The Higher education Opportunity act from 1965 was introduced in January 1965 by Edith Green and originally passed on November 8, 1965. This was the beginning of a foundational understanding that higher education is indeed an opportunity; an opportunity that many don’t get to indulge in. Many point to different reasons as to why college has become so inaccessible for the low-income middle working class. The Higher Education Opportunity Act was created to enforce methods that make higher education accessible to those who generally wouldn’t easily have access to it. However, in a plot twist of things, this has not been the case recently. With student debt reaching up to $1.6 trillion at the end of 2020[i] one must wonder; how is this affecting students in the long run? In an even deeper conversation, why is this number only increasing?[ii]Why, when there is an amendment that’s goal is to fully educate students on borrowing loans, do students still feel misinformed thus making them uneducated borrowers leading them to make uninformed borrowing decisions. As a Berkeley student, I will be focusing my answers on how UC Berkeley is putting the Higher Education Opportunity Act in action in their own institution. Ultimately asking, if my own institution isn’t doing enough to educate their students, what does that say about other institutions? What does that say about the regulations set in place by the Entrance and Exit Counseling 20 U.S.C. § 1092 Public Law No. 110-315?
This exploration does not start at UC Berkeley, it begins where my curiosity was first prompted; the introduction of the Higher Education Opportunity Act in 1965.
Higher Education Act: Entrance and Exit Counseling 20 U.S.C. § 1092 Public Law No. 110-315
In 1956, due to the heated competition between America and the Soviet Union in the Space Race, the U.S. was determined in educating and equipping more of its citizens to compete against the Soviet Union in this technical war.[i] With that, a higher standard of education became the norm and it allowed for many higher education opportunities to take rise. This took form in federal and state reform; from this, the Higher Education Opportunity Act of 1965 emerged.
However, even with the passage of this Act, there were still 27 plus amendments and additions added since then. With the most recent being the Higher Education Opportunity Act of 2008 (HEOA)[ii]. The addition of so many sections made it easy to forget what the original act is all about. Originally, the act was an acclamation to the U.S. that its citizens need the opportunity to get higher education. Therefore, the act allowed for budgeting to go into more program resources to lower the barriers to higher education. This foundational belief then brought about the amendment of the Public Law No. 110-315, which, covers the accessibility of information that concerns financial aid and “Entrance and Exit Counseling for Borrowers”. The Higher Education Act: Entrance and Exit Counseling Public Law requires that both 4-year and 2-year degree programs/institutions require resources that counsel both “prospective” [iii]and enrolled students of the institutions. The “Entrance and Exit Counseling” was first introduced alongside the reform act on Nov. 9, 2007, and officially became law on August 14, 2008, with the Sponsor being Representative George Miller (D-CA) with 29 cosponsors (all democrat zero republicans)[iv]. Penalties are not exclusive to students of an institution and extend to full time and part-time employees of the University/College, including administrators. Failure on part of the institutions participation in informing their students, and prospective students, of financial aid programs/assistance results in a Civil penalty that can get fined for $25,000 or a maximum of $59,017. [i]
University of Berkeley V. The Higher Education Opportunity Act of 1965
The University of Berkeley is required as a 4-year institution to follow the Higher Education Opportunity Act and all its amendments. Including the .. that includes the “Exit Counseling for Borrowers”. Meaning, by Law it is Berkely’s responsibility to constantly “rights and responsibilities of students receiving financial assistance.”.[i]
Berkeley has three resources that are dominant in the way the institution is counseling their students and adhering to the expectations of the “Entrance and Exit Counseling for Borrowers”. Firstly, they have the Financial Aid resource page (digital), “Contact Us” page for Financial Aid (digital), and the Cal Student Center (CSC) office number for Financial Aid inquires (phone number).
Below are some pictures of the website resources:
This is a screenshot of the UC Berkeley Financial AId & Scholarships Website.
This is a screenshot of the “Contact Us” section on the UC Berkeley Financial Aid & Scholarships Website.
Berkeley then has shortcuts to other resources such as Special Programs for Disabled students, students with dependents, veterans, study abroad programs, and more. In addition, a virtual chat box that can direct them to the section they specifically need to access with a variety of search keywords.
Since Entrance and Exit Counseling on Financial Aid is a contract between universities and colleges and the federal government, the Federal Student Aid has created what they deem to be a “commitment to delivering innovative tools and resources to empower you throughout your financial aid journey”. [i]The Federal Student Aid has a training for Direct Subsidized, Direct Unsubsidized Loan, or Direct PLUS Loan as a graduate for both undergraduate and graduate students alike.
A picture provided by the Federal Student Aid on the new virtual Counseling program for undergraduate and graduate students.
Entrance and Exit Counseling 20 U.S.C. § 1092 Public Law No. 110-315: Analysis
I want to focus back on the written language of the public law; language like, “borrower’s next of kin” and “through the use of interactive programs that test the borrower’s understanding of the terms and conditions of the borrower’s loans under”.
Firstly, generational debt[i] still impacts many generations to this day[ii], with student debt being an issue even still for the silent generation who holds an estimated 6% of the National Student Loan debt. Generation X holds an estimated 38% following with Millennials holding 31% of the National Student loan debt. It is concerning that the oldest generation, the silent generation, still has an accumulated 6% of loan debt which amounts to $86.8 billion. [iii]IN this Public law “forbearance provision” includes in the condition that a borrower has the option to delay their payment if and only if they accept the new conditions that are provided. The new conditions that have been provided due to this amendment are “borrower’s next of kin”. Meaning if when the silent generation accumulated this debt they did not, under the original contract, need to put their next of kin’s information, they do so now. Finally, when this individual dies their “kin” will adopt their debt and be responsible for it. This language only legalizes and even extends the effects of generational debt to an even farther generation that might not have been impacted by such a requirement when they were in college. It is also important to recognize if even the oldest generation alive is experiencing student loan debt, why wouldn’t other generations experience the same fate when they already hold a lot of debt now? Further proving how effective this specific language is at tightening the grip on generational debt.
I also want to recognize that it’s great to see that there is a technological expansion of Financial Aid counseling, especially seeing as to how 2020 has brought about a devastating situation for a lot of students, ultimately, drastically impacting who and how these resources are provided for. With this I want the institution to partner up with other initiatives/researchers to find diverse ways to deliver financial aid information. Organizations such as Organization for Economic Co-operation and Development (OECD). Created an amazing distinction between three methods of delivering information and having it still be accessible for a variety of individuals. The initiatives were:
- Improving access to financial information and advice
- Improving access to training
- Developing skills and Confidence
“The interactive lectures are held online and are given by different specifically trained lecturers. The students can actively engage with their smartphones by answering questions, solving problem-oriented tasks and by contributing their own experiences.”[i] This is the attention to detail and diverse range of presentation of information that students deserve even when the nation is not in a threatened state of mind.
After learning about this public law and how financial aid is supposed to help students have access to funding that will help them complete higher education, I wanted to get an idea of how effective this law was in real life. I anonymously surveyed 42 at random UC Berkeley students. My results and their questions are shown below.
From what I can tell from my survey results, it was clear that students didn’t feel fully informed about the consequences of accepting the loans they were offered in their financial aid despite:
- Going through the federally required Entrance Counseling on Financial Aid.
- Knowing that UC Berkeley had digital/online resources to help students get financial information.
- And seeming as though the Financial Aid resource page was the most often to be looked at for financial Aid resources/consultation.
My predictions are that digital resources are not enough, and that the Institution isn’t doing enough to inform students of the services provided. In addition, the public law itself mentions that in-person consultation is a recommended form of Entrance and Exit Counseling[i] however out of the three main sources used to consult students, only one has an option to speak to a real individual on this topic. It has become a topic of interest to whether digital financial literacy is effective; and if it is, it tends not to be those who need the financial literacy to begin with but those who have been exposed to it prior to seeing such digital formats.[ii] Until such gaps are narrowed, I believe UC Berkeley as an institution needs to better promote these services and fund more initiatives that bring in real people to become accessible to students for financial aid counseling. In the books the act holds both the presentation of information and comprehension of financial aid to be true; in action; though, the institution holds presentation of information the highest. The effects are that students aren’t making fully conscious decisions about their financial aid acceptances.
University of Berkeley V. The Higher Education Opportunity Act of 1965: Final Thoughts and Reform Suggestions
I want UC Berkeley to be more interactive and preemptive about how they are educating students. Well in advance they should hold workshops on how student’s decision on their financial aid effects them 20 years into the future or even right when they graduate. They need to hire more individuals who are going to sit down with a student and say “Choosing this Financial Aid will …. You must pay it back or your credit score will be affected negatively. It will be affected by……. Having a bad credit score limits things such as renting apartments, on opportunities, higher interest rates, higher costs for insurance, and more” [i]As you can see, Financial Aid overlaps with many other human resources needed for students to succeeded past their higher education. Knowing that there is a disconnect between technology and human comprehension it is vital that we have these interactions available for students.
There are still some efforts that need to be made by legislation as well. It is hard to forget that it is legal to inherit debt from a family member. I did not study Financial Aid forgiveness efforts because this specific amendment pertaining to financial aid counseling only mentions “forgiveness” three times and does not expand on this word or the resources available to receive forgiveness on a student loan. This feels intentional. The major focus and goal of this amendment was to help students feel empowered to confidently navigate through financial literacy; however, both language and efforts seem to fall short of actually helping students achieve higher education opportunities. Being given this platform, I want to highlight a really cool initiative called Bears for Financial Success. I never knew of such a resource before doing this research project and after a closer look I believe that this is the type of opportunities that need to be highlighted more on-campus rather than a digital service. The link to their website is below. You can schedule appointments for one-on-one meetings to talk about anything finance-related. From managing debt to creating a personalized spending plan. I hope this resource is of use to someone on Campus.
[i] DeMatteo, M. (2021, May 18). These are the biggest disadvantages of having a bad credit score. CNBC. Retrieved July, 2021, from https://www.cnbc.com/select/side-effects-of-bad-credit/
[i] HIGHER EDUCATION OPPORTUNITY ACT, 110 P.L. 315, 122 Stat. 3078, 2008 Enacted H.R. 4137, 110 Enacted H.R. 4137 (August 14, 2008). https://advance-lexis-com.libproxy.berkeley.edu/api/document?collection=statutes-legislation&id=urn:contentItem:4WYV-B0Y0-0019-T0DP-00000-00&context=1516831.
[ii] Morgan, P. J., Huang, B., & Trinh, L. Q. (2020, November 24). Minding the gaps in digital financial education strategies. G20 Insights. Retrieved July, 2021, from https://www.g20-insights.org/policy_briefs/minding-the-gaps-in-digital-financial-education-strategies-2/
[i] Please cite this publication as: OECD (2021), Digital delivery of financial education: design and practice. http://www.oecd.org//financial/education/digital-delivery-of-financial-education-design-andpractice.htm
[i] Student Loan Borrower Assistance. (n.d.). Will my student loan be discharged if I die? National Consumer Law center. Retrieved August, 2021, from https://www.studentloanborrowerassistance.org/will-my-student-loan-be-discharged-if-i-die/
[ii] RAPPAPORT, A. M. (2019, June 21). Generational Differences and Debt. PENSION RESEARCH COUNCIL. Retrieved July, 2021, from https://pensionresearchcouncil.wharton.upenn.edu/blog/generational-differences-and-debt/
[iii] Hanson, M. (2021, July 10). Student Loan Debt by Generation. EDUCATIONDATA.ORG. Retrieved July, 2021, from https://educationdata.org/student-loan-debt-by-generation
[i] Chief Operating Officer Brown, Mark, & Federal Student Aid. (2021, February 22). Keeping the Promise: Enhanced Entrance and Exit Counseling on StudentAid.gov. Homeroom The Official Blog of The U.S. Department of Education. Retrieved July, 2021, from https://blog.ed.gov/2021/02/keeping-promise-enhanced-entrance-exit-counseling-studentaid-gov/
[i] HIGHER EDUCATION OPPORTUNITY ACT, 110 P.L. 315, 122 Stat. 3078, 2008 Enacted H.R. 4137, 110 Enacted H.R. 4137 (August 14, 2008). https://advance-lexis-com.libproxy.berkeley.edu/api/document?collection=statutes-legislation&id=urn:contentItem:4WYV-B0Y0-0019-T0DP-00000-00&context=1516831.
[i] Department of Education. (Enacted 2002, November 18). 67 FR 69653, 69653-69655 (3 pages), 02-29219. Retrieved August, 2021, from https://www.federalregister.gov/documents/2002/11/18/02-29219/adjustment-of-civil-monetary-penalties-for-inflation
[i] Johnson, A. H. (2020, December 22). WORK U.S. student debt has increased by more than 100% over the past 10 years. CNBC. Retrieved August 2021, from https://www.cnbc.com/2020/12/22/us-student-debt-has-increased-by-more-than-100percent-over-past-10-years.html
[ii] U.S. Department of education. (2010, July 25). Higher Education Opportunity Act – 2008. U.S. Department of Education. Retrieved July 2021, from https://www2.ed.gov/policy/highered/leg/hea08/index.html
[iii] Prospective Student: (2) For the purpose of this section, the term “prospective student” means any individual who has contacted an eligible institution requesting information concerning admission to that institution. Cornell Law School. (n.d.). Higher Education Act: Entrance and Exit Counseling 20 U.S.C. § 1092 Public Law No. 110-315. Legal Information institute. Retrieved July 2021, from https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=20-USC-1373356569-459751983&term_occur=999&term_src=
[iv] HIGHER EDUCATION OPPORTUNITY ACT, 110 P.L. 315, 122 Stat. 3078, 2008 Enacted H.R. 4137, 110 Enacted H.R. 4137 (August 14, 2008). https://advance-lexis-com.libproxy.berkeley.edu/api/document?collection=statutes-legislation&id=urn:contentItem:4WYV-B0Y0-0019-T0DP-00000-00&context=1516831.
[i] Siripurapu, A., & Speier, M. (2014, April 14). Is Rising Student Debt Harming the U.S. Economy? Council On Foreign Relations 100. Retrieved July 2021, from https://www.cfr.org/backgrounder/rising-student-debt-harming-us-economy#:~:text=At%20the%20end%20of%202020,about%20%2410%20trillion%2C%20is%20larger.
[ii] Johnson, A. H. (2020, December 22). WORK U.S. student debt has increased by more than 100% over the past 10 years. CNBC. Retrieved August 2021, from https://www.cnbc.com/2020/12/22/us-student-debt-has-increased-by-more-than-100percent-over-past-10-years.html
foundations of law and society 