The New York Times made a huge statistical error in their overwrought article about higher education borrowing on Sunday. They reported that 94 percent of bachelor’s graduates leave college with educational debt. The correct number is around two-thirds. Few people will see the correction tucked into Wednesday’s Times – certainly not nearly the number who saw the lead sentence on the web version “Nearly everyone pursuing a bachelor’s degree is borrowing money …”.

Everybody makes mistakes, but this one is revealing in several ways. First, the “New York Times analysis” cited as the source was incompetently done. They actually calculated the following figure: among students who borrowed while in college, what percentage still owed money when they graduated? Not surprisingly, very few college students pay off their student debt while in college. Sarah Turner, a professor …

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The current discussion of student-loan interests rates has created a welcome focus on college access and on the difficulties some students have repaying their education loans. The federal government does need to take greater responsibility for protecting students from unmanageable education debt.

Unfortunately, the issue is much more complicated than the current political discourse might suggest. There isn’t time to develop a sound long-term plan addressing this issue before July 1, when the interest rate on a subset of loans students will use next year is set to increase. Locking in current interest rates for another year is likely the only viable solution.

But this is a solution that solves a small set of problems for a small subset of students. A better solution depends on a clear understanding of the issues and a realistic perspective on what really matters for educational…

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Student-aid programs that require a complicated application process or that involve multiple programs with different eligibility criteria, different eligible expenses, and unpredictable award levels are less effective than those that are transparent, predictable, and easy to access. Despite strong evidence that simple programs are more likely to increase college enrollment and success, there is considerable resistance to simplification. Understandably people worry that collecting less information on which to base the allocation of grant aid will make it more difficult to distribute the funds to those who need them most.

A new College Board report should help ease the concerns.

There is a tradeoff between targeting and simplicity. If we don’t know that one family has hundreds of thousands of dollars in the bank, while another family with the same annual income has no assets, we…

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(Photo by Flickr/CC user taberandrew)

Stories of students struggling under the crushing burden of $80,000 of debt or more for a bachelor’s degree that has yet to lead to employment are not representative, but they are more common than they should be. Virtually all students with so much undergraduate debt have relied on private loans, in addition to federal loans. Federal policy makers should move to end the confusion between these two forms of borrowing.

Many people believe that student loans are on the verge of ruining the economy, or at least destroying the lives of a generation. Others suggest that these students are simply irresponsible. Instead of taking either of these extreme perspectives, we should think carefully about the systemic problems contributing to this situation and potential policy…

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The recent discussion in California community colleges about the possibility of charging higher prices for courses in high demand pushes us to put our economists’ hats on to gain some perspective on this controversial idea. As state funding fails to keep up with enrollments in public colleges around the country, many states are struggling to meet the needs of students. Tuition levels have increased quite dramatically in recent years as institutions look for ways to replace the state revenues on which they have depended.

General tuition increases generate anger. But increases limited to specific courses seem to generate even more anger. Will low-income students be excluded from courses they need to graduate? Do we really want to ration access to high-demand courses through the price system?

It is not uncommon for schools to charge lab fees for science and studio art courses or to …

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A while back, the odd fact emerged that, at least by some measures, student-aid debt exceeds credit-card debt. Although this development is in large part the product of the decline in credit-card debt occasioned by consumer response to the financial crisis—an event quite independent of student borrowing—it put a kind of punctuation mark on widespread and rather diffuse worries about student-aid indebtedness. A search for the phrase “student debt exceeds credit card debt” yields 2,460,000 hits on Google. This explosion of interest may qualify as a minor example of what Cass Sunstein and Timur Kuran have labeled an “availability cascade,” in which the salience of a particular example gives it disproportionate weight in people’s thinking.

As Daniel Kahneman describes it in his wonderful recent book, Thinking, Fast and Slow,

An availability cascade is a self-sustaining chain …

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Struck by all the hoopla about the irrelevance of college education to success in our new world of technology, we decided to ask two talented research assistants from the Spencer Foundation, Charles Kurose and Amato Nocera, to look into the matter. Here, in their own words, is what they found.

In a recent New York Times op-ed piece, “Will Dropouts Save America?”, Michael Ellsberg gives an increasingly popular argument against a college education. The argument runs something like this: wildly successful entrepreneurs like Bill Gates and Steve Jobs dropped out of college. They didn’t need a college degree or the kind of skills that are learned from textbooks or in the classroom: passion, creativity, and a revolutionary idea fueled their success and gave the world two of its greatest tech companies: Microsoft and Apple.

Although the anecdote about Gates and Jobs is true, the…

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President Obama shaped his State of the Union address around the notion of creating an America that is “built to last.” This idea invites us to build solid, continuing progress around a strong, stable foundation. It’s a refreshing change from the more familiar, and sometimes self-defeating, political rhetoric of “crisis” and “crash programs,” make-or-break deadlines, and heroic (unsustainable) efforts. We should bring this perspective to discussions of education, including higher education.

The Obama Administration, the Gates Foundation, the Lumina Foundation, the College Board, many states, and no doubt other entities have announced educational attainment and/or degree completion goals with hard deadlines attached. Sometimes we talk about these goals as if once we meet them all will be well. But, as we know deep down, implicit in these goals is the presumption that when…

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A few days ago the National Association of Financial Aid Administrators held a welcome forum on “The State of College Access.”  The session was motivated by concern over the future of the Pell Grant program. Panels addressed “The Future Role of Federal Pell Grants” and “Beyond Pell – Other Pieces to the Access Puzzle.” Congressman Tim Bishop, a strong supporter of federal student-aid programs, opened the session with a discussion of recent changes to the Pell program designed to reduce costs and an explanation of upcoming deficit-reduction requirements, emphasizing that both revenue increases and significant spending cuts will be required.

For the rest of the morning, there was a lot of discussion about important issues related to college access and success.  But even with so many seasoned access advocates, financial-aid experts, and others committed to the goal of…

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