As reported on the UW Office of Federal Relations blog, President Obama made a splash in the higher education community last week when he outlined new proposals for higher education reform in his State of The Union Address and in a speech at the University of Michigan. Many are praising the President’s focus on the value of higher education in today’s economy, and in particular, the importance of high quality, affordable higher education. However, a proposal to more closely tie federal financial aid funding to some kind of institutional performance measures has proved more controversial.
In what the Administration is calling a Blueprint for College Affordability, Obama has proposed that Congress significantly increase available federal campus-based aid (primarily Perkins loans) and distribute the funds based on three institutional performance measures, including relatively low net tuition levels or low tuition growth, providing a good value to students, and serving low-income students. Until a detailed policy proposal is unveiled (likely after the election), it is difficult to know how substantial a shift this may be for institutions, but it is clearly an attempt to send a message to institutions about cost control. Obama stated, “If you can’t stop tuition from going up, then the funding you get from taxpayers each year will go down.”
Other proposals included in Obama’s blueprint, include:
- Creating a $1 billion Race to the Top program to reward states for making systemic changes in education policy and funding to increase efficiency and effectiveness.
- Creating a $55 million First in the World competition to provide seed funding for institutions or other nonprofits to innovate.
- Publishing a ‘College Scorecard’ for each institution, which will provide clear, comparable information on college costs, financial aid, graduation rates and, if these data become available, potential earnings.
- Asking Congress to make the American Opportunity Tax Credit permanent, extend the lowered federal student loan interest rate (3.4%), and double the number of federal work study jobs.
Without policy details it is hard to know how these reforms might affect specific institutions, but because it marks a shift from previous federal efforts to facilitate attainment by increasing federal aid and easing federal loan repayment pressure, it is an important development and one that we will keep a close eye on.
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 U.S. Department of Education’s Stats in Brief report for October 2011 presents updated NCES based research on the types of students engaging in distance learning (defined now as online, or live and interactive video/audio instruction through CD/DVD or webcast), and changes in distance learning over time. Distance education degree programs are those that utilize such classes exclusively.
The report found that, between 2000 and 2008, the percentage of undergraduate students enrolled in at least one distance education course increased from 8 percent to 20 percent, and enrollment in distance education degree programs doubled, from 2 percent of all undergraduates to 4 percent. Other interesting findings included:
- Computer Science and Business majors have the highest rates of enrollment in distance education courses (27 percent and 24 percent vs. 20 percent, on average) and in distance degree programs (8 percent and 6 percent vs. 4 percent, on average). General studies, education and health care majors also have higher levels of enrollment in distance learning, while math, natural sciences, agriculture and humanities students are least likely to enroll.
- Participation in distance education courses is highest for students in associate’s degree programs (25 percent), followed by bachelor’s (17 percent) and certificate programs (13 percent).
- 12 percent of students attending for-profit schools were enrolled in distance education degree programs, compared to 3 percent of undergraduates at other types of institutions.
- Nontraditional students are most likely to participate in distance learning: 56 percent of students 24 and older took distance education courses compared to 15 percent of students age 23 or younger, and 55 percent of students in distance education degree programs had at least one dependent. Furthermore, 62 percent of students in distance degree programs work full time.
To read more about this study, check out the full report here.
The past few weeks have brought a lot of bad news for the for-profit education sector. Federal and state scrutiny of practices, costs, and outcomes, combined with tightened regulations, high profile lawsuits, and student reaction to high prices in a bad economy, have taken their toll on the sector:
- A state investigation has been opened to determine whether for-profit institutions have been improperly compelling employees to support the candidate currently opposing Kentucky’s Attorney General, a man who also happens to be leading a 20 state joint investigation into the practices of for-profit institutions.
- Enrollments have plunged even more deeply than they did last year across the sector as a whole (14.1% on average), and most dramatically across the largest companies, including 47% at Kaplan, 41% at Apollo, and 26% at Corinthian Colleges.
- As a result of tightening regulations, bad press, and plunging enrollment, stock prices are going down.
- A journalist at the Atlantic is wondering if, in order to survive, these institutions should get out of the business of educating students and attempt to use their large infrastructure and resources as consultants to more traditional institutions that are needing to scale their online education operations, and increase their ability to serve the non-traditional student population.
To read related OPBlog posts, see:
Inside Higher Ed published a feature today detailing an ongoing process that has 27 universities, US and abroad, competing for a gift of land in New York City plus $100 million in exchange for the creation of a new tech-centered campus. Several New York based universities are submitting proposals, due in October, but notable universities from elsewhere such as Stanford and Chicago are also competing for the opportunity, as well as universities based in other countries.
As pointed out in the article, New York already has 110 institutions serving over 600,000 students. However, engineering and tech programs in the region have lacked the success and reputation that the city would like. While institutions with an existing presence in NYC or in the region may make more sense as a partner in this project, Stanford appears to be aggressively pursuing the opportunity, touting its role in the creation of Silicon Valley in California. If successful, this would be Stanford’s first campus outside of Palo Alto.
The absence of public universities on the applicant list is stark. Purdue is the only one. However, this is perhaps unsurprising given the billions of dollars likely required to build a fully operational campus from scratch in a short period of time, and the state-centered history of public institutions in the US.
For the lucky institution with the right amount of resources, this will hopefully be a great opportunity with long lasting effects for the institution and the city of New York. For all of higher education, it will be fascinating to see if this kind of partnership between government and institutions can work to create a new, physical campus that can quickly produce innovation and education while building and maintaining a reputation for excellence.
We’ve blogged previously about the controversial reforms being aggressively pursued by Governor Perry and various of the appointees he has placed on Texas higher education governing boards and in university administrations. The reforms were initially developed by the conservative think tank the Texas Public Policy Foundation (TPPF), and are centered around placing the student in a stronger consumer role, basing professor pay and tenure more directly on student evaluations, creating a bright line between teaching and research funding, and changing the state funding model from one that subsidizes institutions to one that provides grants directly to students. Many may recognize these as reforms long advocated for in the K-12 sector for some time.
After a protracted battle between a variety of interested parties (academics, administrators, legislators, state leaders, alumni, lobbyists and more), the University of Texas System Board of Regents unanimously approved what they called ‘A Framework for Advancing Excellence Throughout the University of Texas System‘ at their May meeting. An action plan released last week provided a glimpse at the compromises made to quell strong opposition.
More flexible than initially feared, the action plan allows institutions to tailor the reforms to their institutions. Major system-wide goals include:
- Increased degree production
- Increased use of online and blended instruction
- Development of performance incentives for professors
- Strengthening of post-tenure review for professors
- Creation of external review for schools and colleges within the institution
- Critical review of PhD programs and decreased time to PhD
- Increased research collaboration, especially with non-academic partners
- Increased research and philanthropic funding
- Increased administrative efficiency through standardized systems, sharing of services, and better space utilization
Although much less divisive than the specific reforms championed by TPPF, these goals are ambitious enough to put Texas in a category of its own nationwide. How individual institutions endeavor to implement the action plan in the near future, and the extent to which they engage faculty in the process, will likely determine the mood and direction in Texas public higher education for some time.
In the meantime, Florida Governor Rick Scott is indicating a desire to follow Rick Perry’s lead on this issue.
- UW Ranked 16 in the world: The annual Academic Ranking of World Universities (ARWU), compiled by Chinese university Shanghai Jiao Tong, places the University of Washington at number 16 in the world. The rankings are heavily based on institutional and faculty achievements in STEM fields, including number of Nobel prizes and Fields medals won, and various citation measures. The US dominates this list, with 17 of the top 20 slots and 151 of the top 500.
- Ohio latest state to consider greater autonomy for public institutions: In a reversal of previous reforms that attempted to consolidate the university system in Ohio, Governor Strickland endorsed the idea of ‘enterprise universities’ in his state budget, released March 2011. Chancellor of the Ohio Board of Regents Jim Petro was tasked with creating a detailed plan for legislative consideration. He unveiled The Enterprise University Plan last week. The plan provides three levels of increasing autonomy from various state government requirements in exchange for a reduction in per student funding of 10-20 percent. The state would continue to cap tuition increases at 3.5 percent per year. While the support of Ohio State President Gordon Gee looks likely, it is not yet clear how other universities or faculty members and legislators will react to this plan as many large questions about both intended and unintended consequences have already surfaced. For related information see our previous post, Quest for Greater Autonomy for Public Higher Ed Continues, and our OPB brief on institutional autonomy.
- Federal government joins lawsuits against for-profits: After implementing significant higher education regulation reform through the Department of Education, the Obama Administration shows a commitment to act by joining existing and new lawsuits against several for-profit higher education institutions accused of violating federal law. For related posts, see Federal Scrutiny of For-Profits Spurs State Action.
As the for-profit higher education industry continues to fight federal regulation, states are starting to pay more attention to the fast growing sector. The National Conference of State Legislatures (NCSL) reports that, as of May, twenty states have introduced at least 34 bills aimed at regulating or supporting for-profit higher education. NCSL reports that eight of these bills have already passed, six have failed or been vetoed, and twenty remain in play. They provide a summary of each piece of legislation, as well as a webpage that centralizes information on this topic from various sources.
Meanwhile, Senator Harkin continues to investigate the sector, and a 10 state joint investigation into the practices of for-profit institutions remains ongoing. It appears that one result of all this scrutiny is that the industry has been pressured to begin to take preemptive action toward restructuring and increased transparency.
For previous OPBlog posts on this topic see:
Last week, Oregon Legislators signed a state budget that, among other things, cut funding for public higher education by 17 percent. It is unknown whether this cut will necessitate tuition increases above those already approved earlier this month by the Oregon State Board of Higher Education, including an 8.8 percent increase at Oregon State University and a 7.3 percent increase at the University of Oregon for resident students.
In the meantime, the Oregon Legislature is expected to pass a bill intended to help Oregon public higher education achieve greater long-term stability by ending state agency status for the institutions, enabling new flexibilities in managing and spending resources. In addition to freeing institutions from state processes guiding building projects and repairs, contracting, and employment, the bill ensures that institutions keep all interest earned on tuition revenue, and adds three members to the State Board of Education. In exchange, the institutions must meet agreed upon performance targets regarding enrollment, graduation, and other measures.
Days after the Department of Education released its finalized Gainful Employment rule, Senator Tom Harkin held his fifth Senate hearing investigating the practices of the for-profit higher education industry. Senator Harkin focused the hearing on the high levels of student borrowing and outsized loan default rates for students at for-profit institutions. Previous hearings and reports have revealed that:
- Less than 10% of postsecondary students are enrolled in for-profits, yet they receive 23% of federal aid, and account for 44% of all loan defaults.
- 95% of all students at for-profits borrow money to attend, compared to less than a quarter of community college students, 64% of students at public four year institutions, and 72% at private four year institutions.
Additionally, Harkin grilled Department of Education Under Secretary Martha Kanter on whether the softened gainful employment rule released by the Department would do enough to help reign in exploitative practices of the for-profit higher education industry, noting that stock prices in the industry increased significantly upon publication of the revised rule whereas previous iterations had sent prices down. Kanter, who was attending in place of Secretary Arne Duncan, defended the regulation as a step forward.
Harkin concluded that while the Department of Education regulations were ‘better than nothing’, he continues to believe that Congressional action via legislation may be necessary.
No Republican members of the committee were present, and no further hearings on the topic are scheduled at this time.
For previous OPBlog posts on this topic see:
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