Reviewing the range of responses to President Obama's plan to reduce college costs, and the questions that are being raised on Twitter, it seems important that the Administration clarify a few things sooner rather than later.
1. This effort to reduce college costs is a first step and thus it is not intended to solve all problems. The President should say something more specific about the ultimate goal and what it would look like in practice. Are we working towards a free community college education? Are we trying to close achievement gaps? What is the intended outcome down the road?
2. This is not NCLB for higher education. The President needs to assure the public that he is not calling for standardized testing, the end of professorial tenure, or a focus on specific fields or majors. He is trying to help more Americans access the quality post secondary education they seek, not water down quality or redefine what matters.
3. This is an effort to protect public higher education, not destroy it. This needs to be said loud and clear, and the President's commitment to community colleges in particular must be emphasized. Too many community college leaders are distressed at the roll-out of these plans, and I did not think that was intended.
4. This is also not an attempt to end for-profit or private higher education. The purpose is to ensure that Title IV is spent in ways that support national needs, not to define the entire range of opportunities that can exist. It is certainly possible to support private and for-profit educational providers without insisting that the federal government should also subsidize them.
5. The President is not insisting that everyone must go to college-- he is trying to help make the American Dream a reality by decoupling family income from educational opportunities.
Now, if I'm correct that these are all statements the President and his Administration can agree with, let's move on to figuring out how to take aim at the underlying inefficiencies in the current financial aid system using institutional accountability.
I think it would be a mistake to subject all institutions to metrics anytime in the near future. Most colleges and universities are good actors, keeping college costs down as long as states do their part. What we need to do as a starting point is to get a handle on (a) the bad actors and (b) federal investments that are ineffective and unnecessary.
Which schools fall into those categories? Here's a start.
BAD ACTORS
1. Institutions whose primary revenue source is Title IV. Let's say those who get at least 75% of funding from Pell and/or student loans, for example. These schools aren't operating based on market demand but rather are propped up by federal aid.
2. Institutions with selective admissions (say less than 75% admitted) and low average graduation rates (less than 50% over 5 years).
INEFFECTIVE, UNNECESSARY INVESTMENTS
1. Institutions with large endowments per student.
2. Institutions serving very few Pell recipients (regardless of whether this is due to admissions practices, costs, or a decision to simply be small).
If we could ensure that federal student aid no longer supported these schools, we would see fewer students attend these schools, their prices would likely fall (or they would close), and/or at minimum we'd save money that could be spent elsewhere.
If that were the first stage, then the Department of Education could begin by publishing these lists of problematic schools, issuing a warning that they have three years to get off the list or lose Title IV.
The other big issue is how to get states back to the table. There could be a separate list of states that are put on probation based on a failure to match federal investments in higher education with state investments. All colleges and universities in those states should be put at risk of losing Title IV-- including the privates and for-profits-- and given 5 years to address the problems.
None of this is perfect, of course, but they get us thinking about a more targeted, incremental approach to reform. What do you think? What would you include?
Showing posts with label affordability. Show all posts
Showing posts with label affordability. Show all posts
Saturday, August 24, 2013
Sunday, July 14, 2013
Building the Best Possible "Pay It Forward" Model for Higher Ed Finance
The last week was swept away by Hurricane "Pay It Forward," a new bill advanced by progressives in Oregon. Starting last Saturday I began engaging via Twitter with folks interested in debating its merits, by Sunday night I was knee-deep in a full analysis, and by Wednesday morning that analysis was published by the Century Foundation and NPR gave me an opportunity to discuss the issues On Point. In between, I was fortunate enough to be introduced to both Barbara Dudley and John Burbank, key architects of the plan. I thoroughly enjoyed getting to know both of these incredible activists, and thrilled that they share many of my concerns and end goals.
The number of legislators and members of the media who are continuing to express interest in learning more and building on this plan is amazing. In a key respect, it's also wonderful: people really want to do something NOW to make college more affordable and reduce student debt. It's about time!
With that in mind, I strongly suspect that some version of Pay It Forward will be enacted not only in Oregon, but in other states as well, and potentially with federal support. Thus, setting aside for now my continuing philosophic and political problems with the plan, I'd like to make the following suggestions for making it as effective and progressive as possible.
1. Ensure that it is universal and guarantees repayment. The only way to make it financially feasible and prevent it from furthering inequality is to reduce the fraction of free-riders. Allowing wealthier students to pay upfront perpetuates a two-tiered system and likely increases the percent of future earnings that participants will have to pay.
2. Provide the first year of community college for free. This plan could have a really wonderful effect of helping the most financially-constrained students gain a foothold in higher education, but in order to do this the first year must require no repayment whatsoever. Coupled with the federal Pell Grant, students could make the first year work with no debt and minimal working. That's worth trying- if we cannot significantly boost enrollment rates with a policy like that, it will teach us something. It facilitates the creation of advertising campaigns with a real chance of competing with for-profits' effective overtures to the same students.
3. Vary the percentage paid on future income. Asking the same percentage of income from students with vastly different future income profiles creates a large distortion. At bare minimum, students attending community colleges and public comprehensives should face a different percentage than those attending selective institutions. I would go a bit further and increase the percentage paid by people whose incomes fall above the 80th percentile (or something like that) for their age range in the state.
4. Provide incentives for institutions to make better uses of resources. It is imperative that institutions commit to keeping costs down and tuition low. It is not enough to count on student reactions to hold them accountable.
5. Commit the state to increasing per-FTE appropriations over the implementation period. Tuition must decline in order for Pay It Forward to really increase college completion rates. States should be required to appropriate additional resources that explicitly require institutions to make better use of resources (see above).
These five changes should help improve the model, but I still view it as inferior to one that utilizes redirected Title IV federal aid and progressive taxation to support a free public option. There are simply too many free-riders in the Pay It Forward model, affecting both its sustainability and creating some really negative consequences for those in the public sector. Note that yes, I think higher education generates large positive externalities that compel this country to invest in public higher education. Reasonable people may disagree- and more research is needed-- but that's at the core of my argument. I hope when you weigh in, you make your own assumptions just as clear.
Much thanks to Matt Bruenig, Susannah Tahk, Miguel Palacios, and many others for conversations over the last week that have helped me clarify and advance my thinking. This has been quite a start to my sabbatical!
The number of legislators and members of the media who are continuing to express interest in learning more and building on this plan is amazing. In a key respect, it's also wonderful: people really want to do something NOW to make college more affordable and reduce student debt. It's about time!
With that in mind, I strongly suspect that some version of Pay It Forward will be enacted not only in Oregon, but in other states as well, and potentially with federal support. Thus, setting aside for now my continuing philosophic and political problems with the plan, I'd like to make the following suggestions for making it as effective and progressive as possible.
1. Ensure that it is universal and guarantees repayment. The only way to make it financially feasible and prevent it from furthering inequality is to reduce the fraction of free-riders. Allowing wealthier students to pay upfront perpetuates a two-tiered system and likely increases the percent of future earnings that participants will have to pay.
2. Provide the first year of community college for free. This plan could have a really wonderful effect of helping the most financially-constrained students gain a foothold in higher education, but in order to do this the first year must require no repayment whatsoever. Coupled with the federal Pell Grant, students could make the first year work with no debt and minimal working. That's worth trying- if we cannot significantly boost enrollment rates with a policy like that, it will teach us something. It facilitates the creation of advertising campaigns with a real chance of competing with for-profits' effective overtures to the same students.
3. Vary the percentage paid on future income. Asking the same percentage of income from students with vastly different future income profiles creates a large distortion. At bare minimum, students attending community colleges and public comprehensives should face a different percentage than those attending selective institutions. I would go a bit further and increase the percentage paid by people whose incomes fall above the 80th percentile (or something like that) for their age range in the state.
4. Provide incentives for institutions to make better uses of resources. It is imperative that institutions commit to keeping costs down and tuition low. It is not enough to count on student reactions to hold them accountable.
5. Commit the state to increasing per-FTE appropriations over the implementation period. Tuition must decline in order for Pay It Forward to really increase college completion rates. States should be required to appropriate additional resources that explicitly require institutions to make better use of resources (see above).
These five changes should help improve the model, but I still view it as inferior to one that utilizes redirected Title IV federal aid and progressive taxation to support a free public option. There are simply too many free-riders in the Pay It Forward model, affecting both its sustainability and creating some really negative consequences for those in the public sector. Note that yes, I think higher education generates large positive externalities that compel this country to invest in public higher education. Reasonable people may disagree- and more research is needed-- but that's at the core of my argument. I hope when you weigh in, you make your own assumptions just as clear.
Much thanks to Matt Bruenig, Susannah Tahk, Miguel Palacios, and many others for conversations over the last week that have helped me clarify and advance my thinking. This has been quite a start to my sabbatical!
Thursday, July 11, 2013
Time to Make College Loans Dischargeable
This post has been revised following excellent additional information provided by Zakiya Smith of the Lumina Foundation and Rachel Fishman of the New America Foundation. Thanks!
Student debt is the worst possible form of debt in one critical way: it almost never leaves you. You may be disabled, unemployed, or even dead, but you almost always still have to pay.
This "non-dischargeable"status is said to exist because there is no way to repossess the assets (your education) to pay off the creditors. But that cannot be the only reason for this extreme rule. Instead, it's another example of putting bankers' needs above those of the average American.
Federal student loans technically can be discharged (while private loans cannot-ever) but it's a very difficult process and almost no one does it. Among those seeking a discharge, about 40% are granted, but only 0.1% of student loan debtors filing for bankruptcy have sought to discharge their loans. Those who do file and succeed are often poor, unemployed, and having medical problems. It used to be the case that loans were much more readily dischargeable. All student loans could be discharged in bankruptcy until 1976. Student loans could be discharged after a waiting period (of initially five and later seven years after repayment was scheduled to begin) until 1998. Federal student loans became nondischargeable in bankruptcy in 1998. Private student loans became nondischargeable in bankruptcy in 2005. Why not work to once again make both private and federal loans (more) dischargeable?
The pros are obvious -- students drowning in debt could declare bankruptcy and get a fresh start. Certainly their credit would be ruined for a few years, but since many aren't trying to buy homes and it's increasingly the case that it doesn't hurt job prospects, this isn't the end of the world. In addition, lenders might make credit less available, and I tend to think that will help to drive down the costs in higher education (yes, I partly agree with the Bennett Hypothesis).
The cons are less clear, if we put aside the powerful interests of the financial industry . Would this give students incentive to go bankrupt? Recall that these are people who invested in postsecondary education and thus are actively trying to better their position in the world. They will not take bankruptcy likely, and those who treat it as anything less than a last resort will be a tiny minority (when bankruptcy was the same for student loans as all other loans, far less than 1% of federal loans were discharged this way). In fact, however, bankruptcy is critical in free market economies: it instills a sense of hope in the face of adversity. In other words, there are both conservative and liberal rationales to support this effort.
So if we are not doing this, we have to admit that it's because we aren't brave enough to strong enough to stand up to the lenders. An effort to make private student loans dischargeable again was introduced this year in the Fairness for Struggling Students Act and the Know Before You Owe Act and both failed.
Isn't it time for a change? Can't we mobilize more broadly to advance this right now by pursuing reform in the Senate judiciary committee?
Student debt is the worst possible form of debt in one critical way: it almost never leaves you. You may be disabled, unemployed, or even dead, but you almost always still have to pay.
This "non-dischargeable"status is said to exist because there is no way to repossess the assets (your education) to pay off the creditors. But that cannot be the only reason for this extreme rule. Instead, it's another example of putting bankers' needs above those of the average American.
Federal student loans technically can be discharged (while private loans cannot-ever) but it's a very difficult process and almost no one does it. Among those seeking a discharge, about 40% are granted, but only 0.1% of student loan debtors filing for bankruptcy have sought to discharge their loans. Those who do file and succeed are often poor, unemployed, and having medical problems. It used to be the case that loans were much more readily dischargeable. All student loans could be discharged in bankruptcy until 1976. Student loans could be discharged after a waiting period (of initially five and later seven years after repayment was scheduled to begin) until 1998. Federal student loans became nondischargeable in bankruptcy in 1998. Private student loans became nondischargeable in bankruptcy in 2005. Why not work to once again make both private and federal loans (more) dischargeable?
The pros are obvious -- students drowning in debt could declare bankruptcy and get a fresh start. Certainly their credit would be ruined for a few years, but since many aren't trying to buy homes and it's increasingly the case that it doesn't hurt job prospects, this isn't the end of the world. In addition, lenders might make credit less available, and I tend to think that will help to drive down the costs in higher education (yes, I partly agree with the Bennett Hypothesis).
The cons are less clear, if we put aside the powerful interests of the financial industry . Would this give students incentive to go bankrupt? Recall that these are people who invested in postsecondary education and thus are actively trying to better their position in the world. They will not take bankruptcy likely, and those who treat it as anything less than a last resort will be a tiny minority (when bankruptcy was the same for student loans as all other loans, far less than 1% of federal loans were discharged this way). In fact, however, bankruptcy is critical in free market economies: it instills a sense of hope in the face of adversity. In other words, there are both conservative and liberal rationales to support this effort.
So if we are not doing this, we have to admit that it's because we aren't brave enough to strong enough to stand up to the lenders. An effort to make private student loans dischargeable again was introduced this year in the Fairness for Struggling Students Act and the Know Before You Owe Act and both failed.
Isn't it time for a change? Can't we mobilize more broadly to advance this right now by pursuing reform in the Senate judiciary committee?
Sunday, June 2, 2013
Putting the UW System Tuition Freeze in Context
Today's Journal Sentinel has an excellent chart illustrating how the challenge of paying for college in Wisconsin has changed over time
The only problem is that neither the chart or the accompanying article addresses the likely assumption of many readers: students who can't pay these costs, even by working, are "held harmless" through financial aid. For that reason, many say, we should simply raise tuition further and invest that additional revenue in financial aid distributed to the neediest students.
To evaluate that claim, let's take a look at the "net price" of attending UW-Madison and UW-comprehensives-- the cost paid by the poorest students after taking into account all grant/scholarship aid provided to offset the sticket price.
At UW-Madison, for the upcoming year 2013-2014, that amount is $13,635.00 for Pell recipients with no expected family contribution. As you can see in the chart above, that means students from families typically earning less than $30,000 a year are expected to either work 1,866 hours a year (~35 hours/week) or borrow around $68,000 (5 years is typical time-to-degree for these students at Madison). Is this a reasonable proposition?
In addition, consider that no more than say 3-4% of UW-Madison undergraduates come from this sort of family. After all, more than 85% of students do not receive any Pell at all. For those students, the net price is over $21,000 in the coming year (total cost in 2013-14i s $24,000). Redistribution is helping very, very well-- and many students with substantial need deliberately overlooked by the federal "needs analysis" are being left out in the cold. It's no wonder there's now backlash against our financial aid system-- there's universal need and a narrow means-tested system. Never works.
Now, let's turn to the UW Comprehensives. As this recent presentation from System showed, financial aid tends to reduce the price paid by students at these schools by about $2,200 or 17%. So instead of an average sticker price of $13,000 at places like Parkside or Stout, students tend to face around $11,000. This still means taking on up to $40-50K in debt or working long hours. The only way in which institutions can claim to meet the need of students from families earning less than $60,000 is by assuming their willingness to borrow $20,000 or more in loans-- and frankly, that is a big assumption. When these students graduate, they will have debt amounting to a third of their family's income, and despite a focus on their "future earning power" that fact will matter more to them than anything else because the primary use of those future earnings will be to help keep the family that raised them afloat. These are not students whose families can contribute to paying off their debt upon graduation- -they are far more likely to be helping to pay off the debt their families accrued thanks to the substantial opportunity costs faced by losing their child-worker while they attended college.
Other skeptics point to the availability of the 2-year colleges throughout the state, again assuming that their costs are affordable. While tuition is indeed lower, the costs of attendance itself are not. Students do not live at home rent free while in college any longer-- they live at home while paying rent, and while in school lose time in which they would have been working. In addition, they get far less grant aid because their institutional resources are lower. So once again, this unchecked assumption is wrong-- and the colleges themselves know it. Madison College has billboards posted around Dane County pointing out that students at that college accrue less debt -- not no debt. Since when should students have to borrow to attend a 2-year community institution?
I recognize that many in the political Right want the pending UW System tuition freeze for all the wrong reasons, seeking to starve the System into submission and eventual collapse, to force the end of the public sector. I also recognize that the freeze will do some harm to the colleges and universities throughout the state, and that harm will be disproportionately distributed. But what exactly happens depends in great part to the behavior of System and UW-Madison. The smart response would be to seize the opportunity to ensure that state spending is focused on instruction and distributed according to the needs of the students. The money currently flows disproportionately to the least needy students and is budgeted defensively to support many activities aside from institution. This must stop.
1. Downsize the administrations at most universities and most significantly at UW-Madison.
2. Ensure that UW-Madison does the lion's share of the belt-tightening while requiring that it provide wage increases to faculty and staff. In other words, compel the institution to sacrifice on behalf of its sister institutions and ensure that instruction does not suffer. Find the units in which faculty are not teaching despite have substantial undergraduate enrollment and forbid any teaching releases not paid for with research dollars. Increase the research "buyout" rate on all grants larger than $250,000. Ensure that athletic programs either generate revenue for the campus-- and pass it along-- or close them. Etc.
3. Commission a task force to identify one UW comprehensive university to close and re-assign willing faculty and staff to online endeavors throughout the state. Do this only after thorough analysis and consider of cost-effectiveness and geographic needs.
4. Create an indirect cost incentive fund at 3-5 campuses to grow funding from research.
Again, etc.
I doubt any of this will happen because System will not act as the leader it needs to be, and because Madison will be allowed to retain greater power than any other higher education institution in the state, to the great detriment of the vast majority of students. As a result, the freeze will be followed by a sizable tuition increase. It shouldn't-- following the freeze, tuition should go up according to something like inflation or labor costs. Nothing more.
Actors on both sides seek to protect interests other than students. All should be called out for it. A clear and intentional move to a goal of providing universally affordable postsecondary opportunities throughout Wisconsin is long overdue.
Tuesday, April 16, 2013
The Case for Ending Student Loans
Sometimes public problems deserve massive public solutions. This is one of those times.
As I explained in my testimony to the U.S. Senate HELP committee this morning, student loans have been a requirement for college attendance in the United States. It is no longer possible for the vast majority of American families to afford college without taking on debt. It isn't a "choice." While we can disagree about whether or not the personal benefits of that debt are "worthwhile," the policy question is whether the social consequences are tenable.
I argue that they are not. While the average student loan debt under income-based repayment plans may be "manageable" under current financial industry standards (meaning it represents no more than 10% of annual income) that does not mean it has no negative impacts. (The evidence is far from clear that the debt will in fact be manageable-- the Australians are reportedly amazed that we think lessons from their experiences can reasonably be imported to our very different country and higher education space.) Having student loan debt very likely decreases the likelihood of borrowing for other things, including buying a home, starting a family, and other hallmarks of American middle-class life. It also comes with a special kind of stress, as it is not dischargeable, ever, even in death.
Even more importantly, loans have facilitated bad behaviors on the part of colleges and universities that have other wide-ranging social effects. For example, by attaching a large monetary value to each student, they encourage colleges to enroll students and not spend money to serve them well. They have enabled the expansion of prices affecting even those families who do not borrow. And they perpetuate the long-standing but ill-supported argument that the private benefits of education outweigh the social benefits (the truth is that the former are measured more accurately and more often than the latter, so comparisons are not yet possible).
Milton Friedman is the godfather of the student loan crisis in higher education. The same man who created the voucher system destroying our public schools and much of Latin America began advocating in the 1960s for a free-market approach to higher education financing that would shift the burden of funding college from government entirely to students-- this was his explicit goal. Incredibly, he also managed to convince people that this would be more equitable than the alternative of charging everyone less. Only a market devotee and a political ideologue more committed to theory than evidence would do this. But many economists around him were convinced and helped to push for the "Middle Income Student Assistance Act" of 1978 which originated the guaranteed student loan program in the name of "choice." Unsurprisingly, the private colleges and universities and the burgeoning proprietary sector were major supporters.
The student loan crisis we now experienced is therefore a manufactured one. It was an enormous mistake to shift the focus of financial aid from access to choice, and a mistake we must undo. Here are the next steps:
1. The reauthorization of the Higher Education Act of 2013 should end the guaranteed student loan program. Private banks will not see funding student loans as a good deal, and they will eventually disappear.
2. Stripped of loans as a way to finance college, families and students nationwide will immediately look at the costs of attendance at our colleges and universities and express outrage-- outrage that is long overdue. They will demand that their state legislatures driven down those costs immediately. These voices will be loud, numerous, and powerful.
3. State legislatures will respond, acting to force down the costs of attendance at their public colleges and universities by increasing income taxes and devoting more appropriations to funding them. They will not simply starve the public colleges and universities because the public will not demand it-- families and students will not abide by seeing the quality eroded. They will learn, fast, that price and quality are not one and the same.
4. With prices substantially lowered at public institutions, the different between public and private colleges and universities will be quite large. Privates will either respond by lowering their prices (unlikely), standing firm, or closing. The latter would be just fine-- private institutions should operate only where the market demands it, there is no need for government subsidies. Nearly all for-profit institutions will close as well.
5. Without student loans to pay for the costs of private education, students entering the private sector will mainly be wealthy, just as they are in k-12 private schools. However, given the widespread belief among private institutions in student diversity and their social justice commitments, these institutions will continue to use their endowments to provide scholarships. Pell Grant recipients attending private institutions will have those additional funds to support their needs at those more expensive schools.
The result: a strong public system of higher education sufficiently resourced to educate the masses, and a smaller array of private opportunities for those who can afford them or whom private colleges deem worthy of sponsorship. A college education for all without debt. Sufficiently lowered prices to make covering the costs unmet by grant aid with a modest amount of work.
Am I honestly suggesting we go "backwards"? No. This isn't regression, this is progression. We tried out Friedman's ideas, and they failed, exacerbating socioeconomic inequality in education outcomes, and running millions of Americans into debt. His approach benefitted private interests, not public ones. That's precisely what he meant for them to do-- and we collectively fell for it. Having learned our lessons, it's time to rethink the entire approach and move forward.
Please, tell me what you think. It's a conversation worth having.
My Testimony to the U.S. Senate
This morning, I testified before the United State's Senate HELP committee on the topic of college affordability. My written testimony can be found here. The text of my oral testimony follows, and I have added a q&a to respond to several questions I expect to receive. I welcome your feedback.
Good morning, Chairman Harkin, Senator Alexander, and Members of the Committee. Thank you all for this opportunity.
There’s never been a more important time to address the issue of college affordability. College is now the main road to a stable, secure life, and in this age of global knowledge markets, it is college-educated workers who will be the main driver of the U.S.’s prosperity. But the research evidence is clear: most families and students find the high cost of college attendance unbearable, and it’s affecting their choices about whether to attend college, where to go, and even whether or not to finish the degrees and certificates they start. As access to college becomes more difficult, public frustration is emerging and is spilling over towards other institutions and indeed into the streets.
Today Americans are experiencing annual declines in family income, yet net price of attending public colleges and universities continues to rise by almost $500 per year—that’s after taking aid into account. In the early 1970s, the maximum Pell Grant covered almost 80% of the costs of attending a public 4-year institution--today it covers barely 30%. With so little help, even low-income families are left with a bill of about $12,000 a year. For many, that’s the equivalent of up to 70% of their annual income. And so unsurprisingly, only about 1 in 10 find their way a college degree.
It hasn’t always been this way. The idea that students should bear most of the costs of college comes from a time when college cost much less and powerful people thought markets were saviors. Students today are just as responsible as ever, and just as willing to work for their education, but their task is plainly impossible. Covering that $12,000 in unmet need requires a student to work at least 35 hours a week, 52 weeks a year at the federal minimum wage. That arrangement is untenable, and moreover compromises their chances of completing their degrees.
Congress got it right in 1972 when it affirmed the societal goal of universal access to postsecondary education as a citizen’s right. Understanding that low tuition supplemented by the Pell grant was the most effective means of supporting access, it invested heavily in that key program.
But within a decade, the needs of students and families fell by the wayside, and our financial aid system has never recovered. Acting on the theory that higher education would become more “equitable” and efficient by operating on free market principles, policymakers began reducing the availability of grant aid, increasing the availability of loans, and de facto encouraging rising costs of attendance we see today.
This was a mistake. The decision to move away from a low-tuition approach to higher education, coupled with a refusal to regulate how institutions set prices has forced millions of students into debt. Loans are the new normal because of political choices, not because there are no alternatives. College today what the high school was a century ago, and yet students are being required to both work and borrow for it.
The consequences are evident—I’ve spent the last five years with a team of researchers on the ground in Wisconsin documenting the results. Let me tell you about Chloe, who I met when she enrolled in a Wisconsin technical college after finishing high school in a small, rural Wisconsin town of just 1,800 people. Chloe wanted to become a veterinary technician. Since she was the first person in her family to even try college, they had no savings. So she got the Pell and figured she was set. Not quite. As a last-ditch effort to ensure that she had enough resources for books, she’d sold her family’s horse, whom she’d raised on their farm as a teenager. It broke her heart, but she didn’t know what else to do. The horse was just a short-term fix: a month later, she found herself short of gas money. So she took a job at a fast food restaurant, but they couldn’t offer enough hours, so she found a second job at a fabric store, working one job in the morning and the other at night. She attended class in-between, getting home at midnight, and beginning her day again at 6 am. Working left little time for studying, but she feared loans, since she had seen credit card debt nearly destroy her mother’s finances. Running from job to school to job, she was exhausted, hungry, and stressed.
Six months later, I checked on Chloe, and found that college was done—she’d dropped out. The two-job-plus-school routine led her to fall asleep in her classes, and she’d earned a 1.9 GPA—putting her on academic probation. Her program of study didn’t allow for that, and kicked her out. Furious, confused, and unsure whom to talk to, Chloe bailed. Several weeks later, a bank began calling—the student loan she’d accepted during finals week, when she was trying to find another way forward, was now coming due. Unemployed, in debt, and disillusioned, Chloe was dodging their calls.
Making it this hard to pursue a college degree is weakening our great nation. We have to return to a demonstrably effective approach to putting college within reach of all Americans by providing a meaningful Pell Grant targeted to the neediest families, distributed early enough to help students prepare for college, and stripped of all unnecessary requirements. This should be matched by a difficult but necessary effort to drive down college costs by ending the ineffective tax credits flowing to wealthy families, stemming the tide of indebtedness by capping the interest rate on student loans, and using incentives to push states and institutions to return to a focus on providing high-quality postsecondary education, not glorified summer camps, that are accessible to all Americans. My written testimony contains specific recommendations aimed at accomplishing these goals.
My grandfather is here today because he’s a great example of what happens when Congress acts on behalf of all students. The GI Bill made it possible for him to graduate from NYU in 1950 – the first person in his family to earn a college degree. He went on to graduate and postgraduate education and is still practicing as a psychoanalyst doing work he loves, alongside my grandmother, a writer. He is my constant reminder of the wonderful lives Congress has helped the hard-working people of this nation lead by supporting their educational dreams. I know we can do better right now for students like Chloe and the millions like her. Help us find our way back to the original goals and intentions of financial aid, and we will all benefit.
TESTIMONY
There’s never been a more important time to address the issue of college affordability. College is now the main road to a stable, secure life, and in this age of global knowledge markets, it is college-educated workers who will be the main driver of the U.S.’s prosperity. But the research evidence is clear: most families and students find the high cost of college attendance unbearable, and it’s affecting their choices about whether to attend college, where to go, and even whether or not to finish the degrees and certificates they start. As access to college becomes more difficult, public frustration is emerging and is spilling over towards other institutions and indeed into the streets.
Today Americans are experiencing annual declines in family income, yet net price of attending public colleges and universities continues to rise by almost $500 per year—that’s after taking aid into account. In the early 1970s, the maximum Pell Grant covered almost 80% of the costs of attending a public 4-year institution--today it covers barely 30%. With so little help, even low-income families are left with a bill of about $12,000 a year. For many, that’s the equivalent of up to 70% of their annual income. And so unsurprisingly, only about 1 in 10 find their way a college degree.
It hasn’t always been this way. The idea that students should bear most of the costs of college comes from a time when college cost much less and powerful people thought markets were saviors. Students today are just as responsible as ever, and just as willing to work for their education, but their task is plainly impossible. Covering that $12,000 in unmet need requires a student to work at least 35 hours a week, 52 weeks a year at the federal minimum wage. That arrangement is untenable, and moreover compromises their chances of completing their degrees.
Congress got it right in 1972 when it affirmed the societal goal of universal access to postsecondary education as a citizen’s right. Understanding that low tuition supplemented by the Pell grant was the most effective means of supporting access, it invested heavily in that key program.
But within a decade, the needs of students and families fell by the wayside, and our financial aid system has never recovered. Acting on the theory that higher education would become more “equitable” and efficient by operating on free market principles, policymakers began reducing the availability of grant aid, increasing the availability of loans, and de facto encouraging rising costs of attendance we see today.
This was a mistake. The decision to move away from a low-tuition approach to higher education, coupled with a refusal to regulate how institutions set prices has forced millions of students into debt. Loans are the new normal because of political choices, not because there are no alternatives. College today what the high school was a century ago, and yet students are being required to both work and borrow for it.
The consequences are evident—I’ve spent the last five years with a team of researchers on the ground in Wisconsin documenting the results. Let me tell you about Chloe, who I met when she enrolled in a Wisconsin technical college after finishing high school in a small, rural Wisconsin town of just 1,800 people. Chloe wanted to become a veterinary technician. Since she was the first person in her family to even try college, they had no savings. So she got the Pell and figured she was set. Not quite. As a last-ditch effort to ensure that she had enough resources for books, she’d sold her family’s horse, whom she’d raised on their farm as a teenager. It broke her heart, but she didn’t know what else to do. The horse was just a short-term fix: a month later, she found herself short of gas money. So she took a job at a fast food restaurant, but they couldn’t offer enough hours, so she found a second job at a fabric store, working one job in the morning and the other at night. She attended class in-between, getting home at midnight, and beginning her day again at 6 am. Working left little time for studying, but she feared loans, since she had seen credit card debt nearly destroy her mother’s finances. Running from job to school to job, she was exhausted, hungry, and stressed.
Six months later, I checked on Chloe, and found that college was done—she’d dropped out. The two-job-plus-school routine led her to fall asleep in her classes, and she’d earned a 1.9 GPA—putting her on academic probation. Her program of study didn’t allow for that, and kicked her out. Furious, confused, and unsure whom to talk to, Chloe bailed. Several weeks later, a bank began calling—the student loan she’d accepted during finals week, when she was trying to find another way forward, was now coming due. Unemployed, in debt, and disillusioned, Chloe was dodging their calls.
Making it this hard to pursue a college degree is weakening our great nation. We have to return to a demonstrably effective approach to putting college within reach of all Americans by providing a meaningful Pell Grant targeted to the neediest families, distributed early enough to help students prepare for college, and stripped of all unnecessary requirements. This should be matched by a difficult but necessary effort to drive down college costs by ending the ineffective tax credits flowing to wealthy families, stemming the tide of indebtedness by capping the interest rate on student loans, and using incentives to push states and institutions to return to a focus on providing high-quality postsecondary education, not glorified summer camps, that are accessible to all Americans. My written testimony contains specific recommendations aimed at accomplishing these goals.
My grandfather is here today because he’s a great example of what happens when Congress acts on behalf of all students. The GI Bill made it possible for him to graduate from NYU in 1950 – the first person in his family to earn a college degree. He went on to graduate and postgraduate education and is still practicing as a psychoanalyst doing work he loves, alongside my grandmother, a writer. He is my constant reminder of the wonderful lives Congress has helped the hard-working people of this nation lead by supporting their educational dreams. I know we can do better right now for students like Chloe and the millions like her. Help us find our way back to the original goals and intentions of financial aid, and we will all benefit.
Questions & Answers
The central thesis of my oral testimony is when it comes to promoting equitable access to postsecondary education the combination of low tuition and modest financial aid is a superior approach to a massive program of federal student aid.
Q: Don’t we know that the low tuition model is inefficient and inequitable, since it subsidizes the wealthy?
A: No. That’s a theoretical supposition, and one that’s not borne out by much research. Historically, the largest increases in higher education participation have occurred in places and at institutions of low tuition. A long body of research indicates that financial aid alone doesn’t achieve the same results. The high tuition-high aid model fails because the subsidies never really reach the neediest students, and the costs aren’t borne only by the rich, but also by the middle-class. The American middle-class is losing ground, and is unable to subsidize anyone else. It is bearing the costs of this strategy with student debt, and this is unsustainable.
By keeping tuition low we help everyone. By providing aid for the neediest, we help the poor more. A low tuition model is the same approach undergirding Social Security, one of our most successful programs. Because we know from existing data that children from the country’s wealthiest families almost never attend public universities, by funding this approach with a progressive taxation system, we place a greater burden on the wealthiest 10% who will ultimately pay twice—once via taxes, and twice by sending their children to private schools. That is far more equitable and efficient, especially since it will achieve the equity in outcomes that we desire.
Q: Aren’t you overreacting to what is essentially an informational deficiency on the part of needy students?
No. The needs analysis and the distribution of aid is inherently complicated in the current system and this is why efforts to simplify fail over and over again. It is always difficult to distinguish the truly needy from the somewhat needy from the modestly needy; this is true the world over. Complex systems arise to try and solve this problem, and the result is increased involvement in institutional policy-making and poorly designed formulas and regulations that inadvertently threaten the autonomy of colleges and universities and the long-term political commitment to equity in access to quality, public education. The current needs analysis is undemocratic, bureaucratic, arbitrary and open to evasion.
Q: Are you proposing that we degrade the quality of our colleges and universities to promote access?
A: Not at all. I am proposing that we use taxes rather than financial aid to fund public colleges and universities, and I am proposing that we significantly increase their diversity by ensuring that more students from all family backgrounds can afford to participate.
If we want to keep costs down further, we should decline to subsidize the costs of attendance at private and for-profit institutions entirely. Will these institutions suffer? Not if the market for their form of education can survive without government subsidies. Why should government intervene in the free market to prop them up?
Q: Given that we now have income-contingent repayment plans, why should we care if students take loans?
A: No American should be forced to take on debt of any amount simply because they want the opportunity to receive an education that every citizen now needs to fully succeed in society. A century ago that meant high school; today it means college. Paying off student debt each month under income contingent repayment might be “manageable” in terms defined by the financial industry, but it doesn’t mean it isn’t reducing the quality of peoples’ lives.
Q: Why should the public pay for private goods?
A: First, it is ironic that these distinctions are drawn when it comes to students but not when it comes to institutions. Higher education policy has been remarkably silent when it comes to distinguishing between public and private institutions, or between for-profit and non-profits ones. Financial aid eligibility is extended to students at all types, ignoring important distinctions in how they are financed—even though in its current form student assistance is effectively a form of institutional assistance. In fact, the historical record shows that much of the political support for providing aid in this way came from lobbyists from the private colleges, who hoped that aid would help narrow the tuition gap between publics and privates by encouraging public tuitions to rise. In theory, they thought free market financing would be equitable to the needy, promote freedom of choice, remove regulations, and improve the quality of education through greater competition.
Second, while many claim that the individual benefits outweigh the societal, the fact is that this is a function of the greater difficulty of measuring social benefits. As the late Joseph Pechman of Brookings argued, higher education provides numerous societal benefits but even the state of the art in social science isn’t advanced enough to measure them.
Furthermore, there is no reason to distinguish among levels of education in terms of public financing rationales or between education and other provisions such as national parks or police protection. Low tuition is justified by social necessity, and the costs of any subsidies should be returned via increased tax revenue over time—and if it is not, we simply need to adjust the income taxes.
Q: Are you suggesting that the growth in student loans was intentional?
A: In a word, yes. Beginning in 1955, economist Milton Friedman began promoting the idea that higher education could be financed through student loans, and particularly through income-contingent repayment plans. In 1968, he published an article arguing that higher education should operate without public subsidies in accordance with “free market” principles. Several other reports by economists piggy-backed on these ideas, noting that this could allow tuition to rise to account for a larger percentage of the total cost of education.
But others were concerned, even then. Howard Bowen raised worries that loans would not be conducive “to the widening and deepening of learning” and admitted that “when large amounts of money are involved that I become apprehensive.” Well, today loans are the new normal, and large amounts of money would be an understatement.
Q: Do you think this plan will ever be adopted?
A. Probably not, since the special interests backing it are incredibly powerful. State governments will oppose it since it means they must spend tax dollars on education. University administrators and faculty will oppose it since it diminishes their overall revenue. Private colleges will oppose it for obvious reasons. Free market economists will oppose it simply because it strikes them as irrational.
If you dislike this proposal, then please read my written testimony, since it contains numerous ways to improve the current system.
If you dislike this proposal, then please read my written testimony, since it contains numerous ways to improve the current system.
Q: Please summarize the benefits of your proposed model once more.
A: Low tuition supplemented by need-based student aid brings five distinct advantages:
1. It provides an acceptable level of financial risk for nearly all students.
2. It is simple and non-bureaucratic
3. The amount of financial aid needed is limited because of low tuition
4. The institutional appropriations accompanying low tuition provide large amounts of capital for investment in institutional capabilities to meet student demand, and financial aid expands that for those serving more low-income students.
5. It provides a government-assisted service that nearly every American hopes to access—it has strong popular demand.
Sunday, April 14, 2013
An Education Optimist Goes to Washington
It will be an incredible honor and immense responsibility to appear this Tuesday morning before the United States Senate Committee on Health, Education, Labor, and Pensions for a hearing about college affordability. I am especially happy that the focus of this hearing is on the perspectives of students and families, since they view policy as enacted, not policy as intended.
The hearing will be webcast here beginning at 9 am Central/ 10 am Eastern. My written testimony has been submitted and will be posted on the website following the hearing-- it is substantially longer and more detailed than my oral testimony, since I only get 5 minutes for that.
This committee is chaired by Senator Tom Harkin, and (be still my heart!) includes both Senator Tammy Baldwin and Senator Elizabeth Warren. I'm told they will both be present, and that Senator Baldwin will deliver my introduction.
I will be joined by a representative from the U.S. PIRG and two students. I look forward to this important conversation, and hope that you'll join me in it by tweeting to me @saragoldrickrab
I'll post some reactions and talk a bit about this uncommon experience after the hearing. After my heart stops pounding, of course.
The hearing will be webcast here beginning at 9 am Central/ 10 am Eastern. My written testimony has been submitted and will be posted on the website following the hearing-- it is substantially longer and more detailed than my oral testimony, since I only get 5 minutes for that.
This committee is chaired by Senator Tom Harkin, and (be still my heart!) includes both Senator Tammy Baldwin and Senator Elizabeth Warren. I'm told they will both be present, and that Senator Baldwin will deliver my introduction.
I will be joined by a representative from the U.S. PIRG and two students. I look forward to this important conversation, and hope that you'll join me in it by tweeting to me @saragoldrickrab
I'll post some reactions and talk a bit about this uncommon experience after the hearing. After my heart stops pounding, of course.
Wednesday, March 27, 2013
How Sticker Shock Happens
A colleague who is skeptical of my argument that students and families are susceptible to sticker shock, and that this particularly affects the choices of those without financial strength, raising a good question: If these students and families don't know about financial aid (or changes in financial aid), why would they know about institutional sticker price (or changes in institutional stick price)?
The answer appeared during a trip I took on the New York City subway today. Look at this ad and you tell me-- isn't the message quite clear? If this is the number you see as you stare at subways ads for an hour commute to work, don't you think it will sink in? With so many ads all the time telling the buyer "Trust us, big discount! Just file papers!" why would anyone believe another one, let alone one that comes with a long complex set of forms.
It's a mistake to focus merely on the question of whether a net price intervention can move the dial a bit, helping some students overcome sticker shock. That's just a tiny chip at the iceberg. Instead, consider the massive iceberg we're created, allowing sticker prize to escalate, and begin to melt it.
The answer appeared during a trip I took on the New York City subway today. Look at this ad and you tell me-- isn't the message quite clear? If this is the number you see as you stare at subways ads for an hour commute to work, don't you think it will sink in? With so many ads all the time telling the buyer "Trust us, big discount! Just file papers!" why would anyone believe another one, let alone one that comes with a long complex set of forms.
It's a mistake to focus merely on the question of whether a net price intervention can move the dial a bit, helping some students overcome sticker shock. That's just a tiny chip at the iceberg. Instead, consider the massive iceberg we're created, allowing sticker prize to escalate, and begin to melt it.
Friday, March 22, 2013
Cautions for Chancellor Blank
It seems UW-Madison's system of shared governance may be a new act for Chancellor Rebecca Blank to learn. An interview conducted with journalists today shows her on the record weighing in on both tuition strategies and the composition of the student body.
A word to the wise: This year the University Committee charged two committees to work on these exact issues. The tuition committee has been meeting and working hard all year long -- hiking out-of-state tuition and differentiating tuition further by school or college are strategies that come with significant potential consequences. Reciprocity with Minnesota is costing the university a great deal of money and ending it should not be dismissed out of hand. Regardless, these are not choices made simply by the chancellor, but by the shared governance system. In addition, the Committee on Undergraduate Recruitment, Admissions, and Financial Aid was tasked with developing a profile of the ideal freshman class and working on ways to achieve it. Chancellor Blank does not decide where students "should" come from-- we all do.
Hopefully these are just initial missteps on her part. Hopefully the next time she is asked about these things, she'll inform reporters that it's impossible at this stage to say what will come next, since she hasn't spent time on campus in decades. And hopefully she will schedule a "telebriefing" with shared governance groups soon, seeing as how the one with reporters is now over.
Friday, March 15, 2013
The Real Problem with the College Scorecard
There is an ongoing and reasonably interesting debate about the Obama Administration's College Scorecard that I'd like to weigh in on, in order to draw out what's gone unsaid.
On one side of the debate are a set of elite college presidents who think the Scorecard's narrow focus on economic returns to the degree miss the mark; the college-going decision should be about more than getting a job. For example, Harvard President Drew Faust writes that "the focus in federal policy making and rhetoric on earnings data as the indicator of the value of higher education will further the growing perception that a college degree should be simply a ticket to a first job, rather than a passport to a lifetime of citizenship, opportunity, growth and change...Equating the value of education with the size of a first paycheck badly distorts broader principles and commitments essential to our society and our future."
On the other side are people like the Brookings Institution's Beth Akers, who argue that financial returns are critical to the assessment of whether college is worthwhile, especially for people without substantial family wealth, and that providing more information on economic returns is therefore important to influencing the college-going decision.
Both camps are partially right, in my view, and yet both are missing some critical points as well.
First, it is clear that college has multiple meanings and purposes for all students -- students from lower socioeconomic backgrounds seek access to a "lifetime of citizenship, opportunity, growth, and change" just as other students do. They are not aiming merely at a "first paycheck" -- in fact, if we present them with information on returns from the first paycheck, we won't be showing much economic return at all, since the payback to a bachelor's degree accrues over a lifetime, with the real value often not readily apparent until one's 30s or even 40s. The economic returns come mainly from job stability and retention, not the initial paychecks.
But try telling that to an 18 year old who simply wants a better life for herself, and sees college as the way to do it. The first step in that process, from her angle, is to get a degree that gets her employed. The upward path to social mobility, wherein she is employed longer and more consistently, and also has the knowledge and desire to bring her own children into postsecondary education--that's far down the road. And that's why Akers is right that this sort of information is valuable.
However, the main problem with the College Scorecard approach lies in its deceptively simple approach to the challenge. Even though the people creating it probably know that it's just a teeny tiny part of the fix, its mention in the President's State of the Union and attention it is getting reinforces a common perception that the college cost problem is mainly informational. Informational problems are fundamentally attributed to individual deficiencies rather than institutional or structural actions, and they are addressed in that manner. The College Scorecard equips the "student-consumer" so that they can make a "rational choice" in the face of a rich competitive marketplace. This framework is deeply problematic. Education is not a good like a car or a home. It means far more to people, and has transformative powers that other goods do not provide. The fundamental problem is that colleges and universities have been given strong incentives to act like businesses instead of sites of education, and this is magnified by the Scorecard.
A college education is a social good that actualizes the potential of all who enjoy it. I think President Obama knows this. He knows that a community comprised of college-educated parents feels and acts differently than one with less education. Given this, we cannot and should not address the college attainment problem in this country one person at a time by providing scorecards of information. We need our leadership to insist on a national conversation about social priorities, and insist on approaches to education that are fundamentally democratic-- and therefore public--and are socially just. We have to insist that a focus on equity is not only required but is more important than a focus on efficiency, since cost is not the only way to assess value, and when we say that it is, we prioritize efforts that keep the poor poor.
I am not naive-- the schooling system we have today reflects the state of our economic life, and the College Scorecard is merely a symptom of that status quo. But with each policy decision comes a set of choices, and in his last term, President Obama has the opportunity to initiate important changes in our economic life by rejecting the notion that the advantages held by the 1% trickle down to the rest of us, that the consumerism which suits them so well serves our interests too, and that our college opportunities should be guided by the same approach that their families embrace. Helping college opportunities achieve their potentially liberating ends requires leveraging governmental resources to pursue the provision of a free public education in which the value of college is clearly stated, provided by society to all of its membership.
On one side of the debate are a set of elite college presidents who think the Scorecard's narrow focus on economic returns to the degree miss the mark; the college-going decision should be about more than getting a job. For example, Harvard President Drew Faust writes that "the focus in federal policy making and rhetoric on earnings data as the indicator of the value of higher education will further the growing perception that a college degree should be simply a ticket to a first job, rather than a passport to a lifetime of citizenship, opportunity, growth and change...Equating the value of education with the size of a first paycheck badly distorts broader principles and commitments essential to our society and our future."
On the other side are people like the Brookings Institution's Beth Akers, who argue that financial returns are critical to the assessment of whether college is worthwhile, especially for people without substantial family wealth, and that providing more information on economic returns is therefore important to influencing the college-going decision.
Both camps are partially right, in my view, and yet both are missing some critical points as well.
First, it is clear that college has multiple meanings and purposes for all students -- students from lower socioeconomic backgrounds seek access to a "lifetime of citizenship, opportunity, growth, and change" just as other students do. They are not aiming merely at a "first paycheck" -- in fact, if we present them with information on returns from the first paycheck, we won't be showing much economic return at all, since the payback to a bachelor's degree accrues over a lifetime, with the real value often not readily apparent until one's 30s or even 40s. The economic returns come mainly from job stability and retention, not the initial paychecks.
But try telling that to an 18 year old who simply wants a better life for herself, and sees college as the way to do it. The first step in that process, from her angle, is to get a degree that gets her employed. The upward path to social mobility, wherein she is employed longer and more consistently, and also has the knowledge and desire to bring her own children into postsecondary education--that's far down the road. And that's why Akers is right that this sort of information is valuable.
However, the main problem with the College Scorecard approach lies in its deceptively simple approach to the challenge. Even though the people creating it probably know that it's just a teeny tiny part of the fix, its mention in the President's State of the Union and attention it is getting reinforces a common perception that the college cost problem is mainly informational. Informational problems are fundamentally attributed to individual deficiencies rather than institutional or structural actions, and they are addressed in that manner. The College Scorecard equips the "student-consumer" so that they can make a "rational choice" in the face of a rich competitive marketplace. This framework is deeply problematic. Education is not a good like a car or a home. It means far more to people, and has transformative powers that other goods do not provide. The fundamental problem is that colleges and universities have been given strong incentives to act like businesses instead of sites of education, and this is magnified by the Scorecard.
A college education is a social good that actualizes the potential of all who enjoy it. I think President Obama knows this. He knows that a community comprised of college-educated parents feels and acts differently than one with less education. Given this, we cannot and should not address the college attainment problem in this country one person at a time by providing scorecards of information. We need our leadership to insist on a national conversation about social priorities, and insist on approaches to education that are fundamentally democratic-- and therefore public--and are socially just. We have to insist that a focus on equity is not only required but is more important than a focus on efficiency, since cost is not the only way to assess value, and when we say that it is, we prioritize efforts that keep the poor poor.
I am not naive-- the schooling system we have today reflects the state of our economic life, and the College Scorecard is merely a symptom of that status quo. But with each policy decision comes a set of choices, and in his last term, President Obama has the opportunity to initiate important changes in our economic life by rejecting the notion that the advantages held by the 1% trickle down to the rest of us, that the consumerism which suits them so well serves our interests too, and that our college opportunities should be guided by the same approach that their families embrace. Helping college opportunities achieve their potentially liberating ends requires leveraging governmental resources to pursue the provision of a free public education in which the value of college is clearly stated, provided by society to all of its membership.
Friday, March 8, 2013
Make College Free
It is long past time to make college free, and thankfully the Atlantic writer Jordan Weissman just laid out the case very nicely.
Jordan points out that the money invested in our financial aid system could instead be invested in appropriations to public colleges and universities to drive down costs. Yes, aid to private colleges would end. Oh well! Why do we pay for private colleges when we don't pay for private high schools? (Well, we are starting too but we should stop.) And yes, we need to cover costs of attendance for the poorest students too and we can do that by charging very low tuition to rich kids to give to poor kids (for whom tuition is free)-- and that's a progressive tuition structure rather than this incredibly deceptive price discounting scheme we now have in place.
As I've been pointing out in talks around the country on the subject "When America Goes to College," our current system of affordability was developed at a time when the college-going population largely had advantaged parents who understood and had faith in the system, and when costs of attendance were much lower, and thus sticker shock wasn't so rampant. That approach recognizes that colleges costs are a barrier to attendance but allows those costs of attendance to be determined by colleges and universities, with some input from states. Those costs of attendance are then discounted with financial aid and that aid is distributed directly to students, not to colleges. Therefore, accessing aid requires substantial action and responsibility on part of the student.
That model makes several assumptions:
For example, discounting college costs with financial aid is far more complicated than discounting the price of a movie ticket with a student ID (a classic example of price discounting). For one, you have to file a FAFSA to get the discount-- and until you do it, you have no idea what discount you'll get. For another, you have to trust the government and the school to give you the discount. And with all the mistreatment of low-income families in this country, why would they?
Another issue is that the discount itself has changed over time. We moved from aid in the form of grants to aid in the form of loans, and those do not mean equal things to students or have equal effects. In addition, we have witnessed a proliferation of grants and scholarships with a multitude of requirements (which can conflict in unproductive ways), and from an array of sources, such that students have no idea who's helping them go to college and why, or how long they can count on the support. Aid shifts from year to year, seemingly without warning, and often declines unexpectedly. Students from poor families have little ability to smooth their consumption and adjust to these shocks, and this perpetuates the feeling that aid is untrustworthy.
Perhaps even more importantly, in our effort to ensure that the discount is well-targeted, we've create a monster of program complexity. An industry has grown in order to help students process the FAFSA and yet it's still not working. The formula penalizes students for temporary improvements in their parents' income, even when they will not realize those gains (e.g. when dad finally gets a job after 5 years, it's not likely he can share that new money with you as he struggles to pay off bills, and yet you lose your Pell). And it assumes monetary exchanges between family members that are based on a 2-parent household with middle-class norms-- e.g. parents provide money to kids and expect nothing in return.
What an absolute mess.
If we really wanted to make college affordable, we would direct all dollars towards providing one good affordable option for everyone. We would focus less on choice and more on access to a real outcome- a degree. We wouldn't let aid flow to private or for-profit schools, and by funding public institutions we'd hold them accountable for keeping costs low and campus-climates reasonable so that everyone can fully participate in the experiences.
I thank people like Jordan for putting big bold ideas like free college on the table and making it possible to surface the real issue: most Americans want college to be a privilege and not a right because they care more about "getting ahead" then creating an equitable society in which we live as a community. To get ahead requires leaving someone else behind, and higher education has come to be a major way in which Americans work on doing just that.
Jordan points out that the money invested in our financial aid system could instead be invested in appropriations to public colleges and universities to drive down costs. Yes, aid to private colleges would end. Oh well! Why do we pay for private colleges when we don't pay for private high schools? (Well, we are starting too but we should stop.) And yes, we need to cover costs of attendance for the poorest students too and we can do that by charging very low tuition to rich kids to give to poor kids (for whom tuition is free)-- and that's a progressive tuition structure rather than this incredibly deceptive price discounting scheme we now have in place.
As I've been pointing out in talks around the country on the subject "When America Goes to College," our current system of affordability was developed at a time when the college-going population largely had advantaged parents who understood and had faith in the system, and when costs of attendance were much lower, and thus sticker shock wasn't so rampant. That approach recognizes that colleges costs are a barrier to attendance but allows those costs of attendance to be determined by colleges and universities, with some input from states. Those costs of attendance are then discounted with financial aid and that aid is distributed directly to students, not to colleges. Therefore, accessing aid requires substantial action and responsibility on part of the student.
That model makes several assumptions:
- Equitable access to postsecondary education will be achieved via price discrimination and redistribution
- Some students will pay more than others, and the extra money will go to needy students via financial aid
- Needy students will respond to the discounted price –the lowered cost of attendance will make the benefits more evidently attractive
For example, discounting college costs with financial aid is far more complicated than discounting the price of a movie ticket with a student ID (a classic example of price discounting). For one, you have to file a FAFSA to get the discount-- and until you do it, you have no idea what discount you'll get. For another, you have to trust the government and the school to give you the discount. And with all the mistreatment of low-income families in this country, why would they?
Another issue is that the discount itself has changed over time. We moved from aid in the form of grants to aid in the form of loans, and those do not mean equal things to students or have equal effects. In addition, we have witnessed a proliferation of grants and scholarships with a multitude of requirements (which can conflict in unproductive ways), and from an array of sources, such that students have no idea who's helping them go to college and why, or how long they can count on the support. Aid shifts from year to year, seemingly without warning, and often declines unexpectedly. Students from poor families have little ability to smooth their consumption and adjust to these shocks, and this perpetuates the feeling that aid is untrustworthy.
Perhaps even more importantly, in our effort to ensure that the discount is well-targeted, we've create a monster of program complexity. An industry has grown in order to help students process the FAFSA and yet it's still not working. The formula penalizes students for temporary improvements in their parents' income, even when they will not realize those gains (e.g. when dad finally gets a job after 5 years, it's not likely he can share that new money with you as he struggles to pay off bills, and yet you lose your Pell). And it assumes monetary exchanges between family members that are based on a 2-parent household with middle-class norms-- e.g. parents provide money to kids and expect nothing in return.
What an absolute mess.
If we really wanted to make college affordable, we would direct all dollars towards providing one good affordable option for everyone. We would focus less on choice and more on access to a real outcome- a degree. We wouldn't let aid flow to private or for-profit schools, and by funding public institutions we'd hold them accountable for keeping costs low and campus-climates reasonable so that everyone can fully participate in the experiences.
I thank people like Jordan for putting big bold ideas like free college on the table and making it possible to surface the real issue: most Americans want college to be a privilege and not a right because they care more about "getting ahead" then creating an equitable society in which we live as a community. To get ahead requires leaving someone else behind, and higher education has come to be a major way in which Americans work on doing just that.
Friday, February 1, 2013
Unintended Consequences of Tuition Reciprocity
Providing more students with a variety of college choices is a good thing. But I'm beginning to wonder about the unintended consequences of policies that try to accomplish it.
Take the case of Wisconsin, which shares a tuition reciprocity agreement with Minnesota. Many students, especially those living on the borders of the two states, and those who don't get a place in their flagship university, choose to attend college in the other state. That's very nice, of course, and very neighborly. And, according to the press, it helps the state attract "the best students." But every policy has its downsides, and in this case there may be several:
(1) It seems to nudge data reporting toward the uninformative. Since both Minnesota and Wisconsin are treated as residents for tuition purposes, the vast majority of official reporting from the state and the campuses combines the two groups. This makes it hard for the public to examine the characteristics of Wisconsin residents. For example, say in order to assess equality of educational opportunities you wanted to compare the % of Native Americans among Wisconsin residents statewide to the % of Native Americans among Wisconsin residents enrolled at UW-Madison. It's not in any publicly available report, since reports like these aggregate MN and WI students together. (Sure, this could be changed without altering the reciprocity agreement, but right now there seems no incentive to do it.)
(2) It confuses discussions about key enrollment issues such as the cap on the proportion of non-resident students. Presumably, this cap exists to protect spaces for Wisconsin residents. But the cap, which is now 27.5%, doesn't actually do this since in theory it could be met by enrolling 10% Wisconsin students and 67.5% MN students. It says nothing about the distribution between WI and MN within the resident category. It also makes UW-Madison look like it enrolls relatively few non-residents compared to its peers, when in fact the opposite is true. In fact, if MN students counted as the non-residents they really are, UW-Madison would have to ask itself whether having a large concentration (~12%) of MN students is the best way to diversify the student body.
(3) It may contribute to brain drain. This is typically defined at the out-of-state migration of bachelor's degree holders. But how many students migrate post-high school but before the bachelor's degree? How many students do we send to MN for college, because they are outcompeted by MN students for seats at Madison, for example? And how many of those return to pay taxes in WI? I have no idea, but it's worth exploring. If MN weren't an option, might those students still attend college -- but in Wisconsin, at one of our many universities facing declining enrollment? Of course, we should consider this in relation to how many MN students who attend college in WI choose to remain here, and pay taxes. To the best of my knowledge, this issue hasn't been examined in decades.
(4) It may reduce the incentive to invest more in UW-Milwaukee. Very few reciprocity students from Minnesota choose to attend Milwaukee, but many Wisconsin students who cannot get a seat at Madison seek Minneapolis instead. As Provost Paul DeLuca has said, "Those well-qualified kids who want a big-city experience are inclined to think about Minnesota." Frankly, that's a problem: we need to give them reason to think about Milwaukee, a research university in Wisconsin's major urban center. Maybe if Minneapolis wasn't such a cheap option, there'd be more pressure to enhance Milwaukee or grow UW-Madison.
(5) It seems to cost UW-Madison tuition revenue it can't afford to lose. Madison currently enrolls 3,305 Minnesota students. Each pays slightly more than resident tuition, but the surplus is returned to the state, to settle up with Minnesota. Madison keeps only the resident portion. If instead, all Minnesota students paid out-of-state tuition, or were replaced by out-of-state students who did, UW-Madison would have nearly $27 million more revenue from tuition. Some would be lost to financial aid, sure, but that's an enormous amount of money. Now, I know that the issue of net tuition loss is frequently considered, and assessed to ensure that neither the entire state of Wisconsin or Minnesota loses in the deal-- but the fact that there's no loss to either state as a whole, and the fact that more MN students come to WI than vice versa, doesn't mean that individual campuses don't lose. While overall, I think a system perspective on finance usually makes sense, if this revenue could be used to ensure Madison remains affordable, a change is worth considering. At River Falls and Superior, where enrollment depends heavily on attracting Minnesota students, reciprocity may be a financial win, but at Madison it may be a net loss. Since it clearly has different implications for college choices at each campus, a differentiated policy in this case could do little harm, and much good.
Ok, if Madison weren't a reciprocity option for Minnesota students, maybe they would end the agreement entirely-- but this is short-sighted and will likely affect their border schools too. A recent report from the Legislative Fiscal Bureau notes that when the reciprocity agreement originated in 1965, it involved only border campuses, and "to be eligible, the student had to be an undergraduate whose legal residence or high school was no more than 40 miles from the institution attended in the other state." Is it time to return to this?
To be clear, I'm not saying anything about the quality of Minnesota students. I like them, I teach them, and I work with them. This is a question about policy and how it works in practice. It seems to me that the reciprocity agreement could be changed to exclude UW-Madison and still keep its positive features, while removing many of its potential negatives. Of course, the cap would have to be adjusted-- but not to admit more non-Wisconsin students--just to reflect actual reality. And that, in terms of data reporting, would be a good thing.
Take the case of Wisconsin, which shares a tuition reciprocity agreement with Minnesota. Many students, especially those living on the borders of the two states, and those who don't get a place in their flagship university, choose to attend college in the other state. That's very nice, of course, and very neighborly. And, according to the press, it helps the state attract "the best students." But every policy has its downsides, and in this case there may be several:
(1) It seems to nudge data reporting toward the uninformative. Since both Minnesota and Wisconsin are treated as residents for tuition purposes, the vast majority of official reporting from the state and the campuses combines the two groups. This makes it hard for the public to examine the characteristics of Wisconsin residents. For example, say in order to assess equality of educational opportunities you wanted to compare the % of Native Americans among Wisconsin residents statewide to the % of Native Americans among Wisconsin residents enrolled at UW-Madison. It's not in any publicly available report, since reports like these aggregate MN and WI students together. (Sure, this could be changed without altering the reciprocity agreement, but right now there seems no incentive to do it.)
(2) It confuses discussions about key enrollment issues such as the cap on the proportion of non-resident students. Presumably, this cap exists to protect spaces for Wisconsin residents. But the cap, which is now 27.5%, doesn't actually do this since in theory it could be met by enrolling 10% Wisconsin students and 67.5% MN students. It says nothing about the distribution between WI and MN within the resident category. It also makes UW-Madison look like it enrolls relatively few non-residents compared to its peers, when in fact the opposite is true. In fact, if MN students counted as the non-residents they really are, UW-Madison would have to ask itself whether having a large concentration (~12%) of MN students is the best way to diversify the student body.
(3) It may contribute to brain drain. This is typically defined at the out-of-state migration of bachelor's degree holders. But how many students migrate post-high school but before the bachelor's degree? How many students do we send to MN for college, because they are outcompeted by MN students for seats at Madison, for example? And how many of those return to pay taxes in WI? I have no idea, but it's worth exploring. If MN weren't an option, might those students still attend college -- but in Wisconsin, at one of our many universities facing declining enrollment? Of course, we should consider this in relation to how many MN students who attend college in WI choose to remain here, and pay taxes. To the best of my knowledge, this issue hasn't been examined in decades.
(4) It may reduce the incentive to invest more in UW-Milwaukee. Very few reciprocity students from Minnesota choose to attend Milwaukee, but many Wisconsin students who cannot get a seat at Madison seek Minneapolis instead. As Provost Paul DeLuca has said, "Those well-qualified kids who want a big-city experience are inclined to think about Minnesota." Frankly, that's a problem: we need to give them reason to think about Milwaukee, a research university in Wisconsin's major urban center. Maybe if Minneapolis wasn't such a cheap option, there'd be more pressure to enhance Milwaukee or grow UW-Madison.
(5) It seems to cost UW-Madison tuition revenue it can't afford to lose. Madison currently enrolls 3,305 Minnesota students. Each pays slightly more than resident tuition, but the surplus is returned to the state, to settle up with Minnesota. Madison keeps only the resident portion. If instead, all Minnesota students paid out-of-state tuition, or were replaced by out-of-state students who did, UW-Madison would have nearly $27 million more revenue from tuition. Some would be lost to financial aid, sure, but that's an enormous amount of money. Now, I know that the issue of net tuition loss is frequently considered, and assessed to ensure that neither the entire state of Wisconsin or Minnesota loses in the deal-- but the fact that there's no loss to either state as a whole, and the fact that more MN students come to WI than vice versa, doesn't mean that individual campuses don't lose. While overall, I think a system perspective on finance usually makes sense, if this revenue could be used to ensure Madison remains affordable, a change is worth considering. At River Falls and Superior, where enrollment depends heavily on attracting Minnesota students, reciprocity may be a financial win, but at Madison it may be a net loss. Since it clearly has different implications for college choices at each campus, a differentiated policy in this case could do little harm, and much good.
Ok, if Madison weren't a reciprocity option for Minnesota students, maybe they would end the agreement entirely-- but this is short-sighted and will likely affect their border schools too. A recent report from the Legislative Fiscal Bureau notes that when the reciprocity agreement originated in 1965, it involved only border campuses, and "to be eligible, the student had to be an undergraduate whose legal residence or high school was no more than 40 miles from the institution attended in the other state." Is it time to return to this?
To be clear, I'm not saying anything about the quality of Minnesota students. I like them, I teach them, and I work with them. This is a question about policy and how it works in practice. It seems to me that the reciprocity agreement could be changed to exclude UW-Madison and still keep its positive features, while removing many of its potential negatives. Of course, the cap would have to be adjusted-- but not to admit more non-Wisconsin students--just to reflect actual reality. And that, in terms of data reporting, would be a good thing.
Monday, October 29, 2012
Thursday, October 18, 2012
Making Income-Contingent Loans Cost Effective
Check out an op-ed that I co-authored with my doctoral student Robert Kelchen on income-contingent loans, over at the Chronicle. Then, be sure to check out Robert's new blog!
Wednesday, September 26, 2012
Pell Funding: Is it Out of Control-- and Who Does it Support?
Catching up on my reading from the last few weeks and want to draw your attention to this bit of reporting from Inside Higher Ed.
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Key lessons here:
(1) Pell spending leveled off in the last year.
(2) A very sizable fraction of Pell dollars are still going to for-profit institutions, but this has declined a bit in the last year.
(3) We could cut total Pell spending by $15 billion dollars (almost 45%) simply by deciding that public dollars cannot be spent at for-profit institutions. This would make Pell policy consistent with the policies of most state grant programs.
The Bill and Melinda Gates Foundation is spending $3.3 million on efforts to "re-imagine aid design and delivery." I'm hoping they will revisit the decades-old decision to offer aid through a voucher system that rests on the premise that maximizing choices in an open market will promote the well-being of all students and the national interest in an educated citizenry.
But absent that, let's hope they push to create additional charts like these, including one that shows how much debt Pell recipients had to accrue in order to use their Pells at these institutions. In other words, let's get a sense of which states and institutions are matching this federal investment-- and which ones require students to make the match.
Key lessons here:
(1) Pell spending leveled off in the last year.
(2) A very sizable fraction of Pell dollars are still going to for-profit institutions, but this has declined a bit in the last year.
(3) We could cut total Pell spending by $15 billion dollars (almost 45%) simply by deciding that public dollars cannot be spent at for-profit institutions. This would make Pell policy consistent with the policies of most state grant programs.
The Bill and Melinda Gates Foundation is spending $3.3 million on efforts to "re-imagine aid design and delivery." I'm hoping they will revisit the decades-old decision to offer aid through a voucher system that rests on the premise that maximizing choices in an open market will promote the well-being of all students and the national interest in an educated citizenry.
But absent that, let's hope they push to create additional charts like these, including one that shows how much debt Pell recipients had to accrue in order to use their Pells at these institutions. In other words, let's get a sense of which states and institutions are matching this federal investment-- and which ones require students to make the match.
Monday, August 6, 2012
Wisconsin Needs to Educate, Not Incarcerate
Yet another policy brief highlights what realists know: Wisconsin policymakers are presiding over poor policy decisions that threaten to undermine taxpayers' decades-long investment in the state's human capital.
Far from saving our children from lifetimes of debt, those on the neoliberal Left and the conservative Right advocating for either "freeing" state universities from the limitations of state funding in pursuit of market models, or diminishing state spending in a time of austerity, are accomplishing the same goal: driving up the costs of college attendance and reducing the overall educational attainment of our state's workers.
Forty years ago our grandparents elected officials who invested $14 per $1000 of personal income in higher education. Today, we elect jokers who put in just $5. What happened?
Let's admit it: we aren't leaders anymore, we're laggards. Yes, Wisconsin pays taxes, but we throw away far too much of it on other things. According to Figure 4 in the new report I referenced above, we rank 32nd thanks to the policy choice displayed above-- relative to per capita income, we are outspent by the likes of Mississippi, Alabama, and West Virginia, not to mention our neighbors Illinois, Indiana, Iowa, and Minnesota.
Far from saving our children from lifetimes of debt, those on the neoliberal Left and the conservative Right advocating for either "freeing" state universities from the limitations of state funding in pursuit of market models, or diminishing state spending in a time of austerity, are accomplishing the same goal: driving up the costs of college attendance and reducing the overall educational attainment of our state's workers.
Forty years ago our grandparents elected officials who invested $14 per $1000 of personal income in higher education. Today, we elect jokers who put in just $5. What happened?
 |
| Figure courtesy of Tom Mortenson, Postsecondary Education Opportunity |
Where is that money going instead? One simple word answers the question: corrections. To paraphrase Ronald Reagan, we fought a War on Drugs, and drugs won-- but heck, we are still throwing our money at the problem. Legacy spending, you might call it. Over the last 10 years, spending on corrections went up 9%, while spending on k12 dropped by 6% and spending on higher education dropped 20%. Right, because clearly the goal of Wisconsin taxpayers is not to help educate our children, but rather to lock 'em up and shut 'em up.
For those who manage to avoid prison and get into college, instead of investing in their future, Wisconsin taxpayers seem to want their families to foot the bill. How's that working for us? Well, enrollment in our public institutions is lagging behind those in other states. We have experienced far slower growth in fall enrollment as measured over both 5-year and 10-year periods, compared to the national average (see Table 6 here). Perhaps most startling is how little enrollment in our 2-year colleges has changed-- there was practically no change at all in enrollment there over the last 5 years (0.6%) while the national average was 16.7%! Perhaps not coincidentally, during that time, tuition and fees at the 2-years (already higher than the national average 5 years ago) rose by 20%.
I have to admit being persistently perplexed at how other parents throughout Wisconsin can sit idly by while we pour money intended for our kids into pits of despair like the state's correctional facilities. It is far more cost-effective to educate rather than incarcerate. It's time to make our policymakers do right by the limited dollars we have. Let's re-instate a real early release plan, and rollback the ridiculous "truth in sentencing" guidelines that lengthened parole time, greatly increasing the likelihood of being returned to prison. As UW-Madison expert Walter Dickey notes, there are numerous hidden costs to incarceration, and as state we simply can't afford to be in the corrections business.
The best solution is to treat education as the crime-fighting technique it really is. Providing young people with truly viable opportunities later in life gives them something to really aim for, helping keep them off the streets and on the job. A recent UW-Madison graduate, economist Ben Cowan, finds that a $1,000 reduction in tuition and fees at two-year colleges is associated with a 26% decline in the number of sexual partners an adolescent has, and a 23% decline in number of days in the past month he used marijuana. Policies that support affordable higher education may simultaneously support reductions in the costs of incarceration, in a virtuous cycle that is win-win for all.
This is pure common sense and we all know it. It's simply time we demand that our "leaders" catch up.
Sunday, June 24, 2012
Reflections on Foundations, ALEC and Higher Ed Reform in Wisconsin
Last week, a fellow Madison blogger drew our attention to some potentially troubling relationships between a major higher education foundation, a DC-based consulting group, a conservative political organization, and a new initiative in the UW System. Scott Wittkopf at Badger Democracy is playing a critical role in attending to the relationships among funders of higher education reform efforts, and political constituencies. He has since mapped in greater depth the work of one foundation, Lumina, and another blog post is forthcoming.
Since I have established relationships with both Lumina and HCM Strategists, the consulting group in question, and have blogged (and hosted guest blogs) before on the large role that foundations are playing in pushing the higher ed reform agenda, I want to fully disclose as much as possible my role and assessment of this situation.
First, readers of this blog know my work as an expert on college student success, and as an outspoken champion for expanding college access to underserved populations. I am proud of the major role I played in the fight against the New Badger Partnership and other local efforts to prioritize institutional prestige over the needs of Wisconsin residents. I am constantly engaged in the struggle to ensure that public institutions of all types survive and thrive. At this point I have been active in Wisconsin research, policy, and activism circles for more than eight years.
In my work I spending a lot of time interacting with the higher education reform movements nationally. It is for this reason, over the last decade I have engaged with both Lumina and HCM many times. I am also very well-acquainted with the Gates education initiatives, having been both a grantee (to the tune of $1.2 million for the Wisconsin Scholars Longitudinal Study) and a consultant. Moreover, I participant frequently in the bipartisan higher education working group hosted by the American Enterprise Institute and funded by Gates.
Why do I do these things, despite recent evidence that these places have ties to ALEC and others?
Good question, and one I'm thinking a lot about. I think it is because at the heart of it, the main thrust of reform efforts to improve higher education are bipartisan. We on the Left and the Right share a desire to get colleges and universities (and state legislatures) focused on college completion rather than enrollment, and to make opportunities for all people more affordable.
We diverge most often on the methodology-- what approach we think will work best. Some people I work with really think innovation is encouraged by competition, while others (including myself) advocate for greater cooperation, and a strong faculty role. But I have found over time that it is far better to be in active conversation with those I disagree with rather than limit myself only to relationships I am in alignment with because:
- It makes me much more cognizant of what other points of view mean and how people argue their case
- It helps me sharpen my own lenses and causes me to ask more relevant questions in my work
- Being around others with differing points of view doesn't change my fundamental principles or make me their pawn but rather helps me establish credibility on both sides of the aisle. It is because of my continuous willingness to show up and engage-- to banter, to debate, and to speak freely--that both Democrats and Republicans now talk with me about higher education
So, yes, here's the truth: I have received substantial funding from both HCM Strategists and Gates. I talk with HCM partners Kristin Conklin and Terrell Halaska regularly, including about Wisconsin. Kristin is an old friend of my husband's, from when he worked at National Governors Association, before coming to work as Governor Doyle's education policy advisor. And, I helped Wisconsin become a College Productivity Strategy Lab state. I did this because Strategy Labs bring money that help us to get people informed on key issues, bring in speakers, and open doors to conversations with other leaders nationwide. The fact is that obviously Wisconsin has had a fair amount of academic and political transition and has not engaged much in the Strategy Labs since Lumina invited it to be part of it in 2010. There is no fee to join, just a commitment to try to improve system and state policies for students.
Furthermore, despite my known feelings about the current Governor, I have engaged in conversations with his office about the UW online initiative. To me this is the true fulfillment of the Wisconsin Idea: a government official asked me for input, and rather than put my partisan political feelings in the way, I provided honest, candid feedback and advice. Given their reputation among education leaders in other states, I didn't want Western Governors University to come to Wisconsin, and I felt it very likely that Walker was already talking to them. In these conversation I expressed concern about WGU and I suggested that another approach--- making it an in-house public UW initiative-- would be more effective. The effort to advance an online program was not encouraged by HCM or supported by its technical assistance. The concepts in the program are advocated by organizations like CAEL and in place or under consideration in many states. As UW moves to implement its ideas, the lessons learned from states like Maryland's University College or through SUNY's Empire State college could be accessed through the Strategy Labs.
Yes, online competency-based instruction is now here. I'm not taking credit or blame for it. As I wrote recently, we shouldn't be quick to judge a pedagogical technique that has the potential to bring education to people who otherwise wouldn't get any college instruction at all. Of course we don't want it to fully replace face-to-face instruction, nor should it be operated for profit or cause students to require large loans to afford it. Of course it shouldn't displace faculty, or be privatized. But online instruction is likely to be about as uneven in quality as face-to-face instruction, which let's admit it, is quite uneven.
Supporting a position that is also supported by a conservative group does not mean that's the driver of the position. Not once has HCM or Lumina or Gates ever dictated to me what I should or must say about anything. I have always been my own voice. I speak truth to power with solid data and a clear stance in favor of students, staff, and faculty. I know it's hard to believe, but given my disposition and the fact that my core salary comes from UW-Madison, nothing, nothing could ever change that. Sure, I could easily forgo taking their money, but honestly it would make me less effective as a researcher, and less able to have a voice in ongoing policy debates. I couldn't conduct my large-scale expensive research, couldn't train students to think critically about these issues by actively engaging in them, and couldn't participate in these foundation and policy meetings. In the end, my absence would perpetuate their groupthink.
The fact is that since 2008 Lumina has made many, many grants under the broad umbrella of "productivity." This includes grants to the National Research Council, Public Agenda, and the National Governors Association. I wrote a paper with Doug Harris on productivity that was funded by HCM. Through the writing, Doug can attest that I continually worried about that term and all it means, and I tried to make the paper reflect that (the latest version, now under review, finally does). Not once did a funder object, and in fact they brought me many places to speak my mind on the topic without censorship.
As for HCM, those consultants lead a state policy network and advocate changes consistent with Lumina's Four Steps. To build understanding among state leaders, they bring peers together and give states access to experts. I have helped by writing op eds about financial aid in several states, where policymakers want to strengthen "student incentives," and I push for them to do it in the ways that most help the truly disadvantaged. The fact that those op-eds are bipartisan (written with Mark Schneider, a Republican), seems to be part of why Wisconsin Republicans are willing to even speak with me.
Locals might also want to know that leaders of HCM Strategists were helpful in the fight against the New Badger Partnership, prodding thoughtful higher education leaders around the nation to weigh in with their opinions. These experts did not support Biddy Martin's plans, noting the very real consequences for access to the general public. There's no way this was in service of Walker -- or ALEC's -- agenda.
Scott isn't alone in his concerns. Other researchers have examined the issues surrounding Lumina and reached similar conclusions. In a paper presented at AERA this spring, Cassie Hall and Scott Thomas (one of my mentors) noted that Lumina's approach was uncommonly activist, and focused on student success and productivity. I completely agree with that-- but would note that being pro-student success and pro-productivity is not inherently liberal or conservative. The approach itself could go either way, but the fundamental stance is pro-student, rather than pro-institution-- a stance I firmly agree with and have written much about. As Hall and Thomas write, this stance is driven by "an increasing level of distrust that higher education institutions can successfully enact reforms that will result in meaningful changes to our postsecondary system.” I think that's well-placed mistrust, given the tendency of most top-level higher education administrators to advance "institutional" interests over those of faculty, staff, or students. To be clear, I firmly believe that educators, rather than legislators or foundations, should be charged with this work. But the problem is that boards of visitors and high-level administrators tend to alienate faculty and staff, disempower them, and even portray them as the source of inertia rather than the rightful agents of change.
Yes, I would much prefer to see Lumina and Gates, among others, embrace the talents of faculty in rethinking how we can best serve students. I said this over and over again at a Gates Foundation convening last week. Recent discussions about the governance crisis at UVA reveal that many professors there have, and are plenty happy to, teach online-- and had they been included in the conversation they would have found good solutions to the problems identified by Helen Dragas and the Board of Visitors. The same thing could be said about last year's discussion about the NBP -- Biddy Martin and her team did not engage the faculty, staff, or students in the problem-solving needed to address UW-Madison's financial woes. They went straight to Scott Walker, and embraced an agenda that has demonstrably been shaped by ALEC's desires. This reflects an unfortunate move over the last 20-30 years to portray faculty, staff, and students as naive, ill-equipped obstacles to change, and this I think is not a coincidence-- it is a move to disempower the most expensive part of colleges and universities: the full-time tenured labor. If Lumina, HCM, or anyone else were to support that approach, I'd be utterly opposed to it.
I also fully support and echo Hall and Thomas's concerns about the role these major foundations have played in limiting what is studied and how it is studied, given their small emphasis on peer review and high priority on strategic goals that often do not seem to align with research evidence. In other words, even having been funded by them, I am far from satisfied with their approach and as you can see I still feel confident that engaging in this type of critique will not result in my being deemed ineligible for their support. Recall that I helped bring Robin Rogers' wonderful critique of Gates to the public eye by first running it here before it was in the Washington Post. For Gates to retaliate would be incredibly unwise, and they know it. They don't ask me to give them a pass for their errors-- in fact at a recent Gates convening I tweeted openly of my discontent with some of their practices, and their program officers were open to that conversation.
Perhaps the best way to wrap up this little tell-all is with a quote from Jamie Merisotis from Lumina: “All we can do is be transparent about what we’re trying to achieve and let people decide how we’ve done." While I might prefer to remove the word "all," I think this is basically right. We should hold foundations and public officials, including educational institutions, to full disclosure. In turn we have to consider all potential interpretations of the evidence we have. And we must weigh their approaches against the alternatives. In this case, I think the agenda is focused improvements in student success accomplished by increasing the incentives for colleges and universities to focus mainly on high-quality education, rather than competing for rankings driven by dollars spent and enrollment of elites. That sounds good to me. Yes, let's keep our eyes on ALEC. Yes, let's always question and critique. We must avoid privatization of public education-- and we want to educate people while growing and expanding the labor market so there are jobs waiting on the other end. But the goal of expanding access to a high-quality education while driving down costs is a laudable one-- as long as the role of public democratic governance of that education is preserved. Let's focus on that, and together find the best way forward.
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