CCAP in the News

Ohio University's student newspaper, The Post, did a story on tonight's national debate on education and the economy, interviewing CCAP's Richard Vedder, George Leef of the Pope Center, and former education secretary Margaret Spellings.

increasing college enrollment should not be a national goal. He listed delayed graduation, dropouts and "mountains of student loans" as problems facing college students today, adding that postsecondary education is not necessary for everyone.

Often, college grads are mail carriers, waiters and cutting trees down with a master's degree," he said. "You don't need a master's degree to cut a tree down for someone or to drive a UPS truck. I'm not against UPS truck drivers having advanced education, but I don't know that taxpayers need to subsidize this, particularly given the other problems we're having as a nation right now

The St. Louis Post-Dispatch ran on story about unemployed grads struggling with student loans, interviewing Richard Vedder.

Look for an exponential increase in the ranks of underemployed graduates struggling to cover an education they hoped would boost their earning potential

It's going to be a long-running crisis independent of the recession

The economic downturn, he continued, "exacerbates the fact that beginning salaries are lower and the ratio of the amount of (student) loans to those salaries is getting higher and higher. When that happens, you're getting into problems."

More and more students, Vedder said, are deferring payment (and incurring additional debt) by pursuing advanced degrees. The latest statistics from the Council of Graduate Schools bear him out.

Links for 2/26/10

Scott Jaschik

The median raise for senior administrators at colleges and universities for 2009-10 is no raise at all -- 0 percent -- according to a survey being released today by the College and University Professional Association for Human Resources…

Edububble

If they don’t keep boosting revenues, “excellence” might be destroyed…

Kevin Carey

colleges respond to incentives. Higher education accountability works. If Congress hadn’t exempted HBCUs in 1990, it would have worked earlier. Gentle suggestions that autonomous institutions make difficult changes tend not to be very effective. Nor is it enough to simply report information. The default rates in question had been public knowledge for years. It wasn’t until Congress actually attached consequences to the numbers that the colleges sat up and took notice…

I’m always amazed at how colleges are so quick to argue from their own lack of academic integrity (”Don’t push me or I’ll start churning out worthless degrees!”)…

Erin Dillon

We found that while student characteristics do matter, they are certainly not the only predictor of an institution’s default rate, and that institutional characteristics, particularly a school’s ability to retain and graduate its students, are critically important to reducing loan default rates. Basically, that institutions matter—and they matter a lot…

Links for 2/25/10

JOEL KLEIN

The Houston Independent School District is taking a critical step to ensure that all its students are taught by top-notch teachers. Superintendent Terry Grier — who has long been a true warrior in the national fight to close the achievement gap — is making an important move by recommending that the teacher evaluation process include an examination of student achievement data. The data will look at how much learning a student gains over one year. This type of data is called “value-added,” meaning that it analyzes only the change across one year relative to where a student begins, a leveling of the playing field that allows us to isolate teacher impact. Value-added data will be one element in a set of criteria that are used to gauge a teacher's effectiveness in the classroom.

To be sure, value-added analysis is still a work in progress, and methodological challenges remain. Yet for all its imperfections, value-added analysis is a vast improvement on the existing system, which fails to address the one question that really matters: Compared to other educators with similar students and facing similar challenges, how well are a given teacher's students actually acquiring the knowledge and skills they need to succeed in life? While experts debate the finer points of the value-added model, it is now clear that, at minimum, it is a fair way to identify those teachers who are truly failing our students. Value-added data should never be the only metric by which we assess teachers, but honestly, how can it not be in the mix?

JAMES MCWILLIAMS

This database (like so many others available at major universities and research institutions) makes doing historical research immeasurably easier. It’s no exaggeration to say that, in many cases, a scholar can accomplish in a half hour what might otherwise have taken, literally, an entire career…

it’s safe to say that—had this powerhouse of a search engine not done the digging for me—it would have taken decades for me to find these obscure references…

Which brings me to my question… Should publishing requirements for tenure go up for scholars in the humanities and social sciences?...

I’m entertaining this claim with many reservations—for example, upping tenure requirements will most likely lead to an increase in mediocre work…

Kauffman Foundation v. AUTM on the Bayh-Dole Act.

Bob Blaisdell

We get older, but the students stay the same age…

Which reminds me of this.

Fox 5 DC reports on the future of online education. See video below:

Banning science based on its funding?

by Andrew Gillen

If the peer review process works, than why would there ever be a need for this?

Links for 2/24/10

Kevin Carey

The Obama administration is encountering a lot of resistance to its efforts to help states build robust education and employment data systems. The anti-information forces are mainly comprised of a three-part coalition of hard-left privacy advocates, hard-right anti-government and privacy advocates, and the Washington, DC higher education lobby, which pretends to be a privacy advocate but is actually opposed to the creation of information that might make it easier for policymakers to hold them accountable for how they spend the hundreds of billions of taxpayer dollars they receive every year…

JANE J. KIM

Across the nation, college prepaid plans are operating in the red, putting their promises to investors like Ms. Lambert in jeopardy. For now, the states still are paying tuition as they agreed. But the fine print in some state contracts gives them some wiggle room to pay out less than the promised amounts…

Edububble

Rothenberg was paid $371,387 in fiscal year 2007, but somehow that wasn’t enough for her and so the university goosed her salary an extra $350,000.Why? She says it’s because she didn’t take a “sabbatical”…

I don’t have enough time to split hairs and make some distinction between good sabbaticals and bad ones, but I think that it doesn’t really matter in this case. $350k is a big pile of cash and it comes on top of an insanely large $371k regular salary…

CATHERINE RAMPELL with a graph of labor force status by education.

Upcoming Event - February 26 - National Debate

The debate will be held this coming Friday. For our readers who will not be able to attend, our friends at the Miller Center are compiling a broadcast schedule for various markets across the US. You can access it here.

The debate will also be available online at www.millercenter.org. Below are the details for the event.

Does the United States need more college graduates to remain an economic power, or is college just too expensive to benefit many Americans? That will be the focus of a debate that the Miller Center of Public Affairs at the University of Virginia, in partnership with MacNeil/Lehrer Productions, is holding Friday, February 26 at 7:00 pm at the National Press Club in Washington DC. It will air on PBS stations across the country.

Participants include:
•Richard Vedder, Director, The Center for College Affordability and Productivity; Economics Professor, Ohio University
•George Leef, Research Director, The John William Pope Center for Higher Education Policy
•Margaret Spellings, former U.S. Secretary of Education
•Michael Lomax, President and CEO, United Negro College Fund

Paul Solman, business and economics correspondent for “PBS NewsHour,” will moderate the debate.

Today, about 40 percent of Americans, aged 25 to 34, have graduated from college. That figure has remained stable for decades, while graduation rates in other countries, including China, have increased dramatically in recent years.

Debate participants will argue several questions, including:
*To remain an economic superpower, does the U.S. need to focus on jobs that require innovation and critical thinking, skills best acquired in college, because it cannot compete with the world on the price of labor?
*Are college graduates better off financially and socially? Or with annual tuition averaging $20,000 for public colleges and $30,000 for private schools, does the cost of college outweigh the benefits for many Americans?
*Is it sound public policy to urge Americans to go to college, with the personal savings rate at its lowest since the Great Depression?

If you’re interested in attending, please e-mail or call one of the contacts listed below:

Kristy Schantz
202-758-3918
kkschantz@virginia.edu

Kim Curtis
434-243-2985
kcurtis@virginia.edu

Persistent Rhetoric...

by Daniel L. Bennett

Take a moment to read the following sentences that were espoused during a Congressional hearing in support of increasing the federal government's role in financing higher education:

"Colleges and universities across the country were experiencing acute financial strains and were apprehensive about rising enrollments and the additional burdens they would pose."

"Overcrowded classrooms,inadequate libraries, deteriorating facilities...the scenario painted...in Congress by presidents and deans of institutions of higher learning."

Do these pleas sound familiar? You might guess that they were made prior to passing of Obama's stimulus plan in February 2008, or possibly prior to passage of any of the previous reauthorizations of the HEA. And that would be a great guess because similar pleas are often made by university officials as they beg for government support. But, these statements were in fact testimony made by former Congressman and president of NYU, John Brademas, at a 1985 House subcommittee hearing in describing the justification for passing the original Higher Education Act in 1965 that established the federal student aid programs. That's right, college and universities have been using the same rhetoric about financial strains, growing enrollments and deteriorating facilities for nearly 50 years to extract money from taxpayers.

One would think that enough time (and public subsidies) has elapsed that colleges would have learned how to better manage their resources to avoid such problems. But no, the public feeding continues without no fundamental change in the way that colleges operate, as they continue to hold out their hands. Yet, college continues to become less and less affordable, as its value continues to diminish. It is past time that our politicians and the taxpayers who elect them wise up to this rhetoric and hold these institutions accountable.

Links for 2/23/10

Burton A. Weisbrod and Evelyn D. Asch

Endowments provide income for important spending each year. But they also are a college’s savings -- their insurance for a rainy-day loss in revenue. With insurance, a college can sustain its programs even when bad times cause donations, tuition revenue, or government grants to shrink. Clearly, we have been having a very rainy day. Yet colleges and universities with the largest rainy day funds have been cutting expenditures rather than drawing down their endowments to continue their activities and fulfill their mission until the economy improves…

Now is exactly the time when the rainy day insurance funds should be tapped -- not the time to decimate programs to maintain endowments…

Al Roth

In England, universities faced with unexpectedly many applicants are raising the grades required for admission, which is apparently regarded as somewhat suspect...

Alex Tabarrok

anonymity [for referee reports] is essential because the opportunities for repeat play and thus collusion are too common.

The primary effect of published referee reports would be on editors who would have their work put under greater scrutiny...

Rob Jenkins

Over time, real-life experiences began to challenge my comfortable, theoretical assumptions…

Senior Administration Salaries Flat...Doesn't Tell the Entire Story

by Daniel L. Bennett

Inside Higher Ed reports this morning that senior administrative salaries remain relatively unchanged from last year. The data comes from CUPA-HR's annual survey. While this may at first seem like a positive development (and indeed it is better than previous year's reports of continual increases well above the rate of inflation), it should be taken with caution. First, a zero percent salary increase is still higher than the rate of inflation, which was slightly negative over the past year.

Next, the salary figures do not account for other forms of compensation such as health insurance and retirement contributions. If these costs were up, which I suspect that at least health insurance was, then total compensation may have actually risen and possibly by a substantial amount.

The figures also do not tell us anything about employment levels. While unemployment in the general economy has risen to double digits, did the level of college and university staff fall, remain constant, or even rise? If the employment levels did anything other than fall, then the salary freezes will have had little effect on total costs. Also, these salary figures only include senior officials. There is an entire bureaucracy of junior level employees whose compensation and employment levels need to be evaluated to determine how colleges dealt with employment this past year. Unfortunately, there is a time lag in this data being reported, so we will not know the effect of the recession on employment levels for some time.

Lastly, the report does not provide salary information by institution, only a median of all participating ones. I suspect that some schools handled the recession more responsibly than others. By this I mean that the median increase was zero because some administrations likely took pay cuts while others may have treated the past year like any other and continued with the lavish pay increases that have become commonplace in higher ed.

While I certainly welcome the news that salaries did not rise during what has been a severe recession, I caution that we need to evaluate the rest of the evidence before we go off and pat these folks on the back for a job well done. This is what I've done in a working paper with previous year's data.

Links for 2/22/10

Lynn O’Shaughnessy

Don’t Borrow More Than $27,000…

If students can’t attend the college of their dreams by borrowing just $27,000, they may want to look at their other college options. Down the road, they will probably be glad they did.

Robin Hanson

the “status” theory that academics are mainly trying to be credentialed as impressive often gives quite different predictions than the theory that academics are mainly trying to be useful to the wider world.

Doug Lederman

as a decade's worth of opinion surveys show, the public believes both that higher education is essential and that colleges raise tuition with relative impunity

Stephen Burd

Pity Sallie Mae, it is so misunderstood. The student loan giant says it has spent millions of dollars on high-priced lobbyists and showered lawmakers with hundreds of thousands of dollars of campaign contributions over the last year not to defeat President Obama’s proposal to overhaul the federal student loan system but to enhance it.

Developing Mediocrity

By: Christopher Matgouranis

While going through the course offerings for the next term at my university, something caught my attention: remedial education courses. It has always confused me as to why these exist at the college level. I know that remedial or developmental education courses are not limited to my institution, but exist as a nation-wide phenomenon.

At my university, there are several different remedial education courses offered in the Mathematics (such as basic algebra) and English departments. In addition to these “developmental courses,” the university houses an entire college that has a remedial education focus. This University College offers remedial courses in reading, learning strategies, and “the university experience,” plus it is fully staffed like any other college with administrative assistants, directors and deans. While there may be future educational benefits from assisting students in their adjustment to the college atmosphere, I must wonder whether the benefits associated with an entire college justify the expenditures. Setting aside the questions about the costs and benefits associated with the college, the very existence of a need for remedial education seems out of place at a university.

29 percent and 2 billion dollars. These numbers represent the staggeringly high percentage of four year college students requiring remedial education coursework and its annual dollar cost as estimated by Strong American Schools in the paper titled “The Diploma to Nowhere.” Additionally, it has been noted that there is a high positive correlation between students requiring remedial education and those that later drop out of college. Remedial Education is costly. Its pervasive presence is representative of a lack of knowledge concerning fundamental economic concepts by university admissions workers and administrators. For example, not understanding the basic idea of opportunity cost is obvious in the decision to divert resources (professors, classrooms, number of courses offered, etc.) away from brighter students and focus them on those who may not have what it takes to be in college (and tend to have a significantly higher drop out rate).

There are two different causal problems associated with the amounts of remedial education required at the university level. One issue is that the secondary public school system is not adequately preparing students for collegiate academics. And, while CCAP traditionally focuses on higher education issues, the failure of the public school system to properly prepare a significant percentage of “college bound” students for basic English/reading and mathematics classes is a serious problem and cannot be ignored. A second and distinct issue is that too many unqualified students are being admitted to college. College is not for everyone. A more efficient allocation of resources and lower social costs would be achieved by having those students requiring remedial education courses attend a community college, trade school, or start a career, instead of attending an expensive and taxpayer subsidized four-year institution.

The sheer amount of university students requiring remedial coursework and the steep price tag attached to it are an often unacknowledged problem. Until the idea that a four year college is for everyone begins to fade, it is unlikely that much will be done, causing the problem to persist and a continued rising of higher education costs.

Why Tuition Goes Up Every Year

Richard Vedder explains why in an essay that he wrote and appears on the Minding the Campus website this morning.

Links for 2/19/10

Jay Schalin on Erskine Bowles

he is a lot of conflicting things. He is somebody who directed his staff to cooperate with critics… somebody who could “cuss out” a student government representative to get the young man on board with his policies (according to the young man in question). He is an inside member of North Carolina’s Democratic machine, which is gaining a well-deserved reputation for corruption, while at the same time he favors greater transparency. He is a genuinely decent man who tried to use the power granted him to improve his realm, and a dangerous political infighter with an agenda at the same time.

And he is full of surprises—he once told me in an email to “never pull your punches” when I was criticizing him…

In the final analysis, he must be commended for his public service without regard for personal gain…

Bowles’ policies and actions have often frustrated, angered, and bewildered me (a die-hard conservative). Yet, after the announcement of his impending retirement, I find it impossible not to respect a man who goes out of his way to aid and encourage his most ardent critic, in order to be sure he’s getting all sides of the story with which to make his decisions. There will be some big shoes to fill on Raleigh Road in Chapel Hill very soon.

Martin West

C. Kirabo Jackson reported that the Advanced Placement Incentive Program, which pays both high school students and their teachers for receiving passing scores on AP exams, boosted AP participation rates in participating schools (no big surprise!), the share of students receiving solid SAT or ACT scores, and the share of students going on to post-secondary education…

A follow-up study… shows that the program increased their college GPAs and led to higher college completion rates…

As Jackson explains, the study provides an unfortunately rare example of a late-high-school intervention that seems to yield lasting benefits for students…

Audrey Williams June

Worried faculty members at the University of Iowa now have a report from a provost-appointed task force that names 14 graduate programs — half in the humanities — that could be restructured or eliminated as the university seeks to save money…

David Moltz

Community college transfer students are no longer being courted only by the usual suspects. More private institutions, of every ilk, are aggressively recruiting students from two-year colleges, hoping to bolster and diversify their enrollments and capitalize on the belt-tightening of regional public universities…

“It helps the selective privates with their diversity…

Smaller, more tuition-driven independent institutions, however, often have a more practical reason for actively pursuing community college transfer students: the tuition revenue they bring…

Higher Education's Tunnel Vision

by Daniel L. Bennett

I have a new article on Forbes.com that argues that we have tunnel vision when it comes to focusing our attention on improving graduation rates without first addressing some of the most pressing problems in higher education.

Vast sums of third-party payments from the government have distorted market conditions so far into disequilibrium

Out of control tuition inflation leads to vast expenditures but produces a watered-down educational product that fails to teach graduates the skills they need.

We are focused on quantity rather than quality and on turning out bachelor's degrees rather than vocational aptitude. It would be more appropriate to focus on the latter in both cases.

students are being misdirected to college and set up for failure at a young stage in life, likely with onerous debts that will haunt them for years to come.

a society which increasingly denounces such career paths [vocational, technical or military training] as taboo, creating apprehension among young people and their parents that they must go to college or else failure is imminent.

Links for 2/18/10

Jennifer D. Jordan and Linda Borg

The teachers didn’t blink.

Under threat of losing their jobs if they didn’t go along with extra work for not a lot of extra pay, the Central Falls Teachers’ Union refused Friday morning to accept a reform plan for one of the worst-performing high schools in the state.

The superintendent didn’t blink either.

After learning of the union’s position, School Supt. Frances Gallo notified the state that she was switching to an alternative she was hoping to avoid: firing the entire staff at Central Falls High School...

Ben Miller

lenders currently receive quarterly subsidies when loans they hold are in repayment. Their incentive is thus to keep borrowers active and not to let them default, for if they do, the lender could lose around 3 percent of the loan’s value. By contrast, guaranty agencies and collection agencies get sizeable subsidies for defaulted loans. When a loan defaults, the guaranty agency can tack on collection costs that can easily be upward of 20 percent. The agency also gets to keep 16 percent of any amounts it collects. If the guaranty agency, collection agency and lender are the same company, that subsidy can certainly be enough to wipe out any other losses it might sustain from a default.

That’s basically the situation we have right now with Sallie Mae…

Lynn O'Shaughnessy

Did The Value Of Your College Degree Just Drop $350,000?

Mark Bauerlein

One often hears about stressed and stretched and over-scheduled college students, but every survey I've seen, including those issued by National Survey of Student Engagement (Indiana University) and the Higher Education Research Institute (at UCLA) shows dismayingly low levels of study time and academic engagement among undergraduates…

there doesn't seem to be much difference, in general, between study time and academic outcomes…

Remember the Eastern European joke about wages under communism, "We pretend to work and they pretend to pay us"? Perhaps there is an undergraduate counterpart: "We pretend to study and they pretend to grade us."

The Anti-Lemons Paper is Great, Not Useless

by Andrew Gillen

I’ve had the effects of reputation on higher ed on my mind a lot lately, so I was intrigued to read a slew of blog postings on W. Bentley MacLeod and Miguel Urquiola’s new Anti-Lemons paper.

For those of you who haven’t read it, the basic story is as follows. M&U created a theoretical model to analyze when reputation is a sufficient incentive to yield normal market outcomes (i.e. that a free market is better than a government controlled one). They find that as long as schools cannot select their students based on ability, than doing vouchers and private schools instead of government schools is better since “competition raises average school productivity and improves learning” just as the free market story says.

However, if schools can select their students based on ability, than vouchers are no longer better than government controlled schools. The reason is that schools have an incentive to cream-skim the best students, which bolsters their reputation. This anti-lemons effect- “entry by selective schools that derive their reputation for high quality from selectivity”, in turn means that students have an incentive to go to selective schools (because employers use school reputation as a signal of employee quality), which means that once they get in to a selective school, students have less of an incentive to study.

Liberals like Matthew Yglesias tend to like the paper since one of the findings is that free markets aren’t a panacea.

I would have to pay $5 to read the whole paper, but the abstract conveniently supports political positions I like, so I’ll talk about it some more.

[AG: Don’t let the paywall stop you – just enter your old .edu email and they will send an email to that address that allows you to view the paper.]

Libertarians are more split. On the “we like the paper” side are Megan McArdle and Tyler Cowen’s GMU posse (7th comment on Yglesias’ blog).

On the “we don’t like it” side is Cato’s Andrew Coulson. Coulson was really the only one to discuss the specifics of the paper (everyone else just said “we like it”), but in contrast to his superb book Market Education, I didn’t find him convincing.

Coulson seems to have two main objections to the paper. The first is that “ ‘it’s only a model’ — and not a very good one at that”, with the reasoning being that the assumptions made are unrealistic.

Needless to say, I don’t find that a very convincing critique. I’ll reuse a quote from Paul Krugman to illustrate why:

I am a strong believer in the importance of models, which are to our minds what spear-throwers were to stone age arms: they greatly extend the power and range of our insight. In particular, I have no sympathy for those people who criticize the unrealistic simplifications of model-builders, and imagine that they achieve greater sophistication by avoiding stating their assumptions clearly. The point is to realize that economic models are metaphors, not truth. By all means express your thoughts in models, as pretty as possible (more on that below). But always remember that you may have gotten the metaphor wrong, and that someone else with a different metaphor may be seeing something that you are missing.

The last part of the quote, that the model might be missing something important, is related to Coulson’s second objection: that the predicted results are

completely at odds with the reality established by the large body of empirical findings in this field.

I’m not up to date on all the relevant studies, so this may well be true. However, even going by Coulson’s numbers in figure 2 here, we would expect to find a positive impact of markets over government on achievement in slightly less than 2 out of 3 studies (with insignificant findings making up the majority of the others). If the case for free markets over government schools is really so clear cut (and I lean strongly in this direction), than why isn't this 3 out of 3?

And here is where the usefulness of the M&U paper for Cato’s free market case comes in – it offers a convincing theoretical explanation for why free markets are only convincingly showed to be better 66% of the time. And even more importantly, if it is correct, the paper indicates how school choice programs can be structured to ensure that they make things better.

CCAP in the News

Richard Vedder was quoted in an Insider Higher Ed story that discussed the results of a new study of public opinion regarding college.

[Vedder]was struck by the fact that "nearly twice as many Americans think colleges 'are like most businesses' than believe 'colleges today mainly care about education,' " and that the proportion saying that colleges "care mainly about the bottom line" had increased to 60 percent from 52 percent in just two years.

"Once colleges were revered as selfless institutions trying to educate our youth and serve the public good. Now, apparently, universities are viewed as being somewhat akin to used car dealers, trying to shake down their customers for as much money as possible. In the long run, that is going to hurt a sector dependent on third parties for support."
Vedder acknowledged, though, that he has been surprised by the extent to which many Americans have continued to be willing to pay ever-rising tuitions. When he published his book in 2004, Vedder said, "I always thought there would be a threshold, where people get so angry that they start making different decisions, or that it gets in the consciousness of politicians. Neither of those has really quite happened," he said. Yet students have continued to flock into higher education, and -- defying logic, almost -- families have continued to appear willing to pay tuition at even the most expensive institutions.

"The bubble’s got to burst on this thing.... The staying power of colleges is amazing," he added.

"Americans," he said, "are still in the grin and bear it mode."

William Hoar cited Richard Vedder in an article in New American on the Scheme to Nationalize Student-Loan Industry:

Dr. Vedder, director of the Center on College Affordability and Productivity and author of Going Broke by Degree: Why College Costs Too Much (AEI Press, 2004), further observed: “When the feds created tuition tax credits in the late 1990s, I called it the ‘faculty salary enhancement act,’ since colleges could capture much of the tax break by raising tuition fees and then used some of the money to reward their staff. Money moved as much from taxpayers to university staff members as to the pockets of student consumers.”

Neal McCluskey cited Richard Vedder in a piece over at CATO.

Economist Richard Vedder has long educated people about the inflationary effect of student aid, and does so again with great clarity.

Dan Lips cited Richard Vedder in a piece for National Review Online

As economists like Dr. Richard Vedder have argued, generous government subsidies have actually contributed to the college cost problem. Rather than continuing to follow this failed approach, the time has come for policymakers to solve the college affordability problem through strategies that can lower college costs.

Daniel L. Bennett was quoted in a Fox 5 news story.

There is also an interesting argument going on -- that college tuition is experiencing a bubble, much like we saw in housing. The more loans that are available, the more money students have to spend. That, the theory goes, leads colleges to raise tuition and buy for all sorts of things that don't go directly to education.
"It's comparable to rearranging the furniture on the Titanic," says Daniel Bennett of the Center for College Affordability. "It makes it look nicer but it doesn't take care of the problem."
Bennett agrees with President Obama's statement that colleges need to do their part to bring down cost.

Links for 2/17/10

Kevin Carey

the Binghamton University basketball scandal… wave of academic misconduct and criminality, including assault, thievery, and sale of crack cocaine. Now we learn that assistant coaches helped players plagiarize, … Failing grades were changed to passing, players dropped regular courses for “independent study,” and some were allowed to transfer in courses with titles like “Bowling I” and “Theories of Softball.”…

Why, for the most part, do universities get away with it? Binghamton just happened to get caught. Most universities are a little more discrete…

I think the answer lies with the nature of academic reputations. Binghamton, like nearly all well-regarded colleges and universities, owes its reputation to two–and only two–things… Terrific students + terrific faculty = terrific reputation…

The problem is that neither factor has anything to do with the university’s academic standards for teaching and the awarding of credit…

Keith Hampson interviews Chris Finlay.

Q. Innovation in education is everywhere. Yet, it seems that we are constantly reinventing the wheel: innovations are often not widely or quickly disseminated, and thus we don’t seem to learn as much from our successes and failures as is common in other sectors. How can an organization avoid this trap?

…there are people contributing valuable innovations locally but are often not collecting results or case studies in useful ways…

Q. Are there specific colleges whose efforts to innovate have caught your attention?
Arizona State University continues to impress me. They are combining student centered design and the power of hard data to define their New American University initiative. It is exciting to see a school that size taking such smart steps…

Grant Wilkins

Everyone knows we are past the point of taking budget cuts by giving back vacant positions, reducing expenditures for supplies and travel, shuffling budgets, or other administrative sleights of hand. No, that last round of cuts resulted in real people losing real jobs, in full view…

This wasn't what I signed on for: to destroy careers and make "least worst" decisions. I had a vision, dammit, to create a center of excellence and guide young faculty members so they could achieve their full potential…
At least I'm not a beneficiary and no one can detect a bulge in my belly whenever a nontenured faculty member disappears from the coffee room.

But that isn't true, I am benefiting. My position is secure, my salary is elevated, my access to privileged information guarantees my survival, and my cold-blooded efficiency puts me in a position to rise even higher in academic administration…

here is what I think the snake would say to the mice: "We find ourselves in a terrible situation not of our making and certainly not of our choice. I will do what must be done, not because I want to but because it is required, and I will do everything possible to minimize our collective loss while assuring our collective survival. Your sacrifice is necessary for the community to survive, and your sacrifice will be honored and respected even as I extinguish your existence. Please try to understand."

MARY PILON

When Michelle Bisutti, a 41-year-old family practitioner in Columbus, Ohio, finished medical school in 2003, her student-loan debt amounted to roughly $250,000. Since then, it has ballooned to $555,000.

It is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single $53,870 fee for when her loan was turned over to a collection agency.

"Maybe half of it was my fault because I didn't look at the fine print," Dr. Bisutti says. "But this is just outrageous now." …

There is an estimated $730 billion in outstanding federal and private student-loan debt, says Mark Kantrowitz of FinAid.org, a Web site that tracks financial-aid issues—and only 40% of that debt is actively being repaid…

The Gospel According to St. Bob

By Richard Vedder

Colleges can obtain money to meet new needs in two ways. First, they can go out and raise new funds. Second, they can reallocate existing funds --reduce funding for some activities to expand or initiate programs.

College presidents enjoy (or at least accept) raising new money. They have become good at begging legislatures, private donors and others for funds. Moreover, if that does not do the job (as is usually the case), it is relatively easy to pass the buck (or actually take the buck) from students in the form of tuition hikes. It is this approach that has brought about higher education cost escalation.

College presidents dislike having to reallocate funds, because that makes people on campus mad --really mad. Tenured faculty are kept happy by giving them $$ for new programs, lighter teaching loads, higher salaries, etc., but they are ready to go to war if their programs are reduced. The same is true, perhaps to a lesser degree, with other members of the campus community --alums, administrators, even students. As Howard Bowen said a few decades ago, colleges will spend whatever that have --the marginal propensity to consume out of income always is roughly one (to use old Keynesian lingo).

Along comes Bob Dickeson. Bob is one of my favorites. He has done it all --at a young age, he was a high level university administrator, including serving as President of the University of Northern Colorado for a decade. He was CEO of a major company supplying higher education services --Noel-Levitz. He worked closely with a couple of governors on their staffs. He helped start the Lumina Foundation where he worked as a senior executive for many years. He did some great, straight talking studies for the Spellings Commission, ones that angered the Establishment, which meant they were excellent. His study on accreditation nearly caused a few heart attacks, but was right on the money in terms of identifying a real problem.
Getting to know Bob while on that Commission was a real treat.

Bob has revised his book with the boring title of Prioritizing Academic Programs and Services, first written a decade ago. It is must
reading for all who have the ability to change universities, and especially university presidents, provosts, and trustees. Bob sent me a copy, and I have devoured it. He gets into the nitty-gritty of how reallocating resources should be done at universities, starting with identifying institutional missions (usually done excesssively vaguely and in a manner that gives little clue as to the institution's true direction), the key players in making change happen, the questions that need to be asked and answered in reallocation, etc., etc.

Bob's book is a little wonkish, a little narrow in its scope, but that is what makes it both good and relevant. Today, colleges are being forced into reallocation mode, and cross the board budget cuts are sometimes politically the least unpopular but always the least desirable way to proceed. Should we reduce the sociology department by eliminating its moribund master's program in order to increase research efforts in nano science? Should we out source more activities? Bob gives guidance how to proceed in answering questions like these. More people should read Bob Dickeson, and then call him in Estes Park, Colorado (his home) if more guidance is needed.

Links for 2/15/10

ISI

While College Fails to Adequately Transmit Civic Knowledge, It Influences Opinion on Polarizing Social Issues

RYAN MAC

Computer Science 106A: Program Methodology course at Stanford University…

it may be easy to cheat (cut, paste some code, voila!) but it is just as easy to detect cheating. (It is the computer science department, after all)…

Cases in which students borrow code in computer-science classes make up a disproportionate share of the honor-code violation situations…

The number of honor code violations have prompted Professor Roberts to implement a new system. Describing this method as a “collective incentive” for students to maintain academic standards, the professor said he will add 5 percent for every honor-code violation in his class to the weight of the final exam, which is currently 15 percent of the class grade.
In other words, if one person cheats, the whole class will face more pressure on the final exam, because it will make up a greater portion of a person’s grade. Whether the scorn of fellow students is a bigger deterrent to cheating than being personally disciplined by the university remains to be seen…

Neal McCluskey

there is much more accurate imagery possible when it comes to Sallie Mae: Egomaniacal Dr. Frankenstein furiously blaming the monster he created for doing exactly what he built it to do…

Steve Malanga

the provocative headline, "The Big Lie About the 'Life of the Mind,'" on a recent article in the Chronicle of Higher Education…

As compelling as I found Pannapacker's pieces, what astonished me the most about them is how little things have changed in 30 years. Virtually everything he says is shockingly similar to the warnings of Darcy O'Brien, a novelist and English professor whose 1979 article, "A Generation of Lost Scholars" in the New York Times magazine observed that, "a profession that traditionally prided itself on its gentility and immunity from the raw practices of the marketplace now finds itself unable to employ more than one in three humanities Ph.D.s." This was no accident, O'Brien recounted, because even as universities of the day "question their degree programs," they continued them, while "students, some of them either ignorant or misled, pursue courses of study that may enlighten the mind but will likely lead to unemployment."…

"there is still almost no way...for students to gather some of the most crucial information about graduate programs: the rate of attrition, the average amount of debt at graduation, and, most important, the placement of graduates (differentiating between adjunct, lecturer, visiting, tenure-track positions, and nonacademic positions)." Were he still writing on the subject, O'Brien might observe that thirty years is a long time to be keeping this vital information from students…

Charles Miller is Right

By Richard Vedder

Charles Miller is one of the most perceptive persons I know, and he shares my passion about the need for change in higher education. He sent one of his emails to, roughly, everyone of importance in higher ed in the past 24 hours, and he was on a tear --ripping apart the federal government for many things. I will just talk about one or two of them.

Charles thinks the proposal to completely federalize the student loan program is a disaster. As he points out, the same folks that sent Fannie Mae and Freddie Mac into the ground screwing around with home mortgages now want to become monopolists in the student loan business.

The current federal student aid program is, as Charles says, totally dysfunctional. We have a multiplicity of programs when we should have one. We have had an irrationally complicated form that requires completion before aid is granted, perhaps the single most important obstacle to lower income Americans from applying. We had a 1,000 page higher ed reauthorization that Congress liked --but almost certainly few if any had actually read it. Bills over 50 pages in length should be banned. Bills longer than the Constitution are unwieldly and unmanageable.

The alleged savings from moving to exclude private lenders are illlusionary in any sensible way of calculating costs and benefits, and saying a single provider approach works best is like saying the Bureau of Motor Vehicles/Post Office model is the ideal of America because of economies of scale --never mind the fact that Americans usually find these agencies inefficient, uncooperative, with Soviet-style approaches to customers.

The intensely anti-capitalist views of the Obama crowd along with a total disregard for federal fiscal responsibility have contributed to gold prices being 50 percent higher than they were election day, for the dollar being weak against the Euro (Greece nothwithstanding) and against the yen, and for the inflation-adjusted Dow Jones Industrial Average being 30 percent below what it was a decade ago. A neutral to pro-capitalist president would be running a nation with at least two trillion dollars more in wealth (via higher equity prices), more business confidence, and a faster rising GDP (the stimulus approach, of course, being a dismal failure).

What is worse, as we treat our young persons with contempt (via our awful public schools and so-so universities), we are doubling ripping them off as the present generation pays out entitlements to the elderly etc. that we cannot afford, and we increase our nation's unfunded liabilities that our undereducated youth will have to pay.

Prediction: U.S. sovereign debt, for the first time in American history, will undergo a downgrading --and the day of its happening is growing nearer by every policy disaster emanating from Washington --in higher ed and in the broader macro economy. Charles Miller is right.

Links for 2/12/10

Kevin Carey

Overwhelming, charters have chosen to educate students who have been desperately underserved.

For this, Gary Orfield of the “UCLA Civil Rights Project” has branded charters as “apartheid schools” and “civil rights failures,” because their students are disproportionately–in many cases, overwhelmingly–non-white. If you’re waiting for the punch line, there isn’t one. Charters have created schools to which low-income and minority parents want to send their children, so much so that the annual lottery at my friend’s school is an emotional, high stakes affair. For this, Orfield denounces them by association with the murderous apartheid regime and America’s shameful history of institutionalized racism. If nothing else, this illustrates how powerful and totally bullet-proof major research university brand names have become: pair one of them with a righteous moniker like “Civil Rights Project” (it used to be at Harvard) and major national newspapers will cover even the most bewilderingly narrow-minded reports…

education policy is filled with examples of people who have been tripped up by over-allegiance to nominally worthwhile means. Define equity exclusively in terms of integration and you wind up making a fool out of yourself. Focus all your attention on ensuring that teachers have due process protections and you end up defending indefensible “rubber rooms.”…

Victor Lavy, Olmo Silva, and Felix Weinhardt

We show that a large fraction of ”bad” peers at school – as identified by students in the bottom 5% of the ability distribution – negatively and significantly affects the cognitive performance of other schoolmates…

On the other hand, we uncover little evidence that the average peer quality and the share of very ‘good’ peers – as identified by students in the top 5% of the ability distribution affect the educational outcomes of other pupils. But these findings mask a significant degree of heterogeneity along the gender dimension…

girls significantly benefit from interactions with very bright peers, whereas boys are negatively affected by a larger proportion of academically outstanding peers at school…

Al Roth on the gender imbalance on Chinese campuses.

With more than 120 boys born for every 100 girls in China, parents of boys know that their sons will face a competitive marriage market. Shang-Jin Wei of Columbia and Xiaobo Zhang of the International Food Policy Research Institute argue that this accounts for a substantial portion of the high savings rate in China, as parents anticiipate that wealthier sons will marry more successfully

Alex Tabarrok on the gender imbalance on US campuses. And here.

The sex ratio on many U.S. campuses is around 60/40 and rising. The NYTimes has an excellent piece on the predictable consequences for dating: “Needless to say, this puts guys in a position to play the field, and tends to mean that even the ones willing to make a commitment come with storied romantic histories.”

Go Obama Go

by Andrew Gillen

Paul Basken reports that

The Obama administration is stepping up its drive to compile detailed records on all students from preschool through adult employment, forming a panel of "national experts" to find ways of creating such databases while resolving political and legal concerns over privacy.

The Bush administration tried to form such a student-record database on the national level…But Congress blocked the nationwide effort…

Hopefully Obama can succeed where Bush failed.

Links for 2/11/10

Al Roth

Robert Townsend of the American Historical Association … “The primary problem today, as it was a decade ago, seems to lie on the supply side of the market—in the number of doctoral students being trained, and in the skills and expectations those students develop in the course of their training."

For a dissenting view on this latter paragraph, see Marc Bosquet's column: At the AHA: Huh?

Bosquet, the author of How the University Works (here is the introductory chapter) advocates more stringent licensing of who can teach history to undergraduates, to increase the demand for Ph.D.s in full time positions, by displacing graduate student teaching fellows and part time faculty.

As an economist, I was struck by several things about Bosquet's book, the first of which was in the foreword by AAUP president Cary Nelson. Nelson speaks of the need for theory to help understand the situation of university employees… He then enumerates the failure to do so of "Every body of theory with broad implications for understanding our own practices...", naming each such body of theory in turn "Psychoanalytic criticism...Marxist theory...feminist theory," concluding "The one institutional site where one might have hoped for a theorized account of the job system was the Modern Language Association."

It's humbling (and perhaps illuminating) to note that nowhere do these scholars look to economics for a theory of employment...

Thomas H. Benton

she continues as an adjunct who qualifies for food stamps, increasingly isolating herself to avoid feelings of being judged. Her students have no idea that she is a prisoner of the graduate-school poverty trap…

Scenarios like that are what irritate me about professors who still bleat on about "the life of mind." They absolve themselves of responsibility for what happens to graduate students by saying, distantly, "there are no guarantees." But that phrase suggests there's only a chance you won't get a tenure-track job, not an overwhelming improbability that you will…

The main point of another column I wrote six years ago ("If You Must Go") is that students considering graduate school should "do their homework." But the problem is that there is still almost no way—apart from the rumor mill to which they do not really have access—for students to gather some of the most crucial information about graduate programs: the rate of attrition, the average amount of debt at graduation, and, most important, the placement of graduates (differentiating between adjunct, lecturer, visiting, tenure-track positions, and nonacademic positions). Programs often claim that graduates who are working as adjuncts or visiting faculty members are successfully placed in the profession.

Most departments will never willingly provide that information because it is radically against their interest to do so. I can see no way for that information to become available unless it becomes part of accreditation or rankings in publications such as U.S. News and World Report.

Tim Ranzetta on Nevada’s prepaid tuition plan.

“Fund balance is estimated to have a 51% probability of being adequate to satisfy all Program obligations."

A 51% probability? I don't like those odds for a non-guaranteed financial product where I could get less back than I put in. What makes that 51% figure even more interesting is the fact that it is based on projected investment returns of 7.5% for a fund invested 55% in equity and 45% in fixed income…

Isn't it time that someone took a closer look at protecting consumers from these risky financial products that inadequately disclose their risks?

Jennifer Epstein

University of California students… spent a little more than 28 hours each week combined on class and homework…

Unintended Consequences of the 90/10 Rule?

by Daniel L. Bennett

I've been doing some thinking about the so-called 90/10 rule, which stipulates that profit-seeking colleges must obtain 10% of their revenue from non-federal aid sources. Since proprietary schools do not get state subsidies, research grants, or have a massive income-earning endowment (profit-seeking firms would likely re-invest their retained earnings in growth opportunities anyhow, as they don't have the tax advantage of a public or non-profit organization), the other 10% of revenue usually is generated from out-of-pocket tuition charges. In other words, student tuition payments from private funds such as income, family savings, company sponsorship, private scholarship or private loans.

By requiring colleges to come up with revenue sources other than the federal government, politicians believed that profit-seeking colleges would be forced to provide something valuable that students would be willing to pay out of their own pocket for, with the intent of cracking down on the so-called diploma mills operating in the for-profit space. While the implementation of the rule did lead to some for-profit providers closing up shop, I wonder if there are negative unintended consequences as a result.

For instance, it may be possible that profit-seeking colleges have an incentive to set tuition at a level that exceeds the maximum federal student loan thresholds so that students have to come up with the remainder of the tuition on their own. It may also be possible that proprietary schools set their tuition above the combined maximum annual federal loan and grant thresholds, or some ratio of it depending on the particular target student demographics. In the absence of the 90/10 rule, it is possible that profit-seeking colleges might price their tuition at or below the federal aid thresholds.

I plan to empirically investigate this matter in the future. Stayed tuned.

Links for 2/10/09

John B. Taylor

The new study by my colleague Rick Hanushek and his coauthor Ludger Woessmann shows that bringing US education levels up to the level of Finland would raise real GDP by over $100 trillion measured in present discounted value terms over the next 80 years…

Jean Chatzky

If you can come up with a third of the money your kids need for college before they go, you are doing a good job. Think about paying another third out of your then-cash flow. And have them borrow the final third…

Robin Wilson

most professors and administrators on traditional campuses continue to dismiss for-profit colleges as inferior alternatives that cost too much, consume more than their fair share of federal student aid, and turn out unprepared graduates who default on their student loans…

But the for-profit sector is not only more robust than the rest of higher education, it is helping to force some changes in the way traditional colleges do business…

For-profit universities spend a lot of money to get students in the door…

Once students are enrolled, for-profit institutions work hard to hold on to them…

Keith Hampson talks with Rich Vedder.

Rent Seeking in Columbus

By Richard Vedder

Another example of why universities perhaps should be taxed rather than subsidized surfaced recently. Ohio State University announced that its CFO of two decades, Bill Shkurti, is retiring. He has done a fine job handling finances at this ambitious school that, if US NEWS is to be believed, is getting better all the time. At the time of his retirement, he is being paid a bit under $342,000 a year, a hefty amount for a public servant but perhaps not unreasonable for someone running a $4.5 billion annual operation. His successor, who comes from the private sector, is being paid $625,000 annually --over 82 percent more. Could they not fine a good person for, say, $375,000 a year, not much less than the president of the university was making a half dozen years ago.

Millions in economic rent for middle aged administrators --not a penny for poor students paying ever rising amounts to help finance this scam. Shame.

Robbing the Cradle

By Richard Vedder

The University of Southern California has been rising in the US NEWS rankings through somewhat dubious means I suspect, hiring lots of expensive faculty, doing flashy things that raise ratings. We at FORBES/CCAP rankings have a different view about USC. The kids don't like the professors much, possibly because a lot of them don't speak English but write dull articles for dull journals for a nonexistent audience. We think USC is not in the top five schools in Los Angeles County using an outcomes based approach to measuring excellence.

Now the ultimate example of why this is not a real great university, but more of a tacky entertainment oriented school that venerates Bubbas more than Brains. The new football coach, recently arrived from Tennessee (home of the Escorts who tantalize high school seniors in order to sign them up for football), has signed a 13 year old middle school kid to play football whenever he gets to college in 2016 or thereabouts. Is there no end? Is there anything beyond the pale in intercollegiate sports? Why don't university administrations, the NCAA, the Pac10 or someone put a stop to this madness? Is USC a serious school dedicated to the pursuit of knowledge, or is it an exploiter of child labor for decidedly non-academic purposes?

Links for 2/9/10

Arthur M. Hauptman

The Pell Grant has not had much effect on tuition levels in part because the amount of the awards does not vary with where a student enrolls. Institutions cannot affect how much a student receives, and the institutions that charge the most enroll the fewest Pell Grant recipients.

By contrast, despite the argument that there is no proven causal relationship between aid and price increases, there are several good reasons to believe that student loans have been a factor in the rising cost of a college education. Tuition has increased by twice the inflation rate for the past three decades while annual loan volume has increased tenfold in constant dollars.

Unlike Pell Grants, as part of the aid packaging process, colleges have some control over how much students borrow as loan amounts. Moreover, just as one couldn’t imagine house prices being as high as they now are if mortgage financing were not available, it is difficult to believe that colleges and universities could have increased their charges so rapidly over time without the ready availability of students’ ability to borrow.

Jill Laster

Portland State University is investigating a tenured professor of economics who is reported to have accused a student during class of being an FBI informant and selling weapons to other members of the class…

John B. Hall, stopped teaching in the middle of a lecture … Mr. Hall said an FBI informant was in the room and pointed at one of their classmates, Zaki Bucharest.

Mr. Hall then went on to say that Mr. Bucharest had served as a sniper in the Israeli army, tried to sell weapons to members of the class, and worked with the FBI, among other claims, the students said. Mr. Hall also showed students a letter he had written to the FBI.

Uwe E. Reinhardt

a modern university is a prepaid, staff-model, pedagogic group practice – the educational analogue of a staff-model health maintenance organization, or H.M.O., like the Kaiser Permanente Health Plan…

But suppose universities operated instead on a piece-rate compensation basis, like the current health system…

A “comprehensive initial consultation on a senior thesis,” for example, might cost anywhere from $150 to $300, depending on the student...

The faculty in the natural sciences and engineering would own the laboratories used by their students and charge a facilities fee for each use, along with a professional fee for faculty supervision and set-up costs…

Each time a student used the reserve library to read the voluminous material assigned by the professors, there would be a separate charge… Reading lists in the humanities would be especially long, leading to endless library charges for assigned chapters in archaic books found only in the library…

Students would be charged a professional lecture fee for every class they attended along, of course, with another facilities fee…

Upon requesting a fee schedule from the dean of the college, the latter would patiently explain that different prices had been negotiated with different parents and that all of those fees are proprietary information…

If universities conducted their business in this fashion they, too, might provoke endless rancor and suspicion, endless lawsuits and, sooner or later, much government regulation on how they conduct their business. It may be the reason universities prefer to function like staff-model H.M.O.’s.

And has this approach produced poor quality, as physicians devoted to the hallowed fee-for-service system have so often alleged of H.M.O.’s? It does not appear so, as universities do compete fiercely for students and faculty on their overall reputation…

Jake with a graph of unemployment by educational attainment.

Links for 2/8/10

Chad Aldeman

after teachers had a couple years experience and were up for lifetime tenure, could a district accurately cut off the bottom 25 percent of teachers and improve their workforce?

The answer is a qualified yes.

Tom Deans

I've been considering such evaluations ever since I went through the tenure a second time: the first was at a liberal arts college, the second two years later when I moved to a research university. Both institutions valued teaching but took markedly different approaches to student course evaluations. The research university relied almost exclusively on the summary scores of bubble-sheet course evaluations, while the liberal arts college didn't even allow candidates to include end-of-semester forms in tenure files. Instead they contacted former students, including alumni, and asked them to write letters…

Daniela Werner channels my inner thoughts.

Self-loathing kicks in, and I mentally whack myself over the head…

Like most of my fellow Web users, I exercise little self-control when spending time on the Internet. What I don't know is how I'm going to change…

It's embarrassing to admit that I willingly give up free time that I could spend accomplishing something of academic or personal value…

David Moltz

Amid the enrollment boom at community colleges, two-year honors programs have become more popular…

“More and more of our students in the program are coming here because they can’t afford to go off elsewhere,” Britt said…

Tenure: Gordon Gee Espouses Time for Change

by Daniel L. Bennett

Gordon Gee, one of the most influential university presidents, has recognized that the model used to grant tenure - mainly quantity of research - is outdated, suggesting that

a new approach to tenure is needed to ensure the university stays relevant to students and the outside world.

The universities of the 21st century are going to be the smokestacks of the century...The notion of the large, massive public university that can exist in isolated splendor is dead

Dr. Gee recognizes that the quality of research is more important than the quantity, and that teaching and other service to the college are also important criteria for performance. By saying so, Gee recognizes that diminishing returns have set in for academic research, something that CCAP has been saying for quite some time. He also likely recognizes that public support for higher ed is waning, as the cost of college continues to rise without a comparable increase in quality. Not to mention that the public largely supports education for the purpose of providing just that, education, and not dubious research.

Hopefully, Gee takes the lead with his university. US higher ed often plays follow the leader, so I'm sure that if OSU were to mandate higher average teaching loads and make teaching evaluations (or some other measure of teaching performance) a greater emphasis during contract extensions, then many colleges would begin to follow suit. Better yet, why not eliminate tenure altogether and replace it with a series of long-term renewable contracts of say, 5 or 7 years, to give colleges the flexibility to reallocate resources from time to time, but also the option to dispel the deadwood. While this is likely wishful thinking at this point, I do applaud Gee's comments and think it is a step in the right direction.

Rising College Costs: A Federal Role?

The NY Times Room for Debate forum today asks the questions:

Is there a connection between federal education aid and the inflation rate in higher education? More broadly, what can Washington do, if anything, to improve the effectiveness of its programs and reduce the costs of college?

Richard Vedder opines:

President Obama wants more and bigger Pell Grants to help relieve rising college costs, along with revamped student loan programs. I think he has it backward: federal student financial assistance is more a cause than a consequence of rising college costs.

Work done at my research center reinforces findings of others that exploding student loan programs have contributed to higher tuition charges, and if Pell Grants grow more inclusive and generous, the same effect will occur with them.

The president joins many Americans in wanting to equalize college participation for all. Yet the root cause of low college attainment among poor people is not a lack of resources. It is dysfunctional living arrangements and abysmal academic preparation in our mostly free public secondary schools, particularly those located in inner cities. Indeed, Pell Grant recipients on average are less likely to graduate within six years from college — despite generous financial aid — than others, in large part because of prior educational deficiencies.

It is an inconvenient truth that a larger portion of college students were from low-income backgrounds in 1970, before Pell Grants, than today. No doubt the rise in college costs relative to family incomes makes more believe that higher education is something for the affluent, not everyone. But the cure — federal student aid — is causing (at least in part) the disease.

The demand for higher education grows with rising federal financial assistance, but the supply grows less rapidly, pushing up prices (tuition fees). Supply is comparatively rigid because the so-called best schools attain their lofty reputation by turning away customers: college rankings are enhanced by taking very qualified bright kids who likely will graduate (and are disproportionately affluent). Dropping money out of airplanes over the houses of college students (or its equivalent) is not the solution.

The three “I”s of higher education reform are incentives, information and innovation. Colleges must provide incentives for their staff to want to cut costs and be efficient, they must provide better information on outcomes and finances to consumers, donors and taxpayers, and they must embrace innovation in the forms of labor-saving technology. That, not more student financial aid, is the key to making colleges more affordable.

Arthur Hauptman also offers some interesting analysis:

Unlike Pell Grants, as part of the aid packaging process, colleges have some control over how much students borrow as loan amounts. Moreover, just as one couldn’t imagine house prices being as high as they now are if mortgage financing were not available, it is difficult to believe that colleges and universities could have increased their charges so rapidly over time without the ready availability of students’ ability to borrow.

As does Pat Callan:

But recent increases in Pell Grants during the Bush and Obama administrations and higher levels of federal expenditure for the program have had little, if any effect, on improving college access and affordability. As additional Pell dollars are absorbed by steep tuition increases, the effect is to shift costs from colleges and states to students and the federal taxpayer, with little or no net gain in higher education opportunity.

Links for 2/4/10

David Glenn

Students' minds have been wandering since the dawn of education. But until recently—so the worry goes—students at least knew when they had checked out. A student today who moves his attention rapid-fire from text-messaging to the lecture to Facebook to note-taking and back again may walk away from the class feeling buzzed and alert, with a sense that he has absorbed much more of the lesson than he actually has.

"Heavy multitaskers are often extremely confident in their abilities," says Clifford I. Nass, a professor of psychology at Stanford University. "But there's evidence that those people are actually worse at multitasking than most people."…

In a recent unpublished study, he and his colleagues found that chronic media multitaskers—people who spent several hours a day juggling multiple screen tasks—performed worse than otherwise similar peers on analytic questions drawn from the LSAT. He isn't sure which way the causation runs here: It might be that media multitaskers are hyperdistractible people who always would have done poorly on LSAT questions, even in the pre-Internet era. But he worries that media multitasking might actually be destroying students' capacity for reasoning.

Tim Ranzetta

Nationally, student loan delinquencies have risen 15% from 9.1% in 3Q 2008 to 10.5% in 3Q 2009.

The Onion

The University of Michigan has become the 17th institution of higher learning to be implicated in the checks-for-degrees scandal rocking American campuses…

"We have strong evidence that the University of Michigan granted academic degrees to students in exchange for hefty payments, often totaling tens of thousands of dollars," Deputy Attorney General James B. Comey said. "In the process, thousands of graduates have emerged with degrees, but few or no skills applicable to everyday life. And many are as unprepared to enter the job market as they were when they first enrolled."

Thomas S. Dee and Brian A. Jacob

the decision to plagiarize reflects both a poor understanding of academic integrity and the perception that the probabilities of detection and severe punishment are low.

Links for 2/3/10

Erin Einhorn on NYC’s Rubber Rooms

roughly 700 workers accused of various wrongdoings collect their full salaries for spending seven hours a day in low-ceilinged, over-heated rooms, playing cards, doing puzzles, reading magazines and sleeping…

the longest-serving person stuck in a rubber room as a teacher who was accused of sexually abusing a child and yanked from his classroom 5-1/2 years ago.

Because the allegations were never proved, and because he refuses to quit his job, he collects his full annual salary - up to $95,000…

Lewis Pyenson

Paul Courant and his colleagues at the University of Michigan want the federal government to support the research habits of elite public universities… Not so fast.

Elite public research universities have pots of money, which they can and do choose to fritter away on enterprises of dubious value…

creating a special strategy to feather the nests of fancy universities is not a responsible use of federal funds.

It would make much more sense to award federal funds to scholars and scientists individually, wherever they are located…

Scott Jaschik

the "no loan" policies adopted by many colleges three years ago… The plans were financed by endowments that had grown so large and so rapidly that members of Congress were demanding to see more spending. Then came the collapse of the stock market -- and deep declines in endowments…

That's when Williams College -- which had a gold-plated no-loans, no income limit policy -- announced that it was shifting back…

Lafayette College… raised the loan limit it pledged to students with family incomes of between $50,000 and $100,000…

Lee Burdette Williams with a humorous take on tenure.

offered the gift with the stipulation that tenure be abolished, the president told him we could never do such a thing. But $75 million! Imagine turning that down! Carson offered a compromise, which the president, without a second thought as to the consequences, accepted: tenure food services employees in addition to faculty…

I realize now that back in 1985, Carson still harbored a 20-year old grudge against a professor and the institution that was powerless to hold that instructor accountable, and that Carson’s very clever form of revenge was to subject us to more misery than any college, even a small, private, wealthy liberal arts college, deserves…

two tenured line servers who were miserable in their jobs but unable to get hired elsewhere, were woefully out-of-date on current food serving technique and research, and invested the majority of their energy in sabotaging the authority of both the head of serving and the Food Services director. They were a pathetic pair of institutional critics who, in faculty parlance, would be called “dead wood.” In food services, though, they’re known as “salad spinners.”…

Though we enjoyed the fruits of his generous gift, he had taken one of our most sacred institutions, tenure, and skewered it like lamb on a kabob. The joke, we all knew, but never admitted out loud, was on us...

Obama and the Doctrine of Fiscal Irresponsibility

By Richard Vedder

I am wondering if the day will come when one of the bond rating agencies announcies it is putting the sovereign debt of the United States government on its "watch" list for possible downgrading. The Bush Administration was irresponsible, but irresponsible within previously observed bounds of recklessness. The Obama Administration is proposing a budget with a deficit of over $1.5 trillion, or 10 percent of GDP. It looks like the three year deficit for fiscal years 2009, 2010, and 2011 will exceed $4 trillion, much larger than deficits, even in relation to the economy, than ever observed except in all-out war. For all the talk of budget freezes, etc., Obama wants to spent over 5 percent more next year over this year's bloated total.

I would be surprised if interest rates do not start increasing on long term debt, and that to deal with that Obama will pressure Bernanke into doing the equivalent of printing money. These are bad times fiscally, just as they are in the real economy with its 10 percent unemployment (despite two so-called "stimulus packages" that have had no positive economic effect whatsoever in my judgment).

Amidst all of this, as American families tighten their belts to deal with economic adversity, the president wants to nearly double Pell Grant spending. As I read the numbers, he wants to both expand a good deal the number of Pell recipients as well as the average grant size. A near doubling in the size of the program is proposed. Moreover, he wants to make it an entitlement --everyone, no matter their economic condition, their ability to complete college, etc., has a "right" to large federal grants.

This is a recipe for disaster. We have had a number of good things to say about Pell Grants over the years, and in many ways prefer them to other forms of federal aid. Yet a large expansion in numbers will bring students into the program who are less needy economically and likely to be marginal academically. A growing number of college students, if they are able to graduate, have a terrible time getting a job related to anything they studied in college. A huge expansion in the number of recipients and grant size is an invitaiton for bigger tuition hikes, more attrition of students prior to receiving a degree, and more underemployment of new college graduates.

Links for 2/2/10

Daniel B. Klein

why do college professors overwhelmingly lean to the left?...

The pyramidal structure of each discipline means that publication, awards, grants, recommendations will follow the pyramid's apex, and if the apex goes left it tends to sweep leftists/neuters into job posts throughout the pyramid.

If leftists have a lock on many fields, it means that non-left applicants will tend to be screened out. Awareness of that feeds back to the non-left student's thoughts about the future. Self-selection is a function of the screening…

We found that Republican-voting members of the scholarly associations were significantly more likely to have landed outside of academia… 41% versus 25.

Jay Greene HT: Andrew Coulson

A press release from the National Education Association landed in my inbox this morning with the alarming headline: “Teachers Take ‘Pay Cut’ as Inflation Outpaces Salaries…

The only problem is that this is not what the data in the NEA report actually show. In Table C-14 “Percentage Change in Average Salaries of Public School Teachers 1998-99 to 2008-09 (Constant $)” we see that salaries increased by 3.4% nationwide over the last decade after adjusting for inflation…
I can’t find a single table or figure in the report that would justify the headline and claims in the press release. But when the Ministry of Truth speaks who are you supposed to believe — them or your lying eyes?

Edububble

Now that the police have found a healthy and self-sufficient Phil Agre, I can make a snarky comment. He was a professor of information sciences at UCLA and then he just stopped coming to work. Finally after a number of months, his family noticed he was gone and took action…

most plausible one to me is that Prof. Agre didn’t have any responsibilities between exams in December 2008 and May 2009. So no one at the university noticed when he wasn’t around…

taxpayers have bosses that will notice if you’re not showing up for work. I wonder if UCLA cut off Agre’s paychecks yet. Given what I know about universities and tenured folk, Agre’s checks could still be automatically appearing in his account every two weeks. Gotta love academia.

Somewhere there’s a university leader arguing that the taxpayers need to support more excellence like this.

Paul Basken

President Obama is cracking down on some institutions seen as wasting taxpayer money while they sit secure in the fact that they are too important to be allowed to fail.
He means, of course, the nation's banks.

The nation's colleges, by contrast, appear to be entering another year in which Mr. Obama will be doing all he can to ensure education gets the most possible federal support…

most colleges still haven't made fundamental changes, said Charles Miller… They typically respond to tough economic times by seeking new ways of getting government money or simply cutting staff members, Mr. Miller said, rather than finding ways to be more productive with their existing resources...

NegReg Fails to Reach Compromise

by Daniel L. Bennett

Inside Higher Ed reported today that the Department of Education's (ED) Negotiated Rulemaking Committee failed to reach a consensus during its third round of negotiations last week. The committee ostensibly got hung up on 2 measures that were directed towards career colleges: gainful employment and incentive pay. I wrote negatively about the potential negative impact that such changes would have on the sector in a recent article for Career College Central.

The committees failure means that any regulatory amendments will now be subject to Congress and the political process. I doubt that the attempt to link student debt to income, which is chock-full of problems as I explained here, will survive the political process. This should not, however, be perceived as a free pass to any college to become complacent at seeking to add value to its programs. Students and the taxpayers are investing large sums of money and hope in the postsecondary education system, and these students and the public deserve better outcomes than is currently the case.

Links for 2/1/10

F. King Alexander

many states based their entire higher education reductions not on valid educational principles or state formulaic considerations, but on the simple threat of losing federal resources…
12 states (including Colorado in 2011) reduced their funding for higher education to the exact amount or within less than half of 1 percent of the threshold set by the maintenance of effort requirement…

The power of these data convinces me that … Congress should make maintenance of effort requirements a regular part of doing business when allocating federal funds for higher education…

Tim Ranzetta

the number of Pell Grant recipients grew to 6.2 million from 4.7 million while the dollars disbursed grew to $13.9 billion from $8.9 billion. The average Pell Grant also grew to $2,223 from $1,885, an 18% increase…

Eric Kelderman

The report is from the Data Quality Campaign, an effort begun in 2005 through the efforts of 10 education groups to press states to collect and use information on student performance. The campaign says states are largely succeeding in gathering the data: Forty-six states have put in place at least eight of the 10 benchmarks the organization has set for such systems…

But having data doesn't help if states aren't sharing the information with decision makers and using it to drive their policies, the campaign says, and that is where states continue to fall short.
For example, only nine states share reports on individual students with their teachers, the survey found, and no state yet has policies to train teachers in how to access, analyze, and use the data on student achievement to improve their work in the classroom…

Doug Lederman

a U.S. Congressman and several supporters unveiled legislation Thursday … The bill… would (1) cement in federal law definitions of "diploma mills" and "accreditation mills" (the unauthorized agencies from which the phony institutions claim to derive their authority to operate), (2) bar federal agencies from using degrees from diploma mills to provide jobs or promotions that depend on candidates' educational credentials, and (3) give the Federal Trade Commission more authority to define and crack down on deceptive practices by dubious institutions...