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+State cuts have led tuition to spike harming the ability to students to enter college, especially those who come from low income backgrounds or are people of color – The impact is a blow to the national economy because a college degree is a crucial internal link to working in a skilled job, decreasing health care costs, and bringing greater wealth to local communities |
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+Mitchell et al 16 (Report published by the Center on Budget and Policy Priorities; authors were Michael Mitchell (State Budget and Tax), Michael Leachman (State Budget and Tax), and Kathleen Masterson, “Funding Down, Tuition Up: State Cuts to Higher Education Threaten Quality and Affordability at Public Colleges”, http://www.cbpp.org/research/state-budget-and-tax/funding-down-tuition-up, |
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+Years of cuts in state funding for public colleges and universities have driven up tuition and harmed students’ educational experiences by forcing faculty reductions, fewer course offerings, and campus closings. These choices have made college less affordable and less accessible for students who need degrees to succeed in today’s economy. Though some states have begun to restore some of the deep cuts in financial support for public two-and four-year colleges since the recession hit, their support remains far below previous levels. In total, after adjusting for inflation, funding for public two-and four-year colleges is nearly $10 billion below what it was just prior to the recession. As states have slashed higher education funding, the price of attending public colleges has risen significantly faster than the growth in median income. For the average student, increases in federal student aid and the availability of tax credits have not kept up, jeopardizing the ability of many to afford the college education that is key to their long-term financial success. States that renew their commitment to a high-quality, affordable system of public higher education by increasing the revenue these schools receive will help build a stronger middle class and develop the entrepreneurs and skilled workers that are needed in the new century. Of the states that have finalized their higher education budgets for the current school year, after adjusting for inflation: Forty-six states – all except Montana, North Dakota, Wisconsin, and Wyoming – are spending less per student in the 2015-2016 yeah than they did before the recession. States cut funding deeply after the recession hit. The average state is spending $1,598, or 18 percent, less per student than before the recession. Per-student funding in nine states – Alabama, Arizona, Idaho, Illinois, Kentucky, Louisiana, New Hampshire, Pennsylvania, and South Carolina – is down by more than 30 percent since the start of the recession. In 12 states, per-student funding fell over the last year. Of these four states – Arkansas, Illinois, Kentucky, and Vermont – have cut per-student higher education funding for the last two consecutive years. In the last year, 38 states increased funding per student. Per-student funding rose $199, or 2.8 percent, nationally. Deep state funding cuts have had major consequences for public colleges and universities. States (and to a lesser extend localities) provide roughly 54 percent of the costs of teaching and instruction at these schools. Schools have made up the difference with tuition increases, cuts to educational or other services, or both. Since the recession took hold, higher education institutions have: Increased tuition. Public colleges and universities across the country have increased tuition to compensate for declining state funding and rising costs. Annual published tuition at four-year public colleges has risen by $2,333, or 33 percent, since the 2007-08 school year. In Arizona, published tuition at four-year schools is up nearly 90 percent, while in six other states – Alabama, California, Florida, Georgia, Hawaii, and Louisiana – published tuition is up more than 60 percent. These sharp tuition increases have accelerated longer-term trends of college becoming less affordable and costs shifting from states to students. Over the last 20 years, the price of attending a four-year public college or university has grown significantly faster than the median income. Although federal student aid and tax credits have risen, on average they have fallen short of covering the tuition increases. Diminished academic opportunities and student services. Tuition increases have compensated for only part of the revenue loss resulting from state funding cuts. Over the past several years, public colleges and universities have cut faculty positions, eliminated course offerings, closed campuses, and reduced student services, among other cuts. A large and growing share of future jobs will require college-educated workers. Sufficient public investment in higher education to keep quality high and tuition affordable, and to provide financial aid to students who need it most, would help states develop the skilled and diverse workforce they will need to compete for these jobs. Sufficient public investment can only occur, however, if policymakers make sound tax and budget decisions. State revenues have improved significantly since the depths of the recession but are still only modestly above pre-recession levels. To make college more affordable and increase access to higher education, many states need to supplement that revenue growth with new revenue to fully make up for years of severe cuts. But just as the opportunity to invest is emerging, lawmakers in a number of states are jeopardizing it by entertaining tax cuts that in many cases would give the biggest breaks to the wealthiest taxpayers. In recent years, states such as Wisconsin, Louisiana, and Arizona have enacted large-scale tax cuts that limit resources available for higher education. And in Illinois and Pennsylvania ongoing attempts to find necessary resources after large tax cuts threaten current and future higher education funding. State and local tax revenue is a major source of support for public colleges and universities. Unlike private institutions, which rely more heavily on charitable donations and large endowments to help fund instruction, public two-and four-year colleges typically rely heavily on state and local appropriations. In 2015, state and local dollars constituted 54 percent of the funds these institutions used directly for teaching and instruction. While states have begun to restore funding, resources are well below what they were in 2008 – 18 percent per student lower – even as state revenues have returned to pre-recession levels. (See Figures 1 and 2.) In the states that have finalized their higher education budgets for the current 2015-16 school year compared with the 2007-08 school year, when the recession hit, adjusted for inflation: States spending on higher education nationwide is down an average $1,598 per student, or 18 percent. In only four states – Montana, North Dakota, Wisconsin, and Wyoming – is per-student funding now above its 2008 pre-recession levels. 26 states have cut funding per student by more than 20 percent. Nine states have cut funding per student by more than 30 percent. Arizona and Illinois have cut funding by more than half. Over the past year, most states increased per-student funding for their public higher education systems. (See Figures 3 and 4.) Thirty-eight states are investing more per student in the 2015-16 school year than they did in 2014-15. Nationally, spending is up an average of $199 per student, or 2.8 percent. The funding increases vary from $13 per student in Missouri to $1,730 in Wyoming. 15 states increased per-student funding by more than 5 percent. Five states – Colorado, Nevada, Oregon, Washington, and Wyoming – increased funding by more than 10 percent. But this trend is far from universal. In 12 states, per-student funding fell over the last year – declining, on average, 8.8 percent or by more than $516 per student. Funding cuts vary from $20 per student in New Jersey to $1,746 in Illinois. Six states – Alaska, Arizona, Illinois, Oklahoma, West Virginia and Wisconsin – cut funding by more than $250 per student over the past year. Four states – Arkansas, Illinois, Kentucky, and Vermont – have cut per-student higher education funding for the last two years. Reductions in support for public colleges reflect in part the strategy that many states chose during the deep national recession and slow recovery. State tax revenues fell sharply during the Great Recession. The recession of 2007-09 led to record-breaking declines in state revenues, and the slow recovery continues to affect them. High unemployment and a slow recovery in housing values left people with less income and less purchasing power. As a result, states took in less from income tax and sales tax, their main sources of revenue for funding education and other services. By the fourth quarter of 2015, eight years after the recession hit, total state tax revenues were just 6.4 percent greater than they were at the start of the recession after adjusting for inflation. Many states chose to close their budget deficits through sizeable budget cuts rather than a more balanced mix of spending reductions and revenue increases. States relied disproportionately on damaging cuts to deal with declining revenue over the course of the recession Between fiscal years 2008 and 2012, states made up 45 percent of the loss in revenue through reducing support for public services – and only 16 percent through increases in taxes and fees. (They closed the remainder of their shortfalls with federal aid, reserves, and various other measures.) States would have lessened the deep cuts to higher education if they had been more willing to raise additional revenue. Meanwhile, college enrollment has risen. Public higher education institutions must educate more students, raising costs. Enrollment in public higher education was up by nearly 900,000 full-time-equivalent students, or 8.6 percent, between the beginning of the recession and the 2013-14 academic year (the latest year for which there are actual data). The recession played a large role in swelling enrollment numbers, particularly at community colleges, as many high school graduates chose college over dim employment prospects and older workers returned to retool and gain new skills. Other areas of state budgets also are under pressure. For example, an estimated 803,000 more K-12 students are enrolled in the current school year than in 2008. Long-term growth in state prison populations – with state facilities now housing nearly 1.56 million inmates – also continues to put pressure on state spending. In recent years states have modestly increased investment in two-and four-year colleges from their recession lows. As such, tuition hikes have been much smaller than they wee in the worst years of the recession. Published tuition – the “sticker price” – at public four-year institutions increased in 34 states over the past year, but only modestly. Average tuition increased $254, or 2.8 percent. Between last year and this year: Louisiana increased average tuition across its four-year institutions more than any other state, hiking it by more than 7 percent, or roughly $540. Nine states raised average tuition by more than 5 percent. In Washington State, tuition actually fell by nearly 4 percent. Nevertheless, tuition remains much higher than it was before the recession in most states. Since the 2007-08 school year, average annual published tuition has risen by $2,333 nationally, or 33 percent. (See Figures 5 and 6.) Steep tuition increases have been widespread, and average tuition at public four-year institutions, has increased by: more than 60 percent in seven states; more than 40 percent in 14 states; and more than 20 percent in 39 states. In Arizona, the state with the greatest tuition increases since the recession hit, tuition has risen 87.8 percent, or $4,978 per student. Average tuition at a four-year Arizona public university is now $10,646 a year. Tuition increases, while substantial in most states, have fallen far short nationally of fully replacing the per-student support that public colleges and universities have lost due to state funding cuts. In nearly half of the states, tuition increases between 2008 and 2015 have not fully offset cuts to state higher education funding. Because tuition increases have not fully compensated for the loss of state funding, and because most public schools do not have significant endowments of other sources of funding, many public colleges and universities have simultaneously reduced course offerings, student services, and other campus amenities. Data on spending at public institutions of higher learning in recent years are incomplete, but considerable evidence suggest that these actions by many public colleges and universities likely reduced the quality and availability of their academic offerings. For example, since the start of the recession, colleges and university systems in some states have eliminated administrative and faculty positions (in some instances replacing them with non-tenure-track staff), cut courses or increased class sizes, and in some cases, consolidated or eliminated whole programs, departments, or schools. Public colleges and universities continue to make these types of cuts, even as states have begun to reinvest in higher education. For example: The University of Alaska Fairbanks eliminated six degree offerings – including engineering management, science management, and philosophy. The University of Arizona cut 320 positions from its budget including layoffs, firings, and resignations, and increased class seizes for core undergraduate courses. In addition to laying off over 200 employees the university of Akron in Ohio eliminated its school baseball team. Facing large state funding cuts, the University of Wisconsin-Madison laid off or reduced staff and faculty vacancies by 400 slots and held faculty salaries level. Nationwide, employment at public colleges and universities has grown modestly since the start of the recession, but proportionally less than the growth in the number of students. Between 2008 and 2014, the number of full-time-equivalent instructional staff at public colleges and universities grew by about 7 percent, while the number of students at these institutions grew by 8.6 percent. In other words, the number of students per faculty member rose nationwide. Over time, students have assumed much greater responsibility for paying for public higher education. That’s because during and immediately following recessions, state and local funding for higher education has tended to fall, while tuition has tended to grow more quickly. During periods of economic growth, funding has tended to recover somewhat while tuition has stabilized at a higher level as a share of total higher educational funding. (See Figure 7.). In 1988, public colleges and universities received 3.2 times as much revenue from state and local governments as they did from students. They now receive about 1.2 times as much from states and localities as from students. Nearly every state has shifted costs to students over the last 25 years – with the most drastic shift occurring since the onset of the Great Recession. In 1988, average tuition amounts were larger than per-student state expenditures in only two states, New Hampshire and Vermont. By 2008, that number had grown to ten states. By 2008, that number had grown to ten states. In 2015 (the latest year for which there is data), tuition revenue was greater than state and local government funding for higher education in 22 states, with six – Colorado, Delaware, Michigan, New Hampshire, Pennsylvania, and Vermont – requiring students and families to shoulder higher education costs by a ration of at least 2- to -1. The cost shift from states to students has happened over a period when absorbing additional expenses has been difficult for many families because their incomes have been stagnant or declining. In the 1970s and early-to mid-1980s, tuition and incomes both grew modestly faster than inflation; by the late 1980s, tuition began to rise much faster than incomes. (See Figure 8.) Since 1973, average inflation-adjusted public college tuition has increased by 274 percent while median household income has grown by only 7 percent. Over the past 40 years, the incomes of the top 1 percent of families have grown by almost 170 percent. This means that public college tuition has outpaced income growth for even the highest earners. The sharp tuition increases states have imposed since the recession have exacerbated the longer-term trend. Tuition jumped nearly 30 percent between the 2007-08 and 2014-15 school years, while real median income fell roughly 6.5 percent over the same time period. Rapidly rising tuition at a time of weak or declining income growth has damaging consequences for families, students, and the national economy. Tuition costs deter some students from enrolling in college. While the recession encouraged many students to enroll in higher education, the large tuition increases of the past few years may have prevented further enrollment gains. Rapidly rising tuition makes it less likely that students will attend college. Research has consistently found that college price increases result in declining enrollment. While many universities and the federal government provide financial aid to help students bear the price, research suggests that a high sticker price can dissuade students from enrolling even if the net price, including aid, doesn’t rise. Rising tuition may be harming students of color and reducing campus diversity. New research finds that rising tuition and fees jeopardize campus diversity at public four-year colleges as students of color are less likely to enroll as the cost of tuition goes up. “All else equal, a $1000 tuition increase for full-time undergraduate students is associated with a drop in campus diversity of almost 6 percent,” New York University researchers found in a 2015 study. Another study, which examined tuition policy changes in Texas in the early 2000s, concluded that rising tuition rates limited enrollment gains for Hispanic students in the state. The share of students coming from communities of color at public two-and four-year colleges had risen significantly in the years leading up to these tuition increases. State cuts to higher education, made up for with higher tuition rates, jeopardizes this trend. Tuition increases likely deter low-income students, in particular, from enrolling. College cost increases have the biggest impact on students from low-income families, research further shows. For example, a 1995 study by Harvard University researcher Thomas Kane concluded that states with the larges tuition increases during the 1980s and early 1990s “saw the greatest widening of the gaps in enrollment between high-and low-income youth.” The relative lack of knowledge among low-income families about the admissions and financial aid process may exacerbate these damaging effects. Students from families that struggle to get by – including those who live in communities with lower shares of college-educated adults and attend high schools that have higher student-to-counselor ratios tend to overestimate the true cost of higher education more than students from wealthier households in part because they are less aware of the financial aid for which they are eligible. These effects are particularly concerning because gaps in college enrollment between higher-and lower-income youth are already pronounced. In 2012, just over half of recent high school graduates from families with income in the lowest 20 percent enrolled in some form of postsecondary education, as opposed to 82 percent of students from the top 20 percent. Significant enrollment gaps based on income exist even among prospective students with similar academic records and test scores. Rapidly rising costs at public colleges and universities may widen these gaps further. Tuition increase may be pushing lower-income students toward less-selective public institutions, reducing their future earnings. Perhaps just as important as a student’s decision to enroll in higher education is the choice of which college to attend. A large share of high-achieving students from struggling families fail to apply to any selective colleges or universities, a 2013 Brookings Institution study found. Even here, research indicates that financial constraints and concerns about cost push lower-income students to narrow their list of potential schools and ultimately enroll in less-selective institutions. Another 2013 study found evidence that some high-achieving, low-income students are more likely to “undermatch” in their college choice in part due to financial constraints. Where a student decides to go to college has broad economic implications, especially for economically disadvantaged students and students of color. Students who had parents with less education, as well as African American and Latino students, experienced higher postgraduate earnings by attending more elite colleges relative to similar students who attended less-selective universities, a 2011 study by Stanford University and Mathematica Policy Research found. As tuition soared after the recession, federal financial aid also increased. The Federal Pell Grant Program ― the nation’s primary source of student grant aid ― increased the amount of aid it distributed by just over 80 percent between the 2007-08 and 2014-15 school years. This substantial boost has enabled the program not only to reach more students ― 2.7 million more students received Pell support last year than in 2008 ― but also to provide the average recipient with more support. The average grant rose by 21 percent — to $3,673 from $3,028.44 The increase in federal financial aid has helped many students and families cover recent tuition hikes. The College Board calculates that the annual value of grant aid and higher education tax benefits for students at four-year public colleges nationally has risen by an average of $1,410 in real terms since the 2007-08 school year, offsetting about 61 percent of the average $2,320 tuition increase. For community colleges, increases in student aid have more than made up the difference, leading to a drop in net tuition for the average student.45 Since the sticker-price increases have varied so much from state to state while federal grant and tax-credit amounts are uniform across the country, students in states with large tuition increases ¾ such as Arizona, Georgia, and Louisiana ¾ likely still experienced substantial increases in their net tuition and fees, while the net cost for students in states with smaller tuition increases may have fallen. Financial aid provided bystates, however — which was far less than federal aid even before the recession — hasfallen on average. In the 2007-2008 school year, state grant dollars equaled $740 per student. By 2014, the latest year for which full data is available, that number had fallen to $710, a drop of roughly 4 percent.46 Federal financial aid has certainly lessened the impact of tuition and fee increases on students from families with low incomes. However, the overall average cost of attending college has risen for these students, because room and board costs have increased, too. As a result, the net cost of attendance at four-year public institutions for low-income students increased 12 percent from 2008 to 2012. For those at public community colleges, the increase over the same time period was 4 percent.47 Because grants and tax credits rarely cover the full cost of college attendance, most students — students of color and low-income students in particular — borrow money. In 2012, 79 percent of students from families whose incomes are in the lowest 25 percent graduating with a bachelor’s degree had student loans (compared with 55 percent of graduating students from families whose incomes are in the higher 25 percent).48 In the same year, more than four of every five African American students borrowed at public institutions (compared with 64 percent of graduating students overall).49 Further, the overall share of students graduating with debt has risen since the start of the recession. Between the 2007-08 and 2013-14 school years, the share of students graduating with debt from a public four-year institution increased from 55 percent to 60 percent. At the same time, the average amount of debt incurred by the average bachelor’s degree recipient with loans at a public four-year institution grew to $25,500 from $21,200 (in 2014 dollars), an increase of $4,300, or 18 percent. By contrast, the average level of debt incurred had risen only about 1 percent in the six years prior to the recession.50 In short, at public four-year institutions, a greater share of students are taking on larger amounts of debt. By the fourth quarter of 2015, students held $1.23 trillion in student debt — more than car loans and credit card debt combined.51 Yet, while college loan burdens have increased significantly for students at public four-year institutions, the significant run-up in debt levels has been driven in large part by a growing share of students attending private for-profit institutions — such as Corinthian and the University of Phoenix — and two-year community colleges. In 2000, borrowers entering repayment on student loans from for-profit and two-year institutions made up roughly 30 percent of all borrowers overall, a study from the U.S. Treasury Department and Stanford University researchers found. By 2011, these borrowers represented nearly half of all federal student loan borrowers entering repayment. In fact, for-profit institutions have been such a driving force that in 2014, eight of the top ten and 13 of the top 25 institutions whose students owe (collectively) the most in federal student loan debt were for-profit institutions. (See Table 1.) In 2000, only one for-profit made the top 25 (the rest were either four-year public or private non-profit institutions).52 The reduced college access and graduation rates that research finds likely result from decreased state support for college hurt more than just students, because college attainment has grown increasingly important to long-term state and national economic outcomes. A college degree is increasingly a pre-requisite for professional success and for entry into the middle class or beyond. A young college graduate earns $12,000 a year more than someone who did not attend college. The benefits of academic attainment extend beyond those who receive a degree. Entire communities benefit when more residents have college degrees. For instance, higher educational attainment has been connected with lower rates of crime, greater levels of civic participation, and better health. Areas with highly educated residents tend to attract strong employers who pay their employees competitive wages. Those employees, in turn, buy goods and services from others in the community, broadly benefitting the area’s economy. As a result, the wages of workers at all levels of education are higher in metropolitan areas with high concentrations of college-educated residents, economist Enrico Moretti of the university of California at Berkeley finds. This implies that – even though not all good jobs require a college degree – having a highly educated workforce can boost an area’s economic success. The economic importance of higher education will continue to grow. In a 2013 report, researchers from the Georgetown University Center on Education and the Workforce projected that by 2020, nearly two-thirds of all jobs will require at least some college education, up from 59 percent in 2007. The Georgetown Center further projects that, based on current trends – without significant new investment in capacity – the nation’s education system will not keep pace with the rising demand for educated workers. By 2020, the country’s system of higher education will produce 5 million fewer college graduates than the labor market will need. The increase in student debt in recent years also has important implications for the broader economy, most explicitly for students who incur the college debt but do not graduate. While debt is a crucial tool for financing higher education, excessive debt can impose considerable costs on both students and society as a whole. Research finds that higher student debt levels are associated with lower rates of homeownership among young adults; can create stresses that reduce the probability of graduation, particularly for students from lower-income families; and reduce the likelihood that graduates with majors in science, technology, engineering, and mathematics will go on to the further academic study that is often needed to obtain advanced positions in those fields. There is also growing concern that rising debt levels may be preventing some young adults from starting businesses. Many entrepreneurs rely heavily on personal debt to help launch their small businesses, and rising levels of student loan debt may make it more difficult to obtain loans or other lines of credit necessary for launching a startup. Looking at the period from 2000 to 2010, researchers from the Federal Reserve Bank of Philadelphia found that as student loan debt rose, net business formation of the smallest businesses – those employing four or fewer people – fell. These findings mean states should strive to expand college access and increase college graduation rates to help build a strong middle class and develop the entrepreneurs and skilled workers needed to compete in today’s global economy. They suggest further that the severe higher education funding cuts that states have made since the start of the recession will make it more difficult to achieve those goals |
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+The only thing keeping graduation rates stable is financial aid ~-~~-~- allows students to study full-time, encourages academic progress, and is the only way low-income students can afford to enroll |
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+Johnson 14 (Hans Johnson – supported by the College Access Foundation of California and writing for the Public Policy Institute of California, “Making College Possible for Low-Income Students: Grant and Scholarship Aid in California”, http://www.ppic.org/content/pubs/report/R_1014HJR.pdf, pg. 20-24,) |
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+Students fail to complete college for many reasons, including financial constraints. Certainly it is well known that low-income students are less likely to finish college than other students, even accounting for differences in academic preparation and records. Surveys of students who drop out of college find that, indeed, financial constraints play an important role. In one survey, respondents not only cited the need to work as the primary reason for leaving college but also said that work and family commitments were the reasons for not being able to return to school. More than half of the respondents said that financial aid “that completely covered tuition and books” would induce them to return to school (Johnson et al. 2009). Studies on the direct effect of grant and scholarship aid on college completion also suggest that financial aid leads to increases in graduation rates. Assigning causality in such work is difficult, however, because students who apply for aid might be more motivated than others to earn a degree and because college prices and grant aid programs vary dramatically across colleges. In general, most studies find that grant aid for low-income students increases persistence rates by as much as 10 percentage points and completion rates by at least a few percentage points (Dynarski 2005; Deming and Dynarski 2009; Kuh et al. 2008).16 A rigorous study of Florida’s “Student Access Grant” found that students whose family income made them just barely eligible for the grant of $1,300 were four percentage points more likely to earn a bachelor’s degree within seven years than students who were ineligible for the grant because their income was just above the required level (28 versus 24; Castleman and Long 2013). Using data from the National Center for Education Statistics “Beginning Postsecondary Survey,” we examined college completion rates among students in the United States who first entered college in 2003 and were followed through 2009.17 The data shows that grant aid is associated with higher rates of baccalaureate completion, even after controlling for institutional characteristics and student characteristics such as high school grade point average and family income. And our analysis indicated that the effect of grant aid is fairly strong: Every standard deviation increase in grant aid is associated with a 6.7 percentage point increase in the likelihood of graduating within six years. Our findings are consistent with but slightly different from those of Franke (2014). Restricting his analysis to students first enrolling in four-year colleges, Franke found that the effect of grant aid depends on its source: For every $1,000 in grant aid, federal aid (mostly Pell Grants) led to a 2.5 to 2.8 percent increase in degree attainment, state need-based aid led to a 2.4 to 2.6 percent increase, and institutional aid led to a 1.3 to 1.6 percent increase in degree attainment.18 A key consideration is whether the form of delivery of grant aid might lead to improvements in completion rates. It has been suggested, for example, that performance-based grants in which grant renewal depends on academic outcomes, such as grades and units completed, might be one way to improve college completion rates.19 However, studies have found only minimal if any effects of performance-based grants on student completion beyond the effects of other types of grants.20 The most rigorous of these evaluations, based on randomized controlled trials in seven states (including California), found mixed results (Patel et al. 2013). Among five states with findings related to persistence, the share of students registering at the beginning of the second year was slightly higher in only two of the states, including California (where persistence rates were 81.4 percent for program participants compared to 79.0 percent for the control group). In the six states with published findings on academic units (excluding California), the number of units earned in the first year increased slightly (but was not significant in two of the six states). Finally, in Ohio, the only state with several years of experience, completion rates (attainment of a vocational certificate, associate’s degree, or bachelor’s degree) increased by 3.5 percentage points (26.9 for program participants versus 23.4 for the control group), driven almost entirely by an increase in associate’s degrees. These generally positive results are consistent with, and of the same order of magnitude as, the effects of general grant aid and scholarship programs. In other words, increases in grant aid improve student persistence and completion, but performance-based grants do not seem to have greater effects than other types of grants. These results are not necessarily surprising, as almost all grants already have de facto performance requirements. For example, the amount of most grants depends on full-time versus part-time status, with full-time students receiving more aid. Moreover, the renewal of grant aid often depends on some measure of academic progress (such as not being on academic probation). Finally, and most obviously, students cannot receive grant aid if they fail to enroll in college. In addition to the direct effect on student persistence and completion, grant and scholarship aid can also indirectly improve student outcomes. For example, financial assistance enables students to work less and focus more on school. And to the extent that it allows students to attend college on a full-time rather than part-time basis, grant aid could reduce time to completion and increase completion rates. And finally, because the amount of grant aid offered is higher for full-time students, this form of assistance incentivizes full-time attendance. A second and perhaps more important indirect role of grant aid is that it can induce students to attend four-year colleges rather than community colleges. Because of high net prices at four-year colleges, some low-income students in California opt for community colleges because of their low fees and low net prices. Costs of attending community college can be particularly low for students who live at home, with sticker prices about $10,000 lower than for students with independent living arrangements. Among incoming freshmen at the state’s community colleges in 2007-2008, 50,000 were deemed ready for college-level work. Some of these students would have been eligible for CSU or even UC but instead opted for a community college. The downside of this is that students attending a community college rather than a four-year college are less likely to complete college. Using data from over 2,000 students who were awarded scholarships by the College Access Foundation of California (CAFC) and who were followed for six years, we estimated the probability of earning a bachelor’s degree based on the type of institution first attended. The CAFC students all intended to earn a bachelor’s degree, even if they first enrolled at a community college. However, as shown in Figure 6, students who began their college career at a four-year college were much more likely than those who enrolled at a community college to earn a bachelor’s degree, even when controlling for high school grade point average. Because we cannot control for all the differences between students first attending a community college and those first attending a four-year college, it is likely that our results overstate the causal effect of attending a four-year college on earning a bachelor’s degree. But even if we were able to account for all the differences between community college and four-year college students, we would certainly find that enrolling in a four-year college leads to much higher rates of degree attainment than starting first at a community college and then trying to transfer. 24 In this study, we examine the role of grant and scholarship aid in California in making college more accessible and in helping students complete college. Our primary findings are that: For many low-income students, college would probably not be possible without grant and scholarship aid, which has contributed greatly to keeping net prices from rising as fast as sticker prices. Grant and scholarship aid is associated with higher rates of baccalaureate completion. These findings hold even after controlling for institutional characteristics and student characteristics including high school grade point average and family income. Performance-based grants do not seem to have greater effect than other types of grants, largely because students already must meet institutional academic requirements to remain enrolled in college. An important role of aid is that it can induce students to attend four-year colleges rather than community colleges. Students are much more likely to earn a degree if they first enroll at a four-year college. |
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+Restrictions on free speech may be unconstitutional, but not doing so in cases involving sexual violence causes public colleges to lose federal funding under Title IX |
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+Bernstein 3 (David E. Bernstein – George Mason University Foundation Professor of Law with a focus on constitutional history, “You Can’t Say That: The Growing Threat to Civil Liberties From Antidiscrimination Laws”, “Censoring Campus Speech”, https://books.google.com/books?id=zU2QAAAAQBAJandpg=PA60andlpg=PA60anddq=public+colleges+could+lose+funding+if+they+allow+for+racistsandsource=blandots=W67N5E3bznandsig=xXeBW8YaTy_Ilb34MIbu-grciy4andhl=enandsa=Xandved=0ahUKEwiBoqTkn_nQAhVBjFQKHcc7CIkQ6AEITDAI#v=onepageandq=public20colleges20could20lose20funding20if20they20allow20for20racistsandf=false, pg. 60-61,) |
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+Given these constitutional barriers, public university speech codes were on the way out until the federal Department of Education revived them in 1994. Male students at Santa Rosa Community College had posted anatomically explicit and sexually derogatory remarks about two female students in a discussion group hosted by the college’s computer network. Several aggrieved students filed a complaint against the college with the DOE’s Office for Civil Rights. The DOE found that the messages probably created a hostile educational environment on the basis of sex for one of the students. University toleration of such offensive speech, the government added, would violate Title IX, the law banning discrimination against women by education institutions that receive federal funding. Under this standard, to avoid losing federal funds, universities must proactively ban offensive speech by students and diligently punish any violations of that ban. The DOE failed to explain how its rule was consistent with the First Amendment. Speech codes enacted by public universities clearly violate the First Amendment even if the codes are enacted in response to the demands of the DOE, so requiring public universities to enact speech codes or forfeit public funds would obviously be unconstitutional. Nevertheless, facing this choice, public university officials have ignored the First Amendment issue and complied with DOE guidelines. Although a few schools may truly be concerned about the potential loss of federal funding, the prevailing attitude among university officials seems to be that the DOE’s Santa Rosa decision provides a ready excuse to indulge their preference for speech codes. University officials implicitly reason that if the DOE can get away with ignoring the First Amendment, then so can they. Unfortunately, they may be right. |
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+Federal funding is used to maintain financial aid resources and colleges are only growing more dependent on it as state funding goes down |
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+Pew 15 (The Pew Charitable Trusts – compiles evidence and non-partisan analysis to inform the public and create better public policy, “Federal and State Funding of Higher Education: A Changing Landscape”, http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2015/06/federal-and-state-funding-of-higher-education) |
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+States and the federal government have long provided substantial funding for higher education, but changes in recent years have resulted in their contributions being more equal than at any time in at least the previous two decades. Historically, states have provided a far greater amount of assistance to postsecondary institutions and students; 65 percent more than the federal government on average from 1987 to 2012. But this difference narrowed dramatically in recent years, particularly since the Great Recession, as state spending declined and federal investments grew sharply, largely driven by increases in the Pell Grant program, a need-based financial aid program that is the biggest component of federal higher education spending. Although their funding streams for higher education are now comparable in size and have some overlapping policy goals, such as increasing access for students and supporting research, federal and state governments channel resources into the system in different ways. The federal government mainly provides financial assistance to individual students and specific research projects, while state funds primarily pay for the general operations of public institutions. |
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+College credentials are crucial to social mobility and national economic growth – affects everything from health insurance to better marriages to lower unemployment rates |
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+White House 14 (Report by the Executive Office of the President, “Increasing College Opportunity for Low-Income Students: Promising Models and a Call to Action”, pgs. 10 – 11, https://www.whitehouse.gov/sites/default/files/docs/white_house_report_on_increasing_college_opportunity_for_low-income_students_1-16-2014_final.pdf,) |
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+The benefits of postsecondary education are well documented and have major implications for economic growth, equality, and social mobility. Getting a postsecondary credential leads to greater lifetime earnings, lower unemployment, and lower poverty. Over the course of one’s working lifetime, the median earnings of bachelor’s degree recipients are 65 percent higher than median earnings of high-school graduates. 30 College graduates are also more likely to find a job; the unemployment rate for bachelor’s degree recipients is half the unemployment rate of high school graduates – and this gap grew during the Great Recession, which hit lowwage, low-education workers especially hard.31 Gaining a postsecondary education has positive effects beyond higher earnings. Individuals with higher education levels are more likely have retirement benefits and health insurance through their employer.32 Education also leads to better decision making about health, marriage, and parenting; improves patience; and makes people more goal-oriented.33 College access and attainment also leads to positive externalities and benefits to taxpayers by reducing crime and the need for social services, and increasing taxes paid and civic engagement.34 Importantly, the returns to higher education have increased over time as the demand for college-educated workers has outpaced the number of students getting a college education.35 Over the past four decades, the median earnings gap for full-time workers aged 25-34 with and without a college degree increased substantially for women and more than doubled for men; from 1971 to 2011 the earnings premium for men increased from 25 percent to 69 percent.36 Likewise, the earnings gap between those with and without a college degree increases as workers age.37 In response to the growing earnings gap between those with and without postsecondary education, a report from the Pew Economic Mobility Project remarked that, “unless something is done to boost the number of young people earning postsecondary credentials, millions of Americans will continue to be limited in their economic mobility.”38 Without a college degree, children born in the lowest fifth of the income distribution children have a 45 percent chance of staying in the bottom, and just a 5 percent chance of moving to the top Figure 1. Yet when these same children go on to earn a college degree, their chances of making it to the top nearly quadruple, and their chances of moving out of the bottom increase by 50 percent.39 |
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+The impact is massive – combatting the structural barriers that prevent individuals from attending college is the main internal link to competitiveness |
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+U.S. Department of Commerce 12 (Prepared by the U.S. Department of Commerce with consultation from the National Economic Council, “The Competitiveness and Innovative Capacity in the United States”, http://www.esa.doc.gov/sites/default/files/thecompetitivenessandinnovativecapacityoftheunitedstates.pdf, pgs. 2-10) |
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+Education is a key element for promoting economic growth and increasing the innovative capacity of a firm or a country. Economic growth “closely depends on the synergies between new knowledge and human capital, which is why large in‐ creases in education and training have accompanied major advances in techno‐ logical knowledge in all countries that have achieved significant economic growth.”1 Our nation’s education system underpins the United States’ rise to the position of richest nation on the planet in the last century.2 However, we must recognize and address cracks in this building block of American innovation, lest we fall behind countries that have placed a higher priority on developing a skilled workforce. It is not sufficient in today’s global economy for a nation to have a generally skilled and educated workforce. Increasingly, the specific skills embodied in science, technology, engineering, and mathematics (STEM) education fuel the innovative processes that are especially valuable to our economy. These skills are sought by companies across the economy as they look to expand their work‐ forces. These STEM skills are not only important for those working towards advanced degrees. All levels of the education system should incorporate the critical thinking and other skills that are the hallmark of STEM education.3 This chapter compares the United States to other nations on the dimensions of access to education and training and academic outcomes, with a particular focus on STEM. Furthermore, it outlines the diverse and critical role of the Federal government in building a skilled and competitive workforce. Areas to be addressed are summarized below: The United States must sustain the quality of its post-secondary education system, which is the top destination for students from abroad, while also removing barriers that have limited the post-secondary participation and performance of U.S. students. It is essential that the United States equip future and current workers with the skills needed to compete in a global labor market. Given the importance of the role played by technological progress and innovation in promoting economic growth, investment in STEM education is especially important. Yet the United States is falling behind in this area at all education levels, and addressing this shortcoming is needed if we are to continue to produce not only a workforce with the technical skills needed to fill current job openings, but persons with the unique blend of technical expertise and entrepreneurial spirit who will create the products and industries of the future. Education is a complex and multifaceted process that spans pre‐school through life‐long learning and involves policy issues ranging from affordability and technology, to questions of support for higher education, classroom size, equal access, and teacher compensation. This chapter primarily and narrowly focuses its attention to STEM because of the strong link between STEM skills, STEM occupations, and innovation. However, our narrow attention to STEM in no way implies that other aspects of education policy are not important in making our country more innovative and competitive. Indeed, our attention to STEM should be viewed as only one example of an area where concern has been raised about the nation’s performance relative to other countries in the world. The STEM workforce is typically defined as the set of professional and technical support occupations in the fields of computer science and mathematics, engineering, and life and physical sciences. In 2010, there were 7.6 million STEM workers in the United States, representing about 1 in 18 workers. Computer and math occupations account for close to half of STEM employment, followed by engineering with 32 percent of STEM jobs, physical and life sciences with 13 per‐ cent, and STEM management jobs with 9 percent. Over the past 10 years, growth in STEM jobs (7.9 percent) was three times as fast as growth in non‐STEM jobs (2.6 percent). Looking ahead over the coming years, STEM employment is expected to continue to grow at a faster rate (see figure 4.1). STEM workers fill our nation’s research and development facilities and drive our nation’s innovation and competitiveness by generating new ideas, new companies, and new industries.Not surprisingly, more than three‐fourths of the most celebrated inventors and entrepreneurs since 1800 had degrees in engineering, physics, chemistry, computer science, or medicine.4 Commensurate with their importance in driving economic productivity and growth, workers in STEM fields earn more on average than workers in other fields. As a result, providing more students with the skills to work in STEM fields is crucial both to the nation’s economic future and to improving the incomes of our workers. STEM workers enjoy large earnings premiums over non‐STEM workers. For example, in 2010, the STEM premium earned by workers with a bachelor’s degree was 27 percent, and for workers with a graduate degree, it was 12 percent5 (see table 4.1). STEM workers are also less likely to experience joblessness than their non‐STEM counterparts. Just as innovative processes take place both inside and outside the traditional spheres of research and development (RandD), STEM is now often defined both in‐ side and outside the traditional set of science and engineering jobs. Thus, STEM can be defined not just as a group of workers in science and engineering jobs, but also as a set of workers with STEM education or STEM knowledge and skills, whether or not they work in STEM jobs. The human capital embodied in the work that STEM workers perform is valued in other sectors of the economy. This capital includes knowledge of mathematics, computers, and electronics and more general skills, such as critical thinking, troubling shooting, and various forms of reasoning.6 More generally, a growing number of occupations in the economy have been found to require a greater intensity of non‐routine analytical and interactive tasks—that is, ones requiring reasoning and high executive functioning—while a declining number of occupations rely more heavily on manual and routine tasks.7 Nearly two-thirds of workers with undergraduate degrees in a STEM field are working in non-STEM occupations, such as healthcare, education, the social sciences, and management (see figure 4.2). These workers are not underperforming, nor are they mismatched in their current jobs. Rather, the same human capital that drives innovative processes through traditional RandD-related employment is needed across our economy, a suggestion that is confirmed in surveys of these workers as well. Furthermore, many STEM-educated workers who choose education jobs are likely teaching STEM skills to others. The value of STEM human capital is reflected in the earnings premium enjoyed by college‐educated workers with a STEM degree. All else equal, workers with a STEM degree earn 11 percent more per hour in full‐time non‐STEM jobs than workers with other undergraduate degrees. When STEM majors work in STEM jobs, their earnings premium rises to 20 percent, relative to persons with non‐ STEM degrees working in non‐STEM jobs. Given that more than two‐thirds of STEM workers have at least a college degree and that demand for STEM workers and workers with STEM degrees continues to grow, the U.S. college and university system is a cornerstone of our STEM future. Fortunately, at the college level, the United States continues to set the standard of the quality of the educational system and in the value of obtaining a college degree. However, the United States is losing ground to other countries in important areas of education, specifically in creating opportunities for students to gain expertise in STEM skills. Improvements are required at all education levels, including post‐secondary school, if the United States is to remain internationally competitive and for it to continue to excel in preparing its workforce for an increasingly knowledge‐intensive economy. Elite institutions within the United States’ college and university system typically dominate global rankings of prestigious higher education institutions. In 2011‐ 2012, in a worldwide ranking, 18 out of the top 25 universities and 30 out of the top 50 universities were in the United States. The United Kingdom was next with four in the top 25 and five in the top 50.11 These rankings make our country a magnet for the best students from around the world. The United States is still the top destination for students studying abroad, although its share has fallen some‐ what over time (see figure 4.3). Another way to look at the desirability of the United States as a destination for study is in export terms: when students from abroad come to the United States to study, that is an export of educational services (see figure 4.4). In 2010, receipts from education exports exceeded $21 billion, more than doubling over the previous 10 years in keeping with the rising cost of attending U.S. colleges and universities. Close to half of the receipts came from China ($4.0 billion), India ($3.3 billion), and Korea ($2.2 billion) (see figure 4.5). Roughly 40 percent of international students in 2010–2011 were studying in STEM‐related fields, such as engineering (18.7 percent), math and computer sciences (8.9 percent), and physical and life sciences (8.8 percent). Business and management ranked the most popular individual field (21.5 percent).12 While the United States continues to have top‐flight higher education institutions, fundamental problems in the kindergarten through college system threaten our ability to increase the skills of our workforce as rapidly as needed. Among high school graduates who do enroll in college, a remarkably high proportion—20 percent—takes at least one remedial course their freshman year.13 Stu‐ dents who take remedial coursework often do not fully catch up with their other college‐going peers: compared with college students who need no remediation, students who take even a single remedial course are less likely to earn their bachelor’s degree than students who did not take any remedial courses.14 More generally, the United States has slipped behind other countries in terms of college attainment rates over the second half of the 20th century. The cohort born be‐ tween 1943 and 1952 had the highest share of bachelor degree holders in the world. Since then several other countries have not only caught up but surpassed the United States in the proportion of adults who have completed college. Currently, the share of the U.S. population aged 25–34 that has attained post‐secondary education is only slightly above the OECD average.1 Of those who graduate from college, the United States produces fewer STEM graduates relative to other developed countries. OECD data show that in 2009 12.8 percent of U.S. graduates with bachelor’s degrees were in STEM fields. This places the United States near the bottom of OECD countries in terms of the percentage of STEM graduates produced. Significant economic competitors—such as South Korea (26.3 percent), Germany (24.5 percent), Canada (19.2 percent), and the United Kingdom (18.1 percent)—are on the long list of countries producing a much higher percentage of STEM graduates.16 As they advance through the education system, U.S. students choose not to enter STEM fields or, if they do pursue these studies, do not continue. Three out of four high school students who test in the top math quartile don’t start with a STEM major in college, and only half of all students who start in a STEM major graduate with a STEM degree.17 While no single reason can account for the low share of students in STEM fields, students’ poor K–12 math and science preparation and their unwillingness to commit the additional study time needed for math and science courses relative to other classes are likely contributing factors.18 As detailed below, the Department of Education and the National Science Foundation have developed initiatives to improve K–12 and college‐level STEM instruction and to reduce the number of students exiting STEM majors for other majors. Given the importance of a college education to a worker’s productivity and earnings, particularly for STEM‐educated workers, it is striking that only 70 percent of high school graduates in 2009 went on to some higher education—a rate lower than that of the highest performing countries, such as Norway and New Zealand.19 One barrier to college attendance is the high price of tuition and fees. Whether for a 2‐year or 4‐year degree, tuition has climbed much faster than consumer prices and household incomes. Over the past decade, in‐state public university tuition and fees more than doubled while tuition and fees for 2‐year schools rose 71 percent. During the same period, overall consumer prices increased 27 percent and nominal median household income rose 18 percent (see figure 4.6). In other words, household income over the period was not able to keep up with the overall increase in consumer prices, let alone the soaring sticker price of a college education. The cost of room and board (not included in tuition and fees) was no more forgiving. Between the 1999–2000 and 2009–2010 school years, the cost of staying in a college dormitory rose 80 percent while board increased 55 percent. Grant aid from public and private sources, including Federal Pell Grants and Federal education tax credits and deductions, however, have helped soften the financial blow to families. As a result, the net price of a college education—that is, the published price of tuition and fees minus all forms of financial aid—has not in‐ creased as fast as the sticker prices.20 In fact, in constant dollars the net price for full‐time students attending public, four‐year institutions in 2011–2012 increased just $60 relative to 2007–2008, while the net price for public, two‐year schools and private schools in 2011–2012 was lower than in 2007–2008.21 |