California is losing its higher education edge, warns a new report. State universities and community colleges must be redesigned to produce the educated workers the economy needs, said Lt. Gov. Gavin Newsom, who commissioned the report.
The percentage of young adults earning associate and bachelor’s degrees in California already is below the U.S. average, warns the Committee for Economic Development, which wrote the report. The higher education system must be redesigned to serve an increasingly diverse and low-income population, CED advised.
Along with boosting graduation rates at Cal State and community college campuses, which enroll the vast majority of the state’s college students, the study calls for greater collaboration with for-profit private colleges, employers and K-12 schools.
Lead author Patrick Callan, president of the Higher Education Policy Institute, said that if the state is serious about meeting its “productivity challenge,” it will need to create “new kinds of institutions that take advantage of innovative instructional technologies and business plans to develop nontraditional ways of providing high-quality postsecondary education programs.”
“Modest injections of funding” and “tweaks in current educational policy and practice” won’t be enough to fix California’s underperforming higher education system, said Newsom.
Without federal student aid — loans, Pell Grants, tax credits — higher education would cost less and be less elitist, said economist Richard Vedder in a Nov. 15 speech in San Diego. While fewer people would enroll in college, those who do would be more likely to earn a degree and less likely to end up as sales clerks and bartenders. Colleges would hire fewer administrators.
Vedder recommends seven steps he thinks are “politically feasible.”
First, return the program to its roots: helping poor persons attend college. Right now, over 17 percent of students from families with incomes from $60,000 to $80,000 a year get Pell Grants—these individuals have above median incomes. Over a few years we should tighten eligibility significantly, reducing the number of Pell recipients by perhaps 50 percent. Similarly, PLUS loans to parents of high income kids should end. Tuition tax credits benefit families whose kids would go to college in the absence of the credit, mostly from above average incomes. Go to a single grant program and a single loan program.
Second, impose academic performance standards to continue receiving grants. Reward students who graduate in less than four years, and cut off aid for, say, students who are in their sixth year of full-time attendance.
Third, he’d get the federal government out of student loans and let private lenders “strengthen the tie between interest rates charged students and market rates.”
Fourth, make participating colleges have some skin in the game. If colleges accept students and promise them Pell grants or guaranteed loans, make them share in the burden of high levels of defaults on loans, or the failure associated with Pell recipients not graduating. This would lead to a needed reduction in lending to persons who lack the aptitude, background, or discipline for college level learning.
Fifth, he’d gear federal aid to the cost of a basic college education from a relatively low cost state university. Increases would be linked to the inflation rate to discourage colleges from raising tuition to capture increased aid.
In step six, Pell Grants would become a voucher for very low-income students tied to academic progress. “Top students could be paid extra for superior academic performance,” Vedder suggests.
Finally, he’d “encourage private investors to begin human capital equity funds.” Investors would pay college costs in return for a portion of the graduate’s future earnings for a set time period, Vedder writes. “A graduate from M.I.T. majoring in electrical engineering might have to pay 8 percent of his income for 12 years, while a graduate in anthropology from Central Michigan University might have to pay 15 percent for 20 years.” These market signals would be useful for students.
Directing aid to low-income students — and away from the middle class — doesn’t sound all that politically feasible to me. Setting performance standards also would generate a lot of resistance.
Massachusetts is betting that funding community colleges based on performance will close the job skills gap, reports Governing. Most states with performance funding link less than 10 percent of higher education to results. Massachusetts will tie half of its community college funds to results. Only Tennessee goes that far.
Massachusetts also increased its community college funding by $20 million after years of cutbacks. It dropped a funding formula that gave some campuses nearly $6,000 per full-time student while others received only $2,500.
In addition to Massachusetts and Tennessee, 11 states have added performance criteria to community college (and sometimes university) budgets. Four other states are moving in that direction.
Demands for accountability are rising, says Richard Kazis, vice president of Jobs for the Future, which promotes workforce development. “There’s a sense that we shouldn’t just fund institutions for getting people to sit in seats briefly; we should fund them for succeeding and moving people forward. How do you make the most out of each dollar?”
Massachusetts will tie funding to each community college’s ability to improve graduation rates, contribute to the state’s workforce needs and help more minority students succeed. Within three years, half of each college’s funding will hinge on these benchmarks. The other half will be determined by course credits completed.
Community college presidents accepted performance funding “as the price of getting a rational funding formula,” says Bill Messner, president of Holyoke Community College.
South Carolina jumped to 100 percent performance funding for colleges and universities in 1996. The system used dozen of metrics.
“They built a system they couldn’t deliver,” says Kazis of Jobs for the Future. The funding formula was never embraced by university faculty and administrators, who were not included in the process of designing it. Administrators who tried to implement the program were overloaded with unfamiliar demands. After seven years, the program was abandoned.
Massachusetts and Tennessee going slow and collaborating with the higher education community, notes Governing.
To prevent colleges from boost success rates by limiting access, both states award points for outcomes achieved by low-income, adult or minority students.
During the first two years of the new performance funding system, all but one of Tennessee’s 13 community colleges increased the number of associate degrees awarded to low-income students. At the state’s nine universities, all succeeded in increasing the number of bachelor’s degrees awarded to low-income students.
Rewarding enrollment growth and ignoring results sends the wrong message, says Richard Freeland, higher education commissioner in Massachusetts. “It leads to too many students coming in the door and dropping by the wayside.”
Aid Like a Paycheck – low-income students get financial in two-week increments — promotes academic success and good money management, concludes an MDRC study. The Institute for College Access and Success came up with the idea in 2009.
Students are encouraged to think of school as a job that requires regular attendance and effort, notes Ed Week‘s CollegeBound. If they stop going to classes, their aid stops too.
Typically, a college applies a student’s financial aid award toward tuition and fees, and then gives the remaining money to the student as a financial aid refund in one or two installments a semester. MDRC research shows that money often runs out, leaving students short on living and school-related expenses. If students get all of their refund, but then drop out, they may be required to return a part of the money to school.
Colleges aren’t very good at collecting that money.
Aid Like A Paycheck was tested first at Mt. San Antonio College, a large community college in southern California. Tuition is only $780, while Pell Grants are worth up to $5,500, so students had large refunds to manage. In the pilot, 200 students received biweekly payments of $125 to $350 instead of getting all the money upfront.
Soon after Mt. San Antonio College, another pilot began at Triton College outside of Chicago.
At the colleges, as students signed up for more credits or dropped classes, the disbursements would be adjusted to reflect their new eligibility status. Exceptions were made in the event of a demonstrated hardship, but few students made these requests. Students in the pilot program were regularly emailed information about online tools to help with budgeting, borrowing, and money management.
Students told MDRC the new system helps them “spend their money wisely, reduce their work hours, and put more energy into their school work,” reports Ed Week.
Federal student aid should reward success, said Richard Vedder at a Brookings Institution event last week. An Ohio University economist, Vedder directs the Center for College Affordability and Productivity.
Despite rapid growth in federal student aid since 1971, lower-income students make up a smaller share of college graduates, Vedder pointed out. As federal aid expands, state governments spend less and universities charge more.
He believes financial aid has “contributed to high dropout rates, mediocre levels of student work effort and academic performance” and underemployment for college graduates.
I think we are probably over-invested, not under-invested, in higher education in the United States, creating a credential inflation arising from using degrees as an obscenely expensive screening device, one involving massive wastes of potentially highly productive human resources.
Phasing out federal aid isn’t politically viable, at least in the short run, so we need to “correct two perverse incentives,” Vedder argues.
First, there needs to be rewards for good academic performance and negative financial consequences for poor performance. . . . Second, colleges should have skin in the game. Their inappropriate admissions decisions or inattention to floundering students massively contributes to loan defaults, yet they face no adverse consequences. That needs to change.
Beyond that, simplify the system, restricting aid to more affluent families, doing away with PLUS loans and tuition tax credits, in line with RADD (Reimagining Aid Design and Delivery) recommendations. We also should convert Pell Grants into progressive performance vouchers. . . . No full-time student should get money for more than five years. “A” students graduating in less than four years should get a small bonus for saving the government money and as a reward for high academic achievement.
Federal policy should encourage private approaches to financing, such as letting students “contract to forfeit part of post-graduate earnings in return for financial support of college,” Vedder argues.
Changing financial aid to promote college completion could limit access, warns Do No Harm, a report by the U.S. Advisory Committee on Student Financial Assistance. Several proposals under discussion could make it harder for low-income students to attend college, the panel advises.
The report lists 10 financial aid “fallacies.”
For example, redirecting need-based grants to higher achievers and colleges with higher graduation rates would not improve completion, the report argues. The loss in access and completion for unfunded students will offset completion gains, it predicts.
To increase completion, financial aid proposals must address barriers for low-income students, the panel recommends. These include: high net prices for low-income students; excessive borrowing; decoupling of federal, state and institutional aid; complex forms and eligibility determination; inadequate early information and intervention, and insufficient in-college support services.
To increase access and completion, the panel proposes: Using federal aid to spur state and institutional aid; doubling the maximum Pell Grant; converting higher education tax credits to Pell Grants, and redesigning income-based loan repayment.
Better advising can get more low-income kids to college, writes Sophie Quinton in The Atlantic. The National College Advising Corps (NCAC) sends recent college graduates to high schools to help needy students understand their postsecondary options, get waivers for admissions test fees, write essays and apply for financial aid.
The college-applications process can be overwhelming for any high school student. But for low-income minority students like (Erica) Elder with no graduates in their families to guide them, it is often paralyzing. Many such students choose two-year schools by default, or they decide not to go to college at all.
. . . “The people who really got pummeled by this recession were people with a high-school degree or less,” says Nicole Farmer Hurd, founder and executive director of NCAC. Higher education continues to be a powerful weapon against inequality: Low-income students who earn a four-year degree, reports the Pew Economic Mobility Project, become nearly four times more likely to catapult into the top fifth of earners. Yet low-income students are 30 percent less likely to go directly to college than their wealthier peers, according to the National Center for Education Statistics.
A $623,000 grant from the Jack Kent Cooke Foundation in 2004 launched the advising corps. Now NCAC fields 334 advisers in 14 states, reaching 116,000 teenagers. Sixty percent of NCAC advisers are first-generation graduates, minorities or from low-income families. They receive a stipend and a $5,500 grant each year toward paying off their student loans or for graduate school.
Low-income, first-generation achievers often “undermatch” when they apply to college, writes Alexandria Walton Radford. College counseling is often impersonal, she writes.
. . . valedictorians learned mainly about the in-state, public colleges that their high school’s graduates most frequently attended. Valedictorians struggled to get a one-on-one meeting with their often overstretched counselors, and even in these meetings counselors did not refine the college options they discussed to take into account the glittering achievements and tremendous potential of the top student before them. Counselors rarely suggested that valedictorians consider out-of-state or private colleges—and hardly ever mentioned elite universities.
Elite colleges may offer generous scholarships to low-income achievers, writes Radford. Yet, “families eliminate good college options because they don’t understand the extent to which need-based aid can reduce their actual costs.”
Classes began today at Bellingham Technical College in Washington after a weeklong faculty strike. The faculty union and a second union representing support staff reached a tentative contract agreement Saturday.
Students couldn’t collect financial aid till classes started, reports the Bellingham Herald.
About 84 percent of the school’s students receive some form of financial aid. Many are nontraditional, older students, some with families. The average age of a BTC student was 28 during the 2011-12 school year.
Tami Reynolds, a 32-year-old single mother of three, is an accounting student at BTC. In addition to providing for her 7- and 10-year-old boys, she cares for her 2-year-old daughter, who has a severe immune system deficiency. Due to her daughter’s condition, Reynolds may not put her daughter in day care while she works.
“I rely fully on financial aid,” Reynolds said. “I’m doing online courses because I have to be home with her. I did the accounting program in the hopes I could get a job in bookkeeping from home.”
Other students complained they’d quit jobs or reduced work hours to make time for classes.
Faculty members were seeking pay raises and new rules on teaching workloads.
Financial aid counselors should “rethink their role in student retention” to help first-generation students, writes Sara Goldrick-Rab on Education Optimists. Helping students succeed should be a “cross-campus effort.”
“Students who have overcome enormous challenges” to get to college often struggle academically, she writes. They must make Satisfactory Academic Progress (SAP) — usually a C average — to retain financial aid.
However, many first-generation students don’t know how to raise their grades and “are ill-equipped to sort out good advice from bad advice,” writes Goldrick-Rab.
They have little external support, experience more family crises, work longer hours, and are often more averse to taking on loans. While they might want to seek out help from others, that help is often offered only during daytime hours when their schedules are packed. In addition, when told they they should take on loans, they feel alienated and misunderstood.
Financial aid officers, often the first to know a student is in trouble, should sound an early warning. This would trigger proactive efforts to offer comprehensive advising that “integrates academic, financial, and family support.”
El Camino College (California) publishes a report on students who lose aid due to failure to make SAP. More colleges should be “open and honest” about the challenges, Goldrick-Rab concludes.
“Higher education is divided into high-poverty and low-poverty colleges to a disturbing degree,” writes Andrew Gillen, research director at Education Sector.
More than half of federal aid recipients come from families with an annual income under $30,000. These low-income students tend to attend colleges with low graduation rates: community colleges and for-profit four-year colleges.
“The high concentrations of low-income students at for-profit, four-year colleges and public two-year colleges indicates these institutions are doing the heavy lifting in promoting equality of opportunity,” Gillen writes.
More than 80 percent of aid-receiving community college students are from families making less than $48,000; most come from families with less than $30,000.
Low-income students are less likely to enroll at public four-year schools and very scarce at private nonprofit four-year colleges. At private non profits, “about one-third of students who receive federal aid are from families making more than $110,000 a year. At these more-selective schools, there are as many students in this high-income category as those from households earning under $30,000 a year.”