Not everyone wants a cheap, no-frills degree

Higher education’s financial squeeze will worsen, predicts a Moody’s report. All the traditional revenue sources — tuition, state and federal funding, endowments and philanthropy — are under pressure.

The end is not nigh for U.S. colleges and universities, argues Robert J. Sternberg, provost and professor of psychology and education at Oklahoma State, in the Chronicle of Higher Ed.

Some people want the cheapest education possible that will get them the job they want. Others want much more: nice dormitories, diverse student activities, world-famous professors, top-flight institutional reputation—and are willing to pay for it. An advantage of the higher-education market is that financial aid is often available to help students reach beyond what they normally could afford.

Second, students are not merely consumers of higher education; they also actively construct their college careers. They develop a plan for their coursework, their project work, their extracurricular activities, and their social network.

. . .  two students going to the same college may produce entirely different educations.

Top German universities charge much less than comparable U.S. universities but offer no “university-sponsored athletic teams or facilities, fraternities, sororities, student clubs, dormitories, meal plans, or other accouterments,”  Sternberg writes. If German students want activities, they organize and pay for them.

American universities can reduce costs by greatly lowering their overhead, as do the German universities, or by having professors do some or even all of their teaching online. What students may lose, however, is much, or even most, of the informal curriculum of college—the networking and the face-to-face personal interactions that many people feel are so important to the college experience.

Some will choose a cheap, no-frills college degree, but others will pay more for an academic-and-social degree, Sternberg suggests.

Community college students forego nearly all the frills, using far less student aid than those who opt for “the college experience.” Should taxpayers be asked for fund students’ social life?

Lumina: same goals, new strategies

Lumina Foundation’s new strategic plan for 2013-2016 describes new ideas for ways to reach the foundation’s goal:   60 percent of Americans with high-quality degrees, certificates, and other credentials by 2025.  The plan calls for:

Creating new models of student financial support that make college more affordable, make costs more predictable and transparent, provide incentives to increase completion, and align federal, state and institutional policies and programs.

Creating new higher education business and finance models that significantly expand the nation’s capacity to deliver affordable, high-quality education—supported by public finance and regulatory policies that create incentives for, and remove barriers to, innovation.

Creating new systems of quality credentials and credits defined by learning and competencies rather than time, clear and transparent pathways to students, high-quality learning, and alignment with workforce needs and trends.

Lumina plans to spend $300 million over the next four years.

“There hasn’t been enough progress on the attainment agenda,” Jamie Merisotis, Lumina’s president, told Inside Higher Ed.

Lumina will also continue to push completion-related efforts at both the state and federal levels. And the foundation’s leadebbrs said federal policy would be crucial in shaping a modern higher education system necessary to encourage the 23 million additional degrees and meaningful credentials needed to hit 60 percent attainment.

They pointed to a desperate need for strong leadership at the federal level on questions about the structure of student aid, quality assurance and accreditation, and the alignment of workforce development and higher education.

Lumina wants to make it easier for students who’ve learned on the job, online or on their own to earn credits for competency.  Officials also are keeping an eye on “emerging forms of credentialing, like certificates issued by massive open online course (MOOC) providers,” notes Inside Higher Ed.  Lumina will add certificates to its Degree Qualifications Profile, which “attempts to establish what constitutes a valuable college degree.”

4 more years: What’s next for higher ed?

On the campaign trail, President Obama touted the expansion of Pell Grants and income-based repayment of student loans. He proposed federal funds to train two million workers at community colleges. But, with increased funding pressures and a still-divided Congress, what’s ahead for higher education in the president’s second term?

Expect more of the same, predicts The Chronicle of Higher Education. President Obama will continue to sidestep Congress to “change education policy through his own executive and regulatory authority,” higher-education advocates said.

The for-profit higher education sector is expecting the return of “gainful employment” regulations, which could cut access to student aid: For-profit college shares fell sharply the day after the election.

Even the nonprofits are concerned about more federal regulation, reports the Chronicle.

The Obama administration over the past four years “sharply expanded the federal government’s role in overseeing colleges and universities, often with no evidence that there was a serious problem that needed regulation,” said Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education. He cited as examples some of the Education Department’s regulations on gainful employment, state authorization of online programs, and academic issues like the definition of a credit hour.

In speeches, President Obama talked of linking federal aid to colleges’ willingness to slow the rate of tuition growth. His goal is to cut the growth rate in half over the next 10 years. However, some think the president’s campaign rhetoric won’t generate a policy proposal. Deciding whether a college provides “good value” isn’t easy:  Colleges that have raised tuition sharply will find it easy to cut the rate of growth, compared to those that have raised tuition moderately.

Subsidized student loans could be “on the table” in budget negotiations, predicts Inside Higher Ed.

The Higher Education Act, which includes federal financial aid programs, expires in 2013, but the reauthorization process could drag on.

‘Swirlers’ may run out of Pell eligibility

“Swirling” — multiple transfers between two-year and four-year colleges — is increasingly common in higher education, notes Inside Higher Ed. Swirlers risk running out of eligibility for Pell Grants under new rules, which limit students to 12 semesters.

Trident Technical College, in South Carolina, students who changed programs multiple times, or who enrolled after pursuing, but not earning, a degree at a for-profit college are among those who are most likely to have run out of eligibility, said Meg Howle, the college’s vice president for advancement.

About 540 of the college’s 22,748 students lost their Pell Grant eligibility and still returned this fall, Howle said. The college does not know how many lost eligibility and dropped out as a result.

Students who had been enrolled in college before but still needed remedial courses were also affected, because those students had used up more of their Pell Grant eligibility without earning credits that count toward a degree, Howle said.

Students who start at community colleges and transfer to four-year universities could run out of time, said David Baime, vice president for government relations at the American Association of Community Colleges.

About 4 percent of California State University students lost Pell Grant eligibility because of the 12-semester cap, said Michael Uhlenkamp, director of media relations. At Sacramento State University, some brand-new transfer students already had received 12 semesters of Pell aid, said Edward Mills, associate vice president for enrollment management. Some had lingered at community colleges. Others had “swirled” for too long.

College aid: Research, then reform

After four years of rapid growth, the Pell Grant program faces a “funding cliff” in 2014, writes Andrew P. Kelly,  an American Enterprise Institute research fellow. Research student aid before trying to reform it, Kelly writes in the Chronicle of Higher Education. Temporary fixes won’t be enough. There are big questions to be answered.

How can scarce money be allocated more efficiently? Can reforms help more students complete college while maintaining a commitment to ensuring them access to postsecondary education?

MDRC and the nonprofit Institute for College Access and Success are studying “aid as a paycheck.” Community colleges receive their aid in regular payments, rather than getting a lump sum at the start of the term.

The Wisconsin Scholars Longitudinal Study, directed by (Sara) Goldrick-Rab, is a statewide experiment that examines the impact of a privately financed, need-based award on Pell Grant recipients at public two-year colleges. So far, results suggest that $1,000 of additional aid is associated with a two-to-four-percentage-point increase in rates of retention from the first to second year of college.

. . . the federal government is finally getting its act together. This past summer, the Department of Education announced the first-ever federal Pell Grant experiments. The program will study two changes in Pell eligibility. The first will provide bachelor’s-degree holders with access to Pell dollars to pay for vocational training. The second will enable students to access Pell dollars for shorter-term, lower-intensity programs (as short as eight weeks and a minimum of 150 clock hours) than current law allows.

It’s not enough, writes Kelly. “At $160-billion, financial aid is the most expensive higher-education strategy for promoting student attainment that we have. The least we can do is devote a fraction of that commitment to making sure it works as well as it can.”

Aid tops tuition for community college students

The average “sticker price” at community colleges rose this year to $3,130, a 5.8 percent increase, according to College Board’s 2012 Trends in College Pricing report. However, Pell Grants, tax credits and other aid covers community college tuition — with an extra $1,220 for other costs for the average student, notes Community College Times.

Student aid and other benefits have more than covered average tuition and fees for full-time students at community colleges since 2008-09. Pell recipients can use grants to fund books, transportation, child care and living costs.

Over the past five years, changes in inflation-adjusted tuition and fees at community colleges ranged from a decline of 3 percent in Maine (minus $103 in 2012 dollars) and an increase of 1 percent in Montana ($32), to increases of 49 percent in Virginia ($1,367) and 104 percent in California ($722). Even with the substantial increase, California still has the lowest prices in the country at $1,418, the College Board says.

In-state tuition and fees at public four-year colleges increased 4.8 percent from $8,256 to $8,655, according to the report.

Pell spending declines

After nearly tripling in five years, Pell spending fell $2.2 billion in the last fiscal year, even as more students received grants, reports Inside Higher Ed. Spending totaled $33.4 billion, “well short of the department’s estimated $40 billion price tag for Pell.” Five years ago, the program cost $12.8 billion.

. . . more of the almost 9.7 million lower-income students who received the grants last year got smaller awards. One reason for that could be more students attending college part time, because part-time enrollment status reduces Pell award amounts.

Experts said another probable cause for the decrease in expenditures is the elimination of the year-round, or summer, Pell Grant, which allowed students to qualify for two awards in a year. But that cut, which went into effect in July 2011, was projected to save only $4 billion per year, and the program came in more than $6.5 billion under its estimated cost. So something else must also be at play.

Fewer recipients are attending for-profit institutions, accounting for $1.4 billion of the decline.  Slightly fewer community college students received Pell Grants, but Pell revenue increased a bit as students qualified for somewhat larger grants.

For-profit students’ average grant award is larger than that for students who attend community colleges, who are more likely to enroll on a part-time basis. So the flattening of Pell spending despite increasing numbers of recipients might be partially due to the for-profits’ woes, but experts said it was too early to make that call based on the new numbers.

The $2.2 billion decrease surprised officials at the American Association of Community Colleges, said David S. Baime, the association’s senior vice president of government relations and research. “It’s really dramatic at a time that the program is growing.”

Pell was expected to be short $20 billion this year. By cutting summer grants, Democrats saved the $5,550 maximum grant, which Republicans had proposed cutting by 845. However, advocates fear higher education spending will go off a “fiscal cliff” next year as Congress tries to balance the budget.

Tell Pell recipients they’re expected to succeed

Pell Grants are nearly invisible, even to the needy students who receive them, writes Sara Goldrick-Rab on Scholars Strategy Network. As a result, the program doesn’t get the respect and support it deserves.

In a  study of Pell  recipients in Wisconsin,  her research team found 80 percent of recipients knew the the grant’s name, but not how Pell was funded or what it meant. America should improve “the clarity and moral force of the messages we send to the needy college students helped by federal grants,” Goldrick-Rab writes.

Here is an easy way to make the Pell Grant more than just a check to be cashed or a line item in a bigger financial aid package: Have the President of the United States send an annual letter to each and every Pell recipient – explaining that the Pell program represents the investment of America’s taxpayers in the student’s college education, made possible because families across the country worked hard in their jobs and paid taxes to make sure all young people who are prepared can have a fair shot at achieving a college education. The Pell Grant, the letter should spell out, promises continuing support in return for “your” continued hard work and good faith effort to complete college.

Many Americans would approve telling grant recipients that they’re expected to give their country a return on the investment, she writes.

Again, Obama touts community colleges

President Obama touted community colleges as “community career centers” in his State of the Union speech. He proposed training 2 million people for skilled jobs through business-college partnerships, not a new idea.

Obama cited the experience of Jackie Bray, a single mom in North Carolina who was laid off from her job as a mechanic. “Then Siemens opened a gas turbine factory in Charlotte and formed a partnership with Central Piedmont Community College,” Obama said. “The company helped the college design courses in laser and robotics training. It paid Jackie’s tuition, then hired her to help operate their plant. I want every American looking for work to have the same opportunity as Jackie did.”

The president also pledged to make a college education affordable, pitching his student aid promises to middle-class families.

Rethinking federal student aid

Let’s Rethink Federal Student Aid, writes Jeff Selingo in a Chronicle of Higher Education commentary.

The higher-ed establishment in Washington spends most of its time trying to protect the status quo on student-aid programs, all the while arguing for more money to help pay higher tuition prices. But if we’re headed for an age of at least some austerity in the federal government, then the higher-ed associations are going to need a new playbook.

Selingo throws out some ideas, starting with allowing colleges to limit loan eligibility so students don’t borrow well more than the cost of tuition, live off the extra cash and find themselves unable to repay their loans. That’s more of an issue at low-cost colleges and universities.

He also suggests linking aid to measures of student success, such as graduation rates.

Nearly 60 percent of high-school graduates from the bottom income quartile entered college in 2009, but only 7.3 degrees went to students from the lowest quartile. In part, that’s because low-income students tend to choose colleges with a low sticker price — such as community colleges — and low graduation rates.

Needy students and their parents don’t realize the net price of colleges is much lower than the sticker price, says Andrew P. Kelly, a research fellow at the American Enterprise Institute.

If low-income families knew more about the net price of a college, Kelly maintains they would be better able to balance cost with the likelihood of success. Rather than just go to the cheapest college, they might pick a slightly more expensive one with a higher graduation rate.

In addition, Selingo writes, “colleges that fail to graduate a reasonable number of low-income students, whether those on Pell Grants or with sizable loan burdens, should be banned from the federal student-aid programs.”

That could hit community colleges hard:  Pell Grant recipients’ graduation rates are low.