Less than 40 percent of students who start at a two-year public college will complete a degree in six years, reports Pew Research Center. The completion rate is 62.4 percent for students who start at a two-year for-profit institution.
Two-year colleges are enrolling fewer students but granting more associate degrees, according to the U.S. Department of Education’s annual Condition of Education report.
Enrollment — about 7.2 million in 2012 — declined by 7 percent from 2010 after steady growth since 1990. The number of associate degrees increased by 8 percent from 2010-11 to 2011-12.
The Gainful Employment Rule Is Coming For Everyone, warns Edububble. For now, the for-profit colleges are being forced to “generate a real return for their students,” but it won’t stop there, he writes.
Once the world starts getting the bill for Income-Based Repayment, this will be the only choice for the Republic. Come after the source of the pain and that means all of those twits studying cross-disciplinary BioTheater and other overpriced courses like English or even Bio.
. . . There are too many defaults and the government is just going to have to shut down the free money fountain.
The gainful-employment rule applies to career programs at public and private nonprofit colleges, as well as to for-profits. If too many students in a career program default on loans or run up a high level of debt relative to their earnings, that program’s students would lose access to federal student aid. Community colleges, which have a rising number of borrowers and high default rates, are plenty worried about it already.
The U.S. Education Department’s revised proposal is “flawed, arbitrary, and biased,” and will shut millions of students out of college, contends the Association of Private Sector Colleges and Universities, which represents the for-profit sector, reports the Chronicle of Higher Education.
A 100-age report by economists at Charles River Associates, funded by the for-profit trade group, attacked the regulations for using the level of students’ earnings rather than their earnings gains to measure a program’s effectiveness.
While the Education Department estimates 31 percent of students would be affected, potentially losing access to student aid, the report predicts as many as 44 percent would be enrolled in programs that fail the federal test.
Coupled with income-based repayment, the proposed rules would protect programs whose graduates have very low earnings, writes Ben Miller on EdCentral. “Allowing programs to pass solely based on the annual debt-to-earnings measure makes it possible for a program with sub-poverty wages to still avoid failing the metrics.”
“Of the for-profit gainful employment programs that our department could analyze, and which could be affected by our actions today, the majority — the significant majority, 72 percent — produce graduates who on average earned less than high school dropouts.” So said Education Secretary Arne Duncan at a White House news conference on March 14. That earned two “Pinocchios” for lying from the Washington Post’s fact-checker.
Essentially, Duncan compares apples to oranges — with a few lemons thrown in — to make for-profit colleges look bad.
The Education Department estimates that high school dropouts average $24,492 year. The Labor Department puts the median annual wage at $18,580 to $22,860. A Census estimate is $20,241.
Then, Duncan compares employed dropouts’ earnings to all recent for-profit graduates. Comparing all dropouts to all for-profit graduates — or employed dropouts to employed graduates — would show a very different picture.
Comparing dropouts of all ages, including many with job experience, to less-experienced for-profit graduates also skews the results.
Duncan’s number looks at the number of programs that produce low-earning graduates, not at the number of graduates. “The Education Department does not have individual student data, so it could well be that most graduates do fine, especially from the larger programs,” reports the Post.
A third of community college programs’ graduates earn less than high school dropouts, by the Department’s measure, observes the Post. “Graduates of 57 percent of private institutions — a list that includes Harvard’s Dental School but also child-care training programs — earn less than high school dropouts.”
For-profit colleges enroll many low-income, minority and adult students, who are the least likely to succeed in college. Tuition is higher, since the for-profits aren’t subsidized by taxpayers. Students depend heavily on federal loans and default rates are high.
Community college students averaged $2,300 in tuition in 2009-10 compared to $15,000 for students at for-profit two-year colleges, according to one study. However, 62.4 percent of students at for-profit two-year colleges complete a credential in six years, compared to 39.9 percent of community college students, according to the National Student Clearinghouse.
Gainful employment regulations are baaaaaaaack. The Obama administration will try again to regulate career training programs — primarily at for-profit colleges — that leave students in debt they don’t earn enough to repay.
The draft “includes standards for debt-to-earnings rates and other language that could generate significant debate,” reports the Washington Post. The Education Department estimates that 9 percent of career training programs could fail to meet the new standards.
The White House push is too narrow, argues Reihan Salam on Reuters.
The Department of Education plans to identify vocational programs that leave their average graduate paying a high share of their earnings in loan payments (8 percent or more of total earnings, 20 percent or more of discretionary earnings) as well as those with a high average loan default rate (of 30 percent or more). Programs that cross these red lines in two out of three years will lose the right to offer their students federal financial aid.
Curbing the abuses of this sector could do some good. But career training programs represent a small subset of the higher education universe. If we take a somewhat wider view, it seems pretty puzzling that, say, business or engineering majors at four-year colleges and universities aren’t being treated as enrollees in vocational programs.
Many recent college graduates are underemployed and unable to pay back student loans, Salam argues. Most thought their degree would lead to a good job.
“If the regulation were applied to all of higher education, programs like a bachelor’s degree in journalism from Northwestern University, a law degree from George Washington University Law School and a bachelor’s degree in social work from Virginia Commonwealth University, would all be penalized,” complains Steve Gunderson, president of the Association of Private Sector Colleges and Universities, the for-profits’ trade association.
Why not “protect consumers from the least effective post-secondary programs” in all branches of higher education?, asks Salam. Whether it’s overpriced paralegal training at a career college or an overpriced bachelor’s in film studies from a private nonprofit college, the borrower is likely to default.
The White House higher education summit sidelined community colleges and other institutions serving low-income students, complain critics, reports Katherine Mangan in the Chronicle of Higher Education.
Most were excited that the issues they’d long grappled with were taking center stage. But some couldn’t help pointing out that many ideas emerging from the White House summit—targeted scholarships, better test preparation, summer enrichment programs, fast-tracked remedial education—were old news on their campuses, which nonetheless continue to see low completion rates.
More than 100 colleges made the guest list. Only 10 community colleges participated, even though most lower-income college students attend community colleges.
Colleges had to commit to new efforts to serve needy students, said Patricia A. McGuire, president of Trinity Washington University. “If you’re an institution like us, where 80 percent of the students are eligible for Pell Grants and the median family income is $25,000, there’s hardly any room to do anything new or more than we’re already doing.”
Much of the discussion at the White House meeting was about the phenomenon of “undermatching,” in which many high-achieving, low-income students who would qualify for admission to selective colleges instead end up at institutions that are beneath them academically, and typically have lower graduation rates. More-selective colleges, the thinking goes, tend to offer better support—small classes, tutoring—to students unfamiliar with the demands of college.
Not surprisingly, many educators bristle at the suggestion that the colleges that enroll most of the nation’s low-income and underrepresented students aren’t up to the task.
Achieving the Dream, which focuses on raising community college completion rates, committed to dedicating a day of its annual institute to workshops on helping the least-prepared students. “While our colleges have been working for a long time to try to improve outcomes, they’ve deepened their commitment in light of the call from the White House,” said Carol A. Lincoln, senior vice president at Achieving the Dream.
College leaders were “inspired” by the summit, reports the Chronicle in another story.
Gainful employment regulations aim to ensure that career programs don’t leave students jobless and in debt, writes the New America Foundation’s Ben Miller in Improving Gainful Employment. The Obama administration’s new proposal is simpler and stronger than the one invalidated by a judge in 2012, he writes. But it still has loopholes.
In addition to measuring students’ debt-to-earnings ratio, Miller suggests three performance tests. Students would have to pay down their loans, no more than a third of students could withdraw in a year and the average graduate would have to earn at least as much as a full-time minimum-wage worker.
Career programs that can’t meet these standards — or have graduates with too much debt compared to their incomes — would risk losing eligibility for federal student aid.
Career programs need to focus on all their students — dropouts as well as graduates — Miller argues.
Furthermore, it’s not enough for programs to show low student debt if students also have low earnings, he writes: “Students are also spending billions in federal grant aid and arguably an even more precious resource, their time. They should expect better than living in or near poverty after completing a postsecondary program.”
Community college students typically don’t borrow — or don’t borrow very much — to pursue a vocational credential. But some don’t earn much either. Community colleges also have high dropout rates.
Gainful employment rules will hit high-cost for-profit colleges the hardest, but they also apply to nonprofit colleges that provide job training.
President Obama’s plan to control college costs is heading in the wrong direction, writes Sara Goldrick-Rab on the Education Optimists. Education Secretary Arne Duncan has taken the lead on the planning, which means “yet another quasi-market solution that fails to grapple with the real problems.”
The current financial system hinges on the actions of students, prioritizing their consumer choice in the hopes that those choices will be well made. It assumes that any problems with schools will be resolved by students turning away from them. But this assumption is deeply flawed, not only because students do not (and cannot, and will not) make informed choices, but also because a segment of selective schools (and states) have manipulated aid policy for so long that the incentives are now distorted and they can do whatever they wish. And what they want is to maximize their own interests, which are rarely aligned with those of their students. So the problem, in other words, is really the behavior of schools and states. Yes, students and families are an issue too, but their lack of information is just a fraction of the overall college cost problem.
Creating a ratings system for colleges and universities won’t help, Goldrick-Rab writes. Student choice is limited by “finances, family and geography.” If a local community college is “bad,” most students have no choice but to attend anyhow. If it closes, they may be forced to try a high-price for-profit institution.
A college ratings system is a waste of money, she writes. The Scorecard and Navigator sites “aren’t used or demonstrably effective,” and this will be no better. (Both Scorecard and Navigator were shut down when federal government furloughed “nonessential” staff. You’d think they could run automatically.)
Tying Title IV financial aid to institutional performance makes sense, writes Goldrick-Rab. Instead of turning to Duncan, Obama should rely on “experts who’ve crafted nuanced accountability systems with anti-creaming provisions.”
We can’t afford to make every institution Title IV eligible, she argues. Private colleges should have to re-compete for eligibility:
(a) the selective, elite private non-profits whose admissions criteria mean they do not serve any kind of public good while they establish “standards” for college quality that are conflated with great expense, and
(b) the for-profit institutions that set their tuition according the availability of federal aid.
President Obama should put public funds into public institutions of higher education, Goldrick-Rab argues. Funding them well will decrease students’ time to degree and raise the quality of instruction.
Next, create accountability metrics intended to lower costs and open access at the private non-profits (else cut them out of Title IV), and to lower costs and increase completion rates at the for-profits (again, or else they’re out).
The community colleges will “do their jobs better by having a decent amount of money to spend,” Goldrick-Rab concludes.
Student loan default rates continue to rise, reports the U.S. Department of Education. After two years, 10 percent of former students are in default; that rises to 14.7 percent after three years.
“The growing number of students who have defaulted on their federal student loans is troubling,” U.S. Secretary of Education Arne Duncan said. The department will expand outreach to explain loan repayment options.
Community colleges have the highest two-year default rate — 15 percent — of any higher education sector. After three years, the community college default rate tops 20 percent, nearly as high as the rate for two-year for-profit programs.
The official default rate understates borrowers’ pain, says Rory O’Sullivan,policy and research director at Young Invincibles, a Washington nonprofit group. The rate, which includes graduates and dropouts, shows the share of borrowers who haven’t made required payments for at least 270 days. It doesn’t include borrowers who are putting off payments through “forbearance” and those on federal income-based repayment programs. “It’s financial disaster for borrowers,” said O’Sullivan. “Defaults can dramatically affect their credit rating and make it harder to borrow in the future.”
Nearly a half-million student borrowers are in default within two years and 600,000 within three years, notes the National Association of Student Financial Aid Administrators.
Eight institutions with high default rates could lose eligibility in federal student aid programs.
India hopes to establish 10,000 community colleges by 2030 to train 500 million young people in job skills. University of Mumbai delegates recently visited Hawaii Community College.
Private vocational training is taking off in India, reports the New York Times.
Ghaziabad, India — In a simple classroom above a storefront on a bustling street, four young men crowded around the colorful innards of an open computer hard drive while their teacher explained in Hindi how it all worked.
The computer repair course was among 25 offerings at Gras Academy, a private institution with 58 skills training centers across India, including this one in Ghaziabad, a city on the outskirts of New Delhi.
. . . Inderjeet Singh, 19, is a first-year student at a government college; but attendance there is not mandatory, giving him time to attend Gras’s computer repair class. His college tuition is about 5,000 rupees, or less than $90, per year, but he is willing to pay 22,000 rupees for the six-month Gras course. He thinks it will be worth it, because 70 percent to 75 percent of Gras’s graduates find jobs immediately, according to the academy.
Kanchan Sharma, 17, is studying accounting in a government college, but her correspondence course doesn’t teach the software most Indian companies use. So she’s also taking a six-month accounting course at Gras. “Here, classes are smaller and the quality of teachers is good,” she said of Gras. “Plus, what we are being taught is practical and linked to industry.”
Nearly 70 percent of Indian employers say they can’t find enough skilled workers. That’s especially true in telecommunications and retail, which are expanding rapidly.
Government vocational institutes are known for poor quality and outdated curricula.
Gras Academy has developed its own textbooks, manuals, training system and on-campus job placement services.
Teachers undergo 40 hours of training and must pass a test. There is also an incentive program: They get financial rewards if 70 percent of their students land jobs, plus extra recognition if 85 percent do.
Gram Tarang, another private training company, works with employers to place graduates. “We are currently swamped by demands from industry for semiskilled and skilled workers,” says Abhinav Madan, managing director.
For years, college officials have complained about the federal method for calculating gradution rates: Only full-time students who start and finish at the same institution are counted. That leaves out a lot of students, especially at community colleges.
The new Student Achievement Measure (SAM) shows the percentage of students who are still working toward a degree after six years and those who’ve transferred. Part-time community college students are included.
“This effort will show that higher education is performing better than many people think — even if graduating more students, particularly at community colleges, remains an imperative,” David Baime, senior vice president for government relations at the American Association of Community Colleges, tells Inside Higher Ed.
SAM’s associate’s and certificate program model will report on part-time as well as full-time students enrolling for the first time. It will show the percentage of students who have (1) graduated from the reporting institution, (2) are still enrolled at the reporting institutions, (3) transferred to a subsequent institution, or (4) whose enrollment or completion status is unknown.
The SAM Project is a joint initiative of the six national higher education presidential associations: the American Association of Community Colleges (AACC), the American Association of State Colleges and Universities (AASCU), the American Council on Education (ACE), the Association of American Universities (AAU), the Association of Public and Land-grant Universities (APLU), and the National Association of Independent Colleges and Universities (NAICU). The Gates Foundation provided the funding.