Office of Planning and Budgeting

Georgia State University (GSU) has launched an innovative pilot program, called the Panther Retention Grant, designed to help retain and graduate GSU students who drop out of school for financial reasons.  At Georgia State, a diverse public university with over 24,000 undergraduates, administrators have been struggling to raise the undergraduate 6-year graduation rate, which has been below 50 percent for years. This task is complicated by the diversity of the student body–more than 50 percent of students qualify for federal Pell grants, 60 percent are non-white, and 26 percent are adult learners.

In an effort to better understand the root of its low graduation rates, GSU administrators decided to study the students who were dropped from classes for non-payment. They found that the majority of students who were dropped had good grades and owed less than $1,000 on their tuition bill. The university therefore created the Panther Retention Grant—small grants awarded to students who would otherwise be cut due to nonpayment—to bridge the gap on their tuition bill and give students the opportunity to return to school. The grant comes with strings attached—students must complete three online financial literacy modules and fill out a study skills questionnaire to receive the funding.

GSU has already seen promising results. A few years ago, the university provided small grants to 200 students who had been cut for nonpayment to allow them to return to school. The program not only helped retain those students, it also generated more than $660,000 in otherwise forgone tuition revenue. Last year, GSU expanded the program, awarding $600,000 to more than 700 students. GSU hopes its program will demonstrate the effectiveness of targeted, need-based aid in improving graduation rates, particularly for low-income and minority students.

 The University of Washington has long recognized the importance of ensuring affordable education for low-income students with its commitment to Husky Promise. Thirty-three percent of resident undergraduates were eligible for Husky Promise this year, which covers all tuition and fees for resident students who qualify for the Pell Grant or State Need Grant.  This contributes to the UW’s remarkable success in retaining and graduating students: 79 percent of entering freshmen graduate from the UW within six years, one of the highest 6-year graduation rates among public universities in the nation.

To read more about Georgia’s program, check out the Higher Ed Chronicle’s article. For more information about the UW’s commitment to affordable education, please see the Husky Promise website.

Accenture, a management consulting firm, recently conducted a survey of 2011/2012 college graduates and 2013 pending graduates. The survey focuses on the 2011/2012 graduates’ job search experience, and asks them about their current jobs, salaries, and future education plans. Accenture then contrasts their responses with the employment expectations of pending 2013 graduates. Some interesting findings include:

  • While more than 77 percent of 2013 grads expect to receive employer-provided training at their future job, only 48 percent of 2011/2012 grads actually received such training from their employer.
  • 50 percent of 2011/2012 grads who are currently unemployed claim that they cannot find a job because companies believe they do not have enough experience, even though 72 percent of 2011/2012 grads participated in an internship during school.
  • 41 percent of 2011/2012 graduates believe they are underemployed, meaning their job does not require a college degree.
  • Yet despite the still-sluggish economy, 81 percent of 2011/2012 graduates report they found a secure job within 6 months of graduation.
  • Of 2011/2012 graduates, 42 percent expect to pursue a graduate degree, but only 18 percent of 2013 grads expect to do so.

Accenture’s report points to the disconnect between employers’ and graduates’ expectations of employment, particularly when it comes to experience and training. The report encourages employers to hire based on potential and a broad skill base, not on specific expertise or perfect qualifications. Furthermore, it recommends that employers provide increased on-the-job training for recent graduates so they can gain necessary experience and job skills to supplement their educational qualifications. Finally, Accenture advises that employers work more closely with educational institutions to help better align their needs with university curriculums, and to provide more internship opportunities for students.

To read the full report, click here, or check out this summary from the Chronicle of Higher Education.

Of the nearly 900 schools that received federal money for research and development (R&D) in FY 2011, the UW ranks first among public institutions and second overall in terms of federal research funding. According to a study by the National Science Foundation (NSF), approximately 20 percent of all federal R&D support went to just 10 universities. 24/7 Wall St. reviewed those universities, Table 1 summarizes their findings.

Johns Hopkins University, a private institution, topped the list with nearly $1.9 billion—more than doubling what any other university received that year. The majority of Johns Hopkins’ federal funding came from the Dept. of Defense and NASA. The university also brought in billions via fundraising efforts.

The UW came in second with almost $950 million in federal R&D funding—the most of any public school. The majority of the UW’s money came from the Dept. of Health and Human Services; however, the University was the top beneficiary of NSF funding, receiving more than $145 million in 2011.

Year after year, the same schools consistently receive the most money, said Ronda Britt, a survey statistician with the NSF. 24/7 Wall St. quotes her as saying, these universities “have big research programs that receive a lot of support year after year, and have a lot of infrastructure that helps them keep the money stable.” This holds true for the UW, which has ranked first among public schools since 1974. Having large endowments was another commonality of the top 10 schools, yet federal funding covered the bulk of R&D expenditures in all cases.

As these universities rely heavily on the federal government to support their research, many are concerned about the sweeping cuts of sequestration. The UW and other universities are preparing for a range of possible impacts. As described in our joint brief, the sequester could reduce the UW’s federal grant and contract support by an estimated $75M to $100M during FY13. The UW community is encouraged to remain cautious and conservative in spending federal awards and in planning for future federal funding.

The American Association of University Professors (AAUP) recently released its report on faculty salaries for 2012-2013. Salaries for full-time faculty members rose by an average of 1.7 percent in 2012-2013, which offsets inflation (estimated at 1.7 percent in 2012-13). However, increases varied widely across institution type—pay at private universities was much higher than salaries at public institutions, and professors at doctoral universities made significantly more than faculty at baccalaureate institutions. Furthermore, the survey counts only faculty members who are employed full-time; part-time adjuncts, whose pay is generally significantly lower than that of full-time professors, are excluded.

Inside Higher Ed has compiled a list of the highest-paid full professors in academia.  Based on the average salary of full professors, Columbia University ($212,300), Stanford University ($207,300), University of Chicago ($203,600), Harvard University ($203,000) and Princeton University ($200,000) are the top five highest-paying institutions. Of the ten universities with the highest average pay, not a single institution is public. The highest-paid full professors at public institutions are at University of California, Los Angeles, ($167,000), New Jersey Institute of Technology ($166,700), University of California, Berkeley ($158,900), Rutgers University at Newark ($154,700) and Rutgers University at New Brunswick ($151,000).

Detailed information about the UW’s submission to AAUP can be found here. In addition, OPB has prepared a table that compares UW average faculty salaries to those at our Global Challenge State (GCS) peer institutions. UCLA and Rutgers University, whose full professors are some of the highest paid in academia, are both in the GCS peer group. According to our analysis, average faculty salaries (of full, associate, and assistant professors combined) would need to increase by 11.4 percent to equal the GCS peer average. The average salary of full professors would need to increase 16 percent and that of associate professors would need to increase 9.2 percent to equal the peer average. As can be seen on the graph below, the UW’s salaries moved closer to those of the GCS peers between 2003 and 2008, but this progress reversed in 2009, when the legislature imposed a four-year salary freeze.

The Grapevine project’s annual compilation of data on state funding for higher education shows that 30 states increased their appropriations for higher ed institutions and financial aid from FY12 to FY13. On Tuesday, the
researchers at Illinois State University and the State Higher Education Executive Officers released their tables summarizing initial allocations and estimates reported by states from September 2012 through January 14, 2013. As most states are in the midst of FY13, their budgets for the year are more-or-less finalized; however, some changes could occur due to reporting lag time.

Overall, states are spending just 0.4 percent less on higher education in FY13, compared with FY12—a relatively small decline given that state support for colleges dropped 7.5 percent from FY11 to FY12. The net decrease in this year’s budgets resulted from cuts in just 16 states, with the worst appearing in Florida (8 percent), Alabama (6 percent) and New Jersey (5.5 percent). Another 16 states, including Washington, are showing increases of less than 2 percent, which The Atlantic notes “will likely amount to a cut once inflation takes its bite.” Budgets in the other 18 states indicate more sizable increases, all the way up to 14 percent in Wyoming.

Generally, however, the gains that some universities are receiving this year do little to make up for massive cuts since the recession. States are still collectively spending 10.8 percent less than they were five years ago, when the recession began, and thirty-eight states have decreased their overall higher ed appropriations during that time, according to a Grapevine table. Among those 38, Arizona and New Hampshire cut their budgets by 37 percent and 36 percent respectively and a dozen states, including Washington, sliced funding by over 20 percent.

A news release accompanying the survey data, cited by The Chronicle, states, “Barring a further downturn in the economy, the relatively small overall change … suggests that higher education may be at the beginning stages of a climb out of the fiscal trough caused by the last recession.” However, even if state appropriations continue to stabilize, the Moody’s report discussed in our previous post points out that federal spending, tuition revenue, endowment returns, and other traditional revenue sources for colleges and universities face major challenges in the coming year. We aren’t out of the woods yet.

In its new report, “Knocking at the College Door,” the Western Interstate Commission for Higher Education projects that 45 percent of high school graduates in 2020 will be minority students, up from 38 percent in 2009. According to the report, the number of white and African-American students will decline, while the number of Asian-American/Pacific Islander and Hispanic students will rise precipitously. While the supply of high school graduates will decline a bit in the next decade, it is expected to stabilize at three million students per year. Of course, this large number masks the individual experiences of states: in Texas, Colorado, and Utah, for example, the number of high school graduates is expected to increase by 15 percent before 2020, while Michigan, Maine and New Hampshire are projected to have 15 percent fewer high school graduates in that same time frame. Washington State is expected to have moderate growth in the number of high school graduates, on the order of about five percent by 2020. The trend can already be felt at the University of Washington, where 51 percent of the 2012 entering freshman class was minority students (including Asian-American students). Underrepresented minorities at the UW comprised 17.4 percent of the freshman class of 2012.

Universities are already beginning to respond to the expected increase in minority students by analyzing their admissions criteria and financial aid policies, and assessing the new resources they will need to meet the needs of this growing group of students. As higher education student demographics become more diverse, colleges will focus increasingly on raising educational attainment among underrepresented minorities.  Universities also want to do better in reaching out to high school seniors and graduates during the application process, as underrepresented minority students often have less access to information about the college application and financial aid processes.

To read more about the report, and how universities are responding to it, please read the Chronicle’s analysis or the full report.

Here is a quick look at some recent happenings in the world of higher education:

  • The College Scorecard confuses students and lacks desired information, says a report released today by the Center for American Progress (CAP).  The College Scorecard, which President Obama proposed last February, is an online tool to help students compare colleges’ costs, completion rates, average student-loan debt, and more.  The CAP asked focus groups of college-bound high-school students for their opinions on the scorecard’s design, content, and overall effectiveness. Student responses indicated that they did not understand the scorecard’s purpose; they would like the ability to customize the scorecard according to their interests; they want more information on student-loan debt; and they would prefer seeing four-year graduation rates, rather than six-year rates. The CAP report includes recommendations for improving the readability and usability of not just the scorecard, but of government disclosures in general.
  • The U.S. House of Representatives passed the STEM Jobs Act on Friday by a 245 to 139 vote. The bill would eliminate the “diversity visa program,” which currently distributes 55,000 visas per year to people from countries with low rates of immigration to the U.S.  Those visas would instead go to foreign graduates from U.S. universities who earn advanced degrees in science, technology, engineering or mathematics (STEM). Proponents of the Republican-backed bill say it would keep “highly trained, in-demand” workers in the U.S., boosting the nation’s economy and preserving its global competitiveness. While the White House and most Democrats support the expansion of STEM visas, they oppose the bill’s attempt to eliminate the diversity visa program. Consequently, the measure is unlikely to pass the Democrat-controlled Senate.
  • The overlapping agendas of Texas, Florida, and Wisconsin governors could signal a new Republican approach to higher education policy, says Inside Higher Ed. The three governors agree on cost-cutting strategies such as requiring some colleges to offer $10,000 bachelor’s degrees; limiting tuition increases at flagship institutions; linking institutions’ graduation rates to state appropriations; and letting performance indicators, such as student evaluations, determine faculty salaries.  Although the governors’ proposed reforms appeal to some voters, “actions taken by all three have been sharply criticized not only by faculty members and higher education leaders in their states, but also by national leaders, who view the erosion of state funding and increased restrictions on what institutions can do a breach of the traditional relationship between state lawmakers and public colleges and universities.”

As a means of both acknowledging and analyzing the recession’s impact on students, this year’s National Survey of Student Engagement (NSSE) included a new set of questions asking how students’ finances affect their stress and academic activities. Approximately 15,000 first-year and senior students from “a diverse group of 43 institutions” responded to the new addendum.  The results, which were released last week, indicate that “finances were a significant concern for the majority of students.” 

As seen in Table 5 from the official report:

  • The majority of students frequently worried about paying for college and regular expenses.
  • Roughly 1 in 3 students said financial concerns interfered with their academic performance.
  • About 30 percent said they frequently chose not to buy required academic materials due to cost.
  • More students looked into working more hours than into borrowing more money as a way to cover costs.
  • Approximately 3 in 4 students still agreed that college is a good investment.

In addition to these findings, the study found that over 55 percent of full-time seniors said that their choice of major was influenced by factors such as ability to find a job and/or the prospect of career advancement.  Yet, 89 percent of students overall said the most influential factor in choosing a major was still how well it fit with their talents and academic interests.

Although other nations continue to outperform the U.S. in terms of educational attainment, the Pew Research Center reported yesterday that record numbers of young Americans are attending and completing college. Of Americans aged 25 to 29 in 2012, 33 percent have completed at least a bachelor’s degree and 63 percent have completed some college—up from 17 and 34 percent respectively in 1971.

The NY Times noted that this is welcome news following the “education reversal” of the early 2000s, when the percentage of young Americans (ages 25 to 29) earning bachelor’s degrees leveled off and was surpassed by the share of “prime age adults” (ages 45 to 64) receiving degrees. Now, this trend “has vanished or been reversed by recent improvements in the education attainment of young adults,” according to the report.

The authors posit that more young Americans may have recently pursued (and earned) degrees in higher education as a means of weathering the job drought caused by the 2007-09 Great Recession. However, the report acknowledges that the portion of young adults attending and completing college has generally increased since 1980. This long-term trend it attributes to improved public opinions regarding the importance of a college education. According to a 2010 Gallup survey, 75 percent of Americans agreed that, in order to get ahead in life, a college education is necessary (up from only 36 percent in 1978).

Unfortunately, the fact remains that other countries are not only achieving higher levels educational attainment than the U.S., their rate of improvement outpaces ours. If the U.S. is to reclaim its title as a global leader in higher education, we will need greater gains than this in the coming years.

A landmark study from 1990 classified 212 US institutions as liberal arts colleges, but new research shows a 39 percent decline in that number—only 130 institutions currently meet the original study’s classification criteria. Of the 82 institutions no longer classified as liberal arts colleges, a handful were subsumed by larger institutions, while about half had shifted their mission away from the standard liberal arts definition.

Historically, definitions of liberal arts colleges (including Carnegie Classifications) have highlighted their focus on undergraduate studies; selective admissions; small class sizes; emphasis on nurturing diverse perspectives and personal growth; and de-emphasis on cultivating professional skills. According to the more recent study, however, many liberal arts institutions are now offering more “professional” programs and incorporating more research into their curricula. The authors speculate that liberal arts colleges may be making this shift away from their standard definition in response to economic pressures. For example, schools may be attempting to:

  • Offset dwindling revenue streams by attracting new segments of the market;
  • Remain competitive in a market flooded by online and for-profit institutions; or
  • Accommodate students’ increased focus on vocational preparation.

To expand on that last point, recent federal and state-level preoccupation with graduates’ potential earnings has put liberal arts colleges in a difficult position as degrees in traditional liberal arts fields (i.e. social sciences and humanities) may be less lucrative for graduates than other degrees (i.e. professional or STEM degrees). For example, according to CollegeMeasures.org, the average first-year earnings of a graduate with a four-year degree in the State of Virginia are about $30,000 if the degree was in sociology or about $46,000 if the degree was in civil engineering.

A widely-regarded strength of the US higher education system is its diversity. However, if liberal arts colleges shift their missions to include the research and career-preparatory goals of other schools, the system may become more homogeneous—leaving students with fewer educational options.

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