Borrowing trouble

President Obama’s executive order expanding Pay As You Earn (PAYE) will provide some debt relief to some borrowers, writes Diana Carew, director of the Young American Prosperity Project at the Progressive Policy Institute. But it also will boost subsidies for a “broken higher-education financing model” and reinforce the idea that college attendance is the only postsecondary option.

While everyone needs some form of post-secondary education to earn a living, not everyone needs a bachelor’s degree, writes Carew.

The wage premium for college graduates is growing not because the degree is worth so much more, but because high school diplomas as worth so much less. In fact, real earnings for recent college graduates have been falling over the last decade, and underemployment remains at record highs.

. . . Moreover, the new tools of digital learning — such as online courses — should be driving education costs down, yet tuition continues to climb. That suggests the entire financing model for higher education needs reform. And because there are too few viable pathways into the workforce after high school, our $100 billion per year federal student aid system is channeling people into four-year colleges who may be better suited for less expensive options.

Expanding PAYE may help some borrowers now, but it  almost certainly “will exacerbate the burden on the federal student aid system in the long run, argues Carew. “Borrowers have less incentive to make smart borrowing decisions, or complete in a timely manner. And schools have less incentive to control costs.”

Expanding PAYE “won’t do much to make college more affordable,” writes Clare McCann on The Hill.  It will affect only people who’ve left college and already are eligible for income-based repayment. They must be Direct Loan borrowers — but most pre-2007 borrowers used the now-defunct Federal Family Education Loan program instead.

Few borrowers have opted for income-based repayment so far because the plans are so complex, she writes. “Gimmicks like this one don’t help much — in fact, they make the system even more complex.”

College heads resist federal ratings

College presidents “agree that their institutions should be reporting much more information about the career and other outcomes of their graduates,” but they’re wary of federal involvement,  according to Inside Higher Ed‘s new survey of college presidents.

Three-quarters of presidents say their institutions should be reporting the debt levels, job placement rates and graduate school enrollment rates of recent graduates, for instance (though fewer say they are doing so now). But just half of campus leaders agree that it is “appropriate for the federal government to collect and publish data on career and other outcomes of college graduates” (with public and for-profit college leaders much more likely to say so than their private nonprofit peers), and just 13 percent believe the government has a “good chance” of collecting such data accurately.

Higher education leaders aren’t happy about President Obama’s plans to create a federal ratings system of “college value,” notes Inside Higher Ed.

In  a poll of college presidents late last year, only 2 percent plan believed the ratings plan would be “very effective” at making higher education affordable.

Only a third of private non-profit college leaders.think it’s appropriate for the government to collect and publish outcomes data. By contrast, more than 60 percent of community college, public university and for-profit college leaders accept a federal role.

Few in any sector believed the federal government will do a good job of tracking higher ed outcomes.

Asked if the government has a “good chance” of collecting and reporting accurately on higher education outcomes, 9 percent of private nonprofit presidents (on the low end) and 16 percent of public university leaders (on the high end) answered positively.

We need college ratings aimed at the 85 percent of students who go to unselective or less-selective institutions, writes Carrie Warick of National College Access Network.

. . . prospective college students need to know not just about accessibility/selectivity (average GPA, SAT/ACT scores), but also about affordability (net price by income tier, average student loan debt, ability to repay loans) and accountability (graduation rates by race and by income). The information should be sortable by location (to aid place-bound students) and by institution type (two-year, four-year, public, private) for students to compare side by side.

. . . we must change the federal calculation of graduation rates as soon as possible to account for part-time and transfer students, and we must collect and report institutional Pell Grant recipient graduation rates as part of the federal data system (IPEDS). Over the long term, we should also find a valid way to assess workforce outcomes for students.

Get the system up and running quickly, writes Warick. Then “we can turn to the more complex and politically difficult question of how to use federal financial aid dollars to incentivize better institutional outcomes.”

Texas creates 3-year ‘affordable’ bachelor’s

three-year bachelor’s of applied science degree will cost $13,000 to $15,000 for Texas students, reports the Chronicle of Higher Education. The competency-based degree was developed by South Texas College and Texas A&M University at Commerce under the aegis of the Texas Higher Education Coordinating Board. Students will mix online and face-to-face learning.

The degree emphasizes organizational leadership, the board said, adding that the program “will culminate with a digital-capstone experience where students will apply their knowledge and skills to real-world business problems.”

The coordinating board said that the new offering was “a faculty-driven initiative, developed by community-college and university faculty,” but “we also listened to what national and regional employers are saying they really want: graduates with critical-thinking skills who are quantitatively literate, can evaluate knowledge sources, understand diversity, and benefit from a strong liberal-arts and sciences background.”

Shirley A. Reed, South Texas College’s president, said in a statement that the new degree “is a transition from colleges measuring student competencies based on time in a seat to now allowing students to demonstrate competencies they have acquired in previous employment, life experiences, or personal talents.”

Two years ago, Gov. Rick Perry called on the state’s colleges to offer bachelor’s degrees that would cost students no more than $10,000 each, notes the ChronicleUT-Permian Basin offers a $10,000 bachelor of science four-year degree, while UT-Arlington and UT-Brownsville offer similar programs, developed through partnerships with community colleges and school districts.

The Texas Affordable Baccalaureate Program is supported by the College for All Texans Foundation and by a two-year, $1-million grant from Educause and the Bill & Melinda Gates Foundation.

Online instruction will upend the economics of higher education, according to The Economist.

California accreditor survives — for now

The commission that accredits two-year colleges in California will keep its federal recognition for another year, reports Inside Higher Ed.  A federal panel told the accreditor to show that it is complying with federal standards.

The accreditor, the Accrediting Commission for Community and Junior Colleges, has been under fire for its decision this year to revoke accreditation of City College of San Francisco. Many supporters of the college — faculty unions, student advocates, and some elected officials — had been pushing for the panel to recommend the Education Department strip the accreditor of its federal recognition.

More than two dozen students, faculty members, union leaders and other supporters of City College of San Francisco testified Thursday and Friday.

The federal panel also voted to recommend another year of recognition for the Northwest Commission on Colleges and Universities, which is under fire for how it’s handled complaints from adjuncts.

Last week’s meetings of the federal accreditation panel occurred against the backdrop of a larger debate over the future of accreditation that has begun to play out in Washington as Congress considers the reauthorization of the Higher Education Act. Policy makers have discussed, among other issues, whether accreditors are doing enough to promote innovation in higher education and whether they should do more to keep college affordable.

Outgoing Undersecretary of Education Martha Kanter asked the panel to revisit its 2011 recommendations for improving accreditation and make new suggestions.

Working through ‘gainful employment’

gainful employment

Negotiations are underway on “gainful employment” regulations proposed by the U.S. Education Department, reports Community College Times.

While the regulations are expected to hit hardest at for-profit career colleges, vocational programs at community colleges also will be affected. Colleges must gain federal approval for some new programs or students won’t be able to get federal aid.

“Whatever the regs are, you’ve got to keep them simple, you’ve got to keep them affordable,” said negotiator Richard Heath, financial aid director at Anne Arundel Community College (Maryland).

 “Any time I add a new program, it is vetted to death,” Heath said.

Unnecessary layers drag out the time to create new programs that local businesses need, and they are expensive, Heath said. They can add months to the approval process and tens of thousands of dollars in costs.

Negotiators will meet again Oct. 21 to 23. If they don’t reach a unanimous consensus on the rules, the department can propose its own final version.

Kevin Jensen, financial aid director at the College of Western Idaho, also was one of the 14 negotiators. Three alternates from community colleges are: Rhonda Mohr, student financial aid specialist at the California Community Colleges Chancellor’s Office; Glen Gabert, president of Hudson County Community College (New Jersey); and Sandra Kinney, vice president of institutional research and planning at the Louisiana Community and Technical College System.

Community colleges take biggest financial hit

Community colleges “took the greatest hit” in 2010 as higher education struggled to recover from recession, concludes the Delta Cost Project in College Spending in a Turbulent Decade.

All colleges and universities are trying to serve more students with less money, the report found. “As funding failed to keep pace with historic increases in enrollment, educational spending per student plummeted to its lowest level in a decade.”

Community colleges suffered the greatest financial hardships.

Historic enrollment increases, combined with sharp losses in per-student revenues from state appropriations and meager increases in net tuition revenue, resulted in significant cuts to academic spending per full-time equivalent (FTE) student. Community colleges concluded the decade spending less per student than they had ten years earlier.

State universities were able to preserve spending on instruction and student services, while private four-year institutions implemented widespread cuts, the report found. Although students covered a larger portion of educational costs, sharp tuition increases were not enough to offset lost revenues.

Funding for community colleges continued to fall further behind other public institutions. . . They were the only public institutions at which average total operating revenues per FTE student declined in 2010 and also were lower than a decade earlier. Community colleges suffered the deepest cuts in state and local appropriations per student in 2010, with funding reduced by approximately $1,000 per student; however, they  also limited the new money coming from net tuition revenue more than did other types of public institutions.

Efforts to keep community colleges accessible and affordable while accommodating more than 40 percent of new higher education students—often the most economically or academically disadvantaged—have significantly eroded the resources they have to devote to each student.

The growth in less costly, shorter-term certificate programs cut the cost of completion in community colleges from 2000 to 2010.

Where workers come from

Community colleges are Where the Workers Come From, according to The Street.

The dizzying increase in college tuition has opened a debate about whether higher education really pays off. What’s not debatable is that many jobs do require specialized training beyond a high school degree. And that training includes technical skills that aren’t taught at Harvard or Yale, such as how to process paperwork at a busy medical practice, or troubleshoot a robotic arm on an automated assembly line.

As many as 1 million jobs are going unfilled for lack of qualified applicants, estimate economists at the New York branch of the Fed.

President Obama proposed an $8 billion Community College to Career Fund in his 2013 budget to held colleges partner with employers on job training, though it’s not clear the funding will get through Congress.

Community Colleges Offer Cheaper Alternative to Grad School, suggests U.S. News. I think the idea is that four-year graduates who need to switch careers can learn new skills at a community college, rather than investing time and money for a graduate degree.  It’s not an uncommon strategy for people with bachelor’s degrees in Canada.