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UW Slips Slightly in US News Rankings: Here’s Why

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US News and World Report released its annual college rankings Tuesday and the UW dropped from 42 to 46 in the National Universities category, and from 10 to 13 among public universities.

This drop isn’t as severe as it might seem. As noted by the Seattle Times, this change is a relatively small one. In the rankings, many universities may have equal scores and so share a numeric rank. This year, for example, there are five institutions that are ranked 46th.  Last year, there were several institutions ranked 42nd. Only one institution is now ranked above the UW that was not ranked above or tied with the UW last year: UC Irvine.

Ranks are calculated by weighting a number of factors:

  1. Undergraduate academic reputation
  2. Retention
  3. Graduation rate
  4. Faculty Resources
  5. Student selectivity
  6. Spending per student
  7. Alumni giving

Interestingly, the factor for which the UW shows the greatest deviation from other similarly ranked institutions is “Faculty Resources.” While the UW is ranked 46th overall, it is ranked 150th in terms of faculty resources. The two most heavily weighted measures in faculty resources are:

  1. The percentage of classes with fewer than 20 students, and
  2. Average faculty salary.

Given the recent economic situation faced by the UW, it is not surprising that these are problematic measures for us.

In summary, the UW’s ranking has dropped, but the significance of that drop is low. Moreover, the UW’s low ranking on the key “Faculty Resources” factor is to be expected given the salary freeze and state funding cuts the UW has experienced during the Great Recession.

New to the OPBlog

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Hi, my name is Becka Johnson. I recently joined the OPB as the Higher Education Policy Analyst and am excited to be contributing to the OPBlog as part of my new position. I earned a BA in Psychology from Whitman College and, this June, I received my Master of Public Administration (MPA) degree from the UW’s Evans School of Public Affairs. I look forward to putting my experience to use at the UW and to keeping the community informed of relevant policy topics.

Please feel free to contact me at jbecka@uw.edu if you have any questions or feedback. Thanks for reading!

Pell Expenditures Decrease as Recipients Increase

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The Pell Grant program, the largest federal student grant program, was expected to be $20 billion short of the $40 billion price estimated for FY12 (which ended July 1). However, the Department of Education surprised many with newly-released data showing the federal government not only spent well under that estimate at only $33.4 billion, but in fact $2.2 billion less than FY11.

Recently, Pell eligibility increased dramatically as college enrollments rose and the recession continued to impact family/student income. This trend continued in FY12 and, interestingly, the dip in Pell spending occurred despite a 58,000 increase in Pell recipients—to almost 9.7 million. In fall 2011, nearly one quarter of UW freshmen were Pell eligible.

Reasons for the decline in Pell spending include:

  • The elimination of the year-round, or summer, Pell Grant, which allowed students to qualify for two awards in a year.
  • More students attending college part time as part-time status reduces Pell award amounts.
  • Fewer students attending for-profit institutions, which tend to enroll students who qualify for larger awards. Recent bad press and slumping enrollments have hit for-profits hard. Consequently, the number of Pell recipients at for-profits declined by 108,000 students, to roughly 2.1 million, and accounted for $1.4 billion of the decrease.

The drop in Pell expenditures is a relief for most lawmakers as they face next year’s “fiscal cliff” and must address both the impending tax hikes (when Bush tax cuts expire) and the automatic spending cuts (as mandated by the sequester). The Obama administration and congressional Democrats have resisted financial aid-related budget cutting, maintaining the maximum Pell award of $5,550 and writing specific protection for Pell Grant funding into the Budget Control Act. However, recent financial straits have already caused the federal government to eliminate several student loan programs such as the previously-mentioned summer Pell Grant, the six-month grace period for loan repayment, subsidized Stafford Loans for graduate students, and incentives for early loan repayment. With the sequester and difficult budget decisions looming on the horizon, it is safe to say that no funding is safe.

Washington Monthly National Universities Ranking Released

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Today, the Washington Monthly released its 2012 national university rankings. Unlike the better known U.S. News & World Report survey, which considers only “widely accepted indicators of excellence [such as] freshman retention and graduation rates and the strength of the faculty”, the Washington Monthly focuses on schools’ “contribution to the public good”. It rates schools in three broad categories: Social Mobility (recruiting and graduating low-income students), Research (producing cutting-edge scholarship and PhDs), and Service (encouraging students to give something back to their country).

The University of Washington-Seattle ranks 8th in the nation among national universities, while UC San Diego, Texas A&M and Stanford take the top three spots. This represents a huge jump for the UW, from 23rd in 2010 to 16th in 2011, and now to 8th place, achieved amidst severe budget cuts. The UW’s notably high score on social mobility (6th in the nation) is a reflection of its strong commitment to financial aid despite rising tuition rates. For full results and a more thorough explanation of the methodology, click here.

New Employment & Financial Aid Data Released

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Yesterday, the National Center for Education Statistics (NCES) published a report summarizing fall 2011 employment data and academic year 2010-11 student financial aid data submitted by all Title IV institutions to the Integrated Postsecondary Education Data System (IPEDS).

Here are some of the findings:

ON EMPLOYMENT:

  • Public institutions offered more employment opportunities to graduate students than private ones: fully 17% of the public institutions’ labor force was composed of graduate students, while the figure stood at 7% for private non-profits and 0.3% for private for-profit institutions.

  • Private for-profit institutions relied heavily on part-time instructors: 86% of the staff engaged in instruction, research and/or public service at these institutions was reported as part-time, while 36% of public institution instructional staff and 30% of private nonprofit institution instructional staff fell in that category.

ON FINANCIAL AID:

  • For those attending public four-year institutions, average cost of attendance before aid was approximately $17,600 and net price was about $11,000; for those attending nonprofit institutions, average cost before aid was twice as high – approximately $34,000 – while net price was about $19,800; finally, for those attending for-profit institutions, average cost before aid was approximately $27,900 and net price was about $22,500. The average cost of attendance includes tuition and required fees, books and supplies, room and board, and other expenses.

  • An analysis of the average amount of total Title IV aid received by students per income category demonstrates public institutions’ focus on targeting those most in need: public institutions covered 53% of the total cost for students with family income below $30,000, and only 10% of the cost for students with family income above $110,000. The following table provides more detail on the comparable figures for private institutions.

Average Title IV aid
and average price before aid by type of institution,
academic year
2010-11

Family Income Level

$0-30,000

$30,001-48,000

$48,001-75,000

$75,001-110,000

$110,001 +

Public

Average Aid

9,288

7,869

4,742

2,328

1,703

Aid Ratio

53%

45%

27%

13%

10%

Avg. Net Price

8,286

9,705

12,832

15,246

15,871

Private Nonprofit

Average Aid

18,190

17,687

15,262

13,090

10,515

Aid Ratio

54%

52%

45%

39%

31%

Avg. Net Price

15,798

16,301

18,726

20,898

23,473

Private For Profit

Average Aid

5,472

4,517

2,467

962

853

Aid Ratio

20%

16%

9%

3%

3%

Avg. Net Price

22,336

23,292

25,342

26,847

26,956

The release of this information by the NCES coincides with an emerging effort aimed at “reimagining aid design and delivery” supported by the Bill & Melinda Gates Foundation, which was the subject of a recent article on Inside Higher Ed. We will keep abreast of developments related to this effort and provide updates as more information emerges in the next few months.

Another Depressing State Budget Forecast

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Yesterday, Governor Gregoire’s budget office issued a lackluster four-year revenue and expenditure outlook for the state’s near general fund. The coming 2013-15 biennium (FY14 & FY15), for which the Governor will release a budget in December, comes up short on anticipated revenue and long on expenditures. Before accounting for required increases in K12, across-the-board salary increases, and minor increases to financial aid spending, the anticipated deficit for both years of the coming biennium is $1.7 billion. If the Legislature appropriates funds from the budget stabilization account, the biennial deficit shrinks to $956 million. The deficit was calculated based on the assumption that near general fund revenue will grow 2.2% in FY14 and 4.4% in FY15.

Expenditure assumptions include the backfill of an equivalent 3% salary reduction in each of the prior two fiscal years (FY12 & FY13). In other words, it is presumed that the Legislature will backfill the UW’s budget by approximately $12 million per year to replace the temporary salary-related reductions it imposed on the University during the prior biennium. However, without an infusion of revenue, the Legislature will not be able to fund required K12 policy enhancements, financial aid, or salary increases.

The outlook serves as a reminder that the state’s economy remains tenuous and even a minor replenishment of higher education spending is questionable.

Credit Agencies Release Reports on the Financial Health of the Higher Education Sector

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Late last week, Moody’s and Standard & Poor’s released a revised assessment of the financial health of the higher education sector.

Not surprisingly, both agencies noted that the sector’s financial risks have intensified since January: state budget appropriations continue to fall, operating expenses are outpacing tuition revenue growth, and diminishing family net worth could affect enrollment as a growing number of colleges become unaffordable. At the same time, institutions’ ability to respond and adapt to these risks is limited by rising political and regulatory scrutiny of the industry and tougher accreditation standards.

S&P and Moody’s also highlighted the importance of successfully navigating the rising tide of technology change. They noted that administrators would need to be “flexible” and “bold” to take advantage of new opportunities for the delivery of educational content and new revenue streams.

Unfortunately, the reports are not public, but Moody’s and S&P subscribers can obtain copies of them through the agencies’ Web sites.

Harkin Issues Damning For-Profit Higher Education Report

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Senator Harkin (D-Iowa) released a much anticipated for-profit higher education report today, detailing the sector’s disproportionate use of federal funds, predatory recruitment tactics, insufficient student support programs, and dismal student outcomes. The lengthy report contains alarming evidence that the colleges included in the two-year investigation – with few exceptions – engaged in behavior to maximize profit from taxpayer investment at the expense of students’ financial security and academic success.

Here are some of the findings:

  • Disproportionate use of federal (taxpayer-supported) funds: Last year, the federal government spent over $32 billion on financial aid in the for-profit sector (25 percent of all federal student aid funds available), though fewer than half of the students in that sector graduated with a degree in 2008-09. Committee staff found that 97% of students at for-profit institutions took out loans to pay their expenses, compared to 13% of students at non-profit community colleges and 48% of students at non-profit four-year baccalaureate institutions. These students also typically borrowed more money (57% borrowed more than $30,000) and defaulted on their loans far more often than their peers in the non-profit sector.
  • Focus on marketing and recruitment at the expense of student support and instruction: Not only do students studying at for-profit institutions take out more loans at higher rates, but their institutions spend far less on instruction and student support than on marketing, recruitment, and pre-tax profit. In FY09, for-profit institutions included in Senator Harkin’s report spent 22.7% of all revenue on marketing, advertising and recruitment expenses and 19.4% on pre-tax profit, but only 17.2% on instruction. On average, these corporations paid their CEOs in excess of $7.3 million annually. While practices varied, by and large, for-profit colleges employed three times more recruiters than student support services employees. The report concludes that, “…once a student is  enrolled that same level of service is often not available. This is true even though the companies seek to enroll the students that research demonstrates are most critically in need of those services.” The investigation found that two of the largest for-profits offered no career services and several have falsified job placement data in the last five years.
  • Current Federal Regulations Insufficient: One of the most alarming findings concerned the 90/10 proportionality rule, which dictates the amount of federal money that the colleges collect. Evidence of fraud was uncovered, as for-profit institutions sought to maximize profit and avoid the federal proportionality rule.    

Despite evidence of fraud, abuse of taxpayer funds, and a low, if not absent, standard of care for students, federal interventions seem unlikely at this stage, as for-profit support remains deeply partisan.  No clear intervention efforts emerged so far.

New Report Suggests State Budget Woes Will Continue

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A new study from the State Budget Crisis Task Force concludes that in many states, anticipated revenues will be insufficient to cover mounting Medicaid enrollment caseloads, underfunded pension commitments, and local government budget obligations. The authors focused their investigation on California, Illinois, New Jersey, New York, Texas, and Virginia. They predicted that anticipated revenues (from sales, income, or other taxes) would be both insufficient to cover expenses and fairly instable, as personal income remains volatile and unemployment (and underemployment) high. In other words, we are edging towards the state budget precipice, even as the national economy distances itself from the official end of the Great Recession proclaimed in 2009.

These conclusions are not unfamiliar to readers; we recently blogged about state-level fiscal uncertainty and sluggish revenue growth. However, this study sheds additional light on the subject, being the first to make a comprehensive assessment of the tension between mounting expenses and shaky revenues in highly populated states.

While Washington State continues to experience slow economic growth in some sectors and in its generation of tax revenue, the Economic Revenue and Forecast Council (ERFC), in its July collections report, refrained from making any firm economic revenue projections due to the excessive variability of receipts. The ERFC report also emphasized slowing job growth: while reducing state unemployment by 0.5 percent would require 160,000 new jobs each month, the state only added 80,000 new jobs in June.

While anticipated revenue is increasing slightly, the downside risks of a second recession brought on by the debt crisis in Europe, disappointing job growth, and depressed consumer confidence are significant. Despite these concerns, ERFC predicts slight revenue increases for both the 2011-13 and 2013-15 biennia, due to legislative action from the 2012 supplemental budget.

 

MOOCs, Plus a Sign Off

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I’m moving on from the UW and wanted to leave a note here on the blog about how much we appreciate any and all readers and to say that you can look forward to even more authors and topics in the near future!

As I exit, the news of the UW linking up with Coursera has hit the press. While MOOCs offer amazing new opportunities for higher education across the world, they are nowhere close to being more than a complement to the education universities currently provide, as was outlined in a recent OPB brief.

As we naturally get caught up in the high hopes for the transformative power of technology in what is considered a very tradition-bound industry, I recommend that anyone interested read a recent book by Columbia Professor of Literature, Andrew Delbanco. College: What it Was, Is, and Should Be  does not so much propose solutions for the myriad outstanding questions about the future of higher education, particularly public higher education, but does a fantastic job of reminding us how and how much higher education has evolved in the United States over time and, most importantly, what education actually is. Any efforts to alter or replace our current delivery model must be grounded in a clear understanding of that model’s origins, essence, and outcomes.

It’s been a pleasure creating and maintaining OPBlog. As always, stay tuned here for the latest from from OPB.

Jessica Thompson