Mobility? Non-profit colleges fall short

Upward mobility is a myth for many students who borrow to attend private non-profit colleges, a Third Way report, Incomplete: The Quality Crisis at America’s Private, Non-Profit Colleges.

New, full-time low- and moderate-income students who start at a four-year, nonprofit college have only a 50-50 shot at earning a degree, the report concludes.

Most low- and moderate-income students enroll in less selective colleges with low graduation rates. Looking at net price — what students pay after grants, scholarships and loans — the unselective colleges cost the most.

“Using our mobility metric, the average net tuition paid by low- and moderate-income students was lowest at top-quartile schools ($15,938) and highest at bottom-quartile schools ($18,776),” warns Third Way.

Six years after enrolling, nearly 40 percent of students who borrowed for college don’t earn any more than the average worker with only a high school diploma. On average, 19 percent of borrowers fall behind on repaying loans three years out of college.

Here’s what Third Way doesn’t quite say: College is an engine of upward mobility for students who have the academic preparation to get into a selective college and complete a degree. For those with weak academic skills or shaky motivation, college can lead to debt (that can’t be discharged by bankruptcy) without raising earning power.

“If we’re serious about promoting equality and removing barriers that keep the less fortunate from getting ahead,” we should ban the college box,” writes Glenn Reynolds in USA Today. “If you have to go to college to move up in the world, a lot of people aren’t going to move up.”

How to succeed without a degree

High school graduates with “high credentials” — but no college — earn almost as much as four-year college graduates at the age of 26, concludes a Center for Public Education report. High-credentialed workers earn higher wages and are more likely to be working full-time than those with two-year degrees or “some college,” according to Path Least Taken III: Rigor and Focus in High School Pays Dividends in the Future.

In high school, they completed Algebra 2 and advanced science, earned a C-plus average or better and completed three or more related career-focused courses. After graduation, they earned a professional license or certificate in the same career field.

Employers seek alternatives to college degrees

“Depending on whom you ask, degrees are either increasing in value or about to disappear into the dustbin of history,” writes Ryan Craig, managing director of University Ventures, on EdSurge News. Employers are “demanding more degrees while simultaneously saying degrees don’t matter.”

A new report by The Brookings Institution shows that the bachelor’s degree premium remains as high as ever. Meanwhile, Goldman Sachs says the return on college is falling: “In 2010, students could expect to break even within eight years of finishing school. Since then, that has increased to nine years.”

One third of employers are asking for more higher education, according to a new survey from CareerBuilder. Some are demanding four-year degrees for jobs that used to be open to high school graduates or demanding master’s degrees for jobs that used to require a bachelor’s.

Others have found “degree bias” leads to bad hiring decisions.

. . . Google’s Senior VP of People Operations has gone on record saying that grades in degree programs are “worthless as a criteria for hiring.” As a result, Google also requires candidates to take assessments, which are much more predictive of success on the job.

Credential inflation and openness to alternative credentials are logical responses to employers’ dissatisfaction with college graduates’ hard skills and soft skills, such as reasoning, communication, complex problem solving, innovation and creativity, writes Craig.

Soon, a “plain vanilla bachelor’s degree” won’t be enough. “Newly minted bachelor’s degree grads are already competing in the job market with graduates of coding bootcamps like Galvanize,” he writes. “Soon they’ll be competing with graduates of Udacity Nanodegrees, Coursera Specializations and Lynda Learning Paths.”

A New York Times editorial argues that the government should help more people go to college, even though “the economy does not produce enough jobs that require college degrees.” The Times‘ solution is for the government to create “good jobs at good pay” — and raise the minimum wage.

Oddly, the editorial says graduates can’t find jobs as teachers, ignoring the debate about whether the teacher shortage is national or just local. There’s always been a surplus of would-be elementary teachers and strong demand for math, science, bilingual and special-ed teachers.

Study: Charter high grads earn more as adults

Florida students who attended charter high schools earn significantly more as 23- to 25-year-olds than those who went to traditional public high schools, concludes a large-scale study by Vanderbilt and Georgia State researchers. Charter high school students are more likely to complete high school, go to college and stay in college, concluded the study, which was published in the Journal of Policy Analysis and Management.

Former charter students earned $2,300 more per year, on average, in their early to mid-20s, said Ron Zimmer, one of the researchers.

Test scores weren’t higher at the charters, but these schools may do better at “promoting life skills like grit, persistence, self-control and conscientiousness,” he said.

To create a control group of students from education-minded, school-choosing families, researchers compared charter eighth graders who went on to traditional public schools with charter eighth graders who enrolled in charter high schools. They crunched the numbers five different ways to show their results were “robust.”

It’s not news that charter schools boost “attainment” — years of schooling — for disadvantaged students, even when test scores are no higher. Going farther in school and college pays off.

Zeeconomics has more on the long-term effects of charter school attendance in Boston, Chicago and Florida.

Blacks graduate in lowest-paying majors

Black college graduates are likely to choose low-tech majors that lead to low-paying jobs, according to a report by Georgetown’s Center on Education and the Workforce. Twenty percent of black students major in human services and community organization (median earnings of $39,000). They’re also over-represented in social work ($42,000), early childhood education ($38,000) and psychology.

Few major in engineering, science or math. Those who do often choose the lowest-paying speciality, such as biology for black women and civil engineering for black men.

Early childhood education, one of the lowest-paying majors, is a popular choice for black students.

Blacks are more likely to major in the “caring” professions, such as early childhood education, which lead to low-paying jobs.

Two-thirds of black college graduates are female, which surely explains some of the lean toward the “caring” and underpaid professions.

In addition, most black graduates have attended an open-admissions college that may have limited majors and inadequate counseling, the report observed.

Many Americans — and especially those who are the first in their families to attend college — think any degree guarantees a decent job and a middle-class life. Someone should tell them they’ll have trouble repaying student loans for a non-technical degree from an unselective college.

Elite degree doesn’t matter for STEM grads

Graduating from an elite college doesn’t boost earnings for science, math and engineering graduates, conclude Eric R. Eide and Michael J. Hilmer in the Wall Street Journal. A prestige degree does help business and liberal-arts majors, according to the Journal‘s analysis of a survey of graduates.

STEM grads with a degree from a low-priced state university earn as much as those from elite private schools, they found.

The analysis controlled for “factors that might influence earnings, such as family income, race/ethnicity, gender, marital status, SAT score, postgraduate degree and age at graduation and more.”

In STEM fields, “curriculums are relatively standardized and there’s a commonly accepted body of knowledge students must absorb,” write Eide and Hilmer. Employers seem to be looking for skills rather than prestige.

Assessing a job applicant’s competence is harder if the degree is in what we used to call “fuzzy studies.”

College graduates’ “well-being” — financial security, health, sense of purpose and other factors — isn’t related to their alma mater’s selectivity, size or whether it was public or private, concluded the Gallup-Purdue Index in 2014.

Gallup will use its Well-Being Index  to certify universities that produce the happiest graduates. George Mason is the first university to seek  certification.

Study: Teachers bargain, students lose

Teachers’ collective bargaining rights correlate with lower employment and earnings for students later in adult life, concludes a study by Michael F. Lovenheim and Alexander Willén in Education Next.
They compared student outcomes in states that enacted a duty-to-bargain law to outcomes in states that did not change their collective-bargaining policies.

There was no effect on the amount of schooling students completed.

However, “students who spent all 12 years of grade school in a state with a duty-to-bargain law earned an average of $795 less per year and worked half an hour less per week as adults than students who were not exposed to collective-bargaining laws.” Those educated in duty-to-bargain states were less likely to be employed and those with jobs were more likely to work in low-skilled occupations.

Why? They’re not sure.

Perhaps collective bargaining has made it more difficult for school districts to dismiss ineffective teachers or to allocate teachers among schools. Or perhaps the political influence of teachers unions at the state level has interfered with efforts to improve school quality.

More than 60 percent of U.S. teachers work under a union contract, but some states, such as Wisconsin, Michigan,  Indiana and Tennessee, have moved to restrict teachers’ bargaining rights.

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.

Will college pay? Check the Scorecard

President Obama’s plan to rate colleges on affordability and success rates collapsed. But the Education Department’s new College Scorecard provides useful information for families wondering what a particular college costs by family income and what percentage of students earn a degree and begin paying off their student debts within three years.

Most intriguing, the Scorecard uses IRS data to show enrollees’ median annual earnings 10 years after enrollment and the percentage who earn more than the average high school graduate, about $25,000 a year, six years after entering college. The information includes dropouts and graduates.
PHOTO: In an undated photo, The College Board offers data and information about colleges to prospective students.

At a quarter of American colleges, the majority of students who got federal financial aid end up earning less than $25,000 per year a full decade after they first enrolled,” reports Libby Nelson on Vox.

The Scorecard can track only students who received federal aid, but that’s 70 percent of the total.

Earnings aren’t reported by program or major, masking the variations between different degrees at the same school.

The Scorecard makes it “easier to figure out which schools are a waste of money,”  writes Jordan Weissmann on Slate.

PayScale is using the federal data to calculate the 20-year return on investment at different colleges for students in various family income quintiles.

I’m sure students and parents will find the Scorecard useful. But it has its limits. The highly selective colleges have strong graduation rates and graduates who do well in the workplace, though earnings are lower at liberal arts colleges, higher at technical schools. The less selective schools have much lower graduation rates. Their former students and graduates earn less and have more trouble repaying their debts.

Does an A+ student become a high earner because he chose Georgia Tech over Duke? Does the B- student become a low-earning dropout because she chose the not-very-selective state university over the not-very-selective private college?

I’m not sure C- students will use the Scorecard. If they do, they’ll see that the sort of college they can get into has very low graduation rates and low earnings payoffs. They’ll see two-year vocational degrees, but won’t see vocational certificates.

College payoff is shrinking

What Is College Worth? asks John Cassidy in The New Yorker.  Despite increasing costs, the number of young people going to college keeps going up, he writes.

Some 70 percent of high school graduates enroll in college and half of Americans between 25 and 34 have a college degree.Product Details

“College has been life changing for most people and a tremendous financial investment for many of them,” writes Peter Cappelli, a professor of management at Wharton, in his new book, Will College Pay Off? Yet, for some, “it has been financially crippling.”

The “college wage premium” has stopped growing, writes Cassidy.

In 2001, according to theEconomic Policy Institute, a liberal think tank in Washington, workers with undergraduate degrees (but not graduate degrees) earned, on average, $30.05 an hour; last year, they earned $29.55 an hour.

Other sources show even more dramatic falls. “Between 2001 and 2013, the average wage of workers with a bachelor’s degree declined 10.3 percent, and the average wage of those with an associate’s degree declined 11.1 percent,” the New York Fed reported in its study.

New graduates with bachelor’s degrees have been hit hard by falling wages and rising unemployment. Non-graduates are doing even worse, but that’s little comfort.

“The big news about the payoff from college should be the incredible variation in it across colleges,” Cappelli writes. “The payoff from many college programs—as much as one in four—is actually negative. Incredibly, the schools seem to add nothing to the market value of the students.”