debt

Originally published Jan. 13, 2015

A few decades ago, going to college seemed to be the surest route to the American dream, a path to greater opportunity for most young people. Yet today the U.S. system of higher education is evolving into a caste system with separate and unequal tiers. To be sure, more students from all backgrounds attend college and graduate with valuable degrees. But far too many from low-income and middle-class families depart early with no degrees and crippling levels of student debt. U.S. higher education as a whole is increasingly reinforcing rather than reducing class differences—and federal and state government policies need to change course. more...

The promise of microlending made explicit, if not proven.
The promise of microlending made explicit, if not proven.

Micro loans help small borrowers start or continue enterprises, even if the borrowers cannot put up collateral. Giving such loans to women in developing countries has been widely touted as a way to help them and their families economically – and also boost the social status of women in societies where relations between men and women are very unequal. Do micro loans work to achieve these goals? Our research looked at this issue in Bangladesh and discovered that it takes more than increments of economic help to improve the social status of women.

Results of a Project Meant to Help Women

Our recently completed research project analyzed data collected as part of the Chronic Poverty and Long Term Impact Study in Bangladesh. Various development initiatives over a 10 year period were examined in this study, which used panel surveys, life-history interviews, and focus groups to learn how programs have influenced family decision making and the control of resources by various household members. Our research focuses specifically on women’s participation in the “fishpond program,” an economic development project implemented in the Jessore District of Bangladesh.

The fishpond program aimed to improve economic wellbeing and nutritional standards for women and their families, and at the same time hoped to empower women and improve their social status. Women in a dozen different villages were offered both technical training and credit to help them develop group fishponds using innovative techniques. The female recipients were selected by a non-governmental organization based on economic need.

As the program unfolded, it was evaluated by researchers who interviewed husbands and wives shortly after the project was launched and again ten years later. Of course the researchers wanted to see if the fishponds improved the economic and nutritional status of families, but in addition they probed how the new economic activities of women grantees influenced their social status. Would their marriages improve as a result of the program? Would the women report less domestic violence? Would women come to own a greater share of the marital property after they became more important economic providers? Would both spouses report that women were more equal partners in their marriage? more...

StockMonkeys.com, creative commons.
StockMonkeys.com, creative commons.

Getting a college degree is an increasingly expensive endeavor and many students struggle to make ends meet while they are in school. Although the rising cost of college tuition and fees receives a great deal of public attention, students face other costs, too – including often hefty payments for living expenses, textbooks, and transportation to and from classes. These inescapable extra costs constitute half to three-quarters of total college expenses, and when students cannot afford to cover them, they often struggle to focus on school work and spend less time in the classroom. In dire cases, students may find themselves without a secure place to live or enough food to eat.

Financial aid for college students is meant to help cover the extra expenses, but aid packages often fall short because of chronic underfunding and complex bureaucratic administrative hurdles. Researchers and practitioners have found that when students run into short-term financial problems, college financial aid offices often have difficulty responding quickly.

In addition to traditional financial aid programs, there is also a need for emergency assistance. Promptly responsive emergency aid programs can help keep students enrolled, perhaps allowing more of them to complete studies and receive degrees. In a recent research project we used surveys and interviews to examine such programs, aiming to better understand how they operate and when they succeed. Our work lays the groundwork for much-needed additional evaluations. more...

From 1980 until the start of the financial crisis of 2007 and 2008, U.S. households accumulated debt at an unprecedented pace. Back in the 1960s and 1970s, the ratio of total debt to disposable income – a measure that reveals households’ ability to service their debts out of current income – hovered around 70 percent. Thereafter it rose, increasing to 90 percent by 1995 and peaking at 135 percent in 2007, before declining to 110 percent in 2013.

The financial meltdown brought new attention to the debt loads facing American households, in part because many analysts fingered defaults on subprime mortgages as a chief cause of the crisis. But policy responses have focused too narrowly on financial market reforms. Certainly it makes sense to curb the unfair and fraudulent lending practices that have proliferated over the past few decades, yet new financial regulation alone won’t make most working families more economically secure. For that, we must understand and address the intertwined social, political and economic trends that have created insecure labor markets and heightened debt risks. more...

The outcomes of the elections held on November 6, 2012 will have a big impact on students and other young Americans. The presidential candidates and their parties have taken sharply different stands on college costs, job opportunities, health care, social issues, voting rights, and investments in the nation’s future – all issues of special relevance to young people.

Paying for College – and Debt after Graduation

Since 1985, the price of a college degree has risen at more than twice the rate of inflation. Americans now owe more for student loans than for credit card debt. In response, President Obama increased Pell grants, simplified student aid applications, made it easier for ex-students to repay loans, and ended unnecessary subsidies to banks. The Obama administration has also moved to help students get accurate information on the costs and benefits of various colleges and universities. more...