Category Archives: Education

Approaching a Tipping Point? A History and Prospectus of Funding for the University of California

Source: John Aubrey Douglass and Zachary Bleemer, University of California – Berkeley, Center for Studies in Higher Education, August 20, 2018

From the abstract:
This year marks the University of California’s (UC) 150th anniversary. In part to reflect on that history, and to provide a basis to peer into the future, the following report provides a history of the University of California’s revenue sources and expenditures. The purpose is to provide the University’s academic community, state policymakers, and Californians with a greater understanding of the University’s financial history, focusing in particular on the essential role of public funding.

In its first four decades, UC depended largely on income generated by federal land grants and private philanthropy, and marginally on funding from the state. The year 1911 marked a major turning point: henceforth, state funding was linked to student enrollment workload. As a result, the University grew with California’s population in enrollment, academic programs, and new campuses. This historic commitment to systematically fund UC, the state’s sole land-grant university, helped create what is now considered the world’s premier public university system.

However, beginning with cutbacks in the early 1990s UC’s state funding per student steadily declined. The pattern of state disinvestment increased markedly with the onset of the Great Recession. As chronicled in this report, the University diversified its sources of income and attempted to cut costs in response to this precipitous decline, while continuing to enroll more and more Californians. Even with the remarkable improvement in California’s economy, state funding per student remains significantly below what it was only a decade ago.

Peering into the future, this study also provides a historically informed prospectus on the budget options available to UC. Individual campuses, such as Berkeley and UCLA, may be able to generate other income sources to maintain their quality and reputation. But there is no clear funding model or pathway for the system to grow with the needs of the people of California. UC may be approaching a tipping point in which it will need to decide whether to continue to grow in enrollment without adequate funding, or limit enrollment and program growth to focus on quality and productivity.

What’s Behind the Teachers’ Strikes: The Labor-Movement Dynamic of Teacher Insurgencies

Source: Ellen David Friedman, Dollars and Sense, no. 336, May/June 2018

As we watch—rapt—the unexpected teacher insurgencies in West Virginia, Oklahoma, Arizona, Kentucky, and Colorado, we’re also grasping for understanding: Why is this stunning revolt occurring where unions are weak, where labor rights are thin, and where popular politics are considered to be on the right? To understand the insurgency, we need to look at economics, and at political economy specifically. But we especially need a labor-movement analysis.

A labor-movement analysis starts by understanding the political and economic conditions that shape the objective conditions of a particular group of workers (or labor market) at a given moment—prevailing wages, benefits, work processes, structures of employment, stability of work, market forces in the sector, etc. Then we look at how workers respond to those material factors and conditions: how they understand their interests, how they see their own power (or lack of it), how they understand the interests of the employers and what influences them, and how they develop tactics, strategies, and institutions to bring their power to bear against the power of employers. Finally, the self-directed activity of workers (including their ideas, ideologies, methods of organization, decision-making, and what actions they take) can be embedded in the larger context of other sectors of workers, other social movements, and historical labor movements. Such an analysis can help us interpret the teacher strike wave and, perhaps, gain insights that can help us rebuild capable, fighting unions….

Colorado School District Gives Students 4-Day Weeks

Source: Suzannah Weiss, Teen Vogue, August 15, 2018

Many of us wish we could have longer weekends, but for about 18,000 students in Colorado, that wish is coming true. A school district outside Denver has decided to shorten its week to four days, and the first school year on this new schedule just started, CBS Denver reports. It began on Tuesday, August 14, because the day students get off is everyone’s least favorite: Monday.

While this may sound like a dream come true, it means students will have to sit through longer school days to make up for the hours they’ve lost, according to The Denver Post.

The decision wasn’t made just to give students more days off, though; it had practical motivations: to save money and attract better teachers. The district estimates that it will save $1 million by not having buses on Mondays, hiring fewer subs, and spending less on utilities, according to KUSA Denver. ….

…. Around 560 districts in 25 states include schools with four-day weeks, according to the National Conference of State Legislatures, but evidence is mixed on how the different schedule affects students’ performance. ….

Employer-Provided Student Loan Repayment Assistance Benefits

Source: John G. Kilgour, Compensation & Benefits Review, OnlineFirst, Published August 7, 2018
(subscription required)

From the abstract:
With 70% of recent hires being encumbered with student-loan debt, employers and employees have recently become interested in repayment assistance benefits. Since about 2015, 4% of employers and 8% of large employers have adopted such plans. An estimated 20% will have them by 2018. This article examines the background, growth and magnitude of federal and private student loans. It also examines those programs that have been adopted and gleans from them a number of questions that will help in the design and implementation of new programs by employers.

Midyear update – Higher Education – Favorable government funding and investment returns, tuition revenue pressure continues

Source: Susan E Shaffer, Susan I Fitzgerald, Kendra M. Smith, Moody’s, Sector Comment, August 6, 2018
(subscription required)

While our outlook for the higher education sector remains negative, 2018 growth of several revenue streams has been more favorable than anticipated. Both an improved federal research funding environment and ongoing favorable investment returns are credit positive for the sector. For public universities, overall state fiscal conditions are improving, leading to stable-to-growing appropriations for fiscal 2019. However, moving into fiscal 2019, flat enrollment — declining in certain regions of the country — and a continued focus on affordability will likely continue to limit growth in tuition and fees, the largest revenue stream supporting the sector….

Related:
Community Colleges – Reauthorization of federal career and technical funding credit positive
Source: Patrick McCabe, Susan I Fitzgerald, Kendra M. Smith, Moody’s, Sector Comment, August 6, 2018
(subscription required)

On July 31, the Strengthen Career and Technical Education for the 21st Century Act (Perkins V) was signed into law, reauthorizing the Carl D. Perkins Career and Technical Education Act initially approved in 1984. This federal grant initiative, centered on state and local career and technical education (CTE), serves as an important funding source for secondary and postsecondary programs designed to align training and work-based learning opportunities with evolving workforce needs. Perkins V renews and updates the federal government’s commitment to these goals, an overall credit positive for the community college sector and community colleges’ efforts to improve cooperative education opportunities.

Prosperity Now Scorecard

Source: Prosperity Now Scorecard, 2018

The Prosperity Now Scorecard is a comprehensive resource featuring data on family financial health and policy recommendations to help put all U.S. households on a path to prosperity. The Scorecard equips advocates, policymakers and practitioners with national, state, and local data to jump-start a conversation about solutions and policies that put households on stronger financial footing across five issue areas: Financial Assets & Income, Businesses & Jobs, Homeownership & Housing, Health Care and Education.

The Scorecard assesses all states on their relative ability to provide opportunities for residents to build and retain financial stability and wealth. The state outcome rankings are a measure of financial prosperity and how that prosperity is shared and safeguarded. The Scorecard ranks the 50 states and the District of Columbia on 62 outcome measures in the five Issue Areas. Data for an additional four measures are published, but states are not ranked on these measures due to insufficient data at the state level. The overall state outcome rank is determined by the rankings each state receives for outcome measures within each issue area. The issue area grades in the Scorecard are distributed on a curve, based on how each state fares compared with all other states.

The Scorecard also separately assesses states on the strength of 53 policies to expand economic opportunity. Taken together, these 53 policies provide a comprehensive view of what states can do to help residents build and protect wealth in the issue areas described above. Unlike the outcome measures, the strength of states’ policies are assessed based on fixed criteria arrived at through consultation with issue experts and Prosperity Now’s own knowledge of policies that are promising, proven or effective in helping families build and protect financial stability and wealth.

In addition to the outcome and policy measures used to assess states, the Scorecard provides additional data to understand financial stability and prosperity in states and communities. For 44 outcome measures, trend data are available for states to track progress over time. The Scorecard also allows you to drill down to the local level—city, county, Congressional district, tribal area and metro area—on up to 26 measures. Additionally, for 21 outcome measures at the state level and 11 at the local level, the Scorecard includes outcome measure estimates disaggregated by race and ethnicity. The Scorecard also disaggregates 14 outcome measures at the state level by disability status, providing for the first time in 2018 a glimpse into the financial challenges facing people with disabilities. While these additional data do not factor into a state’s overall performance in the Scorecard, we provide the data to allow for a more meaningful analysis of financial security and stability in the United States.

Related:
Main findings
Custom reports
Methodology

Kansas Supreme Court rules in favor of K-12 public schools, a credit positive for districts

Source: Denise Rappmund, Matthew Butler, Moody’s, Sector Comment, July 18, 2018
(subscription required)

On June 25, the Kansas Supreme Court ruled that the Kansas (Aa2 stable) state legislature’s latest K-12 public school funding bills still do not meet the state’s constitutional standards for adequately funding public education. This ruling is a credit positive for Kansas school districts because it will mean a modest amount of additional operational revenue to districts, on top of the $643.9 million in additional funding over the next five-year period covered by the legislature’s current funding plan. Further, the court has also stated that the current plan is to remain in temporary effect with a stay on the ruling through June 30, 2019, during which time the state will need to re-submit to the court a remedy that will bring funding up to state standards for student achievement.

U.S. Public College And University Fiscal 2017 Median Ratios: Lower-Rated Entities Continue To Face Financial Stress

Source: S&P Global Finance, July 16, 2018
(subscription required)

The credit quality of most rated U.S. public colleges and universities was relatively stable in fiscal 2017, except for lower-rated schools, whose credit issues continued. Enrollment and demand metrics were favorable across higher-rated categories and as a sector, although schools in the ‘BBB’ and speculative-grade categories generally saw theirs weaken.

Related:
U.S. Not-For-Profit Private Universities’ Fiscal 2017 Median Ratios: Competition And Affordability Continue To Be Main Credit Risks
Source: S&P Global Finance, July 16, 2018
(subscription required)

Despite the sector facing continuous challenges in the areas of competition and affordability, S&P Global Ratings’ key median indicators for U.S. not-for-profit private universities in fiscal 2017 were relatively flat as compared with those from a year earlier, reflecting the sector’s continued ability to withstand medium-term pressures.

New Federal Data Show America Still Needs to Improve College Access

Source: Ben Miller, Center for American Progress, July 12, 2018

It’s tempting to think that America has largely solved its problems surrounding access to postsecondary education. The rate at which recent high school graduates enroll in college is around an all-time high. There are more Americans who have started college—but have not finished—than Americans who have dropped out of high school. These trends have increasingly helped shift postsecondary education policy discussions toward issues of retention and completion.

While getting college students to graduation is critical, new federal data show that the United States still fails miserably at providing equitable access to learning beyond high school, particularly in terms of socio-economic status. Students from the lowest levels of socio-economic status (SES) enroll in college at a rate that’s 60 percent the level of their best-off peers. When they do enroll, they are far more likely to attend a nonselective college or pursue something less than a bachelor’s degree. This is particularly striking for black students in the highest SES group, who are still half as likely to attend a highly selective college as their white peers. And this story does not hinge on academic ability: The least-affluent students with good grades and scores on an assessment of math skills enroll in college at about the same rate as the best-off students with middling academic accomplishments…..