Office of Planning and Budgeting

On Monday, Kaplan University launched “Open College” which is intended to help adult students earn a Bachelor of Science degree in Professional Studies by offering credit for a combination of competency-based course assessments, experiential learning, and external exams (AP, IB, CLEP, DSSTs, etc.). Open College will include free online courses and mentoring to help prospective students identify and organize prior experience that could qualify for college credit. Once students enroll and have their prior skills assessed for credit, they will pay a subscription fee of $195 per month, an assessment fee of $100 per each of the remaining 35 “course equivalents” needed to earn a degree, and a $371-per-credit fee for a final six-credit capstone course.

According to The Chronicle:

“A student entering with no credits who pursued the program for 48 straight months could earn a bachelor’s degree for about $15,000. Students who earned credits based on their prior experience would end up paying less than that. Officials expect that such students would typically enroll with about 60 credits, take 24 to 30 months to complete a degree, and pay about $9,500.”

Kaplan’s administration sees Open College as the newest candidate in the hunt to create a $10,000 bachelor’s degree and as a new, flexible way for adults to advance their career.  While Open College’s structure and pricing may work well for some students, a few things should be considered before rushing to enroll in Open College.

First, students at Open College will receive little, if any, financial aid.  Open College’s website says it will not participate in federal student aid programs; it also gives no indication that students will be eligible for state financial aid or that it will offer any form of institutional aid. Therefore, although comparisons are difficult and potentially problematic, it’s worth noting that in 2013-14, resident students at public four-year institutions paid an average of $3,120 in annual net tuition and fees (published tuition and fees less grant and aid scholarship from federal, state or institutional sources).[1] If we assume, as Kaplan did, that a student entering with no credits would take 48 months to earn a degree and that tuition and fees would not increase during those four years, then a resident student who enters a public four-year with no previous credits would pay roughly $12,480 in tuition and fees to earn a four-year degree, compared to a similar student at Open College who would pay $15,000. Of course, this total does not consider the cost of rent or room and board, which can be very expensive; but neither does Open College’s estimate, even though a student earning a degree through their program would presumably still be spending money to eat and live while earning a degree.

Second, employer doubts about the quality of an online degree may impact graduates’ employability. According to the results of two surveys released last fall, only 41 percent of hiring managers believe that online programs are of the same quality as traditional, in-person programs.

On Thursday, the American Association of State Colleges and Universities (AASCU) released its most State Outlook.  According to the report, state operating support for public  four-year colleges and universities is 3.6 percent higher for FY 2015 than it was for FY 2014. Of the 49 states that have passed a budget thus far, support for higher education increased in 43 states and decreased in only 6 states. Of those 6 states that reduced funding, all were under 3 percent: Alaska, Delaware, Kentucky, Missouri, Washington (0.8 percent decrease) and West Virginia.

There was a relatively small amount of variation between states in terms of their year-to-year funding changes. For FY 2015, the spread between the state with the largest gain and that with the largest cut was only a 24 percent—this is compared to 57 percent, 25 percent and 46 percent, respectively, in FYs 2012, 2013 and 2014. The report notes that this decreased volatility likely indicates “a continued post-recession stabilization of states’ budgets.”

Charitable contributions to U.S. colleges and universities increased 9 percent in 2013, to $33.8 billion—the highest recorded in the history of the Council for Aid to Education (CAE) Voluntary Support of Education (VSE) survey. In addition, college and university endowments grew by an average of 11.7 percent in FY 2013, according to a January 2014 study released by the National Association of College and University Business Officers and the Commonfund Institute.  This represents a significant improvement over the -0.3 percent return in FY 2012.

The report also describes ten highlights/trends from states’ 2014 legislative sessions, those being:

  1. State initiatives linking student access to economic and workforce development goals.
  2. Tuition freezes or increase caps in exchange for state reinvestment—this occurred in Washington and another example is discussed in our previous post.
  3. Performance-based funding systems that attempt to align institutional outcomes with state needs and priorities.
  4. Governor emphasis on efforts to advance state educational attainment goals.
  5. Interest in policies related to vocational and technical education, including allowing community colleges to grant certain four-year degrees (as described in our previous post).
  6. Efforts to develop a common set of expectations for what K-12 students should know in mathematics and language arts.
  7. STEM-related initiatives, including additional funding for STEM scholarships in Washington.
  8. Financial support for the renovating and/or constructing of new campus facilities—unfortunately, Washington’s legislature did not pass a capital budget.
  9. Bills allowing individuals to carry guns on public college and university campuses—as of March 2014, seven states had passed such legislation.
  10. Legislation that extends in-state tuition or, as occurred in Washington, state financial aid to undocumented students.

Other noteworthy policy topics described in the report include:

  • Student financial aid programs—some states broadened their programs while others limited them;
  • Online and competency-based education reciprocity agreements;
  • “Pay It Forward” Funding Schemes; and
  • Consumer protection as it pertains to student recruitment, advertising and financial aid at for-profit colleges.

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.

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:

  1. Their findings don’t necessarily mean MOOCs will never reach underrepresented populations, just that they haven’t done so yet; and
  2. The respondents represent only a small percentage of students registered for Penn MOOCs, let alone all MOOCs; thus “the survey may not be generalizable.”

(This piece was originally posted on 07/11/2013, however it was lost due to technical issues and is therefore re-posted here.)

Last week, the Oregon legislature passed a bill that, if signed by the governor, will implement a pilot program to study the effects and feasibility of substituting upfront tuition payments with income-based, post-graduation payments. For 24 years after graduating, four-year college students would pay back 3 percent of their income and community college students would pay back 1.5 percent. Students who do not graduate would pay back a smaller percent determined by how long they were in school.

If, after several years of study, Oregon decides to adopt a plan (or some form of it), it would signify a major shift in the funding paradigm for public institutions. But that’s a big IF. The plan has received considerable criticism due to a multitude of unanswered questions that could pose significant logistical barriers. For example:

  • How would institutions and/or the state pay for the plan’s implementation (i.e. the several years of foregone tuition revenue between when a student enters school and when they graduate and start earning pay)?
  • How would the state efficiently collect accurate income data on students who move out-of-state?
  • How would the state go about collecting and enforcing payments?
  • How would the plan account for and apply to part-time students, transfer students, mid-career students, and other non-traditional students?
  • How would the plan work with federal and state financial aid programs? Would low-income students be accommodated so as to avoid creating barriers to entry?
  • How does one pilot a 24-year repayment program in just 2 or 3 years?

Even if Oregon’s higher education commission, which is tasked with implementing the pilot program, can find viable answers to those questions, the plan still has a number of possible (if not likely) negative consequences. For instance, the plan may:

  • Magnify the public’s view of higher education as a private good (only benefiting the individual) rather than a public good (benefits for many) which, in turn, could spur the continuing and problematic trend of replacing state dollars with tuition revenue;
  • Make institutions even more vulnerable to economic variations and recessions as their revenue would be tied to graduates’ earning and unemployment rates; and
  • Create social and economic imbalance between Oregon and other states since students who expect to earn less—e.g. social science and humanities majors—would be incentivized to go to Oregon, and students expecting to earn more—e.g. engineering and medical students—would likely go elsewhere.

Granted, the idea of basing college payments on graduates’ income is not a new one. Some federal student loans are eligible for income-based repayment and a program similar to Oregon’s already exists in Australia. However, Australia’s version is administered at the federal level, meaning many problems inherent in Oregon’s plan (tracking students who move around the country, imbalance between states, etc.) are avoided.

The Economic Opportunity Institute, a liberal think tank in Seattle, proposed a version of the plan for Washington in October 2012; but, unlike Oregon’s version, it has yet to go anywhere.  We’ll keep you posted.

Last week, President Obama toured several colleges and universities promoting his plans to make college more accessible and affordable for “middle class” students. As he noted during several stops, achieving a higher education remains one of the most critical means by which citizens achieve job security and financial  stability.

For more detailed information about the central themes of the President’s plans, as well as information about which components require action from Congress, please review a brief on the topic, as well as a blog from Federal Relations. Read more about the plans here and here.

 

In “For Public College, the Best Tuition Is No Tuition,” a recent opinion piece published by The Chronicle, the author describes the merits of Finland’s no-tuition education system. In Finland, “all education became public and free” during the 1960s as part of a multipronged strategy to reform and improve education. The other prongs of the strategy involved strengthening the country’s basic education by providing teachers with better pay and training, ensuring that students have individual attention at a young age, and by making education more interactive and experience-based. Forty years later, the country ranks 1st in Pearson’s Global Index of Cognitive Skills and Educational Attainment, which is based on results from a variety of international tests of cognitive skills as well as measures of literacy and high school graduation rates. The US ranked 17th. Though the accolades go to Finland’s basic education system, the author concludes that the US should model its higher education system after Finland’s. However, a higher percentage of the US’s population has attained tertiary education (42 percent, ranked 5th, versus 39 percent in Finland, ranked 9th) and a higher percentage has entered into higher education (72 percent, ranked 8th, versus 68 percent in Finland, ranked 13th).

Even if the US should model its higher ed system after Finland’s, the no-tuition strategy is not nearly as feasible as the author suggests. To determine whether Finland’s approach would be “affordable” for the US, the author multiplies the number of US public students in 2008-09 by the average cost of public tuition, room, and board in 2009-10. By his calculations, the program would cost $130 billion annually which, he notes, is more or less equivalent to what the federal government spent on Pell grants and student loans in 2010 ($134 billion). His approach, however, has some serious flaws:

  • First, what he is analyzing here is the cost of all public education becoming free, not all education becoming public and free, which is Finland’s model. It is unclear whether the author accidentally left out private non-profits and for-profits—which would be converted to public institutions and made free under Finland’s model.  But if the other sectors are added into the equation, the program costs increase significantly.
  • Second, undergraduate tuition and fees have increased since 2008-09. Between 2009-10 and 2012-13, adjusting for inflation, undergraduate tuition and fees increased by about 5 percent per year at public institutions and by an average of 2 percent per year at private non-profits. During that the same time, federal spending on Pell grants and undergraduate financial aid remained relatively stable after adjusting for inflation, meaning the costs would not be nearly as interchangeable as the author suggests.
  • Lastly, completely eliminating the price of tuition would stimulate demand, which would increase enrollment at public institutions and, thus, the cost to taxpayers. Not only would there be a per-student cost (tuition, room, board, etc.) for each additional student, more students would also require more buildings, classrooms, labs, housing and other capital investments.

Another significant feature inherent in Finland’s system that isn’t contemplated by the author is Finland’s use of a barrier to entry. Finland has limited enrollment spaces and, thus, requires that students pass certain standardized tests at specified levels, depending on the program. This works well in Finland due to their exceptional K-12 system, which ensures that all students are thoroughly prepared for college regardless of personal income or community wealth. The same cannot necessarily be said about our basic education system in the US. Thus, it isn’t clear whether a standardized test could serve as a barrier to entry without significantly and profoundly harming less prepared students.

We’re trying to create a system in which students of all backgrounds and privileges have access to higher education, but substituting price for a proxy barrier like college preparedness may not get us very far. College preparedness would be a preferable barrier in that naturally-talented low-income students would have a better chance of attending college than they currently do; but what would happen to the students who don’t have the resources they need to succeed? Would they be denied access to higher education?

There are costs and tradeoffs associated with every higher education system and reform plan, free tuition is no exception. Free tuition may be a viable option, but it’s not a silver bullet.

Today, with public financing for higher education eroding, tuition on the rise, and little growth in household income, the idea that technology can and must revolutionize higher education has once again taken strong hold. Recent start-ups, Coursera and Udacity, founded by Stanford faculty members, and a joint MIT/Harvard venture called edX have the country talking once again about the future of higher education. A new OPB brief  describes these new developments, clarifies the differences between classroom learning, online learning and Massive Open Online Courses (MOOCs), and evaluates their roles in and impact on higher education in the US.

Tom Friedman published a glowing op-ed about MOOCs this week that reads more like a commercial for these start-up companies than a careful consideration, but many of the Reader Picks comments are quite good in pointing out the many, many questions that remain about how this use of technology will fit into education into the future.

Jeff Selingo’s recent blog post on the Chronicle of Higher Education website summarizes conversations he had with students at six higher education institutions about majors, job skills, and online learning. His findings were somewhat surprising and ran counter to many current trends in higher education. First, he learned that students, while completely immersed in the online world otherwise, do not favor online learning. Instead, they crave face-to-face, personal interactions with students and professors. Second, students feel unprepared for choosing a major and a career, and more counseling would be useful in helping students find their ideal career path. Finally, students do not think majors matter that much—instead of pursuing career-specific majors, students want a broad education that exposes them to many disciplines and prepares them to be good learners and thinkers.

As a student, I can relate to most, if not all of Selingo’s findings. I have never taken an online class at the University of Washington, and few undergraduates I know have. Those that have taken online courses say it is much more difficult to stay motivated and keep up with the material when there is no class to go to and no professor or TA to notice if you fall behind. As an International Studies major, discussion and group work are central to my studies and difficult to replicate online. While such classes are likely helpful for non-traditional, working students finishing their degrees, they are not a perfect replacement for an interactive classroom experience.

Selingo’s assertion that students want more career exploration before college is likely accurate, though I know efforts made both in K-12 and higher education in Washington to help students choose careers and majors. The culminating project and High School and Beyond Plan students complete at the end of high school in Washington State is meant to help students identify their interests and strengths and decide on future career and educational goals. FIGs and TRIGs at UW can help students gain an introduction to prospective majors, and career and academic advisors give lots of opportunities for students to explore potential career paths. While certainly not all students seek out help, there are many options and resources for students that look for them.

The finding that surprised me most was that the students Salingo interviewed thought majors did not matter and were not interested in career-specific learning. While most students I know follow their passions and interests when selecting a major, I believe the economic downturn has made my peers more practical about their choices. A student might major in accounting or business instead of economics, or major in biology and pursue their interest in theater in their free time. Many students add second, more job-skills focused majors or minors late in their undergraduate education in order to make themselves more competitive in the job market. Often, internships solicit applications from specific majors like business, engineering or computer science, which pushes students to consider these majors over others in order to get relevant job experience.

To read more of the Chronicle blog post, please click here.

The Center for Studies in Higher Education (CSHE) at UC Berkeley has released a new report calling for a modernization of the UC system’s governance structure. Today, the UC system is run as one university with multiple campuses, and most decisions are made by a single, system-wide Board of Regents. The Center contends that the UC system has undergone huge changes in the past 50 years and that this centralized governance system is outdated. The campuses face individual challenges and opportunities: less funding from the state of California, increasing complexity, more diversity in the student body, and special programs, faculty and capital projects. The report contends that a more localized system of governance would be responsive to the needs of the campuses, would promote more efficient decision-making, and would allow the Regents to better capitalize on the unique opportunities of each campus.

The authors recommend that the UC system shift towards a hybrid system of governance, maintaining the Board of Regents while creating individual campus governing boards. The UC Board of Regents would continue to provide system-wide coordination and planning, preserve the UC-wide state budget, ensure access, and protect the reputation for academic excellence the UC system has cultivated. The local campus boards would approve campus budgets and allocate financial aid monies, set tuition for graduate and out-of-state students as well as for resident undergraduates (within Regental limits), set total enrollment capacity, decide on faculty cost-of-living adjustments, and approve campus construction projects.

The plan is controversial, and has received mixed reviews from UC authorities. While UC President Mark Yudof does not endorse the CSHE proposal, he concedes that the system should have further conversations about governance to make the system more flexible and efficient.  Robert Birgeneau, one of the report authors and the current UC Berkeley Chancellor, defended the proposal, claiming it provides the necessary autonomy for campuses to address their individual challenges and opportunities.

To read more about the proposed structure of the campus boards, or the specific responsibilities they would hold, check out the full report here.

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