How Can We Help America's Opportunity Youth? Five Lessons Learned in New Orleans

Nov 20, 2013Nell Abernathy

Young people who aren't in school or working aren't beyond hope, but we need to invest more in the programs that will help them.

Young people who aren't in school or working aren't beyond hope, but we need to invest more in the programs that will help them.

The great recession has hit younger, less educated workers hardest, leaving 6.7 million young people between the ages of 16-24 out of work and out of school. These “Opportunity Youth” are more likely than their peers to experience unemployment, low wages, and poverty as adults, and more likely to end up incarcerated or in need of government assistance.

The Roosevelt Institute’s Bernard L. Schwartz Rediscovering Government Initiative went to the heart of the crisis, New Orleans, where 23 percent of young people between the ages of 18-24 are out of work and out of school, compared to a national average of 16 percent.

We asked expert academics and practitioners how we, as a country, can tackle this pressing challenge.

Here’s what we learned:

I. Opportunity Youth remain hopeful and we should too.

The vast majority of Opportunity Youth remain motivated and optimistic. One of our panelists, Amy Barad, Director Strategic Initiatives at the Cowen Institute for Public Education Initiatives, summed it up well: “What makes me hopeful is the kids themselves, they really want to get and education, get a job and contribute to society. Based on responses to a national survey, nearly three-quarters of Opportunity Youth are very confident or hopeful that they will be able to achieve their goals. Over three-quarters of respondents believe that getting a good education and job is their own responsibility and depends on their own effort.”

According to a survey conducted on behalf of Civic Enterprises and America’s Promise Alliance, 77 percent of those surveyed believe that getting a good education and a good job is their own responsibility and whether they succeed depends on their own effort, and 73 percent of Opportunity Youth are confident or hopeful in their ability to achieve their life goals. Here are those results in chart form:

II. However, the obstacles to reconnection are enormous and costs of disconnection are huge.

Disconnected Youth are more likely to grow up in poverty than their peers and were hit hardest by the recent recession. They are unlikely to have role models with degrees, the qualifications they need, transportation options for travelling to a job, or access to good jobs in their neighborhoods.

“The challenge is what urban planners call a wicked problem. The factors affecting disconnected youth are numerous, messy, and inter-related," Lauren Bierbaum, Executive Director of the Partnership for Youth Development, said. The obstacles to addressing disconnection are structural and rooted in communities.

For more, see the graphs below from Sarah Burd-Sharps and Kristen Lewis's report One in Seven: Ranking Youth Disconnection in the 25 Largest Metro Areas.

III. Some programs are successfully tackling these challenges, and the Opportunity Youth are eager to receive the help.

Two much-heralded programs designed to support these young people include Project U-Turn in Philadelphia, which recently won $499,000 in funding from the Aspen Institute as part of a plan to identify and replicate a national model, and YouthBuild, a nationwide Department of Labor program for high school dropouts.

Because the long-term societal costs of disconnected youth who don’t get help include lost taxes, more government transfers, higher prison budgets, and more, upfront investment in these programs is much cheaper than doing nothing.

And kids really want this help. “I’m excited to see the youth that are out there and that really want these programs,” Cherie LaCour-Duckworth, from the Urban League of Greater New Orleans, told us. “They are screaming for them. But funding has been cut drastically.”

Through Project U-Turn, the City of Philadelphia launched a collaborative effort to provide at-risk youth with needed services and raised the city’s high school graduation rates from 52 percent in 2005 to 64 percent in 2012. The following graph provided by Project U-Turn demonstrates the program's success so far:

According to a 2010 survey, 50 percent of YouthBuild participants received a high school degree or GED at the end of the program and 60 percent either went on to college or found full-time living wage jobs. Here is a chart illustrating the progam's impact:

Taxpayers are going to pay one way or another, either for fixing the problem upfront or for the costs of negligence later. The following charts from Civic Enterprises' reports on its National Roadmap for Opportunity Youth and The Economic Value of Opportunity Youth show this clearly:

According to the Civic Enterprises Survey, the kids are eager and ready for this help:

IV. But here is the rub: despite the long-term societal and fiscal benefits, we are under-investing in these intervention programs.

Most programs successfully serving disconnected youth are over-subscribed, and due to austerity measures, funding is further reduced. Youth opportunity grants authorized through the Workforce Investment Act reached 90,000 young people and reduced the overall number of out-of-work, out-of-school teens. But the program has not been funded since 2005, and sequestration has reduced overall workforce training funds by an additional $1.5 billion.

AmeriCorps-funded programs, which offer young people from diverse backgrounds the opportunity to serve in communities across the country, have been found to improve graduation and employment rates. The 2009 Serve America Act passed by Congress committed to increasing the number of AmeriCorps positions from 75,000 to 250,000 by 2017. The Act has not been implemented, however, and 85 percent of the more than 500,000 applicants were turned down in 2012. 

Here's a pair of charts highlighting this problem, from the National Skills Coalition and Service Nation

V. So what now?

“The only way we’re going to be able to have an impact is if government at all levels tackles these issues,” Jerome Jupiter, from the Youth Empowerment Project, told us in New Orleans, “This is no one person’s issue. We need all hands on deck – key stakeholders at the federal, state, and local levels, as well as institutions such as higher education all must work collaboratively to address youth unemployment.” 

Nell Abernathy is the Program Manager for the Roosevelt Institute's Bernard L. Schwartz Rediscovering Government Initiative.

 

Banner image via Shutterstock.com

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Local Experiments May Counteract Austerity in Education Funding

Oct 17, 2013Raul Gardea

California is placing a new emphasis on local community needs and closing the poverty achievement gap in education, and the rest of the country would do well to follow.

California is placing a new emphasis on local community needs and closing the poverty achievement gap in education, and the rest of the country would do well to follow.

As our country’s economy has limped along from one crisis to another over the past several years, the impact of state and federal austerity measures on communities has exposed our troubling national priorities. A new report by the Center on Budget and Policy Priorities showed that despite the Great Recession technically ending in 2009, schools have yet to return to pre-recession spending levels, and in some states the cuts reach up to 20 percent per pupil. These drastic cuts have become the norm as communities in states that have resorted to austerity to put out short-term fires must now cope with the fallout from such measures.

And then the government shut down.

So on top of underfunded schools, we had Head Start agencies on the chopping block, long-term WIC funding up in the airfurloughed workers flooding unemployment offices, and the nation on the brink of defaulting on our debt yet again. For many financially insecure families, it’s easy to see why they might hesitate before placing trust in their representatives in Washington or the state capitol to solve these problems.

As a result, the idea of robust and inclusive public education seems like a thing of the past. Cuts in education spending disproportionately affect low-income students, taking resources away from the institutions designed to prepare a generation for an already murky labor market.

California is taking a different path. Rather than normalizing those drastic cuts in school funding, the state is reinvesting the gains from its economic turnaround into providing its students a path to a brighter future. This summer, Governor Jerry Brown signed into law the Local Control Funding Formula (LCFF), the most significant education reform in a generation, which passed the legislature with bipartisan support.

For decades, mountains of red tape and state-mandated programs have hamstrung districts that felt that top-down regulation was detrimental to the quality of education they could provide. The LCFF replaces the old, convoluted funding formula with one designed for equity and transparency. First, the state gives all school districts a ”base grant” per pupil of approximately $7000 depending on grade level. Those funds are supplemented with grants based on student needs and demographics. For example, a low-income, ESL, or special needs student’s district would receive roughly $3000 more for that pupil. An additional $1.25 billion is earmarked specifically for resources to help teachers shift to the new Common Core standards.

Educators and administrators benefit from this in several ways. Districts are given the freedom to manage their increased budget as they see fit by experimenting with different ideas to improve student outcomes. These may include increasing instructional time through a longer school year, rehiring teachers who had previously lost their full time jobs, incorporating new technologies in the classroom, or countless other innovations. LCFF respects and empowers educators while tempering the effects of metrics-based policy like No Child Left Behind and Race to the Top, which used bubble-in testing as the ultimate evaluation of a teacher’s effectiveness and then shut schools down for failing to achieve impossible proficiency rates. Additionally, the degree of freedom given to administrators will require significant community engagement as a measure of accountability, which is why the law mandates parental advisory boards in every school district.

Most importantly, weighted funding formulas like the LCFF recognize poverty as a key driver of achievement gaps. A Princeton study was recently published demonstrating how chronic poverty degrades one’s decision-making abilities, which can then worsen his or her financial circumstances. Any great society should attempt to curb the psychological toll that economic hardship can have on its citizens. Yet state and federal fiscal policy continues to squeeze the working poor from all sides. Policy like LCFF provides an important first step in mitigating the impact of poverty on educational outcomes.

This is precisely why school finance reform in the vein of California, with a purposeful focus on local control and the poverty achievement gap, should become the model for other states. California has a long way to go before its revenue streams match the targets laid out by LCFF, and it cannot replace Title I funds lost due to sequestration, but such policy demonstrates that it is still possible to reimagine age-old institutions. We live in extraordinary times where our country’s economic stability and global competitiveness is under perpetual threat by those we have placed in office. Families and students are feeling the sharp edge of broken policy and austerity economics. California’s willingness to hand the reins to communities demonstrates bold experimentation and a trust in its people, something that the national body politic has all but forgotten.

Raul Gardea is the Roosevelt Institute | Campus Network's Senior Fellow for Education.

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Fifty Years After the March on Washington, Equality Remains a Dream

Aug 28, 2013Jim Carr

We've made progress on addressing many blatant injustices since 1963, but people of color still don't have an equal opportunity to succeed.

We've made progress on addressing many blatant injustices since 1963, but people of color still don't have an equal opportunity to succeed.

This week marks the 50th anniversary of the March on Washington. The Reverend Dr. Martin Luther King Jr.’s electrifying speech at that event was inspiring and unforgettable. Those remarks, combined with hundreds of thousands of people on the National Mall marching for jobs and freedom, seemed to electrify American society to its core. As President Bill Clinton recently remarked, “I remember thinking that, when it was over, my country would never be the same.”

Over the five decades since the March on Washington, much has changed. No longer do black students require National Guard escorts to enter the school of their choice. No longer are protesters for civil or human rights at risk of being beaten or attacked by dogs for exercising their constitutional right to challenge unfair or otherwise unwise laws.

No longer are jobs and opportunity blatantly denied on the basis of an individual’s race or ethnicity, gender, physical appearance, or sexual preference. No longer are America’s cities burning. And perhaps most significantly, no longer is the office of the President of the United States off-limits to an African American.

Yet in spite of these and many other successes that have been achieved over the past five decades, much of the forward momentum seems unsustainable, or old problems are replaced with new ones that continue to deny opportunities disproportionately to people of color.

Take, for example, the fact that our cities are no longer burning in protest to blatant acts of discrimination and denial of civil rights. While that’s true, the city of Detroit has never recovered from the tumultuous days of the 1960s. In fact, Detroit has continued to decay, literally, into bankruptcy. The city’s official unemployment rate was a staggering 16 percent in April 2013, with a black unemployment rate over 20 percent. And Detroit is not alone among cities with exceptionally high black unemployment rates.

The acceleration of the exodus of non-Hispanic white families from the nation’s inner cities, in part to avoid integration after passage of the major Civil Rights laws, combined with the relocation of manufacturing jobs first to the suburbs and later overseas, has created urban economic deserts that deny opportunities as powerfully as any segregationist policies.

National Guard troops no longer stand in front of school houses to block admission—they do not have to. Racial and ethnic residential segregation in many of the nation’s largest cities is so high that black and Latino students do not live within physical proximity of isolated non-Hispanic white suburban enclaves in sufficient numbers to achieve meaningful school integration.

Furthermore, the cost of college tuition is so high these days that no armed presence is needed to prevent young African Americans or Latinos from entering. The majority of African American and Latino students cannot afford access the nation’s major universities even where they meet the academic standards.

In fact, economic deprivation is so great among blacks and Latinos that race is used as a reliable proxy for exploitation by financial firms. Leading up to the recent collapse of the housing market, subprime lenders disproportionately targeted African American and Latino communities for their reckless and irresponsible high-cost loans. They generated huge profits while originating loans that were designed to fail.

The subsequent loss of homeownership among African Americans and Latinos has been the largest contributor to a staggering loss of wealth for African American and Latino households during the Great Recession. Latino and black households have lost two-thirds and more than half of their net wealth, respectively. The result is that today, the racial wealth gap between blacks and non-Hispanic whites, and Latinos and non-Hispanic whites, is greater than it was two decades ago.

Over the next decade, seven of ten new households will be headed by a person of color. In fact, already, the majority of babies born in America are of color. Yet the majority of their economic futures are not promising.

This dramatic shift in the composition of the nation’s population gives even greater impetus now than was the case a half century ago for America to become a more economically inclusive society. Today, economic equality is as much an issue of economic competitiveness and national security, for example, as it is social justice. After all, how can America maintain its economic and military leadership role in the world if the fastest growing segments of the population, i.e., people of color, remain economically marginalized?

In spite of the success we have achieved as a nation in breaking down the barriers to opportunities based on racial or ethnic bias, we remain far from Dr. King’s dream and vision of a just and equitable society.

Jim Carr is a Distinguished Scholar with The Opportunity Agenda and Senior Fellow with the Center for American Progress. He is also co-editor of Segregation: The Rising Costs for America.

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Failing Low-Income Students: How Targeted College Information Could Improve Enrollment

Aug 27, 2013Asha M. Fereydouni

A focus on student loan rates isn't enough to help low-income students. The government needs to improve how it helps these students get enrolled in the first place.

A focus on student loan rates isn't enough to help low-income students. The government needs to improve how it helps these students get enrolled in the first place.

President Obama recently signed a bipartisan bill that ties student loan interest rates to the financial markets, which allows this year’s undergraduates to borrow at 3.9 percent interest -- nearly half of what they would have paid if Congress had failed to act. As a recent college graduate, I, like many of my peers, was very excited to learn of this decision. However, while the federal government has done great work to help those students who are already enrolled in college, it is effectively failing those students who come from families at or below the poverty line.

A recent Brookings Institute and Princeton University study notes that the federal government is spending around $1 billion per year on programs to help low-income students. Despite this funding, the four major college prep programs, Upward Bound, Upward Bound Math-Science, Student Support Services, and Talent Search (known collectively as TRIO), have had “no major effects on college enrollment or completion.” The study shows that students from low-income backgrounds who earn college degrees are 80 percent less likely to be poor. Unfortunately, Brookings and Princeton report that only 34 percent of low-income students actually enroll in college. Of that 34 percent, only 11 percent graduate.

The federal government is spending $1 billion with little or no return, policymakers are focused on other issues, and hardworking low-income students are paying the price. The government needs to refocus its efforts and provide targeted information to low-income students.

The closest thing to such a resource has been developed and marketed by the Consumer Finance Protection Bureau (CFPB). The CFPB created an 11-part online roadmap called the "Financial Aid Comparison Shopper" to help students navigate the college application process.

This tool, while it has some virtues, still effectively fails low-income college students. The first stages of the CFPB tool, “apply for college” and “research schools,” which would be most relevant to low-income applicants unsure about their college prospects and financial options, merely link to a page hosted by the National Center for Education Statistics (NCES).

The NCES page (which looks like it was made in the early 2000s) asks visitors to type in the name of a school, or search by state, zip code, level of award, or institution type. The burden is on the student to search for the right kinds of schools in the right states. There is little guidance as to what kind of school will be the best fit for a given student. By linking to an old-fashioned page with untargeted information, the CFPB is not providing real guidance to low-income applicants. The impacts of this are severe.

Caroline Hoxby, an economics professor at Stanford University, studied 40,000 low-income students and found that simply providing students with an informational tool-kit with targeted information about various colleges and their respective costs made students 53 percent more likely to apply to a peer institution (an institution where the low-income students were just as qualified as their high-income counterparts), 78 percent more likely to be admitted, and 50 percent more likely to enroll.

If the CFPB seeks to remedy the low rates of low-income students attending college, the site needs to be re-worked. It needs to ask students to input specific details about their academic and financial backgrounds and then present a list of potential schools based on those facts.

But the burden is not just on the CFPB. This failure to reach low-income students is a much larger problem that can be seen within all of the federal government’s billion dollar efforts to help potential college students. The untargeted resources transcend every single federal effort.  

While the reduction of student loan rates is a major bipartisan achievement with real-world implications, there is still much to be done to increase enrollment and graduation rates among low-income students. The CFPB needs to update its tool, the Department of Education needs to revamp its efforts, and we must not forget those low-income students who have the grades and the drive, but just need a little more guidance in the college search process.

Asha M. Fereydouni is an alumnus of the University of California, Davis and the Roosevelt Institute | Campus Network, and is currently a graduate student at Oxford. 

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Daily Digest - August 27: High-Speed Internet? Not So Much

Aug 27, 2013Rachel Goldfarb

Click here to receive the Daily Digest via email.

Latest Pew Study Shows 70 Percent of U.S. Has Broadband. But Access Is Still Unequal (Wired)

Click here to receive the Daily Digest via email.

Latest Pew Study Shows 70 Percent of U.S. Has Broadband. But Access Is Still Unequal (Wired)

Roosevelt Institute Fellow Susan Crawford thinks that the Pew study has too broad a definition of "high-speed," and demonstrates the persistence of the digital divide. It shouldn't be acceptable that race, class, and region have so much effect on access.

Health Care and Education are Messed Up for the Same Reason (WaPo)

Ezra Klein argues that health care and education don't work like other markets, because people will do anything to avoid saying "no." That's the cause of the skyrocketing costs, and the reason for government subsidies in these areas.

One Way to End the School-to-Prison Pipeline (TAP)

Bryce Stucki suggests that policies that create job opportunities for low-income youth could do a lot more than keep teenagers busy for a summer. Summer jobs could be one of the keys to reducing suspensions and expulsions, and disrupting the school-to-prison pipeline.

The Outsiders: How Can Millennials Change Washington If They Hate It? (The Atlantic)

Ron Fournier's research shows that Millennials want to change the world, but don't think that public service is the way to do it. He concludes that if they take control of government, they will destroy the current system in order to radically rebuild.

An Unfulfilled Dream From the March on Washington: Labor Rights for Domestic Work (The Nation)

Bryce Covert looks at the state of domestic workers' labor rights, which haven't changed much in the fifty years since the March on Washington for Jobs and Freedom. Because they aren't covered by the Fair Labor Standards Act, domestic workers have few protections.

Why Are 83.4 Percent of Fortune 500 Board Seats Held By Men? (Slate)

Matt Yglesias thinks that since the requirements for serving on corporate boards are few, the low number of women is evidence that companies aren't putting any effort into involving women. It's not as though qualifications are keeping women out.

Look Out: Here Comes the Debt Limit (MSNBC)

Chris Godburn reports that Treasury Secretary Jack Lew has asked Congressional leadership to raise the debt ceiling before mid-October. That means it's time to listen to arguments about not raising the debt ceiling without budget cuts again.

New on Next New Deal

California's Community Colleges Teach Us How to Make Education More Affordable

Roosevelt Institute | Campus Network Western Regional Co-Coordinator Kevin Feliciano considers the changes that California has made to its colleges and universities, and suggests that the President could draw on what California has learned as his higher education proposals develop.

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California's Community Colleges Teach Us How to Make Education More Affordable

Aug 26, 2013Kevin Feliciano

As President Obama's proposals for curbing higher education costs develop, we should look to similar experiments on the state level as a guide to best practices.

As President Obama's proposals for curbing higher education costs develop, we should look to similar experiments on the state level as a guide to best practices.

Last week, President Obama released a plan to combat rising college costs and make college affordable for American families. The president’s plan outlines three proposals: tying federal student aid to college performance based on yet-to-be developed college rankings; promoting innovation and completion by instituting a college scorecard that would give consumers clear, transparent information on college performance to help them make the decisions that work best for them; and ensuring that student debt remains affordable by expanding eligibility for the Pay As You Earn repayment program. While this federal push is new, many of the ideas have already been tried and tested on the state level, and California's community college system in particular provides some important data on what we should expect as these proposals are developed.

As a student who has attended community college and is attending a public university, I applaud President Obama for taking this step toward ensuring an affordable higher education for all. I know firsthand how the middle class has been affected by access and affordability issues. My family had a high enough income to make me ineligible for most federal and state financial aid until I was 24 years old, which is the age of independence. I relied on scholarships, money saved from working multiple jobs, and the support of my parents. I was also fortunate to attend a California community college, which charged an enrollment fee of only $18-46 per unit, depending on the term. My friends were not so lucky.

The cost of a California community college education is deceptive. The current rate of $46 per unit remains the lowest, by far, in the nation, but the other costs associated with an education (room and board, child care, textbooks, transportation costs) can easily amount to over $17,000 per year according to the Institute for College Access and Success. I know students who left community college to transfer to a four-year institution with at least $11,000 in student loan debt.

In the 2011-12 academic year, the Board of Governors of the California Community Colleges convened a 20-member task force on student success, which was comprised of stakeholders from across the system, including faculty, staff, and two students. The Student Success Task Force (SSTF) published 22 recommendations, some of which are similar to the president’s proposals.

Many of these initiatives have already begun to be incorporated into the system, like putting more responsibility on students for their academic performance and ensuring that they are making progress toward their degrees or goals. The Student Success Act of 2012 specifically incorporated one of the SSTF recommendations, which required students to make satisfactory academic progress every term in order to remain eligible for a waiver of enrollment fees. These academic and progress standards are in addition to existing standards required to receive federal and state financial aid. The provision took effect January 1, 2013, and has a goal similar to the president’s: to encourage students to complete their degrees or attain their goals within a reasonable time frame.

President Obama proposes that we empower students with information about the colleges with his new ranking system. The SSTF introduced the Student Success Scorecard in 2013, which provides information on a college’s retention rate; graduation rate; transfer rate; completion rate; success rates of remedial math, remedial English, and English as a second language; and career technical education students, all broken down by gender, age, and ethnicity. The scorecard allows colleges and students to see their progress and make side-by-side comparisons between institutions. This was not intended to help students decide which college to attend, but to assist colleges in narrowing achievement gaps.

The president’s proposal for student loan debt expands the eligibility of the Pay As You Earn program, which caps federal loan payments at 10 percent of discretionary income, to all borrowers. Student loan debt has exceeded the $1 trillion mark in 2013, surpassing credit card debt, and many students go for years without paying off their student loan debt because they can’t afford a car loan or mortgage in addition to student loan repayments. With student loans still excluded from bankruptcy, a predictable student loan repayment plan is important to allow graduates to better plan their financial future.

One particularly concerning facet of this proposal is the intention to tie financial aid to college performance. The proposal indicates that the new college ratings would be used to “compare colleges with similar missions and identify colleges that do the most to help students from disadvantaged backgrounds as well as colleges that are improving their performance.” Institutional, state, and federal financial aid should help students focus on their studies without worrying about how to pay the bills. If students attending a high-performing college receive larger Pell Grants and more affordable student loans, what happens to students at lower-performing schools? Taking aid from those whose options are limited and giving it to colleges and students with greater means does not increase access to affordable, quality higher education. It has the potential to do the exact opposite.

There is still much to be done in order to ensure that colleges work to improve the quality of education they offer, not just increase graduation and transfer rates. President Obama has stated that the Department of Education will be holding public forums on the development of the metrics and proposed policies to gather as much input from stakeholders and the public as possible. The president was correct that a higher education is the single most important investment a student can make in his or her own future; to that end, students must be included in this process. We should learn from California’s example, search for best practices, and learn from one other to better prepare our students and make college more affordable for everyone.

Kevin Feliciano is the Roosevelt Institute | Campus Network Western Regional Co-Coordinator, and is studying Public Affairs and Administration at California State University, East Bay.

 

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Can President Obama's New Metrics Curb College Costs?

Aug 23, 2013Mike Konczal

(Photo Source: White House)

President Obama just announced a major initiative on higher education. Will it contain or reverse rising costs?

I want to discuss the part of it that seems most tailored to containing costs, which is creating new higher education metrics to compare schools. These metrics will be created by 2015, which will be used to determine access to federal dollars such as student loans and Pell grants by 2018.

From the fact sheet, the to-be-determined rankings will be based on three things: access, affordability, and outcomes. Access includes “percentage of students receiving Pell grants,” affordability includes “average tuition, scholarships, and loan debt,” and outcomes includes graduation rates and earnings.

Here are my initial thoughts as I try to understand this. The tl;dr version is that it is important that these metrics are used to drive down private costs relative to public, expose administrative bloat, put pressure on the states, and bring accountability to the for-profits. If they don’t do that, they’re a waste on the cost-containment front. Now, here are six more detailed points to consider about how the metrics will be implemented and what effects they will have:

1. The Goals Will Run Counter to Each Other. The efforts to increase graduation rates and have better post-graduation outcomes may require more spending by colleges. Some colleges in each of the meta-categories are likely to be booted for bad performance, or the metrics will make attending the worst-performing colleges so expensive as to drag them into a death spiral. Good as that may be for education, it will collapse the supply of higher education in the short term, putting more price pressure on existing institutions.

Which is to say that we should distinguish efforts to increase quality through access and outcomes from efforts to contain costs. Students graduating on time will make colleges de facto more affordable, and perhaps that is mainly what the president is looking for.  But that is not entirely cost containment.

2. The Student-Consumer or the Government? What’s different here? As Sara Goldrick-Rab and others argue, one reason cost containment has failed in the past “may stem from the financial aid system’s strong focus on the behaviors of ‘student-consumers’ rather than education providers.”

It’s not clear to me why empowering these “student-consumers,” who go about rationally analyzing disclosed data in the marketplace for education, would give them the ability to make the demands necessary to contain costs at universities as a whole. One could see them driving out obviously underperforming institutions from the landscape, but it’s much harder to imagine them forcing institutions to contain costs, at least without political struggle.

Students themselves are quite aware of the increasing costs in the past few years, with endless “click here to know what you are borrowing” measures that likely don’t do much. There’s really little evidence that an additional range of disclosures would make the institutions here more accountable or force them to contain their costs.

Which is to say that we should focus less on disclosure and the consumer regime for cost containment, and more on how the government will force changes itself by making aid less available unless an affordability metric is met.

3 The Obvious Information to Disclose. Talking about “the problem of higher education costs” is a major category error, as they vary by institution. The factors that cause community colleges to raise tuition (decreasing public support) are different than those facing for-profits (maximizing aid extraction) or private not-for-profits (maximizing prestige and consumer experience).

Consistent across all of these is the idea that increasing administrative costs are a major driver of costs. This strikes me as the obvious, and perhaps only, metric where the consumer-student could force containment and best practices.

So a very obvious thing to inform consumers of is “how much of my tuition goes to instruction?” If consumer-students want to force down football coach salaries and investment in extravagant non-instructional benefits, this is the most obvious way to do it and can be plastered across every disclosure form.

(Another question I think is important, which would be great to deal with for-profits, is to disclose “how much of my tuition will be paid out to shareholders?” Consumers may or may not be happy with paying extra to build a more gigantic football stadium; they are probably not happy paying money that leaves the educational institution entirely.)

4. Taking on Private Universities. It’s worth noting here that these metrics will be applied to private schools as well, using all of the government’s Title IV money (grants and student loans and everything else) as the leverage. And this is probably the major challenge, as private schools will not like this, and they have a lot of political coverage. Who among the elite hasn’t gone to a prominent private university?

In a recent editorial on these new metrics, Sara Goldrick-Rab notes the danger that President Obama will “cave to the private higher-education lobby.” For if private higher education’s “expenses are so merited, we should see bigger gains at private elites than at we do at less-expensive institutions, not just higher graduation rates. None of that is happening now.”

I’m curious how the metrics will “compare colleges with similar missions.” Will they compare public schools and private schools on the issue of cost containment at a given a level of quality? They should, as directly funded public options can drive down the costs of privately allocated goods, but if they do, that will necessarily put a lot of pressure on private schools.

Interestingly, this could lead to a situation where private universities just leave the federal support system. Harvard, for instance, could just say “forget you” to the federal government and fund whatever aid it wants out of its own endowment. This move might split reformers, even though it would likely be for the best.

5. Taking on the States. This is the most incoherent part of Obama’s pitch about the metrics. In the fact sheet, President Obama noted that “[d]eclining state funding has forced students to shoulder a bigger proportion of college costs; tuition has almost doubled as a share of public college revenues over the past 25 years from 25 percent to 47 percent.” Yet at the same time he talks about bloat and waste as drivers. Both could be true, but if the first is a main driver then individual rankings of schools will have a problem.

One way to balance this would be to rank states themselves alongside schools. Demos proposes “an additional ratings system: why don’t we rate state legislatures on their per-student investment in higher education?” This could be useful in giving people in different states a much better sense of what their public higher education looks like. Crucially, it would also adjust for the fact that state education systems function as a continuum with multiple levels and transfers up and down the educational ladder.

6. Political Battles. A lot of commentators are arguing this is a battle between President Obama and liberal professors, so it is unlikely to trigger GOP opposition. I’m not sure about that. The real people who will disproportionately end up in the crosshairs if this is done well, as listed above, are (a) administrators taking inflated salaries, (b) private and flagship schools that provided little value at very high costs, and c) for-profits.

I think Josh Barro misses that for-profit schools are a major GOP constituency. George W. Bush’s Assistant Secretary for Postsecondary Education, Sally Stroup, was a former University of Phoenix lobbyist, and led a successful effort to remove restrictions on for-profit schools. On the campaign trail, Mitt Romney name-dropped a for-profit school that happened to donate to him. Insofar as the Obama administration will try to use these metrics to get a second bite at curbing the for-profit industry as it failed to do in its first term, that will set off alarm bells.

Meanwhile, as noted above, basically every elite within 100 yards of D.C. politics, particularly in elite media and Democratic politics (e.g. “He was my professor actually at Harvard”), functions like a member of a private higher education lobby. How will they react if the hammer comes down there?

There’s a lot of emphasis on getting poor students on Pell grants into high-end schools. That is a good goal. However, the issues with costs and higher education go far beyond this and affect families who are not rich but don’t qualify for means-tested aid. They are the ones who will increasingly demand cost containment.

Something will eventually give. The question remains as to whether or not these metrics will be used to drive down private costs relative to public, expose administrative bloat, put pressure on the states, and bring accountability to the for-profits. If they do, it’s a positive sign; if not, a waste or worse when it comes to cost containment.

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(Photo Source: White House)

President Obama just announced a major initiative on higher education. Will it contain or reverse rising costs?

I want to discuss the part of it that seems most tailored to containing costs, which is creating new higher education metrics to compare schools. These metrics will be created by 2015, which will be used to determine access to federal dollars such as student loans and Pell grants by 2018.

From the fact sheet, the to-be-determined rankings will be based on three things: access, affordability, and outcomes. Access includes “percentage of students receiving Pell grants,” affordability includes “average tuition, scholarships, and loan debt,” and outcomes includes graduation rates and earnings.

Here are my initial thoughts as I try to understand this. The tl;dr version is that it is important that these metrics are used to drive down private costs relative to public, expose administrative bloat, put pressure on the states, and bring accountability to the for-profits. If they don’t do that, they’re a waste on the cost-containment front. Now, here are six more detailed points to consider about how the metrics will be implemented and what effects they will have:

1. The Goals Will Run Counter to Each Other. The efforts to increase graduation rates and have better post-graduation outcomes may require more spending by colleges. Some colleges in each of the meta-categories are likely to be booted for bad performance, or the metrics will make attending the worst-performing colleges so expensive as to drag them into a death spiral. Good as that may be for education, it will collapse the supply of higher education in the short term, putting more price pressure on existing institutions.

Which is to say that we should distinguish efforts to increase quality through access and outcomes from efforts to contain costs. Students graduating on time will make colleges de facto more affordable, and perhaps that is mainly what the president is looking for.  But that is not entirely cost containment.

2. The Student-Consumer or the Government? What’s different here? As Sara Goldrick-Rab and others argue, one reason cost containment has failed in the past “may stem from the financial aid system’s strong focus on the behaviors of ‘student-consumers’ rather than education providers.”

It’s not clear to me why empowering these “student-consumers,” who go about rationally analyzing disclosed data in the marketplace for education, would give them the ability to make the demands necessary to contain costs at universities as a whole. One could see them driving out obviously underperforming institutions from the landscape, but it’s much harder to imagine them forcing institutions to contain costs, at least without political struggle.

Students themselves are quite aware of the increasing costs in the past few years, with endless “click here to know what you are borrowing” measures that likely don’t do much. There’s really little evidence that an additional range of disclosures would make the institutions here more accountable or force them to contain their costs.

Which is to say that we should focus less on disclosure and the consumer regime for cost containment, and more on how the government will force changes itself by making aid less available unless an affordability metric is met.

3 The Obvious Information to Disclose. Talking about “the problem of higher education costs” is a major category error, as they vary by institution. The factors that cause community colleges to raise tuition (decreasing public support) are different than those facing for-profits (maximizing aid extraction) or private not-for-profits (maximizing prestige and consumer experience).

Consistent across all of these is the idea that increasing administrative costs are a major driver of costs. This strikes me as the obvious, and perhaps only, metric where the consumer-student could force containment and best practices.

So a very obvious thing to inform consumers of is “how much of my tuition goes to instruction?” If consumer-students want to force down football coach salaries and investment in extravagant non-instructional benefits, this is the most obvious way to do it and can be plastered across every disclosure form.

(Another question I think is important, which would be great to deal with for-profits, is to disclose “how much of my tuition will be paid out to shareholders?” Consumers may or may not be happy with paying extra to build a more gigantic football stadium; they are probably not happy paying money that leaves the educational institution entirely.)

4. Taking on Private Universities. It’s worth noting here that these metrics will be applied to private schools as well, using all of the government’s Title IV money (grants and student loans and everything else) as the leverage. And this is probably the major challenge, as private schools will not like this, and they have a lot of political coverage. Who among the elite hasn’t gone to a prominent private university?

In a recent editorial on these new metrics, Sara Goldrick-Rab notes the danger that President Obama will “cave to the private higher-education lobby.” For if private higher education’s “expenses are so merited, we should see bigger gains at private elites than at we do at less-expensive institutions, not just higher graduation rates. None of that is happening now.”

I’m curious how the metrics will “compare colleges with similar missions.” Will they compare public schools and private schools on the issue of cost containment at a given a level of quality? They should, as directly funded public options can drive down the costs of privately allocated goods, but if they do, that will necessarily put a lot of pressure on private schools.

Interestingly, this could lead to a situation where private universities just leave the federal support system. Harvard, for instance, could just say “forget you” to the federal government and fund whatever aid it wants out of its own endowment. This move might split reformers, even though it would likely be for the best.

5. Taking on the States. This is the most incoherent part of Obama’s pitch about the metrics. In the fact sheet, President Obama noted that “[d]eclining state funding has forced students to shoulder a bigger proportion of college costs; tuition has almost doubled as a share of public college revenues over the past 25 years from 25 percent to 47 percent.” Yet at the same time he talks about bloat and waste as drivers. Both could be true, but if the first is a main driver then individual rankings of schools will have a problem.

One way to balance this would be to rank states themselves alongside schools. Demos proposes “an additional ratings system: why don’t we rate state legislatures on their per-student investment in higher education?” This could be useful in giving people in different states a much better sense of what their public higher education looks like. Crucially, it would also adjust for the fact that state education systems function as a continuum with multiple levels and transfers up and down the educational ladder.

6. Political Battles. A lot of commentators are arguing this is a battle between President Obama and liberal professors, so it is unlikely to trigger GOP opposition. I’m not sure about that. The real people who will disproportionately end up in the crosshairs if this is done well, as listed above, are (a) administrators taking inflated salaries, (b) private and flagship schools that provided little value at very high costs, and c) for-profits.

I think Josh Barro misses that for-profit schools are a major GOP constituency. George W. Bush’s Assistant Secretary for Postsecondary Education, Sally Stroup, was a former University of Phoenix lobbyist, and led a successful effort to remove restrictions on for-profit schools. On the campaign trail, Mitt Romney name-dropped a for-profit school that happened to donate to him. Insofar as the Obama administration will try to use these metrics to get a second bite at curbing the for-profit industry as it failed to do in its first term, that will set off alarm bells.

Meanwhile, as noted above, basically every elite within 100 yards of D.C. politics, particularly in elite media and Democratic politics (e.g. “He was my professor actually at Harvard”), functions like a member of a private higher education lobby. How will they react if the hammer comes down there?

There’s a lot of emphasis on getting poor students on Pell grants into high-end schools. That is a good goal. However, the issues with costs and higher education go far beyond this and affect families who are not rich but don’t qualify for means-tested aid. They are the ones who will increasingly demand cost containment.

Something will eventually give. The question remains as to whether or not these metrics will be used to drive down private costs relative to public, expose administrative bloat, put pressure on the states, and bring accountability to the for-profits. If they do, it’s a positive sign; if not, a waste or worse when it comes to cost containment.

Follow or contact the Rortybomb blog:

  

 

College graduation banner image via Shutterstock.com

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Daily Digest - August 22: Doing Better Than Student Loans

Aug 21, 2013Rachel Goldfarb

Click here to receive the Daily Digest via email.

Four Ideas For How Obama Could Really Transform The Cost Of College (ThinkProgress)

Click here to receive the Daily Digest via email.

Four Ideas For How Obama Could Really Transform The Cost Of College (ThinkProgress)

Bryce Covert presents four truly transformative ideas, which would have far more effect than keeping student loan interest rates low. She pulls from Roosevelt Institute Fellow Mike Konzcal for her fourth suggestion: make public colleges and universities free.

  • Roosevelt Take: In the piece referenced, Mike looked at how much the government spends on loans and related tax breaks, and suggested that the same funds could cover the cost of public higher education outright.

Elderly More Likely to Be Employed Than Teens (WSJ)

Ben Casselman reports that while ten years ago, a teenage boy was twice as likely to have a job as his 70 year old grandfather, today, the grandfather is more likely to be employed. The decline reflects the jobless recovery of the early 2000s and today's tough market.

How Low Can You Get: The Minimum Wage Scam (The Guardian)

Heidi Moore thinks that the problem isn't just a too-low minimum wage, but a too-low total compensation, including benefits. The nonexistent benefits of low-wage jobs are costing the American government big bucks, while corporate profits skyrocket.

For Retailers, Low Wages Aren’t Working Out (WaPo)

Harold Meyerson looks at the change in how the owners of big retailers consider labor since the 1920s. Back then, retail supported the minimum wage, five-day work weeks, and unions, and retail and labor thrived together.

Two Graphs Showing, Decisively, That Obamacare Is Not Creating a Permanent Part-Time America (The Atlantic)

Derek Thompson examines the data, which proves that part-time work has actually decreased since the Affordable Care Act was passed. The big increase began, rather intuitively, with the Great Recession.

Warren Asks DOJ to Explain 'Timid' FHA Settlement (The Hill)

Peter Schroeder reports that Senator Warren finds the settlement between mortgage servicers and the Federal Housing Authority to be shockingly low. The settlement is less than one percent of the maximum liability, and the Senator wants the DOJ to explain their math.

This One Photo From 1998 Includes Everybody Involved in the Fed Chair Decision (WaPo)

Neil Irwin uses a photo of Bill Clinton talking about the economy to demonstrate just how little the Democratic economics team has changed over the years. The only people missing from the photo are Tim Geithner and a certain then-Illinois state senator.

New on Next New Deal

New Rule: Your Financial Advisor Should Actually Work for You

I wrote on the proposed changes to ethical standards for the financial services industry, and why it's necessary for more advisors to be fiduciaries. Under current rules, most advisors only need to provide "suitable" investment products, and suitable doesn't been best.

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Daily Digest - August 14: Disrupting Cable Not So Simple

Aug 14, 2013Rachel Goldfarb

Click here to receive the Daily Digest via email.

The Future Of Television (Diane Rehm Show)

Roosevelt Institute Fellow Susan Crawford discusses the limits of how web-based models like Netfix can disrupt traditional cable television. Without high-speed internet access, none of these models work, and the cable companies control most broadband.

Click here to receive the Daily Digest via email.

The Future Of Television (Diane Rehm Show)

Roosevelt Institute Fellow Susan Crawford discusses the limits of how web-based models like Netfix can disrupt traditional cable television. Without high-speed internet access, none of these models work, and the cable companies control most broadband.

Bash Brothers: How Globalization and Technology Teamed Up to Crush Middle-Class Workers (The Atlantic)

Derek Thompson explains a new study that found that the monolith "globalizationandtechnology" is actually two forces working in tandem. Globalization increases unemployment overall, while technology increases inequality by replacing middle-class jobs.

U.S. Budget Cuts Hitting Long-Term Unemployed Hard (Reuters)

Paige Gance reports on the struggles facing the long-term unemployed as their benefits are cut due to sequestration. A study shows that callbacks for job interviews dramatically decrease after long stretches of unemployment, which doesn't help her interview subjects.

Parents Losing Jobs a Hidden Cost to Head Start Cuts (Bloomberg)

William Selway reminds us that Head Start exists to provide preschool to low-income kids, so now that sequestration is cutting spots, the parents have no where else to turn. Without the means to pay for childcare, they can't go to work.

Paying It Forward on Student Debt (TAP)

Monica Potts reports that following Oregon's new pay-it-forward plan for college tuition, a number of other states are proposing similar plans. The plans are becoming more sophisticated, and begin to address the critiques of Oregon's model.

Don’t Take My Pension!: The Looming Public Worker Nightmare (Salon)

Adam J. Levitin suggests that public pensions ought to be insured, just like private guaranteed-benefit pension plans. That would solve the problems facing municipalities like Detroit as they face difficult decisions regarding retirees during bankruptcy.

Best-Paid Women in S&P 500 Settle for Less Remuneration (Bloomberg)

Carol Hymowitz and Cécile Daurat look at the compensation of top female executives, and find that even on that level, women are being paid less than men. Their 82 cents to men's dollar can't be explained by levels of experience or skill.

The Justice Department is Blocking the US Airways-American Merger. Here’s Why. (WaPo)

Brad Plumer says that the Department of Justice lawsuit claim that the merger would reduce competition in several key markets is probably true. The merged airline would have absolutely no nonstop competition on seven routes.

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The History of Higher Ed Shows Education is a Right, Not an "Investment"

Jul 29, 2013Mario Goetz

Tuition wasn't always so high, student loans didn't always have those interest rates, and the public higher education system could still return to its roots in social mobility and inclusion.

Tuition wasn't always so high, student loans didn't always have those interest rates, and the public higher education system could still return to its roots in social mobility and inclusion.

For many Millennials, the present higher education system exudes an overwhelming sense of permanence. In our short lives, college tuition has always been high, education funding has always been decreasing, and college has always meant a risky “investment in our futures.” We know that these yearly tuition hikes are wrong, and that the current tuition rates already saddle us with debt we probably won’t pay off until we retire, if we retire. For many of us, the consequences are much more immediate, as many low-income students cannot afford higher education anymore. Yet we continue to shell out the money, or take out the loans. Confronted with the institutional power of the higher education system, we feel powerless.

Depressing, right? But history shows us that all is not lost by exposing the mechanisms that brought about the status quo. In their Fall 2012 article in Dissent, Aaron Bady and Roosevelt Institute Fellow Mike Konczal reveal what higher education used to mean and how it was systematically destroyed. Bady and Konczal transport us to 1950s-'60s California, where bipartisan support for a University of California system built the state into a land of prosperity and innovation, a burgeoning middle class sent its children to college for free, and progressive Republicans happily funded education to support inclusion and social mobility for California’s next generation. In 1960, the Donahoe Act, or the Master Plan for Higher Education, represented California’s commitment to educate anyone who wanted to be educated. Despite the concurrent trends of racism, sexism, and American imperialism that pervaded that era, California’s higher education system was a golden example of what America could achieve.

So what happened? Where did it go? In 1966, Ronald Reagan was elected Governor of California and began dismantling the promising work of the past 20 years. Previously, admission had been free, except for a few relatively small fees, but the Reagan government lifted regulations on how much schools could charge in fees, allowing costs to skyrocket. Also, incentives were created for colleges to accept out-of-state students, who would pay higher fees. Both of these strategies shifted the financial responsibility for higher education onto students rather than the state. The process of culturally redefining higher education as not a right, or a public good, but an investment, subject to the whims of the marketplace and corporate capitalism, had begun.

Reagan’s policies continued to affect Californian higher education after he left office. Bady and Konczal point out two of the most important elements of his legacy: Proposition 13, which cut property taxes and capped their growth rate, limiting state property tax revenue; and the prison-building boom. These policies not only decreased the amount of money the state could use to fund higher education, but also diverted a greater portion away to build prisons. Since then, state investment in higher education has decreased dramatically. Such cuts in spending came as demand for higher education continued to rise, driving up costs even further and restricting access.

This conservative rethinking of higher education did not stay in California. The destruction of public education in California was the first domino in the Reagan revolution, reflected in Reagan’s policies as president and in the policies of governors in other states. Bady and Konczal appropriately call California policies “the beginning of the end of public higher education in the United States as we’d known it.”

These policies were the first cells of a virus that grew and replicated so effectively that it eventually posed as the institutional normal. Today, it can be hard to see through the elaborate and restrictive veil that separates us from our education. However, by understanding how it all began, we can see that the all-powerful system we inherited is not permanent. By identifying how it started, we can condemn it and clear a path toward restoring our values and our institutions.

Higher education was never meant to be an “investment.” It was meant to be a public good -- a right. Pursuing dreams of a college education should not require dire consequences that threaten to cancel out its benefits. Progressives and Millenials will not continue to absorb the seemingly incremental infringements on our rights and liberties. We understand history. We understand that the system was not and is not forever. Today, students fight increases in student loan interest rates, challenging the institutions that say the higher interest rates are necessary. We can take back higher education for ourselves: fight to decrease tuition and fees, increase access for all, and make higher education something we can truly be proud of as Americans.

Mario Goetz is a Junior at the University of Michigan and a Roosevelt Institute | Campus Network Summer Academy Fellow working as the Campus Network Field Intern.

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