2 votes
Foreign aid should be used to educate citizens of other countries - not to Quaddafi who keeps the money while his people eat out of trash cans. Education should be the 2nd human right of all people, second to freedom (i.e., speech, religion, to bare arms, etc).
44 votes
The prison systems appear to be full of able-bodied individuals with a lot of new found time on their hands. Turn this workforce into farmers for internal food production and consumption. Reduce electricity consumption with onsite energy production (more secure sky lighting, no TV, night time complete darkness with battery backed up IR for security, extensive solar panel network, treadmills hooked to generators ect..). ...more »
The prison systems appear to be full of able-bodied individuals with a lot of new found time on their hands. Turn this workforce into farmers for internal food production and consumption. Reduce electricity consumption with onsite energy production (more secure sky lighting, no TV, night time complete darkness with battery backed up IR for security, extensive solar panel network, treadmills hooked to generators ect..). Reduce water consumption with timed showers and utilize local wells or infrastructure collecting rain water. Reserve waste removal and laundry for the underachievers and unmotivated. Offer and impairment “arts and craft”/”essential manufacturing” time to create products for resale to cover any additional costs (guards salaries, medical treatment, education, and rehabilitation supplies, ect…) It’s just that simple and will save piles of cash and wasted resources in the long run.
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3 votes
Allow Government to connect directly with thought leaders of tomorrow. Bypasses venture capital roadblocks that spring up when money-driven individuals put a fence around game changing capabilities (and hinder the national interest in the name of profit). Helps Government shape emerging markets with investment in national priorities without concern for generating revenue. MUCH cheaper than continuing to throw millions ...more »
Allow Government to connect directly with thought leaders of tomorrow. Bypasses venture capital roadblocks that spring up when money-driven individuals put a fence around game changing capabilities (and hinder the national interest in the name of profit). Helps Government shape emerging markets with investment in national priorities without concern for generating revenue.
MUCH cheaper than continuing to throw millions at the big contractors with the same tired ideas that didn't work the last ten times they tried.
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27 votes
The Departments of Agriculture, Veterans Affairs, and Social Security have existing programs, which deny benefits to persons who are wanted in other jurisdictions in local, state, and federal databases for felony offenses. These absconders from justice may use the benefits they receive to further their escape from facing justice and should not be entitled to taxpayer funds until their obligations have been satisfied. ...more »
The Departments of Agriculture, Veterans Affairs, and Social Security have existing programs, which deny benefits to persons who are wanted in other jurisdictions in local, state, and federal databases for felony offenses. These absconders from justice may use the benefits they receive to further their escape from facing justice and should not be entitled to taxpayer funds until their obligations have been satisfied.
This program if implemented at the Department of Education is a direct alignment with the Improper Payments Elimination and Recovery Act signed into law in 2010. In a White House press release fact sheet dated July 22, 2010, stated over $230 million dollars in benefits was given to over 14,000 fugitives or incarcerated felons who were not eligible to receive benefits. At the Department of Education, those incarcerated are already not eligible for benefits but this has not kept my agency from repeatedly finding those currently incarcerated receiving benefits to attend online universities or correspondence courses. There is however, no program at the Department of Education, which keeps wanted fugitive felons from receiving federal student aid funds.
The information provided to apply for federal financial aid from the Department of Education could be compared with information contained in the National Crime Information Center database maintained by the Federal Bureau of Investigation, and those results which have positive results properly vetted could provide information to local, state and federal law enforcement to apprehend the offenders and bring them to justice. We currently compare information contained in the Free Application for Federal Student Aid to records located at the Social Security Administration, Selective Service, Department of Homeland Security, and other databases for eligibility determination. This would be an additional larger review of to prevent funds from being provided to fugitive felons or incarcerated inmates.
The Department of Agriculture’s program in its first year netted over 6,700 arrests, of which 1,500 were violent offenders. With the arrests made, a total cost avoidance based on today’s family monthly benefit average would total nearly $17.7 million dollars, not to mention the public safety gains. If the same positive results were found in the federal student aid program, it would be a cost savings of nearly $61 million dollars based on a 2009-2010 average undergraduate award of $9,100.
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5 votes
Many scientists and engineers in the Department of Defense are required to attain and maintain a DAWIA level III certification, regardless of the likelihood of them being involved in weapons system acquisition at all. In the case of SPRDE cert, where many scientists and engineers would be classified, there is a requirement of 7 online trainings and 15 days of off-site training. For each engineer and scientist exempted, ...more »
Many scientists and engineers in the Department of Defense are required to attain and maintain a DAWIA level III certification, regardless of the likelihood of them being involved in weapons system acquisition at all. In the case of SPRDE cert, where many scientists and engineers would be classified, there is a requirement of 7 online trainings and 15 days of off-site training. For each engineer and scientist exempted, (15 days * 8 hours * $100 overhead rate) + (15 days * (40 per diem + 80 hotel)) = 13,800 just in labor and direct travel cost. if 10,000 engineers can be exempted, that 138 million straight away. If other position types can be added, this number may quadruple. If you account the costs of having to provide for training that will not be used, several million more can be saved. Removing the 80 hours of needless on-line training would be 80 hours * $100/hr overhead rate = 8000 per employee. if 10000 employees could be exempted from the mandatory 80 hours of continuous learning required to maintain certification, this is another 80 million dollars. just in scientists and engineers in direct costs, we are up to 138 + 80 million = 218 million dollars. If other DAWIA categories could be included other than SPRDE, this number might quadruple or more. This is an amazingly expensive education undertaking that has benefit to relatively few federal employees.
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7 votes
When a child has a mental or learning disability and needs 2 adults with him/her all day at school, the parents should pay for some of that additional cost. Assessments need to be made as to the value of the person will contribute to society and fund based on that. A company hires adults with learning disabilities that clean the bathrooms and collects the trash. They are working and contributing. However, some won't ...more »
When a child has a mental or learning disability and needs 2 adults with him/her all day at school, the parents should pay for some of that additional cost. Assessments need to be made as to the value of the person will contribute to society and fund based on that. A company hires adults with learning disabilities that clean the bathrooms and collects the trash. They are working and contributing. However, some won't be able to do that so why try to fund their education like they will go to college. Sounds draconian and it is not really that bad but means testing needs to be done for special needs education.
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23 votes
FY 2010 cost: $47-Billion. Overhead costs extremely high. US Dept of Education does not represent interests of States and DC fairly. Instead, pass funds directly to States and DC and let them decide best use of funds for their people - incl, gifted programs, charter schools, home-schooling, voucher programs, etc.
11 votes
Kids should go to school for the full school year or possibly go to trade school during the summer.
4 votes
With health costs going up in this country, training people to help themselves first can drastically reduce both the number of emergency room visits and the cost of the resulting medical bills. For example, knowing to keep a broken arm in a sling, before you visit the emergency room, will help it heal quicker and straighter, reducing overall medical costs in the long run. Also, only about 18% of emergency room visits ...more »
With health costs going up in this country, training people to help themselves first can drastically reduce both the number of emergency room visits and the cost of the resulting medical bills. For example, knowing to keep a broken arm in a sling, before you visit the emergency room, will help it heal quicker and straighter, reducing overall medical costs in the long run. Also, only about 18% of emergency room visits result in hospital admission. This means with proper training, fewer people will feel the need to visit the hospital for the small things they can take care of themselves.
A side affect will be more interest in the medical field, which will create more medical professionals which will also help lower medical costs.
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3 votes
http://cio-nii.defense.gov/sites/iasp2/docs/2010%20IASP%20Solicitation%20for%20Proposal.zip Currently under the Information Assurance Scholarship program, a student cannot accept any other form of tuition assistance that awards above $2500, which prevents good students from taking advantage of this program and shuns potential interest in working for the us government. We're telling potentially talented and motivated ...more »
http://cio-nii.defense.gov/sites/iasp2/docs/2010%20IASP%20Solicitation%20for%20Proposal.zip
Currently under the Information Assurance Scholarship program, a student cannot accept any other form of tuition assistance that awards above $2500, which prevents good students from taking advantage of this program and shuns potential interest in working for the us government.
We're telling potentially talented and motivated individuals that they're too good for the government to care. We should be trying to recruit these individuals at every turn! Especially the Information Assurance individuals, our military and civilian IA and Computer
Security professionals are bleeding away into the pockets of contractors that gouge tax dollars on massive contracts and private companies that don't share their information for the good of the GIG.
This program needs to be revised to attract these professionals in the same way the NSA does. The NSA is successful with their fellowship program (http://www.nsa.gov/careers/career_dev/fellowships.shtml)
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12 votes
- Tax religions (the church). - Enforce current laws (fraud, property, immigration, bankruptcy, criminal, divorce, patent, consumer, business, criminal, etc.). - Education – The education system is not broken, It is our youth that do not want to learn (we need help from parents). Also, soon there will be fortune 500 colleges and universities offering IPO. Cost of education has skyrocketed nonstop and it will keep on ...more »
- Tax religions (the church).
- Enforce current laws (fraud, property, immigration, bankruptcy, criminal, divorce, patent, consumer, business, criminal, etc.).
- Education – The education system is not broken, It is our youth that do not want to learn (we need help from parents). Also, soon there will be fortune 500 colleges and universities offering IPO. Cost of education has skyrocketed nonstop and it will keep on increasing (our youth cannot afford to rack up in debt).
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38 votes
http://www.hud.gov/complaints/fraud_waste.cfm -section 8 and low income housing encourages dependency and complacent behavior. Why work when you can get a house for practically free and keep collecting entitlements. ILLLEGAL squatting and unauthrized people live with a legal tenet often and this is a criminal offense since changes in family size and income are required to be reported. the section 8 system and low income ...more »
http://www.hud.gov/complaints/fraud_waste.cfm -section 8 and low income housing encourages dependency and complacent behavior. Why work when you can get a house for practically free and keep collecting entitlements. ILLLEGAL squatting and unauthrized people live with a legal tenet often and this is a criminal offense since changes in family size and income are required to be reported. the section 8 system and low income housing system is a complete failure which has drained the US economy of trillions of dollars and maintained tenets in social and financial bondage. there is no incentive to leave section 8 or low income housing. why work or attend college when you can get housing for free or low cost. This encouranges drug abuse and out of wedlock births and tenet abuse by housing squatters and unauthorized people living in the units. section 8 and low income housing also reduce local taxpayers home values and create blighted neighborhoods with loud music and cars with dark windows and dirty messy yards often with dirt as a yard.. SECTION 8 and LOW INCOME HOUSING TENETS NEED TIME LIMITS of 1 to 3 years then they must be evicted from the units since they are living on free enititlements and have no incentive to Raise themselves out of the free benefits. WAKE UP AMERICA! WE ARE TRILLIONS IN DEBT and giving away FREE BENEFITS . remember that all secion 8 and low income housing authoritys are TAX FREE and you pay the costs of educating the people and their rents are susidized and food and insurance are subsidized and paid for. its like the midlle and upper class is paying triple to live, we all have to pay for everyone else.. its not fair..http://www.hud.gov/complaints/fraud_waste.cfm
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16 votes
http://www.hud.gov/complaints/fraud_waste.cfm -section 8 and low income housing encourages dependency and complacent behavior. Why work when you can get a house for practically free and keep collecting entitlements. ILLLEGAL squatting and unauthrized people live with a legal tenet often and this is a criminal offense since changes in family size and income are required to be reported. the section 8 system and low income ...more »
http://www.hud.gov/complaints/fraud_waste.cfm -section 8 and low income housing encourages dependency and complacent behavior. Why work when you can get a house for practically free and keep collecting entitlements. ILLLEGAL squatting and unauthrized people live with a legal tenet often and this is a criminal offense since changes in family size and income are required to be reported. the section 8 system and low income housing system is a complete failure which has drained the US economy of trillions of dollars and maintained tenets in social and financial bondage. there is no incentive to leave section 8 or low income housing. why work or attend college when you can get housing for free or low cost. This encouranges drug abuse and out of wedlock births and tenet abuse by housing squatters and unauthorized people living in the units. section 8 and low income housing also reduce local taxpayers home values and create blighted neighborhoods with loud music and cars with dark windows and dirty messy yards often with dirt as a yard.. SECTION 8 and LOW INCOME HOUSING TENETS NEED TIME LIMITS of 1 to 3 years then they must be evicted from the units since they are living on free enititlements and have no incentive to Raise themselves out of the free benefits. WAKE UP AMERICA! WE ARE TRILLIONS IN DEBT and giving away FREE BENEFITS . http://www.hud.gov/complaints/fraud_waste.cfm
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15 votes
I like most ideas on this website. I think that most ideas have come from somebody who is trying to do a great job at what they do. It has become so difficult to navigate through that, I have decided to take 15 minutes out of my day to dedicate to this at home on my own time. I believe that the top 25 contributors and top 25 idea submitters should be invited to bring their heads together and discuss what is really ...more »
I like most ideas on this website. I think that most ideas have come from somebody who is trying to do a great job at what they do.
It has become so difficult to navigate through that, I have decided to take 15 minutes out of my day to dedicate to this at home on my own time.
I believe that the top 25 contributors and top 25 idea submitters should be invited to bring their heads together and discuss what is really important to their agency and to the federal government as a whole.
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10 votes
I propose that members of the Reserve military forces (National Guard/Reserves) be subject to recurring job specialty proficiency tests. This could be done either on a set time basis, or as part of the re-enlistment process. On initial entry or re-classification, each military member receives specialized training specific to the career field that they have chosen. Army schools (for example) provide the majority of this ...more »
I propose that members of the Reserve military forces (National Guard/Reserves) be subject to recurring job specialty proficiency tests. This could be done either on a set time basis, or as part of the re-enlistment process.
On initial entry or re-classification, each military member receives specialized training specific to the career field that they have chosen. Army schools (for example) provide the majority of this training, but also require “on-the-job” training to round-out the trainee’s knowledge.
Without leadership and other co-workers staying up to date and proficient in their trade, this “on-the-job” training cannot be accomplished for the incoming employee. I therefore propose that each service member be required to take recurring tests to ensure that skills have been retained.
Tests for the specific Military Occupational Specialty (“MOS” in the Army) that each employee is assigned should be updated regularly to include recent changes and procedures. This will ensure that long-time soldiers and leaders are keeping up-to-date with current equipment, procedures, etc.
This will help keep our force (especially the Reserve Component) relevant. If a member cannot show that they can do their job, perhaps it is time for them to leave and clear the way for someone who can.
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10 votes
There is a great opportunity to help Americans reach their education goals by reducing the costs associated with earning a degree online. Online degrees are currently very costly to consumers. Why should they be? There are already hundreds of hours of free class room instruction available to view over the internet for free. E books can be transmitted across the web for next to nothing. New College E-Text Books could be ...more »
There is a great opportunity to help Americans reach their education goals by reducing the costs associated with earning a degree online. Online degrees are currently very costly to consumers. Why should they be? There are already hundreds of hours of free class room instruction available to view over the internet for free. E books can be transmitted across the web for next to nothing. New College E-Text Books could be created, and a flat fee can be offered to those authors for their works rather than the current standard where they earn a percentage of every book sale. Millions of people could afford E-Text Books from Authors who agree to be compensated this way. Many tests can be graded automatically by a program without the need for an instructor. By eliminating the requirement to have a College Professor leading online courses there is no doubt that the cost of obtaining a degree online could be reduced substantially. Create a new degree accreditation to allow College degrees to be awarded without the need for an instructor to be behind the scenes moderating the class and grading work. In some cases the quality of education may not be as high, but if done correctly millions of Americans could afford to earn this degree who cannot afford a degree from a traditional source. A more educated America equals a more competitive and innovative America.
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5 votes
Include teaching Americans how to do a tax return as a mandatory part of the school curriculum and the IRS can eliminate their multi-million dollar program that handles volunteer tax preparation. This would save the $13 million or more that the VITA program uses, the $7 million or more that the TCE program uses, and eliminate the Stakeholder Partnerships, Education and Communications department of the IRS that employs ...more »
Include teaching Americans how to do a tax return as a mandatory part of the school curriculum and the IRS can eliminate their multi-million dollar program that handles volunteer tax preparation. This would save the $13 million or more that the VITA program uses, the $7 million or more that the TCE program uses, and eliminate the Stakeholder Partnerships, Education and Communications department of the IRS that employs over 1000 people and costs multiple millions of dollars a year in salaries, travel, training, printing, etc. Use the Education system to teach something that every American is obligated to do for their entire life. Teach them the "Why and How" of taxes, you can even use the already existing "Understanding Taxes" program that was written for the IRS by teachers.
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14 votes
If we stop minting pennies but keep prices at e.g. $19.96, then pay to the nearest Nickle= $20.00 we would then have an extra 1-4 cents per transaction for the millions of transactions daily and roll the 1-4 cents in to a strictly watched fund that would take care of Education, SS, Road Construction, and pay down on the Deficit. I do not see how this would be bad for anyone.
16 votes
Our Defense spending would still be greater than that of China, the UK, France, Russia, Germany, Japan and Saudi Arabia combined. Spending more in Education is an investment in the future of America. We need to catch up with the rest of the world when it comes to educating our children. Better education means more long-term innovation and prosperity, a healthier job market, a higher standard of living, less poverty, less ...more »
Our Defense spending would still be greater than that of China, the UK, France, Russia, Germany, Japan and Saudi Arabia combined. Spending more in Education is an investment in the future of America. We need to catch up with the rest of the world when it comes to educating our children. Better education means more long-term innovation and prosperity, a healthier job market, a higher standard of living, less poverty, less crime. We cannot keep being the bully of the world forever. We need to set the standard.
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29 votes
I will be part of a large group from the Midwest – many from the same physical location -- that will soon be traveling to CA for training. I am hoping that the idea to send training to the trainees is implemented pronto. Send the trainer, or the training manual on e-reader or DVD, or the video streaming, BUT don't send the masses of employees, please. From a safety standpoint, from a national debt standpoint, from removing ...more »
I will be part of a large group from the Midwest – many from the same physical location -- that will soon be traveling to CA for training. I am hoping that the idea to send training to the trainees is implemented pronto. Send the trainer, or the training manual on e-reader or DVD, or the video streaming, BUT don't send the masses of employees, please. From a safety standpoint, from a national debt standpoint, from removing essential employees from their jobs for weeks at a time standpoint, from an environmental standpoint, to the public perception standpoint – do it now.
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40 votes
With the growing number of FERS employees retiring or becoming eligible to retire, a system for checks and balances needs to be addressed to ensure retirees begin receiving their full entitlements within the first six months of retirement. This would limit the need for retirees to seek new employment and/or outside help.
10 votes
I often hear about a supposed government-wide need for more technically trained and educated personnel. However, I suspect the real problem is a pervasive lack of skill within our human resources departments in assessing the knowledge, skills, and abilities of prospective employees. For example, I have applied for innumerable positions as an government engineer; in spite of indicating that I am a licensed Professional ...more »
I often hear about a supposed government-wide need for more technically trained and educated personnel. However, I suspect the real problem is a pervasive lack of skill within our human resources departments in assessing the knowledge, skills, and abilities of prospective employees. For example, I have applied for innumerable positions as an government engineer; in spite of indicating that I am a licensed Professional Engineer I was always told that I failed to meet basic requirements! Our human resources departments simply need to become competent in recognizing individuals with technical knowledge, skills, and abilities.
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18 votes
The adage "EDUCATION IS FUNDAMENTAL" is important to our nation as a whole. Just read any text on Outsourcing (e.g. The World is Flat, Post American World, etc), which explains how India, China, and a half dozens other countries will lead the world in terms of the amounts of graduate students with nation building skills (math and science). Remember, education is a major vehicle to remain competitive and tuition assistance ...more »
The adage "EDUCATION IS FUNDAMENTAL" is important to our nation as a whole. Just read any text on Outsourcing (e.g. The World is Flat, Post American World, etc), which explains how India, China, and a half dozens other countries will lead the world in terms of the amounts of graduate students with nation building skills (math and science). Remember, education is a major vehicle to remain competitive and tuition assistance for government empoyees with children would provide an improved compensation package to people who have already demonstrated a unparalleled level of dedication to America in order to increase competitiveness.
The alternative is to let graduates from elsewhere take the helm and lead you and I into the future. You decide. CLICK AGREE FOR TUITION ASSISTANCE!
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11 votes
Executive summary: In 2008 the United States spent 0.97% of total outlays on federal student aid, funding higher (tertiary) education programs through the Department of Education, and to support federal student loan origination.[i] There are clear social and economic benefits associated with increasing higher education attainment in the United States. There are simple and low-cost solutions to increasing the availability ...more »
Executive summary:
In 2008 the United States spent 0.97% of total outlays on federal student aid, funding higher (tertiary) education programs through the Department of Education, and to support federal student loan origination.[i] There are clear social and economic benefits associated with increasing higher education attainment in the United States. There are simple and low-cost solutions to increasing the availability of financing through federal student loans—an option that facilitates the pursuit of higher education. This post proposes policy recommendations to Congress, and addresses the following questions: (1) Is it worth having a large portion of the US population attain tertiary education? (2) What are some problems with the current federal policy? (3) Why should the United States government provide financing for higher education? (4) What are the costs to the United States? (5) Why are federal student loans better than nonfederal student loans?
Policy Recommendations in Brief:
-Change the caps on federal student loans and match them to the published cost of tuition, fees, room and board of each college and university participating in the federal student aid program.
-Separate federal student loans from the federal financial aid application process, or replace the Free Application for Federal Student Aid with a very basic application and deliver needed income information directly from the Internal Revenue Service to the Department of Education.
-Fix the annual percentage rate of federal student loans to the federal government’s cost of borrowing.
-Overturn the portion of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 which made private student loans non-dischargeable in personal bankruptcy.
-Advertise the availability of federal student loans separately from the availability of federal student aid.
On American Higher Education: Strengthening the Federal Student Loan Program
Regarding higher (tertiary) education, President Obama’s goal is for America to have the highest portion of college graduates in the world by 2020.[ii] America is ranked 4th, in the latest report[iii] by the Organization for Economic Co-operation and Development (OECD), among the 31 OECD countries in terms of percentage by country population that has attained tertiary education—ranked 6th if you include the OECD partner countries Brazil, Estonia, Israel, Russian Federation, and Slovenia. By volume, the US has the 33.5% of the total OECD 25-64 year-old population with tertiary education (total population is almost 200 million across 31 of the OECD countries, 2008).
Is it worth having a large portion of the US population attain tertiary education?
In the case of the United States, I argue the answer is yes. The ability to innovate is this country’s bread and butter; i.e., e-commerce, web 2.0, human flight, the light bulb, etc. With more people obtaining the ability to think critically—a major learning outcome of higher education—our economy is in a better position to grow through innovation. Yet, it is important to note that not all economies are predisposed to benefit from such a blunt policy. Grover J. “Russ” Whitehurst, a Senior Fellow at Brookings focusing on governance studies, recently wrote about the relationship between years of schooling and the impact to the economy. He referenced econometric studies that find there is a small but consistently positive relationship between long-term growth and the level of education. However, Whitehurst points to the variability in the data from country to country and suggests that blindly marching towards a generic goal may not be the best policy for every country.[iv]
What are some problems with the current federal policy?
Let’s focus on the policies that significantly impact the growing portion of students borrowing nonfederal loans to pay for tertiary education. Later in this post I will discuss why federal loans are materially better than nonfederal loans—if you are not already convinced, for now keep an opened mind. First, some color on the industry; the Congressional Budget Office estimates that in the 2007-2008 academic year the market for private student loans was about one-quarter the size of the market for federal student lending, by dollar volume.[v] There are two main policies I have issue with, the process for applying for federal student loans and the current cap on federal student loans.
The complexity of the Free Application for Federal Student Aid (FAFSA) and the administration of the federal student loan program are making it more difficult for students to borrow federal student loans. In a 2010 College Board report[vi] on student debt, Sandy Baum and Patricia Steele find that dependent students from families with incomes higher than $100,000 have the highest concentration of nonfederal debt. They link this phenomenon to the reality that many of these families do not apply for federal financial aid and therefore are never offered federal student loans. The complexity of the federal student loan process impacts more than just dependent students from higher income families. Students from low-income families and students with limited English proficiency are also at a disadvantage when filing for financial aid. According to a 2008 College Board report[vii] on reforming federal student aid, the FAFSA can be intimidating as it asks for more detailed information than the Internal Revenue Service (IRS) requests from most low-income families. One of the recommendations set out by the report is for the elimination of the FAFSA altogether and to simply have the IRS provide the required information directly to the Department of Education.
There is a cap on federal student loans that complicates obtaining financing for tertiary education. The general culture in the United States is for families to save for college education. However, for those dependents that cannot rely on parents to cover the costs of college and for the independents that do not have college savings in place, financing is the only option. Some color: the cap of federal student loans is different between dependents and independent undergraduates (including dependent students whose parents are unable to obtain PLUS loans). The aggregate limit on subsidized and unsubsidized federal loans for dependent undergraduates is $31,000.[viii] For independent students and dependent students whose parents are unable to obtain PLUS loans the aggregate limit is $57,500. According to a 2010 College Board report[ix], the published in-state tuition and fees at public four-year institutions average $7,605 in the 2010-11 academic year. Extrapolating this yearly cost to an aggregate amount, the total cost of in-state tuition and fees at public four-year institutions is on average $30,420. At first glance it appears that the $31,000 cap on federal student loans works well to cover the average college cost of $30,420. However, the caps on these loans restrict students’ ability to exercise options when selecting a school. For instance, if the student wants to live on campus the average total charges, including tuition and fees and room and board, are $16,140 (an aggregate of $64,560). For an out-of-state public four-year college or university the average cost of tuition and fees is $19,595 (an aggregate of $78,380) and $28,130 for average total charges that include room and board (an aggregate of $112,520).
Why should the United States government provide financing for higher education?
First, let’s point out that financing for higher education is not a social welfare program. Financing is not the same as grants or tax breaks—loans are debt instruments that are paid back with interest. With that said there are many advantages for the United States government to provide low-cost financing for education. There are compelling economic and social benefits associated with a country’s population attaining a higher education.
An increase in earnings is a key measure of the economic benefit of higher education. According to the key indicators on education from the OECD[x], on average the countries tracked report a 53% premium on earnings from employment after tertiary education over those individuals with only upper secondary and post-secondary non-tertiary education (the latter being High School and Technical Schools in the United States). In the United States the earnings premium is higher than the average—males earn 88% more and females earn 71% more than their counterparts that did not attain tertiary education. Increased earnings translate into greater tax revenue both through an income tax and consumption taxes.
The social benefits associated with attaining higher education are also analyzed by the OECD. In their 2010 Education at a Glance report[xi] the OECD data suggest that moving from one level of education to another has a positive correlation to higher levels of self-reported health, political interest, and interpersonal trust. Most countries—if not all—have a vested interest in improving the general health of the population. As the data show, attaining a higher education improves the general health of the individual; this translates into reduced public expenditures on healthcare. Additionally, societies—especially democracies—benefit from an increase in civic and political involvement. Furthermore, individuals with higher education tend to believe that most people can be trusted—the resultant of an increase in tolerance, acceptance of diversity and recognition of the benefits from social cohesion. The OECD also reasons that an indirect increase in trust may result from the likelihood that individuals with a higher education will live and work in similar socioeconomic conditions, where subversive and criminal activity is less likely.
What are the costs to the United States?
In their latest digest (2009), the National Center for Education Statistics (NCES) estimated that in fiscal year 2009 the United States spent $37.2 billion[xii] on post-secondary (tertiary) education.[xiii] Most of the money ($27.7 billion) was spent by the Department of Education on items like: (a) Student Financial Assistance ($23.2 billion)—of which $18.4 billion[xiv] are Pell Grants—and other Federal Student Aid programs that include other grants, loans, and work-study to help students pay for education beyond high school; (b) outlays of $352 million for the Federal Family Education Loan Program and outlays of $1.4 billion for the Federal Direct Student Loan program, which—after vigilantly decoding the notes to the principal financial statements of the Office of the Under Secretary for Federal Student Aid—should be costs associated with interest subsidies, modification of subsidy cost, loan forgiveness, defaults, etc; and (c) Higher Education Program outlays of $2.3 billion, which goes to administering and supporting projects that broaden access to higher education (it funds projects that are awarded to institutions of higher education, non-profit organizations and agencies, and state agencies). The rest of the money ($9.5 billion) is spent by other federal agencies—USDA, DoD, Commerce, Energy, HHS, DHS, HUD, Interior, State, DoT, Treasury, and the VA are the major spenders—on programs like tuition assistance for military personnel, Senior Reserve Officers Training Corps, National Institutes of Health training grants, the Department of State’s Education exchange, All-volunteer-force educational assistance for veterans, and the National Science Foundation to list a few.
Why are federal student loans better than nonfederal student loans?
Federal student loans have advantages when compared to private, nonfederal student loans. The main advantage between these types of loans is the lower interest rate paid by the borrower of federal student loans. The current interest rate for a Stafford Loan is 6.80% fixed. I went to bankrate.com and searched for a $10,000 undergraduate loan for my alma mater. I found one from a well-know private bank with a variable APR ranging between 3.62% and 11.35%, the final rate dependent on your personal credit score. Considering the credit rating of 18 year-olds largely varies, I contend that most are not eligible for the lowest variable APR. Also, we are in the lowest interest rate environment in relevant history with the Federal Funds rate literally at zero percent (0 to 25 basis points, but with the actual for the past two years at an average of 17 basis points—according to the Federal Reserve’s H.15 statistical Release[xv]—I can confidently say that interest rates are literally the lowest they can go). As soon as interest rates trend back to more typical levels, the average for that commercial variable APR will trend well beyond the fixed APR of federal student loans.
Like the vast majority of student loans, federal student loans tend not to be forgiven through personal bankruptcy. In general, when compared to commercial loans in bankruptcy proceedings—where most debts may be forgiven—student loans owed to a public school or government body is typically not forgiven. In rare cases, these types of student loans are forgiven if a court rules that making payments would create an undue hardship. Most people do not file for bankruptcy, and therefore the positive of having a lower interest rate for federal loans outweighs the negative of a lifetime commitment—not the case for nonfederal loans in my opinion due to the more stringent terms and higher APR. Moreover, there are mitigating factors that lessen the impact of enduring federal student loan indebtedness while increasing flexibility if you run into financial trouble down the road. One example is the Income-Based Repayment Plan for federal student loans that caps the annual amount eligible borrowers pay to 15% of their income (10% starting July 2014). Also, after 25 years of making payments under the Income-Based Repayment Plan the remaining loan balance is forgiven (20 years starting July 2014); 10 years for public service employees. The Income-Based Repayment Plan helps make federal student loan payments more manageable for individuals that have high levels of debt relative to their income; it is a preventative measure by the government to reduce outright loan defaults.
A discussion on suggested policy improvements:
-Change the caps on federal student loans and match them to the published cost of tuition, fees, room and board of each college and university participating in the federal student aid program.
--Decrease drop-out rates by increasing student’s “skin in the game” through the expansion of federal student loan availability. Unlike some countries that provide free higher education, I admire the system the United States has developed. Students have some skin in the game, meaning they have to take on some financial responsibility for their education. These students are likely to stay in school and finish what they started for the simple reason that they are paying for it. My student loans gave me an incentive to get the most out of my college experience and I suspect that most people do not take things for granted when they are the ones on the hook financially.
--The arbitrary caps on federal student loans should be replaced with caps that match the tuition and fees and room and board as published by the specific schools these students are attending. Both for in-state and out-of-state students.
-Separate federal student loans from the federal financial aid application process, or replace the Free Application for Federal Student Aid with a very basic application and deliver needed income information directly from the Internal Revenue Service to the Department of Education.
--I agree with the recommendation from the College Board report for reforming federal student aid, eliminate the FAFSA. I would replace the FAFSA with a simpler form that captures relevant information not already able to be provided to the Department of Education by the Internal Revenue Service.
--This will increase the availability of federal student loans to the general public by eliminating bureaucratic barriers of entry.
-Fix the annual percentage rate of federal student loans to the federal government’s cost of borrowing.
--Federal student loan interest rates should be pegged to the cost of borrowing of the Federal government. Currently, a 10-year federal student loan APR is fixed at 6.80% while the average yield on the 10-year treasury in January 2011 was 3.39%. Why does the government need to make a profit on the 341 basis point spread between these two financial instruments? As federal student loans are so hard to forgive, even in personal bankruptcy, the cost of making a student loan should match the cost associated with the government borrowing the funds from the public market. Any losses due to loan forgiveness and administrative costs of the Federal Direct Loan program should be rolled into federal expenditures on education; as described in the next section, the United States can afford it—the federal government spends a very small potion (0.97%) of total outlays on higher education. If costs are too high, Congress should address increasing cost-saving measures within the infrastructure of the Department of Education and not pass on the costs to the customer.
-Overturn the portion of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 which made private student loans non-dischargeable in personal bankruptcy.
--Private student loans have less flexibility and generally have a higher APR. Why are they treated differently in bankruptcy proceedings from other similar loans? If I have a student loan and a line of credit with a major bank and the APR of both financial instruments are comparable, why is one dischargeable in personal bankruptcy and not the other? As a savvy consumer I want options. Give me the option to choose a lower APR knowing that I am stuck with the federal student loan for life, or the higher APR from a private lender knowing that if things do not go well I can eventually obtain a clean slate.
-Advertise the availability of federal student loans separately from the availability of federal student aid.
--The studies referenced in this post indicate that dependents from higher-income families have a higher percentage of non-federal student loans; this may be due to lack of knowledge about the current application process. The government may increase awareness of financing opportunities if they make an effort to advertise the availability of federal student loans separate from promoting general federal financial aid.
At the end of the day, the United States spent 0.97% of the total federal outlays on funding higher education programs through the Department of Education, federal student aid, and to support federal student loan origination in 2008.[i] This is relatively small when looking at the outlays for other programs; for example, national defense spending is 20.66% of total outlays. The studies reviewed in this post provide evidence that higher education attainment lowers the cost of healthcare, reduces crime, and fosters civic engagement. It appears to me that any additional costs associated with implementing the changes listed in the previous section will not significantly increase the overall real dollars spent by the government; though, the changes will significantly lower the barriers to attaining affordable financing for tertiary education.
Notes:
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[i] National defense outlays for 2008 were $616.07 billion, and total outlays were $2.98 trillion, according to historical table 4.2 of the Budget of the United States Government. Total post-secondary education spending for 2008 by the Department of Education was $28.84 billion according to the 2009 Digest of Education Statistics put forth by the NCES.
[ii] Obama, Barack. Remarks by the President and Dr. Jill Biden at Signing of Health Care and Education Reconciliation Act. Northern Virginia Community College, Alexandria, Virginia. 30 March 2010. (http://www.whitehouse.gov/the-press-office/remarks-president-and-dr-jill-biden-signing-health-care-and-education-reconciliatio).
[iii] Education at a Glance 2010: OECD Indicators (OECD, 2010), p. 36. (http://www.oecd.org/document/52/0,3746,en_2649_39263238_45897844_1_1_1_1,00.html#hto).
[iv] Grover J. Whitehurst, Higher Education and the Economy (Washington: The Brookings Institution. 2010). (http://www.brookings.edu/opinions/2010/0809_obama_college_whitehurst.aspx).
[v] Congressional Budget Office, Costs and Policy Options for Federal Student Loan Programs (Washington: 2010). (http://www.cbo.gov/ftpdocs/110xx/doc11043/03-25-StudentLoans.pdf).
[vi] Sandy Baum and Patricia Steele, Who Borrows Most? Bachelor’s Degree Recipients with High Levels of Student Debt (The College Board Advocacy & Policy Center. 2010), p. 9. (http://advocacy.collegeboard.org/sites/default/files/Trends-Who-Borrows-Most-Brief.pdf).
[vii] The College Board Rethinking Student Aid Study Group, Fulfilling the Commitment: Recommendations for Reforming Federal Student Aid in Brief (The College Board, 2008), p. 5. (http://advocacy.collegeboard.org/sites/default/files/rethinking-stu-aid-fulfilling-commitment-recommendations-in-brief.pdf).
[viii] See the Federal Student Aid website on the annual and aggregate limits for Direct Stafford Loans, http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp#02.
[ix] Sandy Baum and Jennifer Ma, Trends in College Pricing 2010 (The College Board Advocacy & Policy Center. 2010), p. 3. (http://trends.collegeboard.org/downloads/College_Pricing_2010.pdf).
[x] See the OECD website on key indicators on education, http://www.oecd.org/document/55/0,3746,en_2649_37455_46349815_1_1_1_37455,00.html.
[xi] Education at a Glance 2010: OECD Indicators (OECD, 2010), pp. 152-153. (http://www.oecd.org/document/52/0,3746,en_2649_39263238_45897844_1_1_1_1,00.html#hto).
[xii] Thomas Snyder and Sally Dillow, Digest of Education Statistics 2009 (NCES 2009-541). (U.S. Department of Education, 2009). (http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2010013).
[xiii] Post-secondary education, as defined by the US Department of Education, is comparable to tertiary education as defined by the OECD.
[xiv] Federal Student Aid Office, U.S. Department of Education, Annual Report 2009 (Washington: 2009), p. 5. (http://federalstudentaid.ed.gov/static/gw/docs/fsa_annual_report_2009_508compliant.pdf).
[xv] See the Federal Reserve Statistical Release website on the annual Federal funds effective rates, http://www.federalreserve.gov/releases/h15/data/Annual/H15_FF_O.txt.
Full article titled "On American Higher Education: Strengthening the Federal Student Loan Program" is also available on my blog.
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19 votes
Periodically many Federal Agencies must upgrade their computers due to the nature of their work and the security required. Hundreds of thousands of computers are then donated to the public without any coordination or oversight. The suggestion is rather than gifting these computers the govt should thoughtfully coordinate and create a program to re-use and re cycle the computers keeping them within federal programs such ...more »
Periodically many Federal Agencies must upgrade their computers due to the nature of their work and the security required. Hundreds of thousands of computers are then donated to the public without any coordination or oversight. The suggestion is rather than gifting these computers the govt should thoughtfully coordinate and create a program to re-use and re cycle the computers keeping them within federal programs such as Peace Corps, USAID, state Dept,
education programs, libraries, public schools,training programs, community colleges,other existing programs- don't throw away milions or billions of dolars worth of computing power every year but harness it for the good of the country and keep it within the vision of the programs created by the federal government.
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