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Month: October 2013

College Board also Releases “Education Pays 2013”

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The College Board recently published “Education Pays 2013: The Benefits of Higher Education for Individuals and Society,” which provides data on U.S. adults’ level of education and its impact on earnings, employment, health-related behaviors, reliance on public assistance programs, civic participation, and more. The goal of the report, the authors say, is to highlight the ways in which individuals and society benefit from increased levels of education. The authors note, “Financial benefits are easier to document than non-pecuniary benefits, but the latter may be as important to students themselves, as well as to the society in which they participate.”

Many old trends continue to hold true. Having a college education increases one’s chances of: being employed, earning a higher income, receiving health insurance and pension benefits, climbing the socioeconomic ladder, being an engaged citizen, and of leading a healthier lifestyle.  These individual benefits translate to larger, societal benefits, including less government spending on public assistance programs, more tax revenue, and greater civic involvement.

A few noteworthy data points about earnings include:

  • In 2011 (the most recent year for which income data is available), the median pre-tax earnings of full-time workers with a bachelor’s degree* were $21,100 higher than those of full-time workers with only a high school diploma.
  • As workers age, earnings increase more quickly for those with higher levels of education. For instance, at ages 25-29, full-time workers with a bachelor’s degree earn 54 percent ($15,000) more than their high school graduate counterparts; but at ages 45-49, they earn 86 percent ($32,000) more.
  • During a standard 40-year full-time working career, median earnings are 65 percent higher for those with a bachelor’s degree than for those with only high school diploma.
  • “Compared to a high school graduate, the median four-year college graduate who enrolls at age 18 and graduates in four years can expect to earn enough by age 36 to compensate for being out of the labor force for four years and for borrowing the full tuition and fee amount without any grant aid.”

The report also provides some interesting facts about participation and success in higher education, such as:

  • Large gaps in enrollment rates and patterns persist, particularly with lower income students. However, gaps between the enrollment rates of black and Hispanic high school graduates and those of white high school graduates narrowed significantly between 2001 and 2011.
  • Although educational attainment rates are increasing, attainment rates and patterns vary noticeably by demographic groups. For example, the percentage of black females ages 25 to 29 who have a bachelor’s degree doubled between 1982 and 2012—going from 12 to 24 percent—whereas the percentage of black males increased from 11 to 16 percent.
  • In the U.S., public funding makes up a smaller percentage of total funding for higher education than in most other developed countries.

* “Bachelor’s degree” means a bachelor’s degree, but not a more advanced degree.

College Board Releases 2013 Edition of “Trends in College Pricing”

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The College Board released its 2013 edition of “Trends in College Pricing” on Tuesday.  The report provides information on what colleges and universities are charging in 2013-14; how prices vary by state, region, and institution type; pricing trends over time; and net tuition and fees—what students and families actually pay after accounting for financial aid.

Here are a few noteworthy points about prices at public four-year institutions:

  • The average published tuition and fees for full-time resident undergraduatesat public four-years increased by 2.9 percent between 2012-13 and 2013-14, going from $8,646 to $8,893—this is the smallest percentage increase in over 30 years.
  • In 2013-14, full-time students at public four-years will receive an estimated average of $5,770 in grant aid and tax benefits.
  • Thus, average net tuition and fees for full-time resident undergrads at public four-years will be about $3,120 in 2013‑14—up from a temporary low of $1,940 (inflation-adjusted dollars) in 2009-10.

And a few key points about private nonprofit four-year institutions:

  • The average published tuition and fees for full-time students at private nonprofit four-years increased by 3.8 percent between 2012-13 and 2013-14, going from $28,989 to $30,094.
  • In 2013-14, full-time undergrads at private nonprofit four-years will receive an estimated average of $17,630 in grant aid and tax benefits.
  • Thus, average net tuition and fees for full-time undergrads at private nonprofit four-years will be about $12,460 in 2013-14—up from a temporary low of $11,550 (inflation-adjusted dollars) in 2011-12, but down from $13,600 a decade earlier.

Average net prices in all sectors took a noteworthy dip around 2010 due, in part, to significant increases in Pell Grants and veterans benefits that occurred in 2009‑10 as well as the 2009 implementation of the American Opportunity Tax Credit. However, some of those benefits have been scaled back since their initial launch. Moreover, total state appropriations declined by 19 percent between  2007-08 and 2012-13 and FTE enrollment in public institutions increased by 11 percent over that same time. Consequently, net prices have risen in the last few years for all sectors, but most noticeably in the public sector.  It is important to remember that there are many variations by institution, region, and state.  Even within institutions, different students pay different prices based on their financial circumstances, program of study, year in school, academic qualifications, athletic ability, etc.

See Inside Higher Ed and The Chronicle for additional analysis and discussion of the report.

California Introduces Two-Tiered Tuition

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As of last Thursday, select California community colleges can charge differential tuition for their most popular extension courses. California’s Governor Jerry Brown supported the bill as an “experiment” that would give a limited number of colleges some flexibility to offer more sections of their most popular courses. The system, which has suffered many years of deep budget cuts, currently turns away as many as 600,000 students because colleges cannot afford to offer enough courses to accommodate them.

The new California law allows six community colleges to charge students for the “actual” cost of the courses, including instruction, equipment, and supplies, rather than the heavily subsidized $46 per credit that they currently assess. The rates are expected to be more than three times higher than the current rate for residents. In order to participate in the program, the colleges must be over-enrolled and the new sections they offer cannot replace the original class. The original class must maintain the current tuition rates, but if the course is full, new sections of the course can be more expensive. The law also requires that a third of the revenue gained from the extension courses be returned back to financial aid.

Critics of the program believe that the law is a first step towards eroding California’s strong commitment to affordable and accessible community colleges. They argue that this program is merely a “toll road for the economically privileged” that will put low-income students at a severe disadvantage. Supporters counter that the program, at the very least, expands access to popular courses and, at best, might even help low-income students because of the 33 percent return-to-aid requirement.

To read more about the program, check out this Inside Higher Ed Article or read the law itself.

Supreme Court Hears Michigan Affirmative Action Case

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On Tuesday, the U.S. Supreme Court appeared to be in favor of upholding a Michigan referendum, known as Proposition 2, which banned the use of affirmative action in the state’s public colleges and universities. The case, Schuette v. Coalition to Defend Affirmative Action, is not about whether it is permissible for public colleges to consider race and ethnicity in admissions, but whether it is legal for voters to bar such consideration. For background information about this case, please see our previous post.

Tuesday’s arguments focused primarily on a piece of the Equal Protection Clause, known as the “political process doctrine,” which states that political processes cannot be altered in a way that puts minorities at a disadvantage. Opponents of Proposition 2, contend that, under the measure, minority groups who want to reinstate affirmative action must launch a difficult and expensive campaign to re-amend the state constitution, whereas Michigan citizens seeking changes to other university admissions policies are free to simply lobby university regents. This, they argue, places an unfair and disadvantageous burden on minorities.

Swing vote, Justice Anthony M. Kennedy, expressed doubts about whether Proposition 2 truly violates the political process doctrine and only two liberal members of the court voiced major criticisms of the Michigan measure. Thus, with Justice Elena Kagan recused from the case, the numbers point toward the court upholding Proposition 2. Such a decision would effectively preserve similar bans adopted by voters in Arizona, California, Nebraska, Oklahoma, and Washington; by lawmakers in New Hampshire; and by the public university governing board in Florida. In addition, it could theoretically embolden campaigns for similar ballot measures
elsewhere.

While it seems clear the Justices will rule in favor of Michigan, it is less clear whether the Justices are interested in reversing the political process doctrine, which dates back more than 40 years. In 1982, for example, the justices ruled against a Washington referendum that attempted to prevent Seattle from using a local busing program to desegregate schools. NPR reports that Michigan Solicitor General, John Bursch, “urged the Supreme Court to reverse the Seattle decision and others like it, if necessary.”

We’ll post updates as more information becomes available.

New OECD Study Finds America Lags Behind in Literacy, Numeracy, Technology Skills

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The Organization for Economic Cooperation and Development (OECD) recently released “Skills Outlook 2013,” a report that studies adults’ skills in literacy, numeracy, and technology across 24 countries. While Japan and Finland ranked first and second respectively in average scores, the United States scored significantly below average in all three fields. Many experts worry that the US will not be able to compete in a global marketplace unless we are able to improve proficiency in these skill areas.

There was not much good news for the United States in the OECD’s report: Americans ranked 16th out of 23 countries in literacy (comprehending and interpreting words, sentences and complex texts), 21st out of 23 in numeracy (solving problems in a mathematical context), and 14th out of 19 in technology skills (problem-solving using a computer). Furthermore, socioeconomic background was a greater predictor of skill proficiency in the United States than in other countries, indicating large social disparities and a low potential for upward mobility. However, socioeconomic background was less of a predictor for younger US adults, meaning (perhaps) that socioeconomic background is becoming less of a barrier with time. Lastly, not only did the US score below average in all areas, there was hardly any improvement between younger and older generations. For numeracy, older US adults (ages 55-65) performed near the average, but younger US adults (ages 16-24) scored dead last among all participating countries. This last point is particularly concerning as it suggests young people are entering a much more demanding labor market, but are not much better prepared than those who are retiring.

These disappointing results raise an interesting question: if the US has such a dearth of skilled workers, how is it able to remain an innovative and productive economy? Anthony Carnevale, from the Georgetown University Center on Education and the Workforce, believes it is because the US compensates the most talented and skilled workers exceptionally well, which attracts significant foreign talent and creates great innovation and growth from the top down. However, as growth in the future will likely require more skills at every level of the economy, the American advantage could be slipping. The authors suggest that better educational opportunities and better training in the workplace will be necessary to reduce social inequities, improve upward mobility, and thus avoid economic stagnation. While the report finds that more education is correlated with higher skill proficiency, the quality of education in different countries can differ to the extent that a 25-34 year old high school graduate from Japan exhibits better skill proficiency than a college graduate from Spain. This suggests that adults can learn important skills outside of the traditional educational track—through better job training, adult education, and skill certification and recognition.  

For more information, check out the full OECD report, or analysis by Inside Higher Ed and the New York Times.

National Nonprofits Critique “Pay It Forward”

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In anticipation of last Monday’s “Pay It Forward” working conference in Philadelphia, national education groups and nonprofit organizations released a joint statement opposing the proposal. For more information about PIF, please review our post about Oregon legislation requiring “consideration” of a “Pay It Forward, Pay Back” pilot. A comprehensive brief about the proposal’s UW application is available.

Stagnant SAT Scores, College Readiness Prompt Changes to the SAT

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Last week, the College Board released its 2013 Report on College and Career Readiness, which found that the percentage of students who are unprepared for college-level work has remained essentially unchanged for the past five years. According to the College Board, only 43 percent of graduating seniors in 2013 had achieved their “SAT College and Career Readiness Benchmark,” defined as scoring a 1550 or above on the SAT. While there have been some achievements—more minority students are taking the test, and both African-American and Hispanic students are scoring higher—scores are not improving on the whole.

In order to improve students’ college readiness, College Board president David Coleman believes the College Board must partner with schools to implement the Common Core, a set of standardized guidelines detailing what students should learn in each grade. He believes this will help students be better prepared both to take the SAT and to perform at the college level. In addition, the College Board is considering making changes to the SAT. According to a Kaplan Test Prep survey, more than 72 percent of college admissions officers think the SAT should change in order to be better aligned with high school curricula, correct perceived socioeconomic and cultural biases, and make the writing section more relevant. Coleman has promised to address these concerns with an overhaul of the SAT in 2015, which will include a stronger emphasis on analysis, a revamped writing section, and more curriculum-based questions.

As the College Board makes changes to the SAT, the test is becoming ever more similar to the ACT—its biggest competitor—which overtook the SAT in market share for the first time last year, according to the NY Times.  The ACT, which is known for more straightforward questions, emphasizing grammar and mechanics over vocabulary, and testing curriculum-based content, has also made some changes in recent years. The test is now available in a computer-based format and features some free response questions in which students carry out virtual experiments and detail their observations. Experts believe the SAT will likely move towards a computer-based delivery system with its revamp in 2015, and many hope the writing section will be optional, as it is on the ACT.

To read more about the coming changes to the SAT, check out this New York Times article. To read the College Board’s report, please click here.

UW Federal Student Loan Default Rates Remain Very Low Relative to National Rates

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On Monday, the U.S. Department of Education (ED) released its annual update on federal student loan cohort default rates (CDRs), which measure the frequency with which student borrowers at all levels (undergraduate, graduate, etc.) default on their federal loans. Although both national and UW CDRs rose, the UW’s rates remain well below those of the nation.

As ED is in its second year of switching to the  more accurate three-year CDR measure, this year’s report includes both the FY 2011 two-year and the FY 2010 three-year CDRs. These rates represent the percentage of student borrowers who failed to make loan payments for 270 days within two or three years, respectively, of leaving school.

The Department provides breakdowns of its data by institution type, state and school. Here are some key findings:

FY 2010 three-year CDR:

  • The national three-year CDR increased from 13.4 to 14.7 percent overall—public institutions increased from 11.0 to 13.0 percent, private nonprofits increased from 7.5 to 8.2 percent, but for-profits’ whopping 22.7 percent rate decreased slightly to 21.8 percent.
  • The UW’s three-year CDR increased slightly from 3.1 to 3.9 percent, but this is still nearly 11 percentage points below the national average. 

FY 2011 two-year CDR:

  • The national two-year CDR increased from 9.1 to 10.0 percent overall—public institutions increased from 8.3 to 9.6 percent, for-profits increased from 12.9 to 13.6 percent, but private nonprofits held steady at 5.2 percent.
  • The UW’s two-year CDR increased from 2.1 to 3.2 percent, but this is still nearly 7 percentage points below the national average. 

While this is good news, many students still struggle to afford ever-increasing tuition fees and/or to repay their student loans. The UW reaches out to our former students at risk of default on their Stafford Loans and helps identify federal repayment options that could benefit them. Former UW students who are in default or experiencing difficulties repaying their loans can contact the Office of Student Financial Aid for assistance (osfa@uw.edu, 206-543-6101). Students can also visit studentloans.gov to explore their repayment options.

Education and Justice Departments Clarify Fisher v. UT Ruling

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On Friday, the Obama administration gave some clarity to the Supreme Court ruling in Fisher v. University of Texas, as the decision had not provided a direct answer about the constitutionality of race-conscious admissions policies in higher education. Instead, the ruling had underscored the necessity of “strict scrutiny”—a term that sparked concern and confusion among some college officials. In a “Dear Colleague” letter, the Education and Justice Departments clarified:

An individual student’s race can be considered as one of several factors in higher education admissions as long as the admissions program meets the well-established ‘strict scrutiny’ standard; specifically, the college or university must demonstrate that considering the race of individual applicants in its admissions program is narrowly tailored to meet the compelling interest in diversity, including that available, workable race-neutral alternatives do not suffice.

In other words, colleges can continue considering race in admissions decisions as long as race-neutral alternatives would not achieve “sufficient diversity,” as Justice Kennedy put it in the case’s majority decision. Determining what constitutes “sufficient” diversity is where much of the remaining ambiguity lies.  However, in their letter, the Departments pledged to provide “technical assistance” to institutions as they interpret the ruling and asserted that previously-provided guidance on affirmative action still holds true.

As Inside Higher Ed reported, legal experts believe the court’s “strict scrutiny” requirement will make it difficult for UT and many other institutions to successfully defend their use of race in admissions. However, the Obama administration seemed to encourage colleges to maintain their diversity efforts. “The Departments of Education and Justice stand ready to support colleges and universities in pursuing a racially and ethnically diverse student body in a lawful manner,” the letter stated.

For more information, see the Departments’ Q&A document and the article by Inside Higher Ed, and stay tuned to our blog for updates.