Category Archives: Higher Education

Genes, Education, and Labor Market Outcomes: Evidence from the Health and Retirement Study

Source: Nicholas W. Papageorge, Kevin Thom, NBER Working Paper No. 25114, September 2018
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From the abstract:
Recent advances have led to the discovery of specific genetic variants that predict educational attainment. We study how these variants, summarized as a linear index — known as a polygenic score — are associated with human capital accumulation and labor market outcomes in the Health and Retirement Study (HRS). We present two main sets of results. First, we find evidence that the genetic factors measured by this score interact strongly with childhood socioeconomic status in determining educational outcomes. In particular, while the polygenic score predicts higher rates of college graduation on average, this relationship is substantially stronger for individuals who grew up in households with higher socioeconomic status relative to those who grew up in poorer households. Second, the polygenic score predicts labor earnings even after adjusting for completed education, with larger returns in more recent decades. These patterns suggest that the genetic traits that promote education might allow workers to better accommodate ongoing skill biased technological change. Consistent with this interpretation, we find a positive association between the polygenic score and non-routine analytic tasks that have benefited from the introduction of new technologies. Nonetheless, the college premium remains the dominant determinant of earnings differences at all levels of the polygenic score. Given the role of childhood SES in predicting college attainment, this raises concerns about wasted potential arising from limited household resources.

Related:
It’s better to be born rich than gifted
Source: Andrew Van Dam, Washington Post, Wonkblog, October 9, 2018

The least-gifted children of high-income parents graduate from college at higher rates than the most-gifted children of low-income parents.

The promise of free college (and its potential pitfalls)

Source: Douglas Harris, Raquel Farmer-Hinton, Debbie Kim, John B. Diamond, Tangela Blakely Reavis, Kelly Krupa Rifelj, Hilary Lustick, and Bradley R. Carl, Brookings Institution, September 2018

From the summary:
….This study examines one of the first randomized control trials of a program similar to many free college and promise scholarship proposals. The Degree Project was launched in Milwaukee Public Schools (MPS) in 2011. Students in 18 randomly selected high schools were promised up to $12,000 to pay for college, at essentially any in-state institution. These funds were sufficient to cover all tuition and fees at the local two-year college—making it a form of free or debt-free college. The funds could also be used to attend four-year colleges, covering more than one year of tuition, and fees. To receive the funds, students had to graduate on time from an MPS high school with at least a 2.5 cumulative GPA and a 90 percent class attendance rate, and fill out the Free Application for Federal Student Aid (FAFSA).

The Degree Project had some impact on students’ motivation, college expectations, and steps toward college, such as applying to more colleges and FAFSA completion. However, it had no effect on the performance measures and no effect on whether students went directly on to college. The most recent evidence does suggest that the scholarship may have slightly increased persistence and graduation in two-year colleges, though not in four-year colleges. We are continuing to track these effects; however, it seems clear at this point that many of the potential benefits, during and just after high school, did not emerge.

Through additional quantitative and qualitative evidence, we identify three related reasons why the effects were not more substantial: (a) the performance requirements greatly reduced the number of students who could plausibly receive the funds; (b) the performance requirements, combined with the temporary, small-scale design, meant that the program did not have the catalyzing effect on high schools that otherwise similar programs have seen; and (c) the context in Milwaukee—particularly, the very low level of academic performance and lack of counselor resources— may have been particularly ill-suited to make a performance-based aid program work well.

In other words, this version of free college did not live up its potential in part because of the way it was designed. While we plan to continue studying the program in future years and more effects may emerge, our first decade of work suggests two key lessons:

1. Avoid performance requirements. Merit or performance requirements, though popular, seem to limit both the effectiveness and equity of financial aid. When students received The Degree Project funds, it increased their attendance and graduation somewhat, but the performance requirements meant that very few actually received any funding. So why have the requirements? The intent is to support and reward students who have the best chance to succeed in college, and therefore the smallest likelihood of dropping out with debt, but the result is essentially the opposite. Under almost any plausible assumptions, performance requirements reduce the number of college graduates more than they reduce the number who drop out with debt. A second possible argument for performance requirements is that they may induce students to work harder and become more academically prepared for college, but we find no evidence of this either. The main effect of performance requirements, then, is to provide more funds to higher-income families, which only reinforces existing disparities.

2. Use free college and other forms of financial aid to catalyze changes in high schools. Policy debates about financial aid tend to focus narrowly on how it makes college cheaper for the individual students who receive the funds. But to fully realize the effects of aid, it has to be leveraged to improve the college-going cultures of high schools. MPS high schools were not set up to make college a viable option for most students. The schools did not make a college prep curriculum or structured supports broadly available, or expect most students to attend college. The Degree Project, with its narrow focus on giving money to individual students, was not designed to address this larger problem and, as a result, it did not have the catalyzing effect on high schools that has been observed in other free college programs. The performance requirements made matters worse; by significantly narrowing the share of students who could benefit from the program, the requirements reduced the potential for positive “spillover effects” across students and educators. In short, for free college to fulfill its potential, policymakers need to leverage it to change high schools…..

Reports: Free College Programs Don’t Benefit Low-Income Students

Source: Ashley A. Smith, Inside Higher Ed, September 6, 2018

Two nonpartisan research groups are urging policy makers to examine the details of tuition-free programs and make them more financially helpful for low-income students.

Related:
The State of Free College: Tennessee Promise and New York’s Excelsior Scholarship
Authors: Alain Poutre and Mamie Voight, Institute for Higher Education Policy, September 2018

From the summary:
As college costs steadily rise, students face unprecedented financial barriers as they pursue higher education. Many federal, state, and institutional policymakers tout free-college programs as solutions to addressing college affordability challenges. But IHEP analysis of two state free-college programs, Tennessee Promise and New York’s Excelsior Scholarship, show that to help low-income students afford college, free-college programs must be designed with equity at their core.

The State of Free College: Tennessee Promise and New York’s Excelsior Scholarship finds that neither Tennessee Promise nor the Excelsior Scholarship allocate scarce state funding to the students with the greatest need. To evaluate if these programs have improved college affordability, IHEP examined the net prices at public colleges in both states before and after the implementation of the free-college programs. The analyses assessed affordability for three student profiles with different financial means and different personal and household characteristics. The research found that both programs do little to remove affordability barriers for low-income students, and instead allocate limited funding to middle- and, in the case of Tennessee, high-income students.

A Promise Fulfilled: A Framework for Equitable Free College Programs
Source: Tiffany Jones and Katie Berger, The Education Trust, September 6, 2018

From the summary:
Each fall, millions of college students across the country start classes in hopes of earning their degree. However, the weight of steep tuition bills, rent, groceries, books, and other costs looming over their heads can often cut that dream short. The latest popular solution to help more students afford a degree, which is supported by policymakers and advocates alike, is “free college.”

But while “free college” sounds good at first, we need to ask, “Does this benefit students from low-income families who need it the most?” Unfortunately, right now the answer is “No. Not unless they are designed around equity.”

Improving Occupational Licensing with Sunrise and Sunset Reviews

Source: Iris Hentz, LegisBrief, Vol . 26, No. 25, July 2018

Occupational licensure is a regulatory method that requires people to secure a license from government in order to practice a certain trade or profession. When implemented effectively, occupational licensure helps protect public health and safety and improves the quality of goods and services.

They Say Their Buildings Are Making Them Sick. Administrators Say They’ve Done All They Can.

Source: Teghan Simonton, Chronicle of Higher Education, August 21, 2018

….Academic workplaces are not generally known for their environmental dangers. But at least a dozen faculty members say such dangers have become a central part of working at this mid-size public university in east-central Pennsylvania.

In at least three buildings, faculty members have for years complained about mold, water damage, humidity, climate control, asbestos, and radon. They’ve taken pictures. They’ve cataloged health issues like skin rashes, asthma, and allergies. They share suspicions that health problems caused by the buildings’ poor conditions could be much graver than just a cough here, a nosebleed there.

Mahoney, and others, say the university has money to fix the problems permanently but chooses to spend it elsewhere. The administration, however, disputes the severity or extent of the complaints raised by the faculty and some of the staff. They say the majority of issues are raised by just a “handful” of people with a higher-than-normal sensitivity to air quality. And, the administration says, many of them have not actually brought their issues and concerns to the administration….

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.

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
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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
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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.

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
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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
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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.