Concerning Commonwealth Colleges

I have been blogging over the past few months on the generally worrisome state of US colleges and on policy remedies that might address the sector’s runaway costs, sagging student outcomes, and insularity.

College remains a topic of enormous daily importance to us here at Match Education since we send graduates from our high school to college every spring.  Our students and families continue to do the hard work to get ready for college and to get in to college.  But, college options that are affordable, full of quality learning, and likely to lead to a job are disappearing at a frightening pace.

In order to be helpful, we recently started Match Beyond, our own college and jobs program for young adults from greater Boston, including some of our own high school graduates.

Sticking to the college theme, I will take a close look in this blog at the college scene here in the Commonwealth.

The body of this blog consists of 25 data tables.  Each table makes a few empirical points, and the tables in their entirety tell a startling story.

To motivate you for what is admittedly a long read below, some introductory points:

  • 2-year Public Colleges in MA.  Of our state’s roughly 500,000 current college students, 20% attend one of 16 2-year public colleges. Alarmingly, only 16% of entrants to these 2-year public colleges earn a degree within three years.  Among Hispanic and African-American entrants to 2-year public colleges in MA, merely 10% earn a degree in three years.  Graduation rates in our state’s 2-year public college system lag the also disappointing graduation rate of 2-year public colleges nationally, in which 19% of entrants earn a degree.
  • 4-year Public Colleges in MA.  In MA, roughly 25% of college students attend one of 14 public 4-year colleges.  In these colleges, 58% of entrants earn a degree in 6 years, a clip almost identical to the national average (59%) among public 4-year colleges.   To attend a 4-year public college in MA, a student now faces an ominous average net price of $15,900 per year, a payment that requires borrowing for a large majority of college-goers.  Not surprisingly, 75% of graduates from 4-year public colleges in MA finish their degree with student loans averaging $29,000.  Debt is obviously even more threatening to the many students who borrow to attend college but never finish.
  • Elite 4-year Private Colleges in MA.  Our state is home to a small number of world-class colleges that serve our country well but are of little relevance to in-state high school graduates.  Specifically, 28% of college students in our state attend on of 16 private 4-year colleges that appear in U.S. News & World Report’s list of top 100 colleges in the US.  Picture institutions like MIT, Boston College, and Williams College. In these colleges, 88% of entrants earn a degree in six years, a result far above the average graduation rate nationally in private 4-year colleges (65%).  Unfortunately, if you care mostly about the Commonwealth, these colleges are little consolation.  Only 18% of their students hail from MA high schools.  By contrast, MA high school graduates account for 92% of students in our state’s public colleges.
  • Typical 4-year Private Colleges in MA.  Finally, 28% of our state’s college students attend one of 72 private 4-year colleges ranked outside U.S. News & World Report’s top 100 colleges in the US.  In these colleges, only 65% of entrants earn a degree in six years, a result identical to the national average.  The average net price to attend one of these 72 colleges is $29,800 per year (a price point, incidentally, that is about $2,000 above the net price at one of top tier colleges that I described above), and 66% of graduates from these 4-year private colleges are saddled with student loan debt of $32,600 on average.
  • Public Funding and Price Inflation.  Encouraged by massive federal loan and grant programs to students, colleges of all types in MA (and nationally) have been driving up their prices and collections relentlessly for decades.  For example, over just the last 10 years in MA, college revenues have grown 5% per year and college revenues from Pell Grants have grown 9% per year, even as enrollment has grown at only 1.6%.  In our state’s public colleges, student-paid tuition and fees (sourced extensively from federal loans and grants) now account for 55% of college revenues, up from 33% 15 years ago.

The alarming price inflation, low graduation rates, and heavy student debt burdens that now characterize colleges of all types in MA are the predictable result, in my opinion, of misguided and long-standing public policy on college aid, college accountability, and college accreditation.

For decades, public policy has enabled an entrenched college establishment to raise prices relentlessly on the back of large public subsidies, protected it almost completely via accreditation from competition, and permitted it to carry on with too little attention to quality or cost control.

I have written elsewhere about the need for new public policy in higher education that invites startups into the college sector in pursuit of innovation, quality, and cost containment.  I won’t repeat that policy plea here, but it applies in our Commonwealth as well as anywhere.



SECTION 1: BASIC ENROLLMENT TRENDS (TABLES 1-4)

*In this blog, unless otherwise stated, the term “private colleges” includes a small number of for-profit colleges.  Less than 1% of MA college students attend for-profit private 2-year or 4-year colleges.

*In this blog, unless otherwise stated, the term “private colleges” includes a small number of for-profit colleges.  Less than 1% of MA college students attend for-profit private 2-year or 4-year colleges.

  • MA has 124 colleges.  They include 16 public 2-year colleges, 14 public 4-year colleges, 6 private 2-year colleges, and 88 private 4-year colleges.
  • The total number of colleges in MA has remained largely unchanged for the last two decades.

  • Over the last 40 years, college enrollment has grown slightly less quickly in MA than it has nationally. This variance is explained mainly by the fact the K-12 population in MA has grown more slowly than in the country as a whole.
  • For more detail on national trends in college enrollment, see my earlier blog.

  • College enrollment in MA totals about 510,000 students, and it splits about evenly between public and private colleges.
  • Compared to college enrollment nationwide, college enrollment in MA skews towards 4-year private colleges.  Nationally, only a quarter of college students attend 4-year private colleges.  In MA, the analogous statistic is 55%.

  • Our state’s approximately 280,000 students who attend 4-year private colleges can be split into two even enrollment halves.
  • One enrollment half attends 16 private 4-year colleges in MA, each of which is ranked in the top 100 US colleges by US News & World Report.
    • These 16 colleges are: Amherst College, Boston College, Boston University, Brandeis University, Clark University, College of Holy Cross, Harvard University, MIT, Mount Holyoke College, Northeastern University, Smith College, Tufts University, Wellesley College, Wheaton College, Williams College, and Worcester Polytechnic Institute.
  • The other enrollment half attends one of 72 private 4-year colleges in MA, each of which is ranked outside the top 100 US colleges by US News & World Report.
    • Examples of these colleges are: Curry College, Emmanuel College, Lasell College, Mount Ida College, Newbury College, Pine Manor College, and Stonehill College.
  • This d istinction will be useful at various points in this blog since student demographics, graduation rates, price inflation, debt frequency, and debt loads vary significantly between these two halves of enrollment in our state’s 4-year private colleges.

SECTION 2: ENROLLMENT DEMOGRAPHICS (TABLES 5-10)

  • 72% of college-goers from MA high schools attend college in MA.
  • Of the 72% of college-goers from MA high schools who attend college in-state, 75% of them go to a public university in MA.

  • 92% of students in public colleges in MA come from MA high schools.
  • By contrast, graduates of MA high schools account for only 32% of enrollment in private colleges in MA and just 18% of students in the 16 MA private colleges that rank among the top 100 US colleges according to US News & World Report.

  • By race, the student body of MA colleges is slightly less diverse than the student body in MA K-12 schools.
  • MA colleges have become more diverse over the last two decades. In 1993, 80% of students in MA colleges were white.  The same statistic was 67% in 2014.

*In this table and at various other places in this blog, data is omitted for private 2-year colleges, either because it is not publicly available or because it is immaterial (private 2-year colleges account for less than 1% of college students in MA).

*In this table and at various other places in this blog, data is omitted for private 2-year colleges, either because it is not publicly available or because it is immaterial (private 2-year colleges account for less than 1% of college students in MA).

  • 2-year public colleges in MA enroll higher shares of Hispanic and African-American students than do 4-year private or public colleges in MA.
  • “Other” includes most significantly international students.  It also includes multi-racial students and students whose race is unknown.

  • 39% of students in 2-year public colleges in MA qualify for Pell grants.
  • By contrast, only 21% of students in private 4-year colleges – and just 14% of students in private 4-year colleges ranked in the top 100 US colleges by US News & World Report – qualify for Pell grants.

  • 47% of low income graduates from MA high schools attend in-state, 2-year public colleges, a rate far higher than their middle class peers.

SECTION 3: COLLEGE FINANCES (TABLES 11-19)

  • College revenues in MA have grown 5% per year over the last decade.
  • During the same period, enrollment grew 1.6% per year.

  • The state of MA currently spends $1.2 billion dollars on higher education annually.
  • 87% of state spending on higher education is aid to public 2-year and 4-year colleges.

  • State spending on higher education in MA has grown at mere 0.9% per year for the last decade.  On a per public college student basis, it has shrunk by 0.9% per year.

  • Revenue from student-paid tuition and fees in MA public colleges has grown 6.3% per year for the last 15 years, a rate that is far ahead of enrollment growth in the same colleges.
  • Revenue from student-paid tuition and fees currently comprises 55% of revenue for public colleges in MA.  That statistic was 33% in 2000.

*College sticker price is the published cost to a student of attending college for one year, before college-issued discounts and generally includes tuition, fees, room, and board.  As used in later tables, college net price is the cost to a student of attending college for one year, after college-issued discounts.  *College sticker price is the published cost to a student of attending college for one year, before college-issued discounts and generally includes tuition, fees, room, and board.  As used in later tables, college net price is the cost to a student of attending college for one year, after college-issued discounts.

  • The sticker prices of 4-year public and private colleges – both nationwide and in MA – have increased rapidly over the last fifteen years.  The sticker prices of MA 4-year colleges are significantly above the national average.

  • Growth in college revenues from Pell Grants (9.1% annually for the last decade) has far outpaced growth in overall college revenues (5.0% annually for the last decade).
  • Generally, MA college revenue growth and price increases over the last several decades have been enabled by federal financial aid.  Federal spending on higher education comes in several forms, notably grants to students (such as Pell grants, which provide low income students with aid grants of up to $6,000 per year) and large public loan programs. Between 2000 and 2012, as state-level spending on higher education fell by 9% nationwide, federal spending on higher education grew by 92%. For more on federal higher education spending, see my earlier blog on the topic.

  • Annual net price – the crucial measure of college cost for families – now averages $7,300 for 2-year public colleges, $15,900 for 4-year public colleges, and $28,800 for private 4-year colleges.
  • Note that while the average sticker price of a private 4-year college in MA is over $53,200, the average net price in these colleges is $28,800. Private 4-year colleges market high sticker prices from which to discount.
  • Escalation in net prices for college is an issue nationally as much as it is in MA.  Since 1990, the national average net price of attending college has grown 3% per year at 2-year public colleges, 4% per year at 4-year public colleges, and 5% per year at 4-year private colleges. For more on the increasing net price of college across the US, see my earlier blog on the matter.

  • 75% of graduates from MA public 4-year colleges enter the job market with student loans averaging $29,000.
  • 59% of graduates from MA private 4-year colleges leave college with an average of $29,700 in debt.
  • Obviously, the consequences of student loan debt are most severe for students who dropout.  I have not found data on the debt frequency and debt size among college non-completers in MA.  That data set is, however, available nationally, and I have written about it here.

  • In MA, 13% of students in 2-year public colleges default on their college loans. The equivalent statistic nationally is 19%.
  • As student loan debt has grown nationally – 40 million Americans now have student loan debt totaling $1.2 trillion dollars – an increasing number of Americans are defaulting on their college loans. I have written about this alarming national trend in a prior blog.

SECTION 4: COLLEGE OUTCOMES (TABLES 20-25)

*Here and elsewhere in this blog, graduation rate is defined as the percent of an entering cohort that earns a degree within 6 years in a 4-year college and within 3 years in a 2-year college.

*Here and elsewhere in this blog, graduation rate is defined as the percent of an entering cohort that earns a degree within 6 years in a 4-year college and within 3 years in a 2-year college.

  • The graduation rate among the half of MA private 4-year college students who attend colleges ranked in the US News and World Top 100 is 88%.
  • By contrast, the graduation rate among the other half of MA private 4-year college students who attend colleges ranked outside the US News & World Report Top 100 is 65%.
  • Recall from Table 6 that MA high school graduates comprise only 18% of students enrolled in MA private 4-year colleges ranked inside the US News and World Report Top 100.

  • 81% of African-American students who enroll in MA private 4-year colleges listed by US News & World Report as a top 100 college earn a degree in 6 years.
  • By contrast, only 43% of African-American students who enroll in MA private 4-year colleges not listed by US News & World Report as a top 100 college earn a degree in 6 years.

*The five 4-year public colleges listed above account for 80% of students enrolled in 4-year public colleges in MA.

*The five 4-year public colleges listed above account for 80% of students enrolled in 4-year public colleges in MA.

  • The graduation rate at 4-year public colleges in MA is 58% – similar to the national average graduation rate in 4-year public colleges of 59%.
  • Among 4-year public colleges in MA, only UMass-Amherst performs above the national average graduation rate of 4-year public colleges.

  • The graduation rates for African-American students and Hispanic students at 4-year public colleges in MA 4-year public colleges are 47% and 48%, respectively.  These results are far below the results of their white and Asian peers at 4-year public colleges in MA.

*The five 2-year public colleges listed above account for 70% of students enrolled in 2-year public colleges in MA.

*The five 2-year public colleges listed above account for 70% of students enrolled in 2-year public colleges in MA.

  • In 2-year public colleges in MA, the graduation rate is 16%.
  • Recall, per tables earlier in this blog, 27% of college-goers from MA high schools attend 2-year public colleges in MA and that 92% of students in MA public colleges are from in-state high schools.

  • Only 10% of African-American students and Hispanic students at 2-year public colleges in MA earn a degree. This graduation rate is far below the 19% graduation rate among white students in public 2-year colleges in MA.

CONCLUSION

Encouraged by enormous support for financial aid programs in DC, MA colleges have been raising prices continuously.  To meet the cost of college, students take out ever-larger loans, maximize what grants they can find, and sap household income.  And once in college, students face alarmingly low graduate rates and high debt burdens.

Even our state’s often-praised private 4-year college sector is, on close inspection, little consolation.  Generally speaking, it offers good outcomes for out-of-state students who enter a small number of elite private colleges in MA and unappealing outcomes for in-state students who typically attend lower tier private 4-year colleges.

I have written here about the higher education policy missteps over the last 50 years that drove our college sector to the brink in the first place – nationally and in our Commonwealth – and about the policy reforms that, in my view, can walk it back from the edge and get it moving over the next decade towards meaningful quality improvement, cost reduction, and design innovation.


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Sources List:

Table 1: Number and Type of MA Colleges

http://nces.ed.gov/programs/digest/d15/tables/dt15_317.20.asp?current=yes

http://nces.ed.gov/programs/digest/d01/dt245.asp

https://nces.ed.gov/programs/digest/d96/d96t237.asp

https://nces.ed.gov/programs/digest/d11/tables/dt11_280.asp

Table 2: College Students, 1970-2014

http://nces.ed.gov/programs/digest/d15/tables/dt15_304.10.asp?current=yes

Table 3: MA & US Enrollment by College Type

http://nces.ed.gov/programs/digest/d15/tables/dt15_303.25.asp

https://nces.ed.gov/programs/digest/d15/tables/dt15_304.60.asp

Table 4: MA Enrollment in Top 100 Private 4-Year Colleges, 2017

https://nces.ed.gov/programs/digest/d15/tables/dt15_304.20.asp?current=yes

https://www.usnews.com/best-colleges

Table 5: College Destinations of MA High School Graduates, 2014

http://profiles.doe.mass.edu/state_report/gradsattendingcollege.aspx

Table 6: In-State v Out-of-State Enrollment in MA Colleges, 2011

http://profiles.doe.mass.edu/state_report/gradsattendingcollege.aspx

http://www.massbudget.org/report_window.php?loc=higher_ed.html

https://nces.ed.gov/collegenavigator/

Table 7: Enrollment by Race

http://nces.ed.gov/programs/digest/d15/tables/dt15_306.60.asp?current=yes

http://profiles.doe.mass.edu/state_report/enrollmentbyracegender.aspx

Table 8: Enrollment by Race in MA Colleges, 2014

http://www.college-insight.org

Table 9: Enrollment by Income in MA Colleges, 2013-2014

http://www.college-insight.org

Table 10: College Destinations of MA High School Graduates, By Income, 2013-2014

http://profiles.doe.mass.edu/state_report/gradsattendingcollege.aspx

Table 11: Revenues and Enrollment of MA Colleges

https://nces.ed.gov/ipeds/trendgenerator/default.aspx

https://nces.ed.gov/ipeds/trendgenerator/default.aspx

http://nces.ed.gov/programs/digest/d15/tables/dt15_303.25.asp

http://nces.ed.gov/programs/digest/d15/tables/dt15_304.15.asp?current=yes

http://nces.ed.gov/programs/digest/d15/tables/dt15_304.20.asp?current=yes

https://nces.ed.gov/programs/digest/d06/tables/dt06_194.asp

https://nces.ed.gov/programs/digest/d06/tables/dt06_195.asp

Table 12: MA State Budget For Higher Education, 2016

http://www.mass.gov/bb/gaa/fy2016/app_16/dpt_16/hrgt.htm

Table 13: MA State Spending on Higher Education

http://nces.ed.gov/programs/digest/d15/tables/dt15_333.30.asp?current=yes

https://nces.ed.gov/programs/digest/d15/tables/dt15_304.15.asp?current=yes

Table 14: Total Revenues from Tuition & Fees at MA Public Colleges

http://nces.ed.gov/programs/digest/d02/dt338.asp

http://nces.ed.gov/programs/digest/d15/tables/dt15_333.20.asp?current=yes

 Table 15: Sticker Price at 4-Year MA Colleges

http://nces.ed.gov/programs/digest/d02/dt313.asp

http://nces.ed.gov/programs/digest/d15/tables/dt15_330.20.asp?current=yes

https://nces.ed.gov/programs/digest/d15/tables/dt15_330.30.asp?current=yes

https://nces.ed.gov/collegenavigator/

Table 16: College Revenues from Federal Pell Grants

http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2015/06/federal-and-state-funding-of-higher-education

https://www2.ed.gov/finaid/prof/resources/data/pell-institution.html

Table 17: Net Price of College, 2015

https://nces.ed.gov/collegenavigator/

https://trends.collegeboard.org/college-pricing/figures-tables/average-net-price-over-time-full-time-students-sector

Table 18: Student Debt of Graduates from 4-Year Colleges, 2013-2014

http://college-insight.org

https://nces.ed.gov/programs/coe/pdf/coe_cug.pdf

http://www.massbudget.org/report_window.php?loc=higher-education-funding-in-massachusetts.html

Table 19: Student Loan Default Rates, 2013 Cohort

https://www2.ed.gov/offices/OSFAP/defaultmanagement/cdr.html

https://studentaid.ed.gov/sa/about/data-center/student/portfolio

Table 20: Graduation Rates at 4-Year Private Colleges

http://collegecompletion.chronicle.com/

Table 21: Graduation Rates at 4-Year Private Colleges in MA, By Race

http://collegecompletion.chronicle.com/

Table 22: Graduation Rates at 4-Year Public Colleges

http://collegecompletion.chronicle.com/

Table 23: Graduation Rates at 4-Year Public Colleges in MA, By Race

http://collegecompletion.chronicle.com/

Table 24: Graduation Rates at 2-Year Public Colleges

http://nces.ed.gov/programs/digest/d15/tables/dt15_326.20.asp

http://collegecompletion.chronicle.com/

Table 25: Graduation Rates at 2-Year Public Colleges in MA, By Race

http://collegecompletion.chronicle.com/

 

College 101: A Call for New Colleges (Part 5 of 5)

An established set of US colleges, largely fixed in number, has dominated our higher education sector for the last 50 years.

Dense law and a powerful college accreditation system protect these established colleges from new entrants, back them with large public subsidies, and leave them free to mop up student enrollment and to raise prices relentlessly.  To date, the college establishment has resisted or avoided almost all forms of hard-nosed accountability, including accountability for the employment and salary outcomes of their graduates.

What will it take for this college sector to improve in a meaningful and lasting way?

What new higher education policy will create a US college sector that is far less expensive to families and our governments and far more successful at graduating students with job-ready skills and knowledge?

The answer, in my view, is an ambitious, intelligently regulated move by the US Congress and the US Department of Education to admit new organizations – specifically, high-quality non-profit organizations and talent-hungry operating companies – into higher education.

With new entry into the college sector – and only with new entry – would come meaningful innovation, cost containment, and quality improvement.


OTHER POSTS IN THIS SERIES


A. The Limits of Policy Reform of the Establishment

Before I turn to my plea for new entry into higher education, I should recognize that it surely makes good sense to regulate anew and again the college establishment.  It is after all the establishment.  As I type this, the establishment – that unchanging set of 3,200 colleges about which I have been writing here – is educating some 20 million American college students.  It needs incremental regulatory attention, of course.

The project of designing the next best wave of college oversight plays out perennially in Washington, D.C.   Higher education policy, in contrast to K-12 policy, is heavily centralized in Washington, D.C. since so much of public funding for college, unlike public funding for K-12 schools, originates in Washington.

In my opinion, recent history in Washington, D.C. is a story, on the one hand, of good efforts and clear thinking at higher education policy reform and, on the other hand, of the drag and incrementalism that invariably arise in trying to regulate an entrenched status quo.

A few observations on this point:

  • Slow Progress on Accountability in the Establishment.  The US Department of Education, in the Obama era and in prior administrations as well, showed genuine interest in requiring colleges to collect and publish quality outcome data, particularly on the economic and employment consequences of a degree.

For obvious reasons, this policy agenda makes sense and needs to be pursued.  If implemented fully, it would sharpen consumer choice, augment competition among colleges, and create a data backdrop against which the government could revoke or curtail funding for underperforming colleges.

Unfortunately, as far as I can tell, the project – while clear-headed and implemented diligently – has struggled to break through in practice.  I have yet to meet a college-goer who can shop among colleges with reliable, complete data on their jobs outcomes.  And I know of few colleges (other than the for-profit colleges that were rightly and heavily scrutinized in recent years) that have come under meaningful pressure for lack of outcomes.

  • Modest Accreditation Reform in the Establishment.  Relatedly, several past administrations have sought to pressure accreditors – particularly the six large regional accreditors that review most of our colleges and powerfully control the flow of public aid into colleges – to evaluate colleges based on outcomes and, ideally, to approve new college models more speedily.

(Note: college accreditors are private membership organizations comprised of, paid for, and governed by the very colleges they evaluate.  They are generally beyond the direct regulatory reach of the US Department of Education, even though Congress has chosen legislatively to limit students’ use of federal grants and subsidized loans to accredited institutions.)

The Obama administration’s critical interest in accreditors was backed with encouraging candor.  At one point, US Secretary of Education, Arne Duncan, dubbed accreditors “watchdogs that don’t bark.”  That summation of things seems fair.  The the six large regional college accreditors in the US, in monitoring 3000+ colleges between 2000 and 2015, revoked institutional accreditation only 26 times.¹

In the end though, efforts stretching back over multiple administrations have made only small progress, as far as I can tell, towards redirecting the hidden world of accreditation.  It remains in place and largely unchanged.

  • Loud Calls for Increased Aid to the Establishment.  Over the last few years, even as the college establishment has carried on mainly untouched by hard-nosed accountability or accreditation reform, calls for more public aid to colleges have intensified among voters and elected politicians.

College is so expensive now that voters – up and down the income ladder and across the political spectrum – feel panic and demand relief.  Recall, about two-thirds of US households can no longer afford college without the Pell Grant, a federally subsidized loan, or some other form of public college assistance.

Proposals for increased public aid for college range widely in their specifics.  Most frequently heard of late are proposals for free or price-controlled public college.  Also popular these days are demands for increases to the Pell Grant, debt forgiveness programs, and other forms of student-side relief.

Increasing aid to higher education would generate all manner of effects in higher education and in society.  I will not cover them in any detail here.  I will just make one cautionary point: more public funding for college will not, in itself, drive institutional change on college campuses.  It does not correlate with cost containment, innovation, accountability, or quality improvement by colleges.

In fact, if history is any lesson, the opposite is likely.  Our governments have funded colleges lavishly for 50 years and – in the absence of new entry and accountability – the college establishment has responded with higher prices, expansion, and yawning results.

In all, Washington, D.C. of course needs to carry on regulating (again) the college establishment.  It needs to reach for another round of regulations aimed at accountability, governance, and funding reform inside the status quo.

That this incremental regulatory project is worthwhile does not make it adequate, though.  It is likely, in my view, to yield the same slow progress over the next 10 years as it has over the past 15 years.  I cannot imagine a regulatory program clever, powerful, and persistent enough to trip our 3,200 existing colleges, en masse, into meaningful and lasting innovation, cost containment, and quality improvement.

We need more than just another wave of regulation aimed at existing colleges.  We also need new colleges.

B.  New Entry: The Centerpiece of Reform

Higher education in the US has been voucher-ized.  Nobody set out to voucherize it, as far as I know.  But that is in fact what has happened.

College students, as we stand now, can shop among 3,200 private and public colleges and make autonomous purchase decisions with their publicly issued loans and grants.

What we lack, in my view, is a public policy that allows college students to choose from a wider, more competitive, and more innovative set of college operators.  Washington, D.C. should aim for that higher education policy goal, I think.

More specifically, Congress and the US Department of Education should amend our federal higher education act and related regulations so as to allow alternative organizations – and I am referring here specifically to high-performing non-profit organizations and operating companies in need of talent – to operate novel degree-granting and job training programs.  Picture Amazon.com and General Electric.  Picture high-grade, mission-driven nonprofits focused on workforce development and economic mobility.

These new operators should be offered a clearly defined, stringently regulated and quick pathway – free of typical accreditation rules and process – into the college sector.  This pathway can be created legislatively in Washington, D.C. in a variety of ways and could be administered by the US Department of Education.  The mechanics of what I propose are easy if politics will permit them.

Students who choose to purchase college education from this new set of providers should be able to do so with the help of their federal financial aid – notably, their Pell grants and subsidized federal college loans.  This point is vital.  We need to free college students to shop for quality educational programs both inside and outside the college establishment.  Their choices, funded with public money, should no longer be limited to the existing set of colleges that generally struggle to innovate, constrain costs, and deliver employment outcomes.

In exchange for access to students with financial aid, these new nonprofits and operating companies should be held unrelentingly accountable for high graduation rates and strong employment outcomes for their students.  Outcome contracts for new providers should be negotiated and reviewed regularly and unapologetically by the US Department of Education.  Our government should be as merciless on outcomes with new college entrants as it is permissive on outcomes with existing colleges.

Along these conceptual lines, the US Department of Education recently launched a pilot college program called EQUIP (Educational Quality through Innovative Partnerships).

The program is small.  It is currently available to only a few thousand students.  But what it lacks in size it makes up for in clarity of mind.

Under EQUIP:

  • Non-traditional organizations (exactly the sort of operating companies and mission-driven nonprofits for which I am advocating) can design and deliver degree-granting programs in slim partnership with an existing and minimally involved college.
  • Students attending these alternative degree programs can use Pell grants and federal student loans to pay for them.  Significant federal financial aid can pass to the non-traditional education and training provider from its upstream college partner.
  • These programs are evaluated for quality by independent organizations, and the US Department of Education exercises total control over their good standing and has promised to close them if they fail to deliver outcomes.
  • In one example of this program, here in Boston, General Electric is setting out, in partnership with Northeastern University, to design and deliver degrees in advanced manufacturing.  Another example, based in New York, allows students to use their federal financial aid to access coding academies that have agreed to deliver strong employment outcomes and viable career paths in programming.

Though small, the EQUIP program is a bright idea.  It delivers on a small scale what higher education needs in large quantity: new entry and, with new entry, a dynamic that can lead to innovation, quality, and cost-containment.

In all, the time has come to invite new actors to the work.  In the years ahead, we cannot rely exclusively on incremental improvement and further regulation of the college establishment, as important as those tasks are.  We also need new organizations with fresh ideas, and they can be found among high-quality non-profits and talent-hungry operating companies that want — as part of their mission or because of their hiring needs — to take a run at college.  With well-regulated new entry — and only with well-regulated new entry — might we get the level of design innovation, cost control, and outcome improvement that we need.


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Footnotes:

(1) Fuller, Andrea and Douglas Belkin. The Watchdogs of College Education Rarely Bite.” The Wall Street Journal. <www.wsj.com/articles/the-watchdogs-of-college-education-rarely-bite-1434594602>

College 101: Outcomes in the College Establishment (Part 4 of 5)

Here, in Part 4 of this blog series, I will cover one last unnerving sub-plot in the story of US colleges.

A small and unchanging set of incumbent US colleges not only control enrollment (Part 2) and large public subsidies (Part 3). They also dodge accountability.

Little data on college outcomes is collected or published by colleges themselves, by the governments that fund them, or by the accreditation agencies that protect them.

And what good data is available – on graduation rates, on employers’ view of the job readiness of graduates, and on students’ self-reported satisfaction with college – is discouraging.


Other Posts in this Series


A. Graduation Rates at 4-Year Colleges

The majority of students who enroll in US colleges do not graduate and a large majority of certain segments of college students (students of color, students from low income households, and students at 2-year colleges) do not graduate.

Consider 4-year colleges first.

4-year colleges enroll approximately 13 million students and account for 66% of US college students (40% in public 4-year colleges and 26% in private 4-year colleges).

Across these 4-year colleges, a mere 40% of students graduate in four years, and only 60% graduate in 6 years.

 

National Center for Education Statistics, Digest of Education Statistics National Center for Education Statistics, Digest of Education Statistics

 

These average graduation rates in 4-year colleges – as low as they are — mask far lower and more alarming graduation rates among students of color.

For example, only 21% of African-American students who enroll in a 4-year college graduate within 4 years.

 

National Center for Education Statistics, Digest of Education Statistics National Center for Education Statistics, Digest of Education Statistics

 

Overall graduation rates in 4-year colleges also cover up far lower graduation rates among low income students.

For example, the 6-year graduation rate in 4-year colleges for students in the lowest income quartile is 32% lower than the analogous graduation rate for students in the top income quartile.

A similar income-related graduation rate gap exists between students who qualify for a Pell grant and students who do not.

 

Note: % of College Students Who Enrolled in College in 2003-2004 who Graduated by 2009 National Center for Education Statistics, Digest of Education Statistics Note: % of College Students Who Enrolled in College in 2003-2004 who Graduated by 2009 National Center for Education Statistics, Digest of Education Statistics Education Trust, The Pell Partnership Education Trust, The Pell Partnership

 

Graduation rates at 4-year colleges also vary considerably by college type. For example, only 18% of entrants to private, for-profit colleges – which enroll approximately 10% of all 4-year college students – graduate in four years.

National Center for Education Statistics, Digest of Education Statistics National Center for Education Statistics, Digest of Education Statistics

 

B. Graduation Rates at 2-Year Colleges

As worrisome as the graduation picture is at 4-year colleges, it worsens at 2-year colleges, almost all of which are publicly run and which educate about one-third of US college students.

Notably, only 28% of students who enrolled in a 2-year college in 2011 graduated within 3 years.

 

National Center for Education Statistics, Digest of Education Statistics National Center for Education Statistics, Digest of Education Statistics

 

Predictably and regrettably, 2-year colleges fare even worse with students of color and students from low income households.

 

National Center for Education Statistics, Digest of Education Statistics National Center for Education Statistics, Digest of Education Statistics Note: Percent of students who enrolled in 2-Year Colleges in 2003-2004 who acquired any degree (Certificate, Associate, or Bachelors) by 2009 National Center for Education Statistics, Digest of Education Statistics Note: Percent of students who enrolled in 2-Year Colleges in 2003-2004 who acquired any degree (Certificate, Associate, or Bachelors) by 2009 National Center for Education Statistics, Digest of Education Statistics

 

Graduation rates at 2-year colleges also vary considerably by college type.

In particular, just 20% of students who enrolled in a 2-year public college in 2011 graduated within three years. And the 3-year graduation rate for African-American students in 2-year public colleges was merely 9.8%.

That the graduation rates of private 2-year colleges are considerably higher than public 2-year colleges is, unfortunately, not much comfort since there are so few private 2-year colleges. They only account for only 2% of US college students.

 

National Center for Education Statistics, Digest of Education Statistics National Center for Education Statistics, Digest of Education Statistics

 

The low graduation rates at public 2-year colleges are worth stressing since these colleges are the subject of so much policy attention of late, and they are now regularly presented — despite their poor outcomes — as institutions worthy of more public aid.

In sum, approximately 30% of all American college students – disproportionately students of color and students from low income backgrounds – currently attend 2-year public colleges. Only 20% of them earn a degree.

C. Employer and Student Perceptions of College

Employers have little faith in the job readiness of college graduates.

For example, a 2015 study commissioned by the American Association of Colleges and Universities surveyed 400 large employers. The study asked employers to evaluate college graduates by specific skill and knowledge areas relevant to employment. The results were discouraging.

 

Hart Research Associates on behalf of the American Association of Colleges and Universities, Falling Short? College Learning & Career Success Hart Research Associates on behalf of the American Association of Colleges and Universities, Falling Short? College Learning & Career Success

 

Like employers, students are unsure of the worth and ROI of college. For example, a 2014 Noel-Levitz survey of approximately 600,000 college students found that nearly half of college students are not satisfied with their college experience.

 

Noel Levitz, LLC, National Student Satisfaction and Priorities Report Noel Levitz, LLC, National Student Satisfaction and Priorities Report

 

D. Conclusion

On the whole, college outcomes are hard to assess for lack of data and, where good data is available, are unimpressive or worse.

In the next blog and to conclude this blog series, I will strike a more optimistic and constructive chord. I will volunteer a forward-looking policy recommendation, one that calls for admitting new and alternative organizations into the college space. It is a policy suggestion that, in my view, is substantial and structural enough to address the trouble with college as I have described it in these past three blogs.





A Note on Sources: With three exceptions, the data in the charts and tables above come from the National Center for Education Statistics’ Digest of Education Statistics. The exceptions are as follows:

  1. Data on 4-year college graduation rates by income level and college type comes from The Pell Partnership, a 2014 report by EdTrust.
  2. Data on employer perceptions of college graduates’ readiness for the workplace comes from a study conducted by Hart Research Associates on behalf of the Association of American Colleges and Universities.
  3. Data on college student satisfaction comes from a 2014 Noel-Levitz study of college student satisfaction.


By submitting this form, you are granting: Big&Small, permission to email you. You may unsubscribe via the link found at the bottom of every email. (See our Email Privacy Policy (http://constantcontact.com/legal/privacy-statement) for details.) Emails are serviced by Constant Contact.

Sources List

Table 1 – Graduation Rate at 4-Year Colleges

http://nces.ed.gov/programs/digest/d15/tables/dt15_326.10.asp

Figure 2 – Graduation Rate at 4-Year Colleges by Race

http://nces.ed.gov/programs/digest/d15/tables/dt15_326.10.asp

Figure 3 – Graduation Rate at 4-Year Colleges by Income

http://nces.ed.gov/programs/digest/d14/tables/dt14_326.40.asp

Table 4 – 6-Year Graduation Rate at 4-Year Colleges by Income Level & College Type

https://edtrust.org/wp-content/uploads/2014/09/ThePellPartnership_EdTrust_2015.pdf

Figure 5 – Graduation Rate at 4-Year Colleges by College Type

http://nces.ed.gov/programs/digest/d15/tables/dt15_326.10.asp

Figure 6 – Graduation Rates: 2-Year v. 4-Year Colleges

http://nces.ed.gov/programs/digest/d15/tables/dt15_326.10.asp

http://nces.ed.gov/programs/digest/d15/tables/dt15_326.20.asp

Figure 7 – Graduation Rate at 2-Year Colleges by Race

http://nces.ed.gov/programs/digest/d15/tables/dt15_326.20.asp

Figure 8 – Graduation Rates at 2-Year Colleges by Income

http://nces.ed.gov/programs/digest/d14/tables/dt14_326.40.asp

Table 9 – Graduation Rate at 2-Year Colleges by College Type

http://nces.ed.gov/programs/digest/d15/tables/dt15_326.20.asp

Table 10 – Employer Perceptions of College Graduates Readiness for the Workplace

https://www.aacu.org/sites/default/files/files/LEAP/2015employerstudentsurvey.pdf

Figure 11 – College Student Satisfaction Survey Data

https://www.ruffalonl.com/documents/shared/Papers_and_Research/2014/2014_NationalStudentSatisfactionReport.pdf

College 101: Government Subsidies and College Price Inflation (Part 3 of 5)

Over the last 35 years, the price of attending college and the revenues collected by colleges have risen sharply. For example, college revenues have grown at 7% annually over the last three decades, a growth rate that has far out-paced wage growth in the US.  In 2013, college revenues were $600 billion (3% of U.S. GDP).

This staggering growth in college revenues is fueled by large public aid programs for higher education. College is one of the most subsidized goods in our society. Federal and state subsidies to colleges total approximately $200 billion annually. These large subsidies include public aid directly to colleges, as well as public aid to students (in the form of student grants, notably the Pell Grant, and in the form of government-backed college loans).

The main beneficiary of this public money is the college establishment (the existing universe of 3,200 institutions) since it has the sole right (given accreditation rules and related regulations) to collect tuition payments that rely on Pell grants, government subsidized college loans, and other forms of public financial aid.

From their sole position as eventual recipients of public aid for higher education, accredited colleges have raised their prices consistently and substantially for decades. Caught in this inflationary cycle (i.e. a cycle where the government increases aid and the college establishment raises price) are students and families who increasingly deplete household income and take out large loans to meet the ever-rising price of college. Another vulnerable party in this cycle is our government, which constantly issues college-related debt marked by hard-to-predict long-term default rates.


Other Posts in this Series


A. Rising College Revenues

Revenues of U.S. colleges have increased approximately tenfold since 1980 and now exceed $600 billion annually. Since 1980, college revenues have grown at a rate of 7% per year. College revenues currently constitute over 3% of U.S. GDP.

 

National Center for Education Statistics, Digest of Education Statistics National Center for Education Statistics, Digest of Education Statistics

 

Because the number of public colleges and private non-profit colleges has remained largely fixed over the past few decades (see earlier Part 2 of this blog series), revenues per college have soared in the same time period.

 

National Center for Education Statistics, Digest of Education Statistics National Center for Education Statistics, Digest of Education Statistics

 

Note: In 2013, the U.S. had 1,623 public colleges that educated 72% of U.S. college students, and 1,652 private non-profit colleges that educated 20% of U.S. college students. The remaining 8% of U.S. college students attended 1,451 private, for-profit colleges. With the exception of the creation of for-profit colleges – colleges which are now declining in number thanks to increased regulation and which account for just 8% of all college enrollment – the total number of colleges has remained essentially fixed since for the last 25 years.