Wednesday, March 15, 2017

 

Slush Funds


After this week’s snow/rain/slush storm, I have slush on the brain.  This piece, though, is about another kind of slush.

The recent New York TImes story about students who just need a small financial boost to make it to graduation rang true for me; it reminded me of this piece by Linda Tirado a couple of years ago about just how quickly a minor shortfall can snowball.  (Again with the winter metaphors…)  Late fees pile up, interest charges pile up.  An unaffordable car repair leads to missed classes or a lost job, which in turn leads to losing an apartment.  When you’re on the brink, it doesn’t take much.

But financial aid, as it’s usually done in higher education, requires (and assumes) patience, consistency, and time.  For people in survival mode, that’s often a terrible fit.  

This year, it’s even worse.  It was supposed to be better.  The Obama administration enacted “prior prior,” which would allow people to use the tax returns from 2015 in 2017.  That way, there’s no need to rush to get the 2016 returns done in time for the first-come, first-served state aid programs.  When a parent is unreachable or uncooperative, that can be challenging.  The goal was to make it slightly easier.  But the Trump administration shut down the IRS site that made previous years’ tax returns available, ostensibly to prevent identity theft.   Now, if you don’t happen to have your own paper copies of 2015’s taxes handy, you’re out of luck.

But even if you have all of the paperwork, financial aid is based on a model of predictable income and predictable expenses.  I remember it working reasonably well at Williams, where nearly everyone was traditional age, attending full-time, healthy, and living on campus.  The paperwork was a hassle, and the attitude towards family contributions from divorced parents back then was, well, counterfactual, but the system was a few tweaks away from being reasonable.  

In the community college world, though, it’s a shaky fit on a good day.  Students’ circumstances are much more heterogeneous and less controlled.  Parental income (or student income) for the self-employed or the marginally employed fluctuates much more quickly than financial aid can be adjusted.  The line between “educational” and “non-educational” expenses may be clear on paper, but it’s fuzzy on the ground.  If Mom’s car needs a repair so she can keep the job that allows her to pay the EFC, is that an educational expense?  The rules say no, but reality says yes.  

I give Sara Goldrick-Rab a lot of credit for starting the Fast Fund, which is an organized slush fund to direct cash straight to students who need it.  It’s not faith-based in the sense of being religiously affiliated, but it’s faith-based in the sense that she’s trusting her confederates not to abuse it.  And that’s where a lot of the issues with financial aid start.

Financial aid is complicated because we’re afraid that people will abuse it.  But its complexity also gets in the way of students who are actually trying, but whose lives are already complicated.  A means-tested benefit requiring two years of paperwork, several forms of i.d., and a few months to process won’t cut it when you’re hungry now, or the car won’t start now.  Tirado’s piece does a great job of spelling out the cascading chain of consequences for a single slip-up when you have no margin for error.  Yes, I understand the need to avoid fraud.  But there’s such a thing as being too vigilant.  

In the short term, I’m thinking the most reasonable paths are the ones that don’t single out individual students at all.  Move to OER as much as possible, so nobody has to go without books, and Pell refund checks go farther.  Extend the free lunch program to community colleges, so students can eat (and don’t have to rely on food pantries).  Over time, move to free community colleges, so students don’t have to work so many hours for pay and can actually study.  And to the extent that it’s possible to establish local versions of emergency grants -- perhaps through college foundations -- it makes sense to try.  

Obviously, none of these would be as effective as an economy with plenty of well-paying jobs to go around, but that’s not on the table right now.  Removing some costs, and setting up slush funds for others, could make significant differences at low cost.  I’m no fan of slush on my awning, but in this context, some slush funds may be just the thing.


Comments:
Georgia State's efforts to help students meet the financial gap and graduate would be more meaningful if the school hadn't created that gap with it's out-of-control athletic fees. The school, where most students are commuters and a large number are non-traditional students, charges an athletic fee of $277 per semester to support its Division 1 football boondoggle. Even with free admission to games, students are interested enough to show up. (Probably because they are too busy working to try to pay their athletic fees.) Stepping away from Division 1 football would save students significant money in fees and have the added bonus of allowing the team a chance to actually win a game. http://www.chronicle.com/interactives/ncaa-subsidies-main#id=details_139940
 
I'm not in a position to see those kinds of financial issues, just personal family problems that can't be solved with money.

The only problem with your idea, on a national scale, is that it only takes one minor "scandal" to blow it all away. Worse, anyone who adds up tiny amounts of fraud across a huge country will easily come up with a million dollar tab for the taxpayers. The only way to do it is with a foundation and hope you don't get punished for it.
 
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