The Land of Hope and Dreams
It's the time of year when high school students are finding out if they are going to college and where. The Princeton Review reports in its "College Hopes and Worries" survey that student and parent anxiety levels are way up; 71 percent of respondents report high levels of stress. Most people (86 percent) say financial aid will be "very" necessary, and within that cohort 61% say "extremely" necessary. Seventy-five percent of respondents report that the state of the economy has affected their college choices, and about half of those (52 percent) say they are applying to more "financial aid safety schools."
The advice offered by parents and students on dealing with these stresses is achingly familiar to those of us who have been through it.
From parents:
"Start saving even before your children are born."
"Don't limit your child's vision of their future by your own financial worries."
"It does end."
From students:
"Take a deep breath and let your parents help. They may actually know something."
"SCHOLARSHIPS! Make sure you apply for as many scholarships as possible and take the practice SATs multiple times because unfortunately colleges take that into big consideration."
"Whoever said that senior year is the easiest is a liar."
This is just the application process, typically with kids who have at least some support and understand the importance of higher education. It's the kind of conversation that policymakers and educators want in every U.S. household to ensure the health of the country's economic future.
The only trouble is that it's not clear that the higher education system is cut out to handle that kind of responsibility. Colleges vary widely in quality and cost, and a job isn't always guaranteed at the end. No one disagrees that higher education is the best, and perhaps the only, path to ensure young peoples' economic security. But how stable is that path?
What are the biggest hurdles facing college-bound kids these days? If the difficulties are largely financial, as the Princeton Review suggests, what should kids and parents know that will help them solve those problems? How much of the stress is self-generated based on academic competitiveness or sheer pride? How much of the stress is based on the actual difficulty of getting in to college and paying for it? Is it possible to go to college without the emotional trauma?

April 13, 2012 10:48 AM
Budget Cuts or Greedy Colleges?
By Neal McCluskey
First, let me apologize: This is my first time trying to post a chart to Google Docs -- actually, all I could manage was a spreadsheet -- so I beg readers' pardon if it's hard to access or doesn't look right. Prof. Dorn might have to give me a tutorial if I botched the posting too badly. I also did these calculations pretty quickly this morning, so I can't swear that they are perfect, but I wanted to get some additional analysis up before it's time to move on to another topic.
Now to the substance.
The key to my first post was that state and local taxpayers have not been disinvesting in higher education. They have, in fact, increased their investment, just not fast enough to keep up with big enrollment gains. This was in response to Prof. Dorn's first post, which spoke of "state budget cuts." When one thinks of budget cuts one doesn't typically think on a per-pupil basis. One thinks of total outlays, and those have risen.
But what about per-pupil, ...
First, let me apologize: This is my first time trying to post a chart to Google Docs -- actually, all I could manage was a spreadsheet -- so I beg readers' pardon if it's hard to access or doesn't look right. Prof. Dorn might have to give me a tutorial if I botched the posting too badly. I also did these calculations pretty quickly this morning, so I can't swear that they are perfect, but I wanted to get some additional analysis up before it's time to move on to another topic.
Now to the substance.
The key to my first post was that state and local taxpayers have not been disinvesting in higher education. They have, in fact, increased their investment, just not fast enough to keep up with big enrollment gains. This was in response to Prof. Dorn's first post, which spoke of "state budget cuts." When one thinks of budget cuts one doesn't typically think on a per-pupil basis. One thinks of total outlays, and those have risen.
But what about per-pupil, which Prof. Dorn correctly notes is what should matter most to individual students? Has "the decline in per-student state spending...been balanced almost exactly by rising tuition," as Prof. Dorn argues?
No. While Prof. Dorn compares start and end dates of the 25-year period between 1986 and 2011 -- the same thing I did to show aggregate growth in state and local appropriations -- I have subsequently applied trend lines to SHEEO's U.S. and state per-pupil appropriation and net-tuition data. That enabled me to see how appropriations and tuition revenue have balanced out over the last 25 years, with the ups and downs of the business cycle smoothed out.
What that revealed -- the results are presented in the spreadsheet -- is first what Prof. Dorn and I agree on: state and local appropriations on a per-pupil basis have been falling. The average change for the entire United States was a loss of $43 per year, and 40 states saw losing trends. Whether or not this constitutes a debilitating disinvestment is debatable, but it is a dropping trend nonetheless.
Where Prof. Dorn's findings differ from mine are in suggesting that public colleges and universities have raised per-pupil tuition revenue just to make up for losses. The trends show that this is not the case nationally or for the large majority of states. No, public institutions have generally raised tuition revenue well in excess of subsidy losses.
Nationwide, the net revenue gain after adding together appropriations and tuition revenue was $40 per student, per year, with schools raising prices almost $2 for every $1 lost. Colleges in forty-one states saw net gains, some quite large. (Net losers are highlighted in red in the third column of my chart.) For example, Connecticut saw a net gain of $172; Maryland a gain of $189; and Delaware took the cake with $196. The biggest net loss? Alaska at $97, but that needs to be taken with a grain of salt -- Alaska far outspends all states except Wyoming, with a 2011 per-pupil allocation of $14,837 per student.
A particularly interesting state is none other than Prof. Dorn's Florida. Why? Because it is one of the few states that had a positive per-pupil subsidy trend. It's not big -- $4 -- but any state with a plus sign stands out. Of course, it is also guilty of raising prices despite generally increasing public subsidies, at a clip of $49 per year.
What does all this tell us? Again, that "public disinvestment" cannot be blamed for rising college prices. The public has invested more in the aggregate -- the fairest way to measure public investment -- and schools have brought in significantly more revenue per-pupil through tuition than they've lost in subsidies.
So maybe the problem isn't hard-hearted state legislators. Maybe, in addition to greatly increased enrollment that all too often doesn't lead to a degree, it's a problem of greedy colleges.
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April 12, 2012 9:28 PM
Yes, cost-shifting is real
By Sherman Dorn
Since Neal McCluskey refers to the SHEEO data reports, let's use its long-term (1986-2011) financial data on public higher education he refers to, which I have supplemented with two additional columns and some color-coding to make long-range changes in funding per student clearer. Over the past quarter-century, only Nebraska has substantially increased its per-student (per-FTE) appropriations in public higher education after inflation is taken into account. Connecticut, Illinois, and Louisiana maintained their 2011 per-FTE appropriations within $50 of the 1986 appropriations in higher education. All other states saw small to very substantial per-student appropriations cuts in higher education over the past quarter-century. Some states increased tuition over the long term to match public disinvestment. Some states have been uanble to fill that hole, and some states hiked tuition we...
Since Neal McCluskey refers to the SHEEO data reports, let's use its long-term (1986-2011) financial data on public higher education he refers to, which I have supplemented with two additional columns and some color-coding to make long-range changes in funding per student clearer. Over the past quarter-century, only Nebraska has substantially increased its per-student (per-FTE) appropriations in public higher education after inflation is taken into account. Connecticut, Illinois, and Louisiana maintained their 2011 per-FTE appropriations within $50 of the 1986 appropriations in higher education. All other states saw small to very substantial per-student appropriations cuts in higher education over the past quarter-century. Some states increased tuition over the long term to match public disinvestment. Some states have been uanble to fill that hole, and some states hiked tuition well above the decline in state appropriations. But 46 states have seen notable long-term declining per-student appropriations.
Yes, given the substantial population and college-going increases, total appropriations have also increased, but the key question is who is now paying for college. In 1986, college students paid approximately one-quarter of the cost of higher education. Today, they pay close to half, and in some states (Colorado, Michigan, New Hampshire, Pennsylvania, Rhode Island, and Vermont), they pay 65% or more of the total costs. My state (Florida) is representative of the shift. Total per-FTE revenues in public colleges and universities have budged a small amount if you look at the end years of the period: Over the long-term, the decline in per-student state spending has been balanced almost exactly by rising tuition.
That is a long-term picture. In the short term, crises matter; total state higher-ed revenues rose substantially in the late 1980s and dropped precipitously in the past five years, so that rising tuition cannot fill the gap in state appropriations. In July, the state universities will be taking a $300 million hit. Not even 15% tuition hikes can fill that gap. Yet colleges and universities are pushed to do that, and a bill is sitting on Gov. Rick Scott's desk that would let the University of Florida and Florida State hike tuition even further.
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April 12, 2012 2:56 PM
Please Don't Blame State Taxpayers
By Neal McCluskey
I don't have any great advice to offer those going through the college acceptance wringer, other than to make sure that going to college -- and doing college-level work -- is really what you want to do. If it's not, don't waste your time and money: Like so many who've gone before you, you'll likely end up with no degree, a degree you don't want to use, and quite possibly lots of debt.
Which gets me to my main point: Blaming high prices on state legislatures, as Sherman Dorn -- but hardly just Mr. Dorn -- does is simply wrong. State and local appropriations to public colleges and universities have risen substantially over the last 25 years.
According to the latest data from the State Higher Education Executive Officers, inflation-adjusted state and local outlays to colleges for general operations rose from $57.7 billion in 1986 to $74.2 billion in 2011, a 29 percent increase. That's "increase," not "decrease."
The one way you could characterize state and local funding ...
I don't have any great advice to offer those going through the college acceptance wringer, other than to make sure that going to college -- and doing college-level work -- is really what you want to do. If it's not, don't waste your time and money: Like so many who've gone before you, you'll likely end up with no degree, a degree you don't want to use, and quite possibly lots of debt.
Which gets me to my main point: Blaming high prices on state legislatures, as Sherman Dorn -- but hardly just Mr. Dorn -- does is simply wrong. State and local appropriations to public colleges and universities have risen substantially over the last 25 years.
According to the latest data from the State Higher Education Executive Officers, inflation-adjusted state and local outlays to colleges for general operations rose from $57.7 billion in 1986 to $74.2 billion in 2011, a 29 percent increase. That's "increase," not "decrease."
The one way you could characterize state and local funding as decreasing is on a per-pupil basis, but that doesn't reflect the heartless budget cutting Mr. Dorn implicates. It reflects huge enrollment increases -- enrollment that often ends with no degree or appreciable learning. And even on a per-pupil basis it would be wrong to write as if we've seen decades of constant cuts: Spending tends to go up and down with the business cycle, and 2001 saw record high state and local spending per pupil for the 25-year period.
I hope students waiting to hear from colleges have to sweat things out as little as possible. I also hope people will stop wrongly turning up the heat on state and local taxpayers. When you look at the data, high prices clearly aren't their fault.
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April 9, 2012 10:04 AM
No more YOYO policy, please
By Sherman Dorn
First, I take the Princeton Review survey with a grain of salt: the sample are its customers, not necessarily representative of all parents.
Beyond that, I hope reporters and readers will avoid obsessing about the college admissions news this time of year that focuses entirely on selective institutions. The majority of college students attend nonselective institutions or institutions where the majority of students are admitted. The problem is generally not getting accepted into one college but being able to pay for it and being able to take all the classes you need and succeed at them. The majority of this year's high school seniors attending college in the fall will be in public two-year colleges or public non-flagship four-year colleges and universities.
The single greatest barrier for many of these seniors will be the ability (broadly speaking) to afford to attend college full-time--and by this I mean the ability to afford tuition, other direct costs of attending, and also the opportunity cost of freeing up enough time to study and pass classes at a full-tim...
First, I take the Princeton Review survey with a grain of salt: the sample are its customers, not necessarily representative of all parents.
Beyond that, I hope reporters and readers will avoid obsessing about the college admissions news this time of year that focuses entirely on selective institutions. The majority of college students attend nonselective institutions or institutions where the majority of students are admitted. The problem is generally not getting accepted into one college but being able to pay for it and being able to take all the classes you need and succeed at them. The majority of this year's high school seniors attending college in the fall will be in public two-year colleges or public non-flagship four-year colleges and universities.
The single greatest barrier for many of these seniors will be the ability (broadly speaking) to afford to attend college full-time--and by this I mean the ability to afford tuition, other direct costs of attending, and also the opportunity cost of freeing up enough time to study and pass classes at a full-time pace. Again, I hope people will stop talking about the costs of Harvard and focus more on the costs of attending Santa Fe Community College, Pittsburg State University, and Cal State Long Beach.
A significant driver of rising tuition at these nonselective or minimally-selective public colleges and universities are state budget cuts. These cuts both force higher tuition and despite higher tuition make it harder for a college or university to offer the courses needed for graduation. In many states, the Lesser Depression accelerated a decades-long trend of shifting the cost of undergraduate schooling away from the public and onto students and their families. But even much steeper tuition cannot backfill the gap states have left. In rushing to cut taxes in the past two decades, no matter what the rationale or economic circumstances, former and current legislatures have eaten the seed corn for the next generation. These days, admissions to a community college or regional state university is not a guarantee of an education but a hunting license for classes.
The greatest barrier for yet other seniors will be not having the skills and background to pass classes the first semester in college. Sometimes these are academic issues, and sometimes they are organizational ones. Sometimes colleges provide significant assistance to first-generation college students to make sure they succeed in their first year. Others treat the first semester as a sink-or-swim experience.
If there is a common thread here, it is that the most significant barriers to success in college is a “you're on your own” or YOYO attitude by state legislators and by some college administrators. You're on your own with college costs, many legislators tell faculty and students. You're on your own with passing classes, too many colleges tell first-year college students. We need to end this YOYO attitude towards public policy and college student success. The success of your child is to my benefit in so many ways, and we need to reorient public policy and college practices back towards the idea that college is a public good, where we all have a stake in the outcome.
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