Category Archives: Education (higher ed)

Gillespie’s Platform for Higher Ed: Tinkering Aggressively on the Margins

Ed Gillespie, policy wonk

If Republican candidate Ed Gillespie gets elected governor in November, there won’t be any question about what he intends to accomplish as governor. He has published 14 public policy positions on topics ranging from taxes and public safety to K-12 education and sea-level rise. I don’t recall any gubernatorial candidate ever digging this deep into the public-policy weeds before. Love him or loathe him, you can’t criticize the man for avoiding specifics.

The latest salvo describes Gillespie’s plans for higher education designed to make Virginia “the opportunity capital.” He outlines three initiatives: a business-education partnership focused on workforce development and retention; one to make colleges and universities more affordable and accessible; and one to empower students and parents as consumers.

“In order for Virginia to truly grow, we need higher education to be more than just a degree manufacturer; we need higher education to contribute to economic growth and job creation and to help our students to pursue their dreams and add to the fabric of our Commonwealth,” said Gillespie in a press release accompanying the plan. “To realize our full potential, we must first ensure that higher education is affordable. With common sense reforms, strong partnerships and clear direction, our higher education institutions will thrive.”

There is so much material to cover that I can’t do it justice in a single post. I will focus on the most pressing set of issues, affordability. If I have time, I will address the other initiatives in future posts.

Within the mega-initiative of cost, affordability and access, Gillespie proposes six sub-initiatives:

Results-focused funding. Gillespie proposes revamping the criteria for funding public higher-ed institutions in Virginia. He would base state support “more on the individual performance of the institutions, with emphasis on results that matter to students and the Commonwealth.” Building on the six-year planning process refined under the Top Jobs Act, the state and individual colleges should agree upon performance objectives and metrics and corresponding support from the Commonwealth.

Metrics should address results that matter most to students, including enrollment, graduation rates, job placement success and earnings expectations, internships and student work opportunities, net cost to students after financial assistance, research and commercialization, and contributions to economic development.

The idea of using metrics to gauge the progress of Virginia’s public colleges and universities dates back to the 2005 Restructuring Act, and has evolved over the years. Small sums of money were tied to achievement of the goals. Gillespie’s new wrinkle appears to be making more funding than before contingent upon achieving the goals, although that is not clear. The challenge, as I outlined in my recent series on the 2005 Restructuring Act, is to gain consensus on the metrics and to be willing to actually withhold funds for institutions that fall short.

Financial predictability. Make state funding more reliable and predictable. The volatility of state support — up in good years, down in bad years — makes it difficult for higher-ed institutions to plan. Gillespie supports the creation of a higher-education reserve fund to even out the fluctuations. “Virginia students and their families,” he says, “will benefit significantly if the four-year met cost of attending a Virginia higher education institution can be guaranteed.”

Net cost restraint. Gillespie recommends a variety of other measures to make college costs more affordable. He would increase financial aid and work-study opportunities for low- and middle-income families. He endorses income-sharing agreements (presumably to repay student loans, although that’s not clear) in which colleges and universities share the risk and reward of post-graduation earnings. He describes the idea of admitting more high-paying out-of-state students as an “under-utilized strategy.”

Affordable alternatives. Gillespie endorses  alternatives to the four-year residential campus experience by promoting online learning, community college transfer programs, dual high school/college enrollment — all of which exist or are in the works already. More controversially, he wants to explore “no frills degree programs that offer reduced fees in exchange for fewer amenities.”

Incentivized collaboration. To “bend the cost curve” of higher education, Gillespie wants more collaboration higher-ed institutions on “measures that reduce costs and improve outcomes for students,” such as bringing new technology to campus to improve both instruction and administration. He cites favorable the newly created Online Virginia Network (soon to be profiled by Bacon’s Rebellion), which will increase online course-sharing across institutions. He also favors creation of a revolving fund for technology acquisition.

Enhanced governance. To enhance governance at Virginia’s public institutions, Gillespie would convene a panel of former rectors, board of visitors members, colleges presidents, and political leaders to examine best governance practices. Among other ideas, he would direct the panel to examine extending board members’ terms from four years to five, and establish minimum credentials for board members, enhance board member training

Bacon’s bottom line: Gillespie is not calling for fundamental change in Virginia’s higher-ed system. Many of the ideas he proposes are already in effect or in the works. He has drawn heavily from former Governor Bob McDonnell’s bipartisan higher education commission, reflecting the thinking of the establishment business community. The most innovative idea is that of exploring the creation of “no-frills degree programs that offer lower fees in exchange for fewer amenities.” Interesting thought. He needs to flesh it out. Otherwise, I would describe his approach as tinkering aggressively on the margins.

Two things are refreshing about Gillespie’s approach. First, he does not call for lots of new spending — he wants to make the higher-ed system work better with the resources it has. The main avenue he has left open for increased spending is his call for a higher-ed reserve fund, but it’s not clear how that would work or how much new money would be put into it. Second, he clearly recognizes that affordability and access are priorities right now. While he does not say forthrightly that higher-ed is experiencing a “middle-class” affordability crisis now, he seems aware that affordability and access are not just issues for lower-income Virginians anymore.

The main failing of the Gillespie plan is that it fails to address the underlying costs of higher-ed inflation. While some portion of tuition increases can be attributed to declines in state funding for higher-ed, legislators can’t be blamed for skyrocketing student fees or the relentless increase in the cost of room and board. Two factors stand out: (a) administrative costs are out of control, and (2) the competition for students has spurred spending on luxurious “Club Ed” amenities that affluent families can afford but others cannot. Unless he’s willing to tackle those two tough issues, Gillespie is best seen as another in a long line of establishment candidates with establishment solutions.

What Happened to Institutional Racism?

Graphic credit: New York Times. Asians and Hispanics have made large percentage enrollment gains at UVa in concert with their dramatic population growth in the state, while white percentage has fallen. Black enrollment has declined from 10% to 7%.

Even after decades of affirmative action, the New York Times has found, black and Hispanic students are more underrepresented at the nation’s top colleges and universities than they were 35 years ago.

“The share of black freshmen at elite schools is virtually unchanged since 1980. Black students are just 6 percent of freshmen but 15 percent of college-age Americans,” writes a NY Times reporting team. “More Hispanics are attending elite schools, but the increase has not kept up with the huge growth of young Hispanics in the United States, so the gap between students and the college-age population has widened.”

Blacks and Hispanics have gained ground at less selective colleges and universities but not at the highly selective institutions, the article says. Whites are slightly more “over-represented” than they were, but Asians have scored the biggest gains. In effect, Asians are displacing blacks and Hispanics.

The numbers provide quite the quandary for the New York Times. If higher education were judged by the same criteria as the private sector, one might readily conclude that the statistical disparity in racial representation reflects evidence of discrimination. Yet higher-ed, one of the most liberal-minded institutions in the country, has made a fetish of multiculturalism and diversity and has aggressively recruited blacks and Hispanics.

In seeking an explanation for the seeming contradiction between noble words and ignoble performance, the Times has stumbled upon an interesting explanation:

Experts say that persistent underrepresentation often stems from equity issues that begin earlier.

Elementary and secondary schools with large numbers of black and Hispanic students are less likely to have experienced teachers, advanced courses, high-quality instructional materials and adequate facilities, according to the United State Department of Education’s Office for Civil Rights.

“There’s such a distinct disadvantage to begin with,” said David Hawkins, an executive director at the National Association for College Admission Counseling. “A cascading set of obstacles all seem to contribute to a diminished representation of minority students in highly selective colleges.”

I don’t recall such a charitable explanation ever being invoked to let private industry off the hook for racial employment gaps, which in their case are regarded as prima facie evidence racial discrimination. So, the article represents progress of a sort. But the Times still doesn’t get it quite right. To be sure, a lack of experienced teachers, advanced courses and adequate facilities may provide some of the explanation. But the phenomena of Asian over-performance and black and Hispanic under-performance applies is repeated over and over within the same school districts and even the same schools. The gap is sociological in origin.

National Review’s David French frames the issue this way:

The cohort that’s most overrepresented in American colleges and universities, Asian Americans, also happens to have the lowest percentage of nonmarital births in the United States. In fact, the greater the percentage of nonmarital births, the worse the educational outcomes. Only 16.4 percent of Asian and Pacific Islander children are born into nonmarried households. For white, Hispanic, and black Americans the percentages are 29.2, 53, and 70.6, respectively. Taken together, that means that staggering numbers of Hispanic and black children face a degree of family stress and uncertainty that their white and Asian peers simply don’t experience.

Compare children from married households, and most of the gap between Asians, Whites, blacks and Hispanics disappears. Not all of it, but most of it.

(Also part of the explanation is attitudinal differences between groups. For example, parents of Asian families are less likely to care about their children being “happy” or “popular,” or “finding themselves” than are their white socioeconomic peers. Consequently, they drive their children to excel academically. Asian-Americans tend to be more willing to defer present gratification for the future reward of attending an excellent college and pursuing a lucrative career.)

Academia has done much to perpetuate the idea that America is irredeemably racist, and that disparities in racial/ethnic representation are evidence of discrimination. I would love to hoist campus liberals on their own petard. “Hah! By your own criteria, you discriminate against minorities. You’re racist!” As tempting as it would be to take such a cheap shot, I refrain. College admissions officers can’t be held responsible for the fact that fewer black and Hispanics graduate from high school, just as high schools can’t be blamed for the fact that students from poor families and broken homes are less academically prepared by the time they reach 9th grade, and so on down the line.

The root causes of inequality are complex. It’s refreshing to see the New York Times implicitly acknowledge a piece of that reality.

(Hat tip: Reed Fawell.)

The Power of an Alumni Revolt

College alumni need to go from tummy-rub dog…

Virginia Tech unleashed a firestorm of alumni protest last year after it disinvited Jason Riley, a conservative African-American columnist with the Wall Street Journal. The university received numerous phone calls and more than 100 angry emails, recounts Jillian Kay Melchior in a WSJ op-ed piece today.

News of the dis-invitation, prompted by administrators buckling in to the campus forces of political correctness, reached millions of readers on Twitter, where the reactions were overwhelmingly negative toward the university and higher education in general.

“While we can respond to the people who write to us,” wrote one administrator, “we cannot dispel the negative impression created by the media against the president, the university, the dean, and the college and the department.”

… to guard dog.

Quailing again, this time from the public’s reaction, Virginia Tech subsequently reissued an invitation to Riley. But the university left the engagement off its campus event calendar and marketed only to alumni. Of the audience of about 125 who came to hear the black conservative, only three or four were students, reported the National Review this past April. Wrote the NR: Tech “was more concerned about its public image than about intellectual freedom, and eventually honored its invitation to Riley out of fear for its image and fundraising, not from principles of respect for its promises or for intellectual freedom.”

As I wrote last week (see “Virginia Tech on a Fund-Raising Tear“), Tech enjoyed a banner fund-raising year last year, collecting a record $160 million. If the university suffered any ill effects from its politically correct behavior, it wasn’t reflected in outside donations. But the Riley episode shows that alumni still can influence policy.

Nowhere has the blacklash against campus radicalism and PC run amok been more evident than the University of Missouri. As the WSJ notes, the response to campus unrest and intolerance in 2015 has been a 35% decline in freshman enrollment this year, and a massive falloff in attendance at football games. (I’ll bet donations were off, too.)

It baffles me that alumni open their wallets to their alma maters and ask so little in return. Give them a few tail-gating parties, reunion bashes, and alumni events, and most grads roll over like a dog begging for a belly rub. But it’s clear that alumni can have a tremendous impact if they choose to. Official alumni associations, which function as extensions of the development office, are worthless as mechanisms for resisting radicals. It’s time for outraged alumni to get organized. They need to attend Board of Visitor meetings, set up websites, monitor official communiques, collect and share intelligence, and act as a countervailing force to campus radicals.

Virginia Tech on a Fund-Raising Tear

Virginia Tech collected more than $162 million in donations and commitments in the last fiscal year, blowing through its previous record of $101.45 million. Almost 35,000 donors, up from 32,000 the previous year, gave money, reports the Roanoke Times. The money will help the Virginia Tech Foundation meet its goal of growing its endowment to $1.6 billion in the coming years. The endowment at the end of the fiscal year was $843 million.

“We asked our alumni and friends to help Virginia Tech have a bigger impact on the world. Their response makes it possible for us to grow as a global university, launch new programs, serve more students and communities, and create productive environments for learning and research,” Tech President Timothy Sands said in a written statement.

Bacon’s bottom line: I’m of mixed minds. On the one hand, state support is inconsistent. Given past history, Virginia Tech has every reason to fear future cuts. No one can blame the university for trying to buffer itself from budgetary vagaries. Further, I’ll say that Tech has done a better job than Virginia’s other research universities of restraining its tuition increases. I’m not sure how Tech did it, but the university has managed to grow its research base without shifting costs to students as sharply as peer institutions have done. Finally, plowing money into Tech augments its ability to function as an economic-development engine for Southwest Virginia.

On the other hand, building big, fat endowments shifts power within the university to the school administration by insulating the feudal empire of presidents, deans, deanlets, provosts, assistant provosts, and associate assistant provosts from market forces (collecting tuition from students), oversight (the General Assembly), and even the faculty. As Benjamin Ginsberg argues in his 2011 book, “The Fall of the Faculty,” big endowments free the administrative bureaucracy to pursue its own inward-looking agenda, which creates little value for anyone but the administrators themselves.

“Fund-raising represents a more attractive income source than tuition,” Ginsberg writes.

To administrators anxious to generate new revenues, an increased emphasis on fund-raising usually seems a far more attractive strategy than seeking additional tuition dollars. Fund-raising is almost entirely under the control of the administration and requires minimal, if any, faculty involvement. …

Today, thanks to schools’ major emphasis on development, gifts to colleges and universities total about 40 percent of their tuition income. … The larger the endowment, the greater the power and independence of the school’s administration. Perhaps this notion helps to explain why many schools — particularly the wealthiest — hoard the earnings from their endowments, reinvesting a large fraction of their annual endowment income so that their endowment and future income will grow.

I’m not suggesting that the critique necessarily applies to Virginia Tech, which has a relatively modest endowment — but it might. Ginsberg describes a behavioral trope common to the richest institutions that must be guarded against. College development officers are wizards at cultivating a sense of tribal loyalty among alumni (football, basketball, reunions, pageantry, rah! rah! sis-boom-bah!) and crafting sales pitches to maximize giving. Alumni are ripe for the picking, for they typically have no source of information other than what administrators spoon feed them.

A humble proposal: Someone should publish a “Virginia Tech Alumni Donor’s Guide” (and like publications for other institutions) which compiles a wide array of data regarding institutional performance. This series of guides would include data available through the State Council of Higher Education for Virginia (SCHEV) website and other sources documenting, just for starters, the history of tuition increases, student fees, student indebtedness, administrative staff ratios, faculty ratios (tenured-track versus instructors and adjunct faculty) and various financial indicators. One set of indicators would describe how the university is administering its endowment. What percentage of income is spent on programs, and what percentage is reinvested to grow the endowment?

Perhaps an organization such as Partners 4 Educational Excellence @ EDU,  a sponsor of this blog, would find value in such an exercise. Just a thought, guys!

Does Virginia Higher-Ed Discriminate against Asians?

The Students for Fair Admissions, an Arlington-based non-profit group, has made waves recently with its lawsuit charging that Harvard University discriminates against Asian-Americans in its admissions process.

The lawsuit asserts that the university administers what amounts to an illegal quota system, in which roughly the same percentage of African-Americans, Hispanics, whites and Asian-Americans are admitted year after year, despite fluctuations in application rates and qualification, reports the New York Times. Numerous academic studies have shown that Asian-Americans have to achieve significantly higher SAT scores than other groups to gain admission to many elite universities.

The controversy got me to thinking — do similar admissions biases exist at Virginia’s top universities? The University of Virginia, the College of William & Mary, and Virginia Tech aren’t as elite as the Ivy League schools, but they are highly regarded and they do recruit students nationally. Asian students in Virginia schools consistently out-perform other racial categories in Virginia high schools. Are they fairly represented or under-represented in Virginia’s top colleges?

That’s hard to say for sure. I can’t find any data online providing average SAT scores broken down by race for any of the three universities. (I conjecture that such data is suppressed precisely to avoid the kinds of accusations made by Students for Fair Admissions.)

But the institutions do provide a breakdown of enrollment by race and ethnicity. At the top of the post, you can view the 2016 enrollment numbers for Asian and Pacific-American students. The percentages at each institution are higher than the percentage of the Asian population in Virginia — 6.5% as of 2015 — as a whole.

But how do enrollments compare to the Asian percentage of college-bound students? According to the College Board, 5,389 college-bound students of Asian origin took the SAT exams in 2016, accounting for 9% of Virginia’s college-bound population. By that yardstick, W&M at 8.7% in-state Asian enrollment appears to have an under-represented Asian population, while UVa and Virginia Tech are comfortably above.

But the story doesn’t stop there. Asian-Americans out-perform other racial/ethnic groups academically. The average reading + math SAT score for Virginia Asian-Americans was 1,145 in 2016. That compared to 1,037 for all Virginia students. Colleges and universities consider factors other than SAT scores, of course, such as grades, student rank in high school, and extracurricular activities. All other things being equal, however, the superior SAT performance by Asians suggests that they should be represented at Virginia’s elite institutions in numbers greater than the percentage taking the SATs.

What numbers would represent a bias-free admission percentage for Asians? The data that I could find isn’t granular enough to make a firm judgment, although a scientific wild-ass guess suggests that UVa, where Asians account for 18.2% of in-state first-year students, is very receptive to Asian admissions, Virginia Tech (12.7) moderately receptive, and William & Mary (8.7%) bears a closer look.

That’s just a rough cut. It’s impossible to dig deeper without seeing the average SAT scores of Asians and other racial/ethnic groups admitted to each institution. Getting that data, I suspect, will be like prying teeth from a dragon.

A Town that Refuses to Die

The past twenty years have been unkind to Halifax County. The Southside Virginia locality has seen wave after wave of plant and business closures — some caused by the restructuring of the tobacco industry, others from globalization and the offshoring of traditional manufacturing industries. The dislocations have been so traumatic that Bloomberg writer Craig Torres used Halifax and the town of South Boston as a mini case study of the downside of the nation’s free trade orthodoxy.

Reflecting a common view, the Heritage Foundation wrote in 2000 that free trade would create “prosperity that benefits every citizen.” While it still is possible to argue that free trade has benefited Americans overall, the impact has been uneven. And hundreds of small-town communities across America like Halifax County were the losers. No wonder, suggests Torres, that Halifax County swung toward avowed protectionist Donald Trump.

Torres spends much of the article describing how economists have begun questioning free trade dogma. He also recounts how the Halifax-South Boston community has undertaken the hard work of reinventing itself, a process that, he says, “might be working.” The jobs gap has closed. Halifax now has 5.1% unemployment, down from nearly 13% — only a tad higher than the nationwide rate of 4.3%. (Torres doesn’t discuss how many people are under-employed or dropped out of the workforce.)

The Southern Virginia Higher Education Center provides a variety of degrees and certifications in partnership with Virginia colleges and universities.

Look at the chart above, taken from the Bloomberg article. The post-NAFTA era of the mid-1990s was devastating to employment in Halifax County. While the U.S. economy as a whole prospered during the Internet boom, unemployment in Halifax shot up to 14%. The county managed to recover to national unemployment levels but got hammered again when the 2001 recession overlapped with China’s entry into the World Trade Organization. But the delta this time between Halifax and U.S. unemployment was somewhat smaller than it had been five years previously. Halifax got slammed in the 2008 recession as well, but the unemployment delta shrank yet again. Today the employment gap has almost disappeared.

Is Halifax County the story of a mill town that has successfully reinvented itself? Writes Bloomberg:

Some manufacturers are still around, from sports-car maker TMI AutoTech Inc. to Swiss industrial giant ABB Ltd. Both received incentives after expanding investment and adding jobs, the county industrial development authority said. The companies’ long-term plans for the region might hinge on whether the local workforce has the right skills; so South Boston and the county turned two former tobacco warehouses into a higher education center, offering college courses and vocational training, from nursing to welding to IT. Technicians trained there are getting hired at Microsoft Corp.’s data center in a neighboring county.

Torres explores what the Halifax example portends for the free trade debate. But the story has implications for a parallel discussion here in Virginia — can Virginia’s mill towns be saved? Or is money spent on economic-development efforts throwing money down the drain?

The evidence of Halifax County is admittedly anecdotal, but it is encouraging. The old economy is gone. It’s hard to imagine that there is anything left for globalization to destroy. Halifax has undergone an economic transition more wrenching than anything that inhabitants of Virginia’s major metro areas could imagine. But the community has adapted. In my humble appraisal, the agglomeration economics of the Knowledge Economy still favor the nation’s big metros and work against communities like Halifax over the long run. But it’s too soon to write off Virginia’s mill towns.

A State-Sanctioned Debt Trap? Really?

Katie Otersen on the GMU campus. Photo credit: Washington Post.

When Katie Otersen transferred from Northern Virginia Community College to George Mason University last fall, tuition and fees totaled $11,300, more than double what she had paid before. Working at a salon, she struggled to pay her bills. Seeking to make a payment in May, she was shocked to learn that GMU had sent her account to a collection agency, which had tacked on a fee of 30 percent.

“I can’t argue or negotiate this. I’m just stuck paying almost $1,000 more,” Otersen told the Washington Post. “The fact that they charged me as a student who has been paying throughout the semester this 30 percent fee is disgusting.”

Otersen, says the Post, is one of thousands of Virginia students caught in a “state-sanctioned debt trap.” When students lack the money to pay their bills on time, they are penalized in a way that makes it harder to meet the obligation.

A Virginia statute requires public colleges and universities to hand over student accounts of less than $3,000 that are 60 days past due to private debt collectors. These companies can charge up to 30% of the outstanding balance as a fee. Past-due accounts of more than $3,00 are referred to the state attorney general’s office, which also pockets a 30% fee.

GMU often gives students five months and eight notices to make arrangements to settle their accounts. Unpaid debts, in most cases, are not referred to a collection agency until after the semester ends, said GMU spokesman Michael Sandler. “We can’t allow students to create their own payment plans. We are bound by state law and have an obligation to be responsible stewards of the taxpayers’ money.”

Bacon’s bottom line: The Post seems to think there is something wrong with charging the collection fees. States the article: “Those fees may be placing students with limited means at risk of falling behind in school and not graduating.”

Yeah, and people with limited means who fail to pay their rent are at risk of being evicted. And people with limited means who fail to pay their electric bill are at risk of getting their juice turned off. And people with limited means who fail to make their car payments are at risk of having their wheels repossessed. That’s the way it works.

Indeed, students are less worthy of sympathy than most. After all, they have the option to take out student loans, which, from what I gather, anyone and everyone qualifies for. I admire Ms. Otersen for working her way through college — something I never had to do — and I hope she earns a degree. But perhaps someone should have advised her to take out student loans, which she can repay at her leisure.

The affordability problem in higher ed doesn’t stem from outsourcing debt collections. It arises from runaway costs and reductions in state support. Virginia’s public universities warrant closer scrutiny for ever-escalating charges for high tuition, fees, room and board, but not for turning over bad debts to collection agencies, a standard practice in every industry. Just wait until Ms. Otersen discovers what happens when she’s late on her income tax payments!

UVa Board of Visitors Discusses Online Learning

Five years after the future of online learning played an important role in the drama over University of Virginia President Teresa Sullivan resignation and reinstatement, the UVa Board of Trustees is making cautious moves to increase the university’s commitment to e-learning.

During a two-day board retreat, Kristen Palmer, director of online learning programs, provided an overview of how other colleges and universities are utilizing online learning — from enhancing the education of residential students to delivering education to off-campus students, reports The Daily Progress.

Still in the brainstorming phase, UVa President Teresa A. Sullivan said at Saturday’s meeting that the first step would be to research the market and determine what would and would not work for UVa. She said online curriculum support for students will be very important, as will options for nontraditional students.

“We’re willing to think outside the box,” Sullivan said. “The sweet spot is that there is so much new knowledge and people beyond college age want it.”

UVa offers more than 50 online courses, 20 certificates and five degrees, and it supports Massive Open Online Courses (MOOCs) — giving the university a significantly larger online presence than it had in 2012 when the Board of Visitors demanded Sullivan’s resignation. Although then-Rector Helen Dragas cited several reasons for seeking Sullivan’s departure, the issue that resonated most with the public was the absence at UVa of a coherent strategy for adapting to the online revolution. MOOCs were generating considerable publicity at the time, and the higher-ed community was divided on whether online learning would fundamentally transform learning or was a passing craze that could never effectively translate into higher education.

After Sullivan mobilized faculty and student support to win reappointment as president, online learning took a back seat compared to other UVa priorities. While individual schools did adopt the technology — the School of Continuing and Professional Studies most notably (see the video above) — UVA as an institution never made a major commitment. Now, as Sullivan prepares to retire, the Board of Visitors is delving deeper.

Many universities — Harvard, Berkeley, MIT, Penn State, Georgia Tech, the University of Michigan and Purdue, among others — have ramped up their investing in online learning. Here in Virginia, Liberty University has ridden the online-learning wave to become the largest university in the state by enrollment). Liberty’s online learning programs have been so profitable that the institution has been able to plow hundreds of millions of dollars into its endowment.

In September 2016, UVa’s Online Education Advisory Committee advanced several recommendations for bolstering online learning. According to Palmer’s presentation PowerPoint, they included:

  1. Identify leader to drive strategic digital learning efforts across
    university
  2. Fund small scale projects focused on measuring effectiveness and
    disseminating findings related to emergent learning technologies
    and digital environments.
  3. Remove barriers for those schools interested in digital learning
    with seed funding with plans for sustainability within 2-5 years
    (possible collaborative Strategic Investment Fund proposal).
  4. Create a Fellows Program by funding, hiring, and supporting
    thought leaders, subject matter experts and practitioners.
  5. Make all digital materials for the university fully accessible for all
    learners

A year later, many questions remain to be answered. Among those raised by Palmer: Who do we want UVa to be? Are there markets UVa could enter at scale? Will moving content online affect the cost of curriculum delivery? Could UVa use online courses as part of the admissions process? Could the university partner with other Virginia colleges or programs?

With discussions still in the early stages, said the Daily Progress, the board will continue to examine pros and cons of online learning. To better support students, said board member Jeffrey C. Walker, it would be advisable to talk to other schools that utilize online learning to find out what works and what doesn’t. Which classes are more proficiently taught online and which are more suited to traditional classrooms?

Explaining the Moderation in College Tuition Increases

Graphic source: SCHEV

The increase in tuition and mandatory fees for in-state undergraduate students attending Virginia’s public colleges and universities will increase an average of 4.8% in the 2017-2018 academic year, according to a final report by the State Council of Higher Education for Virginia (SCHEV). That follows a 4.6% increase in 2017-17 and 6.0% in the year before.

The increase in room and board, which accounts for 45% of the cost of college attendance, will average 3.0%, finds SCHEV’s “2017-18 Tuition and Fees Report.” The total cost of attendance (tuition + fees + room + board) increased 3.9% — the lowest such increase in 16 years.

The moderating price increases suggests that “the Commonwealth’s colleges and universities are holding costs down in other areas such as student activities, housing and meals,” states a press release accompanying distribution of the report.

The SCHEV report frames the challenge of rising college tuition in the context of erratic and declining state levels of state support for higher education. States the report: “Our public system of higher education has endured eight state budget reductions in the past 10 years, and tuition for in-state undergraduate students has risen dramatically in an effort to offset these cuts. Access, affordability and quality — the cornerstones of our system — are in jeopardy.”

Says Dan Hix, SCHEV finance policy director and a lead author of the report, in the press release:

Virginia’s public institutions share our concern that college costs are getting out of reach for many. With support from the governor and the General Assembly, tuition increases last year were the lowest in many years. This year’s tuitions have gone up from that near-historic low. However, the figures show that the Commonwealth’s public institutions are working to rein in other costs.

Last year, the General Assembly and governor increased state support for higher education by more than 8%. This year, Virginia’s colleges will see an average reduction of 2.5%. This Tuition and Fees Report indicates that when the state provides additional support to public higher education, our institutions can better control the rate at which they increase tuition.

Elaborating on this theme in the report itself, SCHEV stated:

An important lesson can be learned, or a “best practice” derived from the 2012-2014 biennium. Here, Virginia made a clear reinvestment in higher education after several years of state budget reductions. In 2013 we experienced an average increase in state funding of about 5% and another 3% in 2014. With these investments came the lowest increases in tuition and fees in a decade.

Despite SCHEV’s positive spin on the numbers, the total charges for Virginia undergraduate students rose to 47.7% of their families’ average disposable income — up almost 12 percentage points from a decade ago, and considerably higher than the national average of 43% in 2016.

To develop a more sustainable, consistent level of state funding, SCHEV has been developing strategies for increasing revenue, from admitting more out-of-state students who pay higher tuition to giving elite institutions more latitude to raise tuition and redistributing the proceeds to institutions that don’t have the market power to raise charges.

“The changes would not be easy or without risk,” says the report, “but the alternative may be diminished access to a generally degraded system. If the next 10 years are similar to the last 10 years for Virginia public higher education, our system is in peril and all options to improve its future should be considered.”

Bacon’s bottom line:  I’m on vacation, and I don’t have time to make a detailed analysis, but I will make a couple of observations. Over the long term (20 to 25 years) the evidence is strong that declining state support for higher education has been one of the factors contributing to steadily rising in-state costs for undergraduate students. But SCHEV frames the issue as if state support were the only factor pushing the cost of attendance higher. As a consequence, SCHEV places the onus of change entirely upon state lawmakers to cough up more taxpayer money — and none of the responsibility on colleges and universities to reconsider policies and practices that might contribute to the runaway cost of attendance.

I have blogged about some of the practices — raising more money for financial aid, hiring more administrators, declining faculty productivity, paying for star faculty, and improving student amenities — that might be contributing to the inflation in costs.  Without data on all the forces at work, our understanding of tuition inflation will remain partial and inadequate.

The most important higher-ed legislation that the General Assembly could enact in the 2018 session would be to give the SCHEV the legal authority and resources to collect and analyze data that would illuminate these other factors.

How Good Intentions Created a Tool of Oppression

Lakisha Johnson and daughter. Photo credit: Reuters

Politicians had the best of intentions when they crafted policies to make higher education more accessible to everyone by handing out generous student loans. But they ended up plunging millions of Americans deep into debt and subjecting them to relentless efforts to recover that debt.

A Reuters investigation into student loan debt collections highlights the plight of a Philadelphia woman, Lakisha Johnson.

Lakisha Johnson figured all she needed was her 2016 tax refund to get her and her daughter out of a homeless shelter and back into a place of their own.

The U.S. Department of Education had other plans.

Johnson, a home health aide, and 12-year-old Aijiah were forced to move out of their West Philadelphia apartment just before Thanksgiving last year, after the landlord jacked up the rent from $675 to $875. Soon, they were living on a bunk bed in the shelter a few blocks from Aijiah’s school. The girl was petrified that a classmate would see her using the secured entrance of the crowded, noisy shelter.

With the $13 an hour she earns caring for her elderly charges, Johnson planned to stay at the shelter — or with anyone who would let the two sleep on a floor, a couch or a spare mattress — until April. In past years, that’s when she received her federal Earned Income Credit tax refund.

The check never came.

On the phone, an Internal Revenue Service agent told her the Department of Education (DOE) was “holding back” the $8,220 refund to recoup some of her student loan debt. It would probably do the same next year, the agent told her, to recover the rest of the nearly $17,000 she owed.

Johnson is just one of eight million borrowers in the United States who are in default on a combined $137.4 billion in government-held or government-backed student loans. Eleven percent of all student debt is severely delinquent or in fault, a higher rate than the mortgage foreclosure rate at the peak of the sub-prime real estate bust. But unlike mortgages, a form of debt that can be discharged, there is no way to shake student loans.

Since the summer of 2015, Reuters has found, student loan servicers and private debt collectors have garnished about $3 billion in wages. And last year, tax refund seizures and Social Security benefit reductions amounted to another $2.6 billion, up from $2.2 billion in 2015. Since 2009, the federal government has clawed back at least $15.2 billion. Writes Reuters:

Default, which usually occurs when a borrower hasn’t made a payment for 270 days or more, can make it only harder for a debtor to regain financial stability. It can trash credit scores, scaring off potential employers. It can disqualify debtors for auto loans, apartment rentals, utilities and even cellphone contracts. In about 20 states, student loan borrowers who default can lose their driver’s and professional licenses.

Needless to say, those impacted from the student debt-collection regime are disproportionately poor and minorities.

The Reuters article focuses mainly on the aggressive tactics of debt collectors and the failure (or refusal) to inform many debtors of all of their options, such as shifting to a plan that limits repayments to a percentage of income. In effect, the debt collectors come across as the “bad guys” in the story.

But Reuters does quote Jack Remondi, CEO of Navient Corp., a loan servicer operating under contract with the Department of Education:

Remondi blamed rising student loan defaults on “the front end of the process,” such as the government policy of lending to borrowers regardless of their credit standing and without consideration of “whether the investment they are making is reasonable.”

Bacon’s bottom line: That is the root of the problem. Under the guise of creating opportunities for the poor, the government policy of treating access to higher education as a “right” and indiscriminately handing out loans to unsophisticated consumers turned millions of Americans into debt peons. Government policy made their condition worse. Government policy, far from liberating the American poor, is grinding many into deeper poverty. Between shoveling out student loans and stoking the issuance of sub-prime mortgages a decade ago, misguided policies emanating from the good intentions of federal policy makers have shattered the lives of millions of poor. (Don’t get me started on the issues of under-performing schools and the mal-incentives of the welfare state.)

Meanwhile the poverty-creation machine chugs on unperturbed in Virginia. Here is data from the State Council of Higher Education for Virginia encompassing public four-year colleges, private four-year colleges, and community colleges:

  • 10% of from first-time-in-college students dropped out after the first year of enrollment.
  • 40% of those students had debt, which averaged $8,036. The wages of college drop-outs the following year averaged $12,500.

All told, 36% of students at 20% of the poverty line and below fail to graduate. College loans, it must be said, also have allowed many students to lift themselves out of poverty, so it would be a mistake to dismantle the entire system. But student lending is in desperate need of reform. Good intentions are not enough.