Here’s a quick roundup of some of this week’s headlines in higher ed news.
Report Argues Gainful Employment Rules Could Hurt For-Profits’ Students
According to a study commissioned by the Association of Private Sector Colleges and Universities, up to 44 percent of students at for-profit colleges could lose access to federal financial aid under the latest “gainful employment” proposal. The authors of the report—Jonathan Guryan, an economist at Northwestern University, and Matthew Thompson of Charles River Associates, a consulting firm—argue that since for-profits tend to serve students who have fewer financial resources and less academic preparation, the proposed rules would leave students without other options. Additionally, the report asserts that the rules should not be based on short-term measures of earnings and student debt, as such metrics tell an incomplete story. The Department of Education released the proposed rules in March. The window for public commenting closed on Tuesday. This report was part of a final lobbying campaign by both sides.
Startups Playing Matchmaker with Students and Employers
Several startups have begun serving as matchmakers between community college students and employers. One of the startups, called WorkAmerica, states that it will provide students with a legally binding job offer before they enroll at one of the startup’s partner colleges. WorkAmerica has already started placing students into trucking programs, and plans to expand to other “high churn” employers, such as those that hire welders, IT technicians, and medical assistants. Another similar startup, called Workforce IO, connects employers with “trainers”—which can include community colleges, in addition to nonprofits and other mentoring agencies. The company uses a library of 275 job-skills “badges” to vouch for its workers’ skills. In an era when students are increasingly concerned with their post-graduation employment opportunities, it’s possible that such a model could be applied to some programs at four-year institutions.
Data Say College is Worth More Than Ever
Research shows that not only is a college degree is worth the time and money it takes to earn one; it’s worth more than ever. According to analysis of Labor Department statistics by the Economic Policy Institute, the pay gap between college graduates and those who either never went to college or never graduated from college, reached a record high last year. The NY Times article summarizes, “Americans with four-year college degrees made 98 percent more an hour on average in 2013 than people without a degree. That’s up from 89 percent five years earlier, 85 percent a decade earlier and 64 percent in the early 1980s.”
Temple University recently created a new partnership between students and the university to help students graduate on time and limit the amount of debt they accrue. Under the program, called “Fly in 4,” if an undergraduate student fulfills a set of requirements aimed at promoting on-time completion, but is still unable to graduate within four years, the university will pay for any remaining coursework (tuition and fees). Additionally, in each incoming class, 500 students with financial need will receive “Fly in 4 grants” of $4,000 per year to help reduce the hours they must put toward employment and increase those they can devote to studying. 
“What we’ve found is that students from low- and middle-income backgrounds tend to take longer to complete their degrees, in part because they spend a lot of time working,” Temple President Neil D. Theobald is quoted as saying.
Starting in Fall 2014, all incoming freshmen and all incoming transfer students who enter on track to graduate on time are eligible for the program; however, only those with demonstrated financial need are eligible for the $4,000 grants. To remain eligible for the grants and/or for Temple to pay for any remaining coursework, students must:
- Meet with an academic advisor each semester;
- Register for classes during priority registration;
- Advance annually in class standing; and
- Complete a graduation review at or prior to completing 90 credits.
President Theobald made six commitments to the Temple community in his October inaugural address, the first of which was to reduce student expenses. Fly in 4 is a part of that commitment.
“For nearly 50 years, researchers have shown that college students employed more than 15 hours per week during the school year earn much lower grades than do those working fewer hours for pay,” Theobald said. “In addition, time-to-graduation has become the primary determinant of student debt.”
To help fulfill its commitment and ensure students graduate on time, Temple has also invested heavily in advising (hiring 60 new full-time advisors since 2006, including 10 this year), created four-year graduation maps for every major, and trained faculty members to assist students with academic and career planning.
 For context, Temple’s 2013-14 undergraduate tuition rates were approximately $14,100 for residents and $23,400 for non-residents (depending on program and year of study).
 Contrary to a number of media reports, it does not appear that students are required to commit to working 10 hours per week or less in order to be eligible for the Fly in 4 grants. Temple University’s website makes no such statement.
Representative Paul Ryan, the House Budget Chairman, released his FY15 budget proposal on Tuesday. The proposal would remove the in-school interest subsidy for all subsidized undergraduate student loans, eliminate mandatory funding for Pell Grants, and freeze the maximum Pell Grant award at $5,730 for the next 10 years.
As Office of Federal Relations put it in their blog post, “That essentially means that $870 in the maximum grant would have to be funded by increased discretionary funds or the maximum be cut from $5,730 to $4,860.”
Please see the Federal Relations website for more information, and check out articles by Equity Line, Inside Higher Ed, and The Chronicle.
Yesterday, March 4th, President Obama submitted his fiscal year 2015 budget request to Congress. The Institute for College Access & Success (TICAS) has published their analysis of the budget as has the Education Policy Program at New America.
TICAS states that the President’s proposal “takes important steps towards making college affordable for Americans by reducing the need to borrow and making federal student loan payments more manageable.” Specifically, his budget:
- Invests in Pell Grants and prevents them from being taxed. The budget provides funds to cover the scheduled $100 increase in the maximum Pell award, raising it from $5,730 in 2014-15 to $5,830 in 2015-16. TICAS notes that although this increase will help nearly 9 million students, “the maximum Pell Grant is expected to cover the smallest share of the cost of attending a four-year public college since the program started in the 1970s.”
- Makes the American Opportunity Tax Credit (AOTC) permanent. TICAS supports making the AOTC permanent as they note research suggests the AOTC is the most likely of the current tax benefits to increase college access and success. New America, however, recommends the administration convert the tax credit to a grant program as they state researchers have found grants to be a more effective way to deliver aid to low-income families.
- Improves and streamlines income-based repayment (IBR) programs. Under the President’s budget, more borrowers would be eligible to cap their monthly payments at 10 percent of their discretionary income and have their remaining debt forgiven without taxation after 20 years. The budget also adjusts the IBR programs to prevent debts forgiveness for high-income borrowers who can afford to pay their loans.
- Requests funding for the College Opportunity and Graduation Bonuses. The budget proposes establishing College Opportunity and Graduation Bonuses, which would reward schools that enroll and graduate low-income students on time. Both TICAS and New America note that, unless this proposal is thoughtfully designed, it could incentivize schools to lower their academic standards in order to make it easier for Pell students to graduate. Further, as this proposal is one of several different efforts to reward colleges that provide affordable, quality educations, it is unclear how its goals and formulas would interact with those of initiatives like the Postsecondary Education Ratings System.
The UW’s Federal Relations blog notes that the budget also proposes $56 billion for an “Opportunity, Growth and Security Initiative,” which “aims to effectively replace the remaining FY2015 sequestration cuts for nondefense discretionary programs – the programs we care about the most.” Please stay tuned to their blog for more information and updates.
On Thursday, The Equity Line, a blog by The Education Trust, posted a critique of Pay It Forward (PIF) that discusses some of PIF’s major flaws. As a reminder, under PIF, instead of paying tuition and fees upfront, students would pay back a certain percent of their adjusted gross income for 25 years. For more information about PIF and how its supporters have applied PIF to the UW, please see the full OPB brief.
The Equity Line’s blog post highlights that although PIF is marketed as a “debt-free” way to pay for college, it is actually just another student loan program:
- It is estimated (by the author and the UW) that many students would pay more under PIF than they currently do to pay back student loans.
- Students with significant need – who currently receive federal, state, and institutional grants to cover tuition and fees – may have their grants (which do not need to be paid back) replaced with loans (which do).
- Students would not be able to cover these other education costs with federal or state need-based grants because by removing the cost of tuition and fees from a student’s budget, that student’s level of calculated need would fall as would their eligibility for federal and state need programs. Thus, students would have to take out more loans (or find a way to pay upfront) for these expenses.
As the author notes, rather than “Pay It Forward,” it’s really “Pay It Yourself and Pay More Than Ever.”
As you may have heard, President Obama recently announced his “Increasing College Opportunity for Low-Income Students” initiative, which aims to help more low-income and underrepresented minority students attend and complete college. On January 16th, the White House hosted a summit of the more than 100 colleges, universities, nonprofits, and foundations that made commitments to increase college opportunity. The Chronicle provides a detailed, sortable list of these commitments.
News coverage of the summit and the initiative includes the following:
Researchers at the University of Pennsylvania recently surveyed students who had taken at least one of Penn’s twenty-four MOOCs and viewed at least one online video lecture. Findings from the responses of 34,779 students revealed that 80 percent of the MOOC-takers already had a 2- or 4-year degree and that 44 percent already had some graduate education. This research supports the platitude that MOOCs primarily serve the well-educated.
The trend was observed for MOOC students in the U.S., as well as those in developing countries, and even those in countries where MOOCs are popular. Coursera – the MOOC provider for Penn and several other universities – has made “access” central to its mission of bringing world-class education to everyone. However, The Chronicle notes:
“Coursera has taken a hands-off approach to publicity, relying almost entirely on word of mouth (and its university partners) to spread awareness of MOOCs. It stands to reason that much of the hubbub about MOOCs has occurred in well-educated circles. Combine that with spotty Internet availability in underprivileged communities, and it makes sense that only the most privileged populations have had occasion to take a MOOC.”
Coursera says they are working on several projects to help reach underserved students, particularly those without internet access. One of these efforts (we assume) are the global “learning hubs” discussed in a prior post and in this NY Times article.
Although the findings are noteworthy, the authors mention two important caveats:
- Their findings don’t necessarily mean MOOCs will never reach underrepresented populations, just that they haven’t done so yet; and
- The respondents represent only a small percentage of students registered for Penn MOOCs, let alone all MOOCs; thus “the survey may not be generalizable.”
The College Board released its 2013 edition of “Trends in College Pricing” on Tuesday. The report provides information on what colleges and universities are charging in 2013-14; how prices vary by state, region, and institution type; pricing trends over time; and net tuition and fees—what students and families actually pay after accounting for financial aid.
Here are a few noteworthy points about prices at public four-year institutions:
- The average published tuition and fees for full-time resident undergraduatesat public four-years increased by 2.9 percent between 2012-13 and 2013-14, going from $8,646 to $8,893—this is the smallest percentage increase in over 30 years.
- In 2013-14, full-time students at public four-years will receive an estimated average of $5,770 in grant aid and tax benefits.
- Thus, average net tuition and fees for full-time resident undergrads at public four-years will be about $3,120 in 2013‑14—up from a temporary low of $1,940 (inflation-adjusted dollars) in 2009-10.
And a few key points about private nonprofit four-year institutions:
- The average published tuition and fees for full-time students at private nonprofit four-years increased by 3.8 percent between 2012-13 and 2013-14, going from $28,989 to $30,094.
- In 2013-14, full-time undergrads at private nonprofit four-years will receive an estimated average of $17,630 in grant aid and tax benefits.
- Thus, average net tuition and fees for full-time undergrads at private nonprofit four-years will be about $12,460 in 2013-14—up from a temporary low of $11,550 (inflation-adjusted dollars) in 2011-12, but down from $13,600 a decade earlier.
Average net prices in all sectors took a noteworthy dip around 2010 due, in part, to significant increases in Pell Grants and veterans benefits that occurred in 2009‑10 as well as the 2009 implementation of the American Opportunity Tax Credit. However, some of those benefits have been scaled back since their initial launch. Moreover, total state appropriations declined by 19 percent between 2007-08 and 2012-13 and FTE enrollment in public institutions increased by 11 percent over that same time. Consequently, net prices have risen in the last few years for all sectors, but most noticeably in the public sector. It is important to remember that there are many variations by institution, region, and state. Even within institutions, different students pay different prices based on their financial circumstances, program of study, year in school, academic qualifications, athletic ability, etc.
See Inside Higher Ed and The Chronicle for additional analysis and discussion of the report.
On Tuesday, the U.S. Supreme Court appeared to be in favor of upholding a Michigan referendum, known as Proposition 2, which banned the use of affirmative action in the state’s public colleges and universities. The case, Schuette v. Coalition to Defend Affirmative Action, is not about whether it is permissible for public colleges to consider race and ethnicity in admissions, but whether it is legal for voters to bar such consideration. For background information about this case, please see our previous post.
Tuesday’s arguments focused primarily on a piece of the Equal Protection Clause, known as the “political process doctrine,” which states that political processes cannot be altered in a way that puts minorities at a disadvantage. Opponents of Proposition 2, contend that, under the measure, minority groups who want to reinstate affirmative action must launch a difficult and expensive campaign to re-amend the state constitution, whereas Michigan citizens seeking changes to other university admissions policies are free to simply lobby university regents. This, they argue, places an unfair and disadvantageous burden on minorities.
Swing vote, Justice Anthony M. Kennedy, expressed doubts about whether Proposition 2 truly violates the political process doctrine and only two liberal members of the court voiced major criticisms of the Michigan measure. Thus, with Justice Elena Kagan recused from the case, the numbers point toward the court upholding Proposition 2. Such a decision would effectively preserve similar bans adopted by voters in Arizona, California, Nebraska, Oklahoma, and Washington; by lawmakers in New Hampshire; and by the public university governing board in Florida. In addition, it could theoretically embolden campaigns for similar ballot measures
While it seems clear the Justices will rule in favor of Michigan, it is less clear whether the Justices are interested in reversing the political process doctrine, which dates back more than 40 years. In 1982, for example, the justices ruled against a Washington referendum that attempted to prevent Seattle from using a local busing program to desegregate schools. NPR reports that Michigan Solicitor General, John Bursch, “urged the Supreme Court to reverse the Seattle decision and others like it, if necessary.”
We’ll post updates as more information becomes available.
On Friday, the Obama administration gave some clarity to the Supreme Court ruling in Fisher v. University of Texas, as the decision had not provided a direct answer about the constitutionality of race-conscious admissions policies in higher education. Instead, the ruling had underscored the necessity of “strict scrutiny”—a term that sparked concern and confusion among some college officials. In a “Dear Colleague” letter, the Education and Justice Departments clarified:
An individual student’s race can be considered as one of several factors in higher education admissions as long as the admissions program meets the well-established ‘strict scrutiny’ standard; specifically, the college or university must demonstrate that considering the race of individual applicants in its admissions program is narrowly tailored to meet the compelling interest in diversity, including that available, workable race-neutral alternatives do not suffice.
In other words, colleges can continue considering race in admissions decisions as long as race-neutral alternatives would not achieve “sufficient diversity,” as Justice Kennedy put it in the case’s majority decision. Determining what constitutes “sufficient” diversity is where much of the remaining ambiguity lies. However, in their letter, the Departments pledged to provide “technical assistance” to institutions as they interpret the ruling and asserted that previously-provided guidance on affirmative action still holds true.
As Inside Higher Ed reported, legal experts believe the court’s “strict scrutiny” requirement will make it difficult for UT and many other institutions to successfully defend their use of race in admissions. However, the Obama administration seemed to encourage colleges to maintain their diversity efforts. “The Departments of Education and Justice stand ready to support colleges and universities in pursuing a racially and ethnically diverse student body in a lawful manner,” the letter stated.
For more information, see the Departments’ Q&A document and the article by Inside Higher Ed, and stay tuned to our blog for updates.
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