In a press release, the Council for Aid to Education (CAE) reported that giving to universities rebounded in 2011, raising $30.3 billion, an 8.2 percent increase over last year (4.8 percent, adjusted for inflation). The top 20 fundraising institutions, of which the University of Washington is number 14, received a total of $8.24 billion in 2011, representing a 15.8 percent increase over 2010. The UW raised a total of $334.49 million last year, up 17.3 percent from 2010 and up 5.8 percent from 2006. In general, most increases in giving to universities were earmarked for capital purposes, such as constructing buildings, though giving for operational purposes is still the majority at 58.7 percent.
A major driver of the increases in charitable giving to universities is thought to be the better performance of the stock market in 2011, which increased the value of gifts of stock universities received by 38.2 percent from 2010. Furthermore, the economy began growing again in June 2009, which increased confidence and therefore increased giving. Universities, which appeal to a number of philanthropic interests, were good candidates for investment. Finally, endowments gained back some value they had lost due to the recession, increasing by a median of 17 percent.
The increase in charitable giving to universities is an important development that could signal increasing confidence in the economy and growing interest in investing in students and learning. To read the full report, or to read more about giving at the UW, please click here and here.
See the latest OPB brief for information about today’s state revenue forecast update.
In a Town Hall Seattle meeting last night, Washington’s six public baccalaureate university presidents and business leaders from REI, Boeing, and Microsoft gathered to discuss unprecedented cuts to Washington’s public institutions and generate energy for the Seattle Times’ Greater Good Campaign. Organized by the Seattle Times and funded in partnership with local businesses, the campaign intends to expand awareness of the importance of higher education for the vitality and economic security of our communities and advocate for increased funding for public higher education.
Last night, the public baccalaureate presidents expressed their concerns with retaining star faculty, providing access to low and particularly middle-income students who don’t benefit from state-supported financial aid programs, and maintaining affordable tuition rates. Business leaders shared their devotion to the Pacific Northwest, but their worries that our state’s inability to educate enough of its citizens may force their companies to look elsewhere for educated workers.
When moderator and Seattle Times editor Kate Riley asked President Young about his impressions of President Obama’s State of the Union address and blueprint for higher education reform, Young said, “They’ve got the guns aimed at the wrong problem.” In Washington, per student funding has remained flat for twenty years, but resources to support educational funding have completely switched. While the state used to provide 70 percent of the per student funding in the early 1990’s, the state now only provides 30 percent. The total funding remains the same but the primary shareholders of our public universities are now students and parents, not the state.
Footage from the event is available here.
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This week, UPenn’s Institute for Research on Higher Education (IRHE) released a report assessing the state of higher education policy in Washington State. While satisfactorily describing the key facts and long-term trends and potential future problems for higher education in Washington State, the report is somewhat unrealistic in its recommendations. It seems to assume that, absent any change in state funding trends, policymakers can dramatically alter educational attainment via structural changes in governance.
Read the latest OPB brief for more information.
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.
The Thomas B. Fordham Institute published an interesting paper recently called Creating Sound Policy for Digital Learning. While primarily focused on the role of technology in K-12 education, the paper provides perspective for higher education as well. This topic is especially important as the economic crisis continues to push universities to produce more with less and, as a result, demands to scale up online learning intensify.
The paper recognizes the hope and possibility that technology will produce productivity gains in education over the long-term, but addresses major questions about quality and cost and emphasizes the need for systematic testing and analysis prior to radically changing today’s teaching model. Among the important points brought up in the paper:
- We must question not only whether online learning can be less expensive than traditional learning, but, more importantly, whether it can be both less expensive and at least as good (or better) in quality and outcomes. We do not yet have enough data to answer this question.
- The world of online learning is not monolithic. There are many ways to integrate technology with learning , and each model has very different costs and benefits and downsides.
- Like with any new model, the start-up costs are very high and require a large up-front investment.
- Many assume that online learning will minimize labor costs by reducing a reliance on in-person instruction, but labor costs associated with developing, running, and maintaining sophisticated technology-based programs are themselves very high.
- Similarly, online learning requires a dependence on expensive equipment (not only individual learning devices for teachers and students, but also servers, storage, and all the needs that accompany the maintenance and management of a large, technology-based enterprise).
- Because technology changes so frequently, many of these costs are confronted anew on a much more regular basis than in a traditional educational model (e.g. Universities spending millions to wire entire campuses and then very quickly having to switch everything over to WiFi).
Technology has revolutionized how we live and do business in the modern world. This has been true in education as well, but the effect has not yet been as transformative as was hoped for. As education becomes more important in developing the human capital required for the economy of the future, its rising costs have become a bigger target for reform. And while it is clear that technology can and should play a larger role in changing how we educate the students of tomorrow, it is important that neither the tools of education nor the cost of education take precedence over the quality of the education.
The New York Times Economix blog has some recent posts discussing new data that continue to illustrate the economic benefits of a college education. Check out all Economix posts that have been tagged with the topic Is College Worth it.
These data and conclusions align with our recent OPB brief, Is Undergraduate Education America’s Next Economic Bubble.
With the special legislative session wrapped up here in Washington, and regular session not set to begin until January 9th, here is some of what has been happening in higher education elsewhere.
Federal Budget Agreement Preserves but Alters Pell Grants: It appears that a last minute FY2012 budget agreement in Washington DC will avert a federal government shutdown. It is reported that this agreement, which cuts billions of dollars and increases NIH funding by a modest one percent, preserves the maximum Pell Grant amount of $5,500 (a priority for Democrats), but alters eligibility. Under this language, Pell grants could only be used for 12 total semesters, not 18. Additionally, the annual income threshold at which a student is automatically determined to have zero Expected Family Contribution (EFC) is lowered from $30,000 to $23,000. Stay tuned to the Office of Federal Relations for frequent updates on these budget negotiations.
Berkeley Unveils New Aid Program: UC Berkeley made big news this week for announcing a new financial aid program aimed at middle class Californians. Students from families making up to $80,000 per year already attend UC schools tuition-free in California. Under this new plan, UC Berkeley students from families making between $80,000 and $140,000 will have to contribute a maximum of 15 percent of annual income toweard the total cost of attendance at Berkeley (currently $32,000, including room and board). The student would also have to contribute about $8,000 per year via loans, work study or scholarships. According to the New York Times, based on current costs, this programs represents a discount ranging from 10 to 37.5 percent for families that fall within the specified income range. A number of private insitututions have similiar programs, but Berkeley is reported to be the first large public institution to follow suit.
Lariviere Out, Berdahl in at Oregon: After less than three years, Richard Lariviere has been fired by the Oregon State Board of Higher Education as President of the University of Oregon following a year in which he found himself at odds with the state System as he pushed for greater independence for the University of Oregon. The controversial move to oust a President who enjoyed student, faculty, and alumni support, was immediately followed by the appointment of Robert Berdahl as interim president. Berdahl is a former long-time University of Oregon professor and Dean, and has also served as the President of the University of Texas, and UC Berkeley Chancellor, among other roles. Berdahl recently ended his tenure as AAU President and took a highly publicized position as a part-time advisor to Lariviere at the University of Oregon.
More Higher Ed Cuts in CA: California Governor Jerry Brown announced another billion dollars in mid-year state budget cuts this week as yet another growing budget deficit loomed. The mid-year cuts include another $300 million reduction for the state’s three higher education systems (UC, CSU, and community colleges), which comprise the largest public higher education system in nation. While UC hopes to use temporary funds to bridge this latest cut for a year, further capped enrollments and tuition increases may be likely throughout the system.
VA Announces New Investments in Higher Ed: Meanwhile, Virginia is one of the only states increasing higher education funding. Governor McDonnell announced a new $100 million in funding for higher education, alongside new capital funding for longer term growth. The money is intended to support the goals contained in legislation passed last year, including increasing college attainment in Virginia, increasing affordability, and increasing the number of STEM and health related degrees awarded.
A new telephone survey, conducted by the Public Policy Institute of California, suggests that although Californians appreciate the quality of their higher education system, they are concerned about the direction in which it is headed. In fact, only 28 percent of Californians think that the system is headed in the right direction, while 62 percent claim it is headed in the wrong direction. While respondents still believe higher education is integral to future success in the workplace, they are worried that affording higher education is becoming increasingly difficult.
Californians’ main concern for the future of higher education is affordability. 61 percent believe affordability is a big problem. Among parents of college students in California, 77 percent are very concerned about the increasing tuition. Fully 69 percent of Californians do not believe we should increase fees to fund higher education. Furthermore, only half of respondents agree that financial help is available for those who need it, and 75 percent believe that students must borrow too much for college.
Respondents mainly blame California’s government for the declining affordability of higher education. Only 29 percent think Governor Jerry Brown is handling higher education well, and only 14 percent think the legislature is doing a good job. 74 percent say the state does not fund higher education adequately. This assertion breaches the ideological divide, with 58 percent of Republicans agreeing that more funding is needed. However, respondents are split on their willingness to pay higher taxes to support higher education (52 percent unwilling, 45 percent willing).
To read more about the survey, check out the full report here.
Released this morning, the November state revenue forecast indicates that the state is short another $122 million below needed revenue for the current biennium. Dr. Arun Raha, Executive Director of the Economic Revenue and Forecast Council, wrote that uncertainty over Southern Europe’s debt crisis and potential political gridlock in Washington, D.C., produced largely expected economic results predicted in September’s dismal forecast. In essence, we still have a $2 billion budget problem and since September, it has grown by $122 million.
The Governor will use this forecast as her benchmark for budget reductions in the 2012 Supplemental budget (first supplemental budget of the 2011-13 biennium). All told, the Governor will need to cut over $2 billion from the current biennial budget in order to produce a balanced budget, which she is required to do before proposing any revenue increases to offset reductions.
This budget will be released this Monday, November 21. We will release a budget brief and blog detailing the impact of the Governor’s budget on the UW as soon as possible. While the Governor’s budget release is a critical first step of the special and regular legislative sessions, we are months away from a final legislative budget.
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