Office of Planning and Budgeting

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.

One of several recent Pell Grant changes has made it harder for some students to finish school and earn a degree, according to Inside Higher Ed. Effective July 1st this year, the federal government decreased the duration of Pell eligibility from 18 semesters to 12 semesters as a means of both cutting costs and incentivizing students to graduate on time. While most students take less than 12 semesters to earn their bachelor’s degree, existing Pell recipients (who expected to receive 18 semesters of eligibility) were not grandfathered in when the changes took place.

Of the estimated 62,000 students affected by the change, colleges say the hardest hit were transfer students and students who have attended some college, but never earned a degree. More specifically, many impacted students seem to be those who:

  • Left school before graduating, but have returned to complete their degree;
  • Transferred, or “swirled,” between multiple schools—a growing trend in higher education;
  • Enrolled with a for-profit institution, but transferred elsewhere before graduating; and/or
  • Changed programs multiple times within the same school.

According to an “informal tally” by the California State University system, about 6,100 of the system’s students (4 percent) lost Pell Grant eligibility because of the new 12-semester limit.

Since some students who lose eligibility may not be able to afford to continue their education and earn a degree, this change could conflict with the government’s emphasis on improving graduation rates and increasing the number of degree-holders. However, as Congress gears up to deal with impending sequester cuts, the financial benefits of these types of tough decisions are increasingly likely to outweigh the nonfinancial costs.

A recent Insider Higher Education article describes the inventive deals that a handful of public universities are pursuing in an effort to keep tuition rates from rising. By offering tuition freezes in exchange for either (1) increased state funding or (2) individual student efforts to graduate on time, universities hope to meet public demands to stabilize tuition and also ease the financial burden of doing so.

1. Public institutions can afford tuition freezes if states pick up the slack. On several occasions, the University System of Maryland has successfully encouraged state lawmakers to “buy down” potential tuition increases. And just last Friday, the University of Minnesota’s Board of Regents accepted a proposal to freeze undergraduate resident tuition if the state provides an additional $42.6 million over the coming two years. This approach has been successful in some states, but the article mentions a major problem: “many states simply don’t have the money or the political will to invest in education at the moment.” However, even when schools do not expect to receive more state support, these proposals may at least spark conversations about the crucial linkage between falling state appropriations and rising tuition rates.

2. Benefits of better on-time graduation rates may be enough to offset costs of tuition freezes. Getting more students to graduate sooner can improve a university’s ranking, lower its students’ average debt, and make room for more incoming students. For some schools, this is enough incentive to provide tuition freezes in a targeted manner. Last week, leaders of the Indiana University system offered to freeze tuition for students who have earned 60 credits by the end of their sophomore year and are, therefore, on track to graduate within four years. Additionally, UT-Austin will pilot a program next year that would award students who receive Federal Direct Unsubsidized Loans with $1,000 of loan forgiveness for each semester they stay on pace to graduate in four years. UT-Austin’s Director of Student Financial Services said the program could save students up to $12,000 over the course of their education.

As public institutions continue to face dwindling state appropriations and increased pressure to stabilize tuition, we may see more of these innovative proposals.

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.

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.

A new report put out by the National Science Foundation examines math and science education at the elementary, secondary and post-secondary level. In general, the news is sobering: elementary and secondary proficiency in science and math is languishing below 40 percent nationwide. Chapter 8 of the report focuses on state indicators, featuring state-by-state breakdowns of science and math education. Important indicators include the number of Bachelor’s degrees conferred, the proportion of degrees in science and engineering (S&E) fields, state expenditures on higher education, and the prevalence of S&E jobs in the workforce. Interesting findings include:

  • In 2009, 1.6 million bachelor’s degrees were conferred in the United States, up 29 percent since 2000. Of these degrees, more than 501,000 were in S&E fields. In Washington State, 32.9 percent of degrees conferred were S&E degrees.
  • During 2010, the annual sticker price for a public 4-year education was $15,014, which represents a 43 percent increase since 2000 (after adjusting for inflation). This does not represent net price, since this number does not include financial aid.
  • In 2009, undergraduate education at a state institution consumed 35.7 percent of a Washington resident’s disposable income. Note that this number does not account for the 20 percent tuition hike in 2010.
  • State funding for major public research universities per student enrolled in 2000 was $10,107, which dropped to $8,815 in 2009.
  • In Washington, 32.5 percent of 25-44 year olds hold a bachelor’s degree.
  • 5.83 percent of Washington’s residents in 2009 were employed in S&E fields, up from 5.16 percent in 2000.
  • Washington has one of the highest rates of patents awarded per worker in S&E occupations in the US—28.2 patents per 1000 S&E workers.

The report indicates that research is flourishing and that Washington is increasingly awarding more degrees in S&E fields, but also that state funding for higher education and affordability have decreased dramatically. We will explore this report more in future posts. To read more about the report, check out the Higher Ed Chronicle post or read the full report.

The Georgetown Center on Education and the Workforce issued a new report,  Hard Times, which focuses once again on why a college education is so important to employment and earnings in the US economy. While persistent critics of the value of higher education point to the recently rising unemployment rate for new college graduates, 8.9 percent, the report points out that for workers with only a high school degree the unemployment rate is 22.9 percent, and 31.5 percent for high school dropouts. The combined unemployment rate for all workers with a BA degree is currently 5 percent.

In addition to pointing out the positive correlation between college education and earnings and employment, the report analyzes data by college major. Perhaps unsurprisingly, they found that the unemployment rate for majors closely tied to a particular industry or job (such as healthcare, business and education) was lower than the rate for those with more generalized degrees. The exception to this were majors like Architecture that are so closely tied to a currently ailing industry that current unemployment rates are the highest of all.

Ultimately, as the economy recovers and the recent graduates gain more experience, all graduates are expected to enjoy improved employment rates.

Last year, Washington State Senate Bill 5182 abolished the Higher Education Coordinating Board and created a Higher Education Steering Committee to assess the state’s need for a redesigned statewide coordinating agency for education. The 13 person Committee met four times and was chaired by Governor Gregoire, and also included UW President Michael Young.

The Final Report, released today, determined that a statewide education coordinating agency in Washington should be singularly focused on increasing educational attainment (at all levels). The report recommends the creation of an Office of Student Achievement, overseen by a majority citizen Advisory Board. This Office would be responsible for:

  • Setting and monitoring short and long term statewide goals for educational attainment
  • Engaging in strategic planning to meet attainment goals
  • Developing performance plans and incentives
  • Engaging in education system design and coordination
  • Providing educational data, research, and analysis in partnership with the existing Education Research and Data Center (ERDC)
  • Developing budget recommendations into the future
  • Setting minimum college admission requirements
  • Administering programs that provide outreach and education to students to increase educational persistence
  • Addressing issues affecting student retention at major transition points (e.g. high school to college, and two-year to four-year)
  • Administering student financial aid programs
  • Serving as the primary point of contact for public inquiries on higher education

The report presents two options for the focus of the Office of Student Achievement. In Option A, the Office would coordinate among and between all state educational entities at every level. In Option B, the Office would focus directly on coordination between secondary and postsecondary education. Governor Gregoire announced today that she was endorsing the adoption of Option B outlined in the Committee’s Final Report and would present implementation legislation shortly.

← Previous PageNext Page →