44% underemployment for new grads is OK

44% of Young College Grads Are Underemployed (and That’s Good News), writes Jordan Weissmann in The Atlantic.  In a weak economy, many new graduates have to take jobs that don’t require a college degree, argues Weissmann. It’s worse now “because the economy got fed through a wood chipper during the recession and we still haven’t picked up all the pieces,” not because a bachelor’s degree has lost value.

The unemployment rate among recent college graduates tends to move “in step with unemployment among all working age adults,” he writes. New graduates are having problems because everybody is.
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College graduates during the 80s and early 90s were as likely to be overqualified for their jobs as young graduates today, according to New York Fed President William Dudley. Most graduates then eventually found professional jobs.

The obvious difference between higher education today and in 1990 is the cost of a degree, and the amount of debt students take on to finance it. So while failing to land a college-level job straight out of school might have been tolerable in the past, today it might mean severe financial hardship, especially if students aren’t savvy about how to handle their student debt (three words: Income. Based. Repayment).

There’s evidence that young people who graduate into a recession and start lower on the job ladder never recover completely.

I’d like to see a good survey asking whether collegebound students understand their likely future earnings and loan payments. Do they know the risks? If they did, second- and third-tier private colleges would have to slash tuition or go out of business.

Be deeply suspicious of promises that a bachelor’s degree will raise earnings significantly, warns Tim Donovan on Salon. If the “higher interest rate convinces even a few 18-year-olds not to take on huge debt for that Musical Theater degree, maybe it’s not so bad,” he writes.

More Americans are college graduates

More Americans are earning college degrees: 33.5 percent of Americans ages 25 to 29 had at least a bachelor’s degree in 2012, compared with 24.7 percent in 1995, according to the National Center for Education Statistics. The number of two-year college degrees, master’s degrees and doctorates has also risen.

Enrollment and graduation rates are up, reports the New York Times. “The recent recession, which pushed more workers of all ages to take shelter on college campuses while the job market was poor, has also played a role.”

However, only about half of first-time college freshmen in 2006 had earned a degree by 2012, according to the National Student Clearinghouse.

Low-income students continue to lag bar behind.  ”Only about 1 out of 10 Americans whose parents were in the lowest income quartile held four-year college degrees by age 24 in 2011, compared to 7 in 10 from the highest quartile.

Lumina’s new report, A Stronger Nation through Higher Education, estimates that 38.7 percent of working-age Americans (ages 25-64) held a two- or four-year college degree in 2011. That’s rising, but not fast enough to meet the foundation’s Goal 2025, which aims to increase the percentage of Americans with “high-quality degrees and credentials” to 60 percent in 12 years.

“There are worrisome signs that the demand for high-skilled talent is increasing more rapidly than we’re actually educating people,” said Lumina Foundation CEO Jamie P. Merisotis.

Lumina announced 10 achievement targets to raise the college attainment trend lines.

High school grad rate tops 78%

The on-time high school graduation rate hit 78.2 percent in 2010, the highest in a generation and up 2.7 points in a year.

“If you drop out of high school, how many good jobs are there out there for you? None,” Education Secretary Arne Duncan told AP.

While 93.5 percent of Asian-American students and 83 percent of whites complete high school in four years, that drops to 71.4 percent for Hispanics and 66.1 percent for blacks.

State graduation rates ranged from 57.8 percent in Nevada to 91.4 percent in Vermont.

Comparing graduation rates to any year before 1992 is impossible, writes RiShawn Biddle. The data collection method changed significantly. Some states and districts are reporting very dodgy data. Connecticut reported a 98 percent graduation rate for the class of 2010, which NCES refused to accept. The District of Columbia claimed “only one percent of students officially drop out over a four-year period.”  The key word is “officially.”

College enrollments fall by 1.8%

College enrollments declined by 1.8 percent in fall 2012 with for-profits and community colleges showing the biggest drops. That could show that more people are finding jobs, but it undercuts President Obama’s goal of making the U.S. first in the world in college-educated workers.

1/3 of young Americans hold college degrees

One-third of the nation’s 25- to 29-year-olds have completed at least a bachelor’s degree, accordin to a Pew study. That’s a new high. Sixty-three percent have completed at least “some” college. And 90 percent have a high school diploma or GED.

With fewer job prospects, young adults are staying in school, Pew reports. In addition, many more people believe a college education is necessary to get ahead in life. In a 2010 Gallup poll, 75 percent said a college education is “very important,”up from 36 percent In 1978.

However, the U.S. higher education system is no longer the best in the world, according to a 2011 Pew survey of college presidents.  ”College presidents are concerned about the quality, preparedness and study habits of today’s college students,” Pew reports. Fifty-two percent say college students today study less than their predecessors did a decade ago; just 7 percent say they study more.

 

After the auto plant closed …

PBS will air As Goes Janesville: A Small Town Struggles in the Recession this evening. The documentary includes a profile of a laid-off assembly-line worker who enrolled in a Wisconsin community college to train as a medical lab technician.

Education spending hits the wall

Many years of growth in education spending and hiring “came to a grinding halt” in 2009-10, writes Education Intelligence Agency, after looking at the annual U.S. Census report and U.S. Department of Education data.

Per-pupil spending grew by 1.1 percent, less than the inflation rate. Enrollment grew by only 3,800 students nationwide; the K-12 teaching ranks fell by 38,000.

Fourteen states cut per-pupil spending in 2009-10: Florida, Georgia, Hawaii, Kansas, Maine, Minnesota, New Mexico, North Carolina, Oregon, Rhode Island, South Carolina, Utah, Virginia and Washington. However, eight states  – Idaho, Illinois, Missouri, Nevada, Pennsylvania, Rhode Island, South Dakota and West Virginia – hired more teachers, despite declining enrollment.

EIA’s a table of the 50 states looks at enrollment, hiring and labor costs (not adjusted for inflation) over a five-year period.

From 2005 to 2010, student enrollment increased a cumulative 0.3 percent, while the K-12 teacher workforce increased 3.8 percent. Per-pupil spending increased 22 percent (about 9.3% after correcting for inflation). Spending on education employee salaries and benefits increased 22.3 percent.

EIA predicts that growth in education budgets will lag behind an economy recovery, just as cuts lagged behind the recession.

Poverty gap widens

The achievement gap is widening between high-income and low-income children, even as the black-white  gap is narrowing, reports the New York Times, citing research at Stanford and the University of Michigan.

. . . wealthy parents invest more time and money than ever before in their children (in weekend sports, ballet, music lessons, math tutors, and in overall involvement in their children’s schools), while lower-income families, which are now more likely than ever to be headed by a single parent, are increasingly stretched for time and resources.

“The pattern of privileged families today is intensive cultivation,” said Frank Furstenberg, a professor of sociology at the University of Pennsylvania. By 2007, upper-class parents were spending twice as much on their children as wealthy parents in 1972; spending by low-income parents grew by 20 percent.

While low-income children are watching TV, affluent children are visiting the museum, the aquarium and the library.

The cultural divide between well-educated and less-educated Americans is growing, argues Charles Murray, a scholar at the American Enterprise Institute, in Coming Apart: The State of White America, 1960-2010. “When the economy recovers, you’ll still see all these problems persisting for reasons that have nothing to do with money and everything to do with culture,” he said.

Update: On his new blog, Dan Willingham suggests another possible explanation for the poverty gap. Poor parents and children live under constant, debilitating stress. He also finds cause for optimism:

Some countries, (e.g., Hong Kong), despite an enormous disparity between rich and poor, manage to even the playing field when the kids are at school. The US does a particularly poor job at this task; wealthy kids enjoy a huge advantage over poor kids.

Yes, Hong Kong is different from the U.S., Willingham concedes. But we should try to learn what they’re doing right.

More high school grads start at community colleges

The recession hasn’t depressed college enrollment, but more high school graduates are starting at community colleges.

Also on Community College Spotlight:  Most community college students never complete a credential because they never start a college-level program of study, a researcher says. Students need clear pathways.

Arizona is likely to approve a plan to fund public colleges and universities based on performance as well as enrollment.

Undereducated Americans

The demand for college-educated workers has outpaced the supply, concludes The Undereducated American, a new study by the Georgetown University Center on Education and the Workforce. The weak economy has hidden the problem, says Anthony P. Carnevale, co-author of the report. “In recession and recovery, we remain fixated on the high school jobs that are lost and not coming back. We are hurtling into a future dominated by college-level jobs unprepared.”

The U.S. economy will need an additional 20 million postsecondary-educated workers by 2025, Georgetown predicts. This includes 15 million with bachelor’s degrees, one million with associate degrees and four million with vocational certificates. Adding these new graduates will stop the rise of income inequality, according to the report, which predicts wages will rise 24 percent for high school graduates, 15 percent for those with an associate degree and 6 percent for bachelor’s degree holders.

All this jibes with President Obama’s push to make the U.S. first in the world in college graduates by 2020, points out Inside Higher Ed.

The shortage of college-educated workers has created a rising wage premium, write Carnevale and co-author Stephen Rose.

College graduates earn 74 percent more than do high school graduates today — a gap that is up from 40 percent in 1980.

. . . (Adding 20 million college-educated workers) would not only allow the wage premium to shrink to 46 percent, much closer to what it was in 1980, but increase the gross domestic product by about $500 billion over what it would be without those better-educated, higher-earning workers.

Increasing college-going and graduation rates requires spending more on higher education — unlikely, Carnevale concedes — or making higher ed more efficient.

Higher education has not historically been inclined to look for efficiency, but it is likely that “as money slims down, there will be kicking and screaming, and higher ed will move toward efficiencies,” he said.

A bachelor’s degree pays off even for secretaries, plumbers and cashiers, asserts New York Times columnist Dave Leonhardt, citing the Georgetown report. Blue-collar workers with a bachelor’s degree earn more and they’re healthier and happier than their high-school-educated colleagues.

“Sending more young Americans to college is not a panacea,” says David Autor, an M.I.T. economist who studies the labor market. “Not sending them to college would be a disaster.”

About 33 percent of young adults earn a bachelor’s degree and another 10 percent receive a two-year degree, Leonhardt writes.

Financial aid cuts the cost:  “Average net tuition and fees at public four-year colleges this past year were only about $2,000 (though Congress may soon cut federal financial aid).”

Meanwhile, the wage premium for college graduates has soared.

According to the Hamilton Project, “college tuition in recent decades has delivered an inflation-adjusted annual return of more than 15 percent. For stocks, the historical return is 7 percent. For real estate, it’s less than 1 percent.”

Perhaps “college filters out people with low cognitive ability, low conscientiousness, and other adverse traits,” writes Arnold Kling.

My elitism comes from the few years I spent as an adjunct at George Mason. The typical undergrad in my course could not write a paper or solve an algebra problem. I doubt that adding more students at this margin is the way to raise people’s incomes.

College attainment will boost economic growth only if it increases cognitive skills, responds Andrew Gillen of the Center for College Affordability and Productivity, citing studies by Eric Hanushek and Ludger Woessmann. “Recent research (such as Academically Adrift) calls into question how much college boosts cognitive skills,” wrote Gillen in an e-mail to Inside Higher Ed.

I don’t see much point in sending more high school graduates to college to take eighth-grade reading, writing and math.