Category Archives: Education (higher ed)

Pell Grants: Soaking Taxpayers and Creating Debt Slaves?

pell_loansby James A. Bacon

Earlier this month the Hechinger Report found that a large percentage of the beneficiaries of federal Pell grants to students from low-income families never graduate. The study also found that the federal government, despite spending $300 billion on the program since 2000, doesn’t keep track. The feds have doubled their commitment to the program since the 2007-2008 school year with absolutely no idea of what results they are getting.

Uncle Sam may be flying blind, but Virginia is not. The Commonwealth has been collecting the data for years and reports the results for every public and private university in the state, reports the VLDS (Virginia Longitudinal Data System newsletter. According to Tod Massa with the State Council for Higher Education for Virginia, “Virginia knows more about the success of students in all the Title IV financial aid programs, which are not ours, than the federal government does.”

Pell grants for low-income students provide awards of up to $5,775 per student. Graduation rates for Pell recipients in Virginia can be seen here.

For all first-time, full-time college students entering a Virginia institution in the 2001 school year, 60.3% graduated within five years compared to 43.4% for Pell recipients. The graduation rate varied widely between institutions, however. The more elite the institution, the higher the graduation rate. For instance the Pell graduation rate within five years at the University of Virginia was 85% for freshmen enrolled in 2001, while it was 20% at Norfolk State University. (View data for individual institutions here.)

The disparity in graduation rates raises the question of whether the program is inducing poor students to attend college when they have no business doing so, either because they are unprepared for college-level work or because they struggle to pay the tuition, fees, room and board. A nearly $6,000 grant covers about a third or fourth of what it costs to attend a public university in Virginia. It would be interesting to know how many Pell recipients end up taking out student loans. It would be even more interesting to know how many Pell recipients end up saddled with student debt without the degree credential that would help them pay it off.

Virginia has the data to undertake such an analysis. The fact that the U.S. Department of Education does not is just disgraceful. It’s not often that a government wealth-distribution scheme can both squander your tax dollars and propel thousands  of would-be beneficiaries into debt slavery.

— JAB

How Germans Control the Cost of Higher Ed

Th University of Cologne: spartan but inexpensive.

The University of Cologne: spartan but inexpensive.

by James A. Bacon

Imagine a college or university stripped down to its essentials: inculcating its students with a body of knowledge and critical thinking skills. Imagine no basketball teams, no dormitories, no gymnasium, no frills. Imagine professors who spend most of their time teaching by delivering lectures in large auditoriums, not engaging in the publish-or-perish rat race. Imagine a college that doesn’t support vast bureaucracies to sort through student admissions, promote economic development or minister to the latest government concerns about diversity, sexual assault and binge drinking.

Then, imagine that institution offering free tuition to everyone meeting the admittance criteria, and students graduating without $25,000-plus in student loan debt.

There are no universities like that in the United States, certainly not Virginia. But that’s pretty much what the German higher education system looks like.

In a fascinating article in Marketplace, Kirk Carapezza profiles the University of Cologne, Germany’s largest university, with 48,000 students. The university includes a law school and medical school. The average cost of an undergraduate degree in Germany is $32,000, which the German government provides for free.

Here in Virginia, VCU students will pay $63,000 in tuition and fees (assuming 2015 rates stay constant, which they won’t), with the result that many will carry tens of thousands of dollars in student debt when they graduate (assuming they do graduate). And they will pay that astronomical sum despite the fact that the Commonwealth of Virginia pays $27,000 per student this year in state support at VCU — only $5,000 per student per year shy of what it costs Germany to educate its students for free!

The problem in Virginia, as in the rest of the United States, is not that the state fails to support higher education, it’s that colleges and universities have let costs run totally out of control. Here are some of the ways the University of Cologne differs from the U.S. system while still managing to provide a quality of education commensurate with one of the world’s leading economies:

  • Campus. The University of Cologne doesn’t lavish money on architectural extravagance. Buildings are bland and utilitarian.
  • Room and board. The University of Cologne doesn’t have dormitories and food courts. Students live off campus.
  • Garages. No garages at the University of Cologne — but there is ample parking for bicycles.
  • Big time sports. Sorry, sports fans, no football teams, no, basketball teams, no Title IX athletic programs, and no athletic facilities needed to support them.
  • Faculty. Professors teach more than American professors, earn less and spend more time handling administrative tasks, which keeps down administrative bloat.
  • Campus activities. Nope, no active student clubs.
  • Administration. The article doesn’t address this, but I would conjecture that it’s a factor: Germans don’t have the obsession with race, ethnicity and gender that has given rise to a vast “diversity” administrative apparatus in the U.S. And the non-residential experience probably avoids the problems arising from America’s alcohol-fueled hookup culture that generates so many charges of sexual assault, along with the attendant bureaucracy to deal with it.

Bacon’s bottom line: I’m not suggesting that Virginia switch wholesale to the German model. If people are willing to pay a premium to attend the University of Virginia, or even VCU, then they should be allowed to. But Virginia’s system of higher education also should provide a stripped-down educational option focusing on academics that enables students to forego the “residential experience” in exchange for vastly lower tuition and fees. It works for the Germans. It could work for us, too.

(Hat tip: Don Rippert.)

Student Debt and the Decline of New Business Formation

by James A. Bacon

Many are the ways in which burgeoning student debt — $1.2 trillion and rising — cripple the economy. On this blog we’ve discussed how debt delays family formation, housing purchases and consumer spending. Recent research from the Philadelphia Federal Reserve Board also suggests that student debt dampens new business formation, an insight that ties into another line of inquiry on this blog: understanding the slow rate of job creation in the current economic cycle.

The engine of job creation in the U.S. economy is new business formation. The spawning of new businesses has experienced a long-term decline since 1978, but that decline has been particularly pronounced since 2005. In recent years more firms have exited the marketplace than have entered it, as seen in this Brookings Institution graph below, taken from “Declining Business Dynamism in the United States: A Look at States and Metros,” published in 2014. The numbers may have improved in the past two  years, but probably not enough to change the long-term picture.

firm_dynamism

I have argued on this blog that the massive wave of regulation enacted in the past six years has dampened the economic recovery by imposing large new costs on businesses. As the regulatory burden has increased, economies of scale have shifted in favor of larger firms which have the resources to deal with the regulations. Numerous industry sectors are consolidating: banking, hospitals and health insurance most visibly. Industry consolidation may be a factor in explaining the decline in overall net business formation but it only goes so far.

The Brookings data shows that the problem isn’t an accelerating death rate of businesses — the exit rate of firms from the economy has remained fairly stable since 1978 — it’s the dearth of business births. I would suggest that regulation has dampened new business formation by creating barriers to entry in many industries.

While I still hew to that view, I think there’s more to the story. There also is strong evidence that the surge in student debt — $1.2 trillion and rising — has depressed new business creation among young people.

Image source: Federal Reserve Bank of Philadephia

Image source: Federal Reserve Bank of Philadephia. (Click for larger image.)

The authors of the recently published Federal Reserve Bank of Philadelphia paper, “The Impact of Student Loan Debt on Small Business Formation,” has found a “significant and economically meaningful” negative correlation between geographic variation in student loan debt and net business formation for small firms of one to four employees. “Based on our model, an increase of one standard deviation in student debt reduced the number of businesses with one to four employees by 14% on average between 2000 and 2010.” (Please don’t ask me to define “standard deviation.” Here’s an an explanation.)

Image source: Federal Reserve Bank of Philadelphia. (Click for larger image.)

Image source: Federal Reserve Bank of Philadelphia. (Click for larger image.)

To launch a business, especially a small business, individuals need access to capital, the authors argue. Small businesses receive approximately 75% of this capital from banks in the form of loans, credit cards and lines of credit, which are contingent upon the borrower’s credit-worthiness. “Given the importance of an entrepreneur’s personal debt capacity in financing a startup business, personal debt that is incurred early in life and that restricts a person’s ability to take on future debt can have profound implications for growth in small businesses,” the study says.

The growth in student debt over the past decade has damaged the credit-worthiness of an entire demographic cohort: 17% of student loans are delinquent, and another 44% are not being repaid due to borrowers either still being in school or having received a repayment deferral or forbearance. Even students who are paying their debt on schedule find their credit worthiness downgraded.

As the Wall Street Journal noted in an editorial today, the Kauffman Foundation has found that new entrepreneurs ages 20 to 34 fell to 23% of self-starters in 2013, down from 35% in 1996.

The U.S. system of higher education may be creating the best educated generation in American history, but it may be the least entrepreneurial in decades.

As Virginians seek ways to reignite a state economy hobbled by the decline in federal spending and an eroding business climate, we need to give more attention to what it takes to stimulate new business formation. And that should entail taking a closer look at the link between higher ed and student debt, and the link between student debt and new business formation. All the state and federal “programs” designed to promote new business formation, I suspect, don’t amount to a hill of beans compared to the rise in student indebtedness. Tackling student indebtedness gets us into a thicket of very complex issues that aren’t easily solved but that’s no excuse for failing to focus on what really matters.

Virginia ACT College-Readiness Scores on the Rise

Source: Virginia Department of Education

Source: Virginia Department of Education

by James A. Bacon Jr.

Some seemingly good news from the Virginia Department of Education (VDOE): Virginia’s college-bound students have shown steady improvement in their ACT college-readiness scores and significantly out-perform their peers nationally as ranked by the percentage of test takers who meet college-readiness benchmarks.

I say “seemingly” because the VDOE has shown a willingness to shamelessly spin data in the past. I don’t see any obvious signs of manipulation in the latest press release, but I don’t know enough to ascertain whether the data is being tortured or not.

Source: Virginia Department of Education

Source: Virginia Department of Education

“The upward trend in the performance of Virginia students on the ACT since 2012 corresponds with the implementation of college- and career-ready state standards and assessments in mathematics, language arts and science,” Board of Education President Billy K. Cannaday Jr. said in the press release. “The progress of students toward meeting these higher state expectations is reflected in the ACT.”

What seems especially encouraging is that Virginia scores have improved even as the percentage of high school graduates taking the test has increased. An estimated 30% of 2015 Virginia graduates took the ACT, up from 22% in 2010. (The pool of test takers includes public and private high school students as well as home schooled students.)

However, it is worth probing these results. The SAT remains the dominant college-admissions test. Not all college-bound students take the ACTs. I don’t know how the student profile of the ACT test taker may differ from the SAT test taker. If those most likely to take the ACTs are the best prepared academically, then it logically follows that enlarging the pool of test takers brings in students who are less prepared. If scores are improving despite this trend, the results appear to be all the more robust. Alternatively, if ACT test takers are participating because they are disappointed with their SAT results and they want an alternative test to present to college admissions offices, they may not represent the cream of the crop, with very different implications.

As the VDOE press release indicates, the College Board is expected to release its annual report on student achievement on SATs this September. If the SAT results match the ACT results, then something really good is going on. If not… you can draw your own conclusions.

Lopsided Gender Ratios and the “Epidemic of Rape”

gender_ratio2
by James A. Bacon

Jon Birgir, author of “Date-onomics: How Dating Became a Lopsided Numbers Game,” advances a fascinating theory on how the ratio of the sexes in U.S. colleges affects dating behavior. In colleges with more men, “traditional” dating patterns  predominate, while colleges with more women tend to have more intense hookup cultures.

The irony is that the dating culture isn’t established by the majority gender but the minority. In male-dominated campuses, women are in greater demand, hence are in a better position to set the terms of the relationship. Conversely, in female-dominated campuses, men are in greater demand, and they set the terms of the relationships. Insofar as college-age men are more interested in engaging in sex rather than establishing long-term relationships, the campus culture tilts toward a hook-up culture.

Thus, according to Birgir’s theory, the decades-long trend in which male-dominated campuses have evolved into female-dominated campuses has tilted the dating supply-and-demand equation decisively in favor of men. The result: boorish, sophomoric, sex-obsessed college males have an outsized say on the college dating culture. Says Birgir in a Washington Post interview:

It’s not just the social science I cite in the book, you can really see it in how kids talk about dating life at those schools.

I use data in the book from Niche.com, which is a college review site. At the schools that are predominantly male, the kids talk about how students like to be in relationships. So for Georgia Tech, which is 66% male, the comment on Niche.com was, “Tech is a fairly monogamous campus.” But for the schools that are skewed female, the hookup culture becomes more intense. So James Madison, which is 63% female, one comment is, “The deficiency of guys creates a scene that tends to embrace random hookups. …

People should know generally that the average gender ratio on campus these days is 57 to 43, which is one-third more women than men, and that is going to lead to a more libertine, a looser sexual culture on campus.

Now, let’s close the loop on the “epidemic of rape” issue I’ve been dissecting on Bacon’s Rebellion. I would argue that rising incidence of rape on Virginia college campuses (and campuses nationally) does not reflect a growing number of the violent encounters, often at gunpoint or knifepoint, that we traditionally thought of as rape but an outgrowth of the alcohol-fueled hookup culture that tends to be — this is a generality, and all generalities have exceptions — more gratifying to men than to women. A result of the hookup culture is that there are many unhappy women on college campuses today. Too many engage in sex that they hope will lead to a lasting relationship only to have their hopes dashed, often cruelly; they come to regret their action, and under the prevailing doctrine emanating from the U.S. Department of Education and arising from campus anti-rape movements, such encounters are now interpreted as rape. It is also possible that a growing number of men feel entitled to sex and that, after bouts of drunken making out, some of them resort to coercion to get what they want.

The gender ratio is not the only factor influencing the campus dating/sex culture. Administrative policies have an influence. So does the cultural background of the student body. The gender ratio at Liberty University, for instance, is more lopsided than it is at the University of Virginia, but I would be very much surprised if the hookup culture at that evangelical university is anywhere near as intense, if it exists at all. Similarly, I would conjecture that commuting campuses, in which student bodies are geographically dispersed, have less intense hookup cultures than campuses in which young men and women are thrown together in dormitories and have easy access to one another.

Yet Birgir’s hypothesis makes a lot of sense to me. Now, to take his conjecture to the next step…. I don’t believe there is any reliably comparable data on the number of complaints about sexual assault on Virginia campuses, but if there were, I would predict a meaningful correlation between the incidence of such complaints and the gender ratio of the student body.

What conclusions can we draw? One tentative conclusion is that student bodies with more balanced gender ratios are less likely to have hookup cultures and complaints of sexual assault than student bodies dominated by females. Insofar as the “epidemic of rape” is tied to the rise of the hookup culture, anything that restores more traditional dating patterns would be beneficial. Unfortunately, it is all but impossible to achieve balanced gender ratios across the board when, for biological and cultural reasons, women are far more better prepared for college and are admitted in much higher numbers. There is little appetite in American culture, even one supposedly dominated by the male “patriarchy,” for undermining the meritocratic principle of college admissions.

Birgir suggests another solution, although it won’t have much impact on college campuses for another 15 years or so — holding boys back in pre-school. Giving boys an extra year to mature in school, he suggests, will make them more competitive in college applications. Says Birgir: “If we essentially red-shirted boys and had them begin kindergarten a year later than girls, it would go a long way to closing this gap.”

Bureaucratizing the War on Men

campus_rapeby James A. Bacon

The bureaucratic machinery for prosecuting the Obama administration’s war on a supposed “epidemic of rape” — is building with frightening rapidity in Virginia. The University of Virginia spent about $1.5 million over the past year to comply with the U.S. Department of Education’s Title IX requirements, while Virginia Commonwealth University spent about $1 million, according to the Richmond Times-Dispatch.

Now state universities are discussing creation of a network of shared resources and investigators to address campus assaults. At a meeting of university presidents at the State Council for Higher Education in Virginia (SCHEV), UVa President Teresa Sullivan said a regional collaboration would help schools with fewer resource meet requirements of federal Title IX investigations.

This summer, UVa hired a new Title IX coordinator, two investigators and a coordinator for the federal Clery Act, which requires the disclosure of crime statistics. “Would I have rather hired four faculty members with that money? Yes, I would,” she said. “But we needed to do this to be in compliance.”

The “epidemic of rape” movement has overshot the mark, going way beyond the commendable objectives of combating campus rape and supporting the victims of rape. The new regime criminalizes sexual encounters — typically involving excess consumption of alcohol — that women regret in retrospect. Under the new logic, women are absolved of any responsibility for their own actions, while men who fail to obtain a woman’s “consent” during their drunken couplings are declared guilty of rape or sexual assault. The  apparatus being foisted into place is not merely solicitous to women but sometimes encourages them to file complaints when they were not initially disposed to do so, while administrative proceedings are stacked against men. As a consequence, an increasing number of men are heading to the courts to seek redress against university sanctions.

Meanwhile, a new puritanism is descending upon college campuses, as witnessed by the reaction to a sophomoric stunt by some Old Dominion University frat boys last week. Their offense: hanging a banner from their house saying, “Rowdy and fun—hope your baby girl is ready for a good time.” Suggestive jokes now are deemed worthy of administrative review and possible punishment.

To be totally clear, I find repugnant the kind of casual drunken sex on college campuses that leads to all too many regrettable and/or violent sexual encounters. I’m all in favor of throwing the book at rapists. I believe in chastising young men who treat young women boorishly. But I don’t favor criminalizing non-criminal acts, dismantling basic legal protections for men and squatting on free speech in order to accomplish that aim. There has to be a better way.

Free Speech on Campus: ODU Update

odu_fraternityby James A. Bacon

When students showed up for the start of school at Old Dominion University last weekend, they were greeted by banners hanging from a balcony at the off-campus Sigma Nu fraternity house:

“Rowdy and fun—hope your baby girl is ready for a good time.”
“Freshman daughter drop off.”
“Go ahead and drop mom off too…”

Suggestive? Certainly. Crude? Yeah. Offensive? To some. So abominable as to warrant a suspension of the fraternity? Sorry, I’m not buying it. The fact is, the banners were a pretty accurate reflection of the college experience — let’s drink, party and get naked. But in the new Puritanism of the Title IX war on “campus rape,” it’s not possible to actually express that sentiment publicly. Don’t get me wrong: I’m repelled by drunken college parties that lead to unfortunate sexual encounters, occasionally even to rape. Student culture is atrocious and needs to change. But I’m no fan of suppressing free speech either.

On Sunday, ODU President John Broderick disseminated a letter to the community, telling how offended he was by the message: “While we constantly educate students, faculty and staff about sexual assault and sexual harassment, this incident confirms our collective efforts are still failing to register with some.”

Broderick said he’d talked to “a young lady” who “courageously” described the “hurt” the signs had caused. “She thought seriously about going back home.”

Oh, poor, delicate flower! Back in the day, people would have responded to tasteless jokes by ignoring them, ostracizing the fraternity or perhaps organizing a demonstration. No longer. Now women swoon at the horror of a crude joke, and university administrations threaten punitive action. Said Broderick: “This incident will be reviewed immediately by those on campus empowered to do so. Any student found to have violated the code of conduct will be subject to disciplinary action.”

Well, we’ll see how the “review” goes, but I’m not expecting from the tone of Broderick’s letter that it will be an objective inquiry. Meanwhile, the national chapter of Sigma Nu has suspended the ODU fraternity — no doubt a pre-emptive move to contain the predictable outrage.

I’m wondering, will the suppression of Sigma Nu do anything to change the campus culture of drunken, indiscriminate sex that underlies the epidemic of regret sex and rape charges? Maybe there were be fewer incidents at ODU’s Sigma Nu while it’s closed, but nothing else will change.

Gender “Justice” at Washington & Lee

kozak

W&L’s Lauren Kozak: “Is it possible that there is something In between consensual sex and rape … and that it happens to almost every girl out there?”

Can this column in PJMedia possibly be a fairly rendered reporting of a “sexual assault” hearing at Washington & Lee University? If the story is accurate, it is scary on at least two grounds: (1) the novel theory of “gray” rape, a consensual sexual act later viewed with regret by the woman, is grounds for dismissing a male student from a prestigious Virginia university; and (2) a student can be evicted in a hearing without any pretense of what most Americans would consider a fair trial. Indeed, the W&L hearing resembled nothing so much as an administration-sanctioned kangaroo court.

I hesitate to draw sweeping conclusions from an opinion column until I have seen all sides of the story, although the author, Hans Spakovsky, a legal fellow with the Heritage Foundation, is a serious commentator, not some no-name blogger, and his account is largely consistent with that of a subsequent lawsuit reported by the Roanoke Times. These allegations are far more momentous than the fabulist Rolling Stone UVa fraternity-rape story because they suggest that the administration of a prestigious university has abandoned core principles of American jurisprudence — punishment of a novel, never-bef0re-articulated offense, the right to a fair and open trial, the right to a lawyer, the presumption of innocence, adherence to basic standards of evidence — in its internal proceedings.

The Rolling Stone article inspired an outpouring of investigative journalism by mainstream media publications, most notably the Washington Post. That’s understandable, given the horrifying nature of the putative crime, which confirmed the narrative of a lot of correct-thinking people. The W&L incident, it seems to me, justifies just as much attention. When political correctness hijacks the administrative machinery of a respected university, that’s just as big a story as frat boys run amuck. Let’s hope the Roanoke Times gives this story the full attention it deserves.

Update: Meanwhile, there’s another date rape controversy brewing at Virginia Wesleyan College.

(Hat tip: Tim Wise)

— JAB

A Footnote to “Cutting Virginians No Slack”

out_of_state_enrollment

A footnote to my “Cutting Virginians No Slack” post from this morning: I was doing some research for a non-blog project when I came across this chart from a March 2015 Virginia Commonwealth University budget workshop. For all their tuition hikes, Virginia colleges and universities perceive themselves to be experiencing chronic fiscal stress. One strategy for alleviating that stress is to increase the number of out-of-state students, who pay higher tuitions than in-state students.

It’s great money if you can get it, which the College of William & Mary and the University of Virginia are pretty good at doing. W&M, for instance, enrolls 33.5% out-of-state students who account for 61.7% of undergraduate tuition revenue. W&M, I suspect, could enroll more but restrains itself from doing so for political reasons.

But it’s a harder slog for Virginia universities, like VCU, that lack national reputations. VCU enrolls only 11.2% of its students from out of state, and out-of-staters account for only 25.7% of tuition revenue. VCU and other universities in a comparable situation have less pricing flexibility as a result.

— JAB

Cutting Virginians No Slack: Colleges and Universities

tuition_hikes

Data source: State Council of Higher Education in Virginia

by James A. Bacon

The rocket-like ascent of college tuition in Virginia continues unabated, with tuition and fees across the state’s higher ed system averaging six percent in the 2015-2016 academic year, according to a new State Council of Higher Education in Virginia (SCHEV) report. That compares to an inflation rate of less than 1.0% between 2015 and 2014 and it outpaces the meager gains in average household income.

Prime offenders: Virginia’s elite universities, the University of Virginia and the College of William & Mary, continuing to parlay their pricing power into higher tuition and fees at a remarkably aggressive rate.

As always, the universities turn to the excuse that state budget cuts made them do it. And, as the SCHEV report makes clear, the past year was a budgetary roller coaster and General Fund support for higher ed was cut by $45 million in each year of the biennium, for a total of 2.1%. But that accounts for only one percentage point of the 6% increase this year. Inflation accounts for another percentage point. That still leaves an unjustifiable increase of 4%.

Meanwhile, the indentured servitude of America’s college-educated youth, especially those whose parents aren’t affluent enough to foot the bill, continues apace. Student debt is accumulating as rapidly as the national debt, now exceeding $1.3 trillion.

If there is a consolation to this dismal news, according to WalletHub, one of the nation’s leading purveyors of listicles, Virginia students are less debt-ridden than the national average. Compiling metrics on the percentage of students with debt, the average size of that debt, debt as a percentage of income, post-college employment rates and delinquent loans, Virginia’s college students rank 6th best off in the country. That is a testimony to the fact that, relatively speaking, Virginia institutions of higher ed are less rapaciously exploitative  than their peers in other states. (Yes, that’s the sound of one hand clapping.)