Monthly Archives: July 2010

State Budget Deficits a Growing National Problem for Higher Ed

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A recent report by the National Conference of State Legislatures (NCSL) and a smattering of national press outlets are calling attention to the dilemma presented by American Recovery and Reinvestment Act (ARRA) funds in higher education. Without these 11th-hour rescue funds from the federal government, many state legislatures would have had to have cut more deeply into higher education funding. With ARRA funds quickly running out and a difficult election year ahead for Congress, it is unlikely that federal support for higher education can continue.

The NCSL report highlighted the often drastic decrease from Fiscal Year (FY) 2009 to FY 2010 among states’ funding of higher education, even with ARRA funding included. Washington, for example, increased appropriations for higher education by 0.5% in FY 2009, but decreased overall funding by 7.6% in FY 2010. Without the ARRA funding, Washington higher education cuts would have equaled 12.1%.  Even with the federal requirement that states keep higher education funding at or above 2006 levels in order to qualify for help, the effect of the recession on institutions was grim.

Because of its unique relationship with state legislatures, public higher education has historically experienced amplified results of economic conditions. When state revenues are robust, leaders often invest heavily in higher education. Conversely, when budget deficits strike, public higher education is seen as having in tuition what no other state agency has – its own revenue stream. Called upon in times of hardship to increase tuition in a bid to make up for lost revenues, higher education administrators have, according to U.S. News and World Report, “little choice but to impose hefty tuition increases or reduce the number of classes and services offered on campus.” So far, administrators during this recession have opted for the former, keeping academic services in tact while calling on students and families to begin shouldering the majority of their public educational costs. With national per-student funding stagnated at a low of $6,928 (the lowest in constant dollars since FY 1980), the concept of a “public” education is quickly fading along with state revenues.

With most public colleges in the nation forecasted to face further hardships during the upcoming fiscal year, it is likely that tuition increases, faculty and staff layoffs, and decreasing enrollments will characterize the next chapter in public higher education. Any potential recourse must be tempered with less ambitious sentiments than those heralded by President Obama, who set a goal of having the world’s highest proportion of college graduates. According to Jim Palmer, the editor of Grapevine quoted in a recent USA Today story on the subject, “Our aspirations for higher education have outpaced our funding systems.”

Congress Takes Action on FY11 Budget

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The U.S. House Appropriations Commitee’s Labor, Health, and Human Services and Education Subcommittee is expected to begin work on the FY11 Labor, Health and Human Services, and Education Appropriations bill on Thursday.

This appropriations bill will set FY11 spending levels for the U.S. Department of Education programs, including the federal student aid programs.

In addition, the bills will provide a first glance at the difference between Congress and the Administration with regard to education, health, and human service spending. In February the Obama Administration released its FY11 request which asked to increase discretionary education spending by $4.5 billion to $50.7 billion. In addition, the Administratin proposed making the Pell Grants an entitlement program by funding it entirely with mandatory funds and increasing the maximum Pell Grant award by $160 to $5,710.

Though it is positive that action on the education appropriations bill will likely take place this week it is a first step among many. Only six of the twelve subcommittees have reported their FY11 spending bills to the full House Appropriations Committee. The Appropriations Committee has not yet scheduled time to work on the bills.

Furthermore, the Senate’s Labor, Health and Human Services, and Education Appropriations Subcommittee has not begun work on its version of the bill.

If the House and Senate are unable to pass FY11 appropraitons bill, a Continuing Resolution will need to be passed to continue funding for federal programs.

NGA Announces Plans to Create Common Measures for College Completion

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This week, the new chairman of the National Governor’s Association (NGA), Joe Manchin III, Governor of West Virginia, announced a plan to create a common set of measures to monitor progress and compare states.

The report, Complete to Compete: Common College Completion Metrics recommends the common higher education measures that all states should collect and report publicly.

According to the NGA website:

Comparable, reliable metrics are essential for states under current fiscal constraints. Information on the progress toward, and degree completion of, all students in higher education allows state leaders to gauge whether policies are successful and helps inform future funding decisions. NGA convened a Work Group on Common College Completion Metrics to make recommendations on the common higher education measures that states should collect and report publicly.

The Work Group on Common College Completion Metrics, convened by the NGA, recommends four outcome metrics and six progressive metrics.

Outcome Metrics

  • Degrees and certificates awarded
  • Graduation rates
  • Transfer rates
  • Time and credits to degree

Progressive Metrics

  • Enrollment in remedial education
  • Success beyond remedial education
  • Success in first-year college courses
  • Credit accumulation
  • Retention rates
  • Course completion

Governor Manchin stated “we’re facing a generation of students that is projected to have lower educational attainment than their parents…an alarming stat”.

Manchin’s comment is well supported. The U.S. ranks 10th in the percentage of young adults with college degrees according to the Organisation for Economic Cooperation and Development. In addition, both the Obama Administration and other higher education focused organizations, such as the Lumina Foundation for Education, have both set laudable goals for increasing the portion of Americans with college degrees.

Federal Health Care and Education Reconciliationo Act Takes Effect

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On July 1, the federal Health Care and Education Reconciliation Act took effect.

As of this date several changes go into effect that will directly impact students and higher education institutions in the coming academic year and for many years to come.

  • The bank-based Federal Family Education Loan Act was eliminated and replaced with the Direct Loan Program for all federal student loans.
  • The maximum federal Pell Grant award for the 2010-11 academic year will increase to $5,550, an $800 increase since 2009. The increase is based on the cost savings provided by transitioning to the Direct Loan Program.
  • Pell Grant award increases are now tied to the Consumper Price Index (CPI).
  • Eligibility for the Income-Based Repayment Plan was expanded.
  • The interest rate on new subsidized student loans fell from 5.6% to 4.5%

Low-Income Students Underrepresented Among Undergraduates

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According to 2004 data analyzed recently in a Wall Street Journal blog, enrollment in four-year colleges by low- to moderate-income students decreased drastically in the years since 1994. The average cost of attendance remained the same proportion of annual income, representing about 48% of low-income families’ annual income, while moderate-income families’ burden was reduced from 26% to 22% during the same time period.

In addition, persistence in four-year institutions decreased to 75% for those beginning in 2003, down from 78% in 1995. The implications are made more serious by the economic climate in which college students find themselves at the completion of their studies – whether they graduate or not. With national unemployment rates highest among young people – even those with bachelor’s degrees – and more and more debt being taken on by students and families in order to cover rising educational costs, the attainment of higher education may be undermined by the financial crisis.

UW Names Interim President

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The University of Washington Board of Regents at a special public meeting yesterday voted to appoint Phyllis M. Wise, UW Provost and Executive Vice President, to serve as interim president of the University of Washington while the Regents conduct a search for a new president to replace Mark Emmert.

As provost, Wise is the University’s chief academic and chief budget officer, and the second-highest university administrator. She will be the first woman and the first Asian-American to serve as UW president.

Mixed Bag for Student Financial Aid

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Washington students received a mixed message with regard to financial aid this week.

On Monday it was reported at the state level that more Washington college students who qualify for state grants based on financial need are being denied.At the federal level, it was noted int he media that students are expected to experience bigger and better grants.

According to Washington’s Higher Education Coordinating Board (HECB) more than 15,000 students who qualify for the state’s largest financial aid program, the State Need Grant, did not receive a grant this year. This is three times the number in previous academic years. The reason there is more demand than there are funds.

At the federal level the story appears to be much less gloomy. An estimated 8.4 million students, approximately 617,000 more than last year, are expected to receive federal Pell Grants in the 2010-11 academic year. In addition, the average student will likely see an increase in the size of their Pell Grant, approximately $220 more.

In addition to the increase in both the size and number of available Pell Grants, eligible students will have access to other grants. On July 1, the federal government will launch the Iraq and Afghanistan Service Grant, which awards $5,500 to any college student whose parent or guardian died while serving in the armed forces in Iraq or Afghanistanafter 9-11.

Finally, the federal government will continue to award Academic Competitiveness Grants of $750 to freshman and $1,300 to Sophomores who qualify for Pell Grants and get good grades in rigorous courses. SMART grants will also continue with a payout of $4,000 to upperclassmen who qualify for Pell Grants and have earned at least B averages while majoring in science, math, or in-demand languages.

Though this appears to be good news on the surface, funding reductions to higher education institutions nationwide will likely limit the improvements to the Pell Grant and other financial aid programs as tuition increases and states find themselves with large funding gaps in state scholarship and grant programs.

Obama Administration Proposes Student Financial Aid Rules

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Last week the Obama Administration proposed a set of rules and definitions to, in their view, strengthen federal student aid programs.

The Notice of Proposed Rulemaking (NPRM) covers several issues.

  • Ensures that only eligible students receive federal funds;
  • Protects consumers from misleading or overly aggressive recruiting practices;
  •  Clarifies state oversight responsibilities; and
  • Clarifies the courses that are eligible for federal aid, and the amount of aid that is appropriate.

The NPRM reflects the work of the U.S. Department of Education and the higher education community around 14 specific issues over the last year.

The NPRM is subject to public comment. The Department plans to closely review all the comments it receives with the goal of publishing a final rule by November 1. This would allow any changes to take effect July 2011.

Research Reveals Effects of Recession on Freshman Enrollment

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A new report by the Pew Research Center demonstrates the effects of the Recession and a boom in minority high school graduation rates on freshman enrollment. The report is an analysis of recent statistics published by the U.S. Department of Education and suggests that the significant growth in minority freshmen, particularly among Hispanic students, could be a result of demographic changes. The report cites a changing youth population in the country, which is more diverse than the current population of adults, as a possible cause for the increase. In addition, Hispanic high school graduation rates reached an all-time high in 2008 of 70%, an increase of 2.5% from 2007.

 While the overall increase in enrollments appears to be sector-wide, the spike in minority enrollments is concentrated in two-year and less-than-two year institutions, where minority students enroll at higher rates than their white peers. At four-year institutions, minority students enroll at less selective schools compared with whites.

 The increase in minority enrollment corresponds with a decrease in white enrollments; in 2007, whites constituted 55% of freshmen at less-than-four-year institutions. By 2008, whites were only 53%. At four-year institutions, whites represented 64% of freshmen in 2007 and 62% by 2008. The increase in minority enrollments, however, was concentrated in certain states and a small number of colleges and universities. Of the 144,000 total increase in freshmen enrollment, around 72,000 were at 109 colleges and universities. As a result, less than 2% of the nation’s colleges and universities absorbed half of the enrollment boom.

Obama Administration’s Unpaid Internship Regulations May Limit Opportunities

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In a rapidly shrinking job market, the new graduate faces unparalleled challenges in finding work. Even before the recession, the college internship operated as an intermediary step between education and employment. In April, however, the U.S. Wage and Hour Division released a Fact Sheet on the legalities of hiring unpaid interns, presenting criteria for prospective employers to meet before moving forward with intern employment.

The criteria brings prevailing labor laws into perspective, requiring that the intern “not displace regular employees,” that the internship be “similar to training which would be given in an educational environment,” and that the employer “derives no immediate advantage from the activities of the intern.”

According to a recent article in the New York Times, these requirements may hurt, not help, potential interns. Many companies and institutions that had previously offered unpaid internships cancelled their programs as a result of the Fact Sheet, or cut down on the number of interns they hired. The Times article highlighted the potential unfairness of access to unpaid internships by students who have the means to spend an entire summer without gainful employment. However, in an economic climate that offers few opportunities to young people, it’s hard to begrudge anyone a head start on a career.