It’s a “big fact” that the economic returns to college are high, write Clive Belfield and Davis Jenkins in a Community College Research center paper. It’s a “big myth” that the “college affordability crisis is actually an efficiency crisis caused by wasteful spending by colleges.” That’s especially true for community colleges.
Neglect of this fact and acceptance of this myth have impaired policymaking, resulting in reduced state funding and new practices (more adjuncts, larger classes, online courses) that cut spending and lower quality.
If colleges invest in improving quality, they’ll improve efficiency as well, write Belfield and Jenkins.
Community colleges serve many underprepared students who need substantial support, they point out. Educating college-ready students is cheaper and easier.
Reforms to remediation, which likely require more (not less) resources, are therefore essential, as are reforms that provide a better articulation between high school and college. Much of the potential efficiency gain would come from improvements at the high school level.
For students already in college, barriers to completion include no-credit remedial courses, college-level courses that don’t meet degree requirements at transfer destinations and “the earning of extraneous credits outside a program area.”
Reforms should include creating more educationally coherent program pathways that lead to student end goals, building on-ramps to help students get into a program of study quickly, and tracking student progress and providing feedback using information technology and reorganized advising.
Low-income and first-generation students, who disproportionately enroll in community colleges, need more information on the returns to college, write Belfield and Jenkins. They also need more “structure and guidance” to succeed in college.
Public colleges and universities could be tuition free for $62.6 billion, writes Jordan Weissmann in The Atlantic. That’s how much tuition state schools collected from undergrads in 2012, according to Department of Education data. That’s less than the $69 billion the feds spent last year “on its hodgepodge of financial aid programs, such as Pell Grants for low-income students, tax breaks and work study funding,” writes Weissmann. “And that doesn’t even include loans.”
. . . rather than simply using our resources to maintain a cheap public system (and remember, public schools educate 75 percent of undergrads), we spill them into a fairly wasteful and expensive private sector. At one point, a Senate investigation found that the for-profit sector alone was chowing down on 25 percent of all federal aid dollars.
Actually, the feds would spend less than $62.6 billion to cover tuition because most of the $21.8 billion in Pell Grants is spent at state colleges and universities, Weissmann writes. However, state and local governments would have to continue their higher education subsidies.
Students at residential colleges would have to pay for room and board. Those choosing the private sector . . . Well, this plan would wipe out all but the elite, well-funded private nonprofit colleges and nearly all the for-profit sector.
California will require community colleges to offer transfer degrees in all majors, reports the Ventura Star. Students who earn a transfer degree will be admitted to a California State University campus as juniors. They also would get priority admission to their local CSU campus.
The bill signed by Gov. Jerry Brown will make transfers “efficient, cost effective and achievable,” said the Campaign for College Opportunity.
Gov. Brown also signed a bill letting six community colleges charge higher tuition for winter or summer “intersession” classes. A typical three-unit class that costs $138 during the regular academic year would cost $600 during the special sessions.
Colleges that decide to participate would have to use one-third of the money they collect on financial aid for low-income students.
Brown said the pilot program “seems like a reasonable experiment” that would let campuses “offer students access and financial assistance to courses not otherwise available.”
President Obama proposes rating colleges and universities on access, graduation rates, graduate earnings and affordability, writes Richard Hersh in an essay on Inside Higher Ed. What about learning?
Myriad studies over the past several decades document that too little “higher” learning is taking place; college students do not make significant gains in critical thinking, problem solving, analytical reasoning, written communication skills, and ethical and moral development.
Institutions respond to rewards, Hersh writes. Linking federal student aid to easily measured goals “will steer colleges and universities further away from higher learning.”
Hersh is co-author of We’re Losing Our Minds: Rethinking American Higher Education.
College costs will keep rising under the Obama plan, predicts economist Richard Vedder, director of the Center for College Affordability and Productivity.
“Colleges’ exploitation of young Americans through rapidly rising and increasingly exorbitant fees is a national scandal,” writes Vedder on Bloomberg News. After promising “tough love” for higher ed for the last two years, President Obama has a plan.
Some of what he proposes is good in principle; some is very bad.
He wants to expand access to information on colleges by having the Department of Education issue a ranking of institutions relating outcomes to costs. The government has the power, via the Internal Revenue Service, to get some interesting data on college graduates’ earnings, and providing that data to consumers would be useful.
. . . Tying federal funding after 2018 to the new federal ratings, which in turn incorporate performance measures such as graduation rates, may be a step toward giving colleges incentives to take cost reduction seriously. But the potential for unintended and damaging consequences is high: If the key to federal funding is raising graduation rates, colleges may lower already abysmally low standards.
Funding educational innovation sounds like a good idea, but previous efforts haven’t paid off, Vedder writes. A better approach would be to stop accrediting agencies from stalling the “cheap or free online courses” that are being created without federal involvement.
The president’s “very bad idea” is to link loan repayments to income, letting millions of students avoid repaying part of their obligation, writes Vedder.
So why not major in fields the economy values least — anthropology or drama instead of engineering or math — if you don’t have to worry about earning enough to pay off your student loans over a certain period?
The idea simply raises incentives for future students to borrow more money, if they know their obligation to pay it back is capped. That, in turn, allows colleges to keep raising costs.
Federal aid has soared from $56.8 billion in 2001-2002 to $173.8 billion a decade later, Vedder writes. That’s fueled tuition increases — without improving access for low-income students.
“A higher education is the single best investment you can make in your future,” President Obama told University of Buffalo students. But, “the soaring cost of higher education” has “become a barrier and a burden for too many American families.” The president announced a plan to rate colleges “on who’s offering the best value so students and taxpayers get a bigger bang for their buck.”
The rankings would start as a consumer tool showing tuition, student loan debt, graduation rates and graduates’ earnings. Eventually, “Congress will be asked to change the federal financial-aid program so as to reward higher-performing colleges by giving students at those institutions larger Pell grants and lower-cost loans,” writes Jon Marcus on the Hechinger Report. However, it’s not a sure thing. “A previous similar proposal, to punish universities with the highest annual increases in tuition, hit snags and has been stalled.”
The president also proposes to raise the maximum Pell grant, the principal federal financial-aid program, by more than $900, to $6,450 per year, and expand tax credits for families paying tuition, ideas that face challenging legislative prospects in an era of austerity.
Students who take out loans to pay for their higher educations would be allowed to cap their repayments at an amount equal to no more than 10 percent of their income, an option now available to only a small number of borrowers.
Obama also will ask for $1 billion for grants to public universities and colleges that meet performance goals and for additional money to reward colleges and universities that graduate the largest numbers of low-income students.
The president pledged to cut off federal aid to students who don’t make “satisfactory academic progress.” (It’s already the law, but it’s loosely enforced.) Pell Grant money — now disbursed in a lump sum at the start of the semester — would be doled out in small increments to discourage students from enrolling, collecting the money and dropping out. The plan also includes Pell eligibility for low-income high school students taking college courses.
Encouraging colleges to innovate will cut costs, the president said.
The plan mentions so-called competency-based degrees, in which college credits are based not on the hours students spend in classrooms, but on how much they can show they know.
Another approach mentioned in the plan is online education through what have become known as “massive open online courses,” or MOOCs, which are mostly free. Mr. Obama also urged consideration of three-year degree programs and dual enrollment programs in which high school students can begin to earn college credits.
So far, though, the administration “has failed to persuade Congress to pay for Race to the Top competition for higher education, under which grants would go to those colleges with promising approaches,” notes the New York Times.
The president promised regulatory waivers to innovative colleges.
The American Association of Community College Trustees praised the president’s “plan to align federal aid disbursement based on academic progress and persistence,” but warned “there may be complexities in implementing this system based on the currently available information.” In other words, community colleges have very low graduation rates if transfers and certificate earners aren’t counted.
Nearly all colleges that admit large percentages of low-income, minority and first-generation students have very low graduation rates. In addition to community colleges, linking student aid to success rates could hurt the historically black colleges. Expect lots of pushback.
Obama’s plan gets an F from Jennifer Rubin, a Washington Post columnist. She quotes Molly Corbett Broad, president of the American Council on Education, who warns, ‘This is extraordinarily complicated stuff, and it’s not clear we have the complete data or accurate data.”
For the first time, a majority of undergraduates — 57 percent — are receiving Pell Grants and other federal student aid, reports Libby A. Nelson on Politico. In addition, 41 percent are taking out student loans, up from 35 percent four years ago.
“Federal grants and loans help students realize the American dream,” said U.S. Education Secretary Arne Duncan, who noted that Pell Grants are going to twice as many college students.
But “increasing federal student aid alone will not control the cost of college,” he added, calling on state policymakers and colleges and universities to hold the line on rising college tuition. “Together we can take collective action to help make college more accessible, affordable, and attainable for middle class Americans across the country.”
Increasing student aid enables colleges to increase tuition, economists argue. “Colleges often deliberately raise their prices when aid is available, in essence ‘capturing’ the aid,” wrote Robert Martin and Andrew Gillen in 2011.
Pell Grant spending has skyrocketed, notes Politico.
About 41 percent of all students received the grant in 2011-12, a 14 percentage point increase. Congress expanded the grant program several times between 2007 and 2009. As the economy faltered and incomes fell, spending on Pell grew from $12.8 billion in 2007 to $35.6 billion in 2011 before falling slightly last year.
For-profit colleges enroll many low-income, minority and adult students who are reliant on federal aid.
More than three-quarters of students at for-profit colleges granting associate or bachelor’s degrees received federal student aid. And an additional 10 percent of students at for-profit colleges granting bachelor’s degrees received veterans’ benefits — a higher proportion than at public or private nonprofit colleges.
Including state aid and college scholarships, 71 percent of students receive help paying for college. Colleges use some scholarship money to help needy students, but just as much goes to academically strong students from affluent families, the report found.
Under pressure from historically black colleges, the Obama administration made it easier for parents with shaky credit histories to take out Parent PLUS loans, notes EduBubble.
Kelly Field at the Chronicle of Higher Education calls this a “victory.” And it is, for the colleges. But what about the students sucking down the outrageous amounts of debt? What about their parents?
These high-interest loans are not a good deal — especially for parents who’ve had financial problems in the past and have kids going to colleges with low graduation rates.
President Obama vowed to “shake up” higher education and “tackle rising costs,” in a speech Wednesday at Knox College. “It is critical that we make sure that college is affordable for every single American who’s willing to work for it,” said Obama, stressing college affordability for middle-class families.
“Families and taxpayers can’t just keep paying more and more and more into an undisciplined system where costs just keep on going up and up and up. We’ll never have enough loan money, we’ll never have enough grant money, to keep up with costs that are going up 5, 6, 7 percent a year. We’ve got to get more out of what we pay for,” Obama said.
“Now, some colleges are testing new approaches to shorten the path to a degree, or blending teaching with online learning to help students master material and earn credits in less time. In some states, they’re testing new ways to fund college based not just on how many students enroll, but how many of them graduate, how well did they do,” he said.
In the 2012 State of the Union address, Obama put colleges “on notice” that federal funding would be linked to controlling tuition increases, notes Inside Higher Ed. That hasn’t happened. At other times, Obama has blamed rising tuition on state budget cuts.
Amy Laitinen, deputy director for higher education at the New America Foundation, and a formerly a policy adviser in the Obama administration’s Education Department, agrees with the sentiments of the president’s talk Wednesday, but was unsure how much change higher education will see. “I think it’s encouraging rhetoric, but pulling it off will take serious political will and capital,” she said. “I’m wondering if his tone suggests he’s going to try to do this with executive authority.”
Laitinen said that there may seem to be a consensus on the issue of tuition rates, with college leaders and politicians alike worried about the impact of rising sticker prices. But she said this consensus only goes so far. “All of the solutions you are seeing don’t force institutions to change at all,” she said.
As an example, she noted that there is widespread interest in expanding options for income-based repayment of loans. In part, she said, “that’s because it does not fundamentally require a rethinking of the business model. It allows institutions to charge as much as they want.”
Becky Timmons, assistant vice president of government relations at the American Council on Education, suggested the president might offer federal grants to colleges that limit tuition increases. ”I don’t see any tool or leverage available to him to set price controls.”
Early reaction on Capitol Hill was mixed, reports Ed Week.
Sen. Lamar Alexander, R-Tenn., cutting campus-based financial aid hurts students, not colleges. “Federal taxpayer funding for colleges and universities is almost all through grants and loans that go to about 20 million students, so his threat to reduce federal spending for colleges is really a threat to cut federal aid to students,” Alexander said.
As Obama was speaking, the Senate passed a bipartisan student loan bill that will lower interest rates now, but will let them rise with government borrowing costs. Undergraduate loans are capped at 8.25 percent, graduate loans at 9.5 percent and PLUS loans at 10.5 percent. The House is expected to pass the compromise bill, which has Obama’s support.
Without a local community college, Erie County, Pennsylvania is losing industry and skilled jobs,writes Mandy Zatynski on Education Sector. Industry won’t invest until Erie invests in training its younger generation.
GE Transportation decided to open a new locomotive plant in Fort Worth in 2011, rather than expanding in Erie, which lost 1,050 jobs. A Forth Worth community college will train machinists and welders in four weeks for jobs in the new factory.
Erie has long fallen short in providing the sort of high-tech training a corporation like GE requires. Recently, 220 employers who responded to an Erie Regional Chamber and Growth Partnership survey said they had almost 2,000 open jobs, but lacked enough skilled workers to fill them. Destination Erie, a consortium formed to revitalize the area’s economy, has already identified this jobs-skills mismatch as one of the region’s top roadblocks to economic growth.
GE will lay off 950 machinists, many with only on-the-job training, adding to the county’s unemployment rate. But laid-off workers have few postsecondary options other than pursuing a bachelor’s degree. Many of the 2,000 open jobs don’t require a four-year degree, but do require the kind of training community colleges provide.
More than 41 percent of Erie workers conclude their education with a high school diploma, in part because of “the limited and overpriced post-secondary options that cater only to those seeking white-collar work,” writes Zatynski.
Penn State Behrend and Mercyhurst University officials are turning more attention to two-year programs, but for the average displaced worker, the costs of these programs are often prohibitive. Annual tuition at Behrend reaches almost $14,000 per year, and tuition at Mercyhurst is the highest in the county at $29,037. Its North East campus charges about half as much, but for someone who is unemployed, these are simply not realistic prices.
The county’s six for-profit colleges advertise attractive educational programs for health care and information technology, but these schools are graduating students with unmanageable debt. Student loan default rates among the area’s for-profit schools are as high as 31 percent, according to the National Center for Education Statistics, indicating that these graduates are unable to find sufficient work to repay their loans.
In short, none of the educational offerings in Erie County provides the flexibility or affordability of a community college, an option that Erie County Council dismissed in 2010 even though the state had allocated table games revenue to help start such an institution.
“When International Paper closed its plant (in 2001), a county-commissioned report spelled economic doom if leaders didn’t establish a community college or otherwise invest in its workforce,” Zatynski writes. “Twelve years later, the picture looks even worse.”
In the State of the Union speech, President Obama promised to control college costs and provide a College Scorecard to help students and parents compare costs, graduation rates and loan repayments for any college or university. Some of the data is old and most has been available from other sources, reports the New York Times.
Further, the information is presented as averages and medians that might have little relevance to individual families. The scorecard does connect to each institution’s net price calculator, which allows individualized cost estimates, but it does not provide side-by-side comparisons of multiple schools, as other government sites do.
Meanwhile the Gates Foundation’s Reimagining Aid Design and Delivery project is generating more ideas.
In Aligning the Means and the Ends, The Institute for College Access & Success calls for doubling the maximum Pell Grant and giving students 7 1/2 years to complete a degree. Colleges should be rewarded for serving low-income students, TICAS urges. In addition, the white paper recommends:
• Use IRS data to simplify financial aid applications
• Combine income-based loan repayment programs into one plan that assures borrowers of manageable payments and forgiveness after 20 years.
• Eliminate higher education tax benefits and use the savings for Pell Grants and incentives for states and colleges to educate low-income students.
“For students who are willing to study, work, or serve their communities, the federal and state governments, along with their institutions, should make sure they can afford to go to college without the fear of crushing student loan debt,” argues the Education Trust in Doing Away With Debt. the Education Trust.
By taking the federal resources we already spend on higher education and focusing them like a laser on reducing college costs for families with incomes below $115,000 a year (the bottom 80 percent) — providing debt-free education to those below $50,000 (the bottom 40 percent) and no-interest loans with income-based repayment to the rest — we can do much to solve this critical problem without adding to the overall cost of federal student aid.
National Association of Student Financial Aid Administrators’ policy brief discusses reforming student loans, improving consumer information, “rethinking entitlement and professional judgment and ensuring that colleges and students have “skin in the game.”