What Are You Doing This Summer?

Want to work with a talented group of students and faculty, helping find ways to make Wisconsin public higher education more affordable? Then please consider joining the Wisconsin Scholars Longitudinal Study as an undergraduate or graduate intern this summer!

The WSLS is seeking students who will commit to at least 10 hours/week of work for summer and fall 2011. The ideal candidates are responsible, trustworthy, and detail-oriented. Those studying sociology, psychology, economics, or political science are especially needed.

Potential tasks include: (1) piloting a study of undergraduates using text-messaging, (2) interviewing students, (3) transcribing and coding interviews, and (4) Using STATA to clean, code, and analyze survey data. Interns will be included in regular biweekly staff meetings and social events.

We offer class credit and/or pay based on experience.

If you are interested, please email Alison Bowman at ambowman@wisc.edu by May 13. Include a resume and short description of your relevant skills and time availability.

Thanks!

Increasing % Pell-- What Does it Tell Us?

Over the last several years, UW-Madison has increased its tuition at a higher rate than its System peers, thanks to the Madison Initiative for Undergraduates. That shift has not been accompanied by a decline in the percent of students receiving Pell Grants--in fact there's been a 5.5 percent increase in % Pell since 2000. Some are saying that this means that low-income students have been "held harmless" from the rising tuition, and that further increases would likely not lead to diminished economic diversity on campus. Furthermore, we are told, we can look to the outreach campaigns of institutions like UVA and UNC-Chapel Hill (home to Access UVA and the Carolina Covenant respectively) for models of anti-"sticker shock" programs that "work."

These claims are terrific examples of why it's a bad idea to make causal claims based on correlational data. If you want to make those statements, you can look to those examples and find support for your agenda. But you shouldn't.

In fact, the increase in the percent Pell at UW-Madison over the last few years is consistent with increases in % Pell at many colleges and universities nationwide over that time period. The cause lies not in successful outreach campaigns, or the failure of tuition increases to inhibit student behavior, but mainly in the recession. The recession had two relevant effects: First, many people were laid off-- and thus saw a temporary loss of income. Thus, students from families that in 2007 were not Pell eligible found themselves eligible for the Pell in 2008. The Pell is based on current and not long-term disadvantage. So an increase in % Pell doesn't mean you coaxed "new" low-income students into attending Madison or did a better job retaining those you already enrolled, but rather that a greater proportion of those who were already UW-bound (or already enrolled) now found themselves eligible for the additional help. Second, the Pell reduced the number of jobs available to students not enrolled in college--thus lowering the opportunity costs associated with college (e.g. foregone earnings). This could have independently increased both enrollment and persistence.

Furthermore, during the same time period, as part of the legislation that increased the maximum Pell the federal government also increased the family income (AGI) a student could have and qualify for the Pell-- from $20,000 to $30,000. Thus, a whole bunch more people became Pell-eligible during the period in which the MIU was implemented. And, the maximum Pell was increased-- possibly helping to offset the increase in tuition.

Thus, it should abundantly clear that it would be incorrect to state that the increasing % Pell at UW-Madison over the last several years is evidence that tuition increases do not inhibit enrollment of low-income students and/or that additional investments in need-based financial aid hold students harmless.

Same goes for the "success" of programs like the Carolina Covenant. Don't get me wrong-- the program seems great, and feels great, and the leadership is great. And for sure, the program's data looks nice-- they've seen an uptick in the representation of Pell recipients on campus and increased retention over time. As an evaluation they show better outcomes than prior cohorts of students. But as compelling as those numbers seem to be, they cannot be interpreted as evidence that these changes are attributable to the program itself-- and that's where the burden of proof lies. Indiana saw increases in college enrollment among the children of low-income families when its 21st Century Scholars Program was implemented, but reforms to the k-12 system were made at the same time, and the economy was booming. The program "effects" may have been little more than happy coincidence. We cannot rely on the potential for such happy coincidences when crafting new policies and making decisions about affordability.

It's time to get honest about what data can and cannot tell us. I've heard too many claims around here that it can tell us whatever we want. While that's undoubtedly partially true under the best of circumstances, it is especially true when we take no steps to collect data systematically and use sophisticated tools when analyzing it. If we were really committed to holding students harmless from tuition increases, we'd have commissioned an external evaluation (external= not done by institutional researchers) and made the data available for analysis. There are plenty of talented folks on campus who know how to do this work-- why not ask them to take a look at what happened under MIU?

More Flexibility to Raise Tuition?

Central to debates over the New Badger Partnership is the question of whether additional flexibilities that make it possible to raise tuition are desirable.

Evidence can and must be used to make these decisions. A robust, evidence-based debate on our campus is obviously needed but to date has not occurred. Instead, to many of us outside Bascom it seems as though administrators have mostly relied on the input of a few economists and some other folks who work in higher education but are not scholars of higher education. It also seems like seeking advice from those mostly likely to agree with you. (Please--correct me if I'm wrong--very happy to be corrected with evidence on this point.)

It would be wonderful to see a more thorough review of existing evidence and the development of an evaluation plan that will assess positive and negative impacts of any new policy in ways that allow for the identification of policy effects-- not correlations. (Let's be clear: comparing enrollment of Pell recipients before and after the implementation of a policy like the MIU does not count.)

A few years ago I blogged about studies on the effects of tuition and financial aid on individual decision-making. To summarize-- effects of each are relatively small (especially when compared to effects of academic under-preparation, for example) but usually statistically significant. Also, what we call "small" reflects our value judgments, and we must recognize that.

Effects of "sticker shock" are thought to accrue early, such that the "shocked" students end up academically unprepared for college (for example don't even graduate high school) and thus are omitted from the eligible population of students on whom effects of aid and tuition are usually estimated. So hypotheses about sticker shock are very hard to test, partly because a good test requires measuring both the initial "shock" and the resulting behavior many years later (when college enrollment decisions are made).

There are other ways to think about these questions, beyond individual-level analyses. For example, we could contemplate possible effects of tuition hikes and aid increases on overall enrollment (which results from the aggregation of behaviors of many individuals). We could also look at evidence on how common it is for institutions like ours that hike tuition and raise aid to sustain the commitment to that aid over time.

Let's start down that path by examining one study that sheds light on the first of those questions. I will review more such studies in the coming days. My goal is to help facts and figures replace fear as the driving force behind our campus decisions.

*************

In "Rising Tuition and Enrollment in Public Higher Education" Hemelt and Marcotte examine the relationships between tuition and aid on the one hand, and enrollment on the other. Essential to this discussion, for most of their analyses they disaggregate by type of institution, making it possible to isolate effects on universities comparable to UW-Madison.

Using national IPEDS data on public 4-year colleges and universities from 1991 to 2007, the authors find that on average a $100 increase in tuition and fees (in 2006 dollars) would lead to a decline in enrollment of a little more than 0.25 percent. Since we rarely raise tuition by $100, let's instead consider that a $1,000 increase in tuition would result in an enrollment decline of 2.5 percent.

But most relevant to this discussion, these economists find that the tuition elasticity of enrollment is largest at Research I universities-- and they specifically give the example of UW-Madison. According to these scholars, freshmen at universities like Madison's are "much more" affected by tuition increases than students at other kinds of institutions (for example, freshmen at UW-Stout). (The tuition elasticity is -0.24 at Research I's compared to -.107 on average). And, the average amount of aid received has the smallest effects for students at Research I universities, compared to other colleges (.06 on average, compared to .01 at Research 1's).

In plain English, what does this mean? The consequences of raising tuition are greatest for students at places like Madison, and the benefits of increasing aid are smallest.

Why is this? The authors consider the possibility that students at Madison are not weighing the price of Madison relative to the price of Stout or Eau Claire, nor the price of other Big 10 schools writ large, but rather the price of comparably elite Research I institutions. Restricting their analysis to the top 120 public universities in the country, then, they again find that these students are particularly price sensitive, and particularly aid insensitive.

A few words from the authors: "These patterns in price and aid sensitivity are consistent with students opting out of “top 120” schools for competitors as price rises, while finding a way to pay tuition bills at other state schools where students may have fewer options....The evidence...of higher price sensitivity but lower aid sensitivity at “top 120” and Research I institutions raises general questions about enrollment patterns at public four-year colleges and universities, beyond the implications of tuition on enrollment at single institutions. One implication may be a shift of students from higher income families to private institutions or public universities in other states, along with a shift of students from lower income families to less expensive public universities within the state. This would suggest a redistribution of students across public colleges and universities within a state, with those most financially able leaving the system, and others scaling back to enroll at more affordable
institutions. Obviously, student-level data are needed to test this."

Distributional consequences of tuition policies are too rarely considered, and are not addressed in the NBP.

Sure, consequences and benefits should be put into context-- for example considered against the consequences of not raising tuition. But this paper by respected economists clearly indicates that it is not appropriate to assert that increasing financial aid at institutions like UW-Madison will effectively hold students harmless from the negative effects of tuition increases. Enrollment will be affected, and distribution of enrollment across institutions may be particularly affected. Who will measure those effects? And who will care?

Overachievers

You don't get to be a professor at a top university by settling or compromising. You get there by striving, competing, and working against all odds to cram extra hours into already-long days. You expect the best, of everyone.

So it's hard to be a professor at a public university right now. Almost by definition, public universities aren't the top of the heap in spending on the things that professors are trained to care most about-- research, salaries, resources. This leads to frustration, anger, and indignation when our talents go unrecognized, our fields disrespected, and our friends leave for private universities.

It's hard to be a professor at a public university, for sure.

Of course, it's also hard to be a kid whose entire future depends on achieving economic stability and that seems to depend on college-- but college is increasingly out of reach. You're told that the flagship college in your state is really the only one that's worth going to and despite your desire to ignore those elitist comments, they nag at you. You want to go there, but annual costs of attendance are more than your family makes in a year. Your parents didn't go to college, and none of your friends managed to get to that place. So really, why bother? Why work your tail off in high school to get the best grades, work after school jobs to save money, and why knock yourself out to take that ACT? You're never going to be able to get in, and if you do, it's gonna financially cripple your family to afford it. The government has never come through with real financial help before, why expect it to now?

Somehow, my heart tells me it's harder to be that kid than it is to be me.

It's time for UW-Madison to be with the children of Wisconsin's working poor families. Offering financial aid -- accompanied as it is by a byzantine system of paperwork, rules, and caveats-- is clearly insufficient to overcome the fear instilled by widespread talk that tuition is high and getting higher. (I am a researcher of financial aid-- it "works" but it by no means demonstrates sufficiently large effects to hold students harmless from high tuition.) Financial aid won't help combat word on the street that the place is so elite it won't even hang with the other UW universities or colleges anymore. It's out for itself--its alumni, current students, and professors-- not for you.

I am not naive-- we are going to take a bone-crushing hit this year. Our belts are going to tighten so much that we can hardly breathe-- at least we will think that's true. But the fact is, UW-Madison doesn't know poverty. Not even close. It's been blessed to have what it needs to be nearly everything it's wanted to be. That's getting harder to do, and now in these times choices will have to be made. Programs will have to be cut. Faculty will have to teach. Class sizes might have to be a bit larger. The truth is, we will survive this-- and we will be more respectable for it. UW-Madison is nothing without the respect of Wisconsin. Leaving the state behind is not an acceptable approach to accommodating our desires to be the "best."

I’m Gonna Be Sick

My email inbox is full of stories sent by friends and colleagues who share my interests in higher education and public policy. I open dozens of links each day, and once in awhile I'll pause, laugh, or stop and think. Rarely, however, do I find myself suddenly overcome with nausea.

Of course, there's a first time for everything. Business Week reports: "The boom in for-profit education, driven by a political consensus that all Americans need more than a high school diploma, has intensified efforts to recruit the homeless." No, I'm not kidding. The article goes on: "Chancellor University in Cleveland....explicitly focused recruiting efforts on local shelters after it realized that Phoenix, owned by Apollo Group was doing so."

What world are we living in? So-called educators are hitting the homeless shelters in search of financial aid-eligible students to enroll in college? And they feel good about it? Says one recruiter: "I feel the homeless are a real population that can't be ignored." If I thought him possibly pure of heart and well-equipped with a battery of successful methods to academically and socially support these folks, I might be a little ambivalent. But come on, this is much simpler-- let's find them, enroll them, and allow them to fail out of colleges into a long debt-laden life.

Not how he sees it--says the recruiter, "borrowing by the homeless to pay tuition "is no different from a middle-class student who has to take out a loan."" Huh?

Seriously, what has this world come to? Something is plain wrong. Government must intervene. Go, Department of Ed-GO!

Making SAFRA Count

The end of last year was a busy time for me as I waited out the birth of my daughter who decided to spend an extra 10 days lounging in utero before emerging into the Wisconsin winter. I was so focused on strategies to promote her exit (sidenote: talk about an area in need of better research-give gobs of data on live births for hundreds of years, docs still refuse to hazard a prediction of labor occurring on any given night!), I virtually shut out the world of higher education policy. Imagine!

Thankfully, others were hard at work around and over the holidays, thinking about ways to make sure that the substantial, timely, and hard-won investment which will (fingers crossed) soon come to higher education via the Student Aid and Fiscal Responsibility Act (SAFRA) are most effective. Evidence of that work is contained in a December Lumina Foundation memorandum to the U.S. Department of Education, awkwardly (but accurately) titled "Structuring the Distribution of New Federal Higher Education Program Funding to Assure Maximum Effectiveness."

The memo gets it (mostly) right. There's great potential for this money to count, but also a real possibility it will do next to nothing if mismanaged. For example, if definitions of key terms like "college completion" are vague, and standards for "rigorous" research evidence ambiguous, then funds will likely go to continuing business as usual-for example, supporting programs that purport to increase college access while doing little to change rates of success-leading some to ask, access to what?

To avoid this the Department of Education needs a distribution system based first and foremost on one principle: keep it simple. It should make states define college completion and disseminate that definition-then stick to it. It's easiest to tell if plans are straightforward and consistent with intended principles if prospective grantees are forced to explain their ideas in a concise manner. Lumina gets this, and its team recommends a two-step process that requires a concept paper in advance of a full proposal.

So the good news is that this Lumina paper hits many of the key issues and makes some solid recommendations. That said, its authors missed an opportunity to address one important issue. The section titled, "How will the U.S. Department of Education know if these investments are actually helping to meet the President's goal?" is essential. It goes to the heart of one major goal of SAFRA-to increase the body of knowledge about what works in promoting college completion, and therefore the field's capacity to create lasting change.

As I recommended to ED's Bob Shireman early last year, we can do higher education a great service by holding a high bar for what constitutes research on college completion. Too often research in higher education hypothesizes that policies or practices advance desired outcomes, but utilizes insufficient methods to establish causal linkages between the two. As a result, we often don't know whether the results we see can be directly attributed to the new practice or investment.

In this case, ED should define "research" and "researchers" and "evidence," ideally in ways that are consistent with current practices at the Institute for Education Sciences; and require states to use those definitions. There should be a prescriptive process for selecting researchers (so as to make sure that truly independent evaluations are conducted) and proposals that allow for sustained research should be prioritized (e.g. those that leverage supportive foundation funding to continue the work to assess mid and long-range outcomes). I'd also like to see ED involved in increasing the capacity of researchers to do this kind of work, since it's far from clear how the demand for new work can be met by the current supply of higher education researchers. Maybe an IES pre- and/or post-doc training program targeted to postsecondary education?

Sure, this would require setting aside sufficient funds for the research side of the initiatives-but absent that investment, we'll likely never know whether the money spent on SAFRA-funded programs and policies had any real effect. That would, of course, be business as usual-precisely what we must avoid if we want to make this once-in-a-lifetime opportunity really count.

The Prison-Education Connection

An article in today's Chronicle Review covers a surge of scholarly interest in "prison studies." The author does a nice job of capturing key areas of research on this topic, though coverage of work by Bruce Western, Chris Wildeman, Alice Goffman, Nikki Jones, and Devah Pager would have deepened the portrait. For example, a discussion of Goffman's recent ethnography of men in Philadelphia could have illustrated how prison life (and the threat of life in prison) is intimately connected with how daily life--outside prison--is experienced by many of today's young urban men.

I just hope educators are paying attention. It's far too easy (and common) for scholars to focus on a single societal institution (like schools) to the exclusion of all others. But anyone committed to democratizing education must connect to the conversation on prison reform.

For example, here are two reasons why higher education researchers, practitioners, and policymakers should follow the debates over prisons:

(1) We want to find ways to broaden access to new populations and spread opportunities. Just 2% of those in state prisons and 8% of those in federal prisons have attained any form of college degree.

At least one study has found that after prison, African-American men are more likely to attend college, perhaps because they hope it will protect them from future participation in undesirable activities.

(2) College attendance during prison is associated with lower rates of recidivism (though evidence has not yet established the relationship as a causal one).

It is thus highly disconcerting that several recent education policies have made it more-- not less-- difficult to use prison time to enroll in postsecondary education and to access college after leaving prison. Consider the following

--Since the reauthorization of the Higher Education Act in 2000, the "aid elimination penalty" has blocked access to aid for adults with drug convictions. By one estimate, this rule has made over 200,000 students ineligible for federal grants, loans, and work study. While the penalty has since been reformed (currently, only students who receive drug convictions during college enrollment and do not pass two unannounced drug tests are ineligible for aid), some suggest that even in its current form it discourages college enrollment (because the financial aid application includes a question about drugs) and perpetuates dropout among vulnerable populations. Wheelock and Uggen write that "relative to whites, racial and ethnic minorities are significantly more likely to be convicted of disqualifying drug offenses and significantly more likely to require a Pell Grant to attend college...It is therefore plausible that tens of thousands have been denied college funding solely on the basis of their conviction status."

--Since 1994, Pell Grants may not be used to support college course-taking that occurs while in prison, a change that has made college much less affordable for that population. Yet at the same time, the number of state prison systems offering postsecondary education is rising (from 30 in 2002 to 43 in 2003-2004)--in Texas and North Carolina more than 10 percent of all inmates participate in some form of college coursework, typically offered by community colleges.

It's time for educators to start thinking hard about who isn't enrolled in their schools, and why. Looking to the ever-growing prison state in this country is a good place to start.

Whispered Policies

Friday's Chronicle reports on a new study that points out how difficult it can be to identify which colleges and universities have no-loans policies designed to enhance affordability. Author Laura Perna and her colleagues find that the majority of elite institutions with these policies fail to advertise them in ways that are accessible to low-income students and families-- effectively maintaining their status as "bastions of privilege." The researchers then go on to make several helpful suggestions about how colleges could change their tactics to increase awareness and uptake of their progressive efforts.

But they could've gone one step further and discussed the incentives colleges have to maintain the status quo-- that is, to continue making their current and former students and staff feel good with liberal actions, garnering attention in elite venues such as the New York Times, without fundamentally changing their overall enrollment demographics or costing too much money. Call me cynical, but as a sociologist it strikes me that this is exactly how power is effectively maintained in the face of pressure for socially responsible actions from powerful institutions.

According to another recent study by economists Waddell and Singell, of the just-over 384,000 Pell Grant recipients attending 4-year institutions in 2000, only 0.3% were enrolled at Ivy League institutions (which disproportionately possess these no-loan policies). Across elite private institutions, Pell recipients rarely amount to more than 1% of the entering class. In 2000, there were only 108 Pell recipients in the freshman class at Harvard, and just 50 at Princeton. These are tiny, tiny numbers. So if no-loans policies actually resulted in massive increases in applications from low-income students, we could see many consequences for those schools. For one, their institutional aid budgets would have to grow-- if low-income students managed to get past the admissions hurdle. Second, depending on how exactly admissions dealt with the increased applicant pool (e.g. whether a 'thumb' was placed on the scale so as to ensure a reasonable proportion were admitted-- an action recommended by Bill Bowen), graduation rates might be affected. Third, you'd see a larger, more visible contingent of people on campuses from different family backgrounds, affecting social dynamics. Many of these outcomes could be interpreted as both positive and negative, depending on your perspective.

Simply put, right now colleges with small numbers of low-income undergraduates can afford to adopt no-loans policies. Based on the two studies discussed here, this is likely because their policies are only weakly communicated to the groups who'd be affected (I hestitate to call these the "targeted audiences" however) and the effects on enrollment are small and subtle. For example, Waddell and Singell conclude that such policies do not increase the overall number of needy institutions at institutions but do have some effect in skewing the composition of that group toward somewhat lower-income students who've traveled longer distances to attend college. Since positive publicity generated by laudatory articles in the elite press may well generate enough new alumni donations to offset current costs, the whole thing may be close to a "wash" --under current circumstances. More effective publicity and outreach to families who do not read the mainstream liberal elite newspapers or visit websites like finaid.org to get their information about college, might change the game. Under those new conditions, I have to wonder-- would no-loans policies continue to be so popular in elite higher education?

Pondering Perkins

Since 1958, the Federal Perkins Student Loan Program has been providing low-interest loans to needy students via campus-based revolving funds. More than 600,000 students (mostly undergraduates with family incomes under $30,000) receive a Perkins each year. The current Perkins differs from other federal loan programs, most notably the Stafford, because it is subsidized (the interest doesn't begin accruing until 9 months after graduation) and has a lower interest rate (5%, compared to the 6.8% Stafford).

The Student Aid and Fiscal Responsibility Act (SAFRA) would change the Perkins in some notable ways, not all of which are clear improvements. The proposed changes are rather intricate, and as I've spent a fair bit of time puzzling over them lately I want to bring some of my nagging questions to this wider audience in an effort to gain some insights and answers. (In full disclosure, the financial aid officer at my university, Susan Fischer, is a vocal opponent of the changes. I have listened to her views, and considered why UW-Madison might resist the changes. Of course, what I'm writing here are my own thoughts, not hers.) Don't get me wrong-- I am generally very supportive of this piece of legislation, which I do think will expand college attainment and improve the American higher education system. I raise these issues in the hopes that tinkering with a few details might make it more effective.

As I understand it, the Obama Administration has several goals for changing the program: (1) increase efficiency via a move to direct lending, (2) expand access by substantially increasing the dollars allocated, and (3) create incentives to keep tuition (and private loan reliance) down by changing the allocation formula (right now the institutional 'fair share' is based partly on tuition costs, and this is thought to contribute to rising tuition).

In a nutshell, goal #2 would appear to be achieved via accomplishing goal #1-- moving to direct lending enables the investment in Perkins to grow from $1 to 6 billion. Goal #3 would appear to be achieved with a new formula that distributes money to campuses based partly on how much non-federal aid they provide, whether they charge below-average tuition and fees, and enrollment of Pell Grant recipients. But what worries me are some of the proposed accompanying changes and plausible unintended consequences. In particular:

(A) In the new version, Perkins becomes an unsubsidized loan, rather than a subsidized one. This would make the Perkins akin to the Stafford, albeit at a somewhat lower interest rate. This makes the program more expensive for students (anyone who thinks even $500 a year in additional interest doesn't matter to the decisions of poor kids just isn't paying attention), and therefore less attractive.How does this enhance access?

(B) In the new version, a match is required from colleges, which they are interpreting as "pay to play." If they do acquiesce, they'll likely draw that money out of need-based funds, or through raising tuition. This would seem to work at cross-purposes with the intentions of the allocation formula, and again, not increase access.

(C) The new allocation formula is likely to benefit private not-for-profit 4-year colleges the most (for more on why, see this cogent analysis by Education Sector).

(D) Most troubling, I am told that another big change is coming with the new Perkins (though I admit, I cannot find evidence of this change in the current legislative language-- I expect it's to come in the rule-making): Packaging rules will require that Perkins be packaged after the Stafford. In other words, financial aid officers must first offer (and students must accept) the unsubsidized Stafford at 6.8% interest, before offering the 5% Perkins. This strikes me as a substantial barrier, likely resulting in few students even getting to the Perkins. Everything we know about loan aversion among low-income populations, and the unwillingness of some of the lowest-cost colleges to even offer their students loans points in this direction. Again, how does this enhance access?

Are there other ways to achieve the same objectives? In particular, is it absolutely necessary to end the subsidy, and change the packaging rules? Could savings be achieved, instead, by ending those abysmal TEACH Grants and perhaps sacrificing GRAD Perkins as well? It might also make sense to keep the subsidy and end the 9-month grace period.

In summary, before we effectively end a mean-tested program offering low-interest loans, have we thought through every alternative and pondered every possible unintended consequence? I realize Perkins may feel like small potatoes in the context of this big bill, but with every penny mattering to our students in this recession, I think the proposed changes to the Perkins deserve closer attention.

New Tune, Same Stupid Key

Well, it had to happen sometime. Faced with a thoughtful, responsive piece of federal legislation to reform the financial aid system, some ideologue had to come forward with a proposal to end federal student aid entirely. Yep, you heard me right-- get rid of financial aid. Throw out the baby with the bathwater.

The Chronicle is reporting that a director of the Cato Institute's Center for Education Freedom -- aka the freedom not to be helped by the government-- is purporting that "student aid explains the pain" of rising tuition. This "higher education expert" (honestly, some people are way too kind) argues that phasing out aid will make colleges more responsive to people who pay "with their own money."

Too bad this expert, Neal McCluskey, didn't bother to do his homework. If he'd cracked a book, he would've learned--fast-- how wrong he is. Not to mention unoriginal. Back in 1987 then-Secretary of Education Bill Bennett made the same argument in a New York Times op-ed titled "Our Greedy Colleges." And economists including Ron Ehrenberg, Caroline Hoxby, and Sandy Baum flatly rejected it--on empirical grounds-- as simplistic and ideologically convenient (much as Kevin Carey apparently did today). Since that time, plenty of studies have tested the hypothesis. As one (real) expert, Harvard's Bridget Terry Long, puts it, "Of the many studies that have tried to identify whether colleges react to federal financial aid, most find little to no response. While several studies do find a college price response, their overall results are mixed and often contradictory. In summary, none of the numerous studies on the subject have found a "smoking gun" in terms of college pricing behavior....the fact that these two trends (rising tuition and rising aid) move in similar directions does not mean that one caused the other." Heck, even Rich Vedder's shop has moved past the simplicity of the idea, instead developing a (somewhat) more nuanced twist in which aid contributes to rising spending, not rising tuition (the latter could occur, but isn't inevitable).

Yet the Bennett hypothesis keeps on rearing its ugly head. I think after more than 20 years of this nonsense it's time to call the idea what it is-- just plain stupid-- and stop giving ink to the people who repeat it.

Premature Conclusions: More Money, No More Grads?

Some members of the media are covering the release of a new Canadian study, associated with the Educational Policy Institute, that examines the effects of a financial aid program on college-going and completion among low-income students. Researchers at the Measuring the Effectiveness of Study Aid Project tried to isolate those effects by examining what happened following a change in student aid policy in Quebec that increase aid eligibility and decreased reliance on loans. By comparing student outcomes both before and after the policy change, and comparing the outcomes of similar student in Quebec to those in other provinces (where such reforms did not occur), analysts attempted to establish a causal effect of aid.

They conclude that the policy affected access (increasing overall enrollment among students from families making less than $20K per year by 4-6 percentage points), and persistence (increasing retention rates by 6 percentage points) but did not affect graduation rates--at least within the 4-year window of time during which graduation was measured.

While noting that the null findings may stem from that short period of observation, the researcher still goes on record with this conclusion: "These results therefore cast doubt on the efficacy of this reform in particular, and of needs-based grants in general, to improve graduation rates."The headline over at Inside Higher Ed reads "More Money Doesn't Equal More Graduates."

This is a distinctly premature and irresponsible conclusion. First, as one of my graduate assistants James Benson pointed out, "if the percentage of college-eligible students that enrolled in college increased by 5 percent, and the persistence and graduation rates remained entirely static, then the program produced a net gain in the proportion of young adults completing semesters and degrees."

Furthermore, there are many reasons why an effect might not be estimated properly in this study. As my colleagues Doug Harris, Phil Trostel, and I explained in a recent paper, a simple correlation between aid receipt and college success is likely to be negative because students from low-income families, in the absence of aid, are for a variety of reasons less likely to succeed. Unless researchers can convincingly account for all of those reasons – and we argue that very few do – the estimated effects of aid are likely to look smaller than they really are. This study is not very convincing and really doesn't move far beyond a correlation, for many reasons. For example, as another graduate assistant, Robert Kelchen, indicates:

1. The comparison groups (Quebec vs. other provinces) have very different rates of financial aid take-up prior to the reform. This calls the validity of the comparison into question. It's also too bad the researcher didn't see fit to post his tables on the website, since we cannot see whether the differences post-treatment are significant.

2. Quebec saw increases in the enrollment rates of high-income students following the reform, in addition to increases in the enrollment rates of low-income students. If financial aid was the real driver, it shouldn't have affected the (ineligible) high-income students.

These are but a few examples-- if a full research paper (such as would be submitted for academic review) was available, I bet we'd have more concerns.

This is a case of the press jumping the gun and running with a story, and a headline, not supported by the empirical work done by the researchers. We're in a recession, and aid programs cost a lot of money. We do need to know if they work, and in particular if they are cost-effective. But the estimation of impacts should be done more carefully, and results discussed in a much more responsible manner. Sexy but un-informed headlines will do little good-- perhaps even casting a shadow on an effective program, reducing its ability to maintain funding. All of us studying financial aid have an obligation to do much, much better.

Image is Everything

Sunday's New York Times features a Style section article that quite frankly turned my stomach (at least, I'm pretty sure it was the article and not the 6 month old fetus I'm carrying!). It describes a debate over Harvard's decision to sign on to a new, expensive preppy clothing line-- one that charges more than $150 for a shirt, and up to $500 for a sports coat. A variety of opinions are represented, from that of the director of admissions and financial aid ( a former aid recipient himself) to an undergraduate who said, “I think it’s good that it’s [Harvard's] doing something to make money."

These deals apparently generate about $500,000 per year for the university, which (poor baby) saw its endowment decline by 30% last year. And that money goes to financial aid, so we're not supposed to worry that Harvard's being greedy.

And that's the main issue the reporter tackles--whether the decision to say yes to a clothing line that portrays an elite undergraduate student body conflicts with Harvard's stated goals of expanding diversity. Whether the money raised is enough to cover the additional costs associated with outreach. The "damage" done.

Well, of course it's not! Image, we all know, is everything-- especially when it comes to those families who rely on media for information in the absence of more informed sources. Harvard's biggest obstacles to bringing in more students from disadvantaged backgrounds are: (1) image; (2) cost of attendance; and (3) admissions requirements. The school is trying to conquer the second one with financial aid, by promising to cover all demonstrated need. That sounds great, but the fact is that the number of admitted students with tremendous financial need isn't very substantial-- if it were, the amount of money required to fulfill that promise would be much more foreboding.

The really poor kids just aren't applying in large numbers to Harvard and that won't change unless it becomes a place that doesn't scream "money, money, money" so loudly to everyone who's ever heard of it. The message that "aid is available, costs are covered" is a good one. But it doesn't neatly translate to "I'll be able to afford to go and enjoy myself and fit in with these kids."

Will TV commercials and print ads featuring Harvard blue bloods generate enough revenue to pay for some more scholarships? Definitely. Will that even begin to offset the damage done by further demonstrations of the internal inconsistencies and contradictions associated with a place that simultaneously wants to do good and yet be the very best? Is anyone seeing those ads (or not seeing them) buying that Harvard's really now open to kids wearing WalMart t-shirts? No way.

No Money Left Behind

Cross-posted from Brainstorm

The U.S. Department of Education has finally announced some concrete plans to reduce the complexity of the Free Application for Federal Student Aid (FAFSA). After years of debate that largely focused on whether to kill the beast entirely (ditching the form and using IRS data instead) or cutting off some of its limbs (cutting some of questions but keeping the form), ED is starting with a middle-of-the-road approach. In spring they’ll pilot a program to use IRS data to populate forms for students who elect to go that route, and in the meantime cut back on asking questions about assets.

While most consumers agree that simple is best, and easy, transparent programs are notably more effective in reaching the families who need aid the most, these steps are not popular with everyone. Complex forms require specific knowledge, and those who specialize in them are nearly assured of keeping their jobs. Reduce the complexity, and paper-pushing jobs can be eliminated entirely. Increase the number of aid applicants, and financial aid officers worry about the increased workload on their end. Furthermore, some states and institutions are concerned that they will not have enough information from a simplified FAFSA with which to tailor their programs. There’s also the potential (unlikely, based on calculations by Sue Dynarski and Judy Scott-Clayton) that fewer criteria will mean that need-based aid will be only slightly less targeted.

But if our goal is to make sure that scarce resources are used efficiently and effectively, FAFSA simplification is one step in the right direction. Set aside the issue of targeting for the moment, and let’s consider how much financial aid money is currently left on the table. Each year, the American Council for Education estimates that each year more than one million students are Pell Grant-eligible but don’t get that money because they do not file a FAFSA. While some people like to blame individuals for inaction, and claim those who don’t file forms don’t “deserve” the money, there are many PhDs who themselves find the FAFSA overwhelming and would agree the time it takes to complete one is well-beyond what’s available in a working-class family’s day.

Ultimately there is no excuse for allocating resources and then not doing everything we can to make sure people can access them. We could do so much more. Right now, there are many programs available to help low-income students build human capital, but they are poorly coordinated or worse yet work at cross-purposes. Welfare reform (TANF) effectively took money for college off the table for poor women, at a time when tax credits for higher education were expanded and we were all implored to attend college. The Workforce Investment Act currently utilizes a byzantine system that makes accessing education and training, particularly at community colleges, harder than ever. Many states and institutions make money available to poor kids, but as they disburse it via the aid package they substitute it for existing resources. Did you know that if your kid gets a Rotary scholarship, their college will likely reduce the institutional aid they’re offering by a similar amount?

Better coordination of existing resources and a simpler, more transparent system – the best would be no application process at all—these things are essential to achieving the President’s goal of more college graduates. ED is going in the right direction—now let’s hope that conversations with Department of Labor and Health & Human Services are coming soon.

Cal Grants: Spared From Termination?

The San Francisco Chronicle reports ("Cal Grants may be spared from budget cuts") that a key legislative committee in California has rejected the Terminator's budget proposal to eliminate Cal Grants.

The Conference Committee on the Budget, which has been wading through Schwarzenegger's budget plan that makes drastic spending cuts across the board, voted to reject his Cal Grants proposal in a 6-4 party-line vote with Democrats in the majority.

Cal Grants are state-funded monetary grants that help eligible students pay for college expenses, up to $9,700 per year.

BACKGROUND: Cal Grant on the Chopping Block

Cal Grant on the Chopping Block

I thought we'd seen the worst of it when yesterday the California Community College system began discussing enrollment reductions of 250,000 students. Now California Governor Arnold Schwarzenegger has proposed to eliminate the Cal Grant--the state's Pell--affecting 100,000 low-income students each year.

I'm not sure where my nausea stems from at this very moment-- my pregnancy, or this insane bit of short-sighted policy-making. Forgive the Terminator, for he knows not what he does....

Why I Voted Against the Madison Initiative, by Guest Blogger Dakota Kaiser

Today we feature a post from an undergraduate student at UW-Madison, Dakota Kaiser. Dakota is a rising senior, and recently distinguished himself as the sole member of the ASM (Associated Students of Madison) to vote against the Chancellor's Madison Initiative for Undergraduates. While many if not all students and faculty can find something to like in the proposal, Dakota has taken a stand for reasons that only he can best articulate. Therefore, today he becomes the first-ever guest blogger on the Education Optimists, here to share his views. Welcome, Dakota!

Why did I vote no? First and foremost, as a student representative on ASM, I could not ethically endorse a tuition increase. As a representative from a rural working class background and a transfer student, I don’t believe my constituency supports this proposal. Higher education is on a path to pricing students out of college every year, and I don’t want Wisconsin to follow the trend. The largest piece of evidence provided for this money is the classic bar graph of funding and financial aid for the big 10. I don’t believe pointing to other schools with high tuition and wanting to fit in is a real argument. Pointing to others actions to justify your own didn’t work on the playground as kids, and it shouldn’t work now. We should take pride in our affordability not be embarrassed and quick to change it. I also question whether or not the BIG 10 is really our peer group. When the average Wisconsin high-school student looks at college choices, it's not between UW-Madison and Penn State, it’s between UW-Madison and other UW schools and community colleges.

While this proposal argues that it will increase economic diversity on campus, I believe it will do just the opposite. Low income, first generation, and other students from disadvantaged communities are likely to suffer from sticker shock when seeing the high tuition on a website, pamphlet or other promotional material. Those students who most need the financial aid that this program is designed to create are those students who will not take it into account when making their post-secondary choices. While the administration just released their report (by no coincidence I’m sure) stating that family income has no impact on acceptance to UW-Madsion, I believe that it does affect who is applying in the first place.

Tuition is the last place a public institution should look to solve its problems, not the first. If the administration has spent a serious amount of time trying other methods to fill the gap and accomplish these same goals and then finally had to turn to tuition, this may be a different story. I also believe that many of the goals and proposals in the initiative can be solved with out such a large increase in funds. More funding doesn’t mean better advising, counseling, or instruction. We have no evidence suggesting that these areas are actually damaged, or that more funding will fix them. All we have are some anecdotal accounts, not solid data. Students were rushed to make a decision on this as it was rolled out, followed by only 6 weeks of an all out marketing, and lobbying blitz, with little time to let these ideas actually settle.

We also have been shown no evidence that changes in the area’s proposed will actually provide a better education, and there are no accountability measures or goals to judge success by. When I asked an administrator about how they will judge success in four years, I was told that they will have more faculty members, more advisers, and more services. When I responded that those are all means to the end of a better education, and asked how they would know that those things are actually making a difference, they had no answer.

In the end I believe that this proposal will not produce the intended results, and may harm our institution. In my opinion the average student doesn’t support this initiative, but they have been given no outlet to speak against it. In the one survey produced by ASM less than 20% of students supported the initiative, while over 80% were neutral or opposed. While the rest of student council was able to ignore that fact, and argue that the educated students were in favor of it and that as time goes on more will be too, I could not.

What is the Evidence on High-Tuition High-Aid Models?

Inquiring minds want to know... and those of us optimistic about the future of education in this country, and the future of our children, are here to provide that service.

Given declining state support to higher education, it's not at all surprising that even the most "public" state flagship universities are considering high-tuition high-aid models-- ones that jack up tuition on all or a subset of students in order to provide more aid to students from lower-income backgrounds. Sounds good, right? Those who can will pay more, and those who can't will get more aid.

As with any policy, especially one so appealing on the face of it, it's worth turning to any available empirical evidence to assess whether it should be enacted. So let's do it.

1. University of Michigan- Ann Arbor began using this model back in 1997. UM is known as the most truly affordable college in the Big 10 by virtue of its gobs and gobs of financial aid. So, is it working? "In 2008, UM reported that tuition has increased 27 percent for incoming freshmen in the College of Literature, Science and the Arts since fall 2004. Tuition cost $10,447... University officials said they've increased financial aid by a greater percentage than the annual tuition increases." But since 1997, the number of low-income UM students has decreased by 10%, while the number of wealthy students has increased by 8%. What's going on? According to the financial aid director at UM “Our cost scares people away… it’s hard for [prospective students] to reconcile that, yes, we may be more expensive, but we give more financial aid."

2. Miami University of Ohio. With a president who understood that unfortunately "high tuition makes people think a school has a lot to offer" this institution raised in-state rates to match out-of-state ones, but also offered automatic grants up to nearly $13,000 to in-staters to offset the cost. The prez promised that net costs for Ohioans wouldn't go up-- that for them costs would remain the same. A year later, applications and enrollment immediately went up. Sounds great, right!? Except over the course of that same year there was an 8 percent decrease in applications from students with high amounts of financial need, and in-state enrollment dropped 13%.

These problems are recognized by the student body at the University of Washington, where a similar model is being considered. See here for an example.

3. Two important facts from financial aid research:

A. Low SES students are particularly price sensitive and have difficulty identifying the amount of aid they can expect to receive (hey, with a FAFSA like that who's surprised?). (See the work of Don Heller). We've never found a successful way to get low-income families accurate info on net cost, so as to influence their choices, early on, before they count themselves out of higher ed.

B. "A $1,000 increase in tuition decreases the attendance rate of low income youth by an estimated 5.2 percentage points more than middle- and high-income youth." (Thomas Kane) If the aid did not match the increases in tuition dollar-for-dollar, not only in theory but in reality, what follows is pretty clear.

Moreover, many of the biggest names in financial aid research and leaders of great public institutions tend to agree. Here are the voices of a few:

Edward St. John (U. Michigan): "The reality of high‐tuition/high‐aid [does] not match the vision advocated by progressives. Institutions leverage student aid to generate tuition revenue, replace tax dollars but adding to inequalities created by the shift in public finance. While rising tuition is a fact of life in public universities, student aid remains ambiguous and uncertain."

University of California System: In 2006, UC declined to go high-tuition/high-aid to protect access for low-income and minority students. UC reviewed the relevant research in advance, and its report declared: "Practically speaking, return-to-aid does not always compensate for the effect of tuition increases. In spite of efforts to increase financial aid in keeping with increase in tuition, high-tuition universities generally do not have student bodies as diverse as their less expensive public cousins....Thus in spite of the University’s excellent intentions and unusual efforts to offset the negative effects of fee hikes, the Compact moves the University toward a high tuition-high aid model that may not be able to prevent reduced access."

Brian Levin-Stankevich, President of Eastern-Washington University: He declined to go high-tuition, high-aid, noting that "the sticker price alone can be a deterrent to even considering college." But, he found an alternative, raising class size and using more technology. (Point of fact: there is no good evidence that smaller undergraduate classes are cost-effective, producing better outcomes worth the price. That said, they are politically popular!)

Patrick Callan: The Miami model, according to Callan, was a “poor execution of a poor idea.” “Everyone thought that high tuition, high aid programs worked well until we heard from privates about their issues with access for low-income students,” said Callan. “It would be a serious mistake for schools to look at the Miami situation and conclude that this is the best way to help low-income students.”

Bruce Johnstone notes that actually translating high tuition into high aid is operationally complex and hard to implement. It would also be hard to know if a university wasn't actually spending the money in that way. Other research, by Griswold and Marine supports this -- tuition pricing and aid allocations are often poorly coordinated.

And just for balance here are the voices of advocates of high-tuition/high-aid models...

James Garland, Miami University of Ohio. “Imagine if there were, in its place, a food subsidy program by which the government paid that $27 billion directly to supermarkets. Under such a program needy families would benefit little, because most of the savings would be passed on to customers who didn't need help. That would be an inefficient use of public money. But this is precisely what happens in public higher education. When states pay their universities to hold down tuition charges, they are indirectly subsidizing wealthy and poor students alike."

Ron Ehrenberg of Cornell University. A recent article about the Madison Initiative quoted Ehrenberg as saying "it’s to be expected that flagship institutions will have to borrow from the private model to maintain quality in an environment of diminishing resources. That said, there are potential pitfalls. “This [increase] is actually going to hit a relatively large fraction of the students, and the downside risk is that there may turn out to be a lot of political opposition to it,” said Ehrenberg, a professor of economics. “There’s always sort of the fear that if you raise tuition you’re going to lose public support, and that’s going to make state appropriations go away even faster,” he added."


Research by Jim Hearn and others has shown that time and again this model becomes popular under conditions of financial stress. But stressful times are times to get creative, to think harder about efficiencies, and to take unpopular stands. They are not the time to leave the poorest citizens among us out in the cold, while we "save" our own children, and our own behinds.

Postscript: I give tons of credit to the Economic Opportunity Institute for a very good brief on the topic.

Should Colleges Require the FAFSA?

Humor me -- I want to float an idea and see what happens.

Put aside for the moment the fact that the U.S. Department of Education is considering significantly revising and/or eliminating the FAFSA. Take as a prior that this form is required to get financial aid. Also take as a prior that people tend to revert to "default" options rather than make special efforts, so we need to structure choices so that defaults result in positive rather than negative outcomes (thanks, behavioral economics and just-plain-sense people).

What if the FAFSA were a requirement for enrolling in college classes (perhaps to start at 4-year colleges with tuition exceeding $1000)? I mean AFTER admission, not before. You get into college, come to orientation and the University provides all the assistance necessary to help students complete the form, and processes it for everyone. If you don't want to file, ok, but you'd need to check a box saying "no thanks."

With FAFSA completion rates under 50% at many institutions, money is simply left on the table. Colleges worry about economic diversity but have no idea what the profile is of non-FAFSA-completers. And sometimes they want to direct special assistance at the lower-income crowds.

So why not help students and families overcome the barrier that is the FAFSA, and reward them for it?

Has anyone tried it? With what results? What are the pros and cons? Write in, let me know. Thanks!

UPDATE: Madison Initiative

UW-Madison's chancellor is in the midst of spreading the good word about her Initiative for Undergraduates. On the surface, much of the campus seems supportive.

In private, it's a different story. I received nearly 30 unsolicited emails from students today. Here, is an excerpt from one:

"I went to the Madison Initiative Forum tonight...[The Chancellor] said early in the forum that students should claim independence from their parents (to get financial aid)-- not even considering the tax implications for the parents. One of the administrators walking around during the small groups part heard my group talking about that and got her to correct her statement....There weren't many students present and most of them seemed opposed to the plan. Engineering students were especially vocal on account of their already having to pay differential tuition and all of the faculty benefits going to Letters & Sciences. A lot of people were also skeptical that their additional funds would go to hiring new faculty that would actually interact with undergrads. I came away from the Forum less impressed with the proposal..."


I think the voices of students are quite important in this discussion, and I urge those for the program and those against to make their opinions heard. This is, after all, one of the last remaining universities of the people.

Keeping you posted....

BACKGROUND: "Sifting and Winnowing"

Time to Get Creative

One of the hardest things about being a scholar of higher education is working at a university. Inevitably we're seen as either pandering to the administration, or in direct warfare with it. What I can't understand is why leaders at universities don't identify and embrace their colleagues as (nearly) free sources of expertise. Those of us who study higher ed are generally a deeply committed body of folks who love nothing more than dreaming up creative ways to help colleges achieve.

Yet so often we're left out in the cold, only brought in at the last minute when it's time to give us a warning and tell us to shut up. Which, of course, makes us less effective, hurt, and generally pissed off.

My last two days were extremely long ones, extremely fraught ones...and today will be no exception. My task: figure out, in short time, highly nuanced and effective ways to increase the amount of need-based aid UW has WITHOUT promoting economic inequality. I'm glad I have a pool of talented colleagues with which to confer. Now only if I'd had more time....