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Category: Higher Ed Research

For Employment and Earnings, Major Matters

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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.

Online Learning Still Plagued by Uncertainty

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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.

Californians Concerned About the Future of Higher Ed

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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).

More about the survey is available in the full report in this PDF document.

Higher Education Increasingly Key to Entering the Middle Class

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A new report by the Georgetown Center on Education and the Workforce finds that higher education is becoming increasingly integral to earning a middle class wage. The Center predicts that, in 2018, while there will still be jobs for high school dropouts and workers with only a high school degree, good jobs for these candidates will be scarce and an associate’s degree, and for many, a bachelor’s degree will be necessary.

The report seeks to paint a picture of the likely employment landscape in 2018, including those job fields (or “clusters”) that are expected to be growing and pay higher wages. It further analyzes what educational qualifications jobs in that cluster will require, finding that upward mobility for workers without higher education will be difficult to achieve—most workers do not stay in the same job for very long and most higher-paying jobs require more education, not simply more experience. Other key findings include:

  • In 2018, 37 percent of jobs are expected to require a high school diploma or less. Of these jobs, however, only one third will pay over $35,000 a year (defined here as the Minimum Earnings Threshold necessary to enter the middle class) and will be concentrated in the areas of Transportation, Distribution and Logistics, Architecture and Construction, and Manufacturing. The higher paying clusters are also heavily male-dominated, making higher education even more determinant for women seeking higher paying employment.
  • Completing any degree significantly improves a worker’s job prospects and earnings. 54 percent of workers with an A.A .degree earn more than $35,000 a year, as do 69 percent of workers with B.A.s and 80 percent of workers with M.A.s.
  • Health Sciences, Information Technology, Law, Public Safety, Corrections and Security are career clusters defined by this report as High Wage, High Demand, and High Skill. This means that wages are higher than the average wage, employment is growing quickly (more than 10 percent expected between 2008 and 2018), and most workers in these industries hold a postsecondary degree.

To read more about the report, refer to the Executive Summary or the Full Report. Also see the Chronicle of Higher Education’s article on the topic.

Does America Have a STEM Supply Problem?

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Georgetown University’s Center on Education and the Workforce released a report that investigates the importance of American science, technology, engineering and math (STEM) positions in the US economy and the perceived shortage of qualified STEM workers to fill them. The report finds that, contrary to popular belief, America already has enough students studying STEM related fields to potentially satiate the demand for STEM workers in the economy without seeking talent from abroad. However, they hold that a process they label ‘diversion’ redirects many students majoring in STEM fields toward employment in non-STEM areas because their professional interests and values do not correspond with traditional STEM jobs. The Center estimates that 43 percent of students that graduate with STEM majors immediately choose non-STEM jobs. It also finds that many high school students capable of entering STEM majors, as measured by their math SAT scores, choose not to because of their preferences or values.

The Center also provided some interesting statistics on the present and future of STEM professions, including:

  • Wages in STEM fields are, on average, higher than wages in other fields (no matter what level of educational attainment), though healthcare and professional and managerial occupations still have higher wages
  • Women and minorities are still underrepresented in STEM jobs, with women constituting only 23 percent of STEM workers. Women and minorities also make less than Caucasian men in STEM positions, though the wage gap is smaller than for other occupations.
  • STEM jobs will grow to represent 5 percent of the labor market in 2018.
  • Two thirds of STEM jobs will require a Bachelor’s degree or higher by 2018.

To read more about this report, check out the Executive Summary or the full report. Also note Inside Higher Ed’s discussion of the report and our previous blog posts on Georgetown Center reports:

As Expected, Federal Loan Borrowing Has Increased

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The US Department of Education’s Stats in Brief from October 2011 entitled “Borrowing at the Maximum” investigates the percentage and demographics of students who take out federal subsidized and unsubsidized Stafford loans, and how this has changed over time. The report also seeks to differentiate between those who take out the program maximum loan amount and those who take out their personal maximum amount (adjusted for their financial need and the cost of their education). Some interesting findings include:

  • the proportion of borrowers has increased significantly over time, from 27 percent of students receiving federal Stafford loans averaging $7,200 (inflation adjusted) in 1989/90, to 46 percent borrowing an average of $10,300 by 2007/08.
  • 43 percent of those borrowing in 2007-08 took out the program maximum Stafford loan amount, while 60 percent took out their personal maximum amount (which can equal the maximum amount for some).
  • 30 percent of those taking out Stafford loans also took out private loans, whereas only six percent of students not taking out federal loans did. Furthermore, 16-18 percent of the parents of those students borrowing through the Stafford program also took out Parents PLUS loans.
  • Students taking out Stafford loans to help finance their education were less likely to have full-time jobs.
  • 73 percent of students who took out Stafford loans also received grants.

To read more about the findings or methodology of this report, check out the full report here.

Distance Learning Growing, Primarily Among Non-Traditional Students

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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.

More about this study is available in the full report.

NCES Projects Growth for Higher Ed, but Short of National Goals

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The National Center for Education Statistics recently released a report entitled Projections of Education Statistics to 2019. The Center seeks to predict future trends in enrollment, completion, and diversity in elementary, secondary, and post-secondary institutions. The Center uses census data and economic forecasts to make its projections; however, such predictions are complicated to produce and always subject to unforeseen political, demographic and economic changes. Overall, the Center predicts growth in enrollment and degree completion for all levels of education, although it does not expect President Obama’s completion goals for higher education in 2020 to be met.

Major findings include:

  •  Total elementary and secondary school enrollment is projected to increase 6 percent by 2019, with especially large increases in the number of Hispanic, Asian, and Native American students. Western states are projected to drive much of this demographic change with a 12 percent increase in these enrollments.
  • The total number of high school graduates nationally is expected to increase by 1 percent by 2019. In the West, however, the number of grads is expected to rise 9 percent.
  • Enrollment in post-secondary programs is projected to increase 17 percent, to 22.4 million by 2019. Minorities again have the highest rates of increase in enrollment, with the number of Hispanic students in particular expected to increase by 45 percent.
  • Women are projected to have larger growth in post-secondary enrollment between now and 2019 (21 percent) than men (12 percent).
  • The number of degrees awarded is expected to increase alongside enrollment, associate’s degrees up 30 percent, bachelor’s degrees up 23 percent, master’s degrees up 34 percent, doctoral degrees 54 percent, and professional degrees 34 percent.

For more information, graphical representation of these data, and details on methodology, check out the full report. To read about some of the reactions to these data and potential limitations of the study, read Inside Higher Ed’s blog post on this topic

New Report Shows Strategic Budget Cuts in Higher Ed

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The Delta Cost Project has published its latest Trends in College Spending report. This year’s version reports on revenue and spending trends in higher education from 1999 to 2009, the latest year of IPEDS data available at this time. As such, this version includes the first year of the recession’s impact on higher education finances.

Overall, the report confirms several already noted trends:

  • The resource gap between public and private institutions continues to grow, and is now so wide that competition between the sectors is virtually impossible (see Figure 22 on page 43 of the report linked above for a stark depiction).
  • At public institutions, the share of education related spending derived from tuition revenue has increased dramatically, surpassing the contribution from state appropriations at a number of universities, including the UW.
  • At public institutions, tuition increases in 2009 represented cost shifting from the public to the student and not increases in institutional spending.
  • At public institutions, administrative and maintenance spending remained flat or declined while spending on instruction went up slightly, indicating that, unlike previous recessions, institutions are making cuts more strategically to help protect the core academic mission.
  • Whether from improved retention or decreased extraneous course-taking, student credit hours per degree appear to have decreased between 2002 and 2009, which is one measurement of efficiency.
  • At public institutions, faculty salaries have been very flat as the cost of benefits have, on average, risen by over 5 percent per year, now accounting for almost 1/4th of all compensation costs.

Overall, this report does a great job of making it clear that the majority of students attend relatively affordable, cost-effective public institutions in the United States, even though a small number of pricey private institutions dominate the public perception. It also places revenue and expenditures in the context of student enrollment and the spectrum of university activities.

One issue we have consistently had with this report is the calculation of what is called the ‘subsidy’, an attempt to measure overall cost by combining various forms of institutional revenue with state appropriations and contrasting that with tuition revenue to determine what portion of overall cost is paid by the student and what portion is subsidized for the student. Our concerns with this measure were detailed in an earlier blog post and brief, if you are interested.