Links for 10/30/09

Paul Basken

For as long as most people can remember, at least as far back as the Sputnik launch in 1957, Americans have feared that their nation's schools and colleges weren't giving companies enough good scientists and engineers.

But in fact the number of talented college graduates in the sciences is "quite in excess of the demand," said Harold Salzman, a professor of public policy at Rutgers University. In a new paper, he and a colleague argue that the real problem is at the employment end of the pipeline.
Fewer than half of all college graduates in science and engineering actually take jobs in those fields, with the percentage who do actually dropping in more-recent years among the top-scoring students. The United States could largely resolve any industry shortfalls by simply convincing more of those elite graduates just to stay in their field, they say.

George Soros

papers that don’t conform to the prevailing dogma are not accepted by the periodicals which are used to give tenure. So there is a self-perpetuating quality about … I think reality will push its way in, in the form of the students who will not want to study a dogma whose time has passed. It’s like a little bit like Marxist dogma. The collapse of the Soviet Union did not bring an end to Marxism. There are still Marxists at universities, maybe more in Europe than in America, and eventually they’ll die out, but until then, they will be there. But they may not have any students listening to them.

Andy Smarick

Looking back on the history of school turnaround efforts, the first and most important lesson is the “Law of Incessant Inertia.” Once persistently low performing, the majority of schools will remain low performing despite being acted upon in innumerable ways…

The second important lesson is the “Law of Ongoing Ignorance.” Despite years of experience and great expenditures of time, money, and energy, we still lack basic information about which tactics will make a struggling school excellent…

Zubin Jelveh on Hoxby's new paper:

the change in selectivity is driven largely by smarter students choosing to go to universities with similarly smart students.

DAVID BROOKS

Ninety-four percent of college professors believe they are above average teachers

Another 3 cheers for Duncan

by Andrew Gillen

I'd like to second Rich's three cheers for Duncan after stumbling accross this very encouraging anecdote about Secretary Duncan from Steven D. Levitt.

it strikes me just how differently he is reacting to a challenge than Arne Duncan (now the Secretary of Education) did when I first told him about my work on teacher cheating when Duncan was in charge of the Chicago Public Schools. I expected Duncan to do what LaHood did: dismiss the findings, circle the wagons, etc. But Duncan surprised me. He said that all he cared about was making sure the children were learning as much as possible, and teacher cheating was getting in the way of that. He invited me into a dialogue, and we ultimately made a difference.

Links for 10/29/09

Alex Tabarrok on how more data leads to better health care:

providing information does seem to drive change if only from the shame that a hospital receives when it is found not to be following best practices. It's true that report cards can cause problems when the drive to get a better score causes hospitals to be more reluctant to treat sicker patients but better data on patient characteristics (stage of cancer etc.) and better process/treatment information can alleviate this problem. In fact, all hospitals should be required to provide standardized information for all patients on patient characteristics, treatments and outcomes. Only by making outcome information public will hospitals have the incentive and researchers have the ability to develop more accurate report cards. In short, I cannot think of a simpler change that would improve health care to as great an extent as freeing the data.

Rob Manwaring

Education will receive $100 billion in stimulus funds in total. According to the report, almost $68 billion of that funding has already been obligated... those 250,000 education jobs saved for the next two year would cost around $34 billion. That is about half of the education stimulus funding. What happened to the other half? Schools were suppose to do a lot with these funds – both saving jobs and supporting education reforms. But most antidotes on how the funding has been spent was that the funding was used to maintain the status quo.

John Leo

many colleges and universities will fight hard for freedom of expression, unless it's inconvenient or threatens to bring bad publicity

Daniel Hamermesh

Students apparently consume mass quantities of the performance-enhancing drug Adderall during exam time. Normally the price is $3 for 10 mg, but it rises during exam week to at least $5.

One student reports that in his suburban Dallas hometown, drug dealers, realizing this price variation, speculated by buying up large supplies of the drug at $3 and dumping them on the market during exam time, hoping to sell at $5.

They didn’t realize that this large increase in supply would cause the price to drop below $5...

Three Cheers for Duncan

By Richard Vedder

It is no secret that I am not wild about the Obama Administration, and that skepticism extends to higher education policy. For example, I think the proposed changes in student lending are more bad than good, that it is wrong to force borrowers into the direct lending program, and that the notion that virtually every student should have a postsecondary education is questionable.

However, I want to applaud Secretary of Education Duncan for his recent remarks on colleges of education. On the typical campus, the education school has the reputation for being the least respectable unit academically, with mediocre students studying mush from so-so faculty, but nonetheless receiving high grades (because of the prevailing college of education teaching philosophy, namely that we should not lower student self-esteem). Education schools have promoted anti-intellectual, anti-knowledge fashions. They think rote memorization is bad but "critical thinking" is good, but fail to realize critical thinking occurs only when people know what to think about.

Only one of every five students who enters an American high school gets a four year college degree within a decade --a big obstacle to the Obama dream of increasing college attainment. Higher education spokespersons rightly note that much of the attrition occurs at the K-12 levels, with students either not graduating from high school, or performing so poorly that college does not appear to be a viable option. As the K-12 people note, however, the teachers of the high school students who fail to perform were educated at America's college and universities --typically in a college of education.

Do we need colleges of education? I think not. I think teachers of young or special needs students may need several courses offering insight into disseminating knowledge to their students; high school teachers may need a couple of courses at most. All teachers could benefit from practice teaching that is monitored by experienced, successful teachers. But most teachers above all need good grounding in the subjects they are teaching. Thus future teachers should major in an academic discipline and take up to a year or so of work that might be considered courses in "education."

Admittedly, I am biased. I am in a university where elementary education majors earned above a 3.9 average in their education courses last year, I am told. I myself never took an education course yet have won numerous awards for good teaching. My wife was an English major who became a superb high school teacher and guidance counselor. Neither of my children, both teachers, had a single education course when they started teaching high school -- yet one was nominated for Teacher of the Year in his first year. I think mandatory study of dozens of semester hours of education college mush or worse is a bad idea. I think states should not subsidize attendance in education schools. Once I even suggested to legislators that they should make it a felony for a school principal or superintendent to knowingly hire a graduate of a college of education. I didn't really mean that, but I do think we need to stop using public funding to support mediocre educational outcomes.

Links for 10/28/09

Kevin Carey

The College Board announced today that the price of higher education increased significantly in 2009…

Following past practice, the College Board presented the findings in a light most favorable to its members, the colleges and universities that increased prices. Comparing this year’s announcement with last year shows this pretty clearly.

In 2008… The message: Tuition increased substantially but so did inflation so it’s not our fault…

[In 2009] The message: Tuition increased substantially but there was an economic crisis so it’s not our fault…

Trends in College Pricing is, along with the accompanying Trends in Student Aid, an invaluable, up-to-date compendium of vital information about how much college costs and how much students pay for it. It is the principal source of the data that informs the public dialogue about college price and affordability. Which is exactly why the College Board shouldn’t use its position as the holder of this data to annually spin the results to the advantage of its members.

Steve Kolowich

After several years of experimenting with “hybrid” Spanish courses that mix online and classroom instruction, the University of North Carolina at Chapel Hill has decided to begin conducting its introductory Spanish course exclusively on the Web.

KC Johnson

In an era when the AAUP has essentially confined its mission of protecting academic freedom to issues involving the interests of the groupthink-immersed faculty majority, FIRE is all the more important. That the organization still has so many battles is cause for concern about the state of the academy, but FIRE's extraordinary record of accomplishment in fighting those battles is cause for celebration.

Sara Goldrick-Rab

the incentives colleges have to maintain the status quo-- that is, to continue making their current and former students and staff feel good with liberal actions, garnering attention in elite venues such as the New York Times, without fundamentally changing their overall enrollment demographics or costing too much money. Call me cynical, but as a sociologist it strikes me that this is exactly how power is effectively maintained in the face of pressure for socially responsible actions from powerful institutions.

Links for 10/21/09

Tim Ranzetta

Warning: This education can be hazardous to your financial health. At this institution, you have a higher probability of defaulting on your student loan than you do of completing this program.

Edward L. Glaeser

But that just pushes the puzzle one step back. Why is the cross-country relationship between income and education levels so strong?...

The wealth of well-educated countries is far higher than one would expect based on the private returns to schooling…
Historic educational enrollments predict subsequent income growth quite well, even when holding past income constant, which seems to reject the view that education is just following income….
If the link between country level income and education is real, then we need to understand why the link between schooling and education gets magnified at the country level…

One hypothesis is that there are spillovers from education, and that human capital enables places to gain access to better technologies…

But country-level income and education may also be closely linked because of politics. There is a very strong correlation between quality of government and education…

Links for 10/20/09

Lexington

In other words, freed from the dead hand of bureaucracy, schools can actually educate children. Even in a city that is poor, violent and recently submerged.

Thom Hartmann on the invention of grades.

While grades didn't help students a bit - and, in fact, had the now well-known effect of "dumbing down" entire nations - they vastly simplified the work of teachers and schools. So they spread across Europe and to America with startling speed, arriving here in the early 1800s.

Without grades, the assembly-line-classroom would not be possible.

Tim Harford

As long as patients have no way to demand better value instead of simply better quality, cost inflation seems inescapable.

[AG: he was speaking in terms of health care, but this seems equally applicable to education.]

Tim Ranzetta has a list of information that career colleges should have to provide (and students sign after receiving):

• Completion rates
• Placement rates
• Average starting wages upon completion (with high and low ranges, too)
• Average student debt at completion
• Accreditation of school and explanation of differences between national and regional
• Student loan default rates
• Student satisfaction levels based on one question: Would you recommend this institution's program to a friend?
• Job retention (did the student still have job 6-12 months after completion)

Why Do Private Schools Have Higher Graduation Rates?

By Richard Vedder

It is well known that the graduation rates of students from private colleges and universities is significantly higher than is the case at public institutions. Of course, a huge part of the reason is that the private schools, on average, get better students --higher SAT scores, higher rank in their high school class, etc. Yet even when these factors are controlled for, usually researchers find that graduation rates are still higher at private institutions?

Why? My own hunch is that the differences between "public" and "private" universities with respect to the way they operate and do business are relatively small. I have not found a huge difference between the private schools with which I have been associated (as a student and parent, Northwestern, as a professor, Claremont McKenna College and Washington University in St. Louis) and the public ones (University of Illinois, University of Colorado, Ohio University), except in one vital respect --personal attention to student needs.

On average, in schools which are more tuition-intensive in terms of revenue sources, there is a sense that the student is indeed a paying customer who needs to be treated with respect, kindness, and even affection. I sense that, on average, advising students is taken a bit more seriously at private schools, especially liberal arts colleges. Many students get lost between the cracks, and some personal attention from a relatively senior faculty member can often get them back on track. I am working more closely than usual with a student who has failed to earn his degree, helping him through the hoops of completing his academic work in a satisfactory fashion. But it takes a bit of time and effort on my part, and many professors don't want to make the effort --publishing articles is much more rewarding in a pecuniary and career sense. When I visit a good liberal arts college (Kenyon College comes immediately to mind), I feel that the faculty have a greater sense that their duties include attentiveness to student needs, come of which extend beyond the narrow classroom experience.

Jonathan Leirer and I are playing around with statistical models trying to explain variations in graduation rates. We do find, other things equal, that student performance varies positively with tuition levels, consistent with the discussion above. Clearly, as Bowen, Chingos and McPherson argue at length in their new book, socioeconomic status matters also in any discussion of graduation rates --the more Pell Grant oriented a school is, the lower the graduation rate (especially the four year rate). But I have seen some results that hint that high amounts of research activity, other things equal, may lower graduation rates, as research activity crowds out the advising of students.

The incentive systems are all out of whack. Publication in obscure journals on topics of tangential interest to the human race that few even bother to read can reap significant rewards --worth thousands of dollars per article. Time spent helping a struggling undergraduate yields nothing in the way of rewards-- or even less, denial of tenure for example, if student concern leads to publication rates below the accepted minimum.

Here would be an interesting proposition, the kind Jeff Sandefer might enact at his Acton School of Business. Set up a large bonus pool that goes to faculty members in each department if, and only if, the department raises the three year moving average of the graduation rate over time upward, subject to the constraint that the department's accumulative grade point average cannot move up at all (indeed, a second bonus should be awarded if higher graduation rates are achieved with falling average grades). This, plus coupling salary increases more to teaching performance and less to research, could lead to improved student outcomes. Will it happen? Not without some fundamental change in the way the academic game is played in the U.S.

Links for 10/19/09

William D. Henderson and Andrew P. Morriss on law school.

Below school No. 26 (Emory), a graduate has a less than one in five probability of starting his or her career at a large law firm. If 80 percent of law school applicants are convinced that they will make that 20 percent cutoff, three out of four are destined to be disappointed.

Justin Fox: “American college grads: Homebodies with worthless degrees”

I had a somewhat disturbing conversation yesterday with Steve Fussell, the senior VP of human resources at pharmaceutical maker Abbott… His basic message… was that Abbott is going to be hiring tons of people for high-paying jobs over the next decade, but not many of them will be Americans because we study the wrong things in college and we're not willing to work overseas.

1) "I hate to say we don't have the world's best universities. We may have the best minds, the best liberal arts education. The problem is it doesn't match the work anymore." (That is to say, not enough students are getting science and math degrees.)

Tim Ranzetta

[Ability-To-Benefit] tests have been around for a while with no proof of efficacy…

If the career colleges are concerned enough to "cut way back" on this population, perhaps it might be time for the U.S. taxpayer to make a similar decision…

If the hurdle of requiring a GED for federal aid weeds out the less serious, less committed and less prepared students, what is so bad about that? Is it good public policy to continue to provide post-secondary access to all, load up the most likely not to succeed with large amounts of debt, and then pretend we are surprised when cumulative default rates are projected to exceed 40% for certain types of borrowers?

These are two great examples of how to respond to ill-thought out comments.

Links for 10/16/09

Mike Konczal

we are currently asking children, 17, 18 or 19 years old, to try and assess how much of a student loan debt burden they can handle vis-a-vis their future income over their entire lives.

Jeffrey J. Williams on student debt as indentured servitude

College student-loan debt has revived the spirit of indenture for a sizable proportion of contemporary Americans… it is a major constraint that looms over the lives of those so contracted, binding individuals for a significant part of their future work lives...

Although it seems as if it crept up on us, student-loan indebtedness is not an accident but a policy. It is a bad policy, corrupting the goals of higher education.

Don Heller

The biggest problem is that not enough grant aid is given to financially-needy students, as more and more financial aid is being funneled to wealthier students who do not need the money to attend college. But it is politically very popular to give money to these wealthier families, so many states do this and many institutions follow suit because it helps them achieve their enrollment management goals of improving their standing in rankings such as those published by U.S. News & World Report. We also need to do much more to simplify the financial aid system…

don’t assume that more expensive is better. Just because one university charges more than another doesn’t make the former a better option for postsecondary education.

Brad DeLong

being a tenured professor at a research university is still an amazing deal. It’s the closest thing in our age to being landed gentry.

Xenia Markowitt

To some degree, we have institutionalized social protest…

the nature of campus activism had changed. After all, sit-ins, or building takeovers, were staged in order to get the attention of the administration. But getting the attention of the administration can be done on my campus with a phone call—even directly to the president himself...

I told her: "If you hold a sit-in, the deans are going to order pizza and sit down next to you and ask what your concerns are. Will you be ready to answer them? You can make an appointment anytime you want to see the president and voice your concerns directly to him. So what is the purpose behind your sit-in? What do you hope to achieve?"

Open Course Ware Is Not Going to Die

by Andrew Gillen

The good news, as relayed by Jeffrey R. Young

Students Find Free Online Lectures Better Than What They're Paying For

The bad news as relayed by Marc Parry

According to David Wiley, "Every OCW [open course ware] initiative at a university that does not offer distance courses for credit will be dead by the end of calendar 2012."

Quick question: what exactly is the advantage of having every school try and do it’s own OCW? We simply don’t need 4k different versions, and having that many has a number of drawbacks, not to mention invalidating the main advantages of such efforts – specialization and economies of scale.

Bottom line, the demise of OCW at Utah State is not a sign of things to come, but rather the part of the natural growing pains of a new way of doing things. OCW will see lots of things come and go, but it’s going to continue to get better and better, and will never die, for the following reasons.

• Students today are much more comfortable doing everything online. And given how much cheaper it is, there will be continued demand for OCW.
• It is an extremely cost effective way to reach large numbers of students – something that the big foundations know and will increasingly be involved in providing support for. Even the government is trying to get involved.
• For elite schools this it is perhaps the most philanthropic thing they do. As such, it provides a degree of protection. While the endowment tax issue has disappeared for now, you can be sure it will come roaring back. When it does, those elite schools that can point to OCW programs that reach thousands or millions of students have an iron clad case that they are indeed using the money for the public good and are therefore deserving of tax exemption.

Given that OCW is a product that consumers demand, some producers have an incentive to produce, and foundations and governments have an interest in seeing survive, predictions of it's demise seem somewhat strange. I certainly don't know what OCW will look like 10 years from now. If I had to guess I'd say that it would be dominated by the schools with the biggest endowments and/or foundation initiatives. But OCW will certainly still be around.

Links for 10/15/09

SLA

for the purposes of the [cohort default rate] calculation, borrowers in forbearance and deferment are considered as borrowers in repayment. This flies in the face of common sense and the standards used by publicly-traded companies…
more than 1 in 3 borrowers struggling with their federal loans…

the cohort default rate used to inform policymakers today so understates the magnitude of this issue to be irrelevant.

Paul Romer on Nobel Laureate Elinor Ostrom:

Most economists think that they are building cranes that suspend important theoretical structures from a base that is firmly grounded in first principles. In fact, they almost always invoke a skyhook, some unexplained result without which the entire structure collapses. Elinor Ostrom won the Nobel Prize in Economics because she works from the ground up, building a crane that can support the full range of economic behavior…

Economists who have become addicted to skyhooks, who think that they are doing deep theory but are really just assuming their conclusions, find it hard to even understand what it would mean to make the rules that humans follow the object of scientific inquiry…

Cheers to the Nobel committee for recognizing work on one of the deepest issues in economics. Bravo to the political scientist who showed that she was a better economist than the economic imperialists who can’t tell the difference between assuming and understanding.

Steve Kolowich

the state-based approval system is centered around the notion that colleges are fixed in a single location that necessarily falls within the borders of a state. Since online colleges aim to teach students in multiple states, they have to go through multiple accreditation processes to achieve a nationwide presence, then satisfy various bureaucratic requirements in each state if they want to keep teaching students there.

John F. Ebersole, president of Excelsior College …[says] it forces online institutions to devote a lot of time and resources to acquiring and maintaining licensure in different states. This, the task force argues, “increasingly may act to inhibit student access to essential learning opportunities and at an unnecessarily high cost.”

637 applications for 2 positions!

Links for 10/14/09

Reihan Salam

My fear is that we'll instead encourage students to pursue college degrees and then post-graduate degrees as a way of fattening up the education-industrial complex. Just as mass incarceration masks unemployment in the United States, mass higher-education increasingly masks unemployment in Germany and South Korea: Students take years to complete useless degrees, and once they're out, they find themselves loaded up with debt. This will work wonders for administrators but not for students. If we really want to encourage change, we need to look to educational entrepreneurs.

In Sweden, the educational landscape has been transformed by the advent of a sweeping choice program that allows anyone--groups of parents, civil society groups, and, most important, for-profit enterprises--to establish their own schools that would then receive per-pupil funding at roughly the same rate as state-run schools. If this sounds like the familiar idea of universal school vouchers, championed by American libertarians and conservatives, you're on the right track.

But it turns out that the solidarity-minded Scandinavians have gone far further in this direction than any American jurisdiction. The results have been a stunning success, one that has delighted students and parents alike. As Anders Hultin, one of the creators of Sweden's system of "free schools," has argued, the profit motive has encouraged successful schools to clone themselves, not unlike a fast-food franchise. One can easily imagine such schools touting their success in placing graduates in good jobs. The beauty of this approach is that it doesn't demand that school administrators in some central office divine the one best way to encourage spontaneity; rather, it allows hundreds, if not thousands, of free-thinkers to experiment.

Looks like Britain is on stage three of my predicted trajectory.

What is going on in English departments? HT: AR

Doug Lederman on for-profit institutions.

Pell Grant Testimony

Andrew Gillen testified before the Senate Health, Education, Labor and Pensions (HELP) Committee last week in Philadelphia. The field hearing was organized by Senator Robert Casey (PA) to discuss

Access and Affordability: How Expanding Pell Grants Will Offer Higher Education to More Americans

You can read Dr. Gillen's official written testimony here.

A Disturbing Tendency

by Andrew Gillen

I have praised some of the Obama administration’s proposals and criticized others, but I have not said much about the Obama administration per se until now. Leaving aside any discussion of the ends aimed for, I’ve noticed a very disturbing tendency in the means used by the administration to achieve their ends.

First there was health care, where Tyler Cowen notes that

the Obama administration had promised deals to doctors and to pharmaceutical companies under the condition that they publicly support health care reform.

Next came the National Endowment for the Arts, where a conference call with artists of all stripes included representatives of the government stating

we can really work together to move the needle and to get ... stuff done… I would encourage you to pick something, whether it's health care, education, the environment.... Then my task would be to apply your artistic, creativity community's utilities. Bring them to the table.

Next came the environment.

The EPA has now formally made an "endangerment finding" on CO2… The idea is to get Exelon and other utilities to lobby Congress to pass a cap-and-trade bill that gives them compensating emissions allowances that they can sell to offset the cost of the new regulations…

White House green czar Carol Browner was explicit on the coercion point last week, telling a forum hosted by the Atlantic Monthly that the EPA move would "obviously encourage the business community to raise their voices in Congress."

Finally, there was higher ed. As reported by Doug Lederman,

At several points in the call, administration officials let the two-year college presidents know that priorities they favor are dependent on Congress passing the Student Aid and Fiscal Responsibility Act (and the community college focused American Graduation Initiative that is part of it) this fall…

a department spokesman… concluded it by saying that "the department is committed to working with you," but that the administration "will need your voices" in the months ahead…

That will depend on when Congress acts on the legislation, Shireman said -- another hint, if the presidents hadn't gotten the message already, that they might want to consider telephoning their Congressional representatives as soon as the department's call ended.

These are four examples of a very disturbing tendency by the Obama administration to use explicit or implicit payoffs to buy political support for other policy proposals. To be clear, any proposed legislation will create winners and losers, and we should not be surprised that the winners can be quite vocal in their support of the legislation. But what we are talking about here is different, and much more insidious. The administration is deliberately creating winners in one area on the condition that they support the administration in a different area.

In the most blatant instance of this, people whose specialty is art were encouraged to support the administration’s position on health care, education, and the environment. The other examples are less clear cut, because they at least are related to the broad field in question. But the tying of payoffs/threats to broader legislation in this manner is troubling. In health care, huge amounts of money were promised to doctors and pharmaceutical companies for their support of a bill that would do much more than just influence doctor and drug pay. In environmental policy, utilities are being offered huge sums of money in the form of pollution credits, so long as they support a system that makes those credits valuable.

In the education example, community colleges were told that “priorities they favor are dependent on Congress passing” SAFRA, whose impacts would primarily be felt outside of community colleges. If SAFRA doesn’t pass, there is no reason that the proposals affecting community colleges couldn’t be considered on their own. But the administration is trying to buy support for one set of policies by tying it together with relatively unrelated policies.

The argument that this is standard operating procedure for Washington doesn't hold much weight - we elected Obama to change the way things are done in Washington, not to make it worse. Moreover, such Frankenstein bills are understandable when the result of horse-trading among legislators, but this appears to be the modus operandi of the administration at the beginning of a policy debate. It is hard to distinguish the add-ons whose only purpose is to buy support for other policies on the one hand, from a form of bribery on the other.

As Tyler Cowen points out,

We should stop using political favors as a means of managing an economic sector. Unfortunately, though, recent experience with health care reform [AG: I would add art, environmental, and higher education policy as well] shows we are moving in the opposite direction…

Should you go to the best school you get into?

by Andrew Gillen

David Leonhardt has an interesting piece up at the NYT discussing the graduation rate problem at many schools.

If you were going to come up with a list of organizations whose failures had done the most damage to the American economy... the list should also include a less obvious nominee: public universities.

...in terms of its core mission — turning teenagers into educated college graduates — much of the system is simply failing.

Make sure to check out the graphic too.

One odd thing is that Leonhardt states "Conservatives are wrong to suggest affordability doesn’t matter." Perhaps I'm blinded because I work at CC[Affordability]P, but are there really people, let alone an entire political worldview, who've argued that affordability doesn't matter?

But moving on...

The second half of the piece gives a lot of weight to a new book, Crossing the Finish Line. Apparently (I just got the book so I haven't read it yet - so I'm going off of Leonhardt's interpretation), the book argues that you should go to the best school you get into, the logic being that this improves your chances of graduation - again see the graphic. While this may help avoid the problem of low income students enrolling in a worse college where they are less likely to graduate, this is potentially very dangerous advice, largely because graduation isn't the only thing that matters. The cost of college and job placement upon graduation also matter.

My understanding of the widely misunderstood Dale and Krueger paper is that if you get into a top school, you should go. This is consistent with the Crossing the Finish Line recommendation.

However, the top schools in the country admit a minuscule fraction of all students, and I'm not convinced that lots of low income kids are getting into Harvard, Princeton and Yale and not going, especially since the top schools are increasingly generous with need based aid thanks to huge endowments.

For non-top schools (ie, where the vast majority of students go to college), I'm not sure the advice is sound. The better schools tend to be more expensive, and when you combine that with the fact that lots of college graduates (40% last I saw) have jobs that don't require a degree, you've got a recipe for high debt and poor job prospects. Nor is this just a hypothetical objection. See this piece by William D. Henderson and Andrew P. Morriss for a real world example of how following the advice to go to the best school you can get into can lead to quite catastrophic consequences once you move past the very top schools.

To sum up, my take is that the advice to go to the best school you can get into is sound if you're thinking about upgrading from a school ranked 115 to one ranked 15. On the other hand, not many students have that option open to them, and are instead choosing between a school ranked 550 and one ranked 450. It's not so obvious that moving up those 100 spots would be worth another 10k a year in debt. Since there are many more students in the second scenario than the first, and those in the first tend to make the recommended choice anyway, I think the advice "go to the best school you can get into" can ultimately hurt more students than it helps once cost and job outcomes are taken into consideration. However, I'll hold off on taking a stand one way or the other until I've had a chance to read their complete argument.

For Whom the Pell Tolls

By Richard Vedder

Doug Lederman had a very well written article for INSIDE HIGHER ED last week on Pell Grants, starting with the interesting observation that the top 10 institutions in terms of Pell Grant recipients are mostly for profit schools.

Some seem to be horrified by this. Sandy Baum, who is the Higher Education Establishment's favorite economist, worries about the high debt carried by students at for profits. Debts are higher because these institutions do not get the government subsidies that community colleges and four year universities do and thus charge higher tuition. She does not seem to rejoice in that the total cost to society of educating a student at one of these institutions is typically LOWER than at traditional schools, in keeping with the "taxpayer be damned" attitude of most university administrators. Worries are expressed at how the for profits work hard to assure that their applicants get federal financial aid --much more so than the not-for-profits. As Don Heller at Penn State notes, the for profits should be praised for this, and traditional universities should learn from the for profit model.

Basically, the problem is the traditional schools have largely ignored the poor. They are more expensive to teach (e.g., need more remedial training), tend to drop out more, hurting college rankings, and want to take courses when the faculty want to be playing golf, reading books, watching PBS, or otherwise amusing themselves (evenings and weekends). The for profits are consumer oriented, the not for profits are not.

The for profits thus are rapidly gaining market share --reaching out to those who want training, servicing the first generation college students, etc. They often teach intellectually lowbrow vocational stuff like hair styling or truck driving, and often give certificates instead of diplomas. But apparently their students get jobs. They are serving a need, and their enrollment growth relative to traditional schools suggests that they are relatively popular. The not-for-profits have only themselves to blame for their disdain and neglect of this segment of the population.

The dilemma for the Obama Administration is this. The president is a socialist who despairs at capitalist involvement in many things, including education (for example, in his efforts to remove private firms from the subsidized student lending program). He views high profits as something obscene, and not serving a public purpose. Yet he also wants to target more assistance and get more attendance from the very segment of the population that is been aggressively served by the for profits. If the Obama Administraiton cracks down on the for profits on ideological grounds, it jeopardize its goals of increasing low income participation in higher education.

I suspect the real battle between the not-for-profits and the for-profits will accelerate when the latter companies increasingly target traditional age students and when, perhaps, they start offering more up scale settings for middle class students -- Yuppie U. As the 19 to 24 year old population shrinks, the introduction of new competition from the for profits will be too much for many of them to take, and I suspect that they will try to restrict federal lending to students at these institutions, use accreditation to restrict entry, etc. It is my hope that they lose this battle, since the for profits are modestly but importantly forcing the traditional schools to be a little less inefficient and indifferent to the needs of the public. Stay tuned.

DL advocates take note

by Andrew Gillen

If the hundreds of billions that we've already put on the line for Fannie Mae and Freddie Mac, the quasi government mortgage giants, wasn't enough, we'll soon be doing the same thing for the FHA, since one out of five of their loans is in some state of delinquency. HT: FS


Those who keep saying student loans from the government will be the greatest thing since sliced bread should really be asking themselves how to avoid the fate of mortgage lending by the government.

Links for 10/12/09

Duncan calls ed schools "the Bermuda triangle of higher education."

Jack Stripling

“You’re dealing with a culture that does not care about reducing cost,” says Carol Twigg, NCAT’s president…

“People in higher education believe in what we’re doing, as long as they don’t have to do it.”

Ronald G. Ehrenberg, Harriet Zuckerman, Jeffrey A. Groen, and Sharon M. Brucker on restructuring humanities graduate programs.

Drew A. Bennett goes all cookie monster on Harvard:

we don’t spend $500 every meeting on cookies! Maybe it’s time to stop drawing attention to the alleged sacrifice of doing without cookies and ask what’s wrong with a system where some institutions have that much money in the first place. Another example is Princeton University spending $5,000 each on chairs for its new library. Every time I read about something like this I want to shout that a million-dollar gift to an institution like Harvard or Princeton is a drop in the bucket, while the same gift to a two-year, rural college is a tsunami.

I had never giving much weight to the transition issue argument against dropping FFEL. Perhaps I should.

What does CCAP blog about?

by Jonathan Leirer

It's Friday, so why not have a little fun and some self reflection while we are at it. Using wordle, which creates graphical representations (so called "word clouds") from text provided by the user, we created a CCAP cloud based off the blog. The size of the word is related to the frequency of its use.


As you can see endowments have been of particular interest to CCAP lately. I'm glad to see aid, students, and hypothesis are also prominent.

Rankings Revisted

By Richard Vedder

The Times Higher Education (THE)world university rankings are out for 2009, and the big news to many is the decline in American listings in the top 100 schools. To me, the news is how much difference there is between alternative rankings systems, and the implications of that.

The correlation between the American universities included in the THE rankings and the FORBES rankings is a very low .491. Cornell University is ranked by FORBES below Cornell College, not in the top 100 American schools, while THE ranks Cornell the 15th best school in the Solar System (or at least Earth). The correlation between THE and US NEWS is higher, but there are still some big differences with respect to American schools in these two rankings.

For the record, I think the THE rankings are based on a bad methodology. The best thing about them, as Daniel Bennett has observed, is the employer survey, a good idea.. But reputation counts for a huge portion of the THE rankings, the sample of academics surveyed is biased, there is a pronounced pro-British bias in the rankings, etc. If an American school hires a lot of Indian mathematicians who speak lousy English, it will raise that school's THE rankings, but almost certainly lower its FORBES rankings. Foreign is beautiful to THE, not to Forbes (which is officially neutral on the geographic origins of students and faculty, as is US NEWS).

Forbes main interest is consumers and undergraduates, THE's is research and what academics think. US News is somewhere in between. For the average citizen, a "do it yourself" approach to rankings works best --possible on the Forbes.com web site. Emphasize the criteria that YOU think is important, not what some periodical thinks. An expansion of the Forbes do it yourself data base would be worthwhile.

All of this points out that perceptions of what constitutes "excellence" vary immensely. It also points out that we have very poor and imperfect measures of success or output in higher education. If we could measure value added by an institution with respect both to teaching and research, we would have better rankings, independent of the value different individuals place on different things. To THE, research seems to play a dominant role, to the extent that not a single liberal arts college in the U.S. is listed. Amherst and Williams and West Point --all ranked highly by both Forbes and US News, are non-entities to the gurus from London (who manage to get two London based institutions in their top five).

Student Employment Builds Character

by Daniel L. Bennett

Full disclosure: I am a former student of Dr. Kalenkoski and she served as my primary master's thesis advisor (for which I am very thankful).

A few weeks ago, Dr. Vedder wrote a blog about new research by economists Charlene Kalenkoski and Sabrina Wulff Pabiloniaon that suggests that college students, on average, work while in school for spending money, rather than to pay tuition, and that hours worked does not hinder academic performance, but may in fact, improve it up to a certain amount. Today, this research was one of Inside Higher Ed's top stories. Dr. Kalenkoski was quoted as saying, "“We’re not saying there aren’t students who work to pay much of their tuition, we’re just saying it’s more likely they’re taking out loans to make up for whatever isn’t covered by other kinds of financial aid or parents.”

I believe that the authors of the study are on to something here that speaks of the affect that student loans are having on not only tuition (which my colleague discusses here), but on student's attitude toward work and study.

Having maintained at least a part-time job for most of my academic career, I can provide anecdotal evidence to support the author's findings. I was fortunate enough to qualify for federal grants and to have been awarded several scholarships to cover the bulk of tuition fees (attending a regional campus of Ohio University for 2 years reduced this cost substantially), so my work earnings from delivering pizza and frying chicken wings as an undergraduate, were not used to pay tuition, but rather to make a car and insurance payment, pay rent and utilities, and incidental expenses (including 'beer money'). I generally worked an average of 20-30 hours per week during the school year, while maintaining a 3.8+GPA as a "full-time student" --which effectively made a 4-year degree into 5-year one.

Lacking an abundance of free time outside of the classroom and work, I had to use my time wisely to complete projects and study for exams. Admittedly, I missed out on much of the social atmosphere that many college students enjoy for the the first several years of college because of employment. This is one of the primary reasons that I decided to study abroad my junior year and not work during my senior year of college, and instead opted to take out student loans to cover the "unmet" out-of-pocket expenses. The extra time generated from not having to work was definitely not replaced with an increase in study time, although my grades remained approximately constant and I did participate in more campus activities, including becoming a patron of the many fine Court Street establishments. It was enjoyable, but looking back, I would have been better off to have worked a part-time job to cover my expenses rather than taking on as much student debt. Hindsight is 20/20.

During my tenure as a master's student, I was fortunate enough to receive a graduate assistantship that was accompanied by full tuition funding and a stipend, in exchange for 16 hours of work for the department's graduate program director -who did not by any means allow his assistant a walk in the park. As graduate-level work is much more intensive than undergraduate, this left me with very little time for campus activities. As a somewhat older returning student, I was much less interested in this aspect of college and spent any free time with my girlfriend (soon to be wife) and/or our close group of friends -not engaging in destructive behavior might I add. The limited amount of free time, coupled with an appreciation for serious academic study that was gained from a few years in the "real world", helped me to remain focused and perform academically better than any other time in my life. And honestly, this was a much more enjoyable life experience that resulted in an abundance more of life takeaway than those last 2 years of the more social undergraduate study.

My experience supports the above author's findings that student employment does not seriously hinder academic performance (it may actually improve it) and that student earnings from employment may not necessarily be used to pay tuition. Reflecting on my own time in college, I am a strong proponent for student employment, as it builds important life skills (e.g. time management, discipline and appreciation for the opportunity to get an education) that many college students lack these days --something that is evident from employer complaints about graduates. Previous generations of college students epitomized the "starving college student" picture, and were often forced to work jobs and live a modest lifestyle in order to pursue a college education. Much of that meritorious tradition has been lost in the modern age, as many now feel entitled to not only a college education, but high marks that may be undeserved. We've allowed college to became a tool for socialization and entertainment, as opposed to a tool for lifelong learning. Easy loan policy by the government has definitely been an enabler of this shift in paradigm.

World University Rankings

by Daniel L. Bennett

The THE-QE World University Rankings 2009 were released today. Harvard was atop the list of 200, but other than Yale at number 3, the top 6 are UK institutions. U.S. institutions round out the remaining top 10. The methodology used in developing the rankings are:

Peer Review Surveys (40%)
Employer Review Surveys (10%)
Staff/Student Ratio (20%)
Citations/Staff (20%)
% of International Staff (5%)
% of International Students (5%)

I like the inclusion of employer surveys, as it provides somewhat of a measure of student outcomes. The research output is a legitimate measure of university performance. The focus on international students and staff is questionable as a metric, but it is the peer review component that is the most controversial. U.S. News receives criticism every year for peer review accounting for 25% of its ranking, and for good reason. The THE-QS World Rankings give it a 40% weighting.

Criticism aside, I like the idea of ranking colleges on a global scale, as universities do compete for students, faculty and resources internationally. There are now several publications that rank schools globally. As we at CCAP believe, the more competition the better.

Links for 10/8/09

Elizabeth Bryan

Ending institutional grants would take the politics out of higher education and allow consumers (the students) to drive which investments universities make. College administrators would need to please enrollees, not lawmakers, to get additional funds.

Frederick M Hess

Rather than addressing the anti-competitive arrangements and cross-subsidies that have led colleges to profiteer at the expense of students, the administration is pushing to spend half a billion dollars to procure online courses that will be offered free of charge to all comers…

Duncan’s proposal is a profoundly short-term solution. If the federal government started freely offering large swaths of cell phone service, it would be difficult for providers to retain customers. The result would be the gradual erosion of the market place and reduced investment in new products or services. Short-term savings would be gained at the cost of gutting the sector’s ability to keep innovating and improving.

Kevin Carey takes some fire for daring to criticize Harvard. To me, most of it does little to address his main point:

In brief: From 1990 to 2008, the Harvard endowment grew by $30 billion. That’s more money than anyone could possibly have dreamed of. And yet in all that time, the people in charge of spending that money never thought to devote even a dime of it to educating more undergraduates. These seem like warped values for an educational institution.

Endowment Woes

By Richard Vedder

CONSUMER WARNING: This is a dull blog except for investment/finance geeks. While the typical university endowment lost 15-20 percent over the past year, Harvard and Yale, the two largest, lost 25 percent or more. Have they been acting imprudently or incompetently? The short answer, I think, is no. They have followed a somewhat high risk investment strategy not appropriate for most endowments, but probably reasonable for very large and diverse endowments. Over the past decade, even with the recent downturns, Harvard, Yale and Princeton have outperformed the markets and most other endowment funds. Their average annual rate of return, even with the past year, exceeds 10 percent; since inflation has been around 3 percent, and endowment payouts for those schools averaged perhaps 4 percent, the real endowment has grown nicely --independent of new gifts.

Consider two endowments in 2008 --one of $100 million held by a relatively poor private school, and the other Harvard with $35 billion. Harvard can make 175 investments, some highly risky, that average $200 million each. Suppose 3 of these investments go completely belly up (fall to zero in value) in a given year, but another 5 are "home run" investments that grow in value in a year to $400 million each. On these 8 risky investments combined, comprising less than 5 percent of total endowment, Harvard makes $600 million total --a 43 percent return. A few disasters are expected, and in and of themselves are no big deal for Harvard. They have so many investments, that they can diversify risks and take a lot of them. The poor school does not dare put the minimum $20 million or so needed for some daring investments --say in hedge funds or some commodity plays. Too large a percent of endowment would be at risk. So they make, say, 100 $1 million investments in mostly safe instruments like blue chip stocks, bonds, and maybe a little real estate. They will average a lower return than Harvard in a typical year, and not likely ever seriously outperform stock market or other investment averages if their assets are allocated in a typical fashion. But it is unlikely they will fare significantly worse than investors in the economy as a whole.

Still, the success of these Ivies (and several other wealthy schools) depends on shrewd human judgments and a bit of luck. Investments in timber can go bad just as investments in bank stocks. Hedge fund investing is very risky and potentially costly in an unanticipated downturn. As the big schools find their endowments fall, even they have pressures in order to make the distributions to fund university operations that they would like. Suppose Harvard paid out $1.3 billion annually when its endowment was $35 billion --about 3.7 percent a year. If the endowment falls to $26 billion, it takes a 5 percent pay out rate --a rather high rate -- just to maintain a $1.3 billion annual spending pay-off. In that environment, with relatively little room for error, universities need to move to a somewhat more conservative philosophy, and perhaps reduce spending for current operations a bit.

All of this shows the prudence of using a moving average calculation of endowment value and limiting payouts to slightly below five percent to assure that real endowment principal is being maintained. Instead of a three year moving average, schools might go to five years. Suppose a school's endowment was the following on June 30: 2005= $900 million, 2006= $1,000 million (a billion), 2007= $1,100 million, 2008= $1,300 million, 2009= $1,100 million (a fairly typical pattern). Suppose it uses a 4 percent payout rule on a three year moving average. In the fall of 2007, the 3 year moving average endowment was $983 million,, allowing for $39.3 million in spending. In the fall of 2008, the endowment base goes to $1,133 million, allowing $45.7 spending. After the 2008-09 investment fall, the 3 yr base is still $1,167 million --and spending would be allowed to actually rise for this academic year slightly to $48.3 million despite the recent decline in endowment values. However, if the endowment fails to appreciate this and next year, eventually spending would have to decline by 6-7 percent from current levels. With a five year rule, the possibility of one bad year forcing reductions in endowment spending are reduced significantly.

Since most endowments have many individual accounts (e.g, scholarship funds), some of the newer accounts may fall below the initial value of the gift, and are "under water." It is often customary to forbid spending from such accounts until the initial nominal value of the endowment is achieved. I am not entirely sure that is optimal strategy, but it does help restore endowment value quicker, at the cost of putting more pressure on current operations.

Too many small endowments spend too much seeking so-so investment advice from so-called experts when they would do just as well allocating funds between broad investment categories (e.g., equities, bonds) as the all-university average and put money into indexed funds instead of trying to guess ups and downs of individual securities in which they have small (say under $1 million) investments.

Alumni and donors should monitor investment policies carefully to see that donor intent is honored and that universities are not acting imprudently. By and large, my only complaint in general is that universities spend too much money on conspicuous consumption among development officers and, in some cases, pay too much for mediocre investment advice. But I don't think endowment investment strategy is one of the big scandals in higher education --there are enough other things to worry about more.

Overstating the Case

by Andrew Gillen

Sara Goldrick-Rab overstates her case in this post, attacking Neal McCluskey for believing in the Bennett Hypothesis (the idea that financial aid leads to higher tuition):

the Bennett hypothesis keeps on rearing its ugly head. I think after more than 20 years of this nonsense it's time to call the idea what it is-- just plain stupid-- and stop giving ink to the people who repeat it.

She’s very angry that the Bennett hypothesis won’t die, and says the evidence shows the idea is "stupid." But there a slight problem with that – that’s not what the evidence says.

The story that emerges from the literature as a whole is that the evidence on the Bennett hypothesis is mixed and contradictory. There isn’t enough either for or against it to make a conclusive determination as to it’s validity. So attacking Neal for espousing a discredited theory that has not in fact been discredited is, well, wrong.

To the literature:

Sara quoted Bridget Terry Long

"Of the many studies that have tried to identify whether colleges react to federal financial aid, most find little to no response. While several studies do find a college price response, their overall results are mixed and often contradictory.”

To which I will add 3 more that I could dig up on short notice.

Rizzo and Ehrenberg

“Estimates of the size of this “Bennett Hypothesis” at public institutions range from negligible to a $50 increase in tuition for every $100 increase in aid.”

McPherson and Schapiro

“We found no evidence of the “Bennett Hypothesis,” [at private institutions]… We did, however, find that public four-year institutions tended to raise tuition by $50 for every $100 increase in federal student aid.”

Singell and Stone

“Previous studies with evidence pertinent to the Bennett hypothesis are suggestive. McPherson and Shapiro (1991), Turner (1997), Li (1999), Netz (1999), Acosta (2001), and Long (2002) all find evidence that tuition rises for at least some segments of the higher education market”

The conclusion to draw from these and other papers is that we just don't know if the Bennett hypothesis is valid or not. Personally, I disagree with Neal on this one - I don’t think the Bennett hypothesis provides an adequate explanation of what’s going on. But that is a far cry from being able to say it's "stupid." This is why I came up with a new and improved version (“nuanced” in Sara’s words. BTW, thanks for picking up on the difference, unlike some others who said “we’ve seen this kind of report before and it’s usually someone with an agenda and not necessarily a very insightful report”).

Importantly, my new theory offers a crucial take on why the evidence is all over the place. On page 18, I said

The second way in which this report differs from the Bennett Hypothesis is that it is explicit about when the effect occurs (and the types of aid likely to suffer from it). Specifically, aid will fuel increases in spending when it is given to students whose ability and willingness to pay is in excess of current costs at the school. Because costs and ability to pay vary by school, this implies that a much more nuanced view is warranted. The same aid program can have different effects based on the characteristics of the school and the students attending… Thus, lumping all federal aid together when analyzing its impact, or even all aid of a given type, is unlikely to yield accurate results. Unfortunately, public data on aid is generally only available in aggregate form (not student specific), which limits the extent to which we can analyze these issues.

Previous studies have mostly used aggregate figures (because finer data isn’t easily available), and some lump all types of aid or all types of a certain kind together (because the original Bennett Hypothesis didn't indicate any reason not to). If my new theory is correct, it would go a long ways towards explaining the mixed results, since at some schools, the aid is given to students who are already willing and able to pay current costs, and at some schools, it isn’t. Thus we would only expect to see higher costs (and presumably higher tuition) at some schools, not all – which is precisely what the literature keeps finding.

Provided I ever finish the current projects I’m working on, I intend to revisit this topic with some rather clever (if I may say so myself) ways to test my new theory more thoroughly (if anyone out there is interested in partnering with me on this, just get in touch).

Something Bad Happen? Blame It On Republicans

by Andrew Gillen

This post by Kevin Carey details how his metro train caught fire the other day. Obviously, this is the fault of… Republicans. No, seriously, he actually says that:

between the 1970s and today a whole political movement rose to power dedicated to the proposition that revenue sources—that is, taxes—are evil, in approximately the same way and to the same degree that Charles Manson is evil, i.e. satanic, depraved, to be opposed with all the righteousness and fervor one can muster.

Those actions had consequences.

This reflexive blaming of Republicans for everything bad that happens means that either Carey has been reading too much Krugman or that the smoke must have gone to his head.

Metro serves DC, MD, and VA. Republicans have never been in charge of DC, are “historically the underdog party in state politics” in Maryland, and while they’ve done well in Virginia lately, this is a relatively new development (post 2000).

Thus at the local level, Republicans can hardly be blamed. Nor does the accusation make much sense at the national level. A quick glance at this picture reveals that Republicans and Democrats have more or less split power evenly since the 1970s, the period in question.

I’m certainly not pro metro fires and crashes, so it seems clear that there has been a government failure to provide the appropriate maintenance/updating. This sort of situation is analogous to the situation on college campuses that neglect facility maintenance in order to reallocate money to other uses, and then make a public plea for more money when things begin to break down.

But trying to blame that on Republicans, who have never held much power locally, and only sporadically nationally, is just plain absurd.

Liberating the Liberal Arts

By Richard Vedder

Last night I attended a remarkably erudite and thought-provoking lecture by Patrick Deneen, a political philosopher at Georgetown University, entitled "Liberating the Liberal Arts: On Re-learning the Art of Being Free." In his discourse on collegiate curricula and the meaning of liberty, Deneen hit on several themes of interest to us at CCAP.

There are different visions of liberty and freedom. To some, liberty means an absence of restraints on personal behavior, a disregard for the old moralities and religious strictures of the Ten Commandments and beyond. For others, liberty involves voluntarily accepting constraints on behavior that ultimately will lead to a better, more ordered, and truly more free society. Colleges have largely abandoned their mission of promoting virtue, self-restraint, thrift, honesty, and other virtues. Deneen is not prescriptive, but obviously he is concerned by this drift of colleges away from the verities that form the corpus of the cultural capital of Western Civilization, some of which is sort of an implicit moral code of conduct that universities are no longer inculcating.

Deneen lamented the decline in the humanities, both in terms of enrollments and content taught. English majors have been in sharp relative decline, while business majors have boomed. The leading major, unfortunately, at Princeton, is economics. College is becoming sort of an advanced vocational school. We no longer are pondering the eternal questions central to any civilization, but we are teaching our kids about how to sell, truck and barter (to borrow from Adam Smith). I would add, parenthetically, that most of that is learned best on the job in any case.

Deneen seems close to accepting my position that we are over-investing in some types of higher education. He talked approvingly of Matthew Crawford's book Shop Craft as Soul Craft which argues that many of the best jobs in life are based on skills of the hands as much as the mind. Crawford, who has a Ph.D., went into motorcycle mechanics successfully and joyfully, and maybe there is a lesson there for higher education. We have too many business majors yes --- but maybe too many of all kinds of majors. Too many people go to school for the jobs that ostensibly are available only to college graduates, and many in the process are learning much of inconsequential importance both to work and to life ---and are missing out on appreciating the richness of the human enterprise that is enhanced by the study of the humanities.

Links for 10/7/09

Three cheers for Cheryl J. Wachenheim.

Scott Jaschik on Gaye Tuchman's new book.

The examples in the book portray an administration much more concerned with making the university look outstanding than actually becoming outstanding. And measures that Tuchman writes are of dubious value (U.S. News & World Report rankings, for example) appear to count much more than the vibrancy of intellectual life or the student learning experience.

Barry Ritholtz

my undergraduate school turned out to be, 10 years later, a one hour diploma mill... I graduated Law School about 3 hours after I graduated College — same day, same year.

“Binge borrowing is the new binge drinking”

The Higher Education Cost Index

By Richard Vedder

There are several things in life I would hate to endure --a hemorrhoid operation, a diet exclusively of spinach, and a week alone on a desert island with Nancy Pelosi would be three examples. Another is having to read and analyze the Higher Education Cost Index of the Commonfund.

The HECI is an abomination. A true price or cost index measures the change in currency units of the price or cost of a given amount of output of constant quality. Since outcomes and outputs are not truly measured in higher education, and there are multiple services produced (teaching, research, basketball entertainment, housing services, etc.) any attempt to calculate a cost index is an exercise of dubious value. Worse, the HECI is used by college administrators to perpetuate inefficiencies and rent-seeking behavior. Schools increase their administrative staff and pay by 10 percent, and this increases the HECI --so the schools claim that "adjusted for inflation", state appropriations are falling. Spending more creates the illusion that universities are receiving less. State appropriations are actually not falling, but appear to be doing so because of the rent-seeking avarice of universities that use the HECI more often than not.

Having said that again, for the umpteenth time, let me admit that the HECI may be a decent measure of the resources expended per student at a university, and that is a better measure than tuition charges of measuring higher education costs. With that in mind, I have taken the new 2009 data and done some calculations.

In 2009, the Higher Education Cost Index rose "only" 2.3 percent, the lowest increase in the history of the index (going back to the early 1960s). Yet college costs rose much more than inflation --as they have every year in this decade. From 1999 to 2009, the Consumer Price Index rose 30.5 percent --but the HECI rose much more --47.7 percent. The real cost of college per students is steadily rising relative to other goods and services which we produce and consume.

Why? Because we keep adding resources, take on new non-academic missions, and show little real concern about productivity. Technology does not lower costs --it raises them. Staffs are increasing per unit of output, not falling as in the rest of the economy. The rhetoric of colleges in claiming high levels of efficiency is just that --rhetoric, and the HECI, for all its many limitations, supports that conclusion.

Critique of Crossing the Finishing Line

In an essay published at Minding the Campus, Richard Vedder critiques Crossing the Finish Line--the recently released book by William Bowen, Matthew Chingos, and Michael McPherson.

Trustees and Intercollegiate Athletics

By: Matthew Denhart

An article in my school’s student newspaper, The Post, demonstrates all that is wrong with the view university trustees too often take concerning intercollegiate athletics. In a presentation before the board of trustees where the athletic director made a plea for more funding, one of our esteemed trustees made this statement: “I can’t imagine a major university without athletics,” and wondered, “What is our plan to go after some of those major athletes, or are we going to be in a constant budget debate?”

The absurdity of her statement is astounding when even an ounce of economic reasoning is applied. The first part of her statement implies that the benefits of intercollegiate athletics so greatly outweigh the costs that it would be unfathomable to even consider the university without it. Such an idea is frightening if one believes that the objective of any university should first and foremost be the education of students.

In our study released last spring, CCAP offered an alternative view of intercollegiate athletics. This view acknowledges that both benefits and costs exist from athletics and concludes that on average too much emphasis is placed on athletics. Just as groups such as the Knight Commission and Drake Group have argued, we believe that there is currently an athletics arms race under way. Although virtually all athletic departments lose buckets of money every year, they continually spend more in hopes of gaining a competitive edge over others. This results in a circular pattern that devotes more and more resources to sports. This has escalated to a point whereas today a majority of FBS football coaches earn more than their university’s president.

The comments such as those put forward by my institution’s trustee are depressing. Not only does she refuse to consider both the benefits and costs (including the opportunity cost of funds), she further encourages the arms race by suggesting that we end budget debates regarding athletics in order to have the means to “go after some of those major athletes.” (Last March in the Wall Street Journal Professor Vedder and I pointed out that often those “major athletes” are greatly exploited at the hands of the NCAA labor cartel).

Trustees have the ultimate power to reverse these backwards priorities. My university, like others across the country, is struggling severely to balance its budget and academic programs are taking serious hits. Yet, athletics receives unconditional support. In its 2009 Statement on Board Responsibilities for Intercollegiate Athletics, the Association of Governing Boards points out that athletics have reached a point where in many cases they “may be detracting from the institution’s mission,” and that there is, “a widening gulf between the athletic and academic cultures at some institutions.” Sadly they seem to have it right.

Now more than ever we need trustees with the capacity to consider critically the appropriate role of athletics within the American university. Judging from the comments of at least one trustee, it doesn’t appear my school will be taking the lead.

Rating the Raters

Guest Post by Lynn O'Shaughnessy*

Here's an assignment that I'd like you to complete in one afternoon:

Rate 262 households in your community on a one-to-five scale. Give exemplary residents the top ranking, while the sort of folks who never take down their Christmas decorations and cheat on their taxes should earn the lowest score.

Yes, it's an absurd exercise, but I did pick 262 for a reason. That's the number of institutions in US News' "national university" category. Every year three administrators from each of these 262 universities are expected to grade their competitors on a one-to-five scale. Yale, for example, is supposed to rate schools like East Tennessee State, Florida Atlantic and Central Michigan, as well as its blue-blooded peers. This peer assessment represents the largest weighting in US News' methodology.

While it's easy to dump on US News' flawed beauty contest, families demand rankings. There just haven't been any worth relying on until the Center for College Affordability & Productivity and Forbes began collaborating.

As I mention in an article that I wrote for CBSMoneyWatch.com in which I rate the various college ranking systems, what I like about the CCAP/Forbes effort is that the creators attempt to measure the type of learning taking place in colleges and universities. While that would seem like a no brainer, US News has remained incurious about what happens in classrooms.

CCAP/Forbes also takes a look at the salaries that graduates of 600 top colleges and universities in the survey are earning. Perhaps these results will dispel the ridiculous belief that undergrads who are shut out of Ivy League networking will never make the big bucks.

I find it fascinating to see what happens when you use more meaningful benchmarks to weigh the true worth of a school. Many elite institutions, such as Princeton, Cal Tech and Williams, also crowd near the top of CCAP/Forbes' rankings, but other elites such Cornell, Dartmouth and Penn sink.

If CCAP/Forbes' rankings merely embarrassed some higher-ed sacred cows, I wouldn't find it all that helpful. But the rankings also perform a wonderful job of highlighting many unheralded schools such as Centre, Wabash, Doane, Kalamazoo, Sweet Briar and Wofford colleges that aren't on enough teenagers' radar.

Frankly, Forbes’ America’s Best Colleges is the only ranking system that I can recommend.

*Lynn O'Shaughnessy is the author of The College Solution and a blogger at TheCollegeSolutionBlog.com and CBSMoneyWatch.com.

Links for 10/5/09

As if my dog blogging weren’t enough, here is even more proof that dogs are smarter than cats.

1. Dog Gets Online MBA…
10. Cat Gets GED

A resurgent British aristocracy?



Richard Whitmire and Andrew J. Rotherham

Unions are asking the public to believe that teachers should never be judged on their effectiveness. Even if the media were in the tank for the unions that would be a tough sell.

Of course, in the past it was difficult to measure teacher performance. But now, as a result of data collected under No Child Left Behind provisions, it is easier to figure out which teachers are succeeding. "Data and results are challenging an industry that was traditionally driven by hope, hype and good intentions," says Jane Hannaway, the director of education policy at the Urban Institute. Ms. Hannaway argues that in the long run these emerging databases may be the most important dividend of today's school accountability policies.

James Guthrie

America does not now need education schools. They add little and cost a great deal…

Are online ed schools any good?
No one knows. The performance of their graduates has not been systematically compared to those completing conventional ed school programs. [AG: I would add that this is true of established conventional programs too]…

Researchers (e.g., Hanushek and Rivkin) cannot discern a positive association between students’ academic achievement and their teachers’ post-BA course credits, degrees, or certificates...

Career College Students Come From Less Affluent Backgrounds

by Daniel L. Bennett

A few weeks ago, I wrote a blog defending career colleges from criticism that their students take on larger average debt loads than students in other sectors. The basis of my argument was

that career college students, on average, come from lower income families than students at public and private not-for-profit schools and would need to borrow more money, on average, than more affluent students, regardless of the type of school they attend.

At the time of the posting, I stated that "I don't have comprehensive comparable data in front of me for the public and private not-for-profit sectors, the evidence that I have seen is that these sectors serve a significantly lower proportion of low income and minority students who are less likely to need student loans to pay for college than does the for-profit sector. This suggests that students at public and private not-for-profit schools are more likely to have at least some help from their parents or other private sources to help pay for college."

In collecting Pell Grant data from DAS, I came across data which supports this statement. The below table shows the percentage of students receiving a Pell Grant and the average grant amount for recipients, by institutional sector and control. At 4-year for-profit schools, 57.5% of students received a Pell Grant in 2007-08, whereas only 25.4% of 4-year public and 25.7% of 4-year private not-for-profit students received a Pell Grant. At 2-year institutions, 71.7% of students at for-profit schools received a Pell Grant in 2007-08, whereas 21.2% of public and 39.2% of private not-for-profit students received a Pell Grant. At less than 2-year institutions, 65.6% of students at for-profit schools received a Pell Grant in 2007-08, whereas 34% of public and 61.9% of private not-for-profit students received a Pell Grant. Because the Pell Grant is a financial need-based award, these data confirm that students at career colleges are much more likely to be from less affluent backgrounds, explaining why they would, on average, take on greater student debt loans than students at public and not-for-profit schools.

Links for 10/1/09

"La. Needs More 2-Yr. College Students"

there are more graduates with four-year college degrees than the state can employ in their fields while the state has a shortage of workers needed for skilled labor jobs.

The NSF seems like a fun place to work.

workers accessing pornography... at the National Science Foundation (NSF) were so pervasive they swamped the agency's inspector general and forced the internal watchdog to cut back on its primary mission of investigating grant fraud and recovering misspent tax dollars...

one senior executive spent at least 331 days looking at pornography on his government computer and chatting online with nude or partially clad women without being detected, the records show.

By all means, have the government take on a larger role in managing financial aid programs. It's not like there are ever problems with conflict of interest, failing to get the money to those who need it, or questionable administrative expenses.

Edububble on colleges new found crusade against student gambling

what’s the biggest gamble for students today? Is it really sports or the chance that their degree in Comparative Mythology Studies or Bioliterature is going to get them a job big enough to handle the massive debt?

Saving Public Universities

by Anthony Hennen

Joseph E. Aoun has an article concerned with saving public higher education. In it, he approves of the strong competition in the American system of higher education, but laments funding cuts to public universities, desiring a progressive tuition structure and revamping public university governance. But doesn’t that miss a better solution?

Wouldn’t the best actions to improve public education, and education in general, be to introduce as much competition as possible into public institutions? Forcing public colleges and universities to run more like businesses and with as little government intervention as possible would assuredly compel universities to make costs minimal and improve curriculum. Aoun recognizes how a decentralized system works more effectively: "The American system is decentralized, which allows for a diversity of approaches and a significant amount of experimentation and innovation. It also fosters healthy competition. Small schools compete with large schools; publics compete with privates; comprehensive universities compete with liberal arts colleges. And there is spirited competition within these groups."

Instead of universities continuously branching out and expanding, perhaps competition would shrink the size of a university by eliminating under-performing departments. A university should focus on doing certain things very well, not offering every major imaginable with only a few valuable departments. When a university stretches itself too thin, it inevitably has inefficiencies and, when it is a public institution, squanders more public money. Monthly, if not weekly, there seems to be a university president or politician lamenting the lack of funding for higher education. But maybe the lack of funding is not the entire problem. Maybe the problem is the distribution and use of the funding. Waste not, want not.

A new business model for higher education could take awhile and cause great change. But if it would make universities more efficient and improve education, and that would only be for the better.

Anthony Hennen is a student at Ohio University and a research associate of the Center for College Affordability and Productivity