Pretty simple answers.  The winners are those who have the common sense.  While the opposite is true for those who defy logic.

Having said that, the American public is smart enough to figure out who belong to each group.  The following example will show to the public how applying strategies that defy logic leads to short-run profit, but disaster in the long-run.  It is commonly known that sellers try to extract or make as much profit as possible out of their customers.  What is wrong with this strategy in the long-run?  Well, for one thing, because charged price is too high, it causes the buyers to run away for they cannot afford to pay it.  This then will trigger them, the consumers, to find substitution products, if there is any or even to completely abandon their plan.  In this sense, some sellers who keep increasing their price-tag indirectly, slowly but surely moving away from their competitive advantage.  As results, they will experience student enrollment decline, not in the short-run, but in the future. This is clearly the example of bounded rationality, where the pack follow the so-called best practices.  Copying what other association members are doing.  However, this hypothesis may not apply to the top schools such as the Ivy League with a single digit admissions rate.

The smart service providers, however, will seize this golden opportunity to stay cool.  By doing so, they indirectly increase their competitive edges and core competencies.  As results, their institutions are able to outsmart their counterparts and take a place as the market leader.  Those who keep increasing their tuition though enjoy the short-run profit,, are, in fact, down graded, or voluntarily give up their competitive advantage to others.  Yet, the school board may reward the management with pay increase or at least patting on the back, simply because the board members operate in different world.  Did anyone see how dysfunctional the whole system was?  This is a clear example of the lack of wisdom!

The Association believe that only a handful institutions even know, understood this kind of logic or are willing to adopt these strategies.  That is one of the reasons why they are classified as the losers.  Lack of wisdom, experience serious bounded rationality and lack of moral virtue are the three traits that cannot be found on the winners side.

ESCC  stands for Education Standard and Compliance Commission

Looking ahead, one may ask what next, after the student loan got written-off from the book?  Well, after 10 years, the same issues will pop again, unless new public policies are put in placed.  Establishing the new policies will be the second step, and in the mathematical concept for optimization, it is called a sufficient condition (SC) in these new efforts.  Let us call this SCN.  The SCN is nothing, but the necessary condition under the old system and named it NCO.  Because of the systematic errors that have been induced in the system for decades, the NCO cannot function well, crippled or ineffective.  The American public can see what kind of damages or results it has caused.  $1.5 trillion debt is accumulated because higher ed industry has been distorted badly, with no possible way to lower it.  This number will keep increasing per second, per second, and accelerate every time, when the American citizens are breathing the air.

Citizens of the United States of America have to make the urgent decisions

Increasing student loan debt should be interpreted as continuous transfer of wealth from the American public to someone’s else pocket.  And this transfer occurs every second.  It is a kind of transfer money or wealth or whatever one wants to call it, from the have-not to the have, or from small to big guys.  Of course it cannot be denied that Uncle Sam makes some $$ through the loan origination fees and the interest charges, which, in some cases higher than what the competitive market is charging.  Pretty pathetic, isn’t it?  Hopefully by now, the American public has a better picture, and realizes how broken the system was and how urgent it is to get it fixed.  But many parties and entities love the broken system for they got the benefit out-of-it.

One may ask why?  The answer is quite straight forward, because lack of control.  DOE does not have the man power to do all the job.  Or should one say it does not have the will to do so, or simply using a simple phrase, DOE does not care.  It hopes that it can do minimal control through IPEDS.  The real world shows that the fruits of this policy are almost close to zero.  But, why Uncle Sam keeps on waiting until the student loan debt (SLD) is in crisis?  Is it because it makes sweet money out of its citizens?  The American public is hoping that the new loans management will be better in the future.  However, the apparatus needs to be established without delay.

AAEA has proposed that Uncle Sam has an entity that is equivalent to SEC (Security and Exchange Commission).  On December 14, 2014, the Association has written, shared and proposed the so-called ESCC (Education Standard and Compliance Commission) followed by the second post on October 30, 2015.  Under the new atmosphere, the American people may have a chance to see the light again,.ie., not worrying about accumulated debt after finishing their education.  However, without ESCC, the disease will comeback again after 10 years.  America, it is the time to make the change!

With the prologue as discussed in Part I and Part II, we now can make a deeper analyses who may or will get favorable support from the 44 million voters.  Clearly, the three candidates with a score of 5 will.  Potentially, among these winners there will run as a running mate in the end. It is estimated that the US population in 2019 is around 329.6712 million.  Remember that those who have or in the process of paying their student loans are estimated at around 20 million.  The current students who are still taking classes, but have taken some sort of loans will need to be added into 44 million.  Realistically speaking, not all 44 million will vote for the candidate with a score of 5.  Here are the simulations and scenarios:

The analyses and numbers shown above are not exact, but estimated within a standard deviation and margin of errors.  It is assumed that everyone that has some sort of student loan debt will support the candidate.  Some may be not while others may have personal preference on certain candidates, regardless of their plan.  However, the estimated percent may or may not fall within a standard deviation of the true statistical mean, but it may well fall within the ballpark.  Some borrowers who have paid off their loans are excluded from the analyses.  However, their sentiment may lean toward supporting the bailed-out effort, for they know how the loan has financially impacted their life.

Roughly, 20% votes will go to the candidate who support the bailed-out.  Candidate that ranks #1 has a credible track record on this particular issue.  She has voiced her stand many years ago, and supporters of college affordability, accountability and transparency.  She is a strong advocate for improving the professionality and work quality of different college accreditation agencies.  Do not be surprise if some who do not make the cut (with a score of 5), will shift or switch their position.  However, this may show to the American public, the individual candidate motivation and interest in running for office.  Is the motivation for the public’s interest or others?

We encourage visitors of this site to read Part 1, before reading through Part II.  The Association has presented a table to show where the candidates for the 2020 big dance stand.  However, it will be beneficial to understand what systematic errors (SE), which is one of the culprits that have caused the ballooning of student loan debt are.  A simple example which may help to understand SE is using a bad or malfunction thermometer to measure how high the daily temperature in a room within a week time.  The result will be well predicted is that none of the measure is accurate.  Therefore, in order to correct the issue, get rid of the bad thermometer and replace it with a new, and good one.  As simple as that.

The same idea can be applies to address the student loan debt.  The skyrocketed of the debt has been caused by the systematic errors brought by all entities or players (Examples are: the loan servicing companies, the college, the lawmakers, the DOE and others) involved in the student loan system for decades.  Now, the public sees the $1.5 trillion loan debt.  But, one needs to remember that this is caused by “errors” that have been purposely induced in the system that benefit the individual entity in the expense of the students, their family and to sum them up the American public.  Therefore, to solve the current student loan debt, the whole system needs to be reset.  It needs to start from ground zero, for no one knows where to start if one needs to partially solve the issue.  For example, if one tries to detangle the water hose, she or he needs to know where to start.  Unfortunately, this is not the case for detangling the student loan debt. No one knows where to begin–not even the administrator or the lawmakers on the Hill. Therefore, the only way to fix the system, if there is the will to do so, is to wipe everything out and reset the whole thing.  This is the first step and a necessary condition to solve the problem.  Will this make every single head in the country in agreement and happy.  The answer is no.  By now the readers should know why and who will not happy.  Any one that got her or his pocket impacted will make the loud voice.  However, Uncle Sam needs to start some where.

With this in mind, the readers and visitors of this site can look at the table, and find out which candidate(s) will score high in this particular issue (please look on the list who score a 5 in that column).  BTW, the Association does not have any association with any of these candidates.  Our mission is to apply analytics and analyze the issue and share the logic to the American public, so that everyone will understand the “real” cause and the root of the problems.

Given the published data shown above, the Association has analyzed where each candidate’s stand on solving  US student loan Debt. Translating from what each candidate has said into different scores, we hope to rank them and share the information to the American public.  Before we go further let us critically think what a public policy can and cannot do to solve any particular problem.  Understanding logically on the problems will help to avoid making unnecessary discussions or debate.  It does not mean that the American public cannot discuss this big issue.  Rather, to do it efficiently and purposely.

As the Association has published many articles on this issue, then it will be easier for the American public to understand the root of the problems.  Basically there are 2 culprits that cause all this crisis: (1). Skyrocketed college cost and (2). Systematic errors purposely induced into the system.  No one can solve the US student loans issue until these two elements are understood and then eliminated.

In the applied econometrics or statistical world, the sources of standard deviation or variance can be classified into 2 groups: random and systematic.  Because the opportunities to make money are widely opened in this $1.5 trillion industry, then everyone is trying to get a piece out-of it.  From lending institutions to loan servicing organizations and others.  Because the interests of each institutions may not be the same, except to make as much money as possible, then each one of them is trying to induce or twick the system for they own benefits.  If there are 10 entities involving in the system then potentially there will be 10 sources of systematic errors.  Because these errors are unique to the institution that brought it in, then there is a small opportunity for other entities or outsider to change that.  For example, the  DOE is hardly check if the loan servicing company is operating under DOE’s guidelines.

Will continue to part II.

The answer may be “yes with a note”.  Many colleges in the past may have relied heavily on what has been known as “Best Practices” or BP to report institutional metrics.  One may notice that almost every US higher learning institution follow the same path on reporting their institutional metrics.  Focus heavily on reporting is what was in the past, which may be less relevant given the current changes and dynamics in the industry.  For example, majority factbook or factsheet are provided and make available on the institution’s website.  There is a clear justification of doing so which is partly to fulfill their accountability as public institutions or to show their responsibility to the donors.

While applying BP is a great way to manage an organization, one may ask how has such a policy helped them to cope with the dynamics and changes that have affected the environments where they are operating?  If the best practices represent the best of best strategies that ever invented, found or practice in the industry, then below are the critical questions to think about:

1. Why the second order for optimal condition on the institutional metrics function such as retention and graduation is greater than zero?  If this is the case, then an institution is in need to find a breakthrough to survive in the future.
2. Why there are so many higher ed institutions listed on the DoE’s HCM list? May be the logical answer is clear in that, they did not adopt the so-called BP. However, the troubled institutions may have adopted the BP, but fail to adapt to the new reality which may have caused the BPs are no longer relevant.

There is a clear flaw if organizations hold tight on the BP without looking at (1). the new reality and (2). the institution’s core competencies as discussed in Harvard Business Review written by C.K. Prahalad and Gary Hamel in1990.  The question is how a higher ed entity is able to recognize its core?  Will the core ever change because of new public policies and industry dynamics?  IRI will help finding the answers.

One of the reasons why the Association was established many years ago is to bring the awareness to the American public on potential challenges facing by Uncle Sam because of the national student loan debt.  In fact, the first article written and posted in the BLOG was written on March 13, 2013.  At that time, no one even believe what we have hypothesized.  However, today, six years later, everyone confirmed what AAEA has predicted.  Below are the recent examples of what the players have said:

1. Current administrators.
2. Wall Street.
3. Politicians.
4. Lawmakers.
5. Reporters.
6. Wealth Consultants.
7. State agencies.
8. Money managers.

There are many others that can be added to the above list.  It took 6 years for everyone to realize that student loan debt accumulations are not a good thing.  There are several things that one might be able to observe from the student loan debts: (1). common theme shown by the provided list above is nothing, but a reaction.  They all reacted on something that has happened.  But, we at AAEA applied data analytics can see what is coming; and (2). perhaps, the public rarely heard comments from the US higher ed institutions on loan debts, even the most respective School of Economics i n the country classified as the Fresh and Saltwater institutions seem to avoid talking about it, even though their institutions are one of the most important source of ideas and many of their faculty have won the Nobel Laureate award.  One may ask, why are they so quite?; (3). the American public will hear less from student loans servicing companies, such as NAVI and NNI.

One needs to be proactive instead of reactive.  However, bounded rationality, moral virtue and wisdom of which the Association has shared to the American public may have blinded players’ mind and soul such that a short-run maximizing model of Neo-classical paradigm is adopted, instead.

Back in 2013 the predecessor of the current administration has introduced the so-called CAR. It has been on the news recently that finally the White House is trying to cope with the US higher education related to the student loan debt.  The American public eager to know what public policies on higher ed are being cooked in the kitchen.  If the Congress votes for them, then there will be huge impacts on higher learning institutions, students, their family and the society.  Apparently, the policy has shifted and perhaps it has made a U-turn from ignoring the American public interests to something in supporting them.  This shift in Higher Ed policy occurs because the student loan debt has been a hot topic in the campaign trails.

Basically HEA is ≅ with CAR with a little, but very important twist to limit the amount of taken student loans which previously is not one of the elements in CAR.  However, this little tweak has huge impacts on some higher learning institutions in that it will affect their enrollment significantly.

Please click=======>HERE<=========

to access your institution’s rating, first click on the provided link (in red above), then click on the drop down menu to find the State where your institution is located, then scroll down to find out the score

Based on publicly available NCES data, in 2013 AAEA has calculated and shared to the American public a proxy of the college rating under CAR.  This rating will be updated with the new component in HEA policy.  The results will be shared soon to the American public through AAEA’s website.  Because of the new component (limit on student loan) will be added, then under HEA, the college rating will produce a College Stressed Test Score (CSTS) as a proxy of an institution’s survival probability under the new proposed HEA policy.  For now, the CAR still relevant, and it can be accessed by clicking this link.

The Association of American Education Analytics is persistent in its missions, prove that its research are honest, unbiased, current, trustworthy, relevant, independent, and helpful.  We, at AAEA can see what is coming, based on what has happened in the past.  We accomplish our research by applying IRI mindset, analytical tools, rigorous and totality in its research approaches on institutional data.