Monday, April 21, 2014

The UC Admissions Bait and Switch

The UC has published its 2014 admissions’ statistics, and while the system is still required to admit all qualified students from California, a secret tactic is being used to make sure that it increases the number of high-paying non-resident and international students.  What the UC is doing is admitting students from California, but not offering them places at the campuses of their choice.  Simply put, students are applying to Berkeley and UCLA, but they are being admitted to Merced and Riverside. 

Looking at the latest statistics, we see that Berkeley accepted 8,391 students from California, 3,071 from out of state, and 1,333 international students.  Likewise, UCLA accepted 9,128 from California, 4,095 from out of state, and 2,537 international students.  So out of the 28,555 students accepted by both campuses, 11,036 are not from California.  These students (39% of the total admittees) each pay $23,000 exrtra for tuition, and they do not receive financial aid. Of course, not all of these students will accept their admission offers, but if all of them did, the two campuses would bring in an additional $254 million. 

If we now look at Merced, we find that 9,313 were accepted from California, and 152 from out of state, and 315 are international students. In the case of Riverside, we get 17,758 from California, 649 from out of state, and 1,390 are international. This means that out of the 27,071 admits from both campuses, 2,506 are not from California, which is 9%, for a total extra revenue of $57 million. In other words, the two elite campuses admitted almost the same amount of students as the two non-elite campuses, but the elites will get about $200 million more in tuition revenue.

Although the UC system is supposed to be correcting the historic inequality between the campuses, it is clear that this is not happening.  Meanwhile, the UC knows that many students who do not get their top choice and are offered admissions at Merced or Riverside will decide to go elsewhere.  Furthermore, the ability of UCLA and Berkeley to be more selective helps to raise their school rankings, which then perpetuates the disparities, since students do not want to go to a lower ranked school. 

Tuesday, April 15, 2014

Congress Recycles Higher Ed Myths

Currently, the US Senate Committee on Health, Education, Labor, and Pensions is holding a series of hearings in anticipation of the reauthorization of the Higher Education Act.  The main underlying theme appears to be that the Democrats want to regulate the for-profit colleges and do something about student debt, while the Republicans would like to deregulate higher education and help the “free market” expand its reaches into public higher education.  In a recent hearing on student debt, this polarized discourse was mediated by a bipartisan set of misconceptions regarding the costs of higher education. 

During his opening statement, ranking Republican member, Lamar Alexander set the stage by arguing that since the average cost for community college was about $3,000 and students receive over $4,000 in aid, some of the money must be going to other things.  In fact, Alexander’s own press release entitled, "College More Affordable than Most Students Think,” argues that, “The average community college student in America is receiving about $1,500 more in grants and scholarships than it costs in tuition and fees” The problem with Alexander’s argument is that he fails to take into account the total cost of education (tuition, fees, room, board, books, and living expenses), and so he can pretend that there is no reason for students to borrow, and if they are borrowing, it is for personal pleasure.

According to Alexander, “An Inspector General’s report from the U.S. Department of Education warns that some students borrow excessively for personal expenses not related to their education.”  However, it is clear that students need a place to live and they have to buy books for their classes, and so these non-educational expenses are actually the main cause for student debt.  The US Department of Education reports that the total annual cost of attendance for a full-time community college student is  $13,237, so if students are receiving on average $4,500 in grant funding, they are still on the hook for close to $9,000 per year. 

Apparently, not only Alexander fails to understand the difference between the cost of tuition and the total cost of attendance, but also James W. Runcie , Chief Operating Officer of Federal Student Aid of the Department of Education, does not understand why students borrow money to go to college.  In response to Alexander’s question about why students are taking out more money than they need, Runcie, (at minute 50) simply says that this is a concern, and the department is looking into possible cases of fraud or abuse.  The underlying message Alexander and others are circulating is college students are going into debt because they are borrowing money to spend on leisure items like fancy cars and clothing. 

This failure to understand the true cost of attending college is also shaping several recent proposals to make community college freeto students in Tennessee, Mississippi, and Oregon.  All of these states are only discussing making tuition free, but most lower- and lower-middle-income students already have their tuition covered by state and federal grants.  This means that only upper-income students will receive the new break, and these tuition-free programs may end up cutting additional funding to the non-wealthy students who need aid to pay for the non-tuition aspects of the total cost of attendance.   Once again, a progressive sounding policy turns out to be welfare for the wealthy as the non-wealthy continue to get stuck with the bill. 

Tuesday, April 1, 2014

Subprime Higher Ed and Washington DC

Like everything else in our nation’s Capitol, higher education has become a deeply polarized issue.  Although the Higher Education Act is supposed to be re-authorized this year, no one thinks that it will get done.  On one side, you have the Republicans in the House who are upset with the Obama administration’s efforts to regulate high-debt, low-peforming for-profit schools, and on the other side, you have some progressive Democrats trying to find ways to reduce and refinance student debt.  While technology is no longer being presented as the solution to all problems, there is little discussion of a comprehensive plan to help higher education.  In fact, most politicians argue that we still have the best system in the world, so all we need to do is just improve access for some excluded groups.

On a more positive note, the United States Student Association’s legislative conference did show that students are very concerned about student debt and the fact that students are paying more and getting less.  There is a new coalition (Higher Ed, Not Debt) that has been formed around the student debt issue, and it has brought together several important groups and progressive political leaders, like Senator Elizabeth Warren.  I am hoping to work with this campaign to tie the issues of student debt, contingent faculty, instructional quality, and higher ed funding together.

When people ask me why I think anything might change for the better in higher education, I argue that the student debt issue threatens to affect so many individuals and families that something will have to be done regarding how we fund and regulate universities and colleges.  As Suzanne Mettler stresses in her book Degrees of Inequality, much of this debt is being driven by the rise of for-profit schools who have used their profits to capture Washington regulators and politicians.  These schools now take in collectively a quarter of all Pell grant funding and a large part of the current GI bill. At some point, the failure of profit-colleges to graduate students could push the government to re-invest in public higher education.

Of course the irony of the for-profits is that many of them receive more than 90% of their funding from the federal government; thus instead of being the free market alternative to public higher ed, these institutions embody the rise of corporate welfare within the context of the fall of public welfare.  Mettler documents how the Obama administration’s attempts to regulate this industry has been countered by not only the free market evangelists of the Republic party but also progressive Democrats who believe that for-profits are the only schools catering to low-income African-American and Latino students.  Like the bipartisan push for subprime loans to minority populations, this cashing in on the poor is a bi-partisan affair: the liberals want to do something for disadvantaged people, and the conservatives want to support the corporations seeking to turn public money into private profits.  Let’s hope that when the student loan bubble bursts, the Fed will bail out the students and not the banks.