Parents pay $1.5 billion remedial college bill

One in four first-year college students must take remedial classes, according to an Education Reform study. Their families pay nearly $1.5 billion for no-credit classes.

Forty-five percent of remedial students come from middle- and upper-income families and nearly half are enrolled at four-year colleges.

“People are underestimating the breadth and depth of high school underperformance. They think it’s not their kids,” said Michael Dannenberg of Education Reform Now, a co-author of the report.

Dropout rates are much higher for unprepared students, leaving many with college debts, but no college degree.

Student aid leads to tuition hikes

A large fraction of the rise in college tuition is explained by the rise in financial aid, concludes a new NBER paper.

The researchers’ model supported the Bennett hypothesis, which states that colleges will raise tuition to capture increased student aid. (It’s named after William Bennett, Reagan’s Education secretary.)

The Bennett hypothesis “fully explains all the tuition increases between 1987 and 2010, according to the study,” reports Reason.

Increasing subsidies doesn’t increase enrollment because the aid is canceled out by tuition hikes, the study found. Instead, students borrow more, leading to more loan defaults down the road.

A study by the New York Federal Reserve also found linked student aid to rising tuition.

Here’s The Atlantic‘s round-up of proposals to make college affordable from Hillary Clinton, Bernie Sanders and Marco Rubio.

 

 

College pays — for some, not all

College pays — on average — but your results may vary, writes Megan McArdle on Bloomberg View. That last part is important: College doesn’t pay for the poorly prepared, who are unlikely to earn a degree.

The college wage premium has risen sharply in the last 30 years for U.S. males, concludes a working paper. However, there’s a much larger gap between high-earning and low-earning graduates.

“More people start college than did in 1985,” writes McArdle. “It’s just that they don’t finish.”

Dropping out may be a sensible decision for low-tier students who are likely to end up in low-paying jobs that don’t require a degree. Why borrow to be a barista?

While we’d like to think of enrolling in college as a guaranteed route to a stable, well-paying job, in reality it’s more like a lottery ticket. There are good jobs out there that are available only to folks with a college diploma. But not everyone with a college diploma gets one. You can also end up underemployed.

. . . Of course, it’s not exactly like a lottery ticket, because the distribution of the rewards isn’t random. Not every college graduate is entered in the “investment banker” or “Silicon Valley software engineer” draws.

According to this model, “the gains from pushing marginal students into college are likely to be small, for both the students and for society,” McArdle concludes.

People who’ve had trouble learning — and getting their work done — in high school occasionally bloom in college. But not very often.

For-profit colleges and the mobility lie

As a for-profit college inspector, Michael Fitzgerald called recruiters, pretending to be a potential student, to see if they were lying. His employer in the summer job was a large chain of for-profit colleges that wanted to protect itself from fraud charges, he writes in Pacific Standard.

Recruiters didn’t lie very often, Fitzgerald reports. They didn’t have to. “They were pitching a product—upward mobility via higher education — that the rest of society had already primed their customers to desire, no matter the cost.”

Raised in a low-income family, Fitzgerald turned down a scholarship to University of Vermont to attend the more prestigious Carnegie Mellon. He used a $5,000 annual Pell Grant, and federal loans — the interest rate was seven percent — to pay the $40,960 annual bill for tuition, room and board. He ran up more than $70,000 in student debt.

I wish anyone involved in my indebtedness—my family, Carnegie Mellon, the federal government, the state of Pennsylvania, or even the Middle States Commission on Higher Education (which accredits both Carnegie Mellon and many of the for-profit schools I called as a fake prospective student) had asked me what I planned to major in and what career I aspired to. Then, maybe, when I’d said “English” and “writer,” they’d have denied me a $5 loan for cab fare home, or told me they’d rather see an armed robber in their office. I would have had to seek out a solid, affordable state school.

His Carnegie Mellon degree helped him get “a salaried position in a competitive field of my choosing,” he writes. He’s paying off his loans.

Marginal students drawn to for-profit colleges typically start poor and remain poor — and in debt — after trying and failing to earn a degree, Brookings warns.

Young people are told that “college is a must-make, can’t-lose investment,” writes Fitzgerald. “For some people, it’s a shouldn’t-make, can’t-win investment.”

Free college

‘Dual’ students will get federal aid

Some low- and moderate-income high school students who take “dual enrollment” college courses will be eligible for federal college aid,  U.S. Education Secretary Arne Duncan announced in Memphis last week, reports the Commercial Appeal.

U.S. Secretary of Education Arne Duncan (center) talks with student Shimera Paxton, 13, (right) during chess class at Douglass K-8 School. Credit: Brandon Dill, Commercial Appeal

U.S. Education Secretary Arne Duncan talks with Shimera Paxton, 13, during chess class at a Memphis school. Credit: Brandon Dill, Commercial Appeal

The experimental program will offer Pell aid to cover college tuition for 10,000 students.

Dual enrollment courses are expanding rapidly nationwide. Some states or school districts cover high school students’ college tuition and textbook costs, but others do not.

Pell Grants, which now cost more than $30 billion a year, should be require college readiness, argues Isabel Sawhill, a Brookings researcher.

Targeting college aid to those most likely to succeed should start with counseling in 9th grade or earlier on the courses, grades and test results needed to do well in college. Students who “achieved a basic level of proficiency” would receive more generous support than the current Pell maximum. Low performers would not get college aid, but could receive “support for other training or education programs.”

Linking Pell to readiness misses students who need help most, responds Sara Goldrick-Rab.

38% of new grads: College was worth the cost

Half of college graduates — 38 percent of recent graduates — strongly believe their college education was worth the cost, according to the Gallup-Purdue Index.

Alumni of for-profit colleges were the most dissatisfied: Only 26 percent strongly agreed their postsecondary education was worth the cost.

scorecard-fig-3

Earnings of former for-profit college enrollees (not necessarily graduates) show wide variability, notes Clive Belfield’s analysis of College Scoreboard data. Top for-profit students earn more than the average four-year student, but low-percentile students earn much less.

The boxes show the middle 50 percent of colleges; the “whiskers” show the 10th and 90th percentiles.

There’s less variability for students who enrolled in community colleges, he writes. “Median earnings at community colleges are significantly below those of four-year colleges, but the top 25 percent of community colleges have median earnings that exceed the average four-year public college.”

Top colleges for value, mobility

University of California at Riverside tops the Washington Monthly’college rankings, which give top honors to schools that enroll and graduate “students of modest means” while “charging them a reasonable price,” write the editors.

The rankings also give credit for research — are these schools “creating the new technologies and ideas that will drive economic growth and advance human knowledge?” — and whether they encourage students to join the military or the Peace Corps or perform community service.

You’ll see it doesn’t intersect very much with U.S. News‘ college rankings.

Two years ago, President Obama pledged to rate every college and university in America by “who’s offering the best value,” note the Monthly‘s editors.

The higher ed lobby mobilized to kill the ratings plan. In June, it was canceled.

The Monthly also ranks the best bang-for-the-buck colleges.

 

Ed Dept drags feet on competency pilots

Two years ago, President Obama touted competency-based education (CBE) as a key to college affordability and quality.

President Obama lauded competency-based education in a speech at SUNY-Buffalo two years ago.

President Obama lauded competency-based education in a speech at SUNY-Buffalo two years ago.

Giving “course credit based on how well students master the material, not just on how many hours they spend in the classroom” will help students finish a degree faster and for less money, the president said.

But no CBE experiments have been launched, writes Amy Laitinen on EdCentral. Colleges are eager to launch competency programs, she writes, “but the Department of Education has been dragging its feet.”

Study: Federal aid fuels tuition hikes

Federal grants and student loans have fueled the rise in college tuition, according to a new report by the Federal Reserve Bank of New York.

Each additional dollar in government aid led to a tuition hike of about 65 cents, the report found. “The numbers were not quite as grim for Pell Grants, where 55 cents of each additional dollar turned into higher tuition, but it was even worse for subsidized student loans (the most common type of aid), where every dollar loaned translates to a 70-cent tuition hike,” writes Blake Neff in the Daily Caller.

This is consistent with earlier research, writes Hans Bader, who’s got lots of links.

Increased regulation also has driven up college costs, argues Bader. Obama’s Education Department has “flooded the nation’s schools with new rules that have never been properly vetted or codified,” college presidents complained recently.

Wastefully run colleges can now increase tuition even faster, at taxpayer expense, as a result of the Obama administration’s recent expansions of the Pay As You Earn program. The Pay As You Earn program limits borrowers’ monthly debt payments to 10 percent of their discretionary income. The balance of their loans is then forgiven after 20 years—or just 10 years, if the borrower works for the government or a nonprofit. It will cost taxpayers a lot, while doing nothing for most student borrowers (who will experience tuition increases as a result), and it will favor imprudent borrowers over prudent borrowers.

. . . (Borrowers) will pay the same amount over 20 years (or 10 years) no matter how much their high-priced college charged in tuition—eliminating any incentive for such colleges to keep costs under control, or to keep their tuition from escalating at a dramatic rate.

Cato’s Neal McCluskey links to eight studies on the inflationary effect of student aid.

Obama’s higher ed legacy includes nearly doubling Pell funding for low- and moderate-income students and more than tripling tuition tax credits for the middle class.