefits in exchange for whatever benefits they perceive at the private school? I guess I’m still trying to understand where I sit on vouchers…but choosing between something private and something public means you get some things and generally you may trade off some things. Why do people think that vouchers are a negative thing? The transfer of public tax dollars via a voucher worth some amount of dollars to the private school? Is that the issue, which is one that I can understand…you don’t need a “voucher” to attend Michigan public charter because there is no cost to the student or family so if vouchers came to Michigan I presume it would be to "use’ that voucher to offset tuition at the private school or is it something else?
I think that one of the concerns for organizations such as Disability Rights Wisconsin (the one whose report I shared above) is that private schools might not offer the same benefits for and protections to students with disabilities and that these students’ parents might not realize the differences until too late (i.e., after their children are enrolled).
With DeVos as Secretary of Education, I doubt there will be a call to regulate charter schools at the federal level … unless that regulation is aimed at making a national law that says charter schools can be truly privatized (something not allowed in DeVos’s home state - at least not in the way some would like it to be - they still have to play by the same rules as public schools in terms of educating all students). Just my opinion, but I think charter schools should be public (and I don’t believe in vouchers for private school - even though I sure could have used the tuition assistance when I sent my kids to private schools). I believe in public k-12 as a greater-good institution … it is in the best interests of the public at large to improve public schools.
As for the post-secondary issues, I agree with @ucbalumnus about the other important issues:
Federal financial aid policies that have resulted in contraction of the for-profit sector in recent years.
There is speculation in the financial aid community that the consumer protections recently put in place - including loan forgiveness for students whose schools closed - may be repealed;
College handling of sexual misconduct claims.
This is also something those in higher ed circles have speculated will be deep-sixed, given the views of those now in a position to repeal such laws.
There is a lot we don’t know, and things may not play out as I worry they will. I do believe it’s important to be aware of what could happen, and to be vocal if what you see on the horizon concerns you.
rosered55, I guess that I see that as a “buyer” beware type situation similar to the concept of “private colleges”…there are some good ones for sure but there are some where students could probably be better served by their own public universities.
Kelsmom, i’m not in total disagreement with you. and I think Michigan has done a pretty good job of threading that needle. Sounds like there are issues in Detroit, but I don’t know that I understand exactly what the issue is with schools in Detroit to comment on Detroit and I’m not aware of issues with public charter schools outside Detroit. I think Title IX is an office of civil rights and justice department issue. I personally think holding federal loans over colleges and universities head was a gross missue of executive powers and that piece of the Dear Colleague letter should be immediately repealed. I think the “heart” and intent of Title IX may live on under the OCR and Justice, but we’ll see if she wants to distance herself from all those lawsuits etc. and leave all that to the justice department. Frankly I’d like to see the OCR moved to oversight by the Justice Department and have the DOE focus on the business of education in the US. Seems to me that civil rights apply to all people in the US and not just people in educational settings.
I disagree with this assessment. I guess it comes down to what is defined as “working well” for whom?
Are people not aware the federal student loan program is priced, literally, some 50% higher as indicated it should be by current interest rates? And that private loans would be cheaper?
I ask this pertinent question - do you all not remember that the federal student loan program interest rates are required to make X amount of money because those monies are earmarked to pay for part of the ACA? That is precisely why the feds took over the program - to take the monies of the fed loan program to help pay for the ACA.
The net result is the interest rates and the terms of repayment are not linked to market rates or market conditions, but are linked to how much revenue the program needs to bring in, in any given year, to fund ACA. Therefore, students are paying more for student loans than they need to via artificially inflated loan rates. Given the marketplace, loans should be around 4.5% not in the 6.8% range.
And there is an additional corrosive effect - banks, which do personal loans for parents for education, have no incentive to follow market rates and hike up rates to closely match or to be above what what the government is doing. That is bad all the way around, as it is an artificially priced market with no competition on both ends now - all created by government taking over the program and setting false rates.
And worse, because it needs the revenue from the loans to balance its books, the government is incentivized to lend “easy money” in order to ensure more revenue, even if lending is not a good idea to particular people because it stretches them too thin - a lending risk a private bank would not do. That is a disservice to the families which should really be looking for cheaper college options.
The overall effect is students are paying much more for federal college loans than they should be and private family loans for college than the marketplace would allow for naturally, i.e., there is no longer any competition as the government drives the rates to what is required for pre-ordained/expected revenue.
Students and families are being socked in the wallet and people somehow think that is a good thing? I find it bizarre for people to think that it is a good thing that students are being overcharged interest rates. But that’s just me, I guess.
I did not know that interest rates were tied to ACA. I don’t have a problem necessarily with the interest rates, my kids are all close to the 5% range…a tiny bit at roughly 6% as personal loans typically are higher were we to have gone to the banks…but i don’t like the idea of co-mingling the dollars to pay for other federal programs unrelated to education. I don’t think we need to revert to not having the feds handle education loans or pushing it back on the states, but if what you are saying is accurate I am bothered by the way the program is structured relative to ACA.
State oversight is important. Consider also the problems in the East Ramapo district in NY where the school board has been gutting programs unless they serve their own particular children.
Maybe Erik Prince will lobby his sister to get sympathetic coverage of mercenaries built into school curriculum standards. (caution ~ not a serious comment)
Pre-2010 subsidized Stafford loan rates seem to have been at a similar premium over 5-year Treasury note rates of September of that year (i.e. the government’s interest rate spread has been similar in the past before the 2010 change). The 6.8% Stafford loans issued in 2006 and 2007 were made when 5-year Treasury note rates were in the 4.something% range in September of those years. http://www.finaid.org/loans/historicalrates.phtml http://www.macrotrends.net/2522/5-year-treasury-bond-rate-yield-chart
The 2010 change was supposed to save money by cutting out the middlemen (private banks) in student loan lending. It became related to ACA because the money it saved would allow it and ACA to go through the budget reconciliation process. As they say, legislation is like sausage…
Perhaps of more relevance then would be the college related stuff where DoE policies have made changes, like the college handling of sexual misconduct claims, and stuff like the gainful employment rule. But either DeVos has not publicly said anything about college issues, or none of the media or opinion writers seem to have noticed.
This article by Chris Street published in Breitbart in 2015 repeats the claim that government profits from student loans are going to subsidize Obamacare:
The author claims that the federal government took over student lending in 2009 and raised interest rates as a way to generate profits to offset the costs of ACA, passed in 2010.
I just read the Washington Post article that fact-checks this claim at 4 Pinocchio’s, but the justification for the Pinocchio’s is not completely convincing.
Here is what I understood the Washington Post article says:
The WaPo and the Obama critics Lamar Alexander et al. mostly agree on the following facts:
Cutting the banks out was calculated to yield $58 billion over 10 years (from 2010-2019)
The breakdown of where the $58 went was:
$36 billion in increases in Pell college grants for low-income students.
$10.3 billion for deficit reduction.
$8.7 billion to support the health care law.
$3 billion for historically black colleges and minority-serving institutions.
The argument of the Obama critics Lamar et al. is that the government should have used the $8.7 billion to lower student loan interest rates, not to subsidize Obamacare.
The WaPo gives three counter-arguments:
(1) The $8.7 billion is not coming from the students, but from the banks.
(2) The interest rate the government is charging is low:
(3 The amount of money shifted from student loan profits to ACA is too small to be significant: 8.7 billion over 10 years is “chump change” in the federal budget.
Here is my response:
It is not convincing to say that the money is coming from the banks. The students and their parents pay the loan interest, not the banks.
I for one agree that it is strange to shift money from student loan interest profits to ACA or even to deficit reduction, budget items completely unrelated to university education. Paying for deficit reduction means that parents are subsidizing other government expenditures unrelated to their children’s education.
Then there is the question of whether the government is charging a low or high student loan interest rate.
The WaPo say it is low because:
So who deserves the Pinocchio’s here?
About point (3), there is a clear disagreement about the amount of money shifted per year. Is it 8.7 billion in 10 years or 8.7 per year? Does anyone know the answer to this?
And if it is just “chump change”, why not just let the parents have it? Why move it to ACA?
The 8.7 billion was over 10 years, since the total 58 billion was over 10 years. As far as ACA being responsible for the current rate on student loans, that is a falsehood. Had they applied the 870 million a year savings to reducing the student loan interest rate, One of the quoted snippets said it would reduce the cost by .75%, so that can’t be responsible for rates going from 3.x% to 6.x%, it is a mathematical impossibility, a cost savings could only reduce the rate of a loan, not make it go up that much. The blame for the 6.x% rate on student loans from what I have read appears to be inaction by congress, the old law expired and congress (anyone wanna guess who) bottled up the replacement.
As far as private banks having cheaper rates, people are comparing apples to oranges. Loan rates are based on treasury notes (which are still at historic lows) + risk, and student loans on the open marker (loans taken out by parents and students) without government backing, are going to be very expensive, because there is a big risk factor on them of default (since these loans are not secured by collateral). Because of our family income, I was offered such loans for my son, and they weren’t cheap, not at all.
Government backed loans would thus be cheaper, but keep in mind that part of the terms of the loan represent profit to the bank. If the federal government cut out the banks and simply gave the loans, even arguing using part of it to cover ACA, likely it should be cheaper. I also will add that unless people have been living in a shell for the last 8 years, banks not only have been charging a lot more for loans, well outside what they would have with a comparable credit rating in the past, it is also a lot harder to get approved, one of the reasons the economy has been strangled in recent years is because banks are afraid to lend, they made stupid decisions in the last decade, burned themselves with crappy loans that were caused by their own greed and stupidity, and now don’t want to lend…so assuming that we went back to the ‘old days’, you likely wouldn’t see the rates pre government takeover and might see rates above the current levels, in fact I would lay heavy odds on it knowing the banking industry.
And citing Breitbart is about as useful as citing the Christian News Service and other such websites, Breitbart is up there with the FUD websites (fear, uncertainty and doubt), it is not a news cite, it is basically a right wing blogsite that cites factoids, not facts, and has no desire or interest in journalism, Fox News actually does some accurate reporting, Breitbart doesn’t even pretend to, it is as whacked out as some of the left wing web sites are.
Quote The interest rate the government is charging is low:
Until July 1, in fact, the interest paid on subsidized Stafford loans was 3.4 percent—which is a pretty good rate. (It has since doubled but lawmakers are trying to reach a deal to alter the formula.)
[/Quote]
This is an argument made for the ignorant (not referring to the poster here).
So what if the rate is a pretty good rate, especially if the rate is still higher than what could be found in the marketplace if competition were allowed?
And note that they single out only one type of loan with the seemingly lower rate, other loans are the ones reaming people even more.
This is a great example of MSM peddling “fake news” by omission by not reporting the other parts of the news to this topic, i.e., the rates are still higher than the market would naturally allow and thus the government is taxing students and parents and some people seem happy with this.
Funny because when a hotel or gas station raises prices in a storm, people scream price gouging, even though this is natural allocation of resources and the prices return to normal after the emergency. Yet, the government gouges students just because it can, not for an emergency allocation of resources, but to milk the students and families FOREVER and people rollover all fat dumb and happy and think governments helping them.
People do get the government they deserve and a government that makes them poorer seems to be one that they like. Go figure.