College Completion

Welcome to the Syllabus, a weekly guide that provides insight into what’s happening in higher education.

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This week New America’s Education Policy Program published Rebalancing Resources and Incentives in Federal Student Aid. In this policy paper we make more than 30 recommendations on how to improve our complex federal financial aid system so that it works better for students and taxpayers. With this many proposals, there was something for everyone to be happy about or frustrated over—sometimes simultaneously.

Inside Higher Ed, The Chronicle of Higher Education, and ProPublica offer great summaries of our proposal if you haven’t already read it. We also have this one-page explainer that will help get you up to speed.

EXECUTIVE SUMMARY

The federal financial aid system is no longer up to today’s demands. Built in a different era, its haphazard evolution over the decades has made it inefficient, poorly targeted, and overly complicated. With the need for higher education never greater and college growing increasingly unaffordable, students deserve a streamlined aid system that is more understandable, effective, and fair.

[The New America Foundation’s Education Policy Program on Tuesday released a comprehensive package of policy proposals that would provide an overhaul of federal financial aid. The report, Rebalancing Resources and Incentives in Federal Student Aid, calls for specific changes to grants, loans, tax benefits, college outreach programs and federal regulations to provide more direct aid to the lowest-income students, while strengthening accountability for institutions of higher education to ensure that more students are able to earn affordable, high-quality credentials. Yesterday, we explained why student aid reform is needed. In today's post, we provide an overview of our proposals.]

In Rebalancing Resources and Incentives in Federal Student Aid, we offer more than 30 specific policy recommenda­tions that are designed to create a streamlined federal student aid system that is more understandable, effective, and fair. Taken together, the package of proposals in our report is budget neutral over the 10-year period from federal fiscal years 2013-2022.

Pell Grants

The Pell Grant program is the cornerstone of federal stu­dent aid. In 1972, when the program was created, a Pell Grant covered most if not all college costs for large num­bers of low-income students. But as college prices have soared over the years, the system has become less and less effective. Moreover, the program is now facing a major “funding cliff” in the 2014 fiscal year and each year there­after.

[The New America Foundation’s Education Policy Program today released a comprehensive package of policy proposals that would provide an overhaul of federal financial aid. The report, Rebalancing Resources and Incentives in Federal Student Aid, calls for specific changes to grants, loans, tax benefits, college outreach programs and federal regulations to provide more direct aid to the lowest-income students, while strengthening accountability for institutions of higher education to ensure that more students are able to earn affordable, high-quality credentials. In today's post, we make our case for why student aid reform is needed.]

When Rhode Island Senator Claiborne Pell helped create the college student aid program that would become his legacy, American higher education looked very different than it does today. In 1972, the typical college student paid the equivalent of $526 per year in tuition and fees, in today’s dollars, to attend a public university in-state. Private college tuition was often affordable, and undergraduate borrow­ing was all but unheard-of. There were no “for-profit” colleges as we know them now. The large majority of all public support for higher education came in the form of direct appropriations to colleges and universities from states.

The world has changed since then. Profound shifts in the structure of the global economy have put a premium on high-skill jobs that require advanced credentials while many well-paying blue-collar jobs have disappeared. Students have flooded onto college campuses, in America and, increasingly, around the world. At the same time, col­leges and universities began a decades-long campaign in the early 1980s of constant price increases that continues, unabated, today. This happened in part because states, eager to cut taxes and facing rising costs for health care and public safety, reduced the portion of their budgets dedicated to higher education. At the same time, colleges competing for students and prestige ramped up spending year after year.

Welcome to the first edition of the Syllabus, a weekly guide that provides insight into what’s happening in higher education.

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The Next Affirmative Action, Kevin Carey
Washington Monthly

In the January/February issue, Carey, Director of the Education Policy Program here at New America, argues that minority students need a much broader reform agenda. Since most students don’t attend colleges with admissions rates below 50 percent, affirmative action only affects the small percentage of students who are qualified to attend elite schools. Instead, we need to re-balance public resources toward those less-selective institutions that enroll the lion’s share of minority students in higher education. Then we should hold them accountable for student outcomes like graduation rates. “Those who set the national education agenda need to look past the handful of universities that graduate the ruling class,” writes Carey, “And focus on improving the neglected institutions that educate the future minority school teachers, scientists, doctors, and engineers.”

On November 7^th, the day after the Presidential election, House Majority Leader Eric Cantor (R-VA) sent a letter to his Republican colleagues expressing disappointment with the outcome, but also the belief that there was room for Republicans and Democrats to “act to bridge our differences and deliver results.” Among the short list that Cantor laid out was the following: “Making it easier for parents and students to make informed decisions about what type of post-high school education is right for them.”

That’s right. The day after the most expensive Presidential campaign in American’s history, amidst deep divisions about the fiscal cliff, taxes, spending, and social issues, education data made the legislative “to do” list.

Both political parties spent much of the past year talking about the need for better information in the face of skyrocketing college costs. President Obama proposed a college scorecard with comparable, easy-to-understand indicators of college value. The GOP platform called for greater transparency around “completion rates, repayment rates, future earnings, and other factors that may affect their (college) decisions.” The message was clear and consistent—students and families need better information.

By Chad Aldeman, Guest Blogger

The National Student Clearinghouse, which boasts of “near-census national coverage” of all college students in the country, has released a number of new reports in the last few weeks, most noticeably a large report yesterday on degree completions. Due to the breadth of its data—indeed, it has quietly become nearly a national student record database—it was able to rely on a sample of 1,878,484 students who began college in 2006. While the Clearinghouse deserves praise for accuracy and completeness of its data, the headline story touted by both the Clearinghouse and Inside Higher Ed, that the data showed, “that America is doing better on college completion than had previously been revealed,” relies on a misreading of the data. Here's why:

• While the data are richer, the outcomes aren't demonstrably better. For students who start at four-year public universities, after six years, the Clearinghouse found that 48.6 percent had completed a degree at the same institution, 8.7 percent have completed a bachelor’s degree at another 4-year institution, 3.2 percent had finished a two-year degree somewhere, and the rest had not completed any degree. That's a sum total of 60.5 percent of students completing any degree, which is lower than the 64.8 percent that NCES found in 2009 for first-time, full-time students at public four-year institutions. The Clearinghouse added in part-time students who aren’t captured in the federal calculations, but the final numbers look about the same.

Now that President Obama has been reelected, and he has more time to sit back and read Higher Ed Watch, we are presenting our wish list for his second term. [And Mr. President, while you're at it, we're sure you'll enjoy our posts from last week highlighting your first term's biggest higher education hits and misses!]

Among other things, we (the authors of this post) would like to see the Obama administration do the following:

• Hold college accountable for reigning in college costs and improving student outcomes. The administration must be willing to take on the entrenched and powerful institutional interests of traditional colleges.

• Develop long-term solutions for revamping the federal financial aid programs, rather than continuing to scramble to come up with stop-gap measures to shore up funding for these programs in the heat of high-stakes budget battles.

• Finalize the financial aid shopping sheet and scorecard—and make them mandatory. Students and families need clear, consistent, useable information at key points in their decision-making process. Given that many institutions currently benefit from the lack of this information, voluntary adoption of these efforts will accomplish very little.

The New America Foundation’s Education Policy Program and the Washington Monthly held a lively panel discussion on Wednesday looking at why the status quo in higher education is not working. As Jamie P. Merisotis, the president of the Lumina Foundation, said at the start of the event, “changes in just about everything that touches the student’s experience” are needed.

Public anxiety about paying for college is at an all-time high, with ever-rising college prices and student loan debt skyrocketing. Congress is battling over funding student financial aid programs, while a billion-dollar student loan debt collection industry is targeting a growing number of students who have fallen behind on their loans. Meanwhile, most higher education institutions are failing to provide the disadvantaged students they enroll with the types of support services they need to succeed in college.

But it doesn’t have to be this way. Panelists at Wednesday’s event offered solutions to these pressing problems.

Great news for those who have been worrying about the college completion crisis – we are focusing on the wrong measures of success. At least that's what Tracy Fitzsimmons, president of Shenandoah University and representative for the National Association of Independent Colleges and Universities, seems to think. If you listen to Fitzsimmons' testimony at last week’s House Education and Workforce Committee hearing on college data, you might be surprised to learn that students don’t drop out because they lack financial or academic support from their colleges or universities. They drop out because they have opportunities that are better than college. Opportunities like becoming members of Congress or joining the national touring company of Beauty and the Beast.