Beyond the skills gap

Job training has moved from employers to colleges — especially community colleges — writes New America Foundation’s Mary Alice McCarthy. The “skills gap” is a policy gap, she concludes.

The Higher Education Act (HEA) needs to be reframed to “support all forms of postsecondary learning, including students on non-degree paths and those seeking specific skills and credentials,” McCarthy writes in Beyond the Skills Gap: Making Education Work for Students, Employers, and Communities.

We are already paying a high price for our failure to support students in these programs – high debt levels, poor employment outcomes, wasted taxpayer dollars, and employers who still struggle to find workers with the right skills. . . . we know a lot about what makes postsecondary career education work – industry partnerships, structured learning pathways, contextualized instruction, and stackable credentials. Now we need to build the federal, state, and institutional policies to support those practices.

As an example, she looks at a Michigan woman who wants to qualify as a medical assistant, a growing field that can be a first step to nursing and other health careers. She faces a baffling array of choices.

In eastern Michigan, the for-profit Everest Institute’s 10-month medical assistant certificate program costs about $20,000. Career Quest Learning Center in Lansing charges $15,000 for an eight-month program. Federal student grants and loans will help cover the cost of her tuition and related expenses.

In the western part of the state, Grand Rapids Community College offers a six-month certificate program that costs only $7,585, but it is “noncredit.” That means she’s not eligible for federal Pell grants or student loans and can’t use her training as the first step toward an associate degree.

Kalamazoo Valley Community College‘s certificate program only costs about $4,000. Students can get state and federal grants and loans. “But there is most likely a waiting list, so she will probably need to wait a semester or two,” writes McCarthy. “In addition, she will have to pass the course placement exams to be admitted or complete remedial courses until she can bring her scores up enough to be allowed to enroll.”

Or perhaps she could consider the 20 schools in Michigan that offer associate degrees in medical assisting at varying costs.

All this for a job with an average annual salary in Michigan of $27,000 – or about $13 an hour.

More than half of undergraduate credentials are in career education, writes McCarthy. Thirty-three percent are vocational certificates and 20 percent are occupationally focused associate degrees. These days, “more than 500 institutions of higher education offer undergraduate certificates in welding technology for which you can get a Pell grant or federal student loan.”

But it’s hard for vocational students to move to academic tracks. Their credits aren’t “stackable.” And it’s easy for colleges to “deliver expensive, low-quality career education programs,” she writes.

Most short-term training programs aren’t eligible for federal aid.

For example, a short-term certificate in phlebotomy may help a student get a job and earn credits toward a certificate in medical assisting, which in turn, can be applied toward an associate degree in nursing, and up to a bachelor’s degree in nursing. But if the first and lowest step on the ladder is not eligible for financial aid, some students will not be able to reach it.

Adults must have a high school credential to be eligible for federal aid, regardless of their skills. That’s a huge barrier for many low-income adults, she writes.

‘Free’ college won’t help low-income students

“Free community college” programs are a hot idea, writes Robert Kelchen, a Seton Hall professor, in Inside Higher Ed. But low-income students, who already are eligible for Pell Grants, will get little or no benefit. Most pay little or no tuition, but struggle to pay for books, commuting, child care and rent.

Tennessee is offering two years of tuition and fee waivers to recent high school graduates. Mississippi, Oregon and Texas legislators have proposed similar plans. Chicago will cover three years of community college tuition for college-ready public school graduates with at least a B average, perhaps 15 percent of the graduating class.

All of these programs are “last-dollar” aid. The state or city will provide tuition aid to supplement federal aid, typically the Pell Grant. But in most places, the maximum Pell Grant of $5,645 covers 100 percent of community college tuition.

In Chicago, 85 percent of students’ tuition and fees will be covered by Pell Grants, officials estimate. That’s why the scholarship offer will cost City Colleges of Chicago so little.

In every state except New Hampshire and South Dakota, the average tuition and fees at community colleges was lower than the maximum Pell Grant of $5,645 in the 2013-14 academic year. Data from the National Postsecondary Student Aid Study (NPSAS), a nationally representative sample of students enrolled in the 2011-12 academic year, show that 38 percent of community college students had their tuition and fees entirely covered by grant aid. An additional 33 percent of students paid less than $1,000 out of pocket for tuition and fees. Eighty-five percent of Pell recipients at community colleges had sufficient grant aid to cover tuition and fees, meaning they would get no additional money from a “free college” program.

The Tennessee Promise will benefit students from middle-income and higher-income families, writes Bryce McKibben of the Association of Community College Trustees. “The program does nothing for the poorest and most at-risk students at community colleges whatsoever.” In addition, the program excludes part-time students, who make up 52 percent the state’s community college students, and returning adults.

Tuition and Fees Not Covered by Grant Aid at Community Colleges, by Income

Income quartile

$0

$1-$999

$1,000-$2,999

$3,000+

Lowest

68.2

18.6

10.1

3.2

Second

36.6

28.7

26.8

7.9

Third

11.2

36.0

38.9

13.8

Top

8.0

34.3

42.7

15.1

Source: 2011-12 National Postsecondary Student Aid Study

Note: Sample includes dependent students attending community colleges.

 

These programs could be modified to help low-income students pay for living costs, writes Kelchen. “Even a $500 award at the beginning of the semester would help low-income students manage upfront costs like books and rent payments, and could be paid for by slightly reducing awards for students who are not Pell-eligible.”

Limiting aid to recent graduates excludes many community college students, adds Kelchen. He advocates “extending the programs to returning adult students,” many of whom are needy. “Finally, it is important to publicize these programs (and their conditions) widely so students and their families know that community college can be an affordable, high-quality educational option.”

Defenders of “free tuition” say many low-income students will be encouraged to go to college. Often disadvantaged students don’t realize they’re eligible for college aid.

Reform work-study to serve low-income students

The federal work-study program favors private colleges that enroll few low-income students, charges a new report by Young Invincibles. Work-study should be redesigned to help more needy students, the group urges.

To improve access to work-study funds, the authors recommend:

Base the formula for allocating work-study funds on how many Pell Grant recipients are enrolled at an institution and how many of those students graduate; eliminate institutions where Pell recipients make up less than 18 percent of students.

Increase the types of jobs available to students by providing more money to create off-campus job opportunities.

Create a career internship program to encourage for-profit employers to post internship opportunities.

Use federal funds to reimburse employers that work with students to create internships related to their majors and career goals.

Graduate students should not be eligible for work-study funding, the report recommends.

Ratings may reward colleges for selectivity

Colleges should be rewarding for educating students, not for selecting only the best, said Andrew P. Kelly, who directs the American Enterprise Institute’s Center on Higher Education Reform, at hearings on the president’s proposed college ratings system.

Unfortunately, our ability to measure the “value-added” by a college program is almost nonexistent, and the measures that the Department of Education has proposed are woefully insufficient as an approximation of that quantity.

It is much easier for colleges to change the students that they enroll than it is to change the quality of education that they provide.

If the ratings system does not account for this, it will likely set up a scenario in which selective colleges are provided with even more resources, while open-access institutions work to become more selective in an effort to improve their outcomes

Federal ratings should not be linked to federal student aid, argued Kelly. Instead, the ratings should be designed to help prospective students evaluate different programs at different colleges.

The Education Department plans to use the percentage of students receiving a Pell Grant as a measure of access. The measure should be linked to Pell graduates, said Kelly.  

Outcomes measures will be based on flawed graduation data, said Kelly. “We need some validation that the diplomas colleges award are worth something,” such as whether graduates earn enough to pay off their loans.  In addition, those developing PIRS should include “rigorous pre- and post- measures of success, or at least identify relevant control groups to compare results.”

Smaller, more selective schools could raise their access ratings  and lower their net price easily by admitting more low-income students, Kelly said. That would help a small number of students.

Large, less selective schools with low rates of student success have a tougher choice. “They can embark on the hard, uncertain work of improving teaching and learning to boost student success. Or they can take the easier route and admit fewer low-income students.”

All of this is to say that if improvement is quicker and easier for low access/high success schools than it is for high access/low success schools, then rewards will accrue to the former. That will simply reinforce their place atop the higher education system and, frankly, waste taxpayer dollars on schools that don’t need them.

Selectivity is the key to U.S. News’ prestigious “best colleges” rankings, Kelly wrote in an earlier Forbes column. “Those measures often have everything to do with who colleges admit and less to do with what colleges actually teach them while they’re there.”

Colleges go after aid-stealing ‘Pell runners”

Police are investigating a $200,000 financial aid scam at the San Francisco Bay Area’s College of Marin, reports the San Francisco Chronicle. Twenty-three people are suspected of posing as online students to collect Pell Grants.

Two faculty members noticed that “several students in their online classes shared the same address and phone number, weren’t participating in online discussions and withdrew soon after financial aid had been disbursed,” reports the Chronicle.

California community colleges give fee waivers to Pell-eligible students and send the entire grant — up to $5,730 — to the student to cover books, living expenses and commuting. “Pell runners” disappear as soon as the check clears. It’s especially easy to scam online classes.

Three men posing as students pleaded guilty in February to stealing more than $1 million in financial aid received through City College of San Francisco, Chabot College in Hayward and Ohlone College in Fremont from 2007 and 2011.

. . .  A ringleader often recruits fake students who allow their Social Security numbers and other personal information to be used to enroll in courses and to apply for federal aid in exchange for a cut of the cash.

Colleges don’t have to repay the stolen money, but loans to scammers — which aren’t going to be repaid — will increase their student default rate.

Fraud rings steal as much as $1 billion a year, estimates the U.S. Department of Education’s Office of the Inspector General.

In the case involving City College of San Francisco, Chabot and Ohlone, the three men created 104 financial aid accounts for fake students, according to a federal indictment filed in the U.S. District Court in Oakland in August 2013.

Aid leader: Link ratings to ‘social responsibility’

Rate colleges on “social responsibility,” said the departing chair of the National Association of Student Financial Aid Administrators at the group’s annual conference. Instead of President Obama’s proposed ratings system, colleges should be recognized for educating low-income students, said Craig Munier, who directs financial aid at the University of Nebraska at Lincoln.

The plan, which is modeled on the LEED ratings of green buildings, would assign institutions ratings of silver, gold, or platinum based on a calculation that would take the percentage of a college’s undergraduate students who are eligible for Pell Grants, multiply the number by a ratio of credit hours earned to credit hours attempted, and divide it by the institution’s cohort-default rate.

Part of the goal, Mr. Munier said, “is to create a little public embarrassment” for institutions that are not fulfilling their duty to educate needy students. He jokingly called the plan “Craig’s LEED certification on social responsibility.”

Panelist Marcus D. Szymanoski, manager of regulatory affairs at DeVry University, argued for multiple metrics that would recognize that different students have different priorities.

Text nudges boost persistence

More than 18 percent of Pell recipients with a B average or higher didn’t reapply for aid for a second year of college, a recent study reports. Close to half did not return to college and those who did return had lower persistence rates than students who had reapplied for aid,

Text-message reminders to apply for aid can boost persistence for community college students, according to a new working paper, Freshman-Year Financial-Aid Nudges. The nudges cost only $5 per student.

Researchers designed a series of messages about financial aid, refiling the Free Application for Federal Student Aid (Fafsa) and maintaining satisfactory academic progress, a precondition of receiving aid, reports the Chronicle of Higher Education.

A group that had helped the students in high school with college and aid counseling, uAspire, sent the messages.

The messages were designed to both connect students with advising and remind them about deadlines and requirements.

. . . The messages made a difference for community-college students. Sixty-four percent of such students in the control group persisted to their second year. For those who got the messages, the rate was 12 percentage points higher: 76 percent.

Messages didn’t affect the re-enrollment rate — 87 percent — of  students at four-year colleges and universities.

Aid on a postcard

two-question postcard could replace the lengthy Free Application for Federal Student Aid (Fafsa) under a bipartisan bill introduced in the Senate. Students would be asked their family size and household income two years earlier.

The Financial Aid Simplification and Transparency Act, introduced by Sen. Lamar Alexander, R-Tenn., and Sen. Michael Bennet, D-Colo., also would let students know about their financial aid prospects before they apply to colleges, restore year-round Pell Grants and simplify student loans. Students would be offered two repayment options: income-based repayment and the standard 10-year repayment plan.

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“Every year, 20 million students waste millions of hours and countless dollars on a 100-question application form that only needs to be the size of a postcard,” Alexander said in a statement.

Year-round Pell Grant would be paid for by eliminating subsidized loans,

Simplifying Fafsa Will Get More Kids Into College, argue Alexander and Bennet in a New York Times op-ed. Some students give up on going to college because they can’t handle the form, they write.

The two-question Fafsa would be accurate for 95 percent of students, argue Susan M. Dynarski and Judith E. Scott-Clayton in College Grants on a Postcard.

Students’ families would save almost 100 million hours a year — the equivalent of nearly 50,000 full-time jobs — with a simplified Fafsa, estimate Dynarski and Scott-Clayton.

Colleges, which now spend $432 million auditing aid applications, would  see much lower administrative expenses, they write.

Pell aid for dual-enrollment students?

Extending Pell Grants to dual-enrollment students would encourage low-income students to get a head start on college, advocates argued before a congressional briefing yesterday.  “For low-income students, they are essentially penalized for taking college early,” Adam Lowe, the executive director of the National Alliance of Concurrent Enrollment Partnerships, told CollegeBound.

Dual-enrollment students are more likely to enroll in college and earn a degree, says Lowe.

In some states, dual-enrollment courses are free, but most charge students for some of the costs, Lowe said. 

Several financial-aid proposals are under discussion, including a recent report from the College Board, reports CollegeBound.

The U.S. Department of Education late last year asked for colleges willing to be experimental sites for new financial aid strategies, including giving high school students Pell Grant money to pay for college. The National Association of Student Financial Aid Administrators recently suggested a promise of a Pell Grant in 9th grade would motivate students to pursue higher education.

It’s hard to estimate the cost of extending Pell coverage. About 1.4 million high school students are taking more than 2 million college courses across the country.

Rubio: Dream the affordable American Dream

Education and the American Dream was the theme of Florida Sen. Marco Rubio’s keynote speech at Making Community Colleges Work, a Next America session sponsored by National Journal at Miami Dade College.

The son of immigrants, Rubio used Pell Grants, student loans, work study and summer jobs to pay for a four-year degree and law school. He started his career as an attorney with $100,000 in student loans.

To find a good-paying job, “it is vital that you get the right degree geared toward the right industry,” Rubio said.

Nationally, majors such as business, liberal arts, and hospitality have underemployment rates at or above 50 percent. There are simply more graduates than jobs in these industries. Meanwhile, engineering, health services and education all have underemployment rates less than 25 percent. 

Students and their families need to be equipped with the information necessary to make well-informed decisions about which majors at which institutions are likely to yield the best return on investment. This is why I, along with Senator Ron Wyden, proposed the “Student Right to Know Before You Go Act,” which aims to give students reliable data on how much they can expect to make versus how much they can expect to owe.

Rubio called for making income-based repayment the universal method for student loans.  He also proposed an alternative to student loans known as Income Share Agreements.

Let’s say you are a student who needs $10,000 to pay for your last year of school. Instead of taking this money out in the form of a loan, you could apply for a “Student Investment Plan” from an approved and certified private investment group. In short, these investors would pay your $10,000 tuition in return for a percentage of your income for a set period of time after graduation – let’s say, for example, 4 percent a year for 10 years.

This group would look at factors such as your major, the institution you’re attending, your record in school – and use this to make a determination about the likelihood of you finding a good job and paying them back. . . . Your only obligation would be to pay that 4 percent of your income per year for 10 years, regardless of whether that ends up amounting to more or less than $10,000.

Income Share Agreements are a great idea, writes Richard Vedder. Investors “buy equity in students as opposed to lending to them.” The risk shifts from students to investors.

Rubio also called for better career and vocational education in high school, apprenticeships and “more pathways for working parents” at the community college level.

Reforming the “broken accreditation system” would open the door to “new, innovative and more affordable competitors,” he said. He proposed a new accrediting agency for online education. With standardized tests to demonstrate competency, students could learn online or on the job and earn a low-cost job certification or degree.