the state of play in college access, affordability, and ......the state of play in college access,...
TRANSCRIPT
![Page 1: The State of Play in College Access, Affordability, and ......The State of Play in College Access, Affordability, and Completion Andrew P. Kelly Director, Center on Higher Education](https://reader033.vdocuments.site/reader033/viewer/2022060902/609eca02e252aa27365d618f/html5/thumbnails/1.jpg)
The State of Play in College Access, Affordability, and Completion
Andrew P. KellyDirector, Center on Higher Education Reform
American Enterprise InstituteMay 26, 2016
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The Context
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Two-year
Four-year
Source: NCES Condition of Education, 2015.
Total Undergraduate Fall Enrollment in Degree-Granting Institutions
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The Context
Source: Urban Institute.
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Percent Change in State Spending Per FTE, 2000-2014(Inflation-Adjusted)
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The Context
Source: Urban Institute.
-24%
-60%
-40%
-20%
0%
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40%
60%
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Percent Change in State Spending Per FTE, 2000-2014(Inflation-Adjusted)
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The Context
Urban Institute, “Financing Public Higher Education,” 2015.
-20%
-60%
-40%
-20%
0%
20%
40%
60%
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Percent Change in State Spending Per FTE, 2000-2014(Inflation-Adjusted)
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The Context
44%
52%
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Percent Change in Four-Year Tuition Prices, 2004-2014(In-State, Adjusted for Inflation)
Urban Institute, “Financing Public Higher Education,” 2015.
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The Context
$0.000
$0.200
$0.400
$0.600
$0.800
$1.000
$1.200
$1.400 Total Student Loan Debt, 2003-2015(Unadjusted)
New York Fed, “Quarterly Report on Household Debt and Credit,” Feb. 2016. 341/492
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$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Student Debt Per Capita, 2003-2015(Unadjusted)
NC United States
The Context
New York Fed, “State Level Household Debt Statistics 2003-2016,” Feb. 2016.
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The ContextCompletion rates decline slightly.
2007 Cohort 2008 CohortCompleted (6 years) 56.1% 55.0%Dropped Out 28.6% 30.3%
National Student Clearinghouse, 2016.
(More degrees, but lower productivity.)
2007 Cohort 2008 Cohort 2009 Cohort
Completed (6 years) 56.1% 55.0% 52.9%
Stopped-Out 28.6% 30.3% 33.0%
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The ContextRepayment Problems
Five-year Cohort Default Rates By Institution Type
1999 2009
2-year Public 24% 38%
For-profit 29% 47%
Non-Selective 4-year 19% 27%
Selective 4-year 8% 10%
Two-year Negative Amortization Rates By Institution Type
2002 2012
2-year Public 37% 64%
For-profit 44% 74%
Non-Selective 37% 59%
Selective 25% 36%
Source: Looney and Yannelis, “A Crisis in Student Loans?, 2015. 344/492
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A Defining Middle Class Issue
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Problem Definition
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Two Student Debt Stories1. Conventional wisdom: growth in aggregate
debt and individual debt loads are the problems to be solved.– Solution: Free college.– Solution: Loan refinancing.– Solution: Loan forgiveness.
Focused on cost-shifting, not cost reduction. 347/492
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Two Student Debt Stories2. Alternative view: student debt struggles reflect
low rates of student success and high costs.– Solution: Improve academic preparation.– Solution: Inform consumers about their options.– Solution: Incentives for institutional
improvement and cost containment.
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Evidence for the Alternative
Meta Brown et al., “Looking at Student Loan Defaults through a Larger Window,” 2015.
College completion is the primary predictor of student loan default.
The highest default rates are on the lowest balances.
3-4% of borrowers have balance of $100k or higher.
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Small Balances Cause Big Problems
Average Outstanding Balance, In Thousands
Rohit Chopra, “A Closer Look at the Trillion,” 2013.
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Debt, No Degree is Growing
63%11%
26%
Borrowers in BPS 1995-2001
Attained
No degree, Stillenrolled
No degree,dropped out
54%
16%
30%
Borrowers in BPS 2003-2009
46 percent of borrowers had not completed six years later.
Author’s calculations, Beginning Postsecondary Students, NCES.
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Stocks Versus Flows
VS
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Stocks Versus Flows
Cleveland Fed Study: • Outstanding balances have grown 280% since 2005,
but average payment up 50% during same period. – 50% of borrowers have monthly payments of $203 or
lower; 25% have payments between $203 and $400. • Bottom Line: “… the increase in earnings from going
to college more than offsets the cost of student loan payments for most borrowers.”
VS
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Student Debt & Home Ownership
Dynarski, 2016.
“What divides the haves and have-nots is not student debt. It’s having a college education.”
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Two Student Debt Stories
• The Red Herring: debt balances and tuition prices are the problem to be solved.– Solution: mechanically lower tuition and debt loads.– Cost-shifting: leaves incentives and cost structures
untouched.
• The Real Problem: low rates of student success and inflated costs = low value programs.– Solution: incentives for institutional improvement,
cost containment, and student success.
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Two Student Debt Stories
• The Red Herring: debt balances and prices are the problem to be solved.– Solution: mechanically lower tuition and debt loads.– Cost-shifting; leaves incentives and cost structures
untouched.
• The Real Problem: low rates of student success and inflated costs = low value programs.– Solution: create incentives for institutional
improvement, cost containment, and informed choices.
Real Problem focuses us on improving value, not just lowering price.356/492
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UNC a Leader on Completion Rates
63.0
54.8
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Six-Year Completion Rates(Four-year Colleges)
North Carolina Publics (4-yr)
National Publics (4-yr)
Southern Publics (4-yr)
Author’s calculations, Integrated Postsecondary Education Data System (IPEDS).357/492
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A Leader in State Funding Per Student
$10,923
$7,568
$6,016
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Funding Per FTE, 2000-2014(2015 Dollars)
North Carolina
Tennessee
Georgia
Alabama
United States
Kentucky
Virginia
South Carolina
Urban Institute, “Financing Public Higher Education,” 2015.358/492
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Comparatively Low Tuition
$6,677
$9,139
$11,449
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
2004-05 2009-10 2014-15
In-State Tuition and Fees, Four-Year Colleges(2015 Dollars)
North Carolina
Georgia
Alabama
Kentucky
Tennessee
Virginia
United States
South Carolina
Urban Institute, “Financing Public Higher Education,” 2015.359/492
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Attainment is Average
20.0
25.0
30.0
35.0
40.0
45.0
50.0
2006 2007 2008 2009 2010 2011 2012 2013 2014
Bachelor's Degree Attainment Rate, 2006-2014American Community Survey
North Carolina
United States
Massachusetts
New York
Florida
US Census Bureau: American Community Survey, 2015.
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Cost Per Degree is Above Average
State 2000 2005 2010 2011 2012 2013
NC
Rank
$75,450
42nd
$78,880
43rd
$75,740
41st
$73,760
39th
$67,740
31st
$69,400
35th
US Avg. $68,450 $65,360
$68,640
$66,790
$64,510
$64,740
Delta Cost Project: Education and Related Expenses Per Degree(2013 Dollars)
Delta Cost Project Database, 2000-2013. 361/492
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Statewide: Economic Mobility Rates Are Low
Chetty et. al, “The Geography of Upward Mobility,” 2014. 362/492
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Chetty et. al, “The Geography of Upward Mobility,” 2014. 363/492
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Higher Ed is a Mobility Enhancer
47%
26%
16%
8%
3%
10%
37%
26%
17%
9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Bottom Second Middle Fourth Top
Adult Quintile by Childhood Quintile and Education(Born in Bottom Quintile)
No Degree
Degree
The Pew Charitable Trusts, “Pursuing the American Dream,” 2012.364/492
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Lessons
• Institutions matter.• Information matters.• Institutions can improve and expand… but it
requires organizational change.• Incentives matter.
The question: How can states drive reform?
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Lesson: Institutions Matter
Author’s calculations, U.S. Department of Education, “College Scorecard.”366/492
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Lesson: Institutions Matter
Recent research shows that institutional choice has significant effect on likelihood of completion.
What goes on in the “black box?”
William G. Bowen, Matthew M. Chingos, Michael S. McPherson, Crossing the Finish Line, 2011. Joshua Goodman and Sarah Cohodes, “First Degree Earns: The Impact of College Quality on College Completion Rates,” 2012.Joshua Goodman, Michael Hurwitz, Jonathan Smith, “College Access, Initial College Choice and Degree Completion,” 2015.
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Lesson: Information Matters
Students respond to inexpensive informational interventions.
How much can information move the needle?
How do we increase the number of quality seats?
Caroline Hoxby and Sarah Turner, “Expanding College Opportunities,” 2013. Benjamin L. Castleman and Lindsay C. Page, Summer Melt, 2014.Gregory Walton and Geoffrey Cohen, “A Brief Social Belonging Intervention,” Science, 2011.
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Lesson: Institutions Can Improve and Expand
Some colleges have made marked improvements in student success rates and/or capacity.
Common themes: data and predictive analytics, proactive advising and services, remediation reform.
What interventions are highest-leverage?
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Organizational Change is Key“Research on organizational effectiveness and improvement strongly indicates that to achieve large improvements in student outcomes, piecemeal changes will not suffice. Rather than trying to bring to scale discrete “best practices,” colleges and universities need to redesign their policies, programs, and services at scale.”
Davis Jenkins,Community College Research Center
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What Role for Technology?
Andrew P. Kelly, “Disruptor, Distracter, or What? A Policymaker’s Guide to MOOCs,” Bellwether Education Partners, 2014.
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Lesson: Incentives Matter
Grants tied to academic incentives increase credit accumulation, grade point averages, and possibly completion rates.
“Finish in Four” programs
What does this mean for federal and state grant programs?
MDRC, “Performance-based Scholarships: What Have We Learned?”, 2013.
Judy Scott-Clayton, “On Money and Motivation,” Journal of Human Resources, 2011.
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How Are States Driving Reform?
• Attainment goals and strategic plans.
• Outcomes-based funding.
• Guided pathways.
• Data and transparency.
• New educational models.
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Attainment Goals & Strategic Plans
• Tennessee: “Drive to 55”
• Texas: Closing the Gaps 2015 (2000); Now: 60x30TX
• Colorado Competes
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States: Outcomes-Based Funding
HCM Strategists: more than 2/3 of states are developing or implementing OBF.
Source: Martha Snyder, 2014.375/492
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Outcomes-Based Funding Examples• Tennessee:
– Complete College TN Act (“Drive to 55”).– 85% of state funding tied to outcomes. – Formulas differ by institution type, and low-
income students weighted more heavily.
• Texas State Technical College System: – “Returned Value” Formula: Institutions funded
based on labor market outcome of graduates.– Formula based on the gap between earnings of
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Does Outcomes-Based Funding “Work?”
• Hillman and Tandberg (2013): very little effect on degree completions.
• Kelchen and Stedrak (2016): colleges subject to PBF receive less per-student Pell revenue, suggesting increased selectivity in response to policy.
• BUT: design of OBF is not consistent across states or time periods (early models weaker).
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Design of OBF Varies Dramatically
Very different policies likely to have different impacts.
Source: Martha Snyder, 2014.
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States: Transparency and Data• 27 States link postsecondary data and wage
information (up from 14 in 2011).
• But few report labor market outcomes at program level: CO, TX, TN, VA, AR, MO, MN, FL, CA.
• Less common: Costs, productivity, & remediation
• Student learning is rare.
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New Models and Credentials
• Competency-based education:– Western Governors University, College for America,
UW Flex, Northern Arizona.
• Microcredentials/stackables: – Stackable certificates.– “University Learning Store.”
• MOOC for credit:– Georgia Tech-Udacity.– ASU Global Freshman Academy.
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What’s Happening Outside of Traditional Higher Education?
• MOOCs: what now?
• Boot camps.
• Bridge programs.
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New Financing Models
• Income-share Agreements.
• Employer partnerships.
• New lenders.
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How Should We Measure Success?
• Paper credentials?
• Student learning?
• Labor market outcomes?
• Cost-effectiveness?
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How Do We Avoid Unintended Consequences?
Beware Campbell’s Law.
Both strategies are easier than organizational change;but they work against increasing educational attainment.
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How Do We Change Cost Structures?
Layering adds fixed costs; reallocating and replacing frees up resources.
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What to Do About College Readiness?
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Unresolved Questions:Where Will Federal Policy Go?
• Free public option?
• Lower barriers to entry and expand choice?
• All of the above?
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