Source: John G. Kilgour, Compensation & Benefits Review, OnlineFirst, Published August 7, 2018
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.
Source: Susan E Shaffer, Susan I Fitzgerald, Kendra M. Smith, Moody’s, Sector Comment, August 6, 2018
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….
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
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.
Source: S&P Global Finance, July 16, 2018
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.
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
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.
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…..
Source: Jen Mishory, Century Foundation, July 12, 2018
– Statewide free college, also known as “Promise” programs, have expanded rapidly in states across the country, and older free college programs can provide lessons for the design of these programs.
– Advocates of the model point to their structure as a free benefit and to the goal of universality as potential drivers of long-term political sustainability: that increased participation and a clear message will help increase and retain aid funding.
– This report identifies and studies six statewide Promise programs that were in operation through the Great Recession to see how they fared. Their resiliency during that significant downturn demonstrates that the model might in fact benefit from more enduring funding support, and that budgetary protections, social insurance-like design, and the defined benefit structure meant that means-tested free college programs also enjoyed that sustained funding.
Source: Matt Reed, Inside Higher Ed, Confessions of a Community College Dean, July 12, 2018
Can a college get better and smaller at the same time? ….The more common case involves sustained incremental cutting and watering-down. That takes the form of replacing full-time faculty with adjuncts, replacing administrators with contracted services, raising class caps, outsourcing campus functions, and the like. As short-term measures, many of those make sense at first, and a few may make sense generally. But after the low-hanging fruit has been picked, the trends don’t stop. This approach assumes, whether consciously or not, that the hard times are temporary. That might make sense in the aftermath of a natural disaster, but it’s delusional in the face of long-term demographic decline. Over time, the decline tends to outpace the incremental cuts, and the college has to resort to layoffs. Those are a nightmare for all involved. Aside from the frustration and hand-wringing of the usual approach, there’s a lack of vision. The challenge for each budget year is to keep doing essentially the same thing, but with less. But with long-term demographic decline, doing essentially the same thing guarantees continuing to get disappointing results. As a long-term survival strategy, it’s exactly wrong. ….
Source: Jared Brewster, Susan I Fitzgerald, Kendra M. Smith, Cassandra Golden, Moody’s, Sector In-Depth, June 28, 2018
For the second consecutive year, median public university revenue growth declined, falling below 3% and trailing expense growth for the first time since fiscal 2014, according to our fiscal 2017 medians. Nearly 25% of public universities reported declining revenue and more than 60% reported revenue growth below higher education inflation. Revenue growth will remain muted as public universities face tuition affordability concerns and ongoing state funding constraints, putting continued pressure on universities to curtail expense growth to maintain margins.
Source: Keith Wardrip, Eileen Divringi, and Kyle DeMaria, Federal Reserve Bank of Philadelphia, Community Development and Regional Outreach, May 2018
This report examines the early impacts of a financial aid program that reduces or eliminates tuition and campus fee costs for lower- and middle-income New Jersey residents. The program boosted enrollment among lower-income students, improved students’ perception of college affordability, and reduced student financial stress. However, it is unclear whether first-year improvements in academic performance are attributable to the program.
Source: Barbara Gault, Jessica Milli, Lindsey Reichlin Cruse, Institute for Women’s Policy Research, #C469, June 2018
From the summary:
Investing in Single Mothers’ Higher Education: Costs and Benefits to Individuals, Families, and Society Postsecondary education is a reliable pathway to economic security and is increasingly important to securing family-sustaining employment. For single mother families, who make up a growing share of U.S. families, and who are especially likely to live in poverty, college attainment is a game changer for improving family well-being and meeting the demands of a changing economy. College credentials are associated with a host of positive outcomes, including increased earnings, higher rates of employment, improved health, increased civic engagement, and improved outcomes among the children of college graduates.
Source: Anthony P. Carnevale Neil Ridley Megan L. Fasules, Georgetown University, Center on Education and the Workforce, 2018
From the press release:
Certificate recipients in Oregon ages 29 or younger reap sizable earnings gains, in some cases more than doubling their pay, as they build their skills and enter the workforce, according to a new analysis of community college programs in the state. The Georgetown University Center on Education and the Workforce (Georgetown Center) report, Certificates in Oregon: A Model for Workers to Jump-Start or Reboot Careers, highlights the role of certificates for people seeking to enter the labor market, an issue that has drawn increasing attention from policymakers in Washington, DC and across the nation.
The new analysis is based on state-level data that sheds light on their labor market value by field of study and their impact on both college-age students entering the labor market and adults established in the workforce. It also shows the importance of major national and state investments in data systems that have allowed states like Oregon to track the earnings returns of particular credentials.