Budget cuts have created a vicious circle of decreasing enrollment in Puerto Rican universities.
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.
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.”
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.
….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….
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.
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.
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…..
– 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.