The Gates Foundation has joined the nation’s financial aid conversation and is attempting to rethink how policies and practices can not only help maintain access (in the face of flagging state support and rising tuition prices), but also help students succeed. In September of last year, the Gates Foundation launched its Reimagining Aid Design and Delivery project, which provided 16 organizations with funding to develop and publish innovative financial aid strategies aimed at encouraging college completion. One of the 16 organizations, the New America Foundation, recently released its white paper, which recommends bolstering Pell Grants, limiting student loan options, and removing higher ed tax benefits.
To improve “both the effectiveness and sustainability of Pell Grants,” the New America Foundation recommends:
- Making the Pell program a mandatory federal budget item;
- Increasing the maximum grant faster than is currently scheduled while restoring summer grant support;
- Limiting Pell eligibility to 125 percent of a program’s length;
- Providing additional federal funding to public and private-nonprofit colleges that have a large proportion of low-income students and high graduation rates; and
- Requiring four-year colleges that enroll a small percentage of low-income students and charge more than $10,000 per year (after financial aid) to match some of the Pell dollars they receive with need-based aid from institutional funds.
The plan, which is intended to be “budget neutral,” recommends that the Pell Grant changes be funded by:
- Eliminating the American Opportunity and Lifetime Learning tuition tax credits, tax-advantaged savings plans for education, and the student loan interest deduction;
- Ending the Supplemental Educational Opportunity Grant program; and
- Encouraging borrowers to refinance old student loans into direct lending.
The authors also recommend consolidating federal student loan programs into a single, “enhanced” Stafford Loan system as a means of simplifying the student loan system and reducing the potential for default. This would involve:
- Automatically enrolling all federal student loan borrowers in income-based repayment plans;
- Eliminating subsidized undergraduate loans;
- Setting student loan interest rates via a fixed formula that adjusts to market conditions;
- Ending the Grad PLUS and Parent PLUS loan programs;
- Increasing borrowing limits slightly to $40,000 total for undergrads and $25,500 per year for grads; and
- Limiting federal student loan eligibility to 150 percent of a program’s length.
Although some (if not many) of these ideas are politically unpopular, the authors argue that their recommendations must be implemented together in order to be effective. However, it seems more likely that Congress will cherry-pick specific suggestions to pursue or perhaps ignore the report’s policy proposals altogether. The Gates Foundation hopes their project will, at the very least, stimulate discussion about reforming financial aid.
Last week, the National Commission of Higher Education published an open letter calling on “every college and university president and chancellor to make retention and completion a critical campus priority” and asserting that such efforts are “an economic and moral imperative.” Six higher-ed associations assembled the Commission in 2011 at President Obama’s request. The 18 college presidents that form the Commission’s membership come from every sector, except for-profits, and were tasked with investigating strategies that individual schools can use to improve graduation rates.
The NY Times quotes Dr. E. Gordon Gee, chairman of the Commission, as saying, “We concentrate most on the admissions side of things, getting the bodies in, and there’s no one in charge of seeing that they get through and graduate.” Although enrollment rates are strong, nearly half of all college students nationwide fail to earn a degree within six years (79 percent of
entering freshman graduate from the UW within six years).
Completion efforts should take into consideration the changing face of higher ed: first-generation, mid-career, part-time, and veteran students are an ever-increasing share of the nation’s student body. The report notes that “adult learners are far less likely than their traditional-age peers to complete their degrees” and will need flexible schedules, more financial assistance, and targeted student services in order to succeed.
Other recommendations from the report include:
- Narrowing course options so that students prioritize completion;
- Putting someone in charge of overseeing completion efforts; and
- Giving credit for previous learning.
The Commission asks colleges to avoid one-size-fits-all solutions and to eschew inflating their graduation rates by admitting only the best-prepared, lowest-risk students and/or by making it easier for students to pass.
The report acknowledges, however, that colleges need assistance in these completion endeavors, saying, “Disinvestment in higher education is terribly damaging and undermines efforts to expand and enhance academic and support services for students.”
The Commission believes the report will trigger a sense of urgency among leaders (academic or otherwise) and, hopefully, meaningful action.
Dartmouth will stop granting college credit for students with high AP test scores beginning with the class of 2018, which will enter in the Fall of 2014. Currently, Dartmouth students with scores of four or five (out of five) on an AP test can have certain lower-level courses waived, earn placement into higher-level courses, or receive credit toward their degrees. When the new policy takes effect, the first two of options will still be available, but students will not be able to earn credits. Dartmouth’s Committee on Instruction proposed the change in policy and the faculty passed it with an “overwhelming majority,” according to Inside Higher Ed. However, faculty members say they “still value AP courses – just not as a replacement for a college classroom.”
Dartmouth changed the policy after its psychology department performed an experiment to assess the college-level competence of top AP scorers. Students who had earned a five on the AP psychology test were asked to take a placement exam based on the final for intro psychology; 90 percent of those students failed, according to the college. The researchers also found that the students who failed and then chose to take intro psychology did not perform better than their peers who had never taken AP psychology or who had scored less than a five. These results challenge those of an independed study published by College Board. College Board officials say they question Dartmouth’s results and believe the college has an obligation to share the details of its experiment.
There are concerns that the college’s change in policy will discourage high school students from accepting the challenge of an AP course and/or could keep students on campus longer than they would if college credit were granted for their scores. Dartmouth’s Committee on Instruction plans to review the policy in three years.
In Washington, RCW 28B.10.053 requires that institutes of higher education “recognize the equivalencies of at least one year of course credit and maximize the application of the credits toward lower division general education requirements that can be earned through successfully demonstrating proficiency on examinations, including but not limited to advanced placement and international baccalaureate examinations.”
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.
The US Departments of Treasury and Education teamed up to analyze higher education and economic data, and released a short report that highlights the following familiar points:
- Education is correlated with higher earnings: median weekly earnings for a worker with a BA degree are now 64% higher than for a worker with only a high school degree.
- Education is key to socio-economic mobility: almost half of children born into the bottom income quintile remain there as adults compared to only 20% of those who receive a degree.
- Funding cuts result in higher tuition: Public funding for institutions has, on average, declined from 60% of revenue to less than 40% over two decades while tuition revenue has increased by almost the same amount of the decline.
As a result of the above, federal financial aid has become an increasingly important contributor to college affordability, comprising over half of all grants and loans awarded to students. While protecting and increasing federal funding for aid is imperative, the report makes clear that states and institutions will have to make changes as these trends continue or broad access to higher education in the US will be at serious risk.
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Released last week by the Brown Center on Education Policy at Brookings, Beyond Need and Merit: Strengthening State Grant Programs describes the scope and type of state grant programs across the US, and provides recommendations for improvement. Such programs currently provide over $9 billion in aid to students each year and comprise, on average, approximately 12 percent of total state funding for higher education. However, they vary widely in number, complexity, eligibility criteria, grant amounts, and efficacy.
Average annual tuition at a public four-year institution in the US is just over $7,000, and the average state grant disbursed to students ranges from $44 in Alaska to over $1,700 in Sourth Carolina (averaging $627 across all states). While 73 percent of all such aid is disbursed based primarily on financial circumstances, many states have adopted large, merit-based programs in recent years that direct grants to non-needy students. For example, the report notes that in Louisiana, where the average annual household income is $45,000, 45 percent of total state grant funds went to students from households with income above $80,000.
Ultimately, the report focuses on ways to potentially streamline state grant programs and better target their resources to those students who need them most in order to increase the impact on both college access and completion. Major recommendations include:
- Focus grants on students with financial need, who have been shown by research to be most postively affected by grant aid.
- Simplify grant programs to the extent possible while still being able to target resources to needy students. Straightforward applications, early knowledge of awards, and effective net-price calculators all have a positive impact on application and enrollment rates for students with financial need.
- Consolidate multiple programs where possible, including converting state required tuition set-asides to state grants to avoid the appearance that the students are subsidizing needy students instead of the state.
- Create financial incentives for students while they are enrolled by requiring minimum but attainable grades and steady progress toward completion.
- Consider targeting resources to non-traditional students, including those who are older, part-time, and placebound.
- When resources are constrained, ration grant aid in a way that is clear and predictable for students.
- Consider state grant aid incentives in concert with federal and institutional aid to ensure that programs are not operating at cross purposes.
- Evaluate existing programs as well as test and evaluate new approaches.
Although not discussed much in the report, Washington State has one of the most generous state grant programs in the nation, even though it currently does not have enough funds to accomodate all qualified students. 98 percent of Washington grant funds are awarded based on student financial need and the average grant per student is nearly $900, compared to the national average of $627. Washington State Need Grant funding and policy has and will continue to be key to maintaining college affordability as scarce resources have necessitated rising tuition while household incomes are stagnant. This report provides some useful guidelines for ensuring that taxpayers receive the best return for each dollar invested in student success.
Demos, a research and advocacy organization, recently published a report entitled “The Great Cost Shift” discussing the effects of higher tuition and lower state investment on a growing and diverse college population. The report focuses on the Millennial generation, the group of students born in the 1980s and 90s and beginning to enter college in the 2000s.
There were 26.7 million young people (ages 18-24) in the US in 1990, and 30.7 million in 2010. This population growth combined with increased participation in higher education created a 37.9 percent undergraduate enrollment increase in public universities over 20 years. Additionally, the Millennial generation is characterized by much greater racial ethnic and racial diversity than previous generations (12.3 percent are African American, 57.2 percent are white, and 20.1 percent are Hispanic). Both the growth and diversity of the young adult population has altered the needs of students, and institutions have had to adjust both services and support as a result.
These changes in the number, type and needs of students over the last 20 years has been accompanied by a steady disinvestment of state governments in higher education, which resulted in significant tuition increases. The very institutions, public, that have absorbed the majority (65.5%) of enrollment increases have also endured the largest decline in funding per student (26.1% decline in real terms from 1990-2010). As a result, public four-year institutions raised tuition by 112.5 percent, adjusted for inflation, over the same time period while the real median household income rose just 2.1 percent.
While states and institutions have often offset these tuition increases with larger financial aid packages for student with need, it is increasingly not enough to cover students’ educational expenses, and students borrowed 4.5 times more in 2010 than in 2000.
The report concluded with a number of recommendations:
- Recognizing that lower investment in higher education results in higher tuition and lower access for low and middle-income students, states should appropriate more money to higher ed, especially investing more in large institutions that produce a significant number of degrees.
- Reform the tax system to relieve the tax burden on low and middle-income families.
- States should move away from merit-based aid and focus on need-based financial assistance. They should also increase awareness about the benefits of federal student loan programs to decrease the volume of private debt students take on.
To read the entire report, please click here.
Excelencia in Education has produced a report that summarizes college attainment rates within the Hispanic population in all fifty states. The report is intended to highlight the importance of increasing higher education participation and graduation rates among Hispanics if the US is to reach its ambitious attainment goals.
According to the report, Latinos are expected to be 20 percent of the US population by 2020, and because they have a median age that is significantly younger than average (27 compared to 40), over 25 percent of the 18-29 year old population. Yet in 2011, only 21 percent of Latino adults had an AA degree or higher compared to 57 percent of Asians, 44 percent of Whites, and 30 percent of Blacks.
The report’s Washington State profile shows a sizable Hispanic population in Washington and a large attainment gap:
- Washington has the 12th largest Latino population in the US
- The median age among Latinos in Washington is 24 compared to 40 among other groups
- Latinos currently comprise 16% of the K-12 population in Washington
- 18% of Latino adults (age 25-64) in Washington State have attained an AA degree or higher compared to 43% among others
This report makes even clearer what many employers and higher education officials and experts have known for years: there is much progress to be made in increasing college attainment within the Hispanic population, and as a significant and growing percentage of the overall population, such gains will be a key factor in whether the US can meet the ambitious goals it has set for college attainment.
At the beginning of the economic downturn in late 2008, a higher than expected number of Americans turned to higher education, leading to a 7.1 percent increase in college enrollment for 2009. This phenomenon is typical of recessions as many need to refresh their qualifications and/or increase their skill sets when faced with a volatile job market. A new NCES report finds that while enrollment increased again in 2010, it went up by at a more modest rate, 2.8 percent. Some other interesting findings from the latest NCES data include:
- For first-time freshmen, one-year retention rates were 72 percent for full-time students, but only 44 percent for part-time students.
- Public four-years got 19 percent of their funding from tuition dollars, while private non-profits and for-profits relied on tuition for 33 percent and 91 percent of their revenues, respectively.
- The average six-year graduation rate for full-time students across all four-year schools, public and private, was 58 percent in 2004.
- In 2009-2010, 82 percent of first-time, full-time undergraduates received financial aid. Of those students receiving grant aid, the average net price (sticker price minus grant aid) of attending a public 4-year university was $10,200 (the net price was $16,700 at private non-profits and $23,800 at private for-profits).
- Men made up a slightly higher proportion of enrollments in 2009 than they did in 2008, 42.8 percent versus 42.6 percent respectively.
To take a look at the report and data, click here. Find additional analysis in this Inside Higher Ed article.
The Lumina Foundation set an ambitious goal to increase the percent of Americans with a two or four year degree from 37.9 percent to 60 percent by 2025. This goal has been picked up and echoed by many, including President Obama. In its latest status report, A Stronger Nation Through Higher Education, the foundation finds that degree attainment is increasing, but not quickly enough to reach the 2025 goal. The percentage of American working-age adults with college degrees has increased to 38.3 percent in 2010 from 37.9 percent in 2008.
The report emphasizes that faster degree attainment growth is necessary to ensure the US has enough qualified workers to meet the needs of the rapidly changing economy, which they estimate will require 60 percent of workers to have some form of higher education. According to the report, attainment could be increased by increasing high school graduation rates and boosting degree attainment for minorities and adults with some college but no degree.
The report also includes a state-by-state breakdown of attainment rates. Seattle has the fifth-highest degree attainment rates of metropolitan areas in the US, with 48 percent of working-age adults holding college degrees. A higher-than-average percentage of Washington residents hold college degrees—42.5 percent versus 38.3 percent nationally in 2010. Twenty-five percent of Washington residents have some college credit but no degree, which the report claims could be a good avenue for increasing degree attainment. However, differences between population groups remain: Asian and White degree attainment is at 54.5 percent and 44.8 percent, respectively, but less than 30 percent of Black, Latino and Native American, working-age Washingtonians hold college degrees. While attainment in Washington State is growing, the report finds faster growth is needed to add 471,000 degrees by 2025.
To read more, check out the full report here.
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