A Wall Street Journal editorial and a Fox News show of Journal editorial members ignored a major contributor to rising college costs -- state budget cuts to higher education -- while falsely blaming federal financial aid for the cost increase.
Despite evidence to the contrary, Fox Business anchor Melissa Francis claimed on Fox's Your World With Neil Cavuto that federal student aid spurs universities to increase tuition and that going to a top-tier university isn't worth incurring the debt it entails.
On August 20, Cavuto asked, "The more aid you give, the more excuse [universities] can have to ratchet up the tuition, right?" Francis agreed, saying that "it just gets absorbed right into the price." Francis then said, "It's like any time you print money. It causes inflation." Later in the segment, Francis referenced a recent study by Demos to assert that student loan debt may be costlier than it seems, claiming, "Down the road that costs them $200,000 worth of wealth, because as you're paying off those loans that's money you're not investing in the market, that's a house you're not buying, that's money you're not putting in your 401k."
Cavuto and Francis cited growing federal student assistance as a reason for increasing tuition costs. The vast majority of studies, however, have held that growing federal aid is not responsible for increasing tuition rates. President Obama also recently signed a new law that lowers student loan interest rates and is embarking on a bus tour to call for more action on college affordability.
Francis also claimed that for some, vocational schools may be a better financial choice in the long run than universities, because the cost of the education is not as great. But Francis ignored the fact that, according to the Bureau of Labor Statistics, in most cases those with higher education will make more money and are less likely to be unemployed.
Similar claims about federal Pell Grants have been made by the Wall Street Journal, and Fox News has repeatedly attacked federal student aid by suggesting that enrollment in fictitious 'cheaper' colleges or forgoing college entirely are solutions for those struggling with the costs of college.
ABC News anchor Diane Sawyer stated that "the Obama administration may be dealing a bruising blow" to the Head Start program -- by implementing the automatic spending cuts commonly known as the sequester -- before noting that "critics say" the cuts could have been avoided. While Sawyer did note that the cuts were linked to sequestration, she framed them as an action taken by the Obama administration while failing to highlight the responsibility Republicans in Congress share or mentioning the White House's long standing offers first to avert sequestration and now to replace it.
On August 18, The Washington Post reported that as many as 57,000 children lost access to Head Start's health, nutrition, and early education programs due to the automatic spending cuts known as sequestration. While covering that story, Sawyer claimed on ABC World News' August 19 broadcast that "an uproar is building tonight after an announcement that the Obama administration may be dealing a bruising blow to the program head start designed to helped preschool children catch up on education."
SAWYER: And now back here at home an uproar is building tonight after an announcement that the Obama administration may be dealing a bruising blow to the program Head Start designed to helped preschool children catch up on education. Word tonight: the administration says the sequester forced cuts, but critics say there may have been another way. And tonight 57,000 children are facing the possibility they will no longer get educational support.
Sawyer appeared to lay blame squarely on the Obama administration's shoulders, or at least ignored the responsibility held by Republicans. Sawyer reported that "critics say there may have been another way," but in fact, Obama offered another way with a plan to avert sequestration. Republicans refused to budge on a deal and some even said the cuts were necessary. Once sequestration hit, Obama called on Congress to replace it with a more balanced approach. The president has also been an advocate of early childhood education and even mentioned it in his 2013 State of the Union.
ABC's coverage was brief -- a common problem in the media's sequestration reporting that Media Matters has previously noted -- but left out critical context that gave the appearance of laying the blame on Obama.
Fox News hosts mislead viewers and each other by hyping the cost of a White House plan to fund high-speed Wi-Fi for schools while obscuring the plan's small impact on individual taxpayers.
On June 6, the White House unveiled the ConnectED initiative, a plan that would give 99 percent of American students access to "high-speed broadband and high-speed wireless" at school by 2018. The plan would be funded through a minimal tax increase on mobile phone users, which the as The Washington Post reported, "could work out to about $12 in fees for every cellphone user over three years."
Fox News similarly reported on the August 15 edition of Fox & Friends First that the initiative would only cost individual consumers about five dollars per year.
But a few hours later on Fox & Friends, the hosts and contributors seemed unable to accurately report what the predicted cost would be for individuals. Though co-host Gretchen Carlson asked Fox Business contributor Charles Payne to specify how much the initiative would "cost each of us as individuals," Payne claimed the "administration doesn't say" and instead hyped the program's net cost and unspecified higher taxes on the middle class:
PAYNE: The administration doesn't say. There's some estimates say it costs like $6 billion but you know how these estimates are when the government gets involved. We know It's going to be multibillions and billions of dollars. It's going to hit individuals, this brings us to the third point. Middle-class taxes, you know, there won't be middle-class tax hikes, but we know already there have been. These are the kinds of things that are taxes on normal, regular people. This would be a tax on every single person watching the show who didn't get a free phone from the government, they are going to have to chip in.
Later, a Fox News reporter once again explained that the increase would only be about five dollars per year, but Carlson remained confused about the ConnectED program's expected cost to individual consumers, saying in a subsequent segment: "I think it would be about $5 a year, or maybe $5 a billing cycle. I'm not exactly sure. But the entire cost is $4 to $6 billion."
Payne and Carlson both followed the media's common practice of relying on abstract and sensational raw number figures when discussing budgetary issues while either ignoring or misreporting the context that would make those figures relevant to viewers. Economists have noted that focusing on raw numbers rather than budgetary percentages or individual costs in economic reporting is often little more than a scare tactic intended to drum up fears about the economy. And Dean Baker of the Center for Economic and Policy Research has noted that the reliance on raw numbers also increases the likelihood that outlets will misreport information.
Fox News' Eric Bolling hosted Hotair.com's editor-at-large Mary Katharine Ham to push school choice and attack public schools, but failed to mention that school choice does little to address educational disparities and may actually disadvantage low income students.
On the August 8 edition of Fox News' Your World with Neil Cavuto, guest host Eric Bolling criticized Matt Damon's decision to send his children to private schools despite advocating for the public school system. Ham used the story - which has received much right wing media hype - to push school choice as an alternative to investing in public schools:
HAM: I would love everybody to have that choice instead of spending all this money on schools that don't work.
BOLLING: Sure, and it really isn't that complicated. There's the charter school program, there's the voucher programs that are available, but they don't seem to want to do that. Why don't--what's the push back on those?
HAM: Well, the argument from the left, and from union leaders and frankly folks like Matt Damon is we need to invest more in public schools, it's always about more money and less accountability, is frankly what it feels like, and they're often very explicit about that. The fact is, holding schools accountable is part of making them work, and sometimes in order to do that you have to give kids a ticket elsewhere so that schools realize, hmm, maybe I should be serving this kid. And if that happens through charter schools, fine, that's a form of public schools that can be held accountable. But I do find it very interesting when the left tells the rest of us we have to invest in public schools and then they take their, perhaps their most rich investment, their own children, and they put them in private schools.
Fox Business host Stuart Varney misleadingly claimed federal student loans are subsidized "at great cost to taxpayers," ignoring the fact that the Congressional Budget Office (CBO) projects that the federal student loan program will contribute more than $50 billion in revenue to the Treasury in 2013 alone.
Varney appeared on Fox & Friends July 18 to discuss a deal reached by a bipartisan group of senators to avert a short-term hike in the interest rates students pay for federally-subsidized loans. While Varney mentioned problems with the high cost of attending college and high levels of indebtedness among college graduates, he claimed the deal doesn't solve "the underlying problem which is we're subsidizing all of these loans at great cost to the taxpayer."
While the rising cost of college and high debt levels for graduates are a serious problem, the fact is according to the CBO subsidized student loans do not cost the federal government any money. On June 16, USA Today reported that the May 2013 CBO projection about the federal student loan program showed that the government could expect "a record $50 billion profit on student loans this year." Although the estimates for future years don't take into account the rates in the new deal, on July 18 USA Today also reported that the new Senate deal is "estimated to reduce the deficit by $715 million over the next decade."
A February post at The Wall Street Journal's Real Time Economics blog explained how the federal government makes a profit by subsidizing student loans:
One reason the government continues to make money off of the programs is that borrowers generally can't discharge student debt through bankruptcy, and the government can garnish wages, tax refunds and even Social Security payments to collect debt. That minimizes losses.
But there's another big factor: The government is borrowing at exceptionally low rates right now, while charging students higher rates to borrow.
The 10-year Treasury yield is currently hovering around 2%, up a bit from the historic lows hit in the last year. Meantime, the government is charging most student borrowers an interest rate of 6.8%, a rate set by Congress and which took effect in 2006. (Some borrowers are charged 3.4%, thanks to temporary subsidies approved by Congress in recent years.)
Thus the spread--the difference between the interest rate the government pays to borrow and what it charges to students--is unusually large right now.
The Washington Post's Wonkblog explained that some economists favor a different method of accounting that would include risk factors similar to private sector loans. Using this so-called "fair value" accounting method, the profits from the federal student loan program would vary by year with some years resulting in deficit and others in surplus. However, even according to this different analysis, in 2013 the program is still projected to result in profit.
Democrats such as Sen. Elizabeth Warren (D-MA) have criticized the federal government for ever making a profit from indebted college graduates, arguing that the program is a public good, but that doesn't give Varney license to mislead in this debate.
Conservative radio host Rush Limbaugh severely misrepresented several years of student loan-related legislation in an attempt to smear Democrats while pushing yet another unfounded conspiracy.
On July 1, interest rates on government-sponsored Stafford Loans automatically doubled from 3.4 to 6.8 percent. Myriad provisions to avoid the rate hike have been advocated by various caucuses in the House and Senate, as well as by the White House.
On the July 1 edition of The Rush Limbaugh Show, Limbaugh stated that "it was Democrat legislation that doubled the student loan interest rate, 3.4 to 6.8 percent." He went on to claim that, originally, "Democrats intentionally wrote law to make student loan interest rates double in an election year" so they could "blame it on the Republicans."
While Limbaugh attempted to pin the automatic rate hike solely on Democrats, the legislation in question -- the College Cost Reduction and Access Act of 2007 -- passed both houses of Congress with broad bipartisan support. On September 7, 2007, the bill passed 292-97 in the House of Representatives with 77 Republican votes before passing 79-12 in the Senate with 33 Republican votes. The legislation did not face so much as a cloture motion from the Republican minority.
Limbaugh's claim that House and Senate Democrats intentionally designed the bill to raise interest rates to previous levels during an election year to help Democrats' election prospects in 2012 is also false. The final rate expiration date specified in the College Cost Reduction and Access Act of 2007 was negotiated with Republicans to go into effect on July 1, 2012 - the original Democratic drafts had the rate cut expiring in 2013.
Last summer, near the height of the election, President Obama and Republican presidential candidate Mitt Romney both lobbied Congress to delay the rate hike for twelve months specifically to avoid making student loan rates an election issue, according to The Washington Post.
Finally, after falsely claiming that Democrats would use the returning issue of student loan rates as a "bludgeon" against Republicans, Limbaugh reiterated a long-debunked claim that the increased revenue from a student loan rate increase would go to fund Obamacare, claiming, "The bottom line is that the student loan rate is going to double. It's gonna go from 3.4% to 6.8%, and here's the reason why: Congress has figured out they need that additional money to spend on Obamacare. "
In the weeks leading up to an automatic doubling of federal student loan interest rates, broadcast and cable nightly and weekend news devoted little time explaining the effects of the rate hike and the expiration of other programs designed to help American students, graduates and families with increasingly high education costs.
In 2007, Congress passed a law to reduce interest rates on federal subsidized student loans, the Stafford Loan program, to 3.4 percent. The law was intended to reduce college costs and increase access to higher education. The Budget Control Act of 2011 ended several provisions of previous law; foremost setting an expiration date of July 1, 2013, for Stafford Loan interest rates. Today, those rates automatically double to their previous 6.8 percent.
Media Matters research found the looming student loan deadline has been largely ignored by major news networks in the past several weeks. Since May 23, the date the House of Representatives passed a party line student loan plan of its own, primetime and weekend television news has offered just 13 brief segments on student loan issues.
Absent from media analysis has been any real discussion of economists' recommendations for dealing with student debt. Many economists, including Nobel Prize winners Joseph Stiglitz and Paul Krugman, have supported various efforts to defray college costs, expand federal funding, and provide restructuring and refinancing options for student and family borrowers.
In May, the Consumer Financial Protection Bureau released a report on student loan affordability. It found that expanded refinancing options for student debt could have a simulative effect on economic growth, household formation and homeownership among borrowers. The Federal Reserve Bank of New York had previously found that student debt was a driving force in decreasing home and automotive purchases among recent graduates.
The rate increase set to take effect on July 1 will directly affect millions of Americans while making college less affordable for prospective students. The Congressional Research Service estimated that the higher rate could cost average borrowers more than $1,000 to take out a subsidized federal loan. College graduates are saddled with an enormous debt burden - more than $1 trillion through 2013, according to The New York Times.
Media Matters conducted a Nexis search of transcripts of Sunday and evening (defined as 5 p.m. through 11 p.m.) programs on CNN, Fox News, MSNBC, and network broadcast news from May 23 through June 30. We identified and reviewed all segments that included any of the following keywords: student loan, college loan, student debt, college debt, student, debt, loan, and college.
The following programs were included in the data: World News with Diane Sawyer, This Week with George Stephanopoulos, Evening News (CBS), Face the Nation, Nightly News with Brian Williams, Meet the Press with David Gregory, Fox News Sunday, The Situation Room, Erin Burnett OutFront, Anderson Cooper 360, Piers Morgan Live, The Five, Special Report with Bret Baier, The O'Reilly Factor, Hannity, On the Record with Greta Van Susteren, Hardball with Chris Matthews, Politics Nation with Al Sharpton, All In with Chris Hayes, The Rachel Maddow Show, and The Last Word with Lawrence O'Donnell. For shows that air re-runs (such as Anderson Cooper 360 and Hardball with Chris Matthews), only the first airing was included in data retrieval.
Media Matters only included segments that had substantial discussion of increasing student debt or the July 1 interest rate deadline. We did not include teasers or clips of news events, and re-broadcasts of news packages that were already counted on their initial broadcast in the 5p.m. to 11p.m. window.
While the five largest network and cable Sunday shows underreported economic developments in the past month, MSNBC's Melissa Harris-Perry provided ample discussion of the economy.
A Media Matters analysis of Sunday show coverage from May 12 to June 9 found that ABC, CBS, CNN, FOX and NBC devoted less than 36 total minutes to the economy. This lapse in coverage occurred despite multiple economic developments emerging over that period.
Of the Sunday shows analyzed, MSNBC's Melissa Harris-Perry stood out for its economic coverage. In five weeks, the show dedicated almost three hours to discussion on the economy -- by far the most coverage of the seven shows Media Matters analyzed. Melissa Harris-Perry was almost five times more likely to discuss the economy than CNN and network Sunday shows combined.
The show's discussion of the economy was diverse, touching on a range of topics including poverty in America, food insecurity, student loan reform, and the recent rebound of the housing market.
The show's ample and diverse economic coverage comes at a critical time -- according to a May 7 Gallup poll, a majority of Americans view an array of economic issues as high priorities.
Fox Business host Liz Claman suggested that students should attend less expensive colleges as a solution to the mounting student debt problem, a recommendation that does not comport with facts about higher education costs.
Commenting on President Obama's speech concerning the importance of finding loan solutions for students and families, Claman argued that parents ought to prioritize "finding a less expensive college" during their university search. From the May 31 edition of Fox News' America's Newsroom:
Claman's argument that aspiring college students should base their choices on tuition costs has little value since education costs are increasing across the board. According to the National Center for Education Statistics (NCES), the average cost of attendance (tuition, room and board) for the 2010-11 academic year at a public university was about $13,600. This rate represented a 42 percent inflation-adjusted increase from the 2000-01 year.
The growing costs have already altered students' choices about where to attend school. More than four in 10 college students are already choosing less selective college options to avoid mountains of debt. Many students opt for public over private universities based on cost calculations, but they still graduate with too much debt and too few employment options.
Claman's argument is even less valuable to the more than 37 million American students and parents who already carry student loans. According to data from the Federal Reserve Bank of New York, the share of 25 year olds with outstanding student debt increased from just 25 percent in 2003 to 43 percent in 2012. The average debt balance-per-student increased from $10,649 to $20,326 during that period -- a 91 percent increase.
Meanwhile, median annual earnings among full-time workers aged 25 to 34 with a bachelor's degree have dropped -- from 2000-2010, earnings fell 12.2 percent among men and 9.5 percent among women.
With interest rates set to double on July 1, from 3.4 to 6.8 percent on subsidized federal loans, tens of millions of Americans need real time solutions, not empty suggestions that ignore reality.
The Las Vegas Review-Journal promoted a plan to create a merit pay system for teachers, but failed to note that merit-based pay schemes have not succeeded and could hurt students in low-income areas.
In the May 1 editorial, the paper claims that criteria such as "teacher experience, credentialing, and graduate degrees do not translate to higher student achievement" and should no longer be the basis for pay increases. Instead, it advocates for a merit pay system, as proposed by former Nevada State Superintendent James Guthrie, which would increase teacher pay based on a testing criteria. The top earners would make $200,000 a year, which, in Guthrie's estimation, would attract some of the nation's top teachers and "rescue Nevada public education."
Teachers are currently paid less than comparable workers and their pay has been declining. However, switching to a merit based system is not a proven solution. A study by the RAND corporation which looked at a merit pay system that gave bonuses to better performing teachers, found that, while students performed better over the course of the study, "students of teachers randomly assigned to the treatment group (eligible for bonuses) did not outperform students whose teachers were assigned to the control group (not eligible for bonuses)." A similar RAND study analyzing New York City's experiment with bonuses for teachers found similar results, causing Education Week's blog to claim that it "put the final nail in the coffin" for the NYC program. According to Education Week, the study confirmed that the bonus incentive wasn't achieving its desired outcome:
Apparently the RAND study, commissioned by New York City's education department, was the final straw. The RAND researchers, like those in the previous studies, found the program did not raise student achievement in mathematics or reading in any grade, nor did it improve teacher job satisfaction. The findings led to the city's decision last week to eliminate the program.
Researchers suggested that the program had not adequately motivated staff to understand the program or buy in to the criteria for the bonuses, and noticed that both participating and control schools already faced intense pressure to improve because of the city's accountability measures.
Fox News hosts have been dismissing the effects of the across-the-board government spending cuts known as sequestration, claiming that "nothing is happening" following the cuts taking effect. But the cuts are already having negative economic consequences that will continue unless the cuts are replaced.
Fox News figures are reviving the myth that the Head Start education program is a failure, in light of reports that the program may lose funding. In fact, research shows the program benefits disadvantaged children in that it has a positive impact both early and later on in their lives.
Fox News political contributor Karl Rove attacked President Obama's proposal to expand pre-kindergarten education as too costly, despite the fact that investment in pre-k education returns more money than it costs. Rover further disregarded the reality that federal spending, including the 2009 stimulus, can often result in net savings.
On the February 13 edition of Fox News' Happening Now, host Jon Scott asked Rove about the pre-k education proposal the president outlined in his State of the Union address. Rove acknowledged that he has no evidence detailing the cost of the president's proposal, but claimed that similar plans would cost $25 billion. When Scott pointed out the return on investment, Rove dismissed it:
SCOTT: But you heard especially with regard to that universal pre daycare kind of thing, universal pre-kindergarten kind of thing the president said that for every dollar you spend on that kind of a program, you get something like $14 back.
ROVE: Well that's how we justify everything. The president justified the stimulus by saying if we spent money on the stimulus, 800 and some odd billion dollars that it would grow the economy. Look, we have tried this idea that we can spend our way to prosperity for four years.
Contrary to Rove's assertion, economists agree that the stimulus has a successful record of creating jobs and preventing a deeper economic recession. Rove also failed to take into account the economic benefits of pre-k programs specifically. For instance, according to Scholastic, "Economists say that the return for every dollar invested in preschool can be anywhere from $2 to $17 when you total the drop in special education, grade repetition, and crime, and add the value of a more productive workforce." A 2005 study by the University of Texas' Children's Learning Institute estimates the return on investment at somewhere between $7 and $8 for every dollar spent, and National Head Start Association study pegs the benefits at $9 returned for every $1 invested in Head Start alone.
From the Children's Learning Institute:
From the February 8 edition of Fox News' The Five:
Loading the player reg...