Category Archives: Parents of College Students

Income-Based Repayment Costs Rising

Income-Based Repayment Costs Rising

February 6, 2015


WASHINGTON -- The Obama administration revealed this week that extending its income-based repayment program to 5 million existing student loan borrowers will cost taxpayers more than $9 billion.

The price tag for the expansion of the Pay As You Earn program had not previously been made public but was included as part of the administration’s annual budget. It came as the U.S. Department of Education also raised its estimate of the long-term cost to the government of all federal direct loans.

The upward projection of $21 billion for all direct loan programs was primarily the result of more borrowers enrolling across all of the federal government’s various repayment plans that tie monthly payments to a borrower’s income and forgive outstanding debt after 10 to 25 years.

Enrollment in those income-based plans has surged over the past years, as the Obama administration and consumer advocates have actively marketed the programs to borrowers who are struggling to make payments. The number of people enrolled in the programs gone up by more than half over the past several years.

The department’s annual recalibrations of the cost of student loans are based on changing economic assumptions, loan performance and other technical factors. The estimates can fluctuate widely from year to year.

Last year, for instance, the Department of Education reported that the long-term costs of outstanding student loans had increased by $6 billion. But the department’s forecast the previous year had gone in the other direction, projecting new savings of $8.1 billion.

Jason Delisle, director of the Federal Education Budget Project at New America, said it’s difficult to draw any firm conclusions about the costs of student loans from any one year’s estimate. “I don’t really put that much stock in the yearly calculation because it changes so much from year to year,” he said.

What is clear from the budget projections, though, is that the federal government’s income-based repayment programs collectively are operating at a cost to taxpayers. Although the revenue or costs associated with the federal government’s different types of loans vary widely in the standard or extended repayment programs, every single loan dollar currently in an income-driven repayment program operates at a cost to the government, budget documents show.

Some advocates for income-based repayment argue that even if the income-based programs make student loans more costly for the government, the program is still on track to generate profits, according to the Congressional Budget Office.

Lauren Asher, the president of the Institute for College Access and Success, which has been a staunch advocate for income-based repayment programs, said that the estimated cost projections tell only part of the story.

"It's important to look at these numbers even in the context of the fact that the loan programs are projected to make tens of billions in profits in the near future and over the next decade," Asher said. "The availability of income-driven repayment plans is really essentially for borrowers who are increasingly facing difficulty repaying their loans.”

Follow the Money

Follow the Money

February 6, 2015


Lots of colleges and universities acknowledge troublesome -- if relatively small -- gaps in pay among men and women professors, and among white and minority professors. But it’s a hard thing to study and address, given the many variables and competing theories involved. So a new,comprehensive study of tenure-line faculty salaries at the University of California at Berkeley -- along with an administrative pledge to close revealed gaps -- is getting a lot of attention.

“There is so much goodwill on our campus -- what we were missing was information,” said Janet Broughton, vice provost for faculty at Berkeley and chair of the joint administration-Academic Senate committee that conducted the study. “Now that we have it, I think we will be able to move forward in many ways, whether it’s helping a department chair build a culture that is richly inclusive or designing a salary program that can help us progress toward our equity ideals.”

The ultimate goals, Broughton said, are to make sure Berkeley’s pay practices are in line with legal nondiscrimination standards, and to offer “salaries as similar as possible to the faculty within each discipline who are of equal accomplishment.”

Berkeley ran the data using two models, due to long-standing debate about which is most appropriate: one controlling for experience, field and rank, and the second controlling for just experience and field. Both models show that women earn less than their comparable colleagues who are white men, university-wide: 1.8 percent less, controlling for rank, and 4.3 percent less, not controlling for rank. There’s a smaller gap for ethnic minorities, compared to white men. For Asians, it’s about 1.8 percent in both models. For underrepresented minorities, it’s 1-1.2 percent, depending on the model. Digging deeper into the data reveals some gaps that are larger for certain groups in certain disciplines.

Without any controls, the gap for women is about 15.8 percent. For Asians, it’s 10.8 percent and for underrepresented minorities, it’s 12.1 percent. Most experts say that some controls are needed because senior ranks of the faculty -- where salaries are typically higher -- still might reflect the bias that limited the ability of those who were not white men to advance in academic careers a generation ago. Further, some of the disciplines that have seen more women hired and promoted nationally are fields (such as the humanities) that tend to pay less than some male-dominated fields in the sciences.

While the gaps suggested in the controlled models are relatively small, the report puts them into context, saying that for women it’s equal to one to four years of experience. The difference for minorities is about one to two years’ experience. In actual dollars, that’s approximately $2,150-$6,092 less for women compared to white men in annual pay and about $2,709-$2,846 less for minorities, compared to white men.

Results differ greatly across schools, divisions and colleges within Berkeley. In the arts and humanities, women actually earn more than white men -- about 1.4 percent more -- when controlling for rank. But not controlling for rank, women earn 3.1 percent less than white men. Controlling for rank, Asians earn 1.4 percent less than white men; not controlling for rank, they earn 7.3 percent less. Underrepresented minorities earn 0.5 percent less controlling for rank, and 2.5 percent more not controlling for rank.

In the social sciences, women earn 1.8 percent less than white men, controlling for rank, and 3.1 percent less considering just experience and field. Differences in salary between Asian and underrepresented minority professors reemerge, with Asians earning 5.4 percent less than white men, controlling for rank, and 2.7 percent less, not controlling for rank. Underrepresented minorities earn 2 percent less than white men when controlling for rank and 4.9 percent less in the less-adjuncts model controlling for just experience and field. (In the baseline models looking only at demography and experience, women fare poorly, earning 16 percent less, with minority faculty members not far behind; the committee attributes this to the economics department, which is less demographically diverse and better compensated than others in the division.)

In the biological sciences, women earn 2.9 percent less than white men, controlling for rank, and 5 percent less not controlling for rank. Minorities, meanwhile, earn 3.5 percent more, controlling for rank, and 2.4 percent more not controlling for rank. The differences are bigger for women in the mathematical and physical sciences. They earn 5 percent less controlling for rank and 7.8 percent less not controlling for rank. But minorities earn 2 percent more than white men in both models in those fields. In chemistry, women earn 2.1 percent less adjusted for rank and 10.6 percent less not adjusted for rank. Minorities fare well, earning 5.9-7.9 percent more than white male colleagues, depending on the model. (The report attributes that “volatility” to the program’s relatively small numbers. David Wemmer, department chair, agreed, saying the “statistics of small numbers” probably inflated the impact of having several good, well-compensated professors who happen to be ethnic minorities in a department of about 46 full-time faculty members overall -- what he said was somewhat above average in size in the sciences.)

Both women and minorities earn significantly less than white men in both models in the natural resources fields: 7.4 percent and 4.6 percent less, respectively, in the more forgiving model. Engineering appears to be the most equitable STEM field overall, with modest, positive differences for women (1.7 percent) and Asians (0.7 percent) in the rank-controlled model; underrepresented minorities saw a negative 1.1 percent difference in pay from white men. The reports notes year-to-year volatility in these figures, however, likely due to the relatively small number of faculty members -- just 15 -- in the program.

The pay gap for women across Berkeley has decreased since 2004, from 3 percent less controlling for experience, field and rank to 1.8 percent in 2014. But the gap for minorities has widened, from a positive difference of about 0.5 percent for Asians in 2004 to negative difference of about 1.7 percent and from a positive difference of 2 percent for underrepresented minorities in 2004 to a negative difference of 1 percent in 2014. The study again attributes the year-to-year “volatility” in minority faculty members’ salaries to their relatively small numbers on campus.

The committee that did the study says it can’t determine from data alone what’s causing the pay gaps. But committee members offer possible contributing causes, such as time in rank, implicit associations or unconscious biases in the faculty review process, social factors that might affect access to education and external factors such as the academic job market and retention. The report includes an exploratory subanalysis on women in the following fields, controlling for scholarly citations: molecular and cell biology, sociology, psychology and business. It found that controlling for Google Scholar citations reduced or eliminated pay gaps between women and white men (the analysis did not include minorities, as the committee determined the sample size would be too small to return valuable results).

The committee says this suggests Berkeley salaries are associated with how often a scholar’s work is cited, and that women’s work may be less often cited than men’s. A similar subanalysis of retention rates found that controlling for whether or not a professor ever has been a “retention case” -- meaning he or she sought a raise in light of a better offer from another institution -- added to the pay gap. Although many women faculty advocates say this plays a crucial role in keeping women’s pay relatively lower, since they are more likely to be geographically bound to an institution due to family responsibilities, the committee says the data set is too small to make a definitive conclusion. But it calls for further study of the issue.

Based on the data and its discussion of possible causes, the committee recommends several steps Berkeley should take to close faculty pay gaps. They include further study, taking steps to help faculty members with work-life balance and improving the campus climate regarding gender and race. The report also recommends faculty salary review programs and salary increases open to all professors but with additional opportunities to help Berkeley meet its “broadest equity goals.” It calls for an immediate review of faculty salary “outliers,” to make sure they’ve been compensated fairly based on their performance.

It also recommends taking a second look at a “target decoupling” initiative adopted in 2012, which aimed to bring the top-performing faculty salaries back in line with the market rate -- but which might have neglected the internal pay gaps issues addressed in the most recent study. The committee calls for a new, three-year faculty equity initiative to be designed by administrators and faculty members by the end of this semester. The report says the program guidelines should "provide mechanisms to ensure that all eligible women and ethnic minority group members are appropriately identified for consideration."

“The steering committee urges in the strongest terms that this study not be put on the shelf,” the report reads. “It should mark the beginning of a new era of thoughtful engagement with issues of faculty salary equity at Berkeley, and it should serve as a basis for fostering sustained and collective discussion and action.”

The Berkeley study is a follow-up to a less comprehensive University of California System-wide study of faculty salary equity completed in 2011. But it also arose from on-campus concerns about gender equity expressed by some professors, which also were documented in a 2011 campus climate survey.

While 1-4.3 percent gaps in faculty salaries might seem small to some, Broughton said she thought such differences “ought to matter. They can be financially significant for individual faculty members as they add up over a career.”

Mary Ann Mason, a professor of law at Berkeley and coauthor of the influential Do Babies Matter? Gender and Family in the Ivory Tower book and larger body of the research of the same name on gender issues and academic careers, agreed, saying the losses are “progressive” over a lifetime. Women professors also end up with one-third less money in their pensions upon retirement, she said. “So yes, it does significantly affect salary in the long run.” (The committee in its recommendations cites Mason’s work, saying Berkeley needs to keep adopting the family-friendly policies she recommends.)

Mason said her research suggests something the study hints at -- that women professors aren’t negotiating their salaries well enough upon hire, putting them at a disadvantage from the start. (Indeed, many experts suggested gender bias was at play in a now-notorious negotiation attempt by a woman candidate at Nazareth College; the offer was revoked.) While men tend to feel comfortable asking for more than they’re initially offered, she said, women tend to say, “Thank you for hiring me.”

Robert Hironimus-Wendt, a professor of sociology at Western Illinois University who studies pay gaps in higher education, said Berkeley’s study applied a solid methodology, producing findings in line with national data. He attributed the discrepancies to a kind of “gated communities” phenomenon in which programs or departments with the highest pay premiums -- business being a classic example (and in which women at Berkeley lag behind white men by 6.4 percent in pay in the rank-controlled model, and minorities, by 0.2 percent) -- are “really good at hiring people who are like them.” Women make up 31 percent of the tenure-line faculty at Berkeley but in business, for example, are just over one-fifth of the faculty. Berkeley's data on the faculty makeup of programs by gender -- showing that some departments are just 10 percent women and others, more than 60 percent -- further support that hypothesis, to a certain degree.

So in addition to all of the committee’s recommendations, Hironimus-Wendt said he thought affirmative action hiring practices also are necessary to ensure results. “Departments might say, ‘There aren’t any women,’ but if you look at the data, there are,” he said. The professor rejected the idea that departments with the least diversity and the biggest pay gaps will become more diverse in a generation, saying that women have been getting Ph.D.s at roughly the same rates as they do today for 20 years -- already one faculty life cycle. “People want to overcompensate and throw in another variable and explain away the possibility of discrimination,” but it's a perpetual problem, he said.

Broughton said that beyond trying to right faculty pay gaps, Berkeley wants keep chipping away at the question of why they exist -- important in creating a positive climate for faculty.

“Do the differences reflect group differences in access to important social networks?” she asked. “Do they reflect the operation of implicit association in the assessment of individual faculty members’ records?  Do they reflect differences for group members in work-family balance? Questions like these point us toward ways in which we can try to make direct or indirect institutional responses.”

White House drops 529 college savings proposal

White House drops 529 college savings proposal
By Jim Acosta, CNN Senior White House Correspondent
Updated 10:24 PM ET, Tue January 27, 2015

President Barack Obama backed down from a proposal to scale back the tax benefits of certain college savings plans.
President Barack Obama backed down from a proposal to scale back the tax benefits of certain college savings plans.

(CNN)The White House is giving up on a costly fight with Congress over the Obama administration's increasingly unpopular proposal to effectively end 529 college savings plans.

A White House official confirmed the move on Tuesday as fierce opposition to the provision was building in Congress, even among fellow Democrats.

READ: Obama proposes scaling back benefits of 529 college savings plans

"Given it has become such a distraction, we're not going to ask Congress to pass the 529 provision so that they can instead focus on delivering a larger package of education tax relief," the official said.

Also known as "qualified tuition programs," 529 college savings plans are typically offered by the states and allow holders to save money and withdraw it tax-free, as long as the proceeds are used towards approved college costs -- typically tuition, fees, room, board and other required supplies. Another kind of 529, prepaid tuition plans, let savers prepay for future tuition and lock in current prices, but they typically do not cover other expenses.

The reversal was a clear signal the White House had underestimated the popularity of the college savings plans and the backlash any proposal to end the program would cause. Republicans said the idea, floated as part of the Obama administration's upcoming budget plan, contradicted President Barack Obama's recent State of the Union theme of "middle class economics."

"It's another example of his outdated top-down approach when our focus ought to be on providing opportunity for all Americans," House Speaker John Boehner said on Tuesday.

Maine Sen. Susan Collins, a moderate Republican, said the plan never made sense.

"It would have led to more student loan debt and undermined the very values that we should be promoting," she said in a statement.

The political damage on Capitol Hill was so clear to House Minority Leader Nancy Pelosi that she lobbied senior administration officials to drop the proposal even as she was flying on Air Force One with the President from India to Saudi Arabia, a source familiar with the White House decision said.

It is unclear how much effort the White House was ever willing to muster to push its 529 plan. There was no mention of the proposal in the President's State of the Union speech.

"We need a tax code that truly helps working Americans trying to get a leg up in the new economy, and we can achieve that together," Obama said broadly about his education plans.

A White House official said the administration can still more than pay for its education proposals, even without the 529 provision, based on savings realized by closing the so-called "trust fund loophole" for wealthier Americans.

A White House official said the administration remains committed to other portions of its education tax reform plan.

"The 529 provision is a very small component of the President's overall plan to deliver $50 billion in education tax cuts for middle class families," the official said. "We proposed it because we thought it was a sensible approach, part of consolidating six programs to two and expanding and better targeting education tax relief for the middle class."

The White House reversal on the 529 proposal was first reported by The New York Times.

Late Tuesday, Boehner welcomed the White House decision.

"I'm glad President Obama has decided to listen to the American people and withdraw his tax hike on college savings. This tax would have hurt middle-class families already struggling to get ahead," Boehner said in a statement.

CNN's Melanie Hicken contributed to this report.…/po…/obama-drops-529-proposal/index.html

Is a college degree worth it?

Recently, there is a growing debate about the worth of a college degree, particularly an expensive college degree. Burdened with college loans that suck the life line out of our young graduates, many are now questioning the real value of a college degree.

Unlike some nations where not every high school graduate is expected to go to college or earn a four-year degree, corporations in the

United States

require or prefer a college degree for many entry-level positions. When you probe this somewhat indiscriminate requirement, hiring managers often confess that the reason they look for at least a college degree is because students, particularly high school students, and now even college students, are not adequately prepared to meet the demands of the workforce.   So does this mean that if you don’t have a college degree you cannot make a decent living? Be a part of the American dream? Become an entrepreneur? Far from it! What this means is that you must have a love for learning and knowledge – whether you get it online or in a class room setting. You must continually learn new things; take a course or attend a workshop or become an apprentice. You must invest your time and effort in developing the right skills for the workforce and the right attitude for success. So what are a few important skills for the workforce (with or without a college degree)?

  • The ability to read, write, and speak. In short, communications. We may not all be perfect at all three, but it is important to have above average skills when it comes to communications.
  • Critical thinking and problem-solving: Can you take a problem, analyze it thoughtfully, and come up with a meaningful and comprehensive solution? Or, do you expect your boss to hand hold you every step of the way?
  • Understanding of the fundamentals of the business world: one may not all be terrific in accounting, but one should have some understanding of business functions. A holistic understanding of the business world is important.
  • Can you speak a language other than your own? If you plan to serve more than your street corner, language skills become vital.
  • Good ethics: what will you do when no one is watching? Do you have an understanding right and wrong?

These skills can be honed, with or without a college degree and for those who do, success is assured.


Dr. Uma G. Gupta is the President of, a New York based educational consulting company that specializes in higher education in Asia.

Sponsored by University of Phoenix.
Become part of the solution to California's looming workforce shortage. Think Ahead.



A Resource for Parents

Parents of college going students have many questions about how to provide the best educational experience for their children. Parents are eager to know about what programs lead to a good career, what are a few good colleges and universities, how to get scholarships, and how to gain the maximum benefits from an institution, and other related questions. Parents of international students, in particular, have many questions and concerns and sometimes simply don't know where to turn. The purpose of this blog is to answer these question for parents in an objective and forthright manner. This blog provides information that goes beyond the marketing blitz of colleges and universities. As a seasoned educator with more than twenty years of experience in higher education, I hope to be of service to you. This piece was written by Uma Gupta.

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