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

Sticker Price is Up, but Net Price is Down

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According to a new report on Net Price by the College Board, tuition and fees, adjusted for inflation and offset by federal grants and tax benefits, are actually lower than they were five years ago. Although tuition and fees rose steadily over the past five years, grants and financial aid outpaced this growth, leading to a net decrease in the actual average price paid by students. The decrease affected both public two-and four-year institutions and private four-year colleges, but were most marked at private schools, where tuition increased by 4.6 percent and financial aid increased by 7 percent this year.

In all, inflation-adjusted net tuition at private schools has decreased 11.2 percent in five years. At public four-year institutions, low-income students generally received grant money that covered all of tuition and fees, with about $1,720 left over for other educational expenses. These findings seem to suggest a shift to a high-tuition, high-aid model in higher education, especially as state investment in colleges and universities declines.

The College Board reported similar findings last year. More about how the UW seeks to make higher education accessible to all students is available on the financial aid website and the Husky Promise program website.

Are Public U Presidents Paying a Price for Seeking Change?

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Recent news has some wondering whether unsuccessful attempts by some public flagship institutions to obtain greater autonomy from the state, and in some cases from a larger university system, have led to negative consequences for the university presidents pushing for the reforms.

Having been strongly criticized by University of Wisconsin system officials and Chancellors for her leadership in working with Wisconsin governor Scott Walker to work out a deal that would allow the Madison campus to split off from the system and enjoy a considerable increase in management and financial autonomy, Chancellor Biddy Martin has announced that she is leaving UW Madison for Amherst College after only three years. In an interview with the Chronicle of Higher Education, Martin claims that the failed attempt to separate the Madison campus from the system is not the reason she is leaving, although she does admit that the strain of budget cuts and politics of leading a large public university may have played some role in her departure.

It appears more clear that University of Oregon President Richard Lariviere, who also led a charge to separate his institution from the greater system, was punished for that effort as the State Board of Education made a point to renew his contract for only one year (when three is standard), and added conditions that he participate more in the efforts of the system as a whole.

Meanwhile, two other presidents of large public research institutions, the University of Arizona and the University of Massachusetts, are facing questions about their leadership over the past several tumultuous years.

Projected 2011-13 State Revenue Takes a Dive

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Yesterday, the Washington State Economic Revenue and Forecast Council released a troubling update for 2011-13 state general fund revenue. Overall, the over $730 million dollars held in reserve in the recently signed budget is now projected to be only $163 million.

If this trend continues, mid-year and supplemental session cuts may be likely. Please see our OPB brief for a summary of this revenue report.

Improved Educational Efficiency at Higher Ed Institutions

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A new State Higher Education Executive Officers (SHEEO) report indicates that institutions of higher education have increased their educational efficiency by decreasing their staff-to-student ratio since 2001. Using three IPEDS data surveys—the Fall Staff survey, 12-month Enrollment survey, and Institutional Characteristics survey—it was calculated that, although both enrollment and staffing have increased between 2001 and 2009, staffing has increased at a far slower rate. At research universities with very high research activity, like the University of Washington, staff levels increased only 6 percent while student enrollment increased by 19 percent. This suggests that higher education institutions have found ways to educate more students with fewer staff. Further findings included:

  • Clerical, secretarial, technical, service, maintenance and crafts staff levels declined steadily over the 8-year period (2001-2009)
  • Faculty, graduate, and other professional staff levels fluctuated more, but tended to increase, showing that universities focused on ensuring instructional quality to keep pace with higher student enrollment
  • Executive and administrative staff levels stayed constant
  • For very high activity research institutions, both full- and part-time employment per 100 student FTE declined (by 12 and 8 percent, respectively)

Altogether, universities with very high research activity and large hospitals like the UW employed around 40 staff per 100 student FTE in 2009, down from 45 in 2001. These data indicate that universities have been innovative in their response to steadily increasing enrollment by focusing staff resources on instruction and streamlining administrative and clerical processes. For more information, check out other UW efficiency initiatives or read the full SHEEO report.

Harkin Holds What Could be Last Senate Hearing on For-Profits

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Days after the Department of Education released its finalized Gainful Employment rule, Senator Tom Harkin held his fifth Senate hearing investigating the practices of the for-profit higher education industry. Senator Harkin focused the hearing on the high levels of student borrowing and outsized loan default rates for students at for-profit institutions. Previous hearings and reports have revealed that:

  • Less than 10% of postsecondary students are enrolled in for-profits, yet they receive 23% of federal aid, and account for 44% of all loan defaults.
  • 95% of all students at for-profits borrow money to attend, compared to less than a quarter of community college students, 64% of students at public four year institutions, and 72% at private four year institutions.

Additionally, Harkin grilled Department of Education Under Secretary Martha Kanter on whether the softened gainful employment rule released by the Department would do enough to help reign in exploitative practices of the for-profit higher education industry, noting that stock prices in the industry increased significantly upon publication of the revised rule whereas previous iterations had sent prices down. Kanter, who was attending in place of Secretary Arne Duncan, defended the regulation as a step forward.

Harkin concluded that while the Department of Education regulations were ‘better than nothing’, he continues to believe that Congressional action via legislation may be necessary.

No Republican members of the committee were present, and no further hearings on the topic are scheduled at this time.

For previous OPBlog posts on this topic see:

Department of Ed Finalizes (and Softens) Gainful Employment Rule

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After much debate, public comment, intense lobbying, a lawsuit, and the threat of political action to block them, expansive new US Department of Education higher education regulations are set to go into effect on July 1st.  While the Department has made revisions to and provided implementation guidance for most of the new rules, it had several times delayed finalizing the most controversial regulation, known as Gainful Employment, which was formally published on June 2nd.

The rule  establishes thresholds for loan repayment rates and debt to income ratios for graduates of for-profit and non-degree career oriented programs, with the ability to cut off federal financial aid funding for entities that do not meet the standards, among other penalties. The final rule was significantly revised from earlier versions, including a delayed implementation year, altered criteria and formulas making it more difficult to find an institution in violation of the rule, and a host of other changes that are widely seen as having softened the rule in response to the pressure applied by the for-profit industry and its political supporters.

Although the gainful employment rule is limited in scope and does not currently apply to degree programs at traditional institutions, as we have previously stated, and both The Chronicle and Inside Higher Education are reporting, the regulation is a watershed moment with important implications for federal regulation of higher education into the future.

Improved Job Prospects For Recent College Graduates

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As the New York Times reported in late May, hiring of recent college graduates is up five percent from last spring—encouraging news for UW students graduating in a few days’ time. The Seattle Times confirmed that this trend is followed in Washington State as well, with the unemployment rate falling from 9.2 percent in April to 9.1 percent in May. Seniors seem more confident and optimistic as local companies like Amazon and Boeing announce their intent to hire more professionals, particularly in the science and technology fields.

Unfortunately, the impact of the recession is still felt by many looking for jobs. Less than a third of college graduates have jobs lined up before graduation, and only 70 percent find one within six months. Some college graduates are forced to take jobs unrelated to their degree, and many—according to the New York  Times, close to 49 percent—take jobs that do not require degrees at all, which edges out high school graduates and teenagers looking for work. Finally, median salaries for college graduates have decreased from $30,000 in 2006/7 to $27,000 in 2009/10.

According to graduates the New York Times and the Seattle Times interviewed, the best way to land a job in tough economic times is networking—most seniors with jobs lined up after graduation had found the position through an acquaintance or college job fair. Many students indicated they wished their schools had done more to prepare them for job hunting.

To see what the UW is doing to help students find jobs in the current economy, check out the UW Career Center website, which offers a wealth of job-related information and services, including résumé building, networking opportunities, career fairs, and mock interviews. For more detailed information on official unemployment statistics, visit the Bureau of Labor Statistics website.

Importance of Need-Based Aid for Achieving Attainment Goals

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A recent Pell Institute Report proposed a new way to think about reaching President Obama’s goal of increasing the proportion of adults with a college degree to 60 percent by 2020. The Institute suggests that income inequality creates a two-tier educational system in which 25-34 year-olds in the top half of the income distribution have degree attainment rates of 58.8 percent, while individuals in the bottom half of the income distribution exhibit attainment rates of 12 percent. The Pell Institute claims that, by focusing on funding and supporting disadvantaged students, higher education can make progress towards achieving President Obama’s goal.  Specifically, the Institute recommends:

  • Improving access to four-year institutions for disadvantaged students
  • Provide data, disaggregated by family income or Pell receipt status, more readily and widely
  • Focus on changing the eligibility requirements for the Pell grant (such as GPA in high school or increased credit hour requirements), instead of cutting the maximum Pell amount
  • Bolster programs like TRIO and GEAR UP that support students academically and improve retention rates

The University of Washington’s commitment to disadvantaged students, through Husky Promise and other forms of need-based aid, are key institutional efforts to provide access to quality higher education for low-income students. In light of potential double digit tuition increases for resident undergraduate students in 2011-12, Husky Promise, as well as the State Need Grant and federal Pell Grant are critical programs for our students.

Pew Survey of College Presidents Highlights Divergent Views from General Public

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Along with its survey of the general public, the Pew Center recently published a survey of 1,055 two- and four-year, public, private and for-profit college presidents, concerning the quality, accessibility, and affordability of higher education. The two surveys were conducted around the same time and asked similar questions.  However, there were notable differences between the opinions of college presidents and the general public on key issues in higher education. On the whole, college presidents were less concerned about affordability and access, and more concerned with student and academic program quality. Some highlights of the data include:

  • 38 percent of college presidents think higher education is moving in the wrong direction, with only 7 percent believing the US system will be the best in the world in 2021
  • 42 percent of presidents believe college is affordable for most families (compared with 22 percent of the general population)
  • 17 percent of presidents believe students get excellent value for their money (only five percent of the general population agrees)
  • The majority (58 percent) of college presidents believe students come to college less qualified than their counterparts ten years ago, and only seven percent think current students study more than students ten years ago

Interestingly, leaders of for-profit schools were most likely to be pessimistic about the affordability and direction of higher education and student preparation. Conversely, presidents of the most selective schools were most optimistic about those factors. Furthermore, the majority of college presidents think it is unlikely that the nation will meet President Obama’s degree attainment goals by 2020. To find out more, check out the Chronicle’s analysis, our blog post on the general public survey or the full Pew Center report on its website.

No Surprises in (Nearly) Final State Operating & Capital Budgets

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While the House and Senate have yet to finish sine die today, both capital and operating budgets are close to final.

The UW’s operating budget cut is $207 million over the biennium. UW’s cuts are comprised of “higher education reductions” and a mandatory 3 percent, general fund state compensation reduction ($12 million per year). Compensation reductions, while mandatory, are not imposed on individual salaries at the colleges and universities but rather, are required compensation savings targets that the University must meet over each fiscal year.

The final operating budget includes a 16 percent resident undergraduate tuition rate cap but provisions from E2SHB 1795 (tuition setting authority bill) are included. The UW Regents will meet June 9, 2011 to discuss tuition setting authority.

The capital budget provides $26.3 million in state bonds for projects like Odegaard Undergraduate Learning Center and minor capital repairs. Additionally, a separate capital budget bill appropriates $53.6 million in UW Building Fees for preventative maintenance and building repairs as well as minor capital repairs.

Please review the OPB’s conference budget brief which assumes that the operating and capital budgets are signed by the Speaker of the House and the President of the Senate in their current forms. We will notify campus of any major amendments once the Governor has reviewed the operating and capital budgets.