Students trying to get into college. Analysts presented studies affecting black and hispanic students including access to Student Loans and the overall effectiveness of college ratings. This is two hours, 35 minutes. The paper i am going to talk about this morning is called the color of student debt is coauthored with robert and jason. This is about student debt. Remember that more than one out of two of them have taken out a loan in order to do so. That is a significant change in the history of this country and it means something. It means the College Opportunity and tales today. In particular, i think its notable that borrowing today is no longer a choice. If one wants to attend college today and particularly of one wants to intend attend college in a low, moderate, or middle income family, its absolutely a necessity now that one borrows and thats a major change over time. Total borrowing has grown by more than 10 in the last year alone and we are hearing numbers about trillions in things like this. I would be happy to talk about the nuances of that trillion dollar number and concerns i might have about pieces of the debate that have been overstated. I think there is no way to studente the fact that debt has become an important facet today. Many students actually need to borrow in order to attend college. The purpose of this paper considers what might be the implications of some of that current federal debate about restricting access to loans whether it is through Accountability Measures for institutions or about institutions to limit the borrowing of their students or some of their bar words in their effort to reduce default rates. We want to raise significant concerns about the unintended consequences of such moves. With think its very important that rather than reacting by limiting borrowing, if we want to do what student debt, we make more proactive adjustments to the broader system of financing Higher Education. In all the talk about interest eriods, thereent p has been something missing, were that has not been said despite the very clear evidence of the strong relationship between Race Ethnicity and Family Resources for college. It is indisputable that student debt today has a color. Most student loan borrowers in this country are nonhispanic whites and middleclass. Most of them. Colorct is, students of and black students in particular are much more likely to require Student Loans in order to finance college. In other words, for these students, it is rarely even a choice. Blackrcentage of undergraduates on Financial Aid is large and growing and 52 of them have a loan. Safe to say that the majority of africanAmerican Students in this country and college would not be there without access to Student Loans. Next slide, please. The data indicates it is fairly straightforward and we have been overlooking a really important fact of todays status quo. That is that white families today have over 20 times the wealth of black families. While the black middle class accumulated some well over the course of the 20th century, it was demolished in the Great Recession. Nearly one third of black families have zero or data to wealth. Incredible incredibly easy to forget about wealth and talk about Financial Aid. Thank you legislative changes over the last 20 years, this sets aside and ignores most family assets. It also ignores debt. The need to borrow for college depends on whether your family has financial stability. Income alone does not bring stability. The racial gap has never been larger. Our empirical analyses indicate that the black white difference in Family Wealth click the slide please the black white differences can over 30 of the black white differential we have observed in student bar when. In borrowing. There has been claims of over borrowing which do not take into account the significant disparities in wealth. Black families understand that moving up in america depends on a College Education but its very hard to move up when you lack wealth. Its easy to think of loans is optional when your family has other options to turn to, home equity, a family inheritance, etc, but for many black families, there are simply no other options. What about those colleges and universities . When we talk about race and student debt we quickly turned to institutions. In this case, my coauthors and i simply wanted to take a look at the data. What does it tell us on this matter . There has been a lot of discussion in particular about historically black colleges and universities. There has been a lot of discussion also about forprofit. With that it was very important to turn some attention to this. It is the case that black students are overrepresented and there and romans in these two types of institutions. We might therefore expect that the borrowing rates of those type of institutions would be higher in part because they have students there who need to borrow. Whether they ask might be bar wing more from those institutions because there are fewer per student resources. In other words, there is less available financially for students and maybe thats why they need to borrow more. We take that into account in our emperor, all. That thisnd is factor, the lack of resources at the institution is contributing to borrowing but is also but it is only doing so at forprofit institutions, not driving up the borrowing at hcbus. The overrepresentation of ever come American Students at forprofit institutions is actually contributing to another 30 of the observed race gap and debt. Gap in debt. In addition, we can see that while Student Loans are especially important to students bus, for all the talk about this on the over a presentation of loans, if you look at the pie chart, you see hcbus comprise only four percent of all borrowing. We need to look elsewhere for our solution. Next slide. With think its clearly important that in discussing the upcoming reauthorization of the Higher Education act way knology importance of Student Loans to the africanamerican committee and families across the country. These Racial Disparities of wealth are enormous and growing rapidly and they are not going anywhere. That means when it allah sees that respond to the problem by knology it and providing help, not cutting them off. There is a way to ensure that students to borrow less. It is meeting their demonstrated financial need. We have a federal Needs Analysis and we ignore it when it clearly indicates a negative expected family contribution. We can change that law and we can ensure that students from families with no access get the pell grant if they need it in order to exceed in order to succeed in college. Right now, we have families and students who should qualify for a negative efc and a larger pell. We ignore that information and require that they borrow and penalize them for doing so. Also increase the transparency and reduce the risk of bar wing by restoring a the risk by reducing of nonpayment. Thelly, we would argue that incomebased repayment options available for student loan should be extended to parents and loan borrowers. Thank you very much. We are preserving your time for questions. Our next speaker is Willie Kirkland from Dillard University. He can tell you from the front lines what this issue looks like to a very important hcbu. Good morning, im here to talk about the experience of one institution with the impact of Financial Aid limits and how it affects the institutions throughout from the individual students to the bottom line. Dillarding about university located in new orleans, louisiana and it was founded in 1869. Throughout its history, the mission has focused on training africanamerican and underprivileged individuals and assume leadership roles throughout the world and the country. Contemporary dillard has about 1200 students. 98 other africanamericans. Of that number, city five percent are from louisiana. We also get a large proportion of students from other states including california where we get about 12 of our students, texas about seven percent, and illinois about six percent. Students of you would receive some of dillard students receive some kind of aid. This means that for the institution, Financial Aid is central. We find that Financial Aid permeates throughout the institution in terms of how it effects and impacts the institution. Dillard had a retention problem. Let me backtrack a little bit in 20 in 2005, dillard experienced a significant loss of property and damage to the infrastructure due to hurricane katrina. That event resulted in dillard losing about half of its student enrollment from about 2000 to about 1000. Subsequently, the institution and barked on reenrolling students and increasing its enrollment. By 2000 nine, about four years after katrina, we ran retentionblem, problem which was serious and a caught the attention of administrators on the board of trustees. It was affecting the bottom line of the institution and its budget. Revenues were down. Looknstitution decided to at retention and what may be driving retention at the institution. No one had an inkling of what may be the problem, we knew attendance was dropping. Individual3, that retention rate dropped to 58 . We had a serious problem. Undertake ao retention study specific to the university. What we were looking for is to identify some things that may affect the university retention. We put together a model specific to dillard and that model had nine independent variables that were used to predict retention. Attention. Econdyear some of the variables included gradepoint average, High School Grade point average, act score, instate versus outofstate, residential versus commuter and some Financial Aid considerations in terms of need. We use that to look at the 2010 year. That twoound is important things stood out. Was theor was gradepoint average. This was driving retention at dillard at least in terms of the 2010 core. , we looked at that and the institution embraced it. Now we kind of have some idea of where i retention problems reside. Where our retention problems reside. We expended on the initial study two we did and we included more years. We were looking to find out whether or not there was reliability in terms of two variables we have looked at. Were they influencing retention across cohorts . We looked at three cohorts. If you are familiar with reliability, you expect similar results no matter how many times you measure of phenomena. What we found is that all three cohorts showed a similar results in terms of the two most potent predictors, first semester gpa, and want and need. Having established a liability, one question that came up since we have this data is what about federal policy and its impact . One of the things that has been talked about is the stricter requirements that aretasked twoparent loans. If we had the data to look for the impact of that from 2012, we were able to obtain data. We performed a cross tabulation and what we saw is that the retention rate for those whose parents were declined alone tended to be higher than those whose parents were approved for the loan and those who did not take the loan. This spurred more interest so we decided to put that particular variable interest model. Into our model. We found that it came out to be a significant difference. Thingenial was another that stood out to us. It has significant implications in terms of policy. Institutions are under a lot of pressure to meet accountability fact, somehen, in federal policies may be confounding the ability to meet the standards. I want to say couple of things about accountability. The institution itself we have monitored accountability significantly over the last five years. One of the things we looked at and walter recommended is that there are factors beyond just an institutions capacity and capability that affect retention. Students come into our institution with varying needs and of course, though students do not persist at the same rate. A lot of that is conditioned by Financial Aid which is what we found at dillard. Is it fair to compare an institution that has 90 of their students on Financial Aid to an institution which has 25 . When you set standards one of the things we looked at is the retention graduation rate, our suggestion is that perhaps some type ofweighted system be incorporated so some his additions were disadvantaged because the student population may indeed sort of even the playing field. Thank you very much. Will bet commentator sonia flores from vanderbilt university. Hello, everybody. Thank you again for the opportunity to respond to this paper. I will respond to the golden graph. This paper brings forward to key social and Financial Realities that deserve more policy and research attention. That of the racial wealth gap in the racial debt gap. While a great deal of attention has focused on differences in income, this paper is direct about how access to wealth which is influenced by a very poor racial history is fundamentally a discussion about race as well. Other contributions include that of a focus on the role of the effects of the Great Recession as the new financial context. It is no secret that low to middle income families may need to take out loans for college. I certainly could not have completed my various postsecondary degrees without this help. However, do Something Different to engage in loan behavior in this post Great Recession era from a personal and statewide context. The authors focused on the federal loan and flow is due to their role in the Rating System but state institutional aid decisions are part of this equation as well in regard to state decisions to deregulate tuition and institutional choices to disproportionally award merit over need. The important question suggested by this paper is how current regulation to loan engagement and response play out in this new financial context of wealth loss for all americans but particularly for racial minority americans. Updated newprovide and Financial Information on hcbus and note the disproportionate attention of loan rates at these institutions. Contributions,se i offer the following recommendations in terms of the racial wealth gap, it might be helpful to look at students, black students be on the hcbu. I encourage the authors to look at the condition of Financial Aid received at institutions considered private debt predominantly black institutions in addition to their work at hcbus to unpack the racial wealth gap and death gap. The authors have begun to do this already. To doct they are able this. Theyre well situated to do it and i look forward to seeing the results on the. My other recommendation is to include other groups in the racial elf and whistled and racial death gap debt gap. And debt gapalth may be more pronounced if you include latino and immigrant families. Analysis which i will present later shows that in texas, is latino students that comprise the most economically disadvantaged students and fouryear institutions. Adding the hsi story will be critical at these institutions if we want to understand Latino College enrollment. Finally, Financial Literacy and wealth in the authors recommend transparency in the Financial Aid process is a great recommendation. I encourage them to continue with this. Thank you. Thank you very much. Our next commentator is brian ridges from the United Negro College fund. Togood morning, i want thankgary and the civil rights roddick for convening this muchneeded event i want to i dr. Kirkland from Dillard University providing his contribution to todays proceedings. Too often these coppers these conversations take place without hbcu practitioners. In my role at unc, we work directly with 37 agencies providing scholarship support. We know the importance of examining the broader hbcu context. It is primarily liberal arts institutions but i hope this demonstrates the need for funding to support applied research at these institutions which is necessary in promoting hcbu value propositions. Ive only got five minutes so i want to highlight a few positives about the kirkland paper and provide some suggestions and ideas for future research and briefly talk about implications. I want to identify the fact that the kirkland paper provides empirical evidence that reinforces recent efforts by the hbcu community to promote continued access to muchneeded Financial Aid dollars. The study also provides evidence that confirms Financial Aid matters when it comes to retention and especially student gpa. The last finding we dont have enough information on. The kirkland study also gives voice to an hbcu which is referenced in total but not considering the wide range of nuances that exist. Research ofbased this caliber is needed to inform the work taking place on the ground and to inform the entire Higher Education community about not only the challenges faced by these institutions but also provide models for best practices. The paper is filled with powerful findings that can inform the work of cap as practitioners who serve low income students. One suggestion is the descriptive to step six descriptors decidescriptive statistics is that the average amount of need has increased suddenly for both returnees and nonreturnees over the three years examined. Foract, the unmet need returning students increased at almost three times the rate is that for nonreturners. A troubling picture emerges that we have known has been taking place for some time that hbcu students of increasingly encountered difficulty finding the funding necessary to make their collegiate dreams a reality. Dr. Kirkland is not highlight this increasing need but it should not be glossed over. The study identifies two variables, unmet need in the thatl of plus loans negatively impact for semester gpa giving us evidence that it limits the impact of Financial Aid on what the study shows is a variable and is the most powerful predictor of early hbcu Student Success which is first gpa. Ter a couple of ideas i would like to see this is entirely through the impact on first semester gpa or are there other impacts . In other words, is there more to denialt of a plus loan and the effect on their gpa . Examine howoes not a denial impacts for semester gpa or retention, the cycle the psychosocial implications could be illuminating. One of the questions is whether the impact of unmet need was consistent across all levels. Did unmet need in the amount of sediment 750 have the same effect as 4000 . Maybe we can create groups based on 1000 increments to see if there is a difference across all levels. This paper as to the body of knowledge about what factors promote or hinder Student Success at age bc used at hbcus. This is a line of inquiry that will become more important as resources continue to shrink at the campus and federal levels. The study conserves a platform for Additional Research that needs to be done. I must encourage by the examination of the impact of parent plus loan denials on dillard students. Africanamerican families were hard hit by the Great Recession adding to the difficulty of these families to send their kids to college print as of the recession, the time when instant institution provide more meritbased aid, state aid shrinks over the long term in the federal government makes legislative and policy changes that reduces access to aid in it should be easily understood why hbcu have fought so hard against this. This helps us better understand how agency be hbcus are disproportionally affected to changes in loan policy given the financial background of the communities and families they tend to serve. Government policies can have a direct impact on disadvantaged populations and the institutions they attempt. This paper confirms that and talks about the plus loan impact and it shows the disproportionate impact on the hbcus. Title documents of the crisis and after an advocacy campaign, the department of education formally proposed new parent plus loan rules that will open colleges to thousands of more students. Research by practitioners is necessary for future cases like this, thank you. That you very much. We have the time that you can ask questions. There is microphones here at the end of each aisle. Come forward quickly. Forward, ie coming will pitch one at the authors. With thethe problem abuse of loans has taken place in the forprofit sector. Are we firing the cannon and hitting the wrong target as we try to restrict plus loans for other kinds of institutions . Sarah . I think there is no question about where the challenges lie. I do think the story and the forprofits is a bit more complicated than the one that has been told thus far. I think there are probably some that are engaged in behaviors we should be concerned about and others that may not be. Arefact of the matter is we trying to design our way to a policy solution that is overly complicated because we are unwilling to make very simple statements about where our funds and public dollars should go. In the absence of having the guts to do that and drying some lines in the sand about the public use of public dollars, this is where we are. We are trying to back into a solution that will cause harm to some of our greatest institutions. Are there other questions . Is everybody still sleepy . Ask you, dr. To ask s kirklands hbcus are defending the plus loans but they have families that do not have any resources. Is it a need to change the formula for the pell grant so we can give students bigger grants to start with . Yes, i would agree. What we found at dillard is an ongoing problem. Students stress about these issues in terms of Financial Aid packages. You are correct in terms of parents who apply for the parent loan at dillard sometimes are reluctant to wanted to it simply because many of the parents at extremely low incomes. For example, if your income is 20,000 per year as a family and you borrow 15 or 20,000 on a plus loan, it creates a serious burden on apparent. In many cases, parents may not be able to repay that. If other aid were available that would preclude parents from having to seek the parent loan to close the gap, it would be important. I think we have go right ahead. Come and ask your question. Thank you and good morning. I am the president of nafio. I would like to thank each one of you again for your time and for presenting this information to us. Special things to you, gary. Given the trends you talked about in wealth and given that the growing populations are low income, firstgeneration students traditionally who are underserved and hispanics and Asian Pacific islanders and african American Students and given that hbcus are proven to keep their costs 10,000 per semester lower than historically , might we not come together around the idea of supporting and investing a cost of doing business, cost of educating the growing up populations into the higher ed bill . This would be for colleges and universities doing the best jobs of educating the growing populations and see they get a bonus. What is the question . That is the question. What are the implications for the higher ed bill . Not the implications, would you support the cost of education bonus to those colleges and universities like hsis that are doing the best job of educating, a cost of education bonus. I think that i probably would. Some clearneed acknowledgment of where colleges are doing an exceptional job of meeting need. I dont mean financial need, the need of the communities around them that they are serving. And i like your phrase cost of doing business. Most of the colleges and universities in this country are open access universities and are not getting the Financial Support they need in order to do their business well. That is very strongly related to their underperformance in graduation rates. We cannot resource institutions with less money than you need to provide highquality remedial education. I would go one step further. Im thinking that your proposal is very modest. I believe that these institutions are providing such a Great Service to the nation that we should have a discussion of them becoming statesupported. We have done that in the past but we need to preserve institutions and preserve our investments in those schools. I think we should consider that i would like to hear a discussion on that among the hbcus. Dr. Kirkland . Tenets that i like dillard, is, at we take students with many challenges and we graduate them with other wellfinanced institutions with higher admission standards who sort of cherry pick off the top and get the top students. Variation in the population of its easy because you get students who are highly motivated and who have strong precollegiate backgrounds and i submit that dillard probably can graduate 95 of the students as well. If weestion becomes were more properly resourced, we would be able to overcome some of the challenges we face with Financial Aid. I would challenge those institutions who graduate 90 to take dillard students and graduate the same percentage we graduate. Thank you very much. One more quick question. We have two minutes. I am from howard university, assistant professor. The policy storyline here, you have the debate of merit versus needbased scholarships. At the state political level, you have almost a debate that is winning in favor of the meritbased conversation. You also have changes in admissions tied to loan default rates. Muchuestion here is not as how we can transform the state political level. The assumptions around Financial Aid but more importantly, how does reauthorization of the Higher Education act connect to that very real challenge at the state level . An example is you can lose this battle if you have a common core conversation where statebystate there was literally a playbyplay and now you have a National Conversation changing policy. How do we do that at the federal level to connect to that debate . Thank you. Would you like to comment on the . I think i understand your question. Important tos acknowledge that policymaking is occurring across our 50 states and they will play a powerful role in how anything is done at the federal level. It can undermine or it can buttress the goals at the federal level. I think is really important that the reauthorization takes a strong stance in terms of messages about what the purpose of the federal Financial Aid program is. The purpose should be to make costeffective investments that transform peoples lives. What we know from research on merit aid as it does not accomplish that. That resources people who already have a look leg up and does not create a delta in their outlook. That is in fashion that is inefficient and not focused on their progress. We want to see where we can see the use the scarce resources to change lives. If you are to have limits on federal loans, we would limit those access to those loans for the most uppermiddleclass loans but thats not what is being talked about. Were talking about institutions were the uppermiddleclass people dont go to school having less access to loans. It is important for the federal government to take the lead in helping the states get their heads around this. They need to make costeffective decisions. To me, it boils down to politics and good politics. You are looking for the voters were going to help you get reelected. One of the things you want to do is to address the community that participates. In louisiana, it is the largess. Legislators look and see if they can benefit the middle class but that allows the middle us in electoral contest. , itet is the National Level has to sort of become an issue that gains traction. There must be reword to those who are serving in terms of fromg able to benefit having more money go to needbased as opposed to merit based resources. Thank you very much. Kickingo this panel for off the conference in such a good way. Iq. [applause] [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2014] the main message of the paper is College Completion is not just a post secondary issue. The data we use which is out of a state administrative database in texas will attract students from canada garden all the way through graduate school and down into the workforce and in between. We find that what contributes to the depp in College Completion t
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