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Category: Higher Ed Policy

Bipartisan Bills Seeks to Provide Transparency in Higher Ed

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The Student Right to Know Before You Go Act of 2013, a bipartisan federal bill championed by Senators Wyden (D-OR), Rubio (R-FL) and Warner (D-VA) and Representatives Andres (D-NJ) and Hunter (R-CA), was introduced in both chambers of Congress last week. The bill seeks to give students and their families more information about graduation rates, student debt, transfer rates, expected earnings and other important considerations. The goal is to centralize the data so that families can make an informed decision about college.

While there is support for some of the major provisions in the bill, especially for more information on student debt, others are more controversial. The bill would create a federal unit-record database, which some privacy advocates fear could cause confidential data to leak and could enable the government to use data for non-educational purposes. Currently, such databases are banned, which is a major hurdle to the passage of the bill.

Furthermore, while everyone agrees that students should have as much information as possible in making their decisions, colleges are concerned about increasing already onerous reporting requirements. Universities attempting to manage scarce resources are wary of diverting money from the academic mission towards reporting. The Government Accountability Office recently released a report indicating that college experts find existing reporting requirements, such as providing data on enrollment rates, campus safety, and cost of attendance, exceedingly burdensome.

It remains to be seen which, if any, pieces of the Student Right to Know Before You Go Act will move forward in the coming weeks. The Office of Federal Relations is tracking this measure. Please follow their blog to receive updates as this and other similar legislation continues through the House and Senate.

UW and WSU collaborate to offer “Academic Redshirt” program

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The University of Washington (UW) and Washington State University (WSU) (along with eight other top universities) have been selected by the National Science Foundation to participate in the Graduate 10K+ program, a $10 million initiative to increase graduation rates in STEM fields, particularly engineering and computer science. The UW will receive $970,000 and WSU will receive $700,000 over five years to fund their projects. The initiative is funded by the Intel Corporation, the GE Foundation and prominent hedge-fund manager and White House adviser Mark Gallogly. While the funding for this program is limited, experts hope it will encourage innovative pilot projects at the selected universities and prompt other companies and individuals to donate.

The UW, in collaboration with WSU, will use its funds to implement an “academic redshirt” program for engineering. The program will enroll low-income high school graduates in a five-year engineering degree program. The first year will focus on solidifying students’ math and science skills. Students will receive individualized advising as well as assistance with acclimating to university workloads. This will help them to be better prepared for the rigors of engineering study at the UW and will remedy learning gaps they might have from high school, hopefully increasing freshman retention and degree completion. After successful completion of the first year, the students will be accepted into one of the UW’s engineering departments. UW and WSU each hope to enroll 32 freshmen in the program, reaching a total of 320 students in five years.

More about the Graduate10K+ program is available in the Higher Ed Chronicle’s article and the UW News article.

Florida to provide extra funding for faculty salaries, research

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On Monday, Governor Rick Scott of Florida signed a bill that gives special status and increased funding to Florida’s top two universities. The bill designates the University of Florida and Florida State University as “pre-eminent” universities and provides them with an extra $15 million per year, for five years, to help them become two of the top ten research universities in the nation. The money  pays for increased faculty salaries and more research funding. In addition, legislators are considering restoring $300 million in funding that was cut in the 2012 legislative session. The bill also relieves the two universities of certain onerous reporting requirements. Eric Barron, president of Florida State, claims the increased funding will not only improve the quality of education at his university but also improve the return on investment of state money, because prominent faculty members will not be “raided” by other institutions were they would be paid much more.

The bill also provides $10 million more in funding for online degree programs this year, with $5 million appropriated in subsequent years. Tuition for online programs is capped to 75 percent of tuition for on-campus programs. The legislature would like to see increased out-of-state enrollment in these online courses, as online degree programs have already provided an additional $70 million in revenue a year for the University of Florida.

More about the Florida legislation is available in the Chronicle article. To read about current proposals for higher education funding in Washington state, please see our recent briefs on Governor Inslee’s budget priorities or the Senate and House budgets.

House Chair Released 2013-15 Operating Budget

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House Ways & Means Chair Ross Hunter released the House budget proposal today. Please see the OPB Brief for a complete analysis. Table 1 shows the total funding the UW would receive under the House chair budget, divided into three standard categories: the carry forward level, the maintenance level and the performance level.

The House assumes that the UW will increase undergraduate resident tuition by 5 percent each year, thus making more revenue available. However, the House Chair budget requires that $2 million go toward the College of Engineering, $12 million be used to create a Clean Energy Institute, and a total of $16.5 million of the appropriation be used to support enrollments in Computer Science and Engineering.

As shown in the table below, once recognized additional operational needs are met and once dedicated funds are removed from the equation, the UW is left with almost $10 million less in net new state funding in 2013-15 compared to the previous biennium under the House budget.  Once the potential additional tuition revenue is taken into account, however, the UW fares better under the House budget, even with its spending requirements.  Moreover, the Senate relies on a draconian 20 percent surcharge on international student tuition to generate this additional funding amount.  As mentioned in our previous brief, given that the majority of international students in Washington are enrolled at the UW, this amounts to a tax on UW students. It is expected that the surcharge will lead to a decline in international student enrollments, which could lead to an overall reduction of revenue for the UW.

We are still reviewing the potential impacts of this budget proposal and will provide revisions to the brief as more information becomes available. Once the House chair budget passes the floor (which is expected later this week), leaders of the House and Senate will begin negotiations to reconcile the differences between their respective approaches. It is likely that the UW will not have a clear sense of its actual anticipated state funding level until the end of this month at the earliest.

International Graduate Applications Plateau After Three Years of Near-10% Increases

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For the first time since “9/11”, the number of Chinese students applying to American graduate programs has declined significantly. According to a Council of Graduate Schools report released today, the number of graduate applications from China is down 5 percent this year, after having risen by 19, 21 and 20 percent in the previous three years.

The drop in graduate applications from China was offset by increases from India and Brazil, resulting in an overall increase of 1 percent in international student applications. However, this figure remains concerning: international graduate applications had increased by 9, 11 and 9 percent in the previous three years.

This news comes as the Washington State Senate contemplates imposing a 20% surcharge on tuition paid by international students to fund higher education in the state. The UW has already warned the such a surcharge would drive away top talent, reduce positive externalities associated with diversity, and generally make the UW less competitive compared to its peers. Today’s report merely strengthens the argument: even without the surcharge, the UW will be competing for a shrinking pool of top international talent.

To follow developments regarding the surcharge proposal (SB 5893), visit BillTracker.

Senate Chair Releases 2013-15 Operating Budget

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Senate Ways & Means Chair Andy Hill released the Senate budget proposal today. Please see the OPB Brief for a complete analysis.

Tuition: The Senate Chair budget contains language allowing the Regents to set tuition and fees for all student categories other than resident undergraduates. The budget bill assumes no tuition increases for resident undergraduates; however, UW Regents retain the authority to set tuition rates under HB 1795. It is crucial to note that the budget states that these tuition provisions will be nullified if SB 5883 passes. SB 5883 would require a 3 percent decrease in resident undergraduate tuition for 2013-14.

Compensation: The budget deems the UW’s collective bargaining agreements (CBA) to be financially feasible and restores the 3 percent salary cut imposed on state agencies in the last biennium. We assume the budget lifts the current salary freeze for state employees as it makes no mention of extending it. In addition, the budget assumes savings by changing the definition of “full time” employee to align state employee healthcare eligibility with the federal standard set out in the Affordable Care Act. This is a significant change in policy, and we expect it to become a serious topic of public debate in the weeks to come.

Other policy changes affecting the UW include:

  1. Funding for the Joint Aerospace Initiative with WSU;
  2. Appropriations for a new Center on Ocean pH Balance;
  3. One-time, performance-based funding;
  4. Operation and maintenance funding for MolE and Dempsey Hall;
  5. Funding reductions related to administrative efficiencies;
  6. An international student surcharge; and
  7. A fund transfer from the UW Hospital Account.

The Senate chair budget proposal is one of a series of budgets released as part of the biennial budget process; the House is expected to release its budget proposal next week. It is likely that the UW will not have a clear sense of its actual anticipated state funding level until later this month.

Supreme Court Takes Up Second Affirmative Action Case

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The U.S. Supreme Court has agreed to consider whether a 2006 Michigan referendum to ban public colleges from using race or ethnicity in admissions is constitutional. This is the second affirmative-action case on the court’s docket —the first being Fisher v. University of Texas at Austin (discussed in a previous blog). If the Supreme Court declares the ban, known as Proposition 2, unconstitutional, similar bans in Washington and five other states could also be invalidated.

Inside Higher Ed nicely summed up the difference between the two affirmative action cases: “The Texas case is about the extent to which public colleges and universities may consider race and ethnicity in admissions, while the Michigan case is about the extent to which voters can bar such consideration.”

The Supreme Court accepted the Michigan case, Schuette v. Coalition to Defend Affirmative Action, after the state’s attorney general, Bill Schuette, appealed a November ruling by the U.S. Court of Appeals for the Sixth Circuit. The appeals court struck down Proposition 2 in an 8-7 vote, on the grounds that it “undermines the Equal Protection Clause’s guarantee that all citizens ought to have equal access to the tools of political change.” Under Proposition 2, minority citizens who want public university admissions to consider race must launch a burdensome ballot campaign, whereas groups seeking other university policy changes are free to simply lobby.

Schuette argues that Michigan’s measure and the Equal Protection Clause both protect a fair political process, whereas “preferential treatment based on race (which necessarily means discrimination against other races)… focuses entirely on achieving a particular outcome (here, an admissions outcome), even at the expense of making the process discriminatory.” Michigan’s measure, he says, “does not endorse race-based policies; just the opposite, it stops discrimination based on race.”

The Supreme Court will hear the Michigan case in its term starting in October.  Its ruling in the Texas case is expected this spring or summer, but could occur at any time.

California Bill Proposal to Make Public Institutions Accept Online Credits

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Legislation was introduced in the California Senate on Wednesday that would require the state’s 145 public colleges and universities to grant credit for faculty-approved online courses taken by students unable to register for overenrolled, on-campus classes. If the bill passes and is signed into law by Gov. Jerry Brown (who has been a strong supporter of online education), online courses could go mainstream much more quickly than predicted. At the moment, however, Senate Bill 520 is just a two-page legislative placeholder, or “spot bill,” to be amended with details later.

According to Inside Higher Ed, the bill’s sponsor, Democrat State Senate President Pro Tem Darrell Steinberg, said the bill is meant to “break the bottleneck that prevents students from completing courses.” In Fall 2012, more than 472,000 of the 2.4 million students in the California Community Colleges system were put on waiting lists and at the California State University system, only 16 percent of students graduate within four years. Theoretically, increasing capacity to meet student demand for key, gateway courses could improve on-time graduation rates and more efficiently use state funds. The debate, of course, is whether online courses are actually effective and thus appropriate substitutes for traditional courses.

Under the proposed legislation, a nine-member faculty council representing the state’s three public higher ed systems would determine which 50 introductory courses are most oversubscribed and which online equivalents should be eligible for credit. When reviewing online courses, the panel is to consider whether a course:

  • Offers instructional support to promote retention;
  • Provides interaction between instructors and students;
  • Contains proctored exams and assessment tools;
  • Uses open-source text books; and
  • Includes content recommended by the American Council on Education.

MOOCs provided by Udacity and Coursera, as well as low-cost, self-paced courses from StraighterLine could all be up for consideration—several of which have already gained ACE approval.

Senator Steinberg emphasized at a news conference that the legislation “does not represent a shift in funding priority” for higher education in California, and is not intended to introduce “a substitution for campus-based instruction.” Nevertheless, for the many faculty and university administrators concerned about SB 520’s consequences, the devil may be in the yet-to-be-determined details. We’ll keep you apprised as those details are fleshed out.

Is All Merit Aid Meritorious?

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Although there are many types of financial aid, it is typically awarded on the basis of either need or merit. Need-based aid is largely a result of a federal calculation and is somewhat predictable:  to ensure access, students with more financial need receive more financial aid of various forms. And, although there is no universal definition of the merit aid, it traditionally describes scholarship money used to attract top academic achievers. However, Kevin Carey, director of education policy at the New America Foundation, asserts in a recent commentary for The Chronicle that a significant portion of merit aid is actually used to attract “academically marginal students with wealthy parents.”

Carey cites evidence of this trend. A 2011 U.S. Department of Education study found that of the full-time students at four-year institutions who received “merit” aid in 2007-08, almost 20 percent had entered college with a combined SAT score of less than 700 and 45 percent had scored below 1000 (out of a possible 1600). The study also shows that although the percentage of private college students receiving need-based aid showed a slight decline from 1995 to 2007 (going from 43 to 42 percent), the proportion receiving “merit” aid nearly doubled during that time span (from 24 to 44 percent).   At public universities, the percentage of students getting need-based aid increased from 13 to 16 percent, but the growth in merit aid outpaced it, going from 8 to 18 percent.  Thankfully, as discussed in a previous post, a group of private-college presidents has been calling on its peers to limit the amount of financial aid awarded on criteria other than need.

The National Association of State Student Grant and Aid Programs’ (NASSGAP) Annual Survey Report on State-Sponsored Student Financial Aid and Brookings’ Beyond Need and Merit: Strengthening State Grant Programs provide corroborating evidence that merit-aid is becoming more prevalent, while need-based aid is diminishing.  However, neither discusses the academic strength of the students receiving merit aid.

So why is this happening?  If a college offers good scholarships and financial aid packages to an affluent family, it may incentivize them to choose that school.  Even though that family’s son or daughter may be a low academic achiever who has a decent chance of dropping out, it is still lucrative for the school to attract those students.  Noel-Levitz, a higher ed consulting firm, revealed that one of its client colleges was able to generate over $10,000 more per low-achieving student than they could per top-achieving student.

Carey hopes that as taxpayers, the news media, and affiliates of universities become aware of this trend, their vigilance will keep institutions in check.

White Paper Focuses on Reforming Tax-based Aid

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Many of the white papers sponsored by the Bill & Melinda Gates Foundation’s Reimagining Aid Design and Delivery project have focused on modifications to the Pell program and/or student loans and repayment (including the two I summarized previously, found here and here). However, the white paper released on Wednesday by the Center on Postsecondary and Economic Success takes a different approach.  It argues that by making tax-based student aid more beneficial to low and middle-income students, the federal government could save billions of dollars, direct those savings to the Pell program and improve the financial aid system as a whole.

Current tax-based financial aid provides high-income families with much larger tax deductions, since the value of the deductions is linked to a family’s marginal tax rate. As The Chronicle notes, “a $100 tax deduction, for example, is worth early $40 to a high-income household but only $10 to a lower-earning family.”  To remedy this issue and refocus the benefits of aid onto low-income families, the Center proposes increasing the refundable portion of the American Opportunity Tax Credit (AOTC). The Center also recommends eliminating nonrefundable tax credits, such as the Lifetime Learning Credit (LLC), since they do not benefit households that pay no income tax (i.e. low-income families).

The table below shows the percent distribution of student aid by type and income category in 2013. As you can see, Pell Grants (in blue) primarily benefit low-income families, whereas tax-based student aid (in purple) does the opposite.  Another interesting table from the Tax Policy Center can be found here.

The paper includes three alternative proposals for making tax-based aid more helpful to low-income students and simultaneously boosting college access and completion.  It also discusses three options for improving performance measures used in student-aid policies.