Educating Brilliance?

by Matthew Denhart and Christopher Matgouranis

Today’s “everyone is a winner” culture has spilled over into higher education. Over the last several decades, there has been consistent grade inflation in American universities. CCAP has addressed this in past posts. It has been estimated that there has been at least a 0.1 percent increase in average student GPA in every decade since the 1950s. In 1991, for example, the average GPA according to gradeinflation.com was 2.93, but had risen to 3.11 by 2006.

So who cares? At first glance this seems like a minor problem considering all the issues facing higher education. Grade inflation might seem like a good deal for students, but actually they are the ones who suffer the most. Grades serve two purposes. The first purpose is to measure competence in a class or subject area and the second is to distinguish oneself from peers. Students and potential employers are given an unrealistic idea of their gained knowledge. Also, when good students attempt to get jobs or continue on to graduate school, they have more trouble distinguishing themselves from their average peers.

While grade inflation is present throughout universities, colleges of education are the most egregious offenders. Using official university grade records, campusbuddy.com has created a comprehensive database of grade distributions for entire universities and individual departments within schools. We found this data for the top 20 CCAP/Forbes 2009 Public Research Universities that have the requisite information for education departments. The chart below shows the average GPAs for all university classes juxtaposed with the GPAs from education classes. Additionally, for all university classes, 43 percent of the grades were an “A” while 80 percent of education grades were an “A.”

Here is a sample chart of education department grade distribution for the University of Washington. This chart gets the point across, but sadly charts for many other leading public schools are just as bad.

University of Washington, Education Department

Often problems in higher education are blamed on a poor K-12 system. However, in a Catch-22 scenario, it may be that the colleges of education are harming the K-12 system by providing poorly trained teachers who then educate the next generation of mediocre college students. In this way, grade inflation hampers the entire education system.

It could be that students taking these courses are far more brilliant than average university students. The problem with this argument is that, at least at our university, data show that entering education majors by all measures (ACT, SAT, high school GPA and class rank) are below the entering class average. Most shocking, the average high school GPA for education majors was 3.35 while their college GPA in education courses was a 3.77. Universities are supposed to be more rigorous, but this data suggests that standards are lower in college, especially in colleges of education.

All of those shocking statistics are just an initial analysis. CCAP thinks that this is a topic that warrants a much deeper investigation. Stay tuned.

Comments on Student Loan Bill

Richard Vedder made the following brief comments about the student loan takeover bill for National Review Onlineyesterday:

President Obama’s signing of the education bill is triply disastrous. First, he violated basic tenets of representative democracy by tying otherwise politically unattainable education changes to the health-care bill.

Second, the bill’s student loan provisions will not save the $68 billion promised, and will move the country closer to a European-style socialism that has brought that continent stagnation. Going to a Soviet/U.S. Postal Service model of student-loan services goes against the sound maxim that competition is always better than monopoly. Moreover, the bill’s repayment terms will lead to increasing student-loan defaults, adding to the crushing fiscal burden on a government whose IOUs are now trusted less than those of some private corporations.

Third, the bill proceeds from a false premise. President Obama asserted Saturday that “by the end of this decade, we will once again have the highest proportion of college graduates in the world.” Putting aside the nasty reality of a 45 percent six year college drop-out rate, the Labor Department forecasts that, over the next decade, there will be fewer new jobs requiring college degrees than there will be new college graduates. This bill aggravates a costly and inefficient system, likely will raise tuition charges, and lead to more over-educated and over-indebted young Americans.

For-Profit Education Policy Trivia

by Daniel L. Bennett

Let's play a little game of education policy and research trivia. Read the below statements regarding the for-profit sector and try to guess when these statements were made.

Private career schools became a front-burner issue for postsecondary education policy about _______ (hint: timeframe)..., in terms of participation in federal programs and in broader discussions about consumer rights and abuses...The impetus...can be traced to one key indicator: rapid increases in the amounts defaulted by students participating in federally guaranteed student loan programs

The sudden interest in proprietary schools generated by the debate over default led to several subsequent policy discussions. One had to do with the level of debt appropriate for young people entering the labor market, another with the increasing proportion of overall federal funds for student assistance going to students in private career schools, and another with consumer rights and abuses related to admissions, advertising, and promises for employment

Now, you are probably familiar with the fact that the Obama Administration and the Department of Education are changing the cohort default rate rules to account for 3-year defaults in 2012, and that there have been discussions about tightening other regulations regarding the for-profit sector, such as the 90/10 rule and gainful employment. So it would be a great guess if you said that the above statements were made in 2009, but you would be way off because they were made during the 1980s and included in a paper by Lee and Merisotis (1990) that I recently came across.

That's right, we've been having the same policy discussion about student default rates and so-called consumer protections for around 25 years - in effect beating a dead horse. Despite subsequent regulations including establishing limits on CDRs to maintain Title IV eligibility, the 90-10 and gainful employment rules, laws requiring career schools to publish their job placement and graduation rates, laws forbidding incentive compensation and a slew of other regulations being placed on the for-profit sector, not much has changed in terms of outcomes. It seems that all of this federal meddling has led to...an escalation of tuition and the closure of 1,000s of career schools. I'm not exactly sure this was the intended outcome.

Just to touch a bit more on CDRs, I don't find it surprising at all that research produced in the 1980s reveals the same findings that current research on default rates does, namely that:

Studies that examine the effect of institutional type on default have sometimes been viewed as controversial because, given the structure of the student loan system; institutions themselves have no direct control over the borrower to influence his or her repayment

...students from different cohorts and varying income levels showed a considerable variance in their propensity for defaulting, supporting the idea that sectoral differences in default rates may at least be partially explained by differences in borrower’s characteristics

Defaulters have, regardless of institutional sector, significantly lower family incomes at the time the loan is made

the disadvantaged socioeconomic status of students attending proprietary and two year schools was found to be most strongly correlated with the likelihood of default, and institutional practices were found to be of limited importance

Links for 3/31/10

Frances Woolley

if what is taught at universities actually makes people more productive, then simply taking university courses should be enough increase earnings. In fact, to get much of a payoff from university education, you have to finish your degree (the “sheepskin effect” ). One reason education pays is that completing a degree “signals” your ability, determination, competence and general stick-with-it-ness.

Perhaps we should think of human capital as a fairy tale, a reassuring bedside story…

But human capital is more than a comforting story – it is a myth that shapes our understanding of the world and thus public policy. Ontario’s government is urging universities to increase retention rates, so everyone who starts university completes a degree. If the human capital theory is true, then this is sound policy: more students completing university means more human capital means a more productive economy. If, however, the value of university education is as a signal of ability, then one of the most important things that universities do is fail students…

[ Mark Thoma comments ]

Chad Aldeman

NAEP is different than most standardized tests. It takes a sample of the current population in every state, so this year’s population of kids is compared to the last time the test was administered. There’s an automatic correction for changing demographics, so as America has gotten less white, so has NAEP. In statistical terms this creates something called Simpson’s Paradox, which makes trend lines seem worse than they really are because of a hidden variable, in this case, race…

In other words, the white-black and white-Hispanic gaps are closing and every group is scoring higher, but the national score is showing more modest improvements because of demographic changes…

Scott Jaschik

a new book, AP: A Critical Examination of the Advanced Placement Program…

believed to be the most comprehensive gathering of studies to date -- is decidedly mixed. Those who distrust AP out of a dislike of programs built around standardized tests won’t find smoking guns about the test itself here…

Claims that the program helps students graduate on time or save money are found generally to have no validity. And research in the book suggests that many of the efforts to push the program into more schools -- a push that has been financed with many millions in state and federal funds -- may be paying for poorly-prepared students to fail courses they shouldn’t be taking in the first place…

David Glenn and Peter Schmidt

Would you like to major in anthropology at Florida State University? Sorry: The department stopped accepting new students last year. What about economics at the University of Louisiana at Monroe? That major is also going out of business. Computational physics at Oregon State? Circling the drain.

Critics sometimes grumble that American universities' curricula constantly metastasize and never shrink. But that hasn't been true in this recession. Dozens of majors and doctoral programs have been suspended or terminated since last year, and many more have been under the shadow of the guillotine…

Links for 3/30/10

Lynn O’Shaughnessy

The University of California is facing its greatest financial crisis of all time, but so far the system has punted in offering real solutions…

Pablo Eisenberg

the revelation in The New York Times that Ruth Simmons, president of Brown University, has been a trustee at Goldman Sachs for 10 years…

For her board work as a trustee in 2009, she was paid $323,539, an enormous sum amounting to more than half of her salary at Brown. She will leave Goldman Sachs later this year with a stock portfolio worth about $4.3 million, a perk granted to board members.
It turns out that Dr. Simmons also sat on two other corporate boards: Pfizer, from which she resigned three years ago, and Texas Instruments, where she remains a trustee. For her service at these two other corporations, she received substantial trustee fees and, presumably, stock or stock options…

While Dr. Simmons did cite the time commitment required for sitting on the Goldman Sachs board as a reason for ending her tenure as a trustee, she did not explain why it took her 10 years to come to this conclusion…

Michael Bugeja

Even as my own institution reorganizes (with departmental budgets reduced by 25, 35, even 50 percent), new courses and degrees keep being added or proposed…

The truth is obvious: Curricular glut affects workload. If a course is in the catalog, someone has to teach it…

The faculty owns the curriculum, so standing committees can act without administrative approval to eliminate and combine courses to decrease workload and add academic rigor…

Tim Ranzetta

Federal Student Loan Program Going 100% Direct; Sallie Mae Share Price Hits 52-Week High

FFEL's Dead, Time to Work on DL

by Andrew Gillen

With half of my master plan to overhaul student loans now accomplished, it’s time to start attacking DL.

The first shot comes courtesy of The Economist telling us a bit about the UK system. The UK has had a version of the DL program for years. How’s that working out?

Those who borrow from the government to pay tuition fees need repay the loan only after they graduate and start earning steady money. Even then, interest-rate subsidies make their loans a drain on the public finances. So the government caps student numbers and fines any university that recruits too many…

We can expect politicians here to continue to try to buy votes with interest rate subsidies, loan forgiveness programs, and loan payment plans for public employees and other favored groups. So it is highly likely that DL will morph into a drain on the public purse in the US just like it is in the UK. When that happens, will we be forced to impose enrollment caps too? It seems unlikely, but then again, so did the idea of turning the federal government into a loan shark, and that didn’t stop us, so who knows.

Looking Beyond the Student Loan Fiasco

By Richard Vedder

Returning from a vacation for a week that took me away from the news, I note that we now put the private student loan providers out of business in the name of efficiency, and greater student educational equality. That is bad, for reasons I explain in a new posting for Minding The Campus.

Yet there is some good news out there. I spent four hours yesterday meeting with top officials at Kaplan Higher Education, the jewel in the crown of the Washington Post Company. It is a division that, along with test preparation services, makes all of that company's profits and then some. I met with CEO Andy Rosen the most, but also Kaplan University President Wade Dyke, with top academic officer Peter Smith (an ex-congressman,university president, and high ranking UNESCO official), author of the interesting Harnessing America's Wasted Talent, and with others as well. This was part of research funded by the Lumina Foundation into the proprietary higher education industry in the United States, to be published shortly as a CCAP study.

Several things stood out. Much more than with traditional schools, the emphasis is on pleasing the customer, defined not only as the student but the employer who hires the student. What can we do to make students learn more? I have had two hour conversations with traditional university presidents where the actual discussion of how much students are learning and what we can do to improve it was either non-existent or secondary. The for profit schools, or at least Kaplan, think much more about the student and his/her needs. It is the key to market acceptance and profitability --but it is also what universities should be thinking about first.

Second, as a general rule Kaplan, like most other for-profits, does things quite differently than traditional universities. They teach mostly on-line, while traditional schools teach mostly using old lecture-discussion approaches. They lease their facilities rather than buy them. Andy Rosen pointed out to me that in a dymanic industry like his, physical plant needs are constantly changing, and it makes little sense to make huge long term financial investments in fixed quantities of real estate. Besides, Kaplan knows the education business better than the real estate one (Kaplan's Fort Lauderdale facilities were very attractive and user friendly, but not grostequely so as is sometimes the case with today's country club-like traditional schools).

Moreover, as Wade and Andy continually emphasized, at a time of limited public availability of funds for universiy investment, the for profit sector has the means and the desire to fund university expansion. Andy said to me, in effect, "do you think the State of California is going to fund eight new University of California campuses?" It is not going to happen. Yet Kaplan and Phoenix and other providers can educate another, say, 150,000 Californians, if need be, over the next few decades.

Andy seemed much more open than most traditional university officials I know to new ideas for service delivery, such as the three year bachelor's degree and the move towards a ceritfication-by-examination approach that some social scientists like Charles Murray have advocated.

All in all, I am impressed with Kaplan and its leadership, as I have been with other leaders in the industry --the innovative Randy Best and the very shrewd Andrew Clark of Bridgepoint Education come immediately to mind, as does financier-innovator Michael Clifford. So amidst the gloom of dubious federal public policy, there are some bright spots. The Obama Administration seems hostile to this sector, which is a shame, because it is expanding access to the very minorities and adult learners that the Administration professes it wants to serve.

Links for 3/29/10

Rick Hess

I am among those (including, apparently, Rep. David Obey) warning that failure to sensibly insulate Race to the Top (RTT) from political officials and pressure poses risks to the credibility and sustainability of the centerpiece of the Obama administration's ed reform agenda.

Now, in a development ripe with irony, Chicago Breaking News has raised a ruckus in Chicago with its report that then-Superintendent Arne Duncan's staff kept a list of politicians' school requests. The report has raised concerns about political favoritism and lack of transparency…

Let's see. Assertions that questionable decisions are just sensible management. Declarations that, of course, Duncan and his team would never exert pressure or tell people what to do. Surprise that anyone might doubt these assurances. At least some plausible grounds for concern that scarce public resources were used to serve private political ends. The decision to limit transparency justified on the grounds of administrative convenience. These are precisely the concerns skeptics have flagged when it comes to RTT…

Sue Shellenbarger

Some critics say today’s kids have never learned to deal with rejection. “This is a generation of kids where everyone on the soccer team gets a trophy. You show up and you’re rewarded,” one admissions dean says. A college denial letter may be the first significant rejection the teen has received…

Anya Kamenetz

Nine colleges were founded in the colonies before the Revolution, and they’re all still in business: Harvard, William and Mary, Yale, Princeton, Columbia, Penn, Brown, Rutgers, and Dartmouth.

For universities, history is authority...

Aisha Labi

in a highly competitive international marketplace, countries and universities are realizing that more foreign students are choosing where to study based not just on where they can get the best education, but also on where their postgraduation job prospects are brightest.

Institutions are scrambling to respond to the growing student focus on employability and are pressing governments to retool immigration policies to allow students more flexibility in seeking jobs after graduation...

Federal Student Loan Takeover

Richard Vedder discusses his dissatisfaction with the federal student loan takeover in an essay for Minding the Campus Be sure to drop by MTC to read why.

Links for 3/26/10

Michael Bassis

each year, after some gnashing of teeth, we opted to set tuition and institutional aid at levels that would maximize our net tuition revenue. Why? We were following conventional wisdom that said that investing more resources translates into higher quality and higher quality attracts more resources…

And most people inside and outside the academy – including those who control influential rating systems of the sort published by U.S. News & World Report -- define academic quality as small classes taught by distinguished faculty, grand campuses with impressive libraries and laboratories, and bright students heavily recruited. Since all of these indicators of quality are costly, my college’s pursuit of quality, like that of so many others, led us to seek more revenue to spend on quality improvements…

the elephant in the room is the cost structure of our academic programs… When quality is defined by those things that require substantial resources, efforts to reduce costs are doomed to failure…

The notion of defining quality in terms of outputs rather than inputs, by the achievements of our graduates rather than the achievements of our entering class, had been a key element in the strategic plan my institution began developing…

we began to change our focus from what we were teaching to what and how our students were learning…

Instead of assuming we needed all of the expensive accouterments of quality, we could focus our attention on those things known to have the most impact on student learning. And it doesn’t take long to discover that, despite claims to the contrary, many of the factors that drive up costs add little value…

I see danger ahead unless we can cut the Gordian knot between cost and quality…

Goldie Blumenstyk

The federal appeals court that handles patent cases has upheld a ruling that could make it harder for universities to obtain patents on the basic research most academics undertake…

"The patent law has always been directed to the 'useful arts,' meaning inventions with a practical use," the judges of the U.S. Court of Appeals for the Federal Circuit wrote in the 9-to-2 decision. "Patents are not awarded for academic theories, no matter how groundbreaking or necessary to the later patentable inventions of others."…

"Universities may not have the resources or the inclination to work out the practical implications" of the research they do, the judges wrote, and that might mean universities become 'disadvantaged" when seeking patents. But the appeals court said that was "no failure of the law's interpretation but its intention."…

Robert N. Watson

according to spreadsheet calculations done at my request by Reem Hanna-Harwell, assistant dean of the humanities at the University of California at Los Angeles, based on the latest annual student-credit hours, fee levels, and total general-fund expenditures, the humanities there generate over $59-million in student fees, while spending only $53.5-million (unlike the physical sciences, which came up several million dollars short in that category). The entire teaching staff of Writing Programs, which is absolutely essential to UCLA's educational mission, has been sent firing notices, even though the spreadsheet shows that program generating $4.3-million dollars in fee revenue, at a cost of only $2.4-million.

So, the answer to "Who's going to pay the salary of the English department?" is that the English department at UCLA earns its own salary and more, through the fees paid by its students—profits that will only grow with the increase in student fees…

[AG: Fair enough – would you mind breaking that down by full time tenured professor and adjunct/TA?]

How Many Cheers?

by Andrew Gillen

I’ve got some mixed emotions about the bill that was just signed (Note I’m ignoring health care completely and just focusing on the education side.) Inside Higher Ed has a good breakdown of who won and who lost in the edusphere.

The main winners were Pell grant recipients, and the main losers were private lenders in the late FFEL program. There were a few other secondary winners and some collateral damage (open courseware took a hit, which is bad, and the higher ed lobby took a hit, which was good) but lenders and Pell grants were the primary show.

I’ve backed larger Pell grants, and I’ve favored the abolition of FFEL, so I’m happy with the actual outcome as regards these two issues. But my happiness is muted somewhat by the realization of how close we came to getting both of them wrong.

From what I’ve read, killing FFEL would have required reconciliation even if it wasn’t attached to health care, because it didn’t have 60 votes in the Senate. I find this highly discouraging. If we were starting a lending program from scratch, and someone proposed anything resembling FFEL, they’d be thought sadistic for deliberately inflicting unnecessary pain on the country. Once we had it, the only reason to adhere to it was the difficulty of transitioning to a better system. Many of these, such as job losses for those involved, carry a bit more weight when the unemployment rate is hovering around 10%, but are still not reason enough to keep FFEL, IMHO. So the fact that killing FFEL couldn’t get 60 votes has some pretty scary implications to me.

For Pell, while we ended up with a good outcome (more money, no entitlement), that was not the goal aimed for. The goal was to make the Pell an entitlement and increase it at the rate of inflation plus one. As Rich and I noted last week, this would have been a huge mistake.

I don’t know exactly how close we came to setting that mistake in stone, but it was pretty close. Had the Senate not sat on the bill so long that it resulted in a lower score from the CBO, and had they not needed to use some of the money from killing FFEL to pay for health care, I think it is very likely that we would have ended up achieving these misguided goals.

The Obama administration comes out of this with mixed evaluations. They ended up doing the right thing on both FFEL and Pell. For FFEL they deserve kudos - their position was correct, and they dragged everyone else kicking and screaming along with them. For Pell they don’t - their position was incorrect, and they were dragged kicking and screaming by reality into backing a better policy.

Dept of ?

by Andrew Gillen

I read and link to Kevin Carey a lot because he’s more often than not correct, and he’s also got a knack for explaining things in enlightening ways. For instance, check out this example where he compares accreditation taking it easy on Southeastern U to the FDA loosening toxicity tolerances for pregnant women.

So I find it strange when he writes bizarre things like this. After characterizing conservatives as wanting to kill poor people and start an empire (note to self – make sure to move out of the DC policy world before I succumb to the apparently irresistible urge to cast those I disagree with as evil), he scolds the Heritage Foundation for supporting DC vouchers on various grounds.

To take but one of the strange claims – there are a few to choose from – that a voucher program needs to account for all school funding to have any effect:

All the money needs to go toward vouchers, so public schools have no choice but to compete, and private firms have sufficient incentive to enter the market.

This is simply not the case. To begin with, all the other voucher programs don’t account for all school funding. And partial voucher systems can have good or bad consequences – check out this paper that I’ve been sparring with Cato about.

PS, I’ve been meaning to respond to Andrew for a while now, but without my glasses, I can’t find the keyboard :) I’ll get around to it eventually.

Links for 3/25/10

Donald Marron

[the student loan program] has experienced two crises in recent years:
• In 2006 and 2007, the crisis was kickbacks…
• In 2008, the crisis was a lack of lending...

As I told my students, I think both of these crises had the same root cause: the fact that the government, rather than market forces, determined how much lenders were paid for making guaranteed student loans. In both cases, the government got the payment levels wrong, and the crises followed soon thereafter.
Back in 2006 and early 2007, the government had set payment rates too high. Lenders thus competed aggressively among themselves to win as much of the market as they could…

To their credit, the folks in Washington correctly diagnosed this problem. Late in 2007, the Congress passed and the President signed a bill that reduced the amount that lenders were paid.

Unfortunately, those reductions happened at the start of a financial crisis … And all of a sudden, lender payments were too low. Lenders thus threatened to flee the student loan market, which could have left millions of students without funding for their education.

Again to their credit, the folks in Washington stepped up and eventually found a solution…

Rick Hess

Both Diane's stance and Duncan's reflect the misguided premise that chartering or accountability is a way to improve instruction--like a new curriculum, professional development model, or reading program--rather than an opportunity to create the conditions where sustained improvement in teaching and learning become possible…

They provide invaluable opportunities to rethink schools and systems that are too often hobbled by anachronistic policies, practices, stifling contracts and cultures. But the action is not in the fact of charters, accountability, or merit pay, but in what one does with them…

The problem, as I see it, is not that choice or accountability "don't work"--but that the naïve faith that they constitute "fixes" has led us to skip past the hard work necessary to take advantage of the opportunities they can provide…

Accountability enthusiasts in the Bush era repeatedly made the same error, while airily dismissing thoughtful skeptics…

Patrick M. Callan

As colleges and universities hike tuition and cap enrollments while pleading for billions of federal dollars, we have new evidence that public disappointment and disillusionment with higher education are building rapidly...

When they see tuition rates outpacing the average family’s paycheck even in times of economic distress, or read stories about excessive compensation of college presidents or about universities bailing out athletic programs while furloughing faculty, it isn’t hard to see how people might be just a bit skeptical about higher education’s priorities...

our largest public college and university systems are freezing or rolling back enrollment and/or hiking tuition in the name of preserving quality. The problem is that a growing majority of Americans just don’t buy that line of argument...

The “squeeze play” -- the combination of beliefs that higher education is essential but that many qualified students are being shut out -- continues... As the squeeze on students and families intensifies and confidence in the altruistic mission of colleges erodes, higher education’s position in the competition for public resources when the economy recovers may be seriously undermined...

Rather than acknowledging the public’s concerns, some higher education lobbyists and advocates instead criticize the public as uninformed...

Keith Hampson

if our value as academics is based on our providing content, our days are numbered...

If universities were primarily about learning, they would have gone out of business with the emergence of mass market publishing. Credentials. Credentials. Credentials...

Links for 3/24/10

Keith Hampson

it is common for universities to have three versions of strategic plans: a published, publicly available version that tends to avoid provocative issues, a more detailed version with relatively sensitive information – made available to staff on a “need-to-know” basis, and an even more “sensitive and confidential” that “might never be committed to paper”, but that resides in the heads of the senior university administration…

Alan Ruby

What can we glean from the failures of branch campuses in Japan? The basic lesson is that location, demand, and brand determine enrollment and revenue…

Donald Marron

Congressional budget procedures are biased in favor of direct student loans over guaranteed loans. As a result, the budget case against guaranteed loans is overstated. It isn’t wrong — we are still talking tens of billions of dollars over the next ten years — but it isn’t as strong as the official numbers suggest. One implication is that eliminating the guarantee program may not save as much money as lawmakers think. That’s important, particularly if lawmakers want to spend those savings on other programs…

1. The administrative costs of the two programs show up in different budget categories…
2. The congressional scoring process does not appropriately measure the cost of bearing financial risk, such as that from extending loans or loan guarantees…

Bottom Line: Eliminating the guarantee program would reduce government spending, but not as much as traditional budget measures indicate…

Rob Manwaring

For the entire NCLB era, the federal government has provided funding (although a lot less) to states on a formula basis to support school improvement activities. The use of the funding has generally been left to the discretion of schools districts who invested in incremental reforms, and at best have seen incremental gains. Now the federal government is playing hardball, forcing dramatic changes at schools that are either dropout factories or the very lowest performing elementary and middle schools. Kudos to the federal government for going after high schools for the first time. (Generally high schools have not been impacted much by NCLB accountability because three-quarter of them don’t receive Title I funds and are therefore not held to AYP accountability requirements.) But, I fear that the timing of these new turnaround efforts and funding may fail to have the desired impact because of the rushed timing of the grant process...

Links for 3/23/10

George F. Will

Doubling down on dubious bets is characteristic of compulsive gamblers and federal education policy…

Donald Marron

Opponents have denounced this change as a government takeover of the student loan market. That makes for a great soundbite, but overlooks one key fact: the federal government took over this part of the student loan business a long time ago.

In a private lending market, you would expect lenders to make decisions about whom to lend to and what interest rates to charge. And in return, you would expect those lenders to bear the risks of borrowers defaulting. None of that happens in the market for guaranteed student loans. Instead, the federal government establishes who can qualify for these loans, what interest rates they will pay, and what interest rates the lenders will receive. And the government guarantees the lenders against almost all default risks.

In short, the government already controls all of the most important aspects of this part of the student loan business. The legislation just takes this a step further and cuts back on the role of private firms in the origination of these loans…

Rick Hess

Anybody out there want to take a stab at what will happen to a scholar who pens a piece that doesn't start from a presumption that cognition, policy, and practice are indelibly racist? Or that offers a less than conspiratorial take on U.S. schooling or "privatization"? I'll venture a guess: they will be rejected out of hand. Mind you, the editors would tell any who asked that this did not reflect bias or an assault on free inquiry; it would simply reflect the failure of authors to conform to the criteria for the special issue of an influential journal. Such is the invidious, largely invisible, groupthink that promotes narrow orthodoxy under the guise of academic routine.

Doug Lederman

when all the shouting and the horse trading and, finally, the voting was done, Congress's Democratic majority had indeed given approval to what supporters, without engaging in hyperbole, characterized as a dramatic reshaping of the federal student loan programs…

Links for 3/22/10 Education Sector Edition

Erin Dillon

The Kindle illustrates how demand can be created by better, innovative products, and how it can snowball. It’s not hard to imagine a technology that changes when, how and where people learn in the same way the Kindle has changed book reading: making it cost effective, broadly available, convenient. After that, demand could snowball to the point where students guffaw at being told they must sit in a chair for a certain number of hours to officially have learned something…

Elena Silva

Brookings released a report calling for a national corps of teachers—a new federal program estimated to cost about $200 million per year to support about 19,000 teachers. The idea behind “America’s Teacher Corps” is to give recognition, more money ($10,000 annually) and a portable credential to teachers who have shown strong performance based on a strong evaluation system and accept teaching positions in high-poverty Title I schools (they would not need to take any more coursework or any additional exams).What’s different is that the goal of the ATC is not to reward good teaching and attract more teachers to teaching, although these are hoped for and expected outcomes, but to improve evaluation systems. The theory is that teachers who are not eligible for ATC, those who can’t show the requisite “sustained superior performance” because they work in districts without established evaluation systems, will push for better teacher evaluation systems in their own districts...

Kevin Carey

The letter is proof that accreditation standards do exist; despite the wide latitude institutions receive to define and evaluate their own success, it is possible to be bad enough long enough to lose accreditation. But Southeastern also illustrates just how low those standards are and how long they can be defied. Given the university’s multidecade history of loan defaults, financial struggles, and scandal, it’s fair to assume that similar letters could have been written years before.

Kevin Carey

In justifying its decision to allow Southeastern to stay open for so long, Middle States said: "Ever since Southeastern University’s initial accreditation … in 1977, the Commission has recognized the University’s mission of serving diverse and underserved student populations. It is largely as a consequence of this recognition that the Commission has been so forbearing in its actions to date."

This is nonsensical. It's the equivalent of the Food and Drug Administration loosening toxicity standards for drugs taken by pregnant women. Diverse and underserved students are the most vulnerable to poor instruction, the most at-risk of dropping out of college, the most devastated when saddled with un-repayable student loans. Colleges that serve these students should be held to the highest standards, not allowed to skate by for decades on end…

CCAP in the News

PBS Newshour previews the national debate on whether the US needs more college graduates.

Richard Vedder was on the Laura Ingraham show on Wednesday. (subscription required)

Richard Vedder is mentioned in an USA Today article.

The Morning Journal cited research by Richard Vedder:

"... America has gotten itself into a vicious cycle with respect to higher education financing that goes like this: In year 1, tuition goes up fairly substantially. Political pressures build to 'do something' about the increases. Congress expands guaranteed student loan programs to make education more affordable, in turn increasing the demand for education and allowing universities in year 2 (or year 3, depending on the lag) to raise prices further. The result is a further expansion of student loan programs, state scholarship efforts, and other third-party funding."

Between 1994 and 2005, financial aid payments increased by 11 percent per year. This huge subsidy has permitted colleges and universities to increase their already exorbitant tuitions, but has not, Vedder argues, resulted in increased quality. Administrative staffs have ballooned, undergraduate instruction has been shortchanged, and salaries for faculty have doubled since 1980. To his own surprise, Vedder also found that increasing state support for institutions of higher learning not only does not result in greater economic growth, it is actually a net loss.

Don’t Make the Pell Grant an Entitlement

by Andrew Gillen and Richard Vedder

For many months Congress has been considering a vast overhaul of federal student financial aid programs. Matters are coming to a head, as Democrats try to fold student aid changes into the health care bill. A key provision is to make the main program helping lower income students, the Pell grant, an entitlement and increase the maximum award every year at the rate of inflation plus one percent (Note, there are reports this morning that the plus one has now been dropped, but the specifics are hazy, and it's not clear if any changes in the entitlement provisions were made). This seemingly meets a real need: After adjusting for inflation, the average Pell award in the late 2000s was roughly the same as it was in the 1970s. Meanwhile tuition has exploded, so the average Pell grant now covers less of the cost of a college education.

Pell grants are essentially vouchers for higher education, and both of us have praised Pell grants in the past, one recently testifying before the Senate that they are the “crown jewel” of federal aid programs, and the other a signatory of the Spellings Commission report recommending Pell Grant expansion as part of a simplification of our current Byzantine system of federal student financial aid. Nevertheless, we feel that making the Pell grant an entitlement is a big mistake.

Entitlements Are Forever

Most importantly, once the Pell grant becomes an entitlement, it will be untouchable. This would be a continuation of what Gene Steuerle calls “fiscal sclerosis — setting future national priorities in stone long before the future has arrived.” While the Pell grant is the best existing federal aid program (it serves egalitarian objectives, is simple, and is directed towards empowering students, not institutions), possibly even better programs could be designed in the future. What happens if, several years from now, we want to give larger Pell grants to students maintaining a high GPA, or to students majoring in STEM fields?

Recall that efforts to reform Social Security by former President Bush, and the more recent efforts of President Obama to cut wasteful spending from Medicare were misleadingly attacked as craven attempts to starve and kill grandma. The lesson is obvious – once a program is made an entitlement, we are stuck with it. Once the Pell grant is an entitlement, most money available for financial aid will be earmarked to it, and the program would be nearly impossible to reform or discontinue. This would lock us into a potentially inferior program long after it has outlived its usefulness, possibly making Pell grants the 21st century equivalent of the mohair subsidy. We like the Pell, but we’re not ready to commit to it for the rest of our lives.

It’s Unrealistic

Our existing entitlement programs have already created huge structural problems for the federal budget. Bruce Bartlett has calculated that the “total unfunded indebtedness of Social Security and Medicare comes to $106.4 trillion.” Without substantial cuts to benefits and/or sharp increases in the taxes imposed to fund these programs, we are already headed for a serious budget crisis. Arguably, we are already there - in 2009, all federal revenues were devoted to meeting past “mandatory” promises.

Making the Pell grant an entitlement would add to these already unsustainable commitments, and when combined with recent calls to expand college enrollment, this could severely aggravate the already precarious long term outlook of the budget. The chart below shows the actual and projected spending (based on the latest CBO figures publicly available) of the program. It is estimated that in 2009 dollars, we will breach the 30 billion dollar mark in 2012, the 40 billion dollar mark in 2018, and the 50 billion dollar mark 2025 (the last five years of the CBO estimate was used to extrapolate out to 2030).

Sources: College Board, Bureau of Labor Statistics, Congressional Budget Office, and authors’ calculations.

To be clear, we’re in favor of increased funding for Pell grants. But we’d like to see a plan for how to pay for it before we start making costly promises for the future. The main source of funding that is being proposed is to end the FFEL program for student loans, which is both dubious fiscally and otherwise highly undesirable, for reasons we have discussed elsewhere. But even ignoring these issues and assuming that we do realize all the real and imaginary savings from killing the FFEL program, the savings probably only gets us through 2016, maybe 2018 if the awards grow more slowly. After that, we’ll need other sources of funding, which will be increasingly difficult since Social Security shifts from surplus to deficit at about the same time. Given the choice between funding the country’s past or its future, we fear the decision politicians will make.

Moreover, other programs that have been indexed to the rate of inflation have come under criticism and calls for reform to slow their increase, in large part because the Consumer Price Index overestimates true inflation. Thus, in the long run, trying to have benefits increase at the rate of inflation is probably unsustainable, and increasing them faster than the rate of inflation is simply delusional.

One of the main reasons the Pell is a good program is that it is one of the few that succeeds in providing financial aid for the disadvantaged without contributing importantly to the explosion in tuition. Most research, including our own, has shown that the current Pell grant program does not contribute to the tuition explosion, largely because the awards are modest in size and the income restrictions ensure that the money goes to the truly disadvantaged. However, as the awards grow in size, there will likely be erosion in income restrictions, much as we have seen with student loans, where more than a third of students from families making more than $100,000 receive a federal Stafford loan. Great expansion in the program thus will almost certainly aggravate the already severe increase in student college costs.

To sum up, the Pell grant is the preferred approach for the government to provide federal aid, and expanding this program is defensible even in times of fiscal stringency. But making it an entitlement and setting it to increase at the rate of inflation (or more) is a huge mistake.

Final Version of the Student Loan Reform Bill

From the Chronicle of Higher Ed this morning comes news of the final language of the student loan reform bill

Congressional Democrats and the Obama administration on Thursday outlined their final agreement on legislation to overhaul the government's student-loan system, with the savings providing annual inflation-adjusted increases in the Pell Grant and billions of dollars in additional aid for higher education.

The final agreement also includes $255-million a year to help historically black colleges

The agreement also includes $750-million over five years for College Access Challenge grants, which support states and other governments in efforts to prepare more low-income students to enroll and succeed in college

despite suggestions last week that money for community colleges would be cut altogether, the bill includes $2-billion over four years to help two-year institutions

also includes $1.5-billion over 10 years to finance the Obama administration's proposal to increase assistance to borrowers eligible for income-based repayment of a federally subsidized student loan by limiting their mandatory monthly payments to 10 percent of discretionary income, down from the current 15 percent, and by forgiving their loans entirely after 20 years, instead of the current 25 years

eliminates $9-billion that had been approved in the House version to reduce the interest rate on federally subsidized loans in 2012-13 and subsequent years. That rate is now due to drop to 4.5 percent for the 2010-11 academic year and 3.4 percent the following year, but then rise to 6.8 percent after that

compromise reached Thursday also eliminated a provision in the House version to spend $8-billion on early-childhood-education programs

But here's the kicker:

accompanying agreement on the health-care legislation

CCAP on YouTube

We announced last week that CCAP is getting in the Youtube business with our own channel. Check out our latest video above, an interview with Rune Rydén of the University of the Arctic.

Links for 3/19/10

Brad DeLong

There is a great tension at the heart of American public higher education. On the one hand, the people who benefit from public and publicly-funded higher education are primarily people who are or will be relatively rich… Publicly-funded higher education is thus, on average, a transfer of wealth from taxpayers in general to the upper-middle class of America today.

On the other hand, the fact that education is as expensive as it is appears to be keeping a great many people from acquiring more… The returns to college are much greater than they were a decade ago? So why aren’t more people attending.

The answer is that lots of people fear college because it is expensive: they would have to go into debt to attend, and they fear to do so.

So our dilemma: if we don’t keep college cheap–and publicly-funded–we find it next to impossible to increase educational opportunity; if we subsidize college with public money, we are transferring from the not-so-rich to the relatively rich.

Tony Judt

On another occasion, a student complained that I “discriminated” against her because she did not offer sexual favors. When the department ombudswoman—a sensible lady of impeccable radical credentials—investigated, it emerged that the complainant resented not being invited to join my seminar: she assumed that women who took part must be getting (and offering) favorable treatment. I explained that it was because they were smarter. The young woman was flabbergasted: the only form of discrimination she could imagine was sexual. It had never occurred to her that I might just be an elitist…

Doug Lederman

the U.S. Education Department and the Department of Health and Human Services have been unable to reach agreement on the former's use of a database managed by the latter that allows student loan guarantee agencies and others to track student loan borrowers who aren't repaying their debt. The forgone revenue from the lack of a "matching agreement" between the two agencies for more than a year now is $1.2 billion…

Scott Jaschik

Those doing the hiring at community colleges were frank that they really need these composition master's programs to work because they aren't content to hire literature doctorates who are applying for composition jobs at community colleges because of the tough job market for new humanities Ph.D.'s.

"We get these cover letters and they are so out of touch with what we need," one community college faculty member said of those seeking to teach writing. "We're looking for someone who has actually been in a community college classroom, and they are writing letters about their dissertations in literature."…

Dr. Vedder to be on Fox Business Live Tomorrow

Dr. Vedder will be making an appearance live on Fox Business Live tomorrow at 12:10 EST to discuss the rising costs of tuition and the best value colleges in America.

Watch it live at your desk here. The program will be broadcast on Fox Business TV on May 27th.

Gainful Employment for Law School?

by Daniel L. Bennett

Yesterday, I posted some data on the maximum amount students pursuing careers in the 10 fast-growing occupations could have borrowed if the Department of Education's (ED) proposed metric to define gainful employment were retro-acted prior to 2003. Then I read an interesting blog by Brandon Platt over at Career College Central in which he suggests that a:

growing number of law graduates...can’t find the employment they felt they were promised, or even...able to find employment and begin paying back [their] loans at graduation

This got me to thinking about all of the horror stories about law school graduates having six figures of debt and unable to find job, and what the ED's proposed metric for gainful would imply for law schools. So, I returned to the BLS site and collected occupations data at the 25th percentile for lawyers in 2003 and 2008 and applied the same methodology that I used yesterday to calculate the max debt that a student could borrow for 3 years of law school.

In 2008, the 25th percentile earnings for lawyers was just under $75,000, an inflation-adjusted increase of 2.3% from 2003. Given this earnings figure, and assuming a 6.8 percent fixed loan rate (which is very conservative considering that many law students take out private loans with much higher interest rates), I calculated that the maximum total debt a law student could borrow would have been just under $44,000, or 2.3% more than he/she could have borrowed in 2003 after adjusting for inflation. Given the ED's proposal, this would also include any debt incurred as an undergrad, unless the student managed to pay it off before starting law school. FYI, the average law school tuition was just under $28,000 in 2007-08.

What this little comparison tells us is that the ED's proposal is unrealistic and way off base. A better idea than implementing some arbitrary metric that even the preferred public and not-for profit sectors could not pass, would be to require colleges to collect and publicize student outcomes data, such as job placement and average earnings, as well as program completion and loan default rates, so that students have enough information to make intelligent decisions.

Minnesota: Soaring Costs, Waning Quality

by Daniel L. Bennett

Our friends at ACTA, along with the Freedom Foundation of Minnesota, just released a state report card for public higher ed in Minnesota. Anne Neal and Annette Meeks have an OpEd in the Star Tribune today discussing their findings, which are generally consistent with the overall state of public higher ed in the US:

many state institutions have poured money into the Ph.D. equivalent of candy -- hiring administrators -- while neglecting their true purpose: delivering a quality education in the classroom.

Cutting costs is, however, only half the battle. There is an equally pressing need to ensure that more students get a well-rounded and timely degree. Getting a bachelor's degree, for instance, is supposed to be a four-year process. But not one of the institutions we assessed graduates even half its students in four years. And on most campuses, the students who do complete their degrees can do so without having taken a broad survey of American history or economics -- the kind that would prepare them to become informed citizens.

ACTA has done similar analyses for the states of Illinois, Missouri and Georgia. Keep up the good work of informing the public and especially, trustees and alumni, of what is really happening on college campuses - exploding costs and declining quality.

Uncovering the Implications of Student Cohort Default Rates

by Daniel L. Bennett

I have an article in the March edition of Career College Central magazine, in which I analyse the recently released 3-year trial CDRs and discuss the policy implications for the for-profit college industry. Read it here.

Proprietary education’s high CDR does not reflect the fact that many proprietary institutions are performing just as well, if not better, than highly regarded public and private NFP institutions, nor does it reflect that the sector enrolls a relatively high proportion of students with characteristics that make them more likely to default.

Links for 3/18/10

Thomas Bartlett

The U.S. Department of Education publishes an online directory of organizations that can "provide information and assistance on a broad range of education-related topics." But how trustworthy is that directory?

A recent search of the Education Resource Organizations Directory revealed a number of organizations that might raise eyebrows. Among them was Victorville International University…
Victorville is on the State of Oregon's list of "unaccredited degree suppliers."

Also listed was the American Association for Higher Education & Accreditation, which is not a recognized accreditation body…

Joshua B. Powers and Eric G. Campbell

We think both sides are wrong in their embrace of the profit motive as a stimulator for university research innovation…

what our research evidenced was the level of investment needed to realize a particular odds-for-success gain and that the marginal benefits of investment fall off noticeably at the above inflection points. Furthermore, our research also revealed that the longer a university subsidized its technology transfer program (i.e., costs exceeding revenues), the less likely it was that the program would ever realize financial success…

David Glenn

Last October, Madhukar Vable said farewell to two teaching prizes that he had won a decade earlier. He packed the plaques in envelopes and shipped them back to the university and state offices that had awarded them.

His packages included long letters about the condition of higher education. Too many colleges, Mr. Vable wrote, chase prestige and research grants at the expense of undergraduate instruction—and his own institution had penalized him because he had not done the same. "A dedicated teacher is becoming THE SUCKER in the system," he wrote. "I will continue to do my best in teaching and scholarship, but I am no longer willing to perpetuate the hypocrisy that excellent teaching ... is still valued at Tech."…

"Is High-Risk Drinking at College on the Way Out?" is the headline to a piece by Brandon Busteed, and this sentence from the piece is why I don’t think the answer is yes:

Students who abstain or drink moderately see college as a precious opportunity to prepare for the real world, as opposed to a four-year vacation from it.

Implications of ED's Gainful Employment Proposal

by Daniel L. Bennett

The career college sector is engaged in a fierce battle with the Department of Education (ED) over its proposed definition of gainful employment, which would create a debt payment-to-earnings ratio that would effectively cap student debt payments at 8% of expected earnings for career college students. It would do so be using the median debt payment of a program's previous 3 years of graduates in the numerator, and national BLS wage data for the 25th percentile income of the occupation for which the program prepared students to enter in the denominator. Programs with ratios exceeding 8% would be given the boot from the Title IV funding programs. This proposal has been met with extreme opposition from the industry, has been denounced by a Congressman, and was described as severely flawed by financial aid expert Mark Kantrowitz.

While I generally agree that the proposal would be extremely harmful and am fundamentally opposed to this type of implicit government price control, I decided to do some analysis to determine what the actual effects would be on 10 occupations for which the career colleges train students (all of which are on the BLS's list of 30 occupations with the biggest projected growth in employment for the next decade) to enter if the policy was retro-acted a few years. I first looked at the 25th percentile income for these occupation for both 2003 and 2008. I then calculated the max student debt for these occupations, given the ED's proposed definition, assuming a 6.8% fixed interest rate (the current direct lending rate). Then, I adjusted all figures into constant 2008 dollars to account for inflation. The results are in the below chart.

What I find is that, if the 8% ratio was retro-acted, students pursuing 7 of the 10 growing occupations above would not have been able to borrow as much to pay for their training in 2008 as they were able to borrow in 2003, in real inflation-adjusted terms. Students pursuing training in the other 3 occupations would not have much more ability to borrow in 2008 than they did 5 years prior. If any college's graduates were to finish with less real (inflation-adjusted) debt today than they did 5 years ago, then that college deserves a carrot for excellency in cost containment, not a brutal beating with a stick.

Since most students borrow money to pay for the education, limiting the amount that they can borrow also limits the professions that they are able to enter, especially for the lowest income students. It may even shut off routes for people to enter a given profession, as many colleges will be unable to offer training programs at a price that allows them to be in compliance with not only gainful employment, but also the 90/10 and cohort default rate rules, and will ultimately stop offering such programs. While this will likely appease some critics of the industry, the end result will be a reduction of educational options and access for low income and minority students, and a shortage of qualified employees to fill the demands of the labor force. Both results are negatives for the economy.

Dr. Vedder on the Laura Ingraham Show

Dr. Vedder will be on the Laura Ingraham radio show live today at 11:15, along with Michael Lomax of the United Negro College Fund, to discuss whether college today is worth the cost. To find a local station, please visit this website. You can listen to the audio from the show here (subscription required).

The show is a prelude to the syndication of the PBS debate, which will air in many markets across the US beginning this evening. Check here for local listings.

Let's Subsidize Students, Rather than Institutions

by Daniel L. Bennett

Public colleges like to go around telling sympathetic listeners (especially legislators) that they are forced to jack up tuition charges because state subsidies are declining. Colleges and their sympathizers espouse the confusing rhetoric that the percentage of their revenues coming from state subsidies has declined, while failing to mention the reason that subsidies have declined as a percentage of their budget: because their rate of SPENDING has outpaced the rest of the economy over the past several decades. This is a much different story than saying, as Neal McCluskey and others have demonstrated: that public subsidies have generally been constant when adjusted for inflation and enrollment over the past 25 years.

The public has generally lived up to its bargain of subsidizing colleges in order to keep tuition affordable so that low and middle income people can get a postsecondary education. It is the colleges who have failed to live up to their end of the deal by engaging in a spending spree and empire expansion, mostly with taxpayer money, that has caused a surge in tuition. When organizations or people in the private world demonstrate an inability to manage their finances in a responsible manner, creditors cut them off. For those who sympathize with providing affordable access to college for the less-fortunate Americans, there is a solution that avoids turning off the spigot altogether: Stop subsidizing the institutions directly and instead subsidize the STUDENTS in the form of a voucher, grant or scholarship (whatever you want to call it) that follows the student to whatever college they choose to attend, regardless of ownership status.

That's right, empower students and their families to vote with their feet where the subsidies should be directed, rather than do so through the political process. This is akin to giving low income families food stamps to buy what they want rather than giving them bags of rice and beans. Schools eager to attract recipient students would then be much more likely to allocate their resources to areas important to students. The end result would likely be greater diversity in institutional models, with one extreme being a low cost online provider, the other the conglomerate country-club campus, and many variations in between.

We currently have institutional diversity to some extent, but the majority of public colleges are moving in the direction of the elite county club campus, making it less and less affordable for lower income students to afford to attend. So let's nudge them along to becoming fully privatized and elitist by cutting off their institutional subsidies and instead empower the students with the subsidies. My guess is that more institutions will move in the opposite direction, towards more value-based models focused on education. This would at least give students the choice in how they spend the taxpayer's money, and provide a glimmer of hope that it will be used more effectively. Doing so would also improve policymakers' ability to target funds to specific objectives, such as improving access to low income students or adult learners.

Links for 3/17/10

Llyod Armstrong

Essentially everyone in higher education would say – and brag- that we provide a social good. We are, however, also quite fond of telling society that we know what it needs better than it does… And we then say that we already are doing what needs to be done quite effectively, and that everyone should just trust us…

In general, however, there is little actual data to show how well we achieve the desired learning outcomes. Where data exists, more often than not they seriously call into question the effectiveness of our approaches.

I imagine that if Drucker were to look at this situation, he would warn us that unless we can demonstrate that we are in fact doing things that society needs as we move into globalization, we risk suffering some of those political and financial outcomes that he had envisaged only for aberrant corporations…

Tim Ranzetta

Sallie Mae captured almost 3/4 of the total growth in the industry…

Eduwonk

In much of our field for profit is synonymous with bad, non-profit and school district is synonymous with good. Yet in practice there is wide variance in quality within all three sectors and the highest performing ventures across all three sectors have much more in common with each other than they do with their low-performing peers. In other words, tax status doesn’t necessarily tell us much. And to the extent this is ideological, anyone arguing that for-profit ventures shouldn’t be involved in education has no idea how school districts operate or procure a variety of goods and services…

Adam B. Schaeffer on obscuring costs in edu.

The Great Paradox

By Richard Vedder

Every day, I faithfully read the Rasmussen Reports, with polling data on everything under the sun. A few days ago I learned that 81 percent believe people learn more about life skills on the job than in college.

We agree. Jordan Templeton and I have measured post-school human capital accumulation and found it to be enormous --lots of learning comes on the job, and on-the-job learning explains why 50 year old workers make more than 25 year old ones.

Yet here is the paradox: 71 percent of Americans believe book learning is more important than "street smarts" in life success. You learn your job on the job --but you must get the education to get the job in the first place.

In short, the certification process is what college is all about --distinguishing the potentially better workers from the so-so ones. A college diploma delivers income --but work experiences develop skills. We pay an awful lot of money for the diploma that certifies competence. Are there better, cheaper ways of doing that? We believe the answer is "yes."

FFEL Savings Estimates Fall Again

by Todd Holbrook

The CBO released its latest savings estimates for the elimination of the FFEL program late yesterday. The estimated savings have dipped yet again, with the lowest coming in at a cool $40 billion, nearly $30 billion below the previous projection (and less than half of the one before that).

The report named credit assistance (present value of future administrative costs and market risk) as the basis for the alternative methodology used in obtaining the lower figure. Another estimate given was $62 billion, $6 billion below a previous estimate credited to a"projected increase in annual discretionary administrative costs in the direct program". The CBO used Federal Credit Reform Act (FCRA) methodology to obtain the $62 billion estimate, but this methodology was dropped for the $40 billion estimate. The reason: FCRA methodology does not account for market risk -seen here as default rates.

Links for 3/16/10

James Mulholland

We—adjuncts, full-time professors, researchers, administrators, politicians, and parents—must retool how we talk about graduate school in the humanities. We can no longer present it as a professional school or as career training, with the assumption that more education and advanced degrees always lead to better lives, more income, increased happiness. Instead, we must think of graduate school as more like choosing to go to New York to become a painter or deciding to travel to Hollywood to become an actor. Those arts-based careers have always married hope and desperation into a tense relationship. We must admit that the humanities, now, is that way, too…

In that sense, then, graduate school in the humanities is not a trap. It's a choice. But it is incumbent on us to make sure it is not a lie. We should not romanticize it…

Peter Schmidt

a jury has ruled that an associate professor of sociology at Iowa State University brought false charges of gender discrimination against two colleagues he had viewed as obstacles to his gaining tenure…

The two professors, Terry L. Besser and Betty A. Dobratz, alleged in their lawsuit that Mr. Krier had filed administrative complaints of bias and discrimination against them in March 2008 because they had been critical of his academic work, and he wanted to keep them off the panel that would be weighing his tenure bid and to intimidate other faculty members who might oppose promoting him…

Mr. Krier's letter accused Ms. Stewart, his former spouse, of contributing to the hostile work environment he faced…

All of the sociology faculty members might face challenging days ahead. Last week, the department learned that it faces a budget cut of 52 percent…

Paul Basken

Congressional Democrats are making plans to trim a proposed increase in Pell Grants, and to cut out other anticipated education-spending programs, in a rush to craft a final version of their long-awaited student-loan legislation.

Kevin Carey

Southeastern finally lost accreditation and shut its doors in August 2009. In researching the article I wanted to learn more about the historical back-and-forth with Middle States... I couldn’t ask Southeastern for the documents, because it didn’t exist anymore. So I asked Middle States, which said I couldn’t see the documents because…wait for it…Southeastern didn’t exist any more. Middle States only publishes documents about accredited colleges and universities, you see, and even then they only make their correspondence available, not the reports and responses that colleges send in return. Now that Southeastern is kaput, the whole sorry history is under lock and key (or through a shredder, who knows.) I replied by saying that I understood (albeit don’t agree with) the notion of concealing accreditation documents about colleges that actually exist, but whose interest was being served by hiding all the information now? I received no reply. Keep this in mind next time you’re told that the accreditation process is “transparent.”

Links for 3/15/10 Protest Edition

WSJ

In the last decade, government worker pension costs (not including health care) have risen to $3 billion from $150 million, a 2,000% jump, while state revenues have increased by 24%. Because the stock market didn't grow the way the legislature predicted in 1999, the only way to cover the skyrocketing costs of these defined-benefit pension plans has been to cut other programs (and increase taxes).

This year alone $3 billion was diverted from other programs to fund pensions, including more than $800 million from the UC system…

EduBubble

there is indeed money, but it’s flowing into the hands of former state retirees. One police chief is said to take home $284,000 a year! He could pay the inflated tuition of a number of students himself.

We’re at the beginning of a battle between the geezers and the twerps…

Mark Bauerlein

Robinson's conclusion: "Yet what did the protesters demand? Peace? Human rights? No. Money. And for whom? For the downtrodden and oppressed? No. For themselves."…

the target shouldn't be racism or exploitation or any other ideological sounding from the Left. It should be the gross mismanagement of public funds by the State of California's leadership in the last decade…

John Ellis

In 1964 there was focus and clarity. This one was brain-dead. The former idealism and sense of purpose had degenerated into a self-serving demand for more money at a time when both state and university are broke, and one in eight California workers is unemployed. The elite intellectuals of the university community might have been expected to offer us insight into how this problem arose, and realistic measures for dealing with it. But all that was on offer was this: get more money and give it to us…

Should the Government Get In on Career Networking?

by Daniel L. Bennett

A new report from the Center for American Progress seems to suggest that the federal government needs to invest in a social networking (or career navigation) platform to help those with low skill and little education to learn about opportunities for development and training in one central place. The authors of the report indicate that there are currently many small pockets of information and programs available to help those in need find opportunities, but that they are too widely scattered - making it difficult for individuals to find help in re-training or career advancement.

Building a network, along the lines of LinkedIn or Careerbuilder, that organizes all of the available programs and opportunities for people in need of retraining in one place sounds like a pretty cool idea. But why does it have to be a government-financed and controlled project? Why not leave it to the the private marketplace that has brought us the likes of Myspace, Facebook, LinkedIn, Careerbuilder, Twitter and Monster - all very successful networking sites. Would it not be better for the private sector, subject to competition and the prospect of failure, to invest in developing such a system? It could even be a non-profit organization funded with private money from foundations or wealthy donors. Either would be a better option than a government-controlled system, which would not be subject to competition or failure, and would be an additional liability for taxpayers.

One other thing that bothered me in skimming through the report is that it mentioned many outlets for people in need of career navigation, including community colleges, labor unions, public workforce systems and community-based organizations, but failed to mention the career colleges - a private source for career development and enhancement. Career colleges play quite an important role in vocational and career training in America, so why exclude them as a source of re-training and career enhancement? Maybe the career colleges will band together to do just what the authors of this report suggest: build a central network of career development and enhancement opportunities at their schools, since they likely would be able to bring it to market sooner.

Links for 3/12/10

Lloyd Armstrong

The old ABA accreditation, based on such inputs as faculty size and library holdings, has been one of the major levers used by law school deans against their administrations in their efforts to inflate their budgets.

Goldie Blumenstyk

Colleges rightly argue that endowments are not simply rainy-day funds. But this apparent reluctance to use them during an undeniably rainy period, either to stave off cuts or to make strategic investments, can only add weight to the questions that so many already have.

David R. Henderson

In a story Friday about the student protests of budget cuts, The Herald reported, "Some professors took students from their classrooms to the rally."

As an educator, taxpayer and citizen, I find these professors' actions appalling. The classroom is supposed to be a place of safety, where the professors don't indoctrinate students with their views. Discussing the issue in class, and letting those who might disagree do so without attacking them, is a good idea. But leading their students out of their classrooms to a rally on a particular issue, whatever the issue, is a fundamental breach of trust.

Whatever these professors think about budget cuts, they should not be leading their students in protest. These professors should be letting the students think for themselves. Whatever else happened last Thursday, this was not education.

NYT

many of China’s best and brightest, its college graduates, are facing a long stretch of unemployment.

In 1999, the government began a push to expand college education — once considered a golden ticket — to produce more professionals to meet the demands of globalization. This year, more than 6.3 million graduates will enter the job market, up from one million in 1999. But the number of high-skilled, high-paying jobs has not kept pace.

Yasheng Huang:
The Chinese educational system is terrible at producing workers with innovative skills for Chinese economy. It produces people who memorize existing facts rather than discovering new facts; who fish for existing solutions rather than coming up with new ones; who execute orders rather than inventing new ways of doing things. In other words they do not solve problems for their employers…

Although Chinese universities are not without pockets of excellence, they are churning out people with high expectations and low skills. That combination cannot be good for any country…

Loren Brandt:
The problem facing new college graduates is neither the economy nor the migrants. Instead, it is the result of a rapid of expansion in higher education and a serious mismatch in the labor market…

Links for 3/11/10

DIANE RAVITCH

the states responded to NCLB by dumbing down their standards so that they could claim to be making progress. Some states declared that between 80%-90% of their students were proficient, but on the federal test only a third or less were. Because the law demanded progress only in reading and math, schools were incentivized to show gains only on those subjects... Meanwhile, there was no incentive to teach the arts, science, history, literature, geography, civics, foreign languages or physical education.

In short, accountability turned into a nightmare for American schools, producing graduates who were drilled regularly on the basic skills but were often ignorant about almost everything else…

Given the weight of studies, evaluations and federal test data, I concluded that deregulation and privately managed charter schools were not the answer to the deep-seated problems of American education…

The current emphasis on accountability has created a punitive atmosphere in the schools…

On our present course, we are disrupting communities, dumbing down our schools, giving students false reports of their progress, and creating a private sector that will undermine public education without improving it. Most significantly, we are not producing a generation of students who are more knowledgable, and better prepared for the responsibilities of citizenship. That is why I changed my mind about the current direction of school reform.

David Glenn

"When the English 130 sections moved above 22 students, it really didn't seem to be working well," says Kim D. Jaxon, a lecturer in composition. "So I thought, Fine. Let's blow it up. Let's try 90."

Scott Jaschik

Not only does Ohio State want to end the all-out dominance of research considerations in reviews for full professor, but the university wants to explore options where some academics might earn promotions based largely on research (and have their subsequent careers reshaped with that focus) while others might earn promotions based largely on teaching (and similarly have career expectations adjusted). Both could earn the title of full professor.

Jeffrey R. Young

An associate professor who focuses on digital media, Mr. Vaidhyanathan regularly teaches and writes enthusiastically about movements to make music, movies, and other creative works free online. I thought he'd be one of the first people to advocate open access to lectures.

But no. "I find myself playing devil's advocate all the time" in class, he said. "I don't want to be on the record saying something I don't even believe" if the lectures go out on the Web. He considers the classroom a "sacred space" that may need to stay private to preserve academic freedom...

Obsession with College

by Daniel L. Bennett

Karin Kasdin tells a compelling story in an artilce for The Faster Times of how her family has managed to accept the fact that their son, who was diagnosed with severe ADHD in middle school and struggled just to finish high school, decided not to go to college. The Kasdin's spent countless money on psychologists, medication and tutors throughout their son's youth in an attempt to get him college ready, all the while ignoring the possibility that he might not be cut out for formal academic education. When they finally accepted this fact and allowed their son to pursue his own interests, he excelled and went on to become a successful commercial real estate salesman and later would start his own internet company - all without having spent a day in a college classroom. This experience appears to have led Kasdin to reach a similar conclusion as CCAP:

vast number of our young people are wasting valuable time and money in college when they could be learning a trade, working as apprentices, becoming entrepreneurs, immersing themselves in the arts, or working in community service. Most large companies today offer training programs through which employees learn the skills they will need to perform well in the jobs for which they were hired.

College has become both an entitlement and a prerequisite to a happy life, so much so, that adults even feel free to push other people’s children.

Kasdin's story reminds me of a close friend who struggled with formal schooling throughout middle and high school, but whose parents, although both highly educated and successful, did not force him to go to college. Rather, they allowed him to explore his own interests. He was very talented in music and the arts, as well as possessing exceptional social skills, and would later start and manage a semi-successful regional band and open his own media production company. Although he did eventually pursue and obtain a formal credential at an arts college, he was already on his way to a successful career before enrolling in a non-traditional college that focused on vocational aptitude, rather than a broad-based liberal arts education.

The point of my story is that we Americans are obsessed with traditional college and the supposed benefits that it confers. It is oversold and I believe that many kids are being set up for failure by sending them off to a 4-year college, when they might be better off pursuing a vocation or trade. This was the topic of a recent article that I wrote for Forbes.