The Lincoln Project, the American Academy of Arts and Sciences’ study of public research universities (PRUs), has recently come out with its fifth and final report, which examines the challenges facing PRUs and recommends strategies for addressing them. The recommendations are threefold:
- Address Financial Challenges:
The sharp reduction in state funding for PRUs—down 30 percent since the year 2000—has been particularly harmful because it has forced public universities to raise tuition. This directly affects access for low-income students—one of the key responsibilities of public higher education. For this reason, the authors highlight financial aid for low-income, in-state undergraduate students as the most important program that institutions can provide. The UW’s Husky Promise program, which provides free tuition to resident undergraduates with financial need, is an example of this type of financial aid.
To cope with diminished state funding, the report also recommends:
- Regional alliances with other PRUs, allowing the schools to combine programs;
- Focusing fundraising on unrestricted donations, allowing universities to put the money towards core educational programs;
- State-led creation of PRU long-term funding plans, allowing universities to more securely plan for their future; and
- Advocating for additional federal research support.
- Form Public-Private Partnerships:
In the authors’ view, there is a natural alliance between PRUs and businesses. PRUs are critical to the business community: they educate workers and provide research upon which businesses and corporations build their enterprises. Universities also rely on businesses for funding assistance and for employment opportunities for their graduates. The report recommends that businesses provide research funds, well-paid internships, scholarships, and other support mechanisms for universities and their students. Universities, in turn, should provide easier access to their research and actively work towards partnering with businesses. The UW has a variety of public-private partnerships, including its Global Innovation Exchange (GIX), a partnership with Microsoft and Tsinghua University in Beijing.
- Serve Students:
- Simplify financial aid: Filling out a FAFSA is a complicated process which can impede access to higher education. Simplifying the loan application procedure would help ensure that a larger proportion of students who are interested in higher education get access to the funds they need to pursue their goals.
- Track student performance: Thanks to improved data analysis tools, universities have an enhanced ability to help students graduate. The report highlights Georgia State University (GSU) as a particularly successful example. GSU uses an algorithm to pinpoint students at risk of failing or dropping out, enabling the university’s advising services to intervene on a one-to-one basis. According to the report, these interventions have increased graduation rates by 20 percent, reduced time to graduation, and eliminated graduation rate differences between racial, ethnic, and socioeconomic groups.
- Improve transfer pathways: The report recommends that four-year institutions work with community colleges to simplify the transfer procedure. Doing so can make higher education more affordable and accessible and can help transfer students graduate with a four-year degree on time and with as little debt as possible.
Two overarching themes of the Lincoln Project’s report are partnerships and accessibility. Public universities will need both in order to continue fulfilling their dual missions of conducting top-level research and providing high-quality, affordable higher education.
The rising costs of college are a popular subject for everyone from presidential candidates to media outlets. Parents and students blanche as published tuition prices climb ever higher. But the published price – often referred to as the “sticker price” for colleges – offers a misleading picture of the cost of higher education. OPB has updated our brief to reflect the newest available data on published price vs. net price. Highlights include:
- Sector-wide data on increases in published price and net price for public and private four-year colleges
- A description of how declining state investment in higher education has spurred tuition increases
- A table of the top 25 research universities’ net price for resident undergraduates receiving grant or scholarship aid
Our updated brief is accessible here.
Over the past few months, income share agreements (ISAs) have received significant attention from political candidates, higher education advocates, and news sources. A new OPB brief takes a closer look at ISAs by:
- Exploring differences between and the history of privately funded ISAs and publicly funded ISAs (such as Pay It Forward).
- Comparing ISAs to federal income-based repayment (IBR) plans in terms of overall structure, years to repayment, monthly payments, and total cost over time.
- Identifying remaining issues regarding ISAs and their implementation.
- Offering alternatives like improving federal loan repayment options.
Please contact Jed Bradley if you have any questions.
The Obama administration has introduced a plan to bring back year-round Pell Grants and to create a $300 bonus for Pell recipients taking at least 15 credits a semester. Both elements of the plan are designed to incentivize students to graduate faster and accrue less debt in school. The plan would cost $2 billion over the next year, according to the Department of Education.
The year-round Pell Grant program was initially put in place by President Bush in 2008 but was cut in 2011 as a budget-saving measure. While the effort to reinstate the program will likely face significant Congressional opposition, there is some bipartisan support. Senator Lamar Alexander (R-LA), Chair of the Senate education committee, and Democratic Senator Michael Bennet of Colorado are cosponsoring legislation to reintroduce year-round Pell Grants. “We have long supported providing students a more flexible Pell Grant program and hope this is one of many areas Congress and the administration can work together to strengthen higher education,” a Republican education committee spokesman was quoted as saying in Inside Higher Ed. Even with this bipartisan support, however, the administration faces a difficult task in getting the legislation through a very budget-conscious Congress.
The $300 bonus, dubbed “15 to finish” by education non-profits, is also somewhat controversial, though the division is between a different set of stakeholders than the Pell Grant expansion. Many college completion non-profits support 15 to finish, saying that encouraging 15 credit semesters is an important tool in incentivizing Pell recipients to graduate on time. The plan has drawn criticism, however, from community college leaders and adult student advocates, who contend that 15 credits is too many for students who are busy working or who have come into higher education unprepared for college-level work.
See the UW Federal Relations department post for further information on the Pell Grant proposal.
New York state has recently instituted the “Get on Your Feet” loan forgiveness program in an effort to keep young college graduates living and working in the state. The program, originally introduced as a part of Governor Cuomo’s 2015 Opportunity Agenda, is designed to help struggling recent graduates in the state pay back their student loan debt. Get on Your Feet is the most recent extension of NY state’s financial aid to its college graduates, which includes loan forgiveness for several public service professions and need-based state grant programs with awards of up to $5,165.
There are a number of eligibility stipulations for the program, including that the graduate be enrolled in the federal Income-Based Repayment plan or the Pay As You Earn plan, that they are making less than $50,000 per year, that they work and have graduated in-state, and that they have received their degree during or after the 2014-15 academic year. Get on Your Feet also only applies to federal loans; private loans are ineligible for relief through the program.
The plan, which has been covered by CNN Money, the Huffington Post, Forbes, and the Washington Post, is not without controversy – recent graduates who do not qualify for Get on Your Feet are upset because they feel they are paying for others’ college costs while reaping none of the benefits of the loan forgiveness. The program is financed through the state’s General Fund, for which the primary sources of revenue are in-state taxes.
The Washington Post article above (linked again here) lists some of the other states that have forms of student loan forgiveness. Forty-five states and the District of Columbia offer some form of loan forgiveness for its residents, according to the article, but New York is the only state that specifically targets lower-income graduates. Most programs in other states are concentrated in public-service industries; health, social work, teaching, and public law.
Washington state provides health-care professionals with loan forgiveness of up to $70,000 over two years (details here) and also gives financial assistance in the form of the State Need Grant (SNG), which distributes financial aid awards up to the price of in-state undergraduate tuition—$10,344 at UW—for Washington residents whose families meet the minimum income requirements.
Unfortunately, more than 33,500 students across Washington, 3,500 of whom attend the UW, are eligible to benefit from the SNG but do not because the program has not received sufficient funding from the state.
The 2016 edition of UW Fast Facts is now available. You can find it on the OPB website, under the UW Data tab and in the Quicklinks bar on the left, or you can access it directly at UW Fast Facts.
Thank you to OPB’s Institutional Analysis team and to our partners around the UW for their work to gather, verify and crosscheck data; format the document; and pull it all together.
Please contact Becka Johnson Poppe or Stephanie Harris if you have any questions.
United States continues slide in global education rankings: A recent report released by the Organization for Economic Cooperation and Development (OECD) reveals that the United States continues to fall behind in educating its populace. The study shows that the US has dropped to fifth in the percentage of young adults, defined as those between age 25 and 34, who have some sort of higher education degree (46 percent). This drop comes despite the Obama administration’s stated goal of having the highest proportion of young adults with degrees in the world by 2020. The report also noted that the percentage of students who leave their home countries for college in the US has dropped significantly since 2000, from 25 percent to 19 percent, with more students opting for the UK, Japan and Australia than ever before.
Income-based repayment now most popular higher ed federal aid program: The U.S. Department of Education reports that more student debt is now being repaid through the Income-Based Repayment (IBR) Plan and the Pay as You Earn (PAYE) Plan—another form of income-based repayment—than any other type of repayment. The combination of IBR and PAYE accounts for $188 billion out of a total of $586 billion, a dramatic increase from past years; the percentage of loan dollars in these two programs has doubled since 2013. According to Jason Delisle at edcentral.org (article linked to above), this is both good and bad news. On the one hand, it seems that more students are learning of income-driven repayment plans and are attracted to the affordability they offer. On the other hand, it could be that more borrowers are not expecting to get jobs that would allow them to afford more traditional loan repayment programs.
College enrollments continue to decline: 19.3 million students enrolled in higher education institutions in fall 2015, 340,000 fewer than enrolled in fall 2014, according to a recent report released by the National Student Clearinghouse. The drop was most pronounced among for-profit institutions, which saw a decline of over 180,000 enrollees from 2014, and among community colleges, at which 145,000 fewer students enrolled. Given the demographics of the students who are choosing not to enroll—primarily full-time community college students and students over the age of 24—researchers have attributed the drop in enrollment largely to the improving job market. The enrollment levels of public and private 4-year institutions stayed largely the same; for information about enrollment trends at the UW, please visit UW Profiles’ enrollment dashboard.
Last week, Congress passed a bipartisan bill to extend the Federal Perkins Loan Program, which had expired in September.
The bill authorizes new undergraduate applicants to join the program through September 2017, but only if they have exhausted all other federal borrowing options first. New graduate students will not be able to join the program, but those who already have Perkins loans can continue to receive them through September 2016.
In the current academic year, over 3,200 University of Washington students have received approximately $12 million in Perkins loans. These low-income, high-need students, rely on Perkins loans to cover any financial gap that remains after grants and scholarships have been applied to their tuition.
More information on the Perkins extension is available at Inside Higher Ed and The Chronicle.
Undergraduates who graduated with student loan debt from four-year colleges in 2014 owed an average of $28,950, according to a recently released report by The Institute for College Access and Success (TICAS). 69 percent of graduates have loan debt, the same figure as last year and slightly higher than it was in 2004 (65 percent). The average amount of debt per borrower is up 56 percent from 2004 – more than double the inflation rate over the same period – but only up 2 percent from 2013.
A number of factors have contributed to the rising student debt load over the past decade. States have decreased their investment in public higher education over the last ten years, causing students at public institutions to bear a higher percentage of the funding burden. Since 2004, the share of public higher education funding provided by states has dropped (from 62 percent to 51 percent) and the share paid by students and their families (in the form of tuition) has increased (from 32 percent to 43 percent).
In addition, the growth of Pell Grants has not kept up with rising costs. The TICAS report shows that between 2004 and 2012—the last year in which data is available—recipients of Pell Grants at public four-year colleges saw average cost of attendance rise by $7,400 and grant aid rise by just $2,900. At private, non-profit colleges the gap is even wider; costs rose by $14,400 and grants increased by $8,700.
Washington state is performing well with regard to student loans: only 58 percent of Washington bachelor’s degree recipients who graduated in 2014 had loans, and those who did had an average of $24,804, more than $4,000 below the national average. The University of Washington also looks good by these metrics: thanks in large part to the University’s commitment to institutional aid through programs such as Husky Promise, less than half of all UW undergraduates who graduated in 2014 had student debt and the average debt burden was $21,558, well below the state and national averages.
While Washington’s performance relative to its peers is laudable, student debt is still a major issue for many students. The TICAS report offers a series of proposals to mitigate the student debt load, among them doubling the size of Pell Grants, simplifying income-driven repayment plans, and improving student loan servicing to make it easier for students to pay back their loans. It is important that policymakers remain focused on reducing the student debt burden and continue working with institutions to make higher education accessible and affordable for all students during and after graduation.
 It’s important to note that borrowing rates and debt levels vary widely by state, college and sector.
 Because the federal government does not require colleges to report debt levels for their graduates, data in the TICAS report is based on voluntary reporting by institutions. Hardly any for-profit colleges voluntarily report their graduates’ average debt, so this year’s debt figures are for public and nonprofit colleges only.
The Department of Education recently released their annual report detailing the 3-year cohort default rate (CDR)—a metric that measures what percentage of postsecondary students default on their loan payments within the first three years of entering repayment—and the data are encouraging: the 3-year CDR for FY 2012 is 11.8 percent, almost two percent lower than the previous year and three percent lower than FY 2010.
While reasons for the drop are uncertain, administration officials have credited the increased enrollment in income-based repayment plans as partially responsible. Secretary of Education Arne Duncan has cheered the lower default rate but cautions that there is more work to do. “There’s no real reason why we can’t significantly reduce default rates even further,” he told reporters in a statement reported by Inside Higher Ed. “We’re going to keep working to hold schools accountable.”
The report also breaks down the CDR by school, state, and institution type. Below is a breakdown of the most salient statistics.
- Public four year institutions saw their 3-year CDR drop to 7.6 percent, down from 8.9 percent last year.
- Private non-profit four year institutions’ default rate also dropped, to 6.3 percent from 7 percent.
- Private for-profit four year institutions’ CDR dropped to 14.7 percent, down from 18.6 percent last year.
- Schools in Washington state have an average 3-year default rate of 10.1 percent, slightly below the national average.
- The University of Washington performed exceptionally well by this measure: the 3-year CDR for UW dropped to 2.7 percent, almost 5 percent lower than the national average for public four year universities and down from 4.3 percent last year.
As previously stated, the declining CDR average nationwide is a hopeful sign for the future of student loan repayment. Nevertheless, loans remain a massive strain on millions of college students and graduates and more must be done to alleviate the student debt burden. The CDR itself has come under fire as a flawed metric; it only measures those students who default on payments and does not take into account the almost one in three borrowers who make payments but cannot make any progress on paying down their debt or the share of students at a given institution who borrow. Some in the education policy world have called for using loan repayment rates, rather than default rates, as the primary metric for gauging an institution’s ability to prepare its students for repayment.
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