Oct 03, 2011

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AnnaK

First Time, Full Time is not All Time, Any Time

Steven C. Panagiotakos, Strategic Policy Advisor for Greenwood & Hall

October 3, 2011

Every student counts but not when it comes to Retention Rates or Graduation Rates.

These rates, that are often quoted and relied upon, only measure first time, full time students. However, this group only makes up about 60% of all higher education students. 

The other 40% is made up of a growing population of part time students, non-first time students and transfers. But they are not counted in the retention and graduation numbers sent by schools to the federal Integrated Postsecondary Education Data System (IPEDS).

How could this be?  Four out of every ten students not counted. Policy, rankings and admissions decisions are based on these important yet incomplete numbers.

That is one of the salient points made by Complete College America in a recent report entitled “Time is the Enemy.”  If we are to get a true picture of student success, let’s get a complete picture by looking at the non-traditional students too.

The cohort used for the study was all public higher education students from 33 participating states, which came to almost 10 million students. The methodology utilized was the Complete College/National Governor’s Association Common Completion Metrics.

See www.completecollege.org

When the complete picture emerges, it is even more troubling than the partial picture of a 57.2% six year Graduation Rate for all first time, full time students at four year institutions.

As might be expected, part time students, who are balancing families, lives and jobs, are struggling to make it through to completion within the IPEDS 150% time frame.

And, unfortunately, the vast majority don’t.

Maybe, because they are only attending part time, we need to look at an expanded time frame for completion. And that’s what this study did.

Full time     Part time           Full time     Part time           Full time     Part Time

27.8%             12.2%               18.8%             7.8%                 60.6%              24.3%

One year certificate               Two year degree               Four Year Degree

within two years                      within four years             within eight years

We would naturally believe that with increased time, the completion rates of part time students would be much closer to full time students.  However, even when you increase the number of years to 200%, the completion of part time students is still abysmal.

The problem is more life than time. Part time students have to become master jugglers to make it through. They don’t have the benefit of being able to be single focused like full time students.

So what can be done?

The report makes these recommendations for helping part time students complete.

1. Use Block Class Schedules for certainty and efficiency and to fit busy lives.
2. Quicken the time to completion with shorter terms, less time for breaks and summer schedules.
3. Make registration easy by signing up just once for a full program of study.
4. Decrease class time by use of eLearning.
5. Develop student support and learning networks.
6. Place remediation into the regular curriculum.
7. Full transparency before enrollment of Cost, Graduation Rates, and gainful employment.                                                  

This study has certainly given us the empirical evidence to identify the severity of the problem and the recommendations and motivation to do something about it. Even though this study only looked at 33 states and only looked at public higher education, it has given the clarion call that when it comes to student success; all students must count and be counted.

Sep 19, 2011

Posted by:

AnnaK

Student Default’s Unabated Climb

Steven C. Panagiotakos , Strategic Policy Advisor Greenwood & Hall

September 16, 2011

This week the U.S. Department of Education announced the Student Default rates for borrowers who were to begin repayment after October 1, 2008 and had defaulted by September 30, 2010 and the numbers were dismal.

Of the approximately 3.6 million borrowers in the 2009 cohort, 320,000 had defaulted for an over-all Default rate of 8.8%. This rate was an increase from last year’s 7%, representing a 26% increase in one year. This continues a troubling trend that has seen overall default almost double in only four years (2005 4.6% DR).

As you can see from the graph below, the increase has occurred in all three sectors of higher education with a 24% one year increase in not-for-profits, a 22% one year increase in publics and a 36% one year increase in for-profits.

The other group, which is not counted in these numbers, is those who are delinquent but not yet in default. This means that there is another large number of borrowers who are having trouble paying back their loans and probably receiving a negative credit history as a result.

There is no doubt that much of the problem can be attributed to the lack of job opportunities and the difficult financial times. In fact, young college graduates, those under 25, are venturing into the worst employment market since the Labor Department started tracking their cohort in 1985.

From April 2010 to March 2011, the unemployment rate for young college graduates was 9.7%. This is significantly higher for this group at the same time during the last two recessions, 6.4 summer 2003 and 6.9% summer 1992.

The unemployment numbers are even more pronounced for Hispanic and Black graduates.

According to the Economic Policy Institute’s Report “The Class of 2011”, this group of graduates will be trying to start their careers in the highest unemployment rate for them since the onset of the Great Recession.   

And those who are fortunate to find jobs are making 10% less than new graduates did 3 years ago.

New York city Mayor, Michael Bloomberg just today cautioned of the possibility of riots in the streets if the federal government is unable to generate jobs. Bloomberg stated in his weekly radio show, “We have a lot of kids graduating college, can’t find jobs…That’s what happened in Cairo. That’s what happened in Madrid. You don’t want those kinds of riots here.”

So with such a bleak labor market can anything be done?

The answer is a resounding YES.

First, student loan literacy must be increased. It’s not just a piece of paper or a few words at the application or disbursement stage. Institutions must put in place a comprehensive program to continue to remind and educate student borrowers and their families about their responsibilities, the consequences and most importantly their help options throughout their loan term.

Many borrowers are unaware of their help options.

For example, in the recent New York Times editorial, “Help Needed for Student Debtors”, it is noted that the Income Based Repayment plan (IBR), which can lower a borrower’s monthly payment by re-determining it in relation to his or her income and family size, goes unknown and unused by many borrowers in distress.  

Also, colleges and universities must make Retention, Persistence and Graduation a separate program that is given the money, the resources, and the planning to help students to degree or certificate completion. After all, even in this economy and job market, those with a college degree or certificate are faring much better finding and keeping a job at a better salary than those without one.

Sep 06, 2011

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AnnaK

The High Cost of Higher Ed Failure

By Steven C. Panagiotakos, Senior Policy Advisor for Greenwood & Hall

September 6, 2011 

As a new group of young Americans start to arrive on college campuses, the stakes couldn’t be higher for them and for our country.

Report after report has verified that in most cases, the higher the educational attainment, the higher the economic attainment.

In fact, the U.S. Census Bureau in its 2009 Population Survey found that the mean annual earnings for those with a High School diploma or GED was $31,300, whereas earnings were $39,500 for those with an Associate’s degree, $58,600 with a Bachelor’s degree, $70,900 with a Master’s degree, $99,700 with a Doctorate degree and $125,000 with a Professional degree.

When you extrapolate these earning differentials out over a forty year work life, the difference becomes even more dramatic and substantial.

It is important to note that these numbers are averages. We all know of individuals without a degree who have done very well but on average, those with a college degree do much better financially than those who have no degree. 

What most people are not aware of, is that over the past few decades, barely 1 out of every 2 entering four year college students have earned their bachelor degree in 6 years. The six year graduation rate for all four year institutions in 2008, as reported by the National Center for Education Statistics, was 57.2 percent.

The cost of this failure to achieve is enormous for the individual student, the taxpayers and society. In fact, a recent study by the American Institute for Research (AIR) has quantified the economic loss and its findings are not just sobering – they are staggering.

AIR’s report is entitled, “The High Cost of Low Graduation Rates: How Much Does Dropping out of College Really Cost?” It found that just for the 2002 class of entering students, the failure to graduate with a bachelor’s degree cost the students $158 billion in lost lifetime income, which cost our country and the states $32.8 billion and $7.6 billion in income taxes, respectively.

Remember, these numbers are just for one entering class. Now, multiply them by every class that entered over the last few decades. The numbers will be higher for those entering before 2002 and less for those entering after 2002, due to inflation. But, in the aggregate, we are no longer talking billions – we are talking trillions.

It also costs the state taxpayers a total of $1.3 billion and federal taxpayers $300 million annually for amounts spent on the education of freshmen who do not continue on to the second year.

And, this study does not attempt to quantify the spin off financial benefit of this increased income churning through our economy or our increased competitiveness from a more educated workforce. Both would be substantial and add to the enormous loss and cost.

Last year, in a speech at the University of Texas, President Obama identified our precipitous decline when he said, “In a single generation, we’ve fallen from first place to 12^th place in college graduation rates for young adults.” 

This realization caused him to set an ambitious goal of increasing the number of young adults with Associate’s degrees or higher (40.4% presently)  by 2020 so that America will regain first place in educational attainment and remain the leader in the global market place of the 21^st Century.

As the President said, “We know that in the coming decades, a person’s success in life will depend more and more …on a higher education.”

This concern and goal has also been echoed in a recent report issued by the Georgetown University Center for Education and the Workforce, “Projections of Jobs and Education Requirements Through 2018.” This report found that the percentage of U.S jobs needing post-secondary degrees or certificates went form 28% in 1973 to 59% in 2008 with that number estimated to grow to 63% over the next ten years.

The report’s authors estimate we will need 22 million new college graduates and 4.7 million new post-secondary certificate holders to fill these jobs. However, under current conditions, we will be significantly off from meeting this demand and “this shortfall will mean lost economic opportunity for millions of American workers.”

If we are to meet these goals, then we must make a more concerted effort in retaining and graduating those who have the motivation and education to enter through the front doors of American Higher Education by keeping the back doors from being easily accessed portals to unfulfilled potential, dashed dreams and unrealized economic attainment for the individual student and American society.

More planning, investment and resources must be dedicated to the retention, persistence and graduation of America’s college students. In short, this means more academic support services, more student support services, proactive tracking of student progress, and much more personal contact with the individual student. The technologies, methods and support systems necessary to improve graduation rates are well-known. There now needs to be both the institutional and public will to allocate the appropriate resources.

For many tuition-dependent schools, investing in comprehensive retention strategies will not only generate an impressive return on investment but also improve institutional reputation. For our institutions largely supported by public funds, such investments will generate long-term returns in tax collections as well as potential savings in social spending. While funding for retention initiatives may be scarce on most campuses, this should be as much of a priority as keeping the lights on in classrooms.

The American Dream is a little different for everyone, but one common truth is that the higher your education, the greater your chance to achieve that dream. Therefore, it is critical that we expend as much energy not just getting students enrolled in degree or certificate programs but that we get them through to completion.  Their future and our future depend upon it.

Aug 23, 2011

Posted by:

AnnaK

On-line or On-the-sideline

By Steven C. Panagiotakos, Senior Policy Advisor for Greenwood & Hall

August 16, 2011 

“Movies are a fad. Audiences really want to see live actors on stage”

Charlie Chaplin 

We are living in a new normal, where our society is being transformed at an accelerating and exponential rate of change. Individuals, organizations and industries can be rewarded with great efficiencies of progress as they fulfill their mission. But they must voluntarily embrace and direct the change or else the change will embrace and direct them.

In education, little has changed since Socrates stood before his pupils and transferred his knowledge and developed their minds in a face to face setting. Certainly, that has been the primary medium of education up until this day. However, online instruction is offering a mode that takes full advantage of today’s technology as a natural evolution of traditional instruction.

Louis Soares, director of postsecondary education at the Center for American Progress recently posed this question, “Is there a secret sauce to a professor sitting in front of 400 students and lecturing that couldn’t be [replicated] online?”

Or made better, using technology?

Of course not, and with the level of communication now available to students and faculty other than office hours, there is more likelihood and opportunity that students will be more engaged with their faculty concerning their studies.

After all, worldwide there are 294 billion emails sent per day and 4.1 trillion text messages. And today’s college students are using these, as well as Facebook, Twitter, Skype, Google+ and other social media to communicate. This means the transfer of knowledge through personal interaction is an “anytime and anywhere” proposition.

Online instruction is not making faculty extinct, but rather it is making them more accessible and therefore, more alive in educational terms. Volery (2000) noted that instructors will evolve from “intellect-on-stage” into “a learning catalyst because the level of interaction has changed in online delivery”.

Technology takes the classroom from bricks and mortar to electronic and virtual. But regardless, of whether it’s on a shaded hill in ancient Greece or a one room schoolhouse or a modern academic building or in front of your computer screen, there is always an instructor.

Wu and Hiltz concluded in their 2004 report that the instructor is an integral part of an online student’s success. They, also, found that effective instructors gave more guidance for discussions, and provided structured and focused topics for discussions. In other words, according to Knowton (2000), they create a learning environment and nurture a learning community with the benefits of today’s technology.

“The professor serves as coach, counselor and mentor; the students become active participants in learning. During the processes of learning, in teacher-centered classroom, professor lectures while students take notes. In online student-centered education, the professor serves as the facilitator, while students collaborate with each other in order to develop personal understanding of course content.” Yang and Cornelious (2005)

Due to the advantages of technology, online instruction properly developed and supported can be even more productive than traditional instruction.

In fact, a recent report for the U.S. Department of Education, Office of Planning, Evaluations and Policy Development, entitled Evaluation of Evidence-Based Practices in Online Learning: A Meta-Analysis and Review of Online Learning Studies (Washington DC 2010,) which examined comparative studies regarding online versus traditional classroom instruction from 1996 to 2008, found that  “on average, students in online learning conditions performed better than those receiving face-to-face instruction.”

This investigation, also, concluded that blended learning had better results than the traditional classroom instruction.

Barbara Means, one of the lead investigators and an educational psychologist at SRI International noted, “The study’s major significance lies in demonstrating that online learning today is not just better than nothing — it actually tends to be better than conventional instruction”.

A blind rush to online education can be fool’s gold if not well-assessed, strategized, marketed and supported. It is important to draw on the experiences and resources of those already in the field to develop the best business and instructional model for your institution. There can be no just “build it and they will come”. Conversely, once the decision is made, the faculty is committed, the plan has been thoroughly examined and approved and the proper resources are in place, the world is just a click away.

The decision to go online is being made by more and more colleges and universities, even our elite schools, as they start to appreciate the benefits as well as the market of online education.

Babson Survey Research Group and the Sloan Consortium, in their annual review of the state of Online Education in America, Class Differences, Online Education in the United States 2010, found that 30% of all higher education students have taken at least one online course. That’s 5.6 million students with projections of online enrollment continuing to grow significantly higher than total higher education enrollments.

Between Fall of 2009 and Fall of 2010, online enrollment increased by 21.1% while overall higher education enrollment only increased by 1.2%. The numbers are real. The trend is upward.  And though it might start to slow down just a bit, online programs will continue to outpace overall enrollment into the foreseeable future.

If you are not online or are not maximizing your online potential, then you need to start assessing your near term not long term strategic plan. Just as movies weren’t the fad Charlie Chaplin thought they would be, online learning and its further evolutions are not the fad that some in higher education think them to be.

Jul 16, 2011

Posted by:

AnnaK

Default Response

By Steven C. Panagiotakos, Senior Policy Advisor for Greenwood & Hall

July 15, 2011

As student loan defaults and student loan debt continue to trend upwards, regulators, lawmakers, policymakers and higher education institutions will be more and more motivated to act. In fact, a response has already been initiated by the President, Congress and the Department of Education.

When the federal student loan process was reviewed with an eye to reform, some basic questions were asked such as the inquiry of  Rep. George Miller (D-CA), then Chairman of the Education and Labor Committee,  “Why are we paying people to loan the government’s money and then the government guarantees the loans and the government takes back the loan?” This concern as well as some others were addressed when, in the historic health care legislation passed by Congress and signed by the President, commercial banks were eliminated as middlemen in federal student loan origination, which proponents at the time argued would save $63B over the next ten years, most of which will be invested into PELL grants.

On federal student loans signed after July 1, 2014, the following changes were made:

1. All federal student loans will be originated by the Department of Education. Commercial banks will not be able to originate.
2. Caps repayment at 10% of student’s income rather than 15%.
3. If the debtor remains current, then the loan is forgiven after 20 years rather than 25 years (even less for certain public servants).
4. A 6.8% interest rate (3.4% for those who qualify for subsidized loan).

 Last month the Department of Education issued its regulations pertaining to Title IV eligibility for career colleges by morphing the previously proposed gainful employment metric into a student loan repayment metric. This continues to increase the importance of student loan success to the DOE and those colleges effected. Because you might not be a career college or a for-profit, does not mean you will have perpetual absolution from this metric.

As warned by Peter Wood on January 16, 2011, in The Chronicle of Higher Education, the problem that this effort is trying to rectify is the efficient exploitation of the Federal Student Loan system while ignoring the quality of education provided and the high student debt caused.

However, he made a further important assessment when he wrote, “But the hard truth of the matter is that a great many colleges and universities in the not-for-profit sector are barely distinguishable from the for-profit institutions on any of these parameters except the efficiency by which they exploit the federal financial aid system.”

 There is no doubt that if the student default problem continues to trend upward then the spotlight will turn to the entire higher education spectrum.

Here are some of the future responses that are on the horizon or should be on the horizon to address student loan defaults and some of its ancillary issues.

Bankruptcy

Since 1978, federal student loans cannot be discharged in bankruptcy in order to protect federal taxpayer funds.

In 2005, commercial banks were able to get private student loans to be included in this discharge protection except under very rare circumstances.

However,  U.S. Senators Dick Durbin (D-IL), Sheldon Whitehouse (D-RI) and Al Franken (D-MN) joined U.S. Representatives Steve Cohen (D-TN), Danny Davis (D-IL), George Miller (D-CA) and John Conyers (D-MI) in introducing legislation, that they believe will restore fairness in student lending by treating privately issued student loans in bankruptcy the same as other types of private debt. They can be discharged.

Senator Durbin stated, “Unlike federal student loans, there are few consumer protections available for these private student loans leaving some students stuck with this debt for the rest of their lives. Today’s bill will restore some fairness in student lending, by allowing financially distressed borrowers of private student loans to discharge those loans in bankruptcy, just as other types of private debt can be discharged.”

Co-Signer Notice

Legislation has been introduced in the House and the Senate to require private lenders to ensure that co-signers understand their obligations, if the borrower dies before the loan is repaid. According to Lauren Asher, president of the Institute for College Access & Success, federal student loans are usually discharged if the borrower dies before the loan is paid off. However, co-signers of private loans may not have this protection. It is all dependent on the wording of their loan contract.

Facilitation of Consolidation of Students Loans

The Student Loan Simplification and Opportunity Act Of 2011 filed by Senator Sherrod Brown (D-Ohio), will give six million college students a financial incentive of a 2% reduction in their FFEL student loan balances if they consolidate them under the federal government’s Direct Loan program within nine months of the laws effect. “Having multiple payments to multiple servicers can complicate the repayment process and increase the risk that a borrower may miss a payment and accrue financial penalties,” Mr. Brown said.

The Congressional Budget Office estimated the legislation would save $1.8 billion over 10 years by eliminating federal subsidies for FFEL lenders and under this bill. Those savings would be reinvested into Pell Grants.

Job Creation

There is no doubt that a major part of the increase in student loan defaults is due to the dismal employment market that we now find ourselves in. Every policy, every program, every regulation and every law must be implemented with both eyes on job creation. Job creation is the key remedy to most of our economic problems.  If you don’t have a job or if you are only able to work part time, then you will struggle paying your bills including your student loans.

That is exactly the challenge facing young college graduates that is empirically laid out in The Economic Policy Institute’s report, “The Class of 2011, Young workers face a dire labor market without a safety net”. This report cites a loss of 11 million jobs with the average stay on unemployment running at nine months. In other words, the job problem is deep and it’s wide.

 It also found specifically that college graduates under the age of 25 are experiencing an unemployment rate of about 9.3% as of March 2011, which is close to the overall unemployment and almost twice as much as the 4.7% for college graduates over 25. This number is especially concerning when you compare it to the last two downturns (6.4% in summer, 2003 and 6.9% in summer, 1992). This report expects that newly minted college graduates will continue to struggle in the toughest job market for them since the beginning of The Great Recession.

The recent June 2011 numbers do not show any relief from this expectation with nonfarm payrolls only adding 18,000 jobs and the unemployment rate increasing to 9.2%. That means that 14.1 million are unemployed, companies are not hiring and jobs are not being created. So, the response should be twofold, “Jobs, Jobs, Jobs” and “Retain, Persist and Graduate.”

Institutional Response

Colleges and universities need to become proactive in addressing the student loan non-compliance problem both at the front door and the back door.  On the front end, schools should have some mandatory education for prospective students to complete before getting their loans. For example, Virginia’s Tidewater College makes students develop budget plans.  On the back end, before a diploma is granted, each graduate should have to complete a formal process that will remind, educate and notify them of their obligations under their student loan contracts, the different remedies available to help repayment problems and the consequences of defaulting.  Throughout their educational journey, schools need to invest more in student success and contact resources that will increase retention and persistence rates and get them to graduation. As is well documented, those with a degree, even in this job market, have a higher likelihood of getting a job and making more money than those who don’t. And that means better resources for timely repayment of their student loans. 

Steven Panagiotakos
Greenwood & Hall
spanagiotakos@greenwoodhall.com

Steven Panagiotakos is the Senior Policy Advisor at Greenwood & Hall. From 1993-2011 he was in the Massachusetts House of Representatives and the Massachusetts Senate, where he was the Chairman of the Ways and Means Committee.