It’s unsurprising that Diane Auer Jones would object to the findings in Debt to Degree, a recent report authored by my colleague Erin Dillon and myself about student borrowing and degree production in higher education. Ms. Jones is an in-house lobbyist for a large for-profit higher education corporation and so her job is to attack anything negative written about her industry, just like tobacco lobbyists who argue about lung cancer and oil lobbyists who cast doubt on man-made climate change. What’s surprising is that her response contains so many obvious errors of fact and reasoning. Most people who get paid big money to flack for large companies are better at their jobs.
Ms. Jones complains of “significant bias and errors” and “false conclusions” in our study. For example, she says:
[T]he calculation used by the study authors to determine average debt has an inclusive numerator (the sum of Stafford and PLUS borrowing for all students), but an exclusive denominator (only those graduates reported to the IPEDS database are captured). Since the IPEDS database collects data only on first-time, full-time students, selective institutions are likely to have nearly all of their graduates included in the denominator, while for proprietary schools, the denominator might reflect only a fraction of the total number of graduates in any given year since they have a large number of students who are transfer students, who attend part-time, or who need to take a semester off here and there to take care of work or family responsibilities. In other words, the authors picked data points for the numerator that would show lower than actual borrowing for students at selective institutions (Perkins, home equity, personal loans and credit card borrowing are excluded) and lower than actual graduation counts for proprietary schools (graduates who are not first-time, full-time students are excluded).
This is flatly incorrect. It is not the case that the IPEDS database collects data only on first-time, full-time students. The denominator in our ratio includes all degrees and credentials conferred by each college, regardless of students’ entering status. I suspect (although who knows?) that Ms. Jones may be thinking of the federal Graduation Rate Survey, which only includes first-time, full-time students. It’s shocking that a former assistant secretary of post-secondary education doesn’t understand this most basic distinction in federal data reporting.
Ms. Jones also writes:
Dillon told the Chronicle that PLUS loans were included in the calculation. One would then think that the study would capture parent borrowing, except that middle- and upper-middle-class families tend to borrow against their home equity or against their retirement savings rather than taking a PLUS loan since PLUS loan interest rates of almost 9 percent are substantially higher than those offered by banks to parents with decent credit scores.
Again, incorrect. According to the National Post-secondary Student Aid Survey, middle and upper income parents do, in fact, borrow PLUS loans. Among students at private, 4-year universities, 30% of PLUS loans went to students in the upper income quartile, while 22% went to students in the bottom quartile. And among upper income students, 14% borrowed PLUS loans, compared with only 4% of students in the bottom quartile.
Ms. Jones complains that we did not include Perkins loans in our methodology. That’s because our study focused on undergraduate borrowing and undergraduate degrees. Perkins loans can be taken by graduate students, and we were unable to get Perkins loan data for undergraduates only. In other words, we excluded Perkins loans in order to avoid precisely the kind of inappropriate comparisons that Ms. Jones (mistakenly) accuses us of performing above.
Ms. Jones goes on to say:
Carey and Dillon seem to use Princeton as the yardstick by which all other institutions are measured, but even Princeton’s president, Dr. Shirley Tilghman, testified at a recent NACIQI meeting that her peer group was only other elite, selective, research intensive institutions. In her words, she has nothing in common with her neighboring community college and should not be considered their peer, nor should they be considered hers.
I can attest that Ms. Jones’ characterization of President Tilghman’s NACIQI testimony is correct, in that I was sitting on the same panel at NACIQI that day. And I agree that Princeton’s borrowing-to-credential ratio is best compared to ratios at other elite, selective research intensive institutions. That, of course, is why we only compared Princeton to other elite, selective research intensive institutions in the report, on a chart titled “Borrowing to credential ratio at elite colleges” and in a section titled “Money matters at elite schools,” both of which are exclusively concerned with private Research I institutions.
If this is the best the industry has to offer, they’re in a lot of trouble.