Reflections on the US College Loans System: Lessons from Australia and England

There is wide agreement that the US student loan system faces significant problems. Seven million borrowers are in default and many more are not repaying for reasons such as returning to school, or economic hardship. The stress of repayments faced by many students results at least in part from the design of US student loans. Specifically, loans are organised like a mortgage, with fixed monthly repayments over a fixed period of time, creating a high repayment burden on borrowers with low income. This paper draws on the experience of the income-contingent loan (ICL) systems operating in England and Australia, in which monthly or two-weekly repayments are related to the borrower's income in that period, thus building in automatic insurance against inability to repay during periods of low income. We discuss the design of this type of loan in detail since such an exercise seems to be largely absent in the US literature. Drawing on data from the US Current Population Survey (CPS) we provide two main empirical contributions: a stylised illustration of the revenue and distributional implications of different hypothetical ICL arrangements for the USA; and an illustration of repayment problems faced by low-earning borrowers in the US loan system, including a plausible example of adverse outcomes with respect to Stafford loans. Importantly, we compare repayment burdens under the existing and alternative systems. Our illustrations show how US mortgage-type loans can create financial difficulties for a significant minority of US borrowers, difficulties which an ICL is designed to address. We note also that the current small and ineffective income-based repayment system in the US has few of the characteristics of an ideal ICL

How did the latest increase in fees in England affect student enrolment and inequality?

This paper presents a first analysis of the increase of undergraduate tuition fees to £9,000 (€11.000) in English higher education in 2012. I use a semi-experimental research design to estimate the effect of the reforms, based on student enrolment data drawn from the Higher Education Statistics Agency (HESA). Taking into account possible anticipation effects of the fee increase, I find that enrolment declined by 15 % in the treated groups as a result of the tuition fee increase. This number is almost three times higher than what previous studies have found, and may represent a serious long term cost for the English economy. The decline in enrolments is particularly pronounced for students in older age groups and students from the service class and the middle class. No effect is visible for students from the working class, indicating that the reforms did not lead to a much-feared increase in class bias in higher education enrolment. The reforms also seem not to have exacerbated ethnic inequality in higher education, as all ethnic groups were negatively affected by the reforms. These results are consistent with earlier research in the United States and the United Kingdom, although they expand our understanding of student price responsiveness in other important ways. The paper argues that younger and older students face different costs and benefits. Older students may be less certain about their benefits, and therefore be more sensitive towards price increases. The strong decrease in mature learners may require a policy response, taking into account these differing incentives

A genomic catalog of Earth’s microbiomes

The reconstruction of bacterial and archaeal genomes from shotgun metagenomes has enabled insights into the ecology and evolution of environmental and host-associated microbiomes. Here we applied this approach to >10,000 metagenomes collected from diverse habitats covering all of Earth’s continents and oceans, including metagenomes from human and animal hosts, engineered environments, and natural and agricultural soils, to capture extant microbial, metabolic and functional potential. This comprehensive catalog includes 52,515 metagenome-assembled genomes representing 12,556 novel candidate species-level operational taxonomic units spanning 135 phyla. The catalog expands the known phylogenetic diversity of bacteria and archaea by 44% and is broadly available for streamlined comparative analyses, interactive exploration, metabolic modeling and bulk download. We demonstrate the utility of this collection for understanding secondary-metabolite biosynthetic potential and for resolving thousands of new host linkages to uncultivated viruses. This resource underscores the value of genome-centric approaches for revealing genomic properties of uncultivated microorganisms that affect ecosystem processes

High School Economic Composition and College Persistence

Using a longitudinal sample of Texas high school seniors of 2002 who enrolled in college within the calendar year of high school graduation, we examine variation in college persistence according to the economic composition of their high schools, which serves as a proxy for unmeasured high school attributes that are conductive to postsecondary success. Students who graduated from affluent high schools have the highest persistence rates and those who attended poor high schools have the lowest rates. Multivariate analyses indicate that the advantages in persistence and on-time graduation from four-year colleges enjoyed by graduates of affluent high schools cannot be fully explained by high school college orientation and academic rigor, family background, pre-college academic preparedness or the institutional characteristics. High school college orientation, family background and pre-college academic preparation largely explain why graduates from affluent high schools who first enroll in two-year colleges have higher transfer rates to four-year institutions; however these factors and college characteristics do not explain the lower transfer rates for students from poor high schools. The conclusion discusses the implications of the empirical findings in light of several recent studies that call attention to the policy importance of high schools as a lever to improve persistence and completion rates via better institutional matches