An International Final Four: Which Country Handles Student Debt Best?

From today’s New York Times:

Although an American college degree remains a good investment on average — the higher earnings for most graduates justify the cost— millions of borrowers are in default on their loans.

Policy analysts generally agree on a need for reform, but not on which path policymakers should take. Can America learn anything from other nations? We gathered experts with a range of perspectives, from America and abroad, and asked them to compare the systems in Australia, Britain, Sweden and the United States.

We chose this grouping of nations because they highlight important differences both in loan repayment systems and in related policies such as tuition and loan limits, not necessarily because they all belong among the best systems in the world. In the spirit of March Madness, we devised a bracket-style tournament, seeding the countries so that those with more similar systems would meet in the semifinals.

Sweden vs. United States

Sweden and the United States differ in whether the monthly loan payment remains the same over time and in the number of years borrowers can repay their loans.

The average American borrower with a bachelor’s degree leaves college with $28,400 in debt. Students can borrow for both tuition and living expenses, although loan limits make it hard for an undergraduate to borrow more than $45,000 over four years.

In Sweden, average debt levels are similar — the equivalent of around $21,000 — even though students borrow only for living expenses (Swedish universities do not charge tuition). Interest rates are also very low; the rate for 2018 is now 0.13.

In the United States, borrowers are required to begin making payments six months after leaving college. By default, payments are set so the whole principal and interest, which is tied to the market rate at the time the loan is made (currently 4.45 percent), will be paid off in equal monthly installments paid over 10 years.

American borrowers can opt into alternative repayment plans, including plans that tie payments to income or that start lower and increase over time. Income-based plans offer forgiveness of any remaining balance after 10 to 25 years, but enrolling in these plans requires making a request to the servicer and filing paperwork annually. If you miss the paperwork, you are put back into a 10-year repayment schedule, but can ask to re-enroll. There are a large number of plans that are hard for borrowers to navigate, especially in times of financial stress.

Swedish borrowers, on the other hand, pay off their loans over a much longer period. Borrowers can be in repayment for up to 25 years, with the typical borrower paying for 22 years.

Read the complete article here.

Work Productivity: Laptops Are Great. But Not During a Lecture or a Meeting.

From today’s New York Times by Susan Dynarski:

Step into any college lecture hall and you are likely to find a sea of students typing away at open, glowing laptops as the professor speaks. But you won’t see that when I’m teaching.

Though I make a few exceptions, I generally ban electronics, including laptops, in my classes and research seminars.

That may seem extreme. After all, with laptops, students can, in some ways, absorb more from lectures than they can with just paper and pen. They can download course readings, look up unfamiliar concepts on the fly and create an accurate, well-organized record of the lecture material. All of that is good.

But a growing body of evidence shows that over all, college students learn less when they use computers or tablets during lectures. They also tend to earn worse grades. The research is unequivocal: Laptops distract from learning, both for users and for those around them. It’s not much of a leap to expect that electronics also undermine learning in high school classrooms or that they hurt productivity in meetings in all kinds of workplaces.

Measuring the effect of laptops on learning is tough. One problem is that students don’t all use laptops the same way. It might be that dedicated students, who tend to earn high grades, use them more frequently in classes. It might be that the most distracted students turn to their laptops whenever they are bored. In any case, a simple comparison of performance may confuse the effect of laptops with the characteristics of the students who choose to use them. Researchers call this “selection bias.”

Read the entire article here.

The Maddeningly Simple Way Tech Companies Can Employ More Women

From the New York Times, August 15, 2017 by Katherine Zaleski:

I am the co-founder of a company that helps clients find ways to diversify their work force. We recently set up an interview at a major company for a senior African-American woman software engineer. After meeting with the hiring panel, she withdrew her application, telling us she felt demeaned by the all-white male group that failed to ask her any questions about her coding skills. She described how one of the men had made it clear to her that she wasn’t a cultural fit and that therefore they didn’t need to proceed with technical questions.

I hear stories like this regularly, as I work with companies in Silicon Valley and beyond who want to bring more women onto their tech teams. Higher-ups declare their intention to hire more women. But the actual hiring is still all too rare.

There’s a continuing debate about the reasons for the lack of diversity in the tech sector, including candidate pools that are mostly male, and stubborn, superficial notions of what it means to be a “cultural fit” for an organization — the template for which is often based on young white men. But at least one small component of this problem is immediately solvable: Many companies are alienating the qualified women who want to work for them, and who they want to hire, during the interview process itself.

While Silicon Valley companies are enthusiastically putting money into STEM programs in schools and nonprofits focused on diversity, with the goal of creating a richer pipeline of talent in 10 years, they’re missing opportunities to make simple, immediate improvements by changing how they communicate with women who are sitting across the table from them now.

Read the entire article here.

A New Kind of Tech Job Emphasizes Skills, Not a College Degree

From today’s New York Times by Steve Lohr:

ROCKET CENTER, W.Va. — A few years ago, Sean Bridges lived with his mother, Linda, in Wiley Ford, W.Va. Their only income was her monthly Social Security disability check. He applied for work at Walmart and Burger King, but they were not hiring.

Yet while Mr. Bridges had no work history, he had certain skills. He had built and sold some stripped-down personal computers, and he had studied information technology at a community college. When Mr. Bridges heard IBM was hiring at a nearby operations center in 2013, he applied and demonstrated those skills.

Now Mr. Bridges, 25, is a computer security analyst, making $45,000 a year. In a struggling Appalachian economy, that is enough to provide him with his own apartment, a car, spending money — and career ambitions.

“I got one big break,” he said. “That’s what I needed.”

Mr. Bridges represents a new but promising category in the American labor market: people working in so-called new-collar or middle-skill jobs. As the United States struggles with how to match good jobs to the two-thirds of adults who do not have a four-year college degree, his experience shows how a worker’s skills can be emphasized over traditional hiring filters like college degrees, work history and personal references. And elevating skills over pedigree creates new pathways to employment and tailored training and a gateway to the middle class.

Read the complete article here.

Update: Congress passes Bipartisan Student Loan Certainty Act of 2013

In a fairly novel turnaround Congress passed a major piece of legislation Wednesday with significant bipartisan support that changes the way interest rates for student loans will be calculated. The Bipartisan Student Loan Certainty Act of 2013 was able to bridge a gap between Democrats and Republicans over the government’s role in regulating financial institutions. The bill passed by an overwhelming majority of 392 to 31.

The fate of the bill has long been in question as both Democrats and Republicans alike tried to find reasons for opposing it, ranging from concerns about protecting students from predatory loan practices among the former to worries about government interference in distorting interest rates.

All federally subsidized Stafford loans will have interest rates that are tied to 10-Year Treasury bonds plus 1.8 percent with a cap of 8.5 percent and 9.5 percent on undergraduate and graduate loan respectively. The federal loan program PLUS would pay the Treasury rate plus 4.5 percent. Roughly, this means individuals taking out new loans after the law passes will pay 3.61 percent for undergraduate loans and 5.21 percent for graduate loans.

Update: Senate reaches compromise on federal student loan interest rates

Senate negotiators reached a tentative deal this morning to address the student loan interest rate crisis. There now appears to be sufficient bipartisan support to pass legislation similar to a proposal by the Obama Administration that would tie interest rates on federally subsidized Stafford loans to 10-Year Treasury bonds plus 1.8 percent with a cap of 8.5 percent and 9.5 percent on undergraduate and graduate loan respectively. The federal loan program PLUS would pay the Treasury rate plus 4.5 percent. Roughly, this means individuals taking out new loans after the law passes will pay 3.61 percent for undergraduate loans and 5.21 percent for graduate loans.

Democratic leaders had been blocking a similar bill because of worries there was no caps on interest rates tied to federal loans that would protect students against sudden market spikes in interest rates. The measure was one President Obama insisted be part of legislation aimed at helping students. Sens. Joe Manchin (D-WV) and Angus King (I-ME) crafted the compromise after they voted against the Democratic bill for failing to address these worries, and with the support of Sen. Tom Carper (D-DE) garnished enough votes for the legislation to pass, pending a final analysis of the law’s deficit impact by the CBO.