By Richard Vedder
Representative Thomas Petri of Wisconsin is a thoughtful congressman, with whom I had a delightful dinner not too many weeks ago. His wife, Anne Neal, is one of higher education's greatest voices of reason in her capacity of president of the American Council of Trustees & Alumni (ACTA).
Representative Petri is promoting a great idea -- using market forces to determine the fees and payments made to loan providers, rather than having that administratively fixed by law or government bureaucrats. Rep. Petri is a Republican, but similar ideas have been endorsed by researchers at the Democratic-leaning Education Sector. Market forces, not political pressures, should determine the optimal pricing. Current proposals before Congress might lead us from moving from a situation where above market pricing means lenders are collecting abnormally high, monopoly profits (the view of many Democrats), to one where profits will fall dramatically, leading to a shortage of loan providers and a difficulty for students in obtaining funds (the view of many Republicans). A market approach avoids this difficulty, and eliminates the need to find what St. Thomas Aquinas would call, if her were alive today, "the just price" for student loans.
Of course, this is a second best approach, but probably the best that is attainable in the current political environment. In a perfect world, the government would argue that the financing of college educations should be handled the same way as the financing of cars, homes, business start ups and the like, with individuals going to private financial institutions on their own and applying for a loan without government interference (to be sure, these loan markets are not pristinely free of governmental distortions either, but they come closer than the college loan market). Why are college "investments" fundamentally different from other forms of investment? Having made this point, however, at least Rep. Petri is trying to introduce some sanity into a process that the Spellings Commission rightly called dysfunctional.
Thursday, June 28, 2007
The Study Time-Booze Consumption Ratio
By Richard Vedder
I would hypothesize that the study time/booze consumption ratio amongst college students has fallen sharply over time. If a student spends 20 hours out of class per week on average studying, preparing papers, etc., and drinks on average the equivalent of 15 cans of beer per week, the ratio would be 1.33 (20 divided by 15). My guess is over the years study time has fallen fairly sharply, while booze consumption has increased. If the average ratio nationally in 1970 was 1.33, I would not be surprised that today it is closer to being less than one-half of that, say .50 (10 hours of studying, 20 cans of beer). There are some data from NSSE (National Survey of Student Engagement) and individual research studies that might give us insight into what the ratio actually is (God forbid the Department of Education or some government agency that collects data on everything else under the sun actually estimate it).
Three professors at the University of Missouri have confirmed what I long was convinced to be true based on limited evidence -- when universities eliminate Friday classes, booze consumption rises. And there is no question there is a sharp decline in Friday classes over time. Hence universities are promoting the decline in the study-booze ratio. To be sure, not all studying is for the good, nor is all drinking for the bad, but colleges are subsidized by third parties who believe studying is good and should be encouraged more than drinking and partying. It is no accident that we subsidize studying (via university subsidies, guaranteed student loans, etc.) while we tax booze.
The decline in Friday and Saturday classes means, of course, that the traditional underutilization of classroom facilities has accelerated over time, and the productivity of capital resources like classrooms is probably lower today than decades ago. Why? Neither students nor faculty want classes on Friday; both want long weekends. With no one overseeing the universities very much, university presidents (mostly former faculty who do not want to annoy the faculty too much given their entrenched status) go along with this. The "hedonistic" college culture spoken about in the great first draft of the Spellings Commission report was partly brought about by actions of college administrators who have gone along with promoting a declining study-booze ratio.
I would hypothesize that the study time/booze consumption ratio amongst college students has fallen sharply over time. If a student spends 20 hours out of class per week on average studying, preparing papers, etc., and drinks on average the equivalent of 15 cans of beer per week, the ratio would be 1.33 (20 divided by 15). My guess is over the years study time has fallen fairly sharply, while booze consumption has increased. If the average ratio nationally in 1970 was 1.33, I would not be surprised that today it is closer to being less than one-half of that, say .50 (10 hours of studying, 20 cans of beer). There are some data from NSSE (National Survey of Student Engagement) and individual research studies that might give us insight into what the ratio actually is (God forbid the Department of Education or some government agency that collects data on everything else under the sun actually estimate it).
Three professors at the University of Missouri have confirmed what I long was convinced to be true based on limited evidence -- when universities eliminate Friday classes, booze consumption rises. And there is no question there is a sharp decline in Friday classes over time. Hence universities are promoting the decline in the study-booze ratio. To be sure, not all studying is for the good, nor is all drinking for the bad, but colleges are subsidized by third parties who believe studying is good and should be encouraged more than drinking and partying. It is no accident that we subsidize studying (via university subsidies, guaranteed student loans, etc.) while we tax booze.
The decline in Friday and Saturday classes means, of course, that the traditional underutilization of classroom facilities has accelerated over time, and the productivity of capital resources like classrooms is probably lower today than decades ago. Why? Neither students nor faculty want classes on Friday; both want long weekends. With no one overseeing the universities very much, university presidents (mostly former faculty who do not want to annoy the faculty too much given their entrenched status) go along with this. The "hedonistic" college culture spoken about in the great first draft of the Spellings Commission report was partly brought about by actions of college administrators who have gone along with promoting a declining study-booze ratio.
US News & World Report Rankings, Once More
By Richard Vedder
A couple of days ago, the Wall Street Journal ran an interesting story on the US News & World Report (USNWR) rankings of law schools. It noted that many articles had been written showing deficiencies in the rankings, pointing out how law schools can distort the rankings using various dubious strategies, etc.
The story went on to say that there are a number of innovative criteria (e.g.,the number of students placed in federal judge clerkships) that some have suggested included in alternative rankings. Moreover, it quoted two law school professors who are negotiating with a publisher to actually do an alternative ranking.
The latter idea has long intrigued me. Rankings are a big business, and the college rankings are no doubt a profit center for USNWR in an era where print news media are facing big challenges. A Consumer Guide to American Law Schools that use other criteria might sell respectably well, garnering some income for the publishers. With this in mind, offering college guides for undergraduate education that utilize other criteria than the USNWR ones is probably highly feasible from a commercial point of view. What is needed, however, is greater cooperation from the colleges in getting meaningful outcomes based measures, such as National Survey of Student Engagement or Collegiate Learning Assessment scores. We applaud the efforts of those pushing to make that cooperation happen, including, surprisingly perhaps, officials in the Department of Education.
Speaking of the Department of Education, on September 17, 1981, Ronald Reagan summoned his Energy Department and Education Department secretaries to a meeting, for the purpose of deciding the order in which these two departments would be eliminated. Now, 26 years later, both departments are alive and well, spending vastly more resources than in the Reagan era. Do we have more energy or better education as a result? I doubt it.
A couple of days ago, the Wall Street Journal ran an interesting story on the US News & World Report (USNWR) rankings of law schools. It noted that many articles had been written showing deficiencies in the rankings, pointing out how law schools can distort the rankings using various dubious strategies, etc.
The story went on to say that there are a number of innovative criteria (e.g.,the number of students placed in federal judge clerkships) that some have suggested included in alternative rankings. Moreover, it quoted two law school professors who are negotiating with a publisher to actually do an alternative ranking.
The latter idea has long intrigued me. Rankings are a big business, and the college rankings are no doubt a profit center for USNWR in an era where print news media are facing big challenges. A Consumer Guide to American Law Schools that use other criteria might sell respectably well, garnering some income for the publishers. With this in mind, offering college guides for undergraduate education that utilize other criteria than the USNWR ones is probably highly feasible from a commercial point of view. What is needed, however, is greater cooperation from the colleges in getting meaningful outcomes based measures, such as National Survey of Student Engagement or Collegiate Learning Assessment scores. We applaud the efforts of those pushing to make that cooperation happen, including, surprisingly perhaps, officials in the Department of Education.
Speaking of the Department of Education, on September 17, 1981, Ronald Reagan summoned his Energy Department and Education Department secretaries to a meeting, for the purpose of deciding the order in which these two departments would be eliminated. Now, 26 years later, both departments are alive and well, spending vastly more resources than in the Reagan era. Do we have more energy or better education as a result? I doubt it.
Tuesday, June 26, 2007
Secret Ballots in Higher Education
Secret Ballots in Higher Education
By Bryan O'Keefe
In another hat that I wear, I sometimes write about labor issues, specifically on matters related to labor unions. Unions have been in the news a lot lately, mainly because of the Employee Free Choice Act. For those of you who have better things to do with your time than follow labor law legislation, the bill would radically change the way that unions are able to organize workers.
Under current law, when workers express an interest in unionization, the National Labor Relations Board comes in and conducts a secret ballot election. Majority rules and the process is very similar to what Americans do on election day across the country. But labor unions want to change those rules and do away with secret ballots. In its place, they would institute “card check” organizing, which would allow unions to organize after employees sign a card – out in the open – stating their intention to join a union. Needless to say, this type of system leaves people open to intimidation and coercion – it’s the same reason why we don’t vote on Election Day out in the open too.
Okay, okay, so what does any of this have to do with the price of tea in China, or, in our case, higher education? There has been a real movement in the last 30 years to make labor unions a more powerful force on the university campus. The pressure comes from many different areas including full-time faculty unions, unions for adjunct professors, unions for the janitors and other support staff, unions even for the beleaguered teaching assistants. In short, organized labor looks at college campuses and they see a lot of non-union employees, most of whom are at least sympathetic to the broader social and political aims of unions.
Universities have fought unionization for the most part, realizing that borrowing the business plan of Detroit car manufacturers is probably not wise. But that’s where the Employee Free Choice Act comes into play. If the bill ever does pass – a not altogether improbable occurrence, especially if the Democrats pick up a few seats in the House and win the Presidency in 2008 – then, we could begin to see mass unionization again. College campuses would probably become ground zero for some of these efforts. We already saw last year that the Service Employees International Union put significant resources into organizing janitors at the University of Miami.
As for EFCA itself, the bill went down in defeat in the Senate today and is dead for the time being. But we have not heard the last of it. Democrats and unions will try to make this a campaign issue in 2008 and tie in the decline of unions with their broader arguments about income inequality. For more on how this could play out, check out my op-ed in the NY Sun today.
On its face, EFCA seems like a labor specific issue, but the impact for higher education could be tremendous. Stay tuned to 2008.
By Bryan O'Keefe
In another hat that I wear, I sometimes write about labor issues, specifically on matters related to labor unions. Unions have been in the news a lot lately, mainly because of the Employee Free Choice Act. For those of you who have better things to do with your time than follow labor law legislation, the bill would radically change the way that unions are able to organize workers.
Under current law, when workers express an interest in unionization, the National Labor Relations Board comes in and conducts a secret ballot election. Majority rules and the process is very similar to what Americans do on election day across the country. But labor unions want to change those rules and do away with secret ballots. In its place, they would institute “card check” organizing, which would allow unions to organize after employees sign a card – out in the open – stating their intention to join a union. Needless to say, this type of system leaves people open to intimidation and coercion – it’s the same reason why we don’t vote on Election Day out in the open too.
Okay, okay, so what does any of this have to do with the price of tea in China, or, in our case, higher education? There has been a real movement in the last 30 years to make labor unions a more powerful force on the university campus. The pressure comes from many different areas including full-time faculty unions, unions for adjunct professors, unions for the janitors and other support staff, unions even for the beleaguered teaching assistants. In short, organized labor looks at college campuses and they see a lot of non-union employees, most of whom are at least sympathetic to the broader social and political aims of unions.
Universities have fought unionization for the most part, realizing that borrowing the business plan of Detroit car manufacturers is probably not wise. But that’s where the Employee Free Choice Act comes into play. If the bill ever does pass – a not altogether improbable occurrence, especially if the Democrats pick up a few seats in the House and win the Presidency in 2008 – then, we could begin to see mass unionization again. College campuses would probably become ground zero for some of these efforts. We already saw last year that the Service Employees International Union put significant resources into organizing janitors at the University of Miami.
As for EFCA itself, the bill went down in defeat in the Senate today and is dead for the time being. But we have not heard the last of it. Democrats and unions will try to make this a campaign issue in 2008 and tie in the decline of unions with their broader arguments about income inequality. For more on how this could play out, check out my op-ed in the NY Sun today.
On its face, EFCA seems like a labor specific issue, but the impact for higher education could be tremendous. Stay tuned to 2008.
Charles Miller Is Right --But Does It Matter?
By Richard Vedder
I have been infuriated by how colleges and universities, afraid of having more light shine on them and their operations, are lobbying Congress to keep the Department of Education from using the accreditation mechanism as a way to implement Spellings Commission recommendations on accountability, assessment, and transparency.
In chatting with my friend Charles Miller, chair of the Spellings Commission, about this, he opined: "What we are seeing today in the nation's capital is no different from what happens with other mature, inefficient economic sectors and industries. A run to Congress for protection." AMEN. Charles hit the nail on the head.
It is absolutely vital in any higher education reform to learn more about what students know or learn or how they think, and to convey this and other useful consumer information to the public. Margaret Spellings realizes this, and she is courageously trying to effect change via her power as "accreditor to the accreditors." She has been thwarted, successfully in the short run it seems, by the Educational Establishment. Shame. Shame. Shame. To be sure, I am worried about federal intrusion into higher education, but Spellings is trying to reform a monopolistic cartel of regulators run by the regulatees it is trying to regulate. Indeed, I wonder if the accrediting process is attackable under the anti-trust laws, legislation that generally speaking I think is worthless but may have some use here.
On the plus side, key establishment organizations like AASCU and NASULGC and their leaders, Deno Curris and Peter McPherson, are saying all the right things (interestingly, Peter is also chairing the board of Dow Jones during a particularly exciting period in that firm's life). They are saying "We want to publish lots of information on our members, including, voluntarily, key data like scores on the National Survey of Student Engagement or the Collegiate Learning Assessment." Even NAICU, the most anti-reformist group led by David Warren, is making the right sounds. Putting Warren in charge of higher education reform would make as much sense as making Lorena Bobbitt or Dr. Kevorkian the Surgeon General, but David is saying some of the right things on this issue. Sounds great, and I hope it happens, but I worry about backpedaling after the heat dies now a bit on this issue. Miller says we need to put the pressure on, and he is right. The American Enterprise Institute, in cooperation with CCAP, will be having a college accreditation conference in Washington on September 21 which should be very interesting.
Stay tuned.
I have been infuriated by how colleges and universities, afraid of having more light shine on them and their operations, are lobbying Congress to keep the Department of Education from using the accreditation mechanism as a way to implement Spellings Commission recommendations on accountability, assessment, and transparency.
In chatting with my friend Charles Miller, chair of the Spellings Commission, about this, he opined: "What we are seeing today in the nation's capital is no different from what happens with other mature, inefficient economic sectors and industries. A run to Congress for protection." AMEN. Charles hit the nail on the head.
It is absolutely vital in any higher education reform to learn more about what students know or learn or how they think, and to convey this and other useful consumer information to the public. Margaret Spellings realizes this, and she is courageously trying to effect change via her power as "accreditor to the accreditors." She has been thwarted, successfully in the short run it seems, by the Educational Establishment. Shame. Shame. Shame. To be sure, I am worried about federal intrusion into higher education, but Spellings is trying to reform a monopolistic cartel of regulators run by the regulatees it is trying to regulate. Indeed, I wonder if the accrediting process is attackable under the anti-trust laws, legislation that generally speaking I think is worthless but may have some use here.
On the plus side, key establishment organizations like AASCU and NASULGC and their leaders, Deno Curris and Peter McPherson, are saying all the right things (interestingly, Peter is also chairing the board of Dow Jones during a particularly exciting period in that firm's life). They are saying "We want to publish lots of information on our members, including, voluntarily, key data like scores on the National Survey of Student Engagement or the Collegiate Learning Assessment." Even NAICU, the most anti-reformist group led by David Warren, is making the right sounds. Putting Warren in charge of higher education reform would make as much sense as making Lorena Bobbitt or Dr. Kevorkian the Surgeon General, but David is saying some of the right things on this issue. Sounds great, and I hope it happens, but I worry about backpedaling after the heat dies now a bit on this issue. Miller says we need to put the pressure on, and he is right. The American Enterprise Institute, in cooperation with CCAP, will be having a college accreditation conference in Washington on September 21 which should be very interesting.
Stay tuned.
Monday, June 25, 2007
George Leef Is Not An Idiot
By Richard Vedder
A little study Whiz Kid Matt Denhart (who is taking a break teaching English to kids in a orphanage in Ghana) and I did in conjunction with the Mackinac Center for Public Policy is stirring up a bit of fuss, which is great. We argued that Michigan's higher ed system was not as poverty stricken as is sometimes portrayed, and that spending more on higher ed there might hurt, not help, economic growth.
Our good friend and ally George Leef wrote some nice things about it on phi beta cons, a great higher education web site within National Review Online. Whereupon George was trashed by some bloggers, I am told. One even wrote a blog "George Leef is an idiot."
Folks, George Leef may be many things, but he is certainly no idiot. Indeed, I find him to be one of the most thoughtful, insightful and provocative writers on higher education today. But the attack on George is symptomatic of a serious problem facing scholarly inquiry in the United States. When you disagree with someone, increasingly you simply attack them with ad hominem diatribes rather than a careful analysis of the underlying arguments.
Indeed, I would go farther. I am deeply worried that we are retreating from the spirit of fact-based scientific method that has categorized most of human inquiry since the Enlightenment, and returning to an earlier, less positive and more destructive approach to observing the world, reaching conclusions based on faith instead of facts and reason. The "faith" of today is not the religious faith of the Middle Ages or Renaissance, but rather an ideologically driven secular set of values that shows contempt for freedom, individual dignity, and for reaching conclusions on the basis of reasoned evidence. This problem can be found among persons on both the left and right of the political spectrum, although I think it is more intense among those on the left.
Too often, politicians are trying to politicize science, either by pushing junk science results or by trying to suppress free inquiry, and universities are, by and large, going along with it rather than offend the politicians who feed them. That is the case, I think, with the global warming debate. If you raise doubts either about the existence of global warming or even about the policy implications, you are viewed as an intellectual pariah, someone who should be shunned, never mind the fact that there are reputable scientists who have raised concerns about purported factual evidence and, more pointedly, about the accuracy of computer models of the effects of warming. We have banned DDT, never mind the fact that the demonstrated harm from that pesticide is almost certainly trivial in relation to the benefits of eliminating malaria. Why aren't academics screaming about this? In the academy, persons who take unpopular, politically incorrect positions are often denied the good jobs that they might otherwise obtain. My American Enterprise Institute colleague Charles Murray is one of America's preeminent social scientists, but almost certainly could never get a job at a prestigious university because of his unpopular, politically incorrect but factually correct views relating to human intelligence. While the disdain for dispassionate review of scientific evidence has not reached the level of the Spanish Inquisition, some of what goes on is pretty bad.
What does that mean for American colleges and universities? The increased politicization of the classroom and research reduces the attractiveness of supporting postsecondary education, which is about advancing our civilization through an appeal to facts, reason and the exercise of objective creativity, not through ideologically based recitations of dubious propositions that might harm our society far more than they help it.
A little study Whiz Kid Matt Denhart (who is taking a break teaching English to kids in a orphanage in Ghana) and I did in conjunction with the Mackinac Center for Public Policy is stirring up a bit of fuss, which is great. We argued that Michigan's higher ed system was not as poverty stricken as is sometimes portrayed, and that spending more on higher ed there might hurt, not help, economic growth.
Our good friend and ally George Leef wrote some nice things about it on phi beta cons, a great higher education web site within National Review Online. Whereupon George was trashed by some bloggers, I am told. One even wrote a blog "George Leef is an idiot."
Folks, George Leef may be many things, but he is certainly no idiot. Indeed, I find him to be one of the most thoughtful, insightful and provocative writers on higher education today. But the attack on George is symptomatic of a serious problem facing scholarly inquiry in the United States. When you disagree with someone, increasingly you simply attack them with ad hominem diatribes rather than a careful analysis of the underlying arguments.
Indeed, I would go farther. I am deeply worried that we are retreating from the spirit of fact-based scientific method that has categorized most of human inquiry since the Enlightenment, and returning to an earlier, less positive and more destructive approach to observing the world, reaching conclusions based on faith instead of facts and reason. The "faith" of today is not the religious faith of the Middle Ages or Renaissance, but rather an ideologically driven secular set of values that shows contempt for freedom, individual dignity, and for reaching conclusions on the basis of reasoned evidence. This problem can be found among persons on both the left and right of the political spectrum, although I think it is more intense among those on the left.
Too often, politicians are trying to politicize science, either by pushing junk science results or by trying to suppress free inquiry, and universities are, by and large, going along with it rather than offend the politicians who feed them. That is the case, I think, with the global warming debate. If you raise doubts either about the existence of global warming or even about the policy implications, you are viewed as an intellectual pariah, someone who should be shunned, never mind the fact that there are reputable scientists who have raised concerns about purported factual evidence and, more pointedly, about the accuracy of computer models of the effects of warming. We have banned DDT, never mind the fact that the demonstrated harm from that pesticide is almost certainly trivial in relation to the benefits of eliminating malaria. Why aren't academics screaming about this? In the academy, persons who take unpopular, politically incorrect positions are often denied the good jobs that they might otherwise obtain. My American Enterprise Institute colleague Charles Murray is one of America's preeminent social scientists, but almost certainly could never get a job at a prestigious university because of his unpopular, politically incorrect but factually correct views relating to human intelligence. While the disdain for dispassionate review of scientific evidence has not reached the level of the Spanish Inquisition, some of what goes on is pretty bad.
What does that mean for American colleges and universities? The increased politicization of the classroom and research reduces the attractiveness of supporting postsecondary education, which is about advancing our civilization through an appeal to facts, reason and the exercise of objective creativity, not through ideologically based recitations of dubious propositions that might harm our society far more than they help it.
Friday, June 22, 2007
Dumbing Down College
By Richard Vedder
A few days ago, Jay Mathews, a reporter for the Washington Post advocated that all students need to go to college. He used a Education Week report to back up his view. According to the report, an increasing proportion of individuals in jobs like electricans have some college training, and that the jobs of tomorrow will almost all require postsecondary skills. He goes on to say that college does not necessary mean students all need to study calculus and physics and tough subjects like that to get in --he advocated a kinder and gentler college where kids of average (or below) intelligence could obtain skills.
In short, Mathews was advocating dumbing down college, at least for some. If college is too hard, make it easier. Let us stretch up what used to be a perfectly good education for blue collar workers that was taught over 12 years (high school), and make it a 16 year program. Let us do less with more resources.
Sure, more electricians have some college. But that does not mean that the skills needed for that occupation require the high levels of cognitive skills and elaborate training traditionally associated with universities. True, higher paying jobs are held by persons with more education, in some cases because of the unique and valuable skills the persons learned in college (accounting, engineering, etc.), but very largely because college graduates are brighter, more responsible, more disciplined, etc., than non-college graduates. College is a sorting device, a way of providing information to employers as to who is reasonably likely to be good, smart, and motivated, as opposed to dull, mediocre and lazy.
What is needed are new screening mechanisms that will perform this sorting function at a lower price. Employers at virtually no cost get the benefits of tens of thousands of dollars spent by students demonstrating they have mastered a minimum level of competency, have at least average cognitive skills, etc. We need to move to a system of examinations, portfolios, internships, etc. that offer cheaper, alternative means of demonstrating competence. Maybe Underwriters Laboratories, J.D. Powers and Associates, or the ACT should go into the alternative certification of skills business --and save Americans a hundred billion dollars or so each year, with college left for the comparative small number of individuals who will be our nation's future leaders, persons who show extraordinary talent and knowledge through an extended educational experience. For the rest of the population, vocational schools and programs, as well as employer provided on-the-job training can provide the job-specific skills needed at far lower costs.
A few days ago, Jay Mathews, a reporter for the Washington Post advocated that all students need to go to college. He used a Education Week report to back up his view. According to the report, an increasing proportion of individuals in jobs like electricans have some college training, and that the jobs of tomorrow will almost all require postsecondary skills. He goes on to say that college does not necessary mean students all need to study calculus and physics and tough subjects like that to get in --he advocated a kinder and gentler college where kids of average (or below) intelligence could obtain skills.
In short, Mathews was advocating dumbing down college, at least for some. If college is too hard, make it easier. Let us stretch up what used to be a perfectly good education for blue collar workers that was taught over 12 years (high school), and make it a 16 year program. Let us do less with more resources.
Sure, more electricians have some college. But that does not mean that the skills needed for that occupation require the high levels of cognitive skills and elaborate training traditionally associated with universities. True, higher paying jobs are held by persons with more education, in some cases because of the unique and valuable skills the persons learned in college (accounting, engineering, etc.), but very largely because college graduates are brighter, more responsible, more disciplined, etc., than non-college graduates. College is a sorting device, a way of providing information to employers as to who is reasonably likely to be good, smart, and motivated, as opposed to dull, mediocre and lazy.
What is needed are new screening mechanisms that will perform this sorting function at a lower price. Employers at virtually no cost get the benefits of tens of thousands of dollars spent by students demonstrating they have mastered a minimum level of competency, have at least average cognitive skills, etc. We need to move to a system of examinations, portfolios, internships, etc. that offer cheaper, alternative means of demonstrating competence. Maybe Underwriters Laboratories, J.D. Powers and Associates, or the ACT should go into the alternative certification of skills business --and save Americans a hundred billion dollars or so each year, with college left for the comparative small number of individuals who will be our nation's future leaders, persons who show extraordinary talent and knowledge through an extended educational experience. For the rest of the population, vocational schools and programs, as well as employer provided on-the-job training can provide the job-specific skills needed at far lower costs.
Wednesday, June 20, 2007
NAICU and the US News Rankings
By Richard Vedder
During the meetings of the Spellings Commission, the group who most consistently opposed many of the proposed reforms was the National Association of Independent Colleges and Universities (NAICU), led by David Warren. In the recent revolt against the US News & World Report rankings, the battle again is being waged by NAICU member independent colleges.
The word is that NAICU is going to develop its own consumer friendly indicator of what is going on in the liberal arts colleges it represents, responding to the Spellings Commission. Other things equal, that is good. However, given to its resistance to change as personified by David Warren's constant attacks on the Commission's findings, I am frankly wondering if some of these schools are trying to kill the one form of information most parents read, and replace it was a bunch of information that provides less guidance to parents because it does not explicitly separate the excellent from the good, the fair from the poor.
Colleges increasingly find it hard to evaluate their students, preferring to give most students high grades. They complain when others evaluate them. Yet life is a series of evaluations, rankings, grades. Employers are consistently evaluating their employees, for example. As colleges get rich and complacent and their staff gets job security with little accountability, they shrink away from doing one of life's necessities -- identifying excellence and mediocrity. This is all the more reasons why we need to have an independently derived rankings system that is more outcomes rather than input based. Until then, I am a supporter of the US News rankings, for all the undesired effects they have on college spending --at least they are trying to serve consumers wanting the very best in higher educational services possible for their budgets and academic potential. But what is really needed is a better "bottom line" for higher education.
During the meetings of the Spellings Commission, the group who most consistently opposed many of the proposed reforms was the National Association of Independent Colleges and Universities (NAICU), led by David Warren. In the recent revolt against the US News & World Report rankings, the battle again is being waged by NAICU member independent colleges.
The word is that NAICU is going to develop its own consumer friendly indicator of what is going on in the liberal arts colleges it represents, responding to the Spellings Commission. Other things equal, that is good. However, given to its resistance to change as personified by David Warren's constant attacks on the Commission's findings, I am frankly wondering if some of these schools are trying to kill the one form of information most parents read, and replace it was a bunch of information that provides less guidance to parents because it does not explicitly separate the excellent from the good, the fair from the poor.
Colleges increasingly find it hard to evaluate their students, preferring to give most students high grades. They complain when others evaluate them. Yet life is a series of evaluations, rankings, grades. Employers are consistently evaluating their employees, for example. As colleges get rich and complacent and their staff gets job security with little accountability, they shrink away from doing one of life's necessities -- identifying excellence and mediocrity. This is all the more reasons why we need to have an independently derived rankings system that is more outcomes rather than input based. Until then, I am a supporter of the US News rankings, for all the undesired effects they have on college spending --at least they are trying to serve consumers wanting the very best in higher educational services possible for their budgets and academic potential. But what is really needed is a better "bottom line" for higher education.
Higher Education in Michigan
By Richard Vedder
No state in the Union was hammered harder by the 2001 recession and by globalization than Michigan, the home of America's automobile industry. For several years, Michigan had the nation's highest unemployment rate, and even negative economic growth. Consequently, the state legislature reduced appropriations to its colleges and universities significantly. To hear my Michigan friends (such as former University of Michigan president Jim Duderstadt) tell it, the university system was under unprecedented financial attack and quality education was endangered.
Now to the evidence. A few minutes ago (9:30 a.m. EDT) the Mackinac Center of Midland, Michigan, in cooperation with CCAP, released a new study prepared by Whiz Kid Matt Denhart and myself. It is a small prototype of broader studies of state higher ed systems we hope to do in cooperation with the State Policy Network and the Center for Higher Education Excellence over the coming year, utilizing our new uber researcher, Andy Gillen, the whiz kids, and myself.
What does the CCAP/Mackinac Center study say?
* Revenue data self-reported by the colleges to the U.S. Department of Education show that in real per student terms, resources available to the schools were generally rising in the early years of this decade, albeit perhaps less than the schools were accustomed to having them go up.
*There are vast differences in per student spending between Michigan's institutions of higher education. Some of it is explainable by large research grants and medical facilities at the flagship Ann Arbor campus of the U. of M., but some of these differences are less easy to explain. Why, for example, does Western Michigan University spend nearly 40 percent more per student than Central Michigan University? Do the more costly schools offer a better education? Who knows? Who cares? Where is the Michigan legislature and governor on investigating these differences?
*Despite allegedly highly stringent financial conditions, revenues rose more than expenditures in this depressed period, suggesting university cash balances actually increased.
The underlying IPEDS data used are not pristine in their accuracy and comparability, although they are reported by the schools themselves. And some institutions (Ferris State, for example) did not have spending increases in this era. And there are other issues not fully explored, such as why Michigan does not have a larger proportion of its adult population with college degrees, despite being generous in higher education funding over much of the least three decades. As a general rule, for example, Michigan spent more than fellow large Midwestern industrial state Illinois, but had fewer college graduates. Matt and I are exploring that relationship fuller. Stay tuned.
Kudos to Michael LaFaive and his colleagues at Mackinac for the professional job they have done on this study. They are great people to work with.
To see the new study, go to www.mackinac.org/8647
No state in the Union was hammered harder by the 2001 recession and by globalization than Michigan, the home of America's automobile industry. For several years, Michigan had the nation's highest unemployment rate, and even negative economic growth. Consequently, the state legislature reduced appropriations to its colleges and universities significantly. To hear my Michigan friends (such as former University of Michigan president Jim Duderstadt) tell it, the university system was under unprecedented financial attack and quality education was endangered.
Now to the evidence. A few minutes ago (9:30 a.m. EDT) the Mackinac Center of Midland, Michigan, in cooperation with CCAP, released a new study prepared by Whiz Kid Matt Denhart and myself. It is a small prototype of broader studies of state higher ed systems we hope to do in cooperation with the State Policy Network and the Center for Higher Education Excellence over the coming year, utilizing our new uber researcher, Andy Gillen, the whiz kids, and myself.
What does the CCAP/Mackinac Center study say?
* Revenue data self-reported by the colleges to the U.S. Department of Education show that in real per student terms, resources available to the schools were generally rising in the early years of this decade, albeit perhaps less than the schools were accustomed to having them go up.
*There are vast differences in per student spending between Michigan's institutions of higher education. Some of it is explainable by large research grants and medical facilities at the flagship Ann Arbor campus of the U. of M., but some of these differences are less easy to explain. Why, for example, does Western Michigan University spend nearly 40 percent more per student than Central Michigan University? Do the more costly schools offer a better education? Who knows? Who cares? Where is the Michigan legislature and governor on investigating these differences?
*Despite allegedly highly stringent financial conditions, revenues rose more than expenditures in this depressed period, suggesting university cash balances actually increased.
The underlying IPEDS data used are not pristine in their accuracy and comparability, although they are reported by the schools themselves. And some institutions (Ferris State, for example) did not have spending increases in this era. And there are other issues not fully explored, such as why Michigan does not have a larger proportion of its adult population with college degrees, despite being generous in higher education funding over much of the least three decades. As a general rule, for example, Michigan spent more than fellow large Midwestern industrial state Illinois, but had fewer college graduates. Matt and I are exploring that relationship fuller. Stay tuned.
Kudos to Michael LaFaive and his colleagues at Mackinac for the professional job they have done on this study. They are great people to work with.
To see the new study, go to www.mackinac.org/8647
Tuesday, June 19, 2007
The Higher Ed Act Renewal, Senate Style
By Richard Vedder
The renewal of the Higher Education Act is a huge enterprise, and Doug Lederman of Inside Higher Ed tells us that the proposed Senate bill is over 500 pages long. Considering that the 10 Commandments are about 100 words and the Gettysburg Address is 320, this 125,000 word or so bill will not win any awards for brevity, conciseness, clarity, etc.
If Doug is right, the good in this bill may out weigh the bad, although truly fundamental, important and, yes, radical reform of the type we embrace at CCAP is missing. On the negative side, perhaps, it abolishes NACIQI, the advisory board of the Secretary of Education that oversees accreditation, replacing it with a new board of the same size. Why? Congress wants to take control, appointing 10 of the 15 members. I worry about that from the standpoint of politicization and good governance, and am concerned Congress is trying to infringe on the functions of the executive branch. We elect a President to run the country, and the Democrats who control Congress may be using short-sighted policy means to increase their hand in battling President Bush and his appointed Education Secretary, Margaret Spellings. But in the very long list of Congressional sins, this one ranks pretty low.
The good seems to be that the Senate is embracing the principles of the Spellings Commission with respect to major increases in information reporting, and pushing colleges in the direction of telling real people (not just policy wonks and government bureaucrats) about outcomes-based measures of performance. That is a real plus. Is it enough? No. Can colleges probably thwart the law at least in part? Probably, yes. But it is a start. And if the colleges ignore it, they may do so at some political peril. Also a plus: the idea of a highly publicized watch list of schools that are raising their tuition fees a lot. Not a price control, it is simply a means of trying to shame and humiliate greedy and inefficient colleges (which, at the moment, is most of them).
The remarkable thing about higher ed legislation this year is that the Dems and GOP seem to agree in principle on a lot of big things, even though they disagree over other things. I am sick of the talk of what is the optimal administrative price (fee) that should be charged by student loan providers. The government should get out of that business entirely, or at the very least allow markets to play a role in fee determination. Pell Grant increases meet certain accessibility goals, but I am increasingly skeptical whether they have much positive impact, and repeat my view that too many, not too few, kids go to college anyhow. But for a bill coming from a committee headed by Edward Kennedy, it could be a lot worse. Maybe divided government isn't such a bad thing. As I once said, "three cheers for gridlock!"
The renewal of the Higher Education Act is a huge enterprise, and Doug Lederman of Inside Higher Ed tells us that the proposed Senate bill is over 500 pages long. Considering that the 10 Commandments are about 100 words and the Gettysburg Address is 320, this 125,000 word or so bill will not win any awards for brevity, conciseness, clarity, etc.
If Doug is right, the good in this bill may out weigh the bad, although truly fundamental, important and, yes, radical reform of the type we embrace at CCAP is missing. On the negative side, perhaps, it abolishes NACIQI, the advisory board of the Secretary of Education that oversees accreditation, replacing it with a new board of the same size. Why? Congress wants to take control, appointing 10 of the 15 members. I worry about that from the standpoint of politicization and good governance, and am concerned Congress is trying to infringe on the functions of the executive branch. We elect a President to run the country, and the Democrats who control Congress may be using short-sighted policy means to increase their hand in battling President Bush and his appointed Education Secretary, Margaret Spellings. But in the very long list of Congressional sins, this one ranks pretty low.
The good seems to be that the Senate is embracing the principles of the Spellings Commission with respect to major increases in information reporting, and pushing colleges in the direction of telling real people (not just policy wonks and government bureaucrats) about outcomes-based measures of performance. That is a real plus. Is it enough? No. Can colleges probably thwart the law at least in part? Probably, yes. But it is a start. And if the colleges ignore it, they may do so at some political peril. Also a plus: the idea of a highly publicized watch list of schools that are raising their tuition fees a lot. Not a price control, it is simply a means of trying to shame and humiliate greedy and inefficient colleges (which, at the moment, is most of them).
The remarkable thing about higher ed legislation this year is that the Dems and GOP seem to agree in principle on a lot of big things, even though they disagree over other things. I am sick of the talk of what is the optimal administrative price (fee) that should be charged by student loan providers. The government should get out of that business entirely, or at the very least allow markets to play a role in fee determination. Pell Grant increases meet certain accessibility goals, but I am increasingly skeptical whether they have much positive impact, and repeat my view that too many, not too few, kids go to college anyhow. But for a bill coming from a committee headed by Edward Kennedy, it could be a lot worse. Maybe divided government isn't such a bad thing. As I once said, "three cheers for gridlock!"
Monday, June 18, 2007
Spellings v. Congress
By Richard Vedder
Margaret Spellings is turning out to be pretty gutsy on one vital issue, higher education accreditation, and she is doing her darnest to implement the Spellings Commission recommendation that calls for more outcomes-based assessment. She wants to force accreditors (who depend on her for their accreditation) to demand this form of assessment.
Congress is now trying to stop this reform in its tracks. Both the Senate and House Education committees have said "don't implement new rules--or else." Sen. Alexander has threatened legislation that would curb the Secretary's powers.
Why is all of this happening? I would bet the family farm (if we had one) that the University and Accreditation Establishments are going to Congress and say "Spellings is forcing us to do things we don't want to do. Stop her." Now the Secretary faces a dilemma: does she go to war over this issue with the people who have the power to reduce her power and authority legislatively? I hope she keeps fighting, but I am very pessimistic about reform of the existing accreditation mechanism and long as lobbyists hold sway over Congress as they do now.
Margaret Spellings is turning out to be pretty gutsy on one vital issue, higher education accreditation, and she is doing her darnest to implement the Spellings Commission recommendation that calls for more outcomes-based assessment. She wants to force accreditors (who depend on her for their accreditation) to demand this form of assessment.
Congress is now trying to stop this reform in its tracks. Both the Senate and House Education committees have said "don't implement new rules--or else." Sen. Alexander has threatened legislation that would curb the Secretary's powers.
Why is all of this happening? I would bet the family farm (if we had one) that the University and Accreditation Establishments are going to Congress and say "Spellings is forcing us to do things we don't want to do. Stop her." Now the Secretary faces a dilemma: does she go to war over this issue with the people who have the power to reduce her power and authority legislatively? I hope she keeps fighting, but I am very pessimistic about reform of the existing accreditation mechanism and long as lobbyists hold sway over Congress as they do now.
The Demise of Antioch
By Richard Vedder
As I prepared to enter college in the late 1950s, I looked at a number of liberal arts colleges in the Midwest, along with a few in the East (e.g., Amherst, Haverford). The list of top ones in the Midwest included Carlton, Grinnell, Oberlin, Kenyon, Denison and DePauw. One school that also was considered respectable and important was Antioch College. Always a liberal, progressive school, Antioch went off the deep end in the 1960s and 1970s, engaging in social activism and opening campuses well beyond its home in Yellow Springs, Ohio. That apparently proved to be a recipe for disaster.
Some might think I would be celebrating Antioch's demise, as I do not have much of a taste for the highly politicized left-wing orientation promoted at that institution. However, I agree with Penn's Alan Charles Kors, who says that Antioch was honest and open about its left-wing activism, while most colleges try to have their cake and eat it to, espousing non-controversial or even conservative values in its catalogues and to its alumni, while following a decidedly biased liberal line to its students. Antioch wasn't two-faced, and is paying the price -- falling enrollments, weak alumni giving, etc.
It occurs to me that there is a disconnect between the view of colleges and universities by the donors (taxpayers, alums, etc.) and what the institutions actually do. They promote all sorts of politically correct policies most Americans would find inane or offensive. I hear that the residence life staff at my school had some sort of celebration of pornography last term. Kids who espouse pro-family or anti-gay beliefs are punished for their views. And so on. This is commonplace in academia. The alums are generally unaware of these developments. Alums (and Trustees) are to be seen and not heard, or so say the faculty and administration. That is unhealthy, it is dishonest, it is wrong. I suspect Antioch, by being honest and straightforward in the pursuit of its mission, hurt itself and its future, since the true demand for expensive radical colleges is pretty small. But I respect its honesty more than the dishonesty of many more prosperous institutions that practice a water downed and stealth version of Antioch's progressivism. And I am saddened that we are losing one of the more colorful members of the vibrantly diverse set of institutions that constitute American higher education.
As I prepared to enter college in the late 1950s, I looked at a number of liberal arts colleges in the Midwest, along with a few in the East (e.g., Amherst, Haverford). The list of top ones in the Midwest included Carlton, Grinnell, Oberlin, Kenyon, Denison and DePauw. One school that also was considered respectable and important was Antioch College. Always a liberal, progressive school, Antioch went off the deep end in the 1960s and 1970s, engaging in social activism and opening campuses well beyond its home in Yellow Springs, Ohio. That apparently proved to be a recipe for disaster.
Some might think I would be celebrating Antioch's demise, as I do not have much of a taste for the highly politicized left-wing orientation promoted at that institution. However, I agree with Penn's Alan Charles Kors, who says that Antioch was honest and open about its left-wing activism, while most colleges try to have their cake and eat it to, espousing non-controversial or even conservative values in its catalogues and to its alumni, while following a decidedly biased liberal line to its students. Antioch wasn't two-faced, and is paying the price -- falling enrollments, weak alumni giving, etc.
It occurs to me that there is a disconnect between the view of colleges and universities by the donors (taxpayers, alums, etc.) and what the institutions actually do. They promote all sorts of politically correct policies most Americans would find inane or offensive. I hear that the residence life staff at my school had some sort of celebration of pornography last term. Kids who espouse pro-family or anti-gay beliefs are punished for their views. And so on. This is commonplace in academia. The alums are generally unaware of these developments. Alums (and Trustees) are to be seen and not heard, or so say the faculty and administration. That is unhealthy, it is dishonest, it is wrong. I suspect Antioch, by being honest and straightforward in the pursuit of its mission, hurt itself and its future, since the true demand for expensive radical colleges is pretty small. But I respect its honesty more than the dishonesty of many more prosperous institutions that practice a water downed and stealth version of Antioch's progressivism. And I am saddened that we are losing one of the more colorful members of the vibrantly diverse set of institutions that constitute American higher education.
Saturday, June 16, 2007
Evidence Makes Me Radical
By Richard Vedder
I started thinking seriously about higher education issues about a decade ago, and expressed my initial thoughts in a Wall Street Journal op-ed piece. A few years and several iterations on my initial thoughts later, I embarked on writing Going Broke By Degree for the American Enterprise Institute. Three years later, after serving on the Spellings Commission and starting the Center for College Affordability and Productivity (CCAP), my views on higher ed have continued to evolve.
Usually, the more you study something, the more moderate you become. The simple radical solutions prove to be impractical, infeasible, or not so simple as originally thought. My evolution, however, has been rather different --I have become more, not less, radicalized in my view that fundamental reform is needed in higher education. This viewed has evolved not because of some sort of ideological change of life, or a quasi-religious conversion of some sort. It has come from running regression models -- studying the evidence. The more evidence that I see that I believe is creditable and meaningful, the more I am convinced of the following:
* Too many students, not too few, are going to college;
* College and universities are extremely inefficient, and at the marginal public spending on them more likely lowers rather than raises economic growth;
* The federal financial aid programs have contributed to raising higher education costs, lowering efficiency, and increasing corruption within higher education --and done precious little good, sending few more kids to college than would have gone anyway (which, given the first point, is not all bad);
* Colleges and universities often violate an implicit contract with their donors in the way they allocate resources, very often paying scant attention to the needs of the undergraduate students who typically are their bread and butter;
*People need knowledge and skills more than ever, but alternative forms of providing those skills, such as vocational schools and on-the-job training are often superior and lower cost options.
*A greater percentage of entering college students should be attending community colleges, moving up to four year universities only if they succeed well at the community college level.
This is a blog, not a book, so I will stop here. Other things could be discussed, such as the fact that falling teaching loads and exploding salaries suggest the higher ed community on average is collecting "economic rents" --unnecessarily high payments --from their patrons. Stay tuned as CCAP enters its second year poised to raise a bigger fuss over the way our colleges and universities do business.
I started thinking seriously about higher education issues about a decade ago, and expressed my initial thoughts in a Wall Street Journal op-ed piece. A few years and several iterations on my initial thoughts later, I embarked on writing Going Broke By Degree for the American Enterprise Institute. Three years later, after serving on the Spellings Commission and starting the Center for College Affordability and Productivity (CCAP), my views on higher ed have continued to evolve.
Usually, the more you study something, the more moderate you become. The simple radical solutions prove to be impractical, infeasible, or not so simple as originally thought. My evolution, however, has been rather different --I have become more, not less, radicalized in my view that fundamental reform is needed in higher education. This viewed has evolved not because of some sort of ideological change of life, or a quasi-religious conversion of some sort. It has come from running regression models -- studying the evidence. The more evidence that I see that I believe is creditable and meaningful, the more I am convinced of the following:
* Too many students, not too few, are going to college;
* College and universities are extremely inefficient, and at the marginal public spending on them more likely lowers rather than raises economic growth;
* The federal financial aid programs have contributed to raising higher education costs, lowering efficiency, and increasing corruption within higher education --and done precious little good, sending few more kids to college than would have gone anyway (which, given the first point, is not all bad);
* Colleges and universities often violate an implicit contract with their donors in the way they allocate resources, very often paying scant attention to the needs of the undergraduate students who typically are their bread and butter;
*People need knowledge and skills more than ever, but alternative forms of providing those skills, such as vocational schools and on-the-job training are often superior and lower cost options.
*A greater percentage of entering college students should be attending community colleges, moving up to four year universities only if they succeed well at the community college level.
This is a blog, not a book, so I will stop here. Other things could be discussed, such as the fact that falling teaching loads and exploding salaries suggest the higher ed community on average is collecting "economic rents" --unnecessarily high payments --from their patrons. Stay tuned as CCAP enters its second year poised to raise a bigger fuss over the way our colleges and universities do business.
Wednesday, June 13, 2007
The Good, The Bad, and the Ugly
By Richard Vedder
The House Education Committee has come up with a major piece of higher education legislation. It still needs to be voted on, but House approval is highly likely. It is provocative and has a few good things in it, some bad things, and some really ugly things. It is not over until it is over, and lots of changes will occur when the Senate looks at the bill, but let us make a few comments on the legislation as it now stands, based on news accounts.
As to the good, the bill does call for more reporting of easy to understand data on college expenditures, dropout rates, etc., which in principle is good, although if it is a costly mandate that has little real impact on consumers (because it is not easily accessible information to the public), the provision is more dubious in value.
As to the bad, where do I start? The increase in Pell Grants is a way to increase our commitment to access for all, but this legislation does not cut the ties between college financial aid offices and the grant provider, does not convert the program into a full voucher system, and may merely increase incentives for colleges to raise tuition. The cutting of fees for private lenders is a populistic move, a typical "rob the rich to give to the poor" effort. Ideally, fees should be set through a competitive bidding process, not mandated by legislation (more ideally, the Feds should get out of the loan business). The loan forgiveness provisions for people who take public service jobs distorts labor market decisions and says some jobs are "good" and worthy of subsidy, and other jobs, notably in the greedy and nefarious private sector (which creates virtually all our nation's wealth) are less good. That is bunk.
Downright ugly is the bonehead notion that LEAP funds provided to various states for higher ed should be reduced if state governments do not not keep up higher education appropriations. Matt Denhart and I have spent the day running regressions showing state appropriations have nothing to do with college graduation attainment rates. Jonathan Leirer and I have made a similar argument regarding appropriations and economic growth --indeed, the relationship may well be negative. State appropriations for higher ed arguably are too high, not too low. There is also a broader political principle involved. Why should the Feds tell states what to do? It undermines federalism, leads to distortions in political decisions, etc.
The one provision that is particularly interesting at CCAP is the idea of tying Pell Grant aid, etc., for colleges to their willingness to keep costs down. I have mixed feelings about it. College presidents yell "price controls," and "interference in markets" when government tries to control tuition increases, and these are arguments that usually evoke sympathy from me. Yet higher education is NOT a free market, and is filled with government interferences. If you are going to be a public supplicant, you have to put up with some controls. Putting pressures on schools to reduce tuition increases is not a bad thing, although I worry about increased federal interference in an already highly inefficient enterprise, higher education. The system of colleges has benefited from its diversity, its relative freedom from central control, and reducing that freedom comes at a potentially high price.
The House Education Committee has come up with a major piece of higher education legislation. It still needs to be voted on, but House approval is highly likely. It is provocative and has a few good things in it, some bad things, and some really ugly things. It is not over until it is over, and lots of changes will occur when the Senate looks at the bill, but let us make a few comments on the legislation as it now stands, based on news accounts.
As to the good, the bill does call for more reporting of easy to understand data on college expenditures, dropout rates, etc., which in principle is good, although if it is a costly mandate that has little real impact on consumers (because it is not easily accessible information to the public), the provision is more dubious in value.
As to the bad, where do I start? The increase in Pell Grants is a way to increase our commitment to access for all, but this legislation does not cut the ties between college financial aid offices and the grant provider, does not convert the program into a full voucher system, and may merely increase incentives for colleges to raise tuition. The cutting of fees for private lenders is a populistic move, a typical "rob the rich to give to the poor" effort. Ideally, fees should be set through a competitive bidding process, not mandated by legislation (more ideally, the Feds should get out of the loan business). The loan forgiveness provisions for people who take public service jobs distorts labor market decisions and says some jobs are "good" and worthy of subsidy, and other jobs, notably in the greedy and nefarious private sector (which creates virtually all our nation's wealth) are less good. That is bunk.
Downright ugly is the bonehead notion that LEAP funds provided to various states for higher ed should be reduced if state governments do not not keep up higher education appropriations. Matt Denhart and I have spent the day running regressions showing state appropriations have nothing to do with college graduation attainment rates. Jonathan Leirer and I have made a similar argument regarding appropriations and economic growth --indeed, the relationship may well be negative. State appropriations for higher ed arguably are too high, not too low. There is also a broader political principle involved. Why should the Feds tell states what to do? It undermines federalism, leads to distortions in political decisions, etc.
The one provision that is particularly interesting at CCAP is the idea of tying Pell Grant aid, etc., for colleges to their willingness to keep costs down. I have mixed feelings about it. College presidents yell "price controls," and "interference in markets" when government tries to control tuition increases, and these are arguments that usually evoke sympathy from me. Yet higher education is NOT a free market, and is filled with government interferences. If you are going to be a public supplicant, you have to put up with some controls. Putting pressures on schools to reduce tuition increases is not a bad thing, although I worry about increased federal interference in an already highly inefficient enterprise, higher education. The system of colleges has benefited from its diversity, its relative freedom from central control, and reducing that freedom comes at a potentially high price.
Tuesday, June 12, 2007
The Myth About Attaining a College Degree
By Richard Vedder and Matt Denhart
We have been running regressions trying to explain state variations in the proportion of adults with college degrees. The range is considerable -- from less than 16 percent in West Virginia to more than 40 percent in Massachusetts. Why the huge variation? Is it related to taxpayer support for higher education?
The answer to the last question is clearly "no." The correlation between state appropriations (averaged over the past two decades or so) and adult college attainment rates is not statistically significant (although it is positive). The most important factor in explaining variations is income. Rich states have more college graduates (the debate: which is cause and which is effect). But here is a shocker: the larger the proportion of students in private colleges and universities, the larger the proportion of college graduates, although the result is only weakly significant statistically. States with high proportions of college graduates like Massachusetts tend to have relatively weak state university systems.
We are expanding our search for understanding of this issue, and our current findings are subject to revision as research proceeds. By and large, however, the notion that vast state appropriations are needed to obtain a college educated adult population does not seem supported by the statistical evidence.
We have been running regressions trying to explain state variations in the proportion of adults with college degrees. The range is considerable -- from less than 16 percent in West Virginia to more than 40 percent in Massachusetts. Why the huge variation? Is it related to taxpayer support for higher education?
The answer to the last question is clearly "no." The correlation between state appropriations (averaged over the past two decades or so) and adult college attainment rates is not statistically significant (although it is positive). The most important factor in explaining variations is income. Rich states have more college graduates (the debate: which is cause and which is effect). But here is a shocker: the larger the proportion of students in private colleges and universities, the larger the proportion of college graduates, although the result is only weakly significant statistically. States with high proportions of college graduates like Massachusetts tend to have relatively weak state university systems.
We are expanding our search for understanding of this issue, and our current findings are subject to revision as research proceeds. By and large, however, the notion that vast state appropriations are needed to obtain a college educated adult population does not seem supported by the statistical evidence.
Friday, June 08, 2007
Kudos to Wick Sloane and Welcome Andy Gillen
By Richard Vedder
Wick Sloane
Wick Sloane is one of the most innovative thinkers in higher education. He thinks outside the box and asks important questions. He has asked, for example, why are all courses roughly the same length? Why don't we give 2.5 credits for some bits of knowledge, 1.2 credits for others? Why don't we teach smaller bits of knowledge for smaller amounts of credit? Or, on another topic, why don't we look at tax exemptions in terms of their "Pell Grant equivalency?"
The estimable Hechinger Institute on Education and the Media at Columbia University has awarded Wick a fellowship for the coming year to explore issues relating to community colleges. Columbia has chosen well; we have used Wick in the past to do a "perspectives" piece for us, and as our resources slowly expand, we hope to use him again very soon. Three cheers for Wick Sloane!!
Andrew Gillen
One of the joys of being a college professor is seeing your "output" --your students --mature, improve, and do great things as they enter adulthood. Thus I am bursting with joy at the fact that Andy Gillen is joining CCAP. Andy studied economics with me at Ohio University, and is finishing his Ph.D. at Florida State, where my buddies on the faculty have told me he has done just fine. He is working in a fascinating new area --experimental economics-- and brings research skills and common sense to CCAP. Bryan O'Keefe and I are looking forward to working with him, and we are taking him to dinner next week to celebrate his coronation as CCAP's first research director. Andy may have taken the job with us because his girlfriend lives in DC, so possibly his hormones overcame his brains in making this vocational decision to join CCAP, but, whatever the case, we are delighted to have him on board!
Wick Sloane
Wick Sloane is one of the most innovative thinkers in higher education. He thinks outside the box and asks important questions. He has asked, for example, why are all courses roughly the same length? Why don't we give 2.5 credits for some bits of knowledge, 1.2 credits for others? Why don't we teach smaller bits of knowledge for smaller amounts of credit? Or, on another topic, why don't we look at tax exemptions in terms of their "Pell Grant equivalency?"
The estimable Hechinger Institute on Education and the Media at Columbia University has awarded Wick a fellowship for the coming year to explore issues relating to community colleges. Columbia has chosen well; we have used Wick in the past to do a "perspectives" piece for us, and as our resources slowly expand, we hope to use him again very soon. Three cheers for Wick Sloane!!
Andrew Gillen
One of the joys of being a college professor is seeing your "output" --your students --mature, improve, and do great things as they enter adulthood. Thus I am bursting with joy at the fact that Andy Gillen is joining CCAP. Andy studied economics with me at Ohio University, and is finishing his Ph.D. at Florida State, where my buddies on the faculty have told me he has done just fine. He is working in a fascinating new area --experimental economics-- and brings research skills and common sense to CCAP. Bryan O'Keefe and I are looking forward to working with him, and we are taking him to dinner next week to celebrate his coronation as CCAP's first research director. Andy may have taken the job with us because his girlfriend lives in DC, so possibly his hormones overcame his brains in making this vocational decision to join CCAP, but, whatever the case, we are delighted to have him on board!
Wednesday, June 06, 2007
Lederman's Lament
By Richard Vedder
One of the very best, if not THE best, reporters on higher education today is INSIDE HIGHER ED's editor and part-owner (I think) Doug Lederman. He has written a superb column for today's edition of his electronic newspaper that is must reading for anyone interested in higher education.
Doug points out that the potential conflict of interest problems that have come to the surface with the student loan scandal may only be the tip of the iceberg. Universities interface with vendors and commercial interests all over the campus community. Harvard's former president Derek Bok wrote a good book about it a few years ago with respect to the possible problems associated with corporate sponsorship of research. In selective admissions schools where the quantity of services demanded far outstrips the quantity supplied at the stated price, there are enormous incentives for bribes and kickbacks. Dan Golden has written about institutional kickbacks and preferential policies, but I wonder if there are admissions officials who have attained a good deal of personal enrichment? Are there IT administrators who have been enriched by favoring certain vendors? Whenever money is dropped out of airplanes (or the equivalent) to support something, human nature is such that some of the funds get illegitimately diverted into the pocketbooks of key personnel. Sometimes it is done legally (if not always productively) as well --there is a positive correlation between salary increases over time for professors and the degree of grant funding from the federal government, for example.
Since public funds are heavily involved, it could be argued that theft of university funds is equivalent of theft of public monies, and should be treated the same way. Universities that cover up or bury acts of malfeasance should face criminal sanctions or --more potent --loss of accreditation, the ability to participate in student loan or research grant programs, and/or the loss of tax exempt status. Hit them hard in the pocketbook, and institutional efforts to ferret out dishonesty will grow and might bear some fruit.
Having said all of this, however, we return to the old dilemma. Federal intrusion into university affairs seldom have a happy result. The strength in our system of higher education is its institutional diversity. Each school can seek its own destiny. Yet federal money is corrupting that principle. If schools want dollars from the Feds, they have to be willing to become quasi-public institutions subject to rules and regulations designed to minimize waste, fraud and abuse, and at the same time they have to be transparent and accountable. The solution? The gradual defunding of higher education from taxpayer sources. Have American higher education move towards the Hillsdale College model. Then corruption becomes a private problem, without widespread ramifications for public policy.
One of the very best, if not THE best, reporters on higher education today is INSIDE HIGHER ED's editor and part-owner (I think) Doug Lederman. He has written a superb column for today's edition of his electronic newspaper that is must reading for anyone interested in higher education.
Doug points out that the potential conflict of interest problems that have come to the surface with the student loan scandal may only be the tip of the iceberg. Universities interface with vendors and commercial interests all over the campus community. Harvard's former president Derek Bok wrote a good book about it a few years ago with respect to the possible problems associated with corporate sponsorship of research. In selective admissions schools where the quantity of services demanded far outstrips the quantity supplied at the stated price, there are enormous incentives for bribes and kickbacks. Dan Golden has written about institutional kickbacks and preferential policies, but I wonder if there are admissions officials who have attained a good deal of personal enrichment? Are there IT administrators who have been enriched by favoring certain vendors? Whenever money is dropped out of airplanes (or the equivalent) to support something, human nature is such that some of the funds get illegitimately diverted into the pocketbooks of key personnel. Sometimes it is done legally (if not always productively) as well --there is a positive correlation between salary increases over time for professors and the degree of grant funding from the federal government, for example.
Since public funds are heavily involved, it could be argued that theft of university funds is equivalent of theft of public monies, and should be treated the same way. Universities that cover up or bury acts of malfeasance should face criminal sanctions or --more potent --loss of accreditation, the ability to participate in student loan or research grant programs, and/or the loss of tax exempt status. Hit them hard in the pocketbook, and institutional efforts to ferret out dishonesty will grow and might bear some fruit.
Having said all of this, however, we return to the old dilemma. Federal intrusion into university affairs seldom have a happy result. The strength in our system of higher education is its institutional diversity. Each school can seek its own destiny. Yet federal money is corrupting that principle. If schools want dollars from the Feds, they have to be willing to become quasi-public institutions subject to rules and regulations designed to minimize waste, fraud and abuse, and at the same time they have to be transparent and accountable. The solution? The gradual defunding of higher education from taxpayer sources. Have American higher education move towards the Hillsdale College model. Then corruption becomes a private problem, without widespread ramifications for public policy.
Tuesday, June 05, 2007
Laureate Education's Buyout and For Profit Education
By Richard Vedder
Many educational traditionalists have thought that the for-profit higher education "fad" had peaked. After all, market leader Apollo (University of Phoenix) had slumping stock prices last year, amidst some questionable accounting practices and sharply slowing growth rates in enrollments. The feeling seems to be growing that the for-profit school market was becoming saturated. I have been skeptical of that argument, and markets are suggesting that there is plenty of life left in for-profit education.
This all came back into mind yesterday when I read in the Wall Street Journal (p. C3) that "Laureate Accepts Sweetened Buyout Bid." Laureate Education is the former Sylvan Learning Systems, and now has more than 262,000 students studying on its on-campus and on-line programs. The management of the company wants to buy out the stockholders --in a $3.82 billion buyout.
What is interesting about the price is that it represents close to 40 times the current annual earnings of the company -- a very high P-E ratio, one usually reserved for "hot" high tech stocks with extremely bright futures. In 2004, the company made $62 million on sales of $648 million, in 2005 it made $75 million on sales of $875 million, and in 2006 it made over $105 million on sales of $1.146 billion. This is not the sign of a company in decline, or one beginning to stagnate.
Not only are publicly traded companies expanding, but so are private firms not traded on stock exchanges (and the Sarbanes-Oxley law is providing perverse incentives for public firms to go private, as Laureate is proposing to do). I have worked with a couple of innovative firms that are booming, not only in the U.S. market but also abroad. Small liberal arts colleges are being bought by for-profits trying to get accreditation and using that to expand greatly, mainly on-line but also through on-site learning centers. The far greater efficiency inherent in market-based forms of educational delivery are increasingly allowing the for profits to compete head on with government or privately subsidized not-for-profit institutions. This is a trend that is to be applauded, not feared, as it introduces much needed competition into American higher education.
Many educational traditionalists have thought that the for-profit higher education "fad" had peaked. After all, market leader Apollo (University of Phoenix) had slumping stock prices last year, amidst some questionable accounting practices and sharply slowing growth rates in enrollments. The feeling seems to be growing that the for-profit school market was becoming saturated. I have been skeptical of that argument, and markets are suggesting that there is plenty of life left in for-profit education.
This all came back into mind yesterday when I read in the Wall Street Journal (p. C3) that "Laureate Accepts Sweetened Buyout Bid." Laureate Education is the former Sylvan Learning Systems, and now has more than 262,000 students studying on its on-campus and on-line programs. The management of the company wants to buy out the stockholders --in a $3.82 billion buyout.
What is interesting about the price is that it represents close to 40 times the current annual earnings of the company -- a very high P-E ratio, one usually reserved for "hot" high tech stocks with extremely bright futures. In 2004, the company made $62 million on sales of $648 million, in 2005 it made $75 million on sales of $875 million, and in 2006 it made over $105 million on sales of $1.146 billion. This is not the sign of a company in decline, or one beginning to stagnate.
Not only are publicly traded companies expanding, but so are private firms not traded on stock exchanges (and the Sarbanes-Oxley law is providing perverse incentives for public firms to go private, as Laureate is proposing to do). I have worked with a couple of innovative firms that are booming, not only in the U.S. market but also abroad. Small liberal arts colleges are being bought by for-profits trying to get accreditation and using that to expand greatly, mainly on-line but also through on-site learning centers. The far greater efficiency inherent in market-based forms of educational delivery are increasingly allowing the for profits to compete head on with government or privately subsidized not-for-profit institutions. This is a trend that is to be applauded, not feared, as it introduces much needed competition into American higher education.
Attainment Honor Roll
By: Matt Denhart
Table 1: State Attainment Honor Roll
As schools are letting out for the summer, it’s appropriate for us to announce our CCAP state college attainment honor roll. By "college attainment" we are referring to the percentage of the population age 25 or more with at least bachelor degrees. These states, as listed in the accompanying table, are the top 10 in attainment during 2005. Accompanying each state’s attainment is its corresponding rank of per capita appropriations to higher education in the year 2005 and historically relative to the other 49 states. What is most remarkable is that not a single top 10 state in terms of attainment had appropriations spending in the top 10, and a majority not even in the top half of states.
As many may argue, state appropriations take time to come to produce results in the form of graduates. To compensate for this time lag we took not only a spending rank for 2005, but also calculated an average rank based on appropriations rankings in 1975, 1985, 1995 and 2005. This historical average ranking actually accents the low spending standing of the majority of honor roll states. As a whole the honor roll states average a spending rank of 31.5 (spending below the median or average), while the bottom ten states in the U.S. average a spending rank of 25th. The better performing states spend on average significantly less. This seems to call into question the hypothesis that increased spending augments state college attainment percentages.
Certainly there are a few exceptions; Minnesota, Washington and California have both historically had relatively high attainment concurrently with higher spending. Yet more striking are those states that appear to have high attainment and low spending. Take Massachusetts, Vermont and New Hampshire for example. All have spending historically in the bottom 10 in the nation while among tops in attainment. Throw Colorado into the mix, and you see 4 states in 2005 that were tops in attainment and the bottom 4 in appropriations spending to higher education. These states clearly demonstrate the flaw in equating higher spending with more graduation success. In fact, my own research seems to call into question any significant relationship between appropriations and attainment at all. Perhaps there are other and better ways to spend these tax dollars to bolster a state’s attainment.
Many will argue that attainment is greatly affected by population migration and cultural factors, and this is the reason for higher attainment in some states relative to others, regardless of appropriations spending. That very well may be case, as skilled and educated workers move to states with better and more skilled labor opportunities. Still, this introduces another question: are some of our high spending states educating students who then migrate out of the state directly upon graduation? While state governments certainly have an obligation to provide for the education of their citizens, are they still justified in such high spending if they are in fact financing the future of other states?
Iowa is one interesting case study. The Hawkeye state has the lowest attainment of any of her six bordering states, while also ranking highest in per capita appropriations with the sole exception of Nebraska. Is Iowa funding the education the Midwest’s future? This is an interesting topic to be further explored and discussed.
Table 1: State Attainment Honor Roll
As schools are letting out for the summer, it’s appropriate for us to announce our CCAP state college attainment honor roll. By "college attainment" we are referring to the percentage of the population age 25 or more with at least bachelor degrees. These states, as listed in the accompanying table, are the top 10 in attainment during 2005. Accompanying each state’s attainment is its corresponding rank of per capita appropriations to higher education in the year 2005 and historically relative to the other 49 states. What is most remarkable is that not a single top 10 state in terms of attainment had appropriations spending in the top 10, and a majority not even in the top half of states.
As many may argue, state appropriations take time to come to produce results in the form of graduates. To compensate for this time lag we took not only a spending rank for 2005, but also calculated an average rank based on appropriations rankings in 1975, 1985, 1995 and 2005. This historical average ranking actually accents the low spending standing of the majority of honor roll states. As a whole the honor roll states average a spending rank of 31.5 (spending below the median or average), while the bottom ten states in the U.S. average a spending rank of 25th. The better performing states spend on average significantly less. This seems to call into question the hypothesis that increased spending augments state college attainment percentages.
Certainly there are a few exceptions; Minnesota, Washington and California have both historically had relatively high attainment concurrently with higher spending. Yet more striking are those states that appear to have high attainment and low spending. Take Massachusetts, Vermont and New Hampshire for example. All have spending historically in the bottom 10 in the nation while among tops in attainment. Throw Colorado into the mix, and you see 4 states in 2005 that were tops in attainment and the bottom 4 in appropriations spending to higher education. These states clearly demonstrate the flaw in equating higher spending with more graduation success. In fact, my own research seems to call into question any significant relationship between appropriations and attainment at all. Perhaps there are other and better ways to spend these tax dollars to bolster a state’s attainment.
Many will argue that attainment is greatly affected by population migration and cultural factors, and this is the reason for higher attainment in some states relative to others, regardless of appropriations spending. That very well may be case, as skilled and educated workers move to states with better and more skilled labor opportunities. Still, this introduces another question: are some of our high spending states educating students who then migrate out of the state directly upon graduation? While state governments certainly have an obligation to provide for the education of their citizens, are they still justified in such high spending if they are in fact financing the future of other states?
Iowa is one interesting case study. The Hawkeye state has the lowest attainment of any of her six bordering states, while also ranking highest in per capita appropriations with the sole exception of Nebraska. Is Iowa funding the education the Midwest’s future? This is an interesting topic to be further explored and discussed.
Hurray for Rateyourprofessor.com!!
By Richard Vedder
Historically, I have been somewhat negative or at least ambivalent about student evaluations of professors. Students sometimes literally do not know who is a good teacher at the time they are taking a course, and sometimes are excessively swayed by the professor's ease of grading. It is not entirely an accident that grade inflation in America roughly began when student evaluations came into vogue 35 years or so ago.
On the flip side of that, however, there is little accountability in higher education, and student evaluations are one form. They convey information -- information that is useful to student consumers of products. And, by and large, the students seem to get it right. They like the professors who take teaching seriously, who know their subject, and devote time to helping students learn and transition into the adult world.
Professors often are especially furious with the rateyourprofessor.com web site. The rankings typically reflect small, non-random samples of students --often several years old, I suspect. Yet, as today's Inside Higher Education reveals, the correlation between these flawed evaluations and more comprehensive official evaluations is quite high. My own reading is that, by and large, the students with high evaluations on rateyourprofessor.com are pretty good, and the ones with low evaluations are pretty mediocre or bad. For some strange reason, I get extremely high (4.9 out of a possible 5) average evaluations on this site, and am even "hot", a particularly cherished designation I am told. Maybe this is further evidence of how flawed the evaluation system is, and maybe biases me in favor of this popular Web site.
In short, the evaluations are an attempt to create a "bottom line". Just as USNews rates colleges, and Consumer Reports rates autos and appliance, so rateyourprofessor.com rates professors. It is a legitimate attempt to convey information to students about the relative attractiveness of faculty. On the whole, I think it does more good than bad, and the principle of student evaluations probably should be extended further, including more systematic evaluation of university and college leaders by members of the university or college community.
Historically, I have been somewhat negative or at least ambivalent about student evaluations of professors. Students sometimes literally do not know who is a good teacher at the time they are taking a course, and sometimes are excessively swayed by the professor's ease of grading. It is not entirely an accident that grade inflation in America roughly began when student evaluations came into vogue 35 years or so ago.
On the flip side of that, however, there is little accountability in higher education, and student evaluations are one form. They convey information -- information that is useful to student consumers of products. And, by and large, the students seem to get it right. They like the professors who take teaching seriously, who know their subject, and devote time to helping students learn and transition into the adult world.
Professors often are especially furious with the rateyourprofessor.com web site. The rankings typically reflect small, non-random samples of students --often several years old, I suspect. Yet, as today's Inside Higher Education reveals, the correlation between these flawed evaluations and more comprehensive official evaluations is quite high. My own reading is that, by and large, the students with high evaluations on rateyourprofessor.com are pretty good, and the ones with low evaluations are pretty mediocre or bad. For some strange reason, I get extremely high (4.9 out of a possible 5) average evaluations on this site, and am even "hot", a particularly cherished designation I am told. Maybe this is further evidence of how flawed the evaluation system is, and maybe biases me in favor of this popular Web site.
In short, the evaluations are an attempt to create a "bottom line". Just as USNews rates colleges, and Consumer Reports rates autos and appliance, so rateyourprofessor.com rates professors. It is a legitimate attempt to convey information to students about the relative attractiveness of faculty. On the whole, I think it does more good than bad, and the principle of student evaluations probably should be extended further, including more systematic evaluation of university and college leaders by members of the university or college community.
Saturday, June 02, 2007
CCAP At Its First Birthday
By Richard Vedder
The Center for College Affordability and Productivity (CCAP) is now one year old. I officially started getting paid on June 15 of last year, but the entity actually began a bit before that. I am not one to toot my own horn, but a review of a few accomplishments of the past year is in order, as well as a brief discussion of future plans.
Over the last year, we have assembled a small but agile team (myself, Bryan O'Keefe, and the "Whiz Kids", mainly Jonathan Leirer and Matt Denhart). We have relied on several volunteer and paid consultants, starting with Brian Fruchey but including others, including my colleague Tony Caporale, and the late Arthur Beroz.
Our blog output is almost precisely one blog per work day for the year. Volume of readers has grown. A highlight of the year was when one reader who comments often, "the cowboy," actually came well over one thousand miles to visit us in Ohio. While I have done a majority of the blogs, increasing numbers are being done by others, especially Bryan.
We have had op-eds appear in a variety of newspapers. I have appeared on national TV, most prominently in a Fox News Special on higher ed (with Newt Gingrich), but also elsewhere, including the ABC Nightly News with Charles Gibson. We have published electronically a couple of longer commentaries, and are finishing up a joint study on Michigan higher education with the Mackinac Center, Michigan's premier public policy think tank. We had a great conference on higher education in the post-Spellings Commission era, keynoted by remarks by Secretary of Education Spellings herself. I have appeared on panels and discussions from Boston to the San Francisco bay region. I have participated in several post-Spellings Commissions meetings of importance. All told, it has been a very good year.
In the coming year, our goal is to ramp up our research and publications. To facilitate that, we will be adding Andy Gillen, who is finishing up his Ph.D. in economics at Florida State, to our staff in two weeks. Andy will serve as our Research Director, overseeing the research of the Whiz Kids, and doing several things of his own. The biggest single project will be to engage in state-specific research. With the assistance of the Pope Foundation, we will look a good deal at North Carolina. Our most exciting project, funded by the Center for Higher Education Excellence, is being done in cooperation with the State Policy Network. We will be researching the higher education systems of several states, although the details are still being worked out. State think tanks will compete for the right to have us do a study, which we will then publish jointly with them. With assistance from the Bradley Foundation, Andy will supervise some additional in depth studies, probably done by outside scholars.
With help again from the Center for Higher Education Excellence, Bryan will be doing a study more fully analyzing the role and ramifications of the monumental Duke v. Griggs Power court case on American higher education, here working in tandem with our friends at the Pope Center in North Carolina. We will be doing more conferences (tentatively, one on accreditation in cooperation with the American Enterprise Institute -AEI- this fall). We will be exploring further the issue of over investment in higher education, and debunking the notion that incremental public spending on higher education in its current form has high pay offs. We will weigh in more on the whole question of student loans, arguing that the nation would be well served if the federal government disengages from this area.
We owe debts to many people and organizations, beginning with the Searle Freedom Trust (SFT) and its benefactor Dan Searle, who put us on the map. Kim Dennis of SFT is our Mother Superior and great friend, assisted ably by Courtney Myers. The Koch Foundation has assisted us by paying for a majority of Andy's salary for the coming year. Fred Fransen has become a good friend, along with our pals in North Carolina, George Leef, Dave Riggs, and, now, Jane Shaw. AEI has worked cooperatively with us. A special friend is Anne Neal, whose American Council of Trustees and Alumni is one of the real positive reform voices in higher education.
Personally, the best thing of all for me is meeting great people and working with them. Bryan O'Keefe is awesome, and his forthcoming wedding in September will be the social event of the forthcoming year. I have had the best student helpers you could ask for, and I will especially miss Jonathan Leirer, who is going off to Florida State to get a Ph.D. in economics.
Enough is enough. This had been a great first year, and we anticipate growth and excitement to mount as we mature in the year ahead.
The Center for College Affordability and Productivity (CCAP) is now one year old. I officially started getting paid on June 15 of last year, but the entity actually began a bit before that. I am not one to toot my own horn, but a review of a few accomplishments of the past year is in order, as well as a brief discussion of future plans.
Over the last year, we have assembled a small but agile team (myself, Bryan O'Keefe, and the "Whiz Kids", mainly Jonathan Leirer and Matt Denhart). We have relied on several volunteer and paid consultants, starting with Brian Fruchey but including others, including my colleague Tony Caporale, and the late Arthur Beroz.
Our blog output is almost precisely one blog per work day for the year. Volume of readers has grown. A highlight of the year was when one reader who comments often, "the cowboy," actually came well over one thousand miles to visit us in Ohio. While I have done a majority of the blogs, increasing numbers are being done by others, especially Bryan.
We have had op-eds appear in a variety of newspapers. I have appeared on national TV, most prominently in a Fox News Special on higher ed (with Newt Gingrich), but also elsewhere, including the ABC Nightly News with Charles Gibson. We have published electronically a couple of longer commentaries, and are finishing up a joint study on Michigan higher education with the Mackinac Center, Michigan's premier public policy think tank. We had a great conference on higher education in the post-Spellings Commission era, keynoted by remarks by Secretary of Education Spellings herself. I have appeared on panels and discussions from Boston to the San Francisco bay region. I have participated in several post-Spellings Commissions meetings of importance. All told, it has been a very good year.
In the coming year, our goal is to ramp up our research and publications. To facilitate that, we will be adding Andy Gillen, who is finishing up his Ph.D. in economics at Florida State, to our staff in two weeks. Andy will serve as our Research Director, overseeing the research of the Whiz Kids, and doing several things of his own. The biggest single project will be to engage in state-specific research. With the assistance of the Pope Foundation, we will look a good deal at North Carolina. Our most exciting project, funded by the Center for Higher Education Excellence, is being done in cooperation with the State Policy Network. We will be researching the higher education systems of several states, although the details are still being worked out. State think tanks will compete for the right to have us do a study, which we will then publish jointly with them. With assistance from the Bradley Foundation, Andy will supervise some additional in depth studies, probably done by outside scholars.
With help again from the Center for Higher Education Excellence, Bryan will be doing a study more fully analyzing the role and ramifications of the monumental Duke v. Griggs Power court case on American higher education, here working in tandem with our friends at the Pope Center in North Carolina. We will be doing more conferences (tentatively, one on accreditation in cooperation with the American Enterprise Institute -AEI- this fall). We will be exploring further the issue of over investment in higher education, and debunking the notion that incremental public spending on higher education in its current form has high pay offs. We will weigh in more on the whole question of student loans, arguing that the nation would be well served if the federal government disengages from this area.
We owe debts to many people and organizations, beginning with the Searle Freedom Trust (SFT) and its benefactor Dan Searle, who put us on the map. Kim Dennis of SFT is our Mother Superior and great friend, assisted ably by Courtney Myers. The Koch Foundation has assisted us by paying for a majority of Andy's salary for the coming year. Fred Fransen has become a good friend, along with our pals in North Carolina, George Leef, Dave Riggs, and, now, Jane Shaw. AEI has worked cooperatively with us. A special friend is Anne Neal, whose American Council of Trustees and Alumni is one of the real positive reform voices in higher education.
Personally, the best thing of all for me is meeting great people and working with them. Bryan O'Keefe is awesome, and his forthcoming wedding in September will be the social event of the forthcoming year. I have had the best student helpers you could ask for, and I will especially miss Jonathan Leirer, who is going off to Florida State to get a Ph.D. in economics.
Enough is enough. This had been a great first year, and we anticipate growth and excitement to mount as we mature in the year ahead.
Friday, June 01, 2007
College Attainment and Prosperity
By Richard Vedder
There is absolutely no doubt that richer states have a large proportion of adults who are college graduates. Tom Mortenson in the last issue of Educational Opportunity has a nice scatter diagram that demonstrates that point, and notes, no doubt correctly, that the correlation between per capita income and attainment of a bachelor's degree or more has grown over time. In my own statistical work using somewhat more sophisticated statistical procedures, I obtain very similar results.
But then Tom and I part company. Mortenson says "If a state were interested in increasing its per capita personal income...then it should focus on increasing the share of its population age 25 and over with at least a bachelor degree." He then asks the question, "So why have states reduced their investment efforts in higher education by 32 percent since FY1980?"
Implicit in Mortenson's question is an assumption that, it turns out, is completely erroneous. He assumes that increasing state appropriations for higher education (his "investment") leads to a greater proportion of the population with bachelor's degrees. Yet using the Mortenson simple correlation approach, Whiz Kid Matt Denhart finds no such relationship exists. The simple correlation in 2005 between per capita state appropriations and the percent of the over 25 population with at least bachelor's degrees is -0.246 --more appropriations, a lower proportion of graduates among the adult population. You could argue that "today's adult college graduates were educated in previous years -- what is relevant are appropriations at earlier points in time. So we took the average of appropriations over 4 years (1975, 1985, 1995, and 2005) and correlated them with BA or greater attainment --again, we obtain a slightly negative result.
Matt did some other interesting things, which I am encouraging him to put in future blogs, op-eds, etc. We see North Carolina, with high levels of per capita spending (thanks largely to former governor Jim Hunt) with relatively low levels of BA attainment (compared with neighboring states. Several New England states and Colorado, with very high levels of educational attainment, have relatively low spending levels. Fairly high spending Iowa has lower educational attainment than most of its lower spending neighbors, and so on.
One factor at work may be migration. States that have high taxes to finance high university expenditures may have lackluster economies that drive recent college graduates to move to other states, for example. Our research shows that higher tax burdens are associated with lower income growth. In states with traditionally high emphasis on private higher education - New England -states like Massachusetts, New Hampshire, Connecticut and Vermont, for example, people use private funds to finance their children's higher education investment in private school more than in states without that tradition. Also, as state appropriations grow, so do university bureaucracies and the salaries of employees --money goes from the pockets of taxpayers who work in the efficient private sector and into the pockets of those in the far less efficient public sector. My reading of the evidence is clear: the reduction in higher educational effort by state governments is rational behavior, and rather appropriate --indeed, it needs to go farther.
There is absolutely no doubt that richer states have a large proportion of adults who are college graduates. Tom Mortenson in the last issue of Educational Opportunity has a nice scatter diagram that demonstrates that point, and notes, no doubt correctly, that the correlation between per capita income and attainment of a bachelor's degree or more has grown over time. In my own statistical work using somewhat more sophisticated statistical procedures, I obtain very similar results.
But then Tom and I part company. Mortenson says "If a state were interested in increasing its per capita personal income...then it should focus on increasing the share of its population age 25 and over with at least a bachelor degree." He then asks the question, "So why have states reduced their investment efforts in higher education by 32 percent since FY1980?"
Implicit in Mortenson's question is an assumption that, it turns out, is completely erroneous. He assumes that increasing state appropriations for higher education (his "investment") leads to a greater proportion of the population with bachelor's degrees. Yet using the Mortenson simple correlation approach, Whiz Kid Matt Denhart finds no such relationship exists. The simple correlation in 2005 between per capita state appropriations and the percent of the over 25 population with at least bachelor's degrees is -0.246 --more appropriations, a lower proportion of graduates among the adult population. You could argue that "today's adult college graduates were educated in previous years -- what is relevant are appropriations at earlier points in time. So we took the average of appropriations over 4 years (1975, 1985, 1995, and 2005) and correlated them with BA or greater attainment --again, we obtain a slightly negative result.
Matt did some other interesting things, which I am encouraging him to put in future blogs, op-eds, etc. We see North Carolina, with high levels of per capita spending (thanks largely to former governor Jim Hunt) with relatively low levels of BA attainment (compared with neighboring states. Several New England states and Colorado, with very high levels of educational attainment, have relatively low spending levels. Fairly high spending Iowa has lower educational attainment than most of its lower spending neighbors, and so on.
One factor at work may be migration. States that have high taxes to finance high university expenditures may have lackluster economies that drive recent college graduates to move to other states, for example. Our research shows that higher tax burdens are associated with lower income growth. In states with traditionally high emphasis on private higher education - New England -states like Massachusetts, New Hampshire, Connecticut and Vermont, for example, people use private funds to finance their children's higher education investment in private school more than in states without that tradition. Also, as state appropriations grow, so do university bureaucracies and the salaries of employees --money goes from the pockets of taxpayers who work in the efficient private sector and into the pockets of those in the far less efficient public sector. My reading of the evidence is clear: the reduction in higher educational effort by state governments is rational behavior, and rather appropriate --indeed, it needs to go farther.
Do Poor College Students Work?
By Richard Vedder
In the good old days (that actually were less good than old-timers like to believe), it was common for students from middle class and especially low income backgrounds to pay for a good bit of their college education by working while in school. Even though our parents paid most of the bills, both my wife and I worked while in college, and that experience was commonplace four or five decades ago. The kids from less affluent backgrounds were more inclined to work than those from affluent ones, since they needed the money to cover college costs.
Do kids from relatively lower income families work in college today? I have always assumed the answer is "yes," and know many students (including my own beloved Whiz Kids) who follow that traditional pattern. Yet some Current Population Survey data that Tom Mortenson of postsecondary.org presented in his May newsletter is making me think, and even wanting to explore that data set more extensively. Let us look at the four major racial/ethnic groups identified by the CPS -- whites, blacks, Asians, and Hispanics. The group with the highest labor force participation in college is whites (42.5 percent work while in school), yet it is either the most affluent or second most affluent group, depending on the measure of financial success used. The group that is clearly the poorest --blacks -- has the lowest rate of college labor force participation, 28.7 percent. Not all blacks are poor, of course, but my suspicion is that blacks are overrepresented among the poor kids attending college. Why, then, do they work less, relative to, say, whites? The picture for Asians and Hispanics is less stark, but even Hispanics work less than whites (40 percent), despite as a group having substantially lower incomes. Asians as a group are relative affluent, and have relatively low levels of work participation, more in keeping with the thesis that college workers are concentrated among the less affluent students.
Caution is in order. Group statistics can be deceptive, and it may well be that blacks attending college are highly concentrated among the black middle class, much more so than, say, whites. But the data suggest at least the possibility that either: blacks are given such substantial preferential treatment in financial aid that they do not need to work as much relative to others of similar economic status, or that blacks are unusually enticed to borrow deeply to fund college. The area is ripe for further exploration, and I am heading down the hall to see my colleague who is the resident expert on using the CPS to see if she wants to collaborate on a project either for journal publication or as a CCAP special study. Stay tuned.
Independent of the racial/ethnic dimension, why is the proportion of working students so low? For the relatively more expensive four year colleges, it is 33.1 percent. Two-thirds of the kids in four year schools do not work, despite the fact that data from the National Survey of Student Engagement suggest that their total academic work absorbs no more than perhaps 35 hours a week on the average. Are we over-subsidizing a bunch of under worked kids? At Berea College, every student works -- period. Berea is a fine school with a growing national reputation. Maybe if we subsidized student loans less, we would get greater labor force participation from students who have excessive time on their hands. I know two cures for hedonistic student behavior. One, demand more of them in class and give more grades below "B". Two, get them a job. To be sure, excessive student employment can interfere with studies and academic success. But I suspect for most students taking a college job would crowd out more party time than study time.
In the good old days (that actually were less good than old-timers like to believe), it was common for students from middle class and especially low income backgrounds to pay for a good bit of their college education by working while in school. Even though our parents paid most of the bills, both my wife and I worked while in college, and that experience was commonplace four or five decades ago. The kids from less affluent backgrounds were more inclined to work than those from affluent ones, since they needed the money to cover college costs.
Do kids from relatively lower income families work in college today? I have always assumed the answer is "yes," and know many students (including my own beloved Whiz Kids) who follow that traditional pattern. Yet some Current Population Survey data that Tom Mortenson of postsecondary.org presented in his May newsletter is making me think, and even wanting to explore that data set more extensively. Let us look at the four major racial/ethnic groups identified by the CPS -- whites, blacks, Asians, and Hispanics. The group with the highest labor force participation in college is whites (42.5 percent work while in school), yet it is either the most affluent or second most affluent group, depending on the measure of financial success used. The group that is clearly the poorest --blacks -- has the lowest rate of college labor force participation, 28.7 percent. Not all blacks are poor, of course, but my suspicion is that blacks are overrepresented among the poor kids attending college. Why, then, do they work less, relative to, say, whites? The picture for Asians and Hispanics is less stark, but even Hispanics work less than whites (40 percent), despite as a group having substantially lower incomes. Asians as a group are relative affluent, and have relatively low levels of work participation, more in keeping with the thesis that college workers are concentrated among the less affluent students.
Caution is in order. Group statistics can be deceptive, and it may well be that blacks attending college are highly concentrated among the black middle class, much more so than, say, whites. But the data suggest at least the possibility that either: blacks are given such substantial preferential treatment in financial aid that they do not need to work as much relative to others of similar economic status, or that blacks are unusually enticed to borrow deeply to fund college. The area is ripe for further exploration, and I am heading down the hall to see my colleague who is the resident expert on using the CPS to see if she wants to collaborate on a project either for journal publication or as a CCAP special study. Stay tuned.
Independent of the racial/ethnic dimension, why is the proportion of working students so low? For the relatively more expensive four year colleges, it is 33.1 percent. Two-thirds of the kids in four year schools do not work, despite the fact that data from the National Survey of Student Engagement suggest that their total academic work absorbs no more than perhaps 35 hours a week on the average. Are we over-subsidizing a bunch of under worked kids? At Berea College, every student works -- period. Berea is a fine school with a growing national reputation. Maybe if we subsidized student loans less, we would get greater labor force participation from students who have excessive time on their hands. I know two cures for hedonistic student behavior. One, demand more of them in class and give more grades below "B". Two, get them a job. To be sure, excessive student employment can interfere with studies and academic success. But I suspect for most students taking a college job would crowd out more party time than study time.
The Decline in Four Year Inistitutions of Higher Education
By Richard Vedder
Tom Mortenson of Postsecondary Education Opportunity is somehow wired differently from us folks at CCAP. We often interpret facts differently. If Tom were to say "empirical evidence leads me to believe that the sun will rise in the East tomorrow, June 2" I might have to rethink my own similar views on the subject. But Tom is unsurpassed in the way he mines data on higher education, with imagination, panache, and, above all, integrity. If you are interested in access issues, run, do not walk, to his web site at http://www.postsecondary.org CCAP is an avid subscriber and consider Tom's work indispensable. This and two subsequent blogs draw from the May issue of his monthly newsletter to subscribers.
A funny thing has happened since 2001: four year colleges have been steadily losing market share of entering postsecondary students. In that year, the Current Population Survey data that Mortenson uses suggested that 68.1 percent of recent high school graduates that went on to college entered four year schools. That share, a modern day high, fell in 2002, and again in 2003, 2004, 2005, and 2006. The 2006 share, 62.7 percent, was the same as it was in 1992, when the 4-year school share was still trending up over time. As Tom correctly notes (we sometimes agree on data interpretation) "If these enrollment shifts...continue, then by 2010 when the total number of school graduates begins its projected decline 4-year colleges and universities will be especially hard hit and find it especially difficult to fill their freshman classes."
This new trend, if sustained, reverses the pattern of the 1980s and 1990s, although revives a trend prevalent in the 1950s and 1960s. In Gong Broke By Degree (AEI Press, 2004) I argued that as incomes rise, parents are more willing to pay big bucks to confer economic advantages on their kids --hence the frantic desire of many to get into elite private universities compared with two generations ago (when I casually turned down admission to Harvard and went to a nearer but slightly less prestigious school, Northwestern, whose 2006 entering class had average SAT scores approaching 1500). Four year schools have what economists call a "high income elasticity of demand" while the two year schools in economist lingo are "inferior goods" --demand falls as income rise, somewhat like with bus travel. However, the recent data contradict this. What has happened, then, in the last five years to challenge that conventional wisdom?
While several ideas come to mind, I think a lot of it has to do with finances. The cost of four year schools has risen very considerably since 2001, while that of two years schools, always lower, has risen less rapidly. The price differential between the two alternatives has grown rather sharply. People prefer to pay less than more. The two year schools take the mission of maximizing access and affordability very seriously, but the four year schools typically do not, their rhetoric notwithstanding. It appears that an increasing proportion of students with their parent's support are saying "I will try a two year school, and if I do well I will transfer to the four year institution, thus saving money and still earning a ticket to a nice paying job." Fear of this trend is no doubt one reason why four year schools sometime erect educationally illegitimate obstacles to the acceptance of transfer credit from two year schools.
The fear of racking up huge college loan debts and the real possibility of dropping out of school makes "investing" in a four year education somewhat risky and problematic for many kids and their families of moderate means. All of this, of course, is leading to the growing stratification within higher ed, with even the flagship state universities becoming elitist bastions for the affluent who live in increasing luxury in country club-like settings, getting some cultural enrichment and learning in between visits to the rec center, student union, and the local bars.
For years, I have been saying that the four year schools will have to alter their behavior --that current trends are unsustainable in the long run. The recent upsurge in reform sentiment, beginning with the Spellings Commission, is a manifestation of that reality.
Tom Mortenson of Postsecondary Education Opportunity is somehow wired differently from us folks at CCAP. We often interpret facts differently. If Tom were to say "empirical evidence leads me to believe that the sun will rise in the East tomorrow, June 2" I might have to rethink my own similar views on the subject. But Tom is unsurpassed in the way he mines data on higher education, with imagination, panache, and, above all, integrity. If you are interested in access issues, run, do not walk, to his web site at http://www.postsecondary.org CCAP is an avid subscriber and consider Tom's work indispensable. This and two subsequent blogs draw from the May issue of his monthly newsletter to subscribers.
A funny thing has happened since 2001: four year colleges have been steadily losing market share of entering postsecondary students. In that year, the Current Population Survey data that Mortenson uses suggested that 68.1 percent of recent high school graduates that went on to college entered four year schools. That share, a modern day high, fell in 2002, and again in 2003, 2004, 2005, and 2006. The 2006 share, 62.7 percent, was the same as it was in 1992, when the 4-year school share was still trending up over time. As Tom correctly notes (we sometimes agree on data interpretation) "If these enrollment shifts...continue, then by 2010 when the total number of school graduates begins its projected decline 4-year colleges and universities will be especially hard hit and find it especially difficult to fill their freshman classes."
This new trend, if sustained, reverses the pattern of the 1980s and 1990s, although revives a trend prevalent in the 1950s and 1960s. In Gong Broke By Degree (AEI Press, 2004) I argued that as incomes rise, parents are more willing to pay big bucks to confer economic advantages on their kids --hence the frantic desire of many to get into elite private universities compared with two generations ago (when I casually turned down admission to Harvard and went to a nearer but slightly less prestigious school, Northwestern, whose 2006 entering class had average SAT scores approaching 1500). Four year schools have what economists call a "high income elasticity of demand" while the two year schools in economist lingo are "inferior goods" --demand falls as income rise, somewhat like with bus travel. However, the recent data contradict this. What has happened, then, in the last five years to challenge that conventional wisdom?
While several ideas come to mind, I think a lot of it has to do with finances. The cost of four year schools has risen very considerably since 2001, while that of two years schools, always lower, has risen less rapidly. The price differential between the two alternatives has grown rather sharply. People prefer to pay less than more. The two year schools take the mission of maximizing access and affordability very seriously, but the four year schools typically do not, their rhetoric notwithstanding. It appears that an increasing proportion of students with their parent's support are saying "I will try a two year school, and if I do well I will transfer to the four year institution, thus saving money and still earning a ticket to a nice paying job." Fear of this trend is no doubt one reason why four year schools sometime erect educationally illegitimate obstacles to the acceptance of transfer credit from two year schools.
The fear of racking up huge college loan debts and the real possibility of dropping out of school makes "investing" in a four year education somewhat risky and problematic for many kids and their families of moderate means. All of this, of course, is leading to the growing stratification within higher ed, with even the flagship state universities becoming elitist bastions for the affluent who live in increasing luxury in country club-like settings, getting some cultural enrichment and learning in between visits to the rec center, student union, and the local bars.
For years, I have been saying that the four year schools will have to alter their behavior --that current trends are unsustainable in the long run. The recent upsurge in reform sentiment, beginning with the Spellings Commission, is a manifestation of that reality.
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