In the last two posts, I showed how the Task Force on Apprenticeship Expansion included misinformation about higher education in its Final Report to the President of the United States. In this post, I will discuss the misinformation about student loan debt included in the report.

Here is the statement included in the report:

Higher education, namely 4-year baccalaureate degree programs, have become increasingly unaffordable for the average American, culminating in the current student loan crisis. On average, a student graduating college in 2016 possessed $37,000 in debt, and the total student loan debt climbed to more than $1.3 trillion, triple the level from a decade ago.

The questionable statement here is that graduating students average $37,000 in debt. Surprisingly, the report does not cite any government data to back up this figure. Instead, it cites an article published in YaleGlobal Online on May 18, 2017, but that article does not cite the source of the figure. An Internet search turned up an article in Wall Street Journal that identified the source of this figure as Mark Kantrowitz, the publisher of Cappex. However, that figure refers to the average loan debt of borrowers, not all graduating students. And the article goes on to note that his figure of $37,000 is disputed by other experts such as the Institute for College Access & Success, which puts it at $28,950.

Articles about student loan debt often make three errors in reporting on this issue. First, they fail to mention that the student loan debt averages relate only to those who actually borrowed. Second, they fail to mention that about 30 percent of students graduate with no debt at all.

Media reports about the “student loan crisis” fail to balance their reporting with facts that indicate the return on that investment. In April 2017, the National Center for Education Statistics published a Stats in Brief titled “The Debt Burden of Bachelor’s Degree Recipients.” Although the report was intended to highlight the difficulties that student loan borrowers have with paying back their loans, it balances that reporting by noting that “the average increase in lifetime earnings from a bachelor’s degree relative to a high school diploma still exceeds average student loan debt.” It also notes that the lifetime earnings premium over a high school diploma is 70 percent. You won’t find this kind of balanced reporting in most articles in the media.

Most reports on student loan debt fail to note the return on the investment. For the cost of a decent new car, one can receive a return of more than $1 million in a lifetime. One can also live without fear of unemployment compared to the high school graduate. And of course, there are many other benefits provided by a college degree, including physical health, emotional health, and social benefits.

Student loans provide access to higher education for many people who would not otherwise have it. They made it possible for me to receive my Ph.D. from Duke University. Through the help of my parents and my own willingness to sacrifice and work several jobs, I was able to finish college and seminary without any loan debt. Because I received little financial help from Duke University at the beginning of my tenure there, I was able to take out loans to get me by for the first three years. The degree that I earned as a result of those loans has opened up opportunities for me that I would not have had otherwise.

The hysteria about student loan debt stirred up by the media can discourage lower-income students from taking out loans and instead cause them to drop out of school. Those of us who work in the area of student retention have noted this trend. Certainly, students should be educated about keeping their loans as low as possible and using them wisely and responsibly, but they also need to know that this upfront investment can produce healthy dividends later in life.

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In the last post, I discussed the assertion made by the Task Force on Apprenticeship Expansion that higher education is unaffordable. Now, I want to discuss the second item of fake news promoted in their report–namely, that higher education no longer guarantees a middle-class income.

This unsubstantiated assertion is baffling because all evidence points to the contrary. Around the same time that the Task Force’s report was released, Georgetown University’s Center on Education and the Workforce released “Five Rules of the College Game,” which contradicts this statement. Carnevale and Cheah (2018) assert that “postsecondary education and training have become the most well-traveled pathways to middle class earnings” (p. 3).

They show that the median earnings for someone with a high school diploma is $36,000, but earnings increase to $62,000 for someone with a bachelor’s degree (p. 5). This equates to more than $1 million of additional earnings over a lifetime, which is often referred to as the “wage premium” of higher education. Earnings increase with each level of education attained. Graduate degrees produce $80,000 in median earnings.

College Board’s Trends in College Pricing 2017 reports different figures based on household income, but their statistics also reveal the wage premium of a college degree. They show that the median family income for a household headed by a holder of a bachelor’s degree or higher was $114,640 in 2016, whereas the median income for a family headed by someone with a high school diploma was $54,600 (Figure 17B). This wage premium is more than double.

Even when the cost of obtaining a college degree is deducted from the wage premium, the college graduate still comes out way ahead. College Board’s Education Pays 2016 contains a chart titled “Estimated Cumulative Full-Time Earnings (in 2014 Dollars) Net of Forgone Earnings and Payment for Tuition and Fees and Books and Supplies, by Education Level” (Figure 2.2A). The cumulative net earnings of someone with a bachelor’s degree is $400,000 more than someone with a high school diploma ($1.2 million vs. $800,000). By age 31, the cumulative earnings of a bachelor’s degree holder has already exceeded those of a high school graduate (Figure 2.2B).

Another often overlooked benefit of a college degree is lower risk of unemployment. According to Education Pays 2016, in 2010, 7.9 percent of high school graduates were unemployed, whereas only 4.0 percent of bachelor’s degree holders were unemployed (Figure 2.11). The Great Recession affected employment of high school graduates much more than college graduates. In 2015, the rates were 4.0 percent and 2.1 percent, respectively.

Of course, these statistics are averages, so one can always find college graduates who are unemployed or earn low wages (often the result of the major that they chose). But to make a sweeping generalization that a college degree does not guarantee a middle-class income is overstating the case.

Next post: Does higher education result in unmanageable student loan debt?

On May 10, 2018, the Task Force on Apprenticeship Expansion released its “Final Report to: The President of the United States.” In the course of making the case for expanding opportunities for apprenticeships, the report inexplicably includes gratuitous attacks on higher education. These ill-informed criticisms repeat and reinforce “fake news” about higher education. I will analyze these statements to show how they distort the truth about higher education.

This task force was formed by the Secretary of Labor in November 2017 in response to an Executive Order from the President of the United States. The 23-member task force included the secretaries of the Departments of Education and Commerce and leaders in higher education, labor, and commerce. The two main representatives of higher education were Walter Bumphus, President and CEO of the American Association of Community Colleges, and Mark B. Rosenberg, member of the Board of Directors of the Association of Public and Land-Grant Universities. Apparently, these delegates from higher education could not or did not prevent the task force from promoting fake news about higher education. The next three posts will clear up the following misconceptions promoted by this report:

  • Higher education is unaffordable.
  • Higher education does not provide economic benefits.
  • Higher education results in unmanageable student loan debt.

The report states that “higher education is a narrow path that is not working for enough young people, in part because it is becoming increasingly unaffordable and no longer guarantees a middle-class income.” Of course, one can marshal evidence to support the statement that higher education is becoming unaffordable, although the report itself makes no effort to do so. For example, Carnevale and Cheah (2018) observe that “since 1980, tuition and fees at public four-year colleges and universities have risen 19 times faster than average family incomes” (p. 3). In addition, College Board’s Trends in College Pricing 2017 reports that average published tuition and fees for full-time in-state students at public four-year institutions rose 3.13 times from $3,190 in 1987-1988 to $9,970 in 2017-2018 (Figure 3).

However, when we look at net prices rather than published prices, a different picture emerges. In 1997-1998, net tuition and fees at public four-year institutions was $2,180 (in 2017 dollars) and had risen to $4,140 by 2017-2018 (p. 18). This still seems very affordable, especially in light of the return on that investment. Adding room and board to the expenses increases the amount considerably from $8,830 in 1997-1998 to $14,940 in 2017-2018.

Certain sectors of higher education may be out of reach for lower-income students, but there are still many affordable options. Online programs would avoid the room and board expense that drives up the cost dramatically. The average net tuition and fees at public two-year institutions in 2017-2018 was -$330 (p. 17). Even highly selective private institutions such as Princeton University and Davidson College have adopted policies to ensure affordability for low-income students.

The danger of a sweeping generalization that higher education is unaffordable is that it can discourage lower-income students from looking beyond the sticker shock of published prices to find more affordable options. And it also overlooks the fact that the upfront investment in higher education produces substantial long-term returns, which is the subject of the next post.

Georgetown University’s Center on Education and the Workforce continually puts out helpful and thought-provoking publications on issues related to higher education and workforce readiness. Their latest publication, released this week, is “Five Rules of the College and Career Game.” The lead author is Anthony Carnevale, director of the Georgetown Center and one of my favorite authors on higher education issues.

The 13-page report is dominated by graphics and charts more than text. Its basic premise is that “postsecondary education and training has become the most well-traveled pathway to middle class earning.” The report points out that two-thirds of jobs now require workers with at least some college. However, the choices of college and programs have grown exponentially since 1950 so that students are confronted with a bewildering array of options. Also, the stakes are higher because the cost of college has also increased exponentially since 1980. Added to these complications is the fact that 51% of college graduates say they would change their major or institution if they had it to do over again. These factors put pressure on prospective students to think carefully about their choices.

To help students navigate “the college game,” the authors offer five rules to guide them as they make the transition to college and then to career. I will summarize the five rules that they offer (stated in my own words) and provide a few observations of my own. The report contains more information than I will focus on here.

Rule 1: More education generally results in more income.

The median earnings of bachelor’s degree holders is $62,000, which is $26,000 more than the median earning of someone with a high school diploma. This means that, over a lifetime, a college graduate on average makes more than $1 million more than a high school graduate. The median earnings of a graduate degree is $80,000.

Rule 2: Certain majors earn more money than other majors.

This point is rather obvious, but some of the statistics offered in the report are interesting. The median earnings of bachelor’s degrees in architecture and engineering is $39,000 more than bachelor’s degrees in education. But even the lowest income-producing major (education) produces $10,000 more per year than the median earnings of a high school diploma.

Rule 3: Income levels vary widely within majors.

The most interesting fact here is that the top 25 percent of liberal arts majors ($81,000) make more than the bottom 25 percent of architecture and engineering majors ($60,000). Although the text of the report does not highlight the following point, the chart provided indicates that the spread within each major between the 75th percentile of earners and the 25th percentile of earners is wider in some majors than others. For example, the gap in education and psychology and social work appears to be very narrow, perhaps indicating that earnings do not increase much over time. These fields may require a graduate degree in order to earn as much as the average bachelor’s degree holder. In majors such as social sciences and physical sciences, the spread seems to be much wider.

Rule 4: Lower degrees can earn more than higher degrees.

Someone with a certificate in a STEM field will earn significantly more than someone with a bachelor’s degree in education ($60,000 vs. $46,000). A bachelor’s degree in business earns more than a graduate degree in psychology and social work. Again, the choice of major affects future income.

Rule 5: Humanities and liberal arts majors will always be at a disadvantage.

This rule seems to contradict Rule 3. However, it makes sense that the median earnings for liberal arts majors will never match the median earnings of the STEM fields. The shocking fact, though, is that the authors suggest that median earnings for humanities and liberal arts and similar fields such as social sciences actually decline later in life. The chart indicates that humanities and liberal arts majors reach peak earnings of $66,000 at age 45 but that it declines to $62,000 by age 59. Social sciences majors reach a peak of $78,000 at age 45, but their earnings decline to $66,000 by age 59. This finding seems to contradict the argument of George Anders in You Can Do Anything: The Surprising Power of a Useless Liberal Arts Education (Little, Brown & Company, 2017) that earnings of liberal arts majors generally increase over a lifetime and eventually surpass earnings of other technical fields.

Conclusion: Money isn’t everything.

Reports such as these make me uncomfortable because they focus entirely on income as if that is the only or most important reason for choosing a major or career. Certainly, if all that a person cares about is making as much money as possible, that person should pursue a degree in engineering rather than a degree in education. But for many people, future income is not the most important consideration.

People who go into education should know that they will never make as much income as someone in the business world, but they are motivated by the desire to help young people and by a passion for teaching. The helping professions don’t pay as well as STEM fields, but many people in those professions experience a high degree of life satisfaction because they are doing something that makes a difference in the lives of others. We know from numerous studies that more income does not necessarily translate into more happiness. People should pursue their passions but with eyes wide open that they may never earn as much money as people who go into other fields of work.

Last week, Civitas Learning released its latest Community Insights report, which provided an analysis of data from 53 institutions (30 community colleges and 23 four-year universities) representing more than 300,000 degree-seeking students. The main finding of the report was that, on average, almost one in five students who do not graduate have completed 75 percent or more of their credit threshold for a degree. Also, one in 10 students who do not persist reach the 90 percent or more threshold. The report terms these late dropouts “near-completers.”

The report provides two other statistics that also raise concerns. First, more than 30 million people in the United States have earned some college credit but no credential. Second, about a quarter of all Americans with student debt from college do not have a degree. If these non-completers would go on to complete their degree, they would help meet the need for skilled, educated workers in the American economy. Consequently, Tennessee’s Reconnect program is encouraging these people to return to school and complete their degree.

The report provides case studies of colleges and universities that have targeted support services and outreach to near-completer students. The authors suggest sending emails or making phone calls to students when they complete 75 percent of their program to remind them of graduation requirements and upcoming deadlines and to offer coaching to help them finish.

Although this analysis is interesting and helpful, a glaring omission is that the report did not provide the statistical breakdown of near-completers by gender. The report discusses how to use certain criteria to predict a student’s likelihood to persist, such as full-time status, age, academic performance, number of credit hours attempted per term, and consistency of activity on an institution’s learning management system. Since we know that men drop out at higher percentages than women, why did they not include that as one of the factors to identify those likely to drop out?

Of the one-fifth of nonpersisting students who have completed 75 percent or more of their degree, what percentage is male and what percentage is female? Based on other statistics, it is a safe guess that a majority of these would be male. For example, the NCES’s Digest of Education Statistics 2016 indicates that, among the 2009 entering cohort, 56.2 percent of first-time, full-time bachelor’s degree-seeking students at 4-year postsecondary institutions who are male completed their degree within six years. However, 62.1 percent of females completed their degree within six years.

This statistic suggests that more men than women would be included among the near-completers and that maleness should be considered one of the risk factors for dropping out after completing 75 percent of the credits needed for a degree. Statistics consistently indicate that retention and completion are a problem for males more than for females, but reports such as this one from Civitas Learning ignore those facts. If we cannot correctly diagnose the disease, we will never find the cure.

In February, the National Center for Education Statistics released its annual Digest of Education Statistics. In this summary, I will list some key facts concerning enrollment trends for degree-granting postsecondary institutions.

  • Fall enrollment increased 23% between 1995 and 2005 but only 14% between 2005 and 2015.
  • Fall enrollment increased 20% between 2005 and 2010 but decreased 5% between 2010 and 2015.
  • Undergraduate enrollment rose 14% from 2005 to 2015, and postbaccalaureate enrollment rose 17%.
  • In 2015, 40% of 18- to 24-year-olds were enrolled, which was not measurably different from the percentage in 2005.
  • The enrollment rate for Hispanic 18- to 24-year-olds rose from 25% in 2005 to 37% in 2015, but the rates for Whites (42%) and Blacks (35%) remained unchanged from 2005.
  • From fall 1976 to fall 2015, the percentage of American college students who were Hispanic rose from 4% to 17%. Black students increased from 10% to 14%, and Asian/Pacific Islanders increased from 2% to 7%. The percentage of White students fell from 84% to 58%.
  • In fall 2015, enrollment was lower than fall 2010 enrollment in 42 states.
  • From 2015 to 2026, enrollment for students under age 25 will increase by 17% but by only 8% for students age 25 and over.
  • In fall 2015, 15% of students took at least one distance education course; 14% took their college program exclusively through distance education courses; and 70% took no distance education courses.
  • In fall 2015, 44% of institutions had fewer than 1,000 students, but those campuses enrolled only 4% of all college students. By contrast, 12% of campuses enrolled more than 10,000 students, and they accounted for 60% of total college enrollment.

For the last few years, the Council of Independent Colleges has carried out a major initiative called “Securing America’s Future.” In 2016-2017, a series of eight workshops was hosted by CIC member presidents on campuses across the nation. The goals of these workshops were to help member colleges and universities prepare for the future more effectively and become more engaged in promoting the value of the liberal arts and of independent colleges and universities. These gatherings brought together teams of presidents, chief academic officers, and other administrators as well as faculty leaders to explore key trends in higher education and society, the pressures that individual colleges and universities face, and potential solutions that can be pursued by their institutions. Approximately 500 campus leaders from CIC member institutions participated in the workshops.

In March, the CIC released a report called Innovation and the Independent College: Examples from the Sector, which presents an overview of the major points of discussion held during the workshops and references hundreds of examples of mission-driven innovations shared by the colleges and universities that sent teams to the workshops. The examples are grouped into eight categories: Athletics, Career Connections, Community Engagement, Consortial Agreements, Cost Containment, Curricular Reform, New Academic Programs, and New Student Populations.

The many examples in this document may spark ideas for similar innovations on private college campuses. For example, in the section on “Career Corrections,” the documents provides several examples of colleges connecting students with alumni/ae who serve as mentors and advisors to them. I thought this was a great idea that could be implemented in many different ways. Many other specific ideas in the document like this provide food for thought.

Two weeks ago, the Boston Consulting Group, in conjunction with Arizona State University, released a research report titled “Making digitial learning work: Success strategies from six leading universities and community college.” Funded by the Bill & Melinda Gates Foundation, the study examined three public research universities, two community colleges, and one state-wide community college system that “have a strong track record of using digital learning to serve large, socioeconomically diverse student populations.” The focus of the study was to examine the return on investment of digital learning under different circumstances.

The study found that, when institutions invest in high-quality courses and programs, they achieve three critical objectives:

  1. They deliver equivalent or even improved student learning outcomes. Students in digital learning earn their degrees faster, which saves them money and enables to them to enter the workforce sooner.
  2. They improve access, especially for disadvantaged students.
  3. They improve the financial picture by growing revenue while reducing operating costs. At four of these institutions, the savings for online courses ranged from 3% to 50% of the average credit hour costs.

In addition, the study summarized seven promising practices for digital learning, which I won’t summarize here. This study should dispel once and for all any remaining skepticism concerning the value and benefits of digital learning. It adds to the mounting evidence that digital learning can enable institutions to increase enrollment, expand access to high-quality education, and improve student performance—all at a lower cost. But as the report emphasizes, institutions must make the investment and commitment to provide high-quality online courses and programs in order to enjoy these benefits.

This report by Gallup and the Strada Education Network is the first in a three-part series examining how college courses affect consumer perceptions of the value and quality of their education as well as their general well-being. Perspectives were gathered from a nationally representative sample of 78,091 adults, ages 18 to 65, who are currently employed and have taken at least some college courses.

Two key questions in the Strada-Gallup Education Consumer Survey let participants rate the relevance of their courses:

  • You learned important skills during your college courses that you use in your day-to-day life.
  • The courses you took are directly relevant to what you do at work.

Results show that consumers who find their coursework to be relevant in their work and day-to-day living report far better outcomes on quality, cost, and their overall sense of well-being. This pattern holds true for individuals across all walks of life. Coursework relevance is proving to be a critical component of how individuals assess the quality and value of their education. This report should motivate all instructors to examine how they can make their courses more relevant to work and everyday life.

On April 12, the National Center for Education Statistics released its annual projection of education statistics. Below, I have summarized some key information from the part of the report the deals with postsecondary education. Note that most of the comparisons are between the 14-year period from 2001 to 2015 (the last year of available data) and the 11-year period from 2015 to 2026.

  • Total enrollment increased 25 percent from 2001 to 2015 and will increase 13 percent from 2015 to 2026.
  • The number of high school graduates increased by 20 percent between 2001-02 and 2012-13 and is projected to increase 3 percent by 2026-27.
  • Enrollment of students who are 25 to 34 years old will increase 11 percent from 2015 to 2026, a significant slowdown from the 35 percent increase from 2001 to 2015.
  • The gender gap will continue to widen. Enrollment by males will increase by 11 percent from 2015 to 2026 but by 15 percent for females. Females will outnumber males by 3.3 million. In addition, associate’s degrees awarded to males will increase by 16 percent but by 34 percent for females. Bachelor’s degrees awarded will increase 8 percent for males and 11 percent for females; master’s degrees awarded will increase 19 percent for males and 23 percent for females; and doctor’s degrees will increase 8 percent for men and 17 percent for females.
  • Enrollment by race/ethnicity will see these changes from 2015 to 2026: Two or more races (+37%), Hispanic (+26%), Black (+20%), Asian/Pacific Islander (+12%), White (+1%), and American Indian/Alaska Native (-3%).
  • Enrollment in public institutions increased 19 percent from 2001 to 2015 and will increase 14 percent from 2015 to 2026.
  • Enrollment in private institutions increased 46 percent from 2001 to 2015 and will increase 11 percent from 2015 to 20126. This is a dramatic slowdown in the increase of enrollment.
  • From 2015-15 to 2026-27, the number of associate’s degrees awarded will increase by 27 percent; bachelor’s degrees will increase by 10 percent; master’s degrees will increase by 22 percent; and doctor’s degrees will increase by 13 percent.

In September of each year, the National Center of Education Statistics releases a report that projects trends in education for the next 11 years from the last year of collected data. The last year of collected data for this report is 2014, so the projections are carried out to 2025. The report also compares the future trends with the past trends of the previous 14 years, in this case 2000 to 2014. Four of the six sections of the report deal with K-12 education, but the last two sections deal with enrollment in degree-granting postsecondary institutions and postsecondary degrees conferred. The table below summarizes statistics from the report and then a few observations follow. The percentages indicate increase, but note that the report compares the past 14-year period with the future 11-year period.

Category 2000–2014 2014–2025
Total Enrollment 32% 15%
Enrollment by Age:    

18-24

33% 13%

25-34

35% 16%

35+

23% 20%
Enrollment by Sex:    

Males

31% 13%

Females

33% 17%
Enrollment by Attendance Status:    

Full-time

38% 15%

Part-time

23% 16%
Enrollment by Level of Student:    

Undergraduate

31% 14%

Postbaccalaureate

35% 21%
Enrollment by Race/Ethnicity:    

White

  3%

Black

  22%

Hispanic

  32%

Asian/Pacific Islander

  16%

American Indian/Alaska Native

  -2%

Two or more races

  37%
Enrollment in Public and Private Institutions:    

Public

25% 16%

Private

56% 14%
First-Time Freshmen Fall Enrollment:    

Total

20% 14%

Males

21% 11%

Females

20% 17%
Associate’s Degrees Conferred:    

Total

73% 29%

Males

69% 15%

Females

76% 37%
Bachelor’s Degrees Conferred:    

Total

50% 9%

Males

51% 6%

Females

50% 11%
Master’s Degrees Conferred:    

Total

59% 30%

Males

53% 35%

Females

64% 27%
Doctor’s Degrees Conferred:    

Total

48% 18%

Males

33% 16%

Females

66% 19%

Here are some observations about this data:

  • The slowdown in enrollment increase will result from a slowdown in population increase among 18-29 year olds. From 2005 to 2014, that population increased by 4.38 million, but from 2015 to 2024, it will increase by only 312,000.
  • The gender gap will continue to increase. Females currently make up 57% of the undergraduate population, and their proportion of enrollment will continue to increase.
  • The booming increase in enrollment for private institutions will drop off dramatically.
  • The greatest increase in degrees conferred will occur in master’s programs.
  • The greatest increases in enrollment will occur among traditionally underrepresented populations, especially those of 2 or more races and Hispanics.

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