0 Rethinking Financial Aid's Role in Student Retention

The administration of federal student aid is a highly complex and bureaucratic job thanks to a great deal of program complexity and regulation. Financial aid offices are often overwhelmed with the tasks involved in that administrative process, with staff finding that little time for anything else remains at the end of the day.

Unfortunately, simply following the rules and norms associated with financial aid administration is demonstrably insufficient when it comes to meeting the needs of today's students.  With a far greater number of students entering higher education without the support of college-educated parents, and facing more significant financial constraints (and higher college costs), an effective financial aid office must do more than distribute financial aid and apply rules and regulations.  To ensure that the aid dollars are spent in a cost-effective manner, aid offices must also be part of a cross-campus effort focused on student retention.

Everyone who works on the campuses of colleges and universities today has a shared responsibility for supporting undergraduate retention. This responsibility is essential if they want to help higher education become an engine of equality and social mobility, rather than the engine of inequality that it currently is.  Many of the nation's financial aid officers are committed to this goal and eager to achieve it.

In today's context, a traditional aid office focused on regulation and personal responsibility is contributing to a crisis.  Across the country, students who have overcome enormous challenges to college access find their way onto campus but struggle to retain their financial aid due to rules surrounding the 'satisfactory academic progress' (SAP) standards.   SAP usually means that students must maintain a C average or risk losing their aid. When students fail to do this, there are significant institutional consequences (a loss of Pell dollars, lower graduation rates) and thus the school has failed as well.

Given the stakes, it is reasonable to ask: what role should financial aid offices play in ensuring students make SAP and keep their aid so that they have the financial support necessary to stay in school and reach graduation?

Recent conversations with aid officers suggest that the typical answer goes something like this:
"We want all students to succeed. We tell them that they must make SAP and what will happen if they don't. When they get in trouble, we let them know, and tell them to get help.  We have lots of students to support, and some do their job, and others don't."

I'm sympathetic to that answer, but research suggests it is woefully inadequate.  Here are three critical facts about first-generation college students to illustrate the problem:

1.  They do not know what actions to take to increase their grades.   Research across the educational spectrum shows that holding students responsible for outcomes they do not know how to achieve is ineffective and counterproductive.  Example #1: a student tries to improve her GPA decides to take fewer classes, which results in her becoming part-time, and losing her grants that require full-time enrollment.  Example #2: a student tries to improve her GPA by taking more courses, because she does not know how GPA is computed and she thinks more is better.

2. They are ill-equipped to sort out good advice from bad advice.   When they follow instructions and go seek advice from advisers, they do not know how to handle conflicting advice or determine when that advice is under-informed.  I have encountered academic advisers who do not know that student #1 above will lose some financial aid, or do not tell student #2 that taking more classes could put her at risk.

3. They have little external support, experience more family crises, work longer hours, and are often more averse to taking on loans.  While they might want to seek out help from others, that help is often offered only during daytime hours when their schedules are packed.  In addition, when told they they should take on loans, they feel alienated and misunderstood. 

The growing presence of such students in higher education and the consequences of failing to support them to make SAP as they work their way through college requires financial aid offices to rethink their role in student retention. The financial aid officer is often the first to know the student is in trouble.  This should trigger an early warning system.  In 2013, the implementation of an early warning system ought to be required at every Title IV institution.  The result of an early warning trigger should be proactive efforts (coordinated by multiple offices as needed) to reach the student for comprehensive advising that integrates academic, financial, and family support.  Proactive efforts must reach the student where they are-- email is notoriously ineffective for this purpose. Until the office is connected to the student and progress is occurring, contact should be by phone or in person.

Effective advising is be supportive, non-judgmental, and aligned with the realities of students' lives.  First generation students are more than willing to take responsibility for their academic performance and they are, at the same time, right to expect their colleges and universities to be responsible in return for serving them.    In this day and age, responsibility in financial aid office goes beyond using the same old practices for every student, irrespective of need. We will never increase equity in graduation rates or do our jobs in a cost-effective manner without this fundamental transformation.

The nation's colleges and universities are littered with dropouts who began college with support from financial aid, only to lose it because of an insufficiently supportive environment.  That is a tragedy we cannot afford.   It's time to act.


Data Note:

Some schools are open and honest about the extent of their SAP challenges.  It would be great if more schools published reports like this one from El Camino.

0 Reality Check: Obama is Standing for Students

Since when did an effort to ensure that students receive a high-quality affordable education in exchange for their financial aid become unconstitutional micromanagement of colleges and universities?

This is where the rubber hits the road, folks. Where the needs of a particularly elite form of academia comes into conflict with the average student's right to an affordable public education. And apparently it's about to get ugly. 

Don't believe the hype. President Obama is not attacking faculty, he is not seeking to destroy public colleges and universities which are the workhorses of higher education, and for pete's sake he is not proposing a pseudo-NCLB for higher education.

The President's main goal is simple:  After decades of hoping that students could hold institutions of higher education and states responsible for providing a high-quality, affordable college experience that leads to degrees, he's calling the nation's attention to the fact that the market isn't working on its own and some really serious regulation is needed.  The federal government is a major financial player in higher education, far more so than in k-12, and it has a responsibility to ensure that the schools it funds do right by their students.  

Despite their loud claims to the contrary, many schools are not currently doing right by their students. Some of them are setting prices so as to absorb all available financial aid and providing students with few supports and long-shots at completing degrees. Others are taking advantage of the availability of student loans to charge the middle-class sky high prices while hiding behind "admissions standards" to leave the majority of students from the 99% out in the cold.  In addition, there are a lot of federal dollars spent unnecessarily, supplanting resources from institutional endowments. Finally, there are plenty of childish states, pulling back on their investments when the federal government provides support. 

All of that should be stopped by holding colleges, universities, and states to the standards that we now hold students.  The problems we face in higher education today are largely due to the behaviors of those institutional actors--not students.  The federal government must use the strings associated with Title IV to ensure that college administrators, boards, and state legislatures behave themselves and let the students and faculty get back to the hard work of education.

That's the goal. It's where Obama is headed, if you'll just give him a chance to get there.

And when he does: NO, this will not make student aid more complicated.  Instead of rules for millions of students we can have a much smaller set of rules for the few thousand institutions. Done right, this will not punish students for the acts of their states and institutions. It will not further push education towards earnings and away from learning.  It should do the opposite-- it focuses on the actual problem-- schools that claim to educate students while merely sifting and winnowing out the ones it doesn't want, schools that recruit students only to leave them behind once checks are signed. It helps direct students towards the states and institutions where their aid will be used well.  It helps ensure that students get degrees--which is the very least they deserve (and come on, don't tell me that in your day you really earned your degree...).

Suggesting the opposite-- suggesting that this effort will hurt students-- is a red herring. It's a line tossed about by privileged elites who have claimed to serve America's middle class while restricting enrollment through selective admissions, and promoting rhetoric that allows some elite colleges to stand on high above their peers, endlessly wealthy and exerting strong influence, helping to push millions of Americans into debt. 

Beware of these scare tactics. The President isn't going to cut students' Pell dollars. He's never going to assign letters grades to each colleges and university.  He's not bringing in standardized tests or value-added modeling for professors, or giving colleges incentives to get rid of teacher tenure or privatize.

Unfortunately, he's also not about to make college--or at least community college-- free.  Now there's something worth critiquing him for.

Sure, the President did make some errors in his plans. He should never have likened this effort to the ridiculous College Scorecard or called them "ratings"-- that trivialized the approach.  He should have challenged schools to improve to certain standards before the move to link aid to institutional performance rolls out.  Race to the Top should never have been a part of this at all, since doing this fast has never been a good way to bring about quality change. He should never have mentioned MOOCs or other such untested approaches to cutting costs, and in fact, he needn't have mentioned specific practices for cost-cutting at all.  That can and should be left up to the institutions to deal with-- he simply needs to tell them what goal posts to aim for and what the rules of engagement are.   For example, he should have reiterated the importance of educators to education, and assured the faculty of their very real place in affordable higher education. He should have placed much more emphasis on the importance of public institutions and the role that states must play in adequately funding them if those states want to get any Title IV funds for their private or profit schools.   

Shoulda, woulda, coulda.  The fact is that the current financial aid system has benefitted colleges and universities-- and states-- far more than students for a very long time, and President Obama is finally going to try to do something about it.  Did he get the plan exactly right on this initial roll out?  Nope. Will it be accomplished in the next few years? No way.   But that isn't and wasn't the point.  He is standing up for students and families and telling higher education administrators and states that they must get some skin in the game-- or get out of Title IV.   It's about damn time. 

0 New Evidence on Need-Based Grant Aid

Ben Castleman and Bridget Long of Harvard University just issued a terrific new paper on the impacts of a Florida need-based grant distributed to students across the state.  Using a rigorous regression-discontinuity design, the authors make several contributions to the study of the impacts of financial aid by tacking a couple of of tough questions:

• Does need-based aid promote college completion?
• Who benefits most from need-based aid? Is it the highest-achievers to whom merit aid is often targeted?

They find that YES, need-based aid (without any performance criteria) produces strong and statistically significant impacts on credits earned and degree completion.  Specifically the authors find that $1,000 more of grant eligibility increased the probability of staying continuously enrolled through the spring semester of students' freshman year by 3.3 percentage points, increased the cumulative number of credits students completed after four years by 2.3 credits, and increased the probability of earning a bachelor’s degree within five, six, and seven years by 2.5, 3.5, and 4.0 percentage points, respectively. This is very similar to what my team is learning from studying a Wisconsin grant program.

They also find that the impacts of need-based aid are strongest for students who did well in high school but are below the cut-off for the Florida Bright Futures grant, again mirroring findings from Wisconsin. 

Critically, the authors also note that most students got this need-based grant just once-- as in Wisconsin, many lost it between the first and second years of college. How much more effective might financial aid be if we made it easier for students to retain it?  

In short, the answers do not surprise me at all and lend important empirical evidence to a debate that has been tilted towards merit & performance aid mainly because of a lack of tests on the need-based aid.

So...implications:

Policymakers:  Please read this carefully before jumping to the conclusion that you must change the structure of need-based aid to promote college completion -- it is already doing so.  Changes could be positive or could undermine effectiveness.  In fact, the authors conclude: "Overall, our results suggest that not only does need-based aid have a positive effect on persistence and degree completion, but also that increasing the award amounts of current aid programs could have beneficial effects." 

States and Colleges and Universities:  Investments in well-prepared students who aren't making your merit cutoffs are good bets for cost-effective investments in need-based aid.  Mark Schneider and I have been saying this for a long time.   Consider making your money really pay off.

0 UVA: Poster Child for Empty Promises and False Hopes

Just a few years ago, we the people of UW-Madison were hearing quite a bit about the flagship university of another state -- the University of Virginia.  Our Chancellor at the time, Biddy Martin, is from Virginia, and lauded UVA's efforts to gain autonomy from the state while also increasing affordability through its "Access UVA" program.

I vehemently and repeatedly disagreed with Martin's assessment of UVA and its "successes" at the time, but to little avail.  She managed to convince most of the university that a semi-divorce from the state would allow for financial flexibilities that would help to make college more affordable. While some of her plans were thwarted by the rest of Wisconsin, she got the vote of the Faculty Senate and to this day, many students and faculty speak of her efforts as if they made UW-Madison more affordable.

In point of fact, they did not, and today even the poster child she commended-- UVA-- fell to pieces. Access UVA will no longer be a grants program, instead it will be scaled back and shifted to include a sizable amount of loans.  Students from low-income families will graduate with $14,000 in debt (if they escape after just 4 years--unlikely) and other students with up to $28,000.

Access UVA, said President Teresa Sullivan, wasn't "sustainable."  There's an end-stop to her statement that makes you wonder if she and the school recognize that the result was not inevitable but rather stemmed directly from the political and policy choices made over the last decade.  Now UVA must face facts: its costs of attendance are high, its support from the state of Virginia is low, and it is going to ask students from poor families to graduate with debt amounting to a third or more of their families' annual income.  These things don't just happen.

High-tuition high-aid models of financing higher education were formulated and evaluated at a time when college students were on average wealthier, whiter, and smaller in number.  It was perhaps possible to feel proudly progressive about taking tuition from the top 75% and redistributing aid to the bottom 25% (or even 90/10).  No longer.  Today about 80% of students feel college is unaffordable, and yet they have to pay high tuition to make the top 20% happy in their glorified teeny-tiny classes, lush campuses, and elitist environments. Only a fraction of that 80% gets any significant grant aid, while the rest carry debt.  In this model, 80% of the students bear the brunt of the education of the top 20%, who escape from their college party years with debt that Mommy and Daddy pay off on graduation day.

The student leader at UVA who objected to these changes perfectly described the real underlying problem when he said "[but] there are increasingly few places left to streamline or cut back on to make these ends meet without impacting the quality of education or student experience.”   There it is-- we need to spend a lot to have high quality.  Affordability be damned.

Anyone who's taken a stroll across UVA's lawns knows that it would be perfectly possible to have a darned good college education for the students of the state at a fraction of what they are spending now. Sure, it wouldn't be the same-- but times they are changing. And it is far less tenable for colleges and universities to throw up their ivy-covered walls and say "sorry you cost too much" to poor students than to insist that they take action to lower their costs for all students, to make college opportunities for all Americans the realities they should and must be.

0 What Constitutes "Satisfactory Academic Progress" in the 21st Century?

I often receive email from students who've learned of my interest in the contemporary college experience and want to provide a window into their own.  Recently I heard from a man who initially enrolled at UW-Madison in 2007 and subsequently took an educational pathway that is increasingly normal.  His efforts to find ways to learn new things and make college affordable are notable, and he challenges us to think about the ways in which traditional forms of higher education align with today's students.  With his permission I'm sharing a letter he wrote, and at his request, I am identifying the author.  The following essay is by James Kasombo, who will be re-entering Madison this fall. 

'Our education system is predicated on the idea of academic ability.'

            Upon graduating from high school in the top five percent of my class, being ushered into the university's honors program, and finding a wholeheartedly welcoming dormitory community off the shores of Lake Mendota, in many respects it felt as though I had made the rightful transition for my life. Granted, no guidance counselors had openly foretold the high costs of a college degree versus the varying returns on investment different majors would create. There was an intense barrier of advanced math and science within the initial semesters of post secondary education if one were to pursue careers in medicine or engineering, stymieing the aspirations of many gifted students having streaked through their K-12 schooling. Convening each night in the communal bathroom to brush our teeth, the floor community would reflect on the day's lectures, discussion groups, and assignments with strikingly different opinions of how this task at hand, that of earning a bachelors degree, was making an impact on our development into adulthood.

            And so it was halfway through the fall semester of 2007, shortly after TED had started an ameliorative experiment of freely posting talks from its conferences on the internet, that I stumbled upon Sir Ken Robinson's now transformative argument for how we look upon education to prepare adults for an unknown future. At that same time, I had successfully tutored a cohort of students through a philosophy midterm, yet failed a calculus exam, and watched as more and more fellow teenagers began the process of withdrawing from their studies altogether.  

            “Students must successfully complete a cumulative 2/3 (67%) of all credits for which they enroll.” Over the course of my three years living in Madison, I would not meet this standard. Instead, I became the youngest person on a team of New Student Leaders for the university's summer orientation program after my freshman year, receiving high marks for engaging with incoming students and relating with the parents who would be sending children their children away. Instead, I produced the Marcia Légère Student Play Festival during my sophomore year. Organizing amateur playwrights, directors, and actors, who would collaborate with drama & literature faculty to create a student driven performance, lead to my reception of the Union Trustee Leadership Award from the Memorial Union Building Association. Instead, I attained an internship with the nation's eleventh largest library system by way of ISIP. Instead, I served as a resident assistant at Highlander House for Steve Brown Apartment's Campus Connect program during my junior year, and also happened to help the UW Model United Nations team win an award at AMUN.

            During those years I would enroll in classes and later withdraw because I did not or could not see a clear connection between my then liberal arts program of study and tangible, substantial opportunities in the labor market. This symptom is seen across the board of postsecondary education as the idea of 'college for all' has collided head first with the reality of costs increasing by sixty percent just over the last decade. Meanwhile, our parents have made zero gains in their income. State institutions of higher learning have watched their funding reduced (such asUW-Madison losing almost ten percent of its budget by way of state taxes, in the space of five years) for the sake of propping up quite arguably the end products of disjointed education,health care and incarceration. Sure, our access to credit was [inappropriately] increased, but in my gut the idea of student debt becoming the new normal was a recipe for disaster: too many college students of today needing to cover growing gaps in their funds by both working and borrowing.

            By the summer of 2010 I had fully withdrawn from the university, personifying yet another data point of those failing to gradate within six years. But as I explained to my parents, it was an opportunity to experience for myself the visceral chasm between my skill set, what I really needed from a college education, and the careers needed to traverse the gap between low skill/low pay work and the upper middle class of the contemporary American economy. Of course, that very summer I would fracture my jaw, requiring surgery covered by my parent's health insurance, and spend several months recovering. This became an all too vital introduction into the treacherous alliance of employment and health we must accept when determining survival, in every sense of the word. Later that year I worked for a luxury hotel in downtown Madison, experiencing significantly higher wages than hotel employees across the capitol square. Being so young and green with employment, it took detailed explanation from the union's representative for me to understand the power of organized labor in service jobs. Yet, I would still fall behind on paying rent, and in lieu of eviction, would move back home to Milwaukee in the spring of 2011.

            Over the following two years I would obtain six different jobs, four of which being full time, with transitions in between being of my own volition. I'd witness the leveling effects the world of retail has on human capabilities. The often direction-less management had detrimental impacts on workers who'd show up day in and day out for the sole task of feeding their kids, and paying interest on loans taken in pursuit of a lifestyle they couldn't afford in the first place. Whether it be a warehouse, bookstore, or banquet hall, I have seen with my own two eyes middle skill laborers becoming prisoners of circumstances, chiefly byway of technology+globalization's effect on productivity. And so, when I was given an opportunity to leap from the role of an hourly worker to that of a manager, I knew my journey into the mindset of real world workplace dynamics was about to become complete. Therefore, in the spring of 2012, I was hired as an assistant manager for a children's museum in downtown Milwaukee, and within a few months was promoted to manager of the visitor services department. This professional experience would finally validate a core reason I stepped out of college and answer the question: Minus the credential of a B.A., did I possess qualifications and life skills necessary to build a fulfilling career?

            At the age of twenty four, I had a job nearly any college graduate of our time would figuratively kill for, management in the non-profit sector. Indeed, I savored every ounce of responsibility placed in my hands, from carrying keys to open the facility, being in a select group of people with safe access, overseeing all front desk operations, handling inventory of the gift shop, to supervising a staff of part time employees and being on the forefront of children's safety & wellbeing. Acting as a hiring manager, looking over the resumes of those jockeying for a job that paid minimum wage yet required significant skills, bringing on those flexible enough to work mornings and weekends, then getting to know the lives of those who would be reporting to me, was an extremely humbling endeavor. Working alongside adults ten, twenty, thirty years my senior with strengths and flaws more seasoned than mine, yet being treated as an equal peer, was wholly invigorating. Yet, after almost a year of sixty hour work weeks, treating injured toddlers, consoling distraught parents, and stressing over six figure budgets, it became apparent that while the answer to the preceding question may have been yes, the real question I had come to answer was how consequential the vehicle of a college degree is in attaining positions of power, influence, and sensible compensation.

            The College Board has made remarkable statements regarding the relaxation of a high school-to-university model many [academically gifted] students assume is the lock step pathway into adulthood. They've advocated creating admission policies for delayed entry after high school, making withdrawal & re-entry policies as clear as possible, and fostering an environment that understands for some students there comes a time when it is appropriate to take a break in their education, when their talents could better flourish in alternative venues. Sadly, these revelations come from a report written over thirty years ago in 1981, and it's safe to say their recommendations have not become mainstream. Ask any Millennial, and we will tell you that when coming of age, preparation for college and preparation for a vocation are indeed mutually exclusive.  In the space of just one generation, the gap between annual wages for a college degree versus a high school degree has increased from fifteen thousand to twenty-five thousand dollars, mainly because the high school graduate has seen negligible gains. Yet, the chance of someone from the top income fifth staying up there without a college degree is higher than someone from the bottom income fifth reaching the top with a college degree. The overarching fact is for those of us in the middle, a bachelor's degree evenly exchanges the probability of winding up in poverty with that of reaching the top, but odds are you stay in the middle depending on your field of study. In other words, placing a magnificent amount of faith in debt which cannot be discharged for the sake of a credential which inherently doesn't acknowledge the wide variance of human capital, has been the harbinger against completion of my degree ever since discovering voices of educational revolution.

            You know that the college degree is not affordable. Two-thirds of college presidents believe a degree is not affordable for those who need it most.  Unfortunately, federal student aid programs have performed poorly, trying desperately to fund accordingly with merit and income, juggling the balance between institutional subsidies and individual aid. Such struggles are why I have wound up appealing for my aid package. Though, it should be made clear, this is a process I support. Public monies should not be loaned nor spent on causes to which there will be no significant return. But I do hope it is inferred from my writings that my time in school was an incredibly formative portion of my life. Lessons learned inside the classroom transferred directly towards my life as an employee. Leadership positions attained at the university were the linchpin towards my success within stressful situations of the workplace, especially in management. And now, I look to return to Madison with aspirations to graduate in the winter of 2015 with degrees in Computer Science and Philosophy. I've spoken with my advisor as how to organize my classes over the coming semesters. I've gained skills in self discipline and persistence to assure academic achievement. Most importantly, I've gained the real world experience necessary to assure my studies not only relate to career goals, but towards my aspirations of leveling the playing field for those residing within the downside of advantage.

            Rising tides of the American economy do not lift all boats. The college degree has become less a sail, more the life jacket in terms of being buoyed by gains of our free market. My time away from the university was an exercise in coming to terms with this well researched conclusion, thanks to tangible successes and mistakes in real life. Once the goals I have set for myself come to fruition, the resulting tributes will acknowledge a proud alumnus, proponent, and advocate of UW-Madison.

 On Wisconsin!

0 Putting the UW System Tuition Freeze in Context

Today's Journal Sentinel has an excellent chart illustrating how the challenge of paying for college in Wisconsin has changed over time

The only problem is that neither the chart or the accompanying article addresses the likely assumption of many readers: students who can't pay these costs, even by working, are "held harmless" through financial aid.  For that reason, many say, we should simply raise tuition further and invest that additional revenue in financial aid distributed to the neediest students.

To evaluate that claim, let's take a look at the "net price" of attending UW-Madison and UW-comprehensives-- the cost paid by the poorest students after taking into account all grant/scholarship aid provided to offset the sticket price.  

At UW-Madison, for the upcoming year 2013-2014, that amount is $13,635.00 for Pell recipients with no expected family contribution.   As you can see in the chart above, that means students from families typically earning less than $30,000 a year are expected to either work 1,866 hours a year (~35 hours/week) or borrow around $68,000 (5 years is typical time-to-degree for these students at Madison).  Is this a reasonable proposition?

In addition, consider that no more than say 3-4% of UW-Madison undergraduates come from this sort of family.  After all, more than 85% of students do not receive any Pell at all. For those students, the net price is over $21,000 in the coming year (total cost in 2013-14i s $24,000).  Redistribution is helping very, very well-- and many students with substantial need deliberately overlooked by the federal "needs analysis" are being left out in the cold. It's no wonder there's now backlash against our financial aid system-- there's universal need and a narrow means-tested system. Never works. 

Now, let's turn to the UW Comprehensives. As this recent presentation from System showed, financial aid tends to reduce the price paid by students at these schools by about $2,200 or 17%.  So instead of an average sticker price of $13,000 at places like Parkside or Stout, students tend to face around $11,000. This still means taking on up to $40-50K in debt or working long hours.  The only way in which institutions can claim to meet the need of students from families earning less than $60,000 is by assuming their willingness to borrow $20,000 or more in loans-- and frankly, that is a big assumption. When these students graduate, they will have debt amounting to a third of their family's income, and despite a focus on their "future earning power" that fact will matter more to them than anything else because the primary use of those future earnings will be to help keep the family that raised them afloat. These are not students whose families can contribute to paying off their debt upon graduation- -they are far more likely to be helping to pay off the debt their families accrued thanks to the substantial opportunity costs faced by losing their child-worker while they attended college.

Other skeptics point to the availability of the 2-year colleges throughout the state, again assuming that their costs are affordable.  While tuition is indeed lower, the costs of attendance itself are not.  Students do not live at home rent free while in college any longer-- they live at home while paying rent, and while in school lose time in which they would have been working.  In addition, they get far less grant aid because their institutional resources are lower. So once again, this unchecked assumption is wrong-- and the colleges themselves know it.  Madison College has billboards posted around Dane County pointing out that students at that college accrue less debt -- not no debt.  Since when should students have to borrow to attend a 2-year community institution?

I recognize that many in the political Right want the pending UW System tuition freeze for all the wrong reasons, seeking to starve the System into submission and eventual collapse, to force the end of the public sector.  I also recognize that the freeze will do some harm to the colleges and universities throughout the state, and that harm will be disproportionately distributed.  But what exactly happens depends in great part to the behavior of System and UW-Madison. The smart response would be to seize the opportunity to ensure that state spending is focused on instruction and distributed according to the needs of the students.  The money currently flows disproportionately to the least needy students and is budgeted defensively to support many activities aside from institution.  This must stop.

1. Downsize the administrations at most universities and most significantly at UW-Madison.

2. Ensure that UW-Madison does the lion's share of the belt-tightening while requiring that it provide wage increases to faculty and staff.  In other words, compel the institution to sacrifice on behalf of its sister institutions and ensure that instruction does not suffer. Find the units in which faculty are not teaching despite have substantial undergraduate enrollment and forbid any teaching releases not paid for with research dollars.  Increase the research "buyout" rate on all grants larger than $250,000.  Ensure that athletic programs either generate revenue for the campus-- and pass it along-- or close them. Etc.

3. Commission a task force to identify one UW comprehensive university to close and re-assign willing faculty and staff to online endeavors throughout the state.  Do this only after thorough analysis and consider of cost-effectiveness and geographic needs. 

4. Create an indirect cost incentive fund at 3-5 campuses to grow funding from research.

Again, etc.

I doubt any of this will happen because System will not act as the leader it needs to be, and because Madison will be allowed to retain greater power than any other higher education institution in the state, to the great detriment of the vast majority of students.   As a result, the freeze will be followed by a sizable tuition increase.  It shouldn't-- following the freeze, tuition should go up according to something like inflation or labor costs. Nothing more.

Actors on both sides seek to protect interests other than students.  All should be called out for it. A clear and intentional move to a goal of providing universally affordable postsecondary opportunities throughout Wisconsin is long overdue.

0 It's Good to Be an Education Optimist

Once in awhile people ask me how I can continue to call myself an education optimist when the "new normal" is so grim.  They ask, "why do you continue tilting at windmills instead of being pragmatic and accepting the situation?"

The answer is simple: acceptance is unnecessary and defeat is not an option.  I challenge the status quo for the sake of students.

Today, I want to say Take that, windmill!

The University of Wisconsin System just ceded to the demands of students across the State and agreed to cap a tuition increase at no more than 2% for the coming year and eliminate the waiting list for the Wisconsin Higher Education Grant.  This is a stunning reversal, as President Kevin Reilly had been lobbying against students, insisting that no cap was necessary.

What happened?  Well, as I have long insisted, the issue is not entirely about a lack of state funding being provided to higher education but how administrators are spending it.  When the incentives for administrators cause they to advance the interests of institutions over the needs of students, accountability measures are required to prevent that.  UW System just got called out, as an audit just revealed that a $404 million balance from tuition payments in 2011-2012 was leftover, unspent, while tuition was hiked by 5.5%.  SERIOUSLY??? Those cash reserves were being held for "specific planned future activities," according to the System.  Sorry Charlie, no way. That is something you do with appropriations, not tuition.  If you aim to help future students and promote stability, that's a public good, and should be on the public dime. This is an outgrowth of the same mindset that's diminished tuition and pushed students into debt-- the same old public / private benefits nonsense. Honestly, the students should demand NO increase and hold firm on doing it for 2 or more years!

So, here we are-- they said it couldn't be done-- the net price of attending UW System schools will likely stay flat or decline over the next year.  HURRAH!

Second, Minnesota legislators took a major step yesterday towards a tuition cap of their own, as the Senate voted to increase spending on higher education by $263 million in exchange for institutional performance accountability and a freeze on tuition increases at the state's universities.  This is remarkable-- using appropriations to drive down the costs of a college education on behalf of the people of one's state. Gee, whoever thought of that!

So folks, the strategy works. Get out there and insist on budgetary transparency and accountability for our institutions of higher education and simultaneously demand that legislators do whatever they can to drive down tuition.  This is the most effective strategy to reducing student debt in the near term.  We can do it!

0 Make College Free

It is long past time to make college free, and thankfully the Atlantic writer Jordan Weissman just laid out the case very nicely.

Jordan points out that the money invested in our financial aid system could instead be invested in appropriations to public colleges and universities to drive down costs.  Yes, aid to private colleges would end. Oh well!  Why do we pay for private colleges when we don't pay for private high schools? (Well, we are starting too but we should stop.)  And yes, we need to cover costs of attendance for the poorest students too and we can do that by charging very low tuition to rich kids to give to poor kids (for whom tuition is free)-- and that's a progressive tuition structure rather than this incredibly deceptive price discounting scheme we now have in place.

As I've been pointing out in talks around the country on the subject "When America Goes to College," our current system of affordability was developed at a time when the college-going population largely had advantaged parents who understood and had faith in the system, and when costs of attendance were much lower, and thus sticker shock wasn't so rampant.  That approach recognizes that colleges costs are a barrier to attendance but allows those costs of attendance to be determined by colleges and universities, with some input from states. Those costs of attendance are then discounted with financial aid and that aid is distributed directly to students, not to colleges.  Therefore, accessing aid requires substantial action and responsibility on part of the student.

That model makes several assumptions:

• Equitable access to postsecondary education will be achieved via price discrimination and redistribution
• Some students will pay more than others, and the extra money will go to needy students via financial aid
• Needy students will respond to the discounted price –the lowered cost of attendance will make the benefits more evidently attractive

Well, those assumptions could be blown for many reasons and my research on the Wisconsin Scholars Longitudinal Study-- which will be documented in a forthcoming book--suggests that they are.

For example, discounting college costs with financial aid is far more complicated than discounting the price of a movie ticket with a student ID (a classic example of price discounting).  For one, you have to file a FAFSA to get the discount-- and until you do it, you have no idea what discount you'll get. For another, you have to trust the government and the school to give you the discount. And with all the mistreatment of low-income families in this country, why would they?

Another issue is that the discount itself has changed over time.  We moved from aid in the form of grants to aid in the form of loans, and those do not mean equal things to students or have equal effects.  In addition, we have witnessed a proliferation of grants and scholarships with a multitude of requirements (which can conflict in unproductive ways), and from an array of sources, such that students have no idea who's helping them go to college and why, or how long they can count on the support.  Aid shifts from year to year, seemingly without warning, and often declines unexpectedly. Students from poor families have little ability to smooth their consumption and adjust to these shocks, and this perpetuates the feeling that aid is untrustworthy.

Perhaps even more importantly, in our effort to ensure that the discount is well-targeted, we've create a monster of program complexity. An industry has grown in order to help students process the FAFSA and yet it's still not working.  The formula penalizes students for temporary improvements in their parents' income, even when they will not realize those gains (e.g. when dad finally gets a job after 5 years, it's not likely he can share that new money with you as he struggles to pay off bills, and yet you lose your Pell).  And it assumes monetary exchanges between family members that are based on a 2-parent household with middle-class norms-- e.g. parents provide money to kids and expect nothing in return.

What an absolute mess.

If we really wanted to make college affordable, we would direct all dollars towards providing one good affordable option for everyone.  We would focus less on choice and more on access to a real outcome- a degree. We wouldn't let aid flow to private or for-profit schools, and by funding public institutions we'd hold them accountable for keeping costs low and campus-climates reasonable so that everyone can fully participate in the experiences.

I thank people like Jordan for putting big bold ideas like free college on the table and making it possible to surface the real issue:  most Americans want college to be a privilege and not a right because they care more about "getting ahead" then creating an equitable society in which we live as a community.  To get ahead requires leaving someone else behind, and higher education has come to be a major way in which Americans work on doing just that.

0 How to Turn Higher Education into an Engine of Inequality

Step 1:  Build an enormous and expansive set of opportunities for higher education and tell everyone that a college education is necessary for economic and social security in America-- but refrain from working towards public consensus on providing a free higher education for all.

Step 2: Create the illusion of access with a program of financial aid distribution that isn't backed with a real entitlement program tied to college costs.

Step 3: Do nothing to stem the behavior of bad actors and those who encourage them. Allow colleges and universities to raise prices and engage in rankings wars based on flawed metrics that distort the market.  Fail to require states to maintain their effort to ensuring affordability.  Allow, even encourage, private business to step into the gaps.

Step 4: Allow the value of need-based aid to decline while redirecting aid towards politically popular programs benefitting the non-needy.

Step 5: Refrain from fundamental reforms addressing the core crisis in the system, and instead introduce small modifications aimed at overcoming individual deficits rather than structural problems.

And here we are!

ps. I highly recommend the CLASP report that includes these figures.

0 On Academics and Athletics

The Faculty Senate at UW-Madison is a very quiet place.  We meet monthly for about two hours and while the agenda is packed, hardly anyone asks questions or makes impassioned speeches (present company excluded, of course).

But on one issue, you can count on professors to speak up: athletics.

More specifically, the money paid to coaches and staff on campus invokes more vehemence and animosity from my colleagues than any other issue I've seen brought to the forefront.

I suspect the same is true at other schools.  For it's fairly uniformly the case that salaries in athletics are far higher than those in academics and rise much, much faster.

But of course, you might say. And how silly, Sara, to doubt that this is not only a good thing, but a smart thing!  For as we all know, athletics brings money and needed attention to universities, generates revenue that benefits the entire institution, and more than pays for itself. In fact, people who care about financial aid ought to be nothing but thrilled to have an awesome football program. Right? I mean, don't you remember that local banks have a history of contributing to financial aid when the players score touchdowns?

We hear this all the time. In fact, the budget for athletics is the one untouchable area of spending on campus, where no one dare ask hard questions lest we seem ungrateful or worse yet anti-Bucky.

This is silly. Let's stipulate to a mutual fondness for competition and sheer enjoyment of football. Let's agree that it's important to have fun, and that fun attracts applications. And let's even say that coaches "earn" those big salaries.  So what?  The relative salaries of coaches and faculty is merely the canary in the coal mine. The larger issue is over the relative status of academics vs. athletics on campus and what that imbalance says about the state of higher education at major universities.

As public universities struggle to stay afloat and talk of unbundling their instruction and research and just about everything else they do, it's time for sports to be placed on the table too.  Because despite all of the protests to the contrary, rigorous analyses suggest that more often than not, athletics competes with academics for dollars.  And while there's often no state funding invested in athletics, there's no reason in the world for taxpayers to stand for activities that undermine the educational investments they're paying for.

A recent brief from the Delta Cost Project asks and attempts to answer some really good questions using national data. It's time for such questions to be asked and addressed by athletic boards, including  UW-Madison's.  Here are points with which to start:

• How much more do we spend per athlete compared to spending per average student?
• How do trends in athletic costs compare to trends in academic costs? Has spending been cut in athletics to the same degree it's been cut in academics? Do expenditures outpace revenues? 
• What percent of the athletic budget is spent on student financial aid for athletes?  How does this compare to the university's budget for financial aid for non-athletes?
• What fraction of total athletic budget revenue comes from ticket sales? What percent comes from student fees? From institutional subsidies? 
• What fraction of the money generated by athletics is distributed for the university's financial aid program? How does this compare to the amount distributed at peer institutions, especially when taking into account student unmet need?

Of course athletic departments like Madison's do use and publish data but the analyses are mainly concerned with public impressions, and this is why they highlight economic impact studies like these. The problem is that such studies do not address the direct and indirect impacts of athletics on academic programs and cannot assess what the university would look and feel like if it weren't home to collegiate sports.  Unsurprisingly, I don't see such information in the annual reports of the Athletic Board either (though admittedly these are only posted through 2010). 

For that kind of data, you have to look to places like the Faculty Senate.  Listen the angry voices of professors who've not had a cost-of-living increase in years but constantly watch the football and basketball coaches get enormous boosts. See the faces of staff members who are literally out-earned many times over by the "big men on campus."  Hear the relative roar of the crowds over touchdowns versus Nobel Prizes.  Watch the surprise on students' faces when they learn they are expected to attend class, not just games. There are effects of such choices. They're all around us.

Tomorrow, the UW Athletic Board will vote on the Athletic Department's budget for 2013-2014. The request is for $133 million.  That includes a one-time, $30 million expense for construction costs related to the department’s Student-Athlete Performance Center.  As Professor David McDonald has noted in the past, this is an Athletic Board with teeth.  It's up to that shared governance body to consider the critical balances in play on this campus and elsewhere, and to ensure that academics aren't outcompeted by athletics.

0 Money Matters, but So Does Avoiding Red Tape

Cross-posted from the original over at the Chronicle of Higher Education. 

“There’s no such thing as free money,” Joanne, a middle-aged African-American mother of two sitting across the table from me declared. “But for me, getting this college degree depends on whether I have enough money to afford it.”

Solving the problem of college affordability lies at the heart of the Bill & Melinda Gates Foundation’s $3.3 million Reimagining Aid Delivery & Design project, which has spurred a series of reports covered weekly in the news this year. While the reports run the gamut of possible suggestions, from tying aid to students’ academic backgrounds to replacing the Pell Grant with a federal-state matching grant, they all have a similar refrain: Whatever the solution, it must be cheaper—it simply isn’t possible to request any additional spending.

Similarly, when I visit Washington policy makers and talk about the needs of the Pell Grant recipients I’ve been studying for the past five years, and describe how financial scarcity is affecting their lives, most listen sympathetically and then apologize, sadly, noting there’s no more money to be found. I get it: They are pragmatists and politicians, unfailingly realistic, and simply asking me to get in line with the new normal.

So if there’s “no free money” and yet more money is essential, what are we to do? First, it’s time to search for answers outside of Washington. And second, we have to consider the possibility of finding solutions outside the narrow higher-education-policy space. Maybe we can learn new things in communities across the country, where hard-working people are thinking beyond the usual silos, connecting the dots to develop new approaches.

Back when I was a graduate student, I spent time conducting research at community colleges across the country as Bill Clinton’s infamous welfare reform was enacted. I watched as programs providing supports to low-income, parenting, community-college students were shuttered, in the name of a “work first” approach to poverty alleviation.  While many students were receiving federal financial aid, the additional child care and transportation they got met their many unmet needs above and beyond the stated institutional “costs of attendance.” Welfare reform ended those supports, and widened the gulf between America’s education and poverty-reduction agenda. College for all, my colleagues and I wrote in our book, Putting Poor People to Work (Russell Sage, 2006), was clearly more hype than reality.

In 1998, as welfare reform was getting under way, Joanne began attending classes at the Borough of Manhattan Community College. She came for a few sessions and was excited about the opportunity to get an education, but quickly realized that the cost of her 45-minute subway commute was draining her budget. She began hopping the subway turnstiles, trying to stay in school and get by. She looked for help at BMCC and didn’t find it. And after a month, she decided that hopping turnstiles wasn’t OK, wasn’t what she really was about, and she dropped out of school.

As advocates like those at the Center for Law and Social Policy have pointed out, transportation is a common barrier to community-college success, as is a lack of housing and food. But usually, community colleges do not have the power or resources to provide vouchers or free rides, nor are they in the business of coordinating social services. And post-welfare reform, they were explicitly disarmed from doing so.

Fast-forward more than a decade. The recent recession hit Joanne hard. She lost her job, and in 2011 re-enrolled at BMCC to try again. This time, as she walked through the doors of her school, she saw a new green sign: Single Stop USA. She walked in a Pell Grant recipient, and walked out equipped with food stamps, transportation vouchers, and child-care benefits.

This wasn’t a typical city social-services office with long lines and suspicious counselors who often treat poor women like Joanne with disrespect. Right in the middle of campus, between her classes, she had a 15-minute appointment with an electronic evaluation process facilitated by a knowledgeable counselor who equipped her with the money and support it seems she needed to make a degree possible. This spring, she will complete her associate degree.

Single Stop sprang into being in the years following welfare reform, arising to pull together the fragile strings of the remaining social safety net and knit them well enough to give the working poor a bit of a landing. Originally located in community-based organizations in New York City, where it was homegrown by the Robin Hood Foundation, in the last three years, the small Harlem-based nonprofit has found homes in 17 community colleges around the country.

In the last 12 months alone, Single Stop served almost 20,000 students. All told, its efforts brought an additional $38-million into the hands of those students, not by increasing the Pell Grant or encouraging them to take on debt, but simply by helping them navigate complicated social services to get the benefits already allocated for their use. Using trained professionals who help students see the importance of efficiently using existing resources to push toward a college degree, and by working closely with colleges to promote a focus on the whole student in order to promote academic success, Single Stop complements the development of both individuals’ soft skills and their financial resources. For every $1 the program costs, it brings $14 in benefits students wouldn’t have otherwise had.

Can we assume that additional money is pushing students like Joanne toward degrees? It’s too soon to tell—there haven’t yet been any rigorous comparison-group evaluations. Thus far this year, I’ve tried to find out by visiting six community-college campuses in New York and Miami where Single Stop is functioning, and interviewing administrators, staff, and students.

Good stories like Joanne’s abound. So do horror stories of tremendous need—community-college students sleeping on grates, suffering strokes, going without food for days—which would make anyone wonder about cruelty of the college-for-all rhetoric unbuttressed by sufficient support.

But even before demonstrating clear impact, Single Stop USA has already proved one thing: If money really matters for college degrees, we may be able to find a lot more of it by bridging unreasonable divides between public agencies, reducing paperwork, and repositioning the community college as a point of connection as well as education. That’s a pragmatic solution we may be all able to live with, and it’s a good place to start.

0 Do Academic Incentives Appear to Augment Financial Aid Effectiveness, Particularly after Enrollment?

The field of financial aid research is rapidly growing and expanding, which is a really good thing since the reliability and validity of evidence on effects pales in comparison to the magnitude of the national investment in aid.  Policymakers shoot me emails almost daily, asking "how can this be?"

Well, it's expensive and difficult to rigorously examine the impacts of expensive, complicated programs. Financial support for aid research is often difficult to come by; seemingly because at least to some foundations and other funders, "we know it all" about aid already and need to move on.

Expert researchers like Sue Dynarski and Judith Scott-Clayton know better than this, and bother to continue studying financial aid and write comprehensive reviews of existing studies on the topic for the rest of us.  I've relied on Dynarski's work continuously since my career began, and continue to be amazed at her ability to conduct incisive, beautifully executed work year after year.  This morning, she issued not one but two new papers from NBER, both on financial aid.  For that, we owe her and her co-authors quite a big thanks.

With that sincere respect for her work in mind, I want to submit one point of disagreement with one of the new papers. It regards a particularly difficult and controversial issue: whether financial aid ought to be reformed to include academic incentives tied to college persistence, to increase its effectiveness.  The abstract for Dynarski and Scott-Clayton's paper reads "for students who have already decided to enroll, grants that link financial aid to academic achievement appear to boost college outcomes more than do grants with no strings attached." This is not a new statement from these researchers, but the paper reiterates it, reviving the debate in the midst of the Gates Foundation's efforts to rethink aid.

A close look at the evidence presented in this new paper leads me to believe that while this is a reasonable hypothesis, it has just as little empirical support today-- or perhaps even less-- than it did a few years ago when the debate over this issue was especially hot.  Let's review.

On the question of the impacts of strictly need-based grants on college persistence, the authors point to two quasi-experimental studies (one by Eric Bettinger, one by Dynarski) with "suggestive but inconclusive evidence that pure grant aid improves college persistence and completion" as well as one study of a program targeting very high achieving students (Gates Millenium Scholars, studied by Steve DesJardins) that found no effects (unsurprising since their high outcomes were hard to improve upon).

In addition, they point to an early working paper (issued in 2011) from my ongoing experimental study in Wisconsin, which at the time, using one cohort of students, found null effects for a private grant program.  This is the extent of the evidence they display about the impacts of grants with no strings attached.  So it's important to note that our paper was updated and re-released last fall 2012 (not uncommon for working papers, and it did get press coverage) to incorporate findings from four cohorts of students and take into consideration that some students saw real increases in financial aid from the grant program while others did not.  The results suggest that grants with no strings attached increased college persistence by about 3 percentage points per $1,000 -- consistent with Dynarski and Bettinger's estimates of aid's impacts from other programs. Sure, those estimates are derived from a quasi-experimental analysis within our experimental study (not dissimilar to the approaches highlighted in the other studies cited), but if you want to be a purist about it, look at the experimental evidence only. That evidence suggests positive impacts as well, and raises the possibility that program complexity is moderating the impacts (another key theme in Dynarski and Scott-Clayton's research from 2006).

On the questions of the impacts of grants with academic incentives, the authors highlight several studies, with two figuring most prominently.  First, the MDRC performance-based scholarship demonstration. They point to evidence from the first, small experiment in New Orleans, which showed positive impacts.  Then, they suggest that the ongoing replication studies of those scholarships "appear to reinforce the findings of the initial study."  Unfortunately, that comment is outdated.  The latest reports on effects are showing null results. The What Works Clearinghouse issued a Quick Review on the New York City results (published in December 2012) last week, indicating the experimental test of performance-based scholarships in that city produced no detectable effects on college retention (the title of the study is "Can Scholarships Alone Help Student Succeed?" but please note that the study is of performance scholarships-- not scholarships alone).  (Full disclosure: I am Project Director on that WWC contract.) Recent conference presentations from the project reveal similar trends-- very little improvement, if any, resulting from the additional of performance based scholarships. Project director LaShawn Richburg-Hayes has been commendably careful to also point out that these scholarships are delivered on top of aid without strings, and also noting that it's unclear why Louisiana's results haven't been reproduced elsewhere.

Next, Dynarski and Scott-Clayton highlight Scott-Clayton's rigorous dissertation study of a West Virginia program. Her quasi-experimental analysis suggests that in West Virginia, effects of tying aid to performance had positive effects.  However, the most important claim for the argument here-- that effects were stronger when academic incentives operated than when they did not--does not tell us that incentives performed better than "no strings attached" for these students.  The two treatments occurred at different points in college for these West Virginia students, with academic performance required early in college, and no performance required later in college.  In other words, there is a key confound (year in college) compromising the results.

The truth is that the experimental work needed to test the hypothesis that academic incentives tied to grant aid outperform grant aid without strings attached hasn't been conducted.  It's clear that the effects of aid are very likely heterogeneous, and there are numerous variations in how aid is designed and delivered.  For this reason, across-study comparisons are very hard to make. We need to set up a horse race between aid and aid+incentives for a sample of students much like those whom we'd hope to reform aid for-- Pell Grant recipients, most likely.   Only then will we know if academic incentives really add value.  And even then, we won't know why-- without rigorous mixed methods research.

For now, the jury is out, and policymakers who pair academic incentives with need-based aid are flying blind.  They may have other rationales for doing wanting to do this-- some people feel better about distributing money when it comes with strings-- but they shouldn't pretend it's an evidence-based decision.  And like merit aid, it emphasizes the "reward" rather than "compensatory" rationales for distributing financial aid; a political norm-laden shift that probably isn't without consequence.

0 I Want YOU to Take My Class!

0 The Gatekeepers of Higher Education

A recent survey conducted by Inside Higher Ed may provide some insights into the sorting mechanism that today's version of higher education is known for.  How does higher education perpetuate inequality?  Let's take a look at the admissions practices of our most accessible, affordable, bachelor's-degree granting institutions-- America's public universities.

Admissions officers at public universities reported:

• Distributing at least some financial aid as a reward, rather than focusing their limited budgets on helping the neediest students afford college. Fully 31% (nearly as many as the private universities) said they are increasing their effort to distribute such "merit" aid, which studies have shown flows disproportionately to advantaged students whose propensities to graduate college are already very high.  There's very little return on investment for such spending and yet 44% of these folks said merit aid was a "good use" of institutional resources. Why? Largely because they help improve the "profile" of entering students-- an input, not an output, but one administrators continue to be obsessed with, since the American public continues to buy the myth that most colleges create great students rather than merely enroll great students.  After all, more than one-third of these admissions officers said that senior administrators, board members, or development officers got involved in trying to influence their decisions!
• Going whole hog after out-of-state students, transfer students, and minority students but doing far less to recruit first-generation students, adult students, or veterans-- those for whom college opportunities are most likely to be in-state and life transforming.
• Largely disagreeing with the notion that promising minority students with otherwise low test scores should be admitted to college. Compared to their peers, about half of whom felt this was a good idea, only 39% of admissions officers at public universities agreed.  But they were more likely than their peers to feel just fine about admitting athletes with sub-par test scores!
• Adhering to the mistaken belief that test scores predict college success, or are otherwise a good tool for admissions.  Only 9% of public university admissions officers feel their schools should go test-optional, compared to 18% of admissions officers overall. So 91% like the standardized tests, but just 84% find admissions essays helpful.  Hmmm...

All I can say is, let's hope this survey is bunk. It had a 15% response rate, which is pretty lousy.  But if it's right, we need to pay a lot more attention to the professionals who are putting our policies into practice. It seems they have some opinions of their own...