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Obama: Raise tuition and lose federal aid

January 28, 2012 By

College affordability was the theme of President Obama’s speech at the University of Michigan yesterday. He called for spending more on Perkins loans and work-study programs — going from $3 billion now to $10 billion  – but only at colleges and universities that provide “value.” Students at colleges that raise tuition could lose access to loans and work-study jobs.

In addition, the president’s plan (pdf) includes a $1 billion “Race to the Top for college affordability” and a $55 million “First in the World” competition to encourage productivity innovations, reports the Washington Post.

Higher education — including community colleges and lifelong learning for workers — is “an economic imperative,” Obama said. While he proposed increasing tuition tax credits and keeping interest rates low on student loans, he said that’s not enough. “Look, we can’t just keep on subsidizing skyrocketing tuition.”

So from now on, I’m telling Congress we should steer federal campus-based aid to those colleges that keep tuition affordable, provide good value, serve their students well.  (Applause.)  . . . If you can’t stop tuition from going up, then the funding you get from taxpayers each year will go down.

If “provide good value” and “serve their students well” means anything, it means the federal government will monitor graduation rates and employment outcomes, as well as tuition, for the entire higher education sector. Currently, “gainful employment” rules, which monitor former students’ earnings and ability to pay back loans, cover only for-profit colleges and community college vocational programs.

 Following the speech, Molly Corbett Broad, president of the American Council on Education, issued a statement saying there’s concern that the proposal would “move decision-making in higher education from college campuses to Washington, D.C.”

Sen. Lamar Alexander, R-Tenn., a former education secretary, said the autonomy of U.S. higher education is what makes it the best in the world, and he’s questioned whether Obama can enforce any plan that shifts federal aid away from colleges and universities without hurting students.

“It’s hard to do without hurting students, and it’s not appropriate to do,” Alexander said. “The federal government has no business doing this.”

President Obama also touted college “report cards” showing college costs and how well graduates do in the job market.

The U.S. Education Department and the Consumer Financial Protection Bureau are working on Know Before You Owe, a financial aid shopping sheet that will let future students estimate their debt, monthly payment and likely ability to repay loans. Parents and students also have requested a breakdown of college costs and information on repayment rates for graduates at each college.

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‘Adrift’ after college

January 27, 2012 By

People who didn’t learn much in college don’t do well as graduates, concludes a follow-up report by the authors of the controversial Academically Adrift study. Graduates who scored in the bottom quintile on the Collegiate Learning Assessment (CLA), a test of thinking skills, were more likely to be unemployed and living with their parents, compared to graduates in the top quintile, reports the Chronicle of Higher Education in ‘Adrift’ in Adulthood.

Thirty-six percent of undergraduates showed no gains in “critical thinking, complex reasoning and written communication skills,” concluded sociologists Richard Arum and Josipa Roksa in the earlier study, which became a book. Arum and Roksa surveyed more than 900 of the “Adrift” students to see how they fared after college.

The students scoring in the bottom quintile were three times more likely than those in the top quintile to be unemployed (9.6 percent compared with 3.1 percent), twice as likely to be living at home with parents (35 percent compared with 18 percent), and significantly more likely to have amassed credit-card debt (51 percent compared with 37 percent).

Top-quintile students also were more likely to say they follow the news and discuss politics.

That suggests “the general higher-order skills” tested by the CLA are “real and meaningful,” Arum said.

Though business majors didn’t show much growth on the CLA — and didn’t spend much time studying in college — they were the most likely to find full-time jobs. ”Perhaps it’s going to catch up to them down the road,” Arum said.

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College’s economic value depends on the degree

January 8, 2012 By

College is worth it, but majors linked to occupations offer better job prospects than majors focused on general skills, concludes a new Georgetown report, Hard Times: Not All College Degrees Are Created Equal (pdf).

Another general rule: “People who make technology are better off than people who use technology.”

A bachelor’s degree is one of the best weapons a job seeker can wield in the fight for employment and earnings. And staying on campus to earn a graduate degree provides safe
shelter from the immediate economic storm, and will pay off with greater employability and earnings once the graduate enters the labor market. Unemployment for students with new
bachelor’s degrees is an unacceptable 8.9 percent, but it’s a catastrophic 22.9 percent for job seekers with a recent high school diploma — and an almost unthinkable 31.5 percent for recent high school dropouts.

Except for architecture graduates, who’ve been hit hard by the construction crash, unemployment rates are higher in non-technical majors such as the arts (11.1 percent), humanities and liberal arts (9.4 percent), social sciences (8.9 percent) and law and public policy (8.1 percent).

Unemployment is low for computer science (7.8 percent) and math (6 percent) graduates who can write software and invent new applications, higher for information systems graduates (11.7 percent)  ”who use software to manipulate, mine, and disseminate information.”  However, the report predicts jobs for computer majors will “bounce back strongly” as the recovery proceeds.

Median earnings among recent college graduates vary from $55,000 among engineering majors to $30,000 in the arts, psychology and social work. While new graduates in computer engineering average $60,000, physiology graduates average only $24,000.

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Why some college grads aren’t employable

December 18, 2011 By

Some college graduates aren’t prepared for work, recruiters tell Jeff Selingo. The top students at nearly any college and most students at top colleges are worth interviewing. But a surprising number of applicants “clearly were not ready to go to college in the first place, yet possess a degree.”

“The focus on access and completion has come at a real cost,” one recruiter told me (he didn’t want his company identified because he’s not allowed to speak on its behalf). “We’re encouraging students to go to college who should be considering other options, and then we’re pushing them through once there.”

In the past, college graduates have fared much better than less-educated workers. That may change for average graduates of average colleges with not-very-rigorous degrees. And that’s a large group.

Many graduates write poorly. “It’s clear they’re not learning basic grammar, usage, and style in K-12,” recruiters say.

While many graduates are hard workers, others skated by in college.

The recruiters complained about professors who clearly gave grades that were not deserved, allowed assignments to be skipped, and simply didn’t demand much from their students.

In addition, many young workers feel entitled to a job, recruiters say. They blame “parents obsessed with their kids’ happiness.”

Many employers have cut training and mentoring to save money, the recruiters admit. Employers want to hire well-educated people who are ready to work with minimal support.

 

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Dual enrollment works only if it’s rigorous

December 14, 2011 By

Dual enrollment — college classes for high school students — boosts college-going and graduation rates only if students take rigorous classes on a college campus, a study finds. There are no gains for marginal students.

Also on Community College Spotlight: More degrees for the dollar?

And, for-profit students are less likely to be working and earn less than similar students who enrolled at a public or private nonprofit college, suggests a new study.

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A costly way to identify intelligence

June 29, 2011 By

Most people don’t need a college education to do their job, but they need a degree to get hired, writes Daniel Indiviglio in The Atlantic. It’s a very expensive way to identify who’s smart enough to do a job, he writes.

. . . when high school standards declined and college became more popular, some applicants stood out above others as being more educated and potentially smarter than those with only a high school diploma. If the trend keeps up, however, a time will come when a college degree isn’t enough either: masters degrees will be commonly sought, as the value of college degrees fall to be worth as little high school degrees are today, since so many applicants will have them. If this trend keeps up forever, perhaps we’ll one day have locksmiths with PhD’s.

Waitresses with a college degree earn more money, but it’s probably not the degree, argues Andrew Gillen.

College is the best investment on the market (for those who complete a degree), counters  Derek Thompson, also in The Atlantic.  Over a working lifetime, “the typical college graduate earns $570,000 more than the average person with only a high school diploma.”

Let’s say you’re deciding where to invest $100,000 at age 18. Maybe you think to put it in gold, corporate bonds, U.S. government debt, or hot company stocks.

The $102,000 investment in a four-year college yields a rate of return of 15.2 percent per year, more than double the average return over the last 60 years experienced in the stock market” and more than five times the return in corporate bonds, gold, long-term government bonds, or housing, according to a report by Michael Greenstone and Adam Looney.

Note that the associate degree’s rate of return is 20 percent, higher than the pay-off for the  bachelor’s degree. I’d guess that’s because the costs of attaining the degree are lower and many associate degrees go to nurses, who make good money.

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Graduates still have an edge

June 4, 2011 By

The Great Recession has cut earnings and employment rates for recent college graduates, concludes a Brookings Institution study. But college graduates still do significantly better than less-educated workers.

Looking at people aged 23 and 24 and in the workforce,  88 percent of college graduates were employed in 2010; average weekly earnings were $581, including those out of work.  That compares to a 79 percent employment for people with “some college,” 64 percent for high school graduates and 43 percent for high school drop-outs.

Iowahawk is less optimistic about the future for college graduates.

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$1 trillion in debt for branding?

April 17, 2011 By

“Student loan debt outpaced credit card debt for the first time last year and is likely to top $1 trillion this year as more students go to college and a growing share borrow money to do so,” reports the New York Times. It’s supposed to be “good debt,” an investment in the future. Like mortgages.

“In the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college,” said Mark Kantrowitz, the publisher of FinAid.org and Fastweb.com, who has compiled the estimates of student debt, including federal and private loans.

It’s about branding, not education, writes entrepreneur Seth Godin. A college diploma “brands” the graduate as employable.

Does a $40,000 a year education that comes with an elite degree deliver ten times the education of a cheaper but no less rigorous self-generated approach assembled from less famous institutions and free or inexpensive resources?

That $1 trillion in debt is a lot to spend for marketing.

What would happen if people spent it building up a work history instead? On becoming smarter, more flexible, more self-sufficient and yes, able to take more risk because they owe less money…

I don’t worry about students who can get into elite colleges. They’ll get an education — and a high-class brand. It’s the students borrowing for non-elite private colleges who are at risk of going into debt for a brand of marginal value. Will they get an education? Depends on the student.

I have a nephew who’s graduated in computer science and a niece who’s about to earn a degree in cognitive science. Both are job hunting. So this cartoon hit home.  (Click on it to get a larger version.) Via Instapundit.

Pearls Before Swine at comics.com.

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Economists see fewer middle-income jobs

September 12, 2010 By

Economists predict a split job market — once employers start hiring — with well-paid jobs for the educated (lawyers, scientists and software engineers) and low-paid jobs for the low-skilled (store clerks and home health aides) and not much for folks in the middle.

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Parents subsidize 'kidadults'

May 4, 2010 By

More parents are subsidizing their “kidadults” through their 20s and longer, reports the Arizona Republic.

Research from the University of Michigan indicates that 56 percent of young adults are living a life of quasi-independence. They have jobs and their own homes but they still get help from their parents when the bills come in.

Young people are staying in school longer, then struggling to find jobs, earn a living and pay off college loans. They’re marrying later and having children later than earlier generations. And they’ve got “helicopter parents.”

“Parents want to have more control, they want to be involved, and in general young people welcome it,” said Patricia Somers, an associate professor of education at the University of Texas-Austin who studies family dynamics.

The recession has made it harder for young people to “launch.” From 2006 to 2010, the employment rate for 18- to 29-year-olds fell by nine points,  reports the Pew Research Center. Employment held steady or rose slightly for those 30 to 64 years old. Young workers are earning less.

The annual earnings of all full-time workers ages 25 to 34 have decreased since 1980, when adjusted for inflation, according to the U.S. Department of Education.

While college graduates earn more and are more likely to be employed, their debt load is increasing: In 1993, the average graduate owed $9,297; by 2008, the average debt was $23,118.

Update: A Brookings study on The Long and Twisting Road to Adulthood estimates that parents spend 10 percent of their income “helping their children begin adult lives.” The percentage of 25-year-olds living independently dropped sharply from the 1970s to the turn of the 21st century.

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