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Content posted prior to 2020. Will not be remediated for accessibility unless specifically requested.

For Employment and Earnings, Major Matters

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The Georgetown Center on Education and the Workforce issued a new report,  Hard Times, which focuses once again on why a college education is so important to employment and earnings in the US economy. While persistent critics of the value of higher education point to the recently rising unemployment rate for new college graduates, 8.9 percent, the report points out that for workers with only a high school degree the unemployment rate is 22.9 percent, and 31.5 percent for high school dropouts. The combined unemployment rate for all workers with a BA degree is currently 5 percent.

In addition to pointing out the positive correlation between college education and earnings and employment, the report analyzes data by college major. Perhaps unsurprisingly, they found that the unemployment rate for majors closely tied to a particular industry or job (such as healthcare, business and education) was lower than the rate for those with more generalized degrees. The exception to this were majors like Architecture that are so closely tied to a currently ailing industry that current unemployment rates are the highest of all.

Ultimately, as the economy recovers and the recent graduates gain more experience, all graduates are expected to enjoy improved employment rates.

Online Learning Still Plagued by Uncertainty

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The Thomas B. Fordham Institute published an interesting paper recently called Creating Sound Policy for Digital Learning. While primarily focused on the role of technology in K-12 education, the paper provides perspective for higher education as well. This topic is especially important as the economic crisis continues to push universities to produce more with less and, as a result, demands to scale up online learning intensify.

The paper recognizes the hope and possibility that technology will produce productivity gains in education over the long-term, but addresses major questions about quality and cost and emphasizes the need for systematic testing and analysis prior to radically changing today’s teaching model. Among the important points brought up in the paper:

  • We must question not only whether online learning can be less expensive than traditional learning, but, more importantly, whether it can be both less expensive and at least as good (or better) in quality and outcomes. We do not yet have enough data to answer this question.
  • The world of online learning is not monolithic. There are many ways to integrate technology with learning , and each model has very different costs and benefits and downsides.
  • Like with any new model, the start-up costs are very high and require a large up-front  investment.
  • Many assume that online learning will minimize labor costs by reducing a reliance on in-person instruction, but labor costs associated with developing, running, and maintaining sophisticated technology-based programs are themselves very high.
  • Similarly, online learning requires a dependence on expensive equipment (not only individual learning devices for teachers and students, but also servers, storage, and all the needs that accompany the maintenance and management of a large, technology-based enterprise).
  • Because technology changes so frequently, many of these costs are confronted anew on a much more regular basis than in a traditional educational model (e.g. Universities spending millions to wire entire campuses and then very quickly having to switch everything over to WiFi).

Technology has revolutionized how we live and do business in the modern world. This has been true in education as well, but the effect has not yet been as transformative as was hoped for. As education becomes more important in developing the human capital required for the economy of the future, its rising costs have become a bigger target for reform. And while it is clear that technology can and should play a larger role in changing how we educate the students of tomorrow, it is important that neither the tools of education nor the cost of education take precedence over the quality of the education.

Tax Benefits Increasingly Key to College Affordability

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Note that the report summarized in this post reflects data through 2007-08. We know from more recent data that 2009’s expansion of the American Opportunity Tax Credit (formerly the Hope tax credit) has more than doubled both benefit and participation rates, so we anticipate future reports to reflect similar but magnified findings.

In its latest Stats in Brief report, the US Department of Education analyzed the impact of federal education tax benefits on college costs for families in 2007-08. The report analyzes three different types of education tax benefits that applied in that year: the Hope tax credit, the Lifetime Learning credit, and the tuition and fees tax deduction.

Eligibility for the credits and deductions was based on student enrollment status, family income level, and citizenship status, and benefits could only be claimed based on the net tuition paid, after grant aid and veterans’ benefits had been taken into account. During the time period analyzed, the Hope credit could be deducted multiple times for multiple children, with a maximum of $1,650 per dependent student. The Lifetime Learning credit and the tuition and fees deduction could only be claimed once per return, with maximums of $2000 and $4000, respectively. The report showed that higher education tax benefits have become an increasing source of student aid: total benefits reached $6.85 billion in 2007-08, and comprised 6 percent of the federal government’s aid dollars that year.

Other interesting findings include:

  • 47 percent of all students in 2007-08 were estimated to have received a federal education tax benefit, reducing college expenses for the year by an average of $700. By contrast, only 27 percent of students received a Pell Grant the same year.
  • Tax credits were most beneficial for low-middle and high-middle income families: low-income families generally do not have enough after-grant net tuition expenses to qualify for benefits, and most high-income families exceed income limits. Of low-middle income families, 56 percent received tax benefits in 2007-08, compared to 63 percent of high-middle income, 48 percent of high income and 29 percent of low income families.
  • While the average benefit for families  in 2007-08 was $700, high-middle income families received an average of $1000 and low-middle income families received $900 in tax benefits.
  • On average, tax benefits decreased the cost of college attendance by about 5 percent.

For more information, check out the full report. To learn more about available tax credits, visit UW’s Office of Student Financial Aid or the IRS’ website.

Higher Ed News Roundup

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With the special legislative session wrapped up here in Washington, and regular session not set to begin until January 9th, here is some of what has been happening in higher education elsewhere.

Federal Budget Agreement Preserves but Alters Pell Grants: It appears that a last minute FY2012 budget agreement in Washington DC will avert a federal government shutdown. It is reported that this agreement, which cuts billions of dollars and increases NIH funding by a modest one percent, preserves the maximum Pell Grant amount of $5,500 (a priority for Democrats), but alters eligibility. Under this language, Pell grants could only be used for 12 total semesters, not 18. Additionally, the annual income threshold at which a student is automatically determined to have zero Expected Family Contribution (EFC) is lowered from $30,000 to $23,000. Stay tuned to the Office of Federal Relations  for frequent updates on these budget negotiations.

Berkeley Unveils New Aid Program: UC Berkeley made big news this week for announcing a new financial aid program aimed at middle class Californians. Students from families making up to $80,000 per year already attend UC schools tuition-free in California. Under this new plan, UC Berkeley students from families making between $80,000 and $140,000 will have to contribute a maximum of 15 percent of annual income toweard the total cost of attendance at Berkeley (currently $32,000, including room and board). The student would also have to contribute about $8,000 per year via loans, work study or scholarships. According to the New York Times, based on current costs, this programs represents a discount ranging from 10 to 37.5 percent for families that fall within the specified income range. A number of private insitututions have similiar programs, but Berkeley is reported to be the first large public institution to follow suit.

Lariviere Out, Berdahl in at Oregon: After less than three years, Richard Lariviere has been fired by the Oregon State Board of Higher Education as President of the University of Oregon following a year in which he found himself at odds with the state System as he pushed for greater independence for the University of Oregon. The controversial move to oust a President who enjoyed student, faculty, and alumni support, was immediately followed by the appointment of Robert Berdahl as interim president. Berdahl is a former long-time University of Oregon professor and Dean, and has also served as the President of the University of Texas, and UC Berkeley Chancellor, among other roles. Berdahl recently ended his tenure as AAU President and took a highly publicized position as a part-time advisor to Lariviere at the University of Oregon.

More Higher Ed Cuts in CA: California Governor Jerry Brown announced another billion dollars in mid-year state  budget cuts this week as yet another growing budget deficit loomed. The mid-year cuts include another $300 million reduction for the state’s three higher education systems (UC, CSU, and community colleges), which comprise the largest public higher education system in nation. While UC hopes to use temporary funds to bridge this latest cut for a year, further capped enrollments and tuition increases may be likely throughout the system.

VA Announces New Investments in Higher Ed: Meanwhile, Virginia is one of the only states increasing higher education funding. Governor McDonnell announced a new $100 million in funding for higher education, alongside new capital funding for longer term growth. The money is intended to support the goals contained in legislation passed last year, including increasing college attainment in Virginia, increasing affordability, and increasing the number of STEM and health related degrees awarded.

Higher Education Steering Committee Report Released

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Last year, Washington State Senate Bill 5182 abolished the Higher Education Coordinating Board and created a Higher Education Steering Committee to assess the state’s need for a redesigned statewide coordinating agency for education. The 13 person Committee met four times and was chaired by Governor Gregoire, and also included UW President Michael Young.

The Final Report, released today, determined that a statewide education coordinating agency in Washington should be singularly focused on increasing educational attainment (at all levels). The report recommends the creation of an Office of Student Achievement, overseen by a majority citizen Advisory Board. This Office would be responsible for:

  • Setting and monitoring short and long term statewide goals for educational attainment
  • Engaging in strategic planning to meet attainment goals
  • Developing performance plans and incentives
  • Engaging in education system design and coordination
  • Providing educational data, research, and analysis in partnership with the existing Education Research and Data Center (ERDC)
  • Developing budget recommendations into the future
  • Setting minimum college admission requirements
  • Administering programs that provide outreach and education to students to increase educational persistence
  • Addressing issues affecting student retention at major transition points (e.g. high school to college, and two-year to four-year)
  • Administering student financial aid programs
  • Serving as the primary point of contact for public inquiries on higher education

The report presents two options for the focus of the Office of Student Achievement. In Option A, the Office would coordinate among and between all state educational entities at every level. In Option B, the Office would focus directly on coordination between secondary and postsecondary education. Governor Gregoire announced today that she was endorsing the adoption of Option B outlined in the Committee’s Final Report and would present implementation legislation shortly.

House Passes Early Action Savings Bill

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In short order, the House of Representatives introduced, passed out of committee, and passed out of their chamber, an early action savings bill nearly identical to the Senate bill we covered earlier. Note that there are no material changes for higher education (including the UW) in the House version of the bill.

It is largely anticipated that the Senate will take up the House’s bill today and the Legislature will adjourn shortly thereafter.

 

Legislature Poised to Take Early Action to Achieve Limited Cuts

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At 3:30 PM today, the Senate Ways & Means Committee will hear an early action bill addressing 25% of the current $2 billion deficit in the form of $323 million in budget cuts and $106 million in fund transfers. Both chambers are expected to move legislation forward quickly in order to sine die at the end of this week.

This bill would cut $248,000 from the UW’s general fund base  to address expected workers compensation rate increases that are charged to all state agencies, based on staffing levels. Otherwise, the bill affects the University and all of higher education very little.

Agencies most affected by the reductions in this bill are Human Services, DSHS, and K12. Human Services reductions (-$127 million) include expenditure savings and reclaiming state appropriations made unnecessary due to unanticipated, higher federal funding. Budget cuts to K12 (-$75 million) include central administrative reductions, school bus depreciation payment shifts, and enrollment funding adjustments. DSHS budget cuts (-$56 million) include delaying payments for programs, capturing savings generated by lower than anticipated costs, and reducing administrative costs.

Regular session begins on January 10, 2012 and reducing expenditures in the current biennium to address the deficit will be the primary focus of session.

New OPB Website!

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We’ve been a bit quiet on the blog front lately. Mainly due to our focus on redesigning the OPB website, which has just gone live!

In particular, we have:

  • Created a new office directory that allows the user to search for staff by content area.
  • Created multiple ways to identify or locate the content you are searching for, including OPB department homepages, quicklinks for popular destinations, topical top-bar navigation that seeks to direct users to popular content even if they are not familiar with UW/OPB terminology or departmental divides, and a search button specifically for OPB content.
  • Added a homepage SlideDeck feature that highlights more recent content in a user friendly way.
  • Created an automated blog feed on the homepage!

While the website will be a work in progress, we hope it represents a major step forward in terms of the user experience. Look out in the coming months for a great interactive data portal, as well as new interfaces for the BillTracker and for accessing current and historic tuition and fee rates.

Many thanks are owed to Creative Communications for their amazing work with us throughout this project! Their creativity and professionalism (not to mention patience with those of us who knew far too little about all things technical) has been invaluable. We look forward to continuing to work with them as we continue to build out the site!

Please contact us with any feedback, questions, or problems regarding this new website!

Governor Cuts UW Funding by $37M, Proposes Offsetting Tax Increase

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The Governor’s budget office released the first supplemental budget proposal today, further reducing state expenditures for the 2011-13 biennium by $1.7 billion. All told, higher education institutions would absorb about nine percent of the total cut.

Under the Governor’s proposal, each of the state’s six baccalaureate institutions  would receive 16-17 percent cuts in state funding for Fiscal Year 2013 (FY13), while community and technical colleges would receive a 13 percent cut.

Funding cuts are once again disproportionately concentrated at four-year institutions even though the Governor discussed making equal across-the-board cuts as recently as October, because, as noted by budget staff, four-year institutions have a greater ability to   generate tuition revenue than community colleges.

Note that the Governor’s budget eliminates funding for the state’s Work Study program next academic year but importantly, preserves funding for the State Need Grant program.

For more information about budget increases for the College of Engineering, aerospace innovation funding, and financial aid impacts, please review our Planning & Budgeting brief.