Sol passed along this lead on a thought-provoking Brookings Institution video. Wonk Richard Reeves uses Legos to explain the likelihood that folks born in the bottom U.S. quintile will move up. An essay on inequality that accompanies the video is here.
In an effort to do a better job of preparing students for well-paying careers, two forward-thinking colleges in New Hampshire are partnering on an advanced-manufacturing program.
The Boston Globe writes, “A new partnership between Nashua Community College and Southern New Hampshire University’s College for America will blend several types of learning focused on advanced manufacturing.
“The program, titled Advanced Manufacturing by Innovation and Design, will be funded by a $2.5 million grant from the US Department of Labor and will create a path for students to move from a certificate in advanced manufacturing to an associate’s degree in precision manufacturing and mechanical design. The program also will allow for the transfer of credits to bachelor’s degree programs. …
“Students will get the benefit of College for America’s curriculum, which is built around online projects, while learning skills in the classroom and gaining experience at Nashua Community College.”
Richard Olson of Randolph Savings Bank sent us a press release from FICO on its new credit-scoring model.
It reads in part, “The new FICO® Score 9 introduces a more nuanced way to assess consumer collection information, bypassing paid collection agency accounts and offering a sophisticated treatment differentiating medical from non-medical collection agency accounts. This will help ensure that medical collections have a lower impact on the score, commensurate with the credit risk they represent. These enhancements help lenders because it leads to a more predictive score. The median FICO Score for consumers whose only major negative references are medical collections will increase by 25 points.”
The new version “captures recent consumer behavior to give lenders better risk assessments across the credit lifecycle and all credit products. It will be available to lenders through the U.S. credit reporting agencies starting this fall.
“FICO Score 9 also supports the desire of lenders to better assess the risk of consumers with limited credit history -– so-called thin files. In the model development process, FICO data scientists represented a consumer’s repayment behavior in degrees of risk. For example, instead of classifying a consumer as someone who paid or didn’t pay her bills in absolute terms, the various degrees of the consumer’s payment history have been quantified. The end result is a score with an improved ability to assess the risk of thin files.” More here.
It does seem like a reasonable approach since medical debt may overwhelm normally reliable borrowers. Lenders may want to know a little more about them than the former score revealed.
West Mitten, Monument Valley, Arizona — Photo by Bernard Gagnon, Wikimedia Commons
Joseph Wood Crutch was a professor of dramatic literature at Columbia University and drama critic for the Nation. In the 1930s, he visited the Southwest “on a trip undertaken without much enthusiasm” and found what eventually would become his new home:
“Suddenly a new undreamed of world was revealed. There was something so unexpected in the combination of brilliant sun and high, thin, dry air with a seemingly limitless expanse of sky and earth that my first reaction was delighted amusement. How far the ribbon of road beckoned ahead! How endlessly much there seemed to be of the majestically rolling expanse of bare earth dotted with sagebrush!”
A dozen years later he would return and write The Desert Year, a chronicle of his desire to experience the region more fully. I’m reading it now, and reading it slowly, not because it is difficult, but because every page serves up something to savor. Take for example, “The Contemplative Toad,” a chapter-long reflection on desert amphibians. Reading it this morning I came across a gentle critique of laboratory-bound biologists — one that I thought might apply equally well to social scientists, chair-bound pundits, and think tank denizens. I offer it here, ever so gently, to wind up the tails of my data-driven friends and colleagues:
“But if one were going to bait the biologists (which of course I am not), the line of attack would go something like this: Biologists spend too much time in laboratories — which is a highly reputable occupation — and too little time observing creatures who are not specimens but free citizens of their own world. The odor which clings to these scientists is too seldom that of the open air, too often that biologist’s odor of sanctity, formaldehyde. They learn an enormous number of the things which can be learned by dissecting preserved corpses, but comparatively few of the things which it would take a much longer time to find out in the field.”
Many families come to the United States to provide a better education and more opportunity for their children, but often those children end up having to go to work to help their families get by.
National Public Radio recently had a report on the phenomenon.
“Starting a career in a struggling economy is difficult, no matter what your background. But for young people in Langley Park, Md., a predominantly immigrant community near Washington, D.C., it is fraught with additional economic and family pressures.
“While some of the challenges Langley Park youth face are common to other children growing up in poverty, according to a new study by the, they tend to face an additional, unique barrier: They are four times more likely than other people their age to leave school early to help provide for their families.
“Molly Scott, lead author of the Urban Institute study, talked to Steve Inskeep on Morning Edition about her findings. …
” ‘If you’re an immigrant parent from Central America, you’re looking at all the people in your household. The youth are the folks who have often the highest level of education in the family, even if it’s only ninth or 10th grade. They’re English-proficient and they don’t have ambiguous legal status. And, so, if you’re trying to figure out how to make ends meet, that seems like a really rational choice. …
” ‘You know, kids start school behind in preschool because of language issues and other things, but they do remarkably well in elementary school. They’re on par with their peers. And that’s really a testament to the great way that these families wrap around these kids and support them when they’re little, right? But the problem is that there’s such a steep drop-off when you get to middle school, and then high school they face these pressures — I think there are just a lot of really strong economic realities.’ “
Providence Business Journal has a short article about a new energy-efficiency loan designed for moderate-income homeowners with poor credit. Capital Good Fund (a frequent partner of the Boston Fed’s Regional & Community Outreach department) is behind the effort.
Rhonda Miller writes, “Capital Good Fund, in partnership with National Grid, offers an interest-free DoubleGreen Home Loan to improve energy efficiency. As the only nonprofit participant in the program, the Fund offers loans of $500 to $5,000 that can be used for insulation, updating wiring, sealing ducts and other weatherization improvements.
“The loan is designed for moderate- to middle-income homeowners with less than perfect credit, with a loan term of two-to-four years, according Capital Good Fund Director Andy Posner.
“ ‘We’ve been doing the DoubleGreen Home Loan for two years and have closed 28 in that time,’ said Posner.
“The nonprofit Capital Good Fund, which uses financial services to tackle poverty and environmental degradation, is also offering the DoubleGreen investment, which pays 2 percent APR on a minimum three-year investment.” Read the article here. Find out more about DoubleGreen loans at Capital Good Fund, here.
Photo: Library of Congress
Unloading wood to heat the house
New research from Dartmouth suggests a connection between the use of payday loans by military personnel and performance on the job.
Kevin Lewis, of the Boston Globe‘s Uncommon Knowledge column, summarizes. “Though institutions from churches to the Department of Defense oppose high-interest loans (aka predatory lending), some economists have argued that such lending is just the free market at work, and that restricting it may make people worse off.
“So what happens when you compare two situations where the option does or does not exist? Two economists used variation in local laws—and the assignment of enlisted airmen to different bases—to identify the effect of access to payday lending on Air Force personnel performance.
“The results support the military’s concern: ‘Access significantly increases the likelihood that an airman is ineligible to reenlist by 1.1 percentage points (i.e., by 3.9%). We find a comparable decline in reenlistment. Payday loan access also significantly increases the likelihood that an airman is sanctioned for critically poor readiness by 0.2 percentage points (5.3%).’
“Because the detrimental effects of payday-loan access were greatest among junior airmen with nonfinancial jobs, the effects seem to reflect a lack of financial sophistication.”
The article by S. Carrell and J. Zinman is “In Harm’s Way? Payday Loan Access and Military Personnel Performance.” It is forthcoming in the Review of Financial Studies, here.