Tag: colleges

GAO Confirms: It Did Nothing Wrong, and It’s None of Your Business

Today, the Government Accountability Office (GAO) confirmed what we already knew it would confirm: According to its own investigation, errors were made in producing a report highly damaging to for-profit colleges, but no one had any bad intentions and the report still stands. Well, the significantly revised report – the one much more favorable to for-profits schools that got almost no attention because GAO sneaked it out – still stands. And please, don’t try to hold the GAO accountable yourself: The GAO’s press release states that the report on its internal investigation will not be publicly released.

Now, it’s quite possible that the GAO investigation on for-profit colleges really was on the up-and-up and there truly isn’t anything to see here. But given the very basic things that the GAO, um, overlooked in its initial report – not to mention the fact that the GAO works for the public – it’s simply not acceptable to tell the public that it’s none of its beeswax what the GAO’s internal investigation found. And really, why should anyone be satisfied with a government agency declaring itself its own judge and jury?

Ending Title IX Survey a “No-Brainer”?

When kids want to know if other kids want to play a game they just ask, “Hey, wanna play?”

Apparently, that kind of straightforward interest assessment won’t cut it with the Obama administration, which today announced that it is eliminating the option for schools to survey women about their desires to play intercollegiate sports in order to comply with Title IX.  The only safe way for schools to comply with the law, as a result, will be to have men and women participate in athletics in almost perfect proportion to their share of total enrollment, and without regard to how potentially disproportionate their desires to play.

In announcing the logic-leaping change, Vice President Biden said it was a “no-brainer.” That’s true, but not in the way Biden intended.

The main problem, though, almost certainly isn’t that Title IX supporters can’t see how obvious and straightforward a survey is for assessing interest in playing sports.  The main problem is likely that many supporters don’t actually want women to be able to express their interest, lest its relative paucity be revealed. And, a survey would almost certainly show a big interest gap, as evidenced by three to four times as many men playing college intramural sports, or men flocking to sports sites on the internet while women clearly prefer social networking.

Of course, the fairest way to judge women’s interest in intercollegiate athletics isn’t a survey – which can’t easily capture intensity of interest – but letting women reveal their preferences by freely choosing between schools that offer lots of athletic opportunities and schools that don’t.  And don’t say that that wouldn’t work because women would be systematically barred from the playing fields: Constituting nearly 57 percent of enrollment at four-year schools, colleges have huge incentives to offer women what they want.  Which seems, sadly, to be exactly what Title IX supporters are afraid of.

Obama Ringing the Pell

As part of his ill-considered credentialing-to-compete initiative, President Obama wants to greatly increase both the size and availablity of Pell Grants. Under his proposed FY 2011 budget, the total pot of Pell aid would rise from $28.2 billion in 2009 to $34.8 billion in 2011; the maximum award would go from $5,350 to $5,710; and the number of students served would rise by around 1 million.  

A critical question, of course, is whether increasing Pell will ultimately make college more affordable or self-defeatingly fuel further tuition inflation. The New York Times took that up in yesterday’s Room for Debate blog.

Economist Richard Vedder has long educated people about the inflationary effect of student aid, and does so again with great clarity. It’s higher-ed analyst Art Hauptman, however, whom I think best captures what likely occurs when Pell is combined with all the cheap loans and other aid furnished by Washington, states, and schools themselves:

The degree to which student aid affects what colleges and universities charge varies between the Pell Grant and student loans. The Pell Grant has not had much effect on tuition levels in part because the amount of the awards does not vary with where a student enrolls. Institutions cannot affect how much a student receives, and the institutions that charge the most enroll the fewest Pell Grant recipients.

By contrast…there are several good reasons to believe that student loans have been a factor in the rising cost of a college education. Tuition has increased by twice the inflation rate for the past three decades while annual loan volume has increased tenfold in constant dollars.

Unlike Pell Grants…colleges have some control over how much students borrow as loan amounts. Moreover, just as one couldn’t imagine house prices being as high as they now are if mortgage financing were not available, it is difficult to believe that colleges and universities could have increased their charges so rapidly over time without the ready availability of students’ ability to borrow.

[W]e should worry…that increases in Pell Grants may lead institutions to reduce the amount of discounts they would otherwise have provided to the recipients, who are from poor families, and move the aid these students would have received to others. This possibility…is supported by the data showing that public and private institutions are now more likely to provide more aid to more middle-income students than low-income students.

So what’s likely going on? Cheap federal loans – which are available to students of all income levels and vary according to a college’s price – are probably the main direct tuition inflator. More indirectly, Pell probably encourages schools to move other aid from poorer to wealthier students, enabling the latter to pay ever-higher “sticker” prices. In other words, student aid powers tuition inflation!

Which brings me to a quick comment about the submission from College Board economist Sandy Baum, who trots out the standard “declining state appropriations”  to explain our college-price pain.

How many more times do I need to disprove this? Apparently, at least once more:

(Source: State Higher Education Executive Officers)

Public funding is a roller coaster and tuition revenue an incline. Over the last quarter century, per-pupil state and local funding for public colleges and universities went up and down, but dropped overall by a mere $8 per year. In contrast, public colleges’ per-pupil revenue from tuition (net of state and local student aid) rose more or less unabated, growing by about $73 per year. 

This – as well as the fact that private colleges are also guilty of huge price inflation – clearly belies the notion that colleges raise prices because skinflinty governments make them. That might be part of the explanation, but an even bigger part is almost certainly that colleges raise prices because, thanks to ever-growing student aid, they can.

College Prices Aren’t So Bad When Other People Are Paying

Today the College Board – maker of such fine products as the SAT and Advanced Placement exams – released its annual reports on college prices and student aid. College prices, it seems, have gone up significantly over the last year. However, if the following statement from the reports’ author, economist Sandy Baum, is accurate – I haven’t been able to see the reports myself yet – student aid largely offset the price increases. And do you know what that might mean? Colleges were able to charge students more without greatly affecting access by pawning much of the new charges off on donors and taxpayers:

Sandy Baum, the College Board senior policy analyst who wrote both reports, said it was important to focus on the net price students actually paid, after subtracting grants and tax benefits, rather than the published tuition, or sticker price. And in that regard, Ms. Baum said, the situation looks far less dire. “Over all, it could have been worse,” she said.

So could it actually be, as I and others have argued repeatedly, that student aid helps fuel tuition increases by having third parties cover so much of the new costs? Here’s yet more evidence saying that yes, it could.

FTC to Protect Us from Multi-Colored Beer Cans

bud lightRecently Anheuser-Busch  hit upon the marketing idea of selling Bud Light beer in cans decorated with the college-team colors.  As the Federal Trade Commission (FTC) doesn’t have much else to do - it’s not like there’s been say fraud going on in the mortgage market - it quickly turned its attention to the issue, expressing “grave concern” that these team-colored cans would encourage underage and binge drinking.

As quoted in the Wall Street Journal,  FTC attorney Janet Evans said “this does not appear to be responsible activity.”  What’s not responsible is the FTC wasting taxpayer resources wondering what color beer cans we are drinking out of.  When I was an underage drinker, the last thing on my mind was the color of the can.  The ultimate purpose of the marketing campaign is to shift demand away from boring, non-team color beer cans toward team color cans.  If beer drinkers (or can collectors) get some pleasure out of a certain colored can, where’s the fraud or deception in that?

The real purpose of FTC’s interest is revealed in the comments of the Licensing Resource Group, which represents the colleges in protecting their logos.  Almost all the colleges that have asked Anheuser-Busch to stop selling the cans have cited trademark concerns.  Yet none of the cans have any team logos.  While no one would dispute the right of a college to control the use of its team logo, is it really reasonable to conclude that the colleges also own the rights to the use of certain colors?

Don’t Fear the Freedom, Higher Ed!

It’s not often that I can transition from my education beat to other hot topics, but an Inside Higher Ed story on colleges’ health-care benefits includes this little nugget:

One trend documented in the survey that may concern many employees is the increase in “consumer driven” health insurance plans by colleges. These typically involve employees setting up tax-free accounts to pay for some care, and then high deductibles for major medical expenses. This year, 17 percent of colleges were offering the plans, up from 11 percent two years ago.

So what’s so terrible about “consumer driven” health care, which from the article sounds like health savings accounts ? The story doesn’t say – nor does it give any details on who puts the money into the accounts or other minimally useful info – it just suggests that employees should be a little scared of controlling their own health care funds. 

Unfortunately, this kind of reflexive fear of markets and freedom is a hallmark of both education and health care debates, so this thoughtless little passage hardly comes as a surprise. But I want to help Inside Higher Ed: If you folks want to be informed next time you cover health care, give these guys a call. They’ll be more than happy to help you, just as I am with all of your education-related needs!

Operators, as they say, are standing by…

How’d That Get in Here?

Understandably, the public is a little preoccupied right now with efforts in Washington to “reform” health care by making it much, much worse. Fortunately, people are starting to notice that a congressional bum rush is heading right toward them — maybe they’ll be able stop it in time. Unfortunately, that is giving Washington a chance to sneak some other stuff by us.

In particular, I’m thinking of the just-introduced Student Aid and Fiscal Responsibility Act. It’s been largely ignored so far, save a little chatter about the community college stuff it incorporates. In a simpler time, it would have generated a lot more copy. After all, it will:

  • end federally backed student loans that come through private companies, and instead make Uncle Sam the universal lender;
  • greatly increase Pell Grants and peg their growth to the rate of inflation plus 1 point;
  • balloon the federal Perkins loan program;
  • authorize $5 billion over two years for elementary and secondary school facility projects, with a focus on “green” efforts;
  • authorize $10 billion over ten years for Early Learning Challenge Grants; and
  • furnish $12 billion for community colleges.

Not all of this, I should say, is terrible. Getting rid of the Federal Family Education Loan Program — which backs loans coming from ostensibly private companies and guarantees lenders a profit — is a good thing. But replacing it all with loans directly from D.C.? That’s a bad thing.

To be fair, transitioning from guaranteed to direct lending could save some money, especially in the short run, eliminating various fees and guarantees Washington pays to lenders under FFEL. But those savings almost certainly won’t be the $87 billion over ten years supporters claim, a number that is no doubt overstated as a result of budget chicanery and how quickly government grows. And don’t expect taxpayers to benefit from whatever savings are ultimately generated. According to the proud declaration of SAFRA sponsor George Miller (D-CA), only $10 billion of the projected $87 billion savings is slated for deficit reduction. The rest — breathtaking deficit be damned! — is going to standard, feel-good government spending, including school “modernization” projects and “early learning” grants

Which brings me to the community college components, which have, unlike the rest of the bill, been getting some media play. I wrote about them earlier this week, noting especially that they make little sense in light of Bureau of Labor Statistics numbers showing that positions requiring on-the-job training will grow in much greater numbers than jobs requiring at least an associate’s degree. What I didn’t mention was the dismal performance of community college students, who take remedial courses in droves and complete their programs at very low rates.

Ah, but we’re told that this new legislation, backed wholeheartedly by the Obama administration, is going to reform community colleges. As David Brooks celebrates in his column today:

The Obama initiative is designed to go right at these deeper problems. It sets up a significant innovation fund, which, if administered properly, could set in motion a spiral of change. It has specific provisions for remedial education, outcome tracking and online education. It links public sector training with specific private sector employers.

Now, I thought Brooks was supposed to be a seasoned political observer, but he seems to have swallowed the reform-y rhetoric hook, line, and sinker. He’s seasoned enough, though, to give himself an out with the qualifier, “if administered properly.”

He’s gonna’ need that out, though the reform failure probably won’t be primarily administrative; the legislation itself offers gaping holes through which schools can escape real reform. To get “innovation” grants, schools would simply have to agree to do such nebulous, input-centric things as provide “student support services” and implement “other innovative programs.” In other words, they’d need do nothing meaningful at all.

Unfortunately, this bill will probably become law. Few politicians or interest groups are standing firmly against it, and with health care storming the public’s front door, few people will notice SAFRA tiptoeing through the back. Combine that with the few people who are writing about the bill giving it little critical thought, and its passage seems assured.