A New Walker Report on Wisconsin Higher Education

Don't you just love last-minute breaking news when you're trying to head out the door on vacation? Come on.....! 

THIS JUST IN.

Tim Sullivan, businessman, has issued a blueprint prepared for Governor Scott Walker that includes some significant plans for higher education.

Among its highlights:

• The skills gap demonstrated by highly-esteemed economists, as well as leading Wisconsin organizations with sizable expertise in business and higher education is apparently a "myth."  Writes Sullivan, "there are opportunities available if people know where to look and can see the value." (p.101) Sure, he admits his is no scientific study-- after all, he is doing policy analysis by anecdote, drawing on his experiences at his own company-- but gee, he's sure confident there's a myth out there to be busted!
• The costs of Wisconsin Technical Colleges are too high because they are doing too much--namely, wasting time on liberal arts college transfer, "spending millions" before "technical education even comes into the picture."
• The new online initiative in UW System is expected to "change the face of education in Wisconsin."  Boy, and we just thought it was an addition, not a replacement....
• UW System, including UW-Madison, is "failing" to produce enough new start-ups, and needs to be more focused on business collaborations.
• We should open the Wisconsin Higher Education Grant (which already runs out of money every year compared to demand among degree-seeking students) to non-degree seeking students. Yes, he said "open" the grant-- not add funding to the grant. Hmm.
• UW System should pay the additional tuition if students don't finish their degrees in 4 years.  That's right-- UWS-- not the state, even though economists like John Bound and Sarah Turner convincingly demonstrate that time-to-degree rises because states cut funding to universities! 
• The publics should act more like the privates and give out more financial aid.  The latter give out a wider range of aid.  Again, duh....wonder why.

Ok, enough. Read the darned thing for yourself, and write in and tell us all about your favorite parts.  Tim Sullivan, businessman, here to save higher ed.

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Stop Subsidizing the Upper Middle-Class

Today Stephen Burd from Education Sector released a provocative new report that fully supports my contention (and that many others including Sandy Baum, Mike McPherson, Rick Kahlenberg) that we should stop subsidizing the upper middle-class with tax credits for college, and start focusing federal financial aid on those who need it most: Pell recipients.

Every time I've publicly discussed this idea I've been attacked as not caring about the middle-class.  This is a red herring-- suggesting that scarce dollars should be targeted to those who most need and will most benefit from them is simply good policy making. It's not about "who cares about whom."  As I pointed out following Obama's latest speech in Michigan, tax credits are demonstrably ineffective at their goals.  Burd calls a spade a spade when he adds, "Notably, while policymakers continue to tout the tuition tax breaks as a middle-class benefit, the introduction of the AOTC led to significant reductions in the share of the overall benefits going to families making between $25,000 and $75,000."

As a result, of the $55 billion distributed in college tax credits between 2010-2014, most will go to families earning over $100,000.  Tax credits don't make or break their children's decisions about attending or college, and are unlikely to even affect where they attend or how long they take to finish.  Instead they operate as a sort of "reward" to the family for having a college-bound child, and a little "apology" for the high costs. Of course these are nice things for the government to do for families, but since they don't change student outcomes, they simply aren't necessary.  Well, mostly.  The one caveat is that they may incur some political support for aid programs generally, a benefit that accrues to all recipients.  But that's very hard to demonstrate, and probably isn't worth their high cost.

Let's hope that Congress is listening, and stops attacking the Pell program as inflated and unbearable. What's clearly not needed are these tax credits.  Enough already.

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What We're Reading: New Evidence on College Prep and Financial Aid

The National Bureau of Economic Research has released a couple of new papers worth reading.

(1) A new study from Kirabo Jackson at Northwestern considers a Texas college-prep program called APIP: Advanced Placement Incentive Program. It provides cash incentives for student and teachers to help students perform well on AP tests, and it provides teacher training, curricula oversight, and test-prep sessions.  While this clearly fits the model of "teaching to the test" it's about way more than paying students for grades.  The cash incentives for the teachers are real money-- depending on the school, as much as $500 for each student in their course scoring a 3 or better on an AP exam, and bonuses up to $1000 at year's end, and for the "lead" teachers, annual bonus payments up to $15,000 per year. Payments to students are also large-- not only is the fee for the exam defrayed, but they can also get up to $500 for good scores.

Now, this is clearly not an entirely public program-- private donors are paying 70% of the costs, which can range up to $200,000 per school per year, which an average cost of $225 per student. Moreover, currently opportunities aren't extended to all schools in Dallas, where the program operates--these are schools that seek out the chance and sign up. In fact, Jackson carefully notes, "Many districts are interested in the program but there are no donors. So there is always a shortage of donors.”

APIP was not randomly assigned to students, but Jackson uses a rigorous quasi-experimental diff-in-diff approach to try and sort out program effects from selection effects.

Jackson identifies program impacts on college attendance and completion, with attendance effects more prominent for white students, and completion effects more pronounced for black and Hispanic students. While he draws attention to these heterogeneous impacts in the paper, he does not discuss the potential mechanisms underlying the heterogeneity-- I hypothesize one reason is that while succeeding in AP coursework may not be enough to move more black and Hispanic students into college, at the institutions when they commonly attend, having the AP credit may well accelerate time to degree for those who manage to go.  On the other hand, a lack of AP courses may be among the few barriers faced by the white students, but since they are more likely to attend selective institutions that use AP in admissions but don't apply those credits against college coursework it may not accelerate time to degree.

In any case, this is a carefully executed study well worth-reading.  The author concludes,"Because there has been little credible evidence on the efficacy of college-prep programs despite large public  and private expenditure on such programs, the results of this study are encouraging about the potential efficacy of college-preparatory programs at improving the educational outcomes of disadvantaged students who are consigned to inner-city schools."  I would only add, the results are only encouraging if you believe that there will ever be enough private donors and/or sufficient resources devoted to helping students at disadvantaged schools succeed. Perhaps living under the Walker-regime in Wisconsin simply makes me a little too pessimistic.


2. The second fascinating study of the morning tests a hypothesis I've floated in several places recently-- perhaps giving promotes giving, especially when it comes to financial aid.  Jonathan Meer and Harvey Rosen examine this at a single (anonymous) research university (which I'm betting is Princeton).  Overall, they find the answer is no-- people don't tend to return the generosity they are given.  There's virtually no effect for students who received scholarships or campus jobs, and in fact students who took out/ are saddled with loans are less likely to give to their institution post-graduation.  In other words, duh -- this strategize that state institutions are being forced to rely on, putting the burden of costs of attendance on their students, is going to drive down the size of their endowments over time.  It contributes to a vicious cycle.

What the paper doesn't do is examine the effects of widely-respected, beloved programs like the federal Pell Grant. In my research I detect substantial gratitude among students for that program, and I strongly suspect that given the opportunity to realize the economic benefits of college attendance--e.g. when people reach their mid-40's-- they are more likely to give back.  A hypothesis still open for testing.

In addition, it's worth considering the possibility that effects of aid on giving are heterogeneous-- much like the effects of aid on college persistence, and the effects of college on wages.  This anonymous university isn't very diverse-- it's 74% white and 31% of students went to a private high school. The authors test for some race interactions and find a few but the more interesting question is whether students more likely to depend on need-based financial aid are more likely to give-- and this school has very few truly poor students attending it.

Overall, a nice start for a literature with plenty of room to grow.

For a free copy of each paper, click the link in the first paragraph of each description and type in a .edu email address.

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Squeeze Public Higher Education-- And Watch it Squirm

Make no mistake about it-- a conservative agenda in public higher education, quite similar to the one for public k-12, is steadily progressing across the nation.  The multi-pronged attack includes cutting budgets ("we have no choice-- look at the deficit!"), deriding outcomes ("college is worthless, students are partying"), and applying business models to evaluating success ( c.f. all the efficiency talk).

Today's news is rife with stories suggesting that under attack, public colleges and universities are abandoning their missions, adapting market-centered approaches, fighting with each other, and otherwise jumping ship.

• A new survey reports that 143 public colleges and universities now have differential tuition -- a policy that seems efficient on its face, but may well further stratify opportunities, leaving behind those with the least information and least ability to pay.

• In Florida, a week after announcing substantial budget cuts to state U's, the legislature is pushing for the most elite public universities to jack up their tuition.  Let's create that 1%, why don't we?

• And in California, the Master Plan is nearly dissolved, as fault lines become battles lines and the new cry is "Forget you, state U-- we are better..."

If you weren't alarmed by events last year in Wisconsin, and what they suggested about national trends, you ought to be waking up now.  And assuming you are concerned, come out this week and hear about how public higher education can fight back.  Gary Rhoades is in town, at a visit sponsored by the Wisconsin Academy and the Wisconsin Alumni Association, and he's giving three talks.  Please join us!  The first one is tonight at 7 pm at MMoca.

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Think Outside Your Box

It is often said that access/diversity and affordability in higher education can only come at the expense of quality. Thus, it is all-too-common for critics to cast those in favor of broadening college access as socialists who simply want to destroy high-quality educational institutions. They promote a false dichotomy that has been kept alive for decades by the consistent retelling of the "tragedy of the commons." The tragedy, we're told, is that people will always strive to maximize their private benefits, and that eventually these will necessarily come at the expense of common goods.  Garrett Hardin famously laid this out for us in 1968.

Sadly, far too many people seem to think the tragedy of the commons is a problem that can't be solved. The "iron triangle" model dominating decision-making in higher education confirms this-- since "we know" that spending leads to quality (thus less spending leads to less quality), and that increased access (e.g. more people) requires more money, then it follows that more access means less quality. Right?
Well, no, not really.  First, the link between spending and quality is notoriously weak -- maybe because there's too little variation in spending and/or quality to detect an effect, but maybe not.  Second, just because money is spent on access does not mean that money isn't also creating more quality (especially if diversity is one measure of quality). And third, it's possible to spend less money on quality and yet produce more quality by increasing productivity.

But you can't produce more productivity without greater compensation since people will only respond only to cash, right?  You can't get hard work without inequality-- and inequality is good since a rising tide lifts all boats. Right?? Well, again, no.  It is possible to solicit great effort from humans with other motivators, including security, community, and self-esteem.  Higher education is terrible at distributing these things; it's a climate where professors are said to be "independent contractors," always trying to one-up each other, and it's the very rare administrator who takes time to commend or praise her faculty's hard work.  But places do exist, whole departments even, where people get along, and this keeps them content and productive even when they are not well-compensated according to "market value."

The current crisis in public higher education demands that we make it a priority to grow and nuture such places.  They have to be created by real leaders, and leadership is what's really lacking right now.  Higher education leaders that are educated and experienced in the areas in which they work (e.g. higher education policy), leaders that focus on goal-setting first, and policy development second, leaders that see nothing as inevitable and everything in education as a possibility-- these are so hard to come by.  We are surrounded by narrow-minded thinkers who can't imagine a world other than the one they live in now. But if we encourage and develop people who can think outside the box--the box created by a highly individualistic vision of higher education-- we will find a sustainable model.  We will, as a community, move beyond the tragedy of the commons.

I'm not alone in this vision.  Hear it again, directly from the first woman to win the Nobel Prize in Economics-- Elinor Olstrom.

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On Tuition Flexibility

This Wednesday the Wisconsin Special Task Force on UW Restructuring and Operational Flexibilities will hear from the chancellors of Madison and Milwaukee on several issues, including flexibility for tuition-setting.

I'm on the record as having numerous concerns about the unintended consequences of giving institutional administrators more say over tuition, since they operate under intense local and political pressures to generate more resources which lead them to raise tuition even when it comes at the expense of access commitments. The latter are far more difficult to uphold, since even when people feel strongly about supporting college opportunities for disadvantaged families, the fact is that those families are quite distant from the lives of decision-makers, and thus easy to neglect.

A new paper from the National Bureau of Economic Research by Columbia economist Judith Scott-Clayton offers important reminders for this task force and the chancellors.  The access commitment is easy to make in theory, and much harder to fulfill in practice.  Sure, we like to believe that we can simply meet it by redistributing tuition revenue from middle and upper-class families to poorer families via financial aid (discounting).  But this relies on a set of assumptions, including that (a) poorer families will know the discount is coming and ignore the sticker price, (b) they will know and believe this information early enough to ensure their kids are prepared for college (as researchers put it, “potential college students cannot respond to a price subsidy if they do not know it exists"), (c) that this redistribution strategy will survive significant political push-back from the middle and upper-class families, (d) that the unintended divisiveness of the policy won't cause many consequences to campus climate and educational opportunities for the poorer students, and (e) that the access commitment will last even as campus administrations change.

I'm skeptical that these assumptions will be met by the kinds of tuition flexibility proposals we've seen in this country.  Short of a flat-out widely advertised and legislated promise to all Wisconsin residents under $80,000 (or some other income cutoff) that the full costs of attending college will be FREE, I don't think (a) and/or (b) will actually happen.  I don't think anyone knows about (c) or (d) and as for (e), get real-- no one puts this stuff in writing like they ought to.

Back to the NBER paper by Scott- Clayton-- here are key takeaways:

1. The chances are good that the market failure known as incomplete information has become more consequential in recent years as pricing of college has become much more individualized.  Despite decades of informational interventions, misinformation remains widespread-- as Scott-Clayton puts it,  "while many students appear well aware of the benefits of postsecondary education—in some cases even overestimating expected earnings gains—they persistently overestimate costs and are uninformed about sources of potential aid."

2. Creating a more complex system in which costs are higher and more variable, and more discounting is utilized, is unlikely to be offset by purely informational amendments.  In other words, an awareness campaign like that proposed by Biddy Martin last year likely won't even partially solve the problem creating by more tuition complexity.

3.  Informational contraints "can potentially undermine the effectiveness of even very large investments in financial aid."  In other words, we could spend a lot of money without creating much access--and we have to keep that in mind. It's a subject deserving of widespread and thorough public debate.

The lesson from this National Bureau of Economic Research paper for Wisconsin is this:  it's imperative that whatever tuition policy we move towards, it should not exacerbate students’ confusion about cost.   In my estimation, tuition "flexibility" at the institutional rather than System level will create more harm than good from those already left out and left behind by Wisconsin and its universities.

Postscript:  I want to clarify that the hearing on Wednesday will include discussion of two different tuition issues. First, whether the legislature should have granted the Regents flexibility to set tuition and then capped tuition.  I concur with Chancellor Ward that this is inappropriate-- the Legislature has much on its plate, and should allow the UW System Board of Regents the opportunity to convene a full discussion of tuition issues and make its own policies.  There are many ways for various constituencies to make their case to the Regents for keeping tuition very reasonable for Wisconsin residents, and the outcome will have more political legitimacy if done this way. Second, I understand that some chancellors want to have the flexibility to set tuition devolved to their own campus-- rather than have the Regents set it. This is not something Chancellor Ward is arguing for-- in contrast to his predecessor, and to the chancellors of Milwaukee and Stevens Point, he concurs that tuition-setting is an important function of university systems.  Finally, one last point-- anyone who claims that an access agenda is antithetical to an educational quality agenda is caught in the old Iron Triangle rhetoric, and needs to get up to speed.  Access (including diversity) is a key element of quality, and providing quality without access is no way to secure our children's future.

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Billionaire Education Policy: Part 2 (Guest Post)

The following is the second post in a two-part series by Robin Rogers, associate professor of sociology at Queens College and the Graduate Center at the City University of New York (CUNY). For more about Robin and her first post, click here.

Before I jump into policy experiments, I want to reflect on the enthusiastic response that I received from last week’s Part One of Billionaire Education Policy. If I could summarize the response with one word, it would be relief.

A lot of people who work in education, philanthropy, and government are wary of the rise in billionaire policymaking, but are reticent in voicing their concerns. Perhaps this is fear of retaliation -- what Edward Skloot calls the “Brass-Knuckles philanthropy”of the Gates Foundation. But I see another, more heartening piece to this puzzle. People in the philanthropic and advocacy communities don’t want to harm the mission of philanthropy. We fear that revealing the pitfalls of billionaire philanthropy might have some unforeseen effect on the good work that these foundations support.

Billionaire policymaking is the elephant in the room, but nobody seems sure how to approach it. I say that we should name the elephant, but we don’t have to shoot him. There is a middle road.

We’ve named the elephant – it is philanthro-policymaking. It is here to stay. A small, well-networked group of the super-rich will make and fund social policy globally. We don’t have to shoot the elephant, but we need to understand its nature and learn to live happily with it. Like any powerful institution, billionaire philanthropy needs checks and balances. Our task is to develop them.

Now, to education policy. If you’re not a policy wonk, wonkette, or even a wink, as my more politically savvy friends called me in college, stay with me. Once you get past the odd language of experimentation and evaluation, it’s all politics and human folly.

Testing new policy ideas is appealing. Why have a political battle over education reform, when you can experiment with a bunch on a small scale, and then pick the one that works best? In my last post, I mentioned the recent New York Times article “Policy-Making Billionaires” by Nicholas Confessore. In his coverage of Mark Zuckerberg’s controversial 100 million dollar donation to the Newark, NJ school system, Confessore wrote that NJ officials now plan use the money to “experiment” with education policy and find “what works” and then replicate the best programs with public money: “Whatever proves most effective [in the experiments] can then be rolled out on a larger scale.”

This approach to policy reform is not new. It was a central part of welfare reform in the 1990s. Testing and measuring are particlulary attractive to super-wealthy business oriented philanthropists – philanthrocapitalists. Philanthrocapitalist apply business models to philanthropy. They want to measure everything like money.

Social good is harder to measure than money. The official U.S. poverty line was changed this year after years of debate and controversy. We are struggling to even measure poverty. How do we measure student performance? Teacher quality? Our measurements are imprecise at best and meaningless and misleading at worst. Most educators, advocates, researchers, philanthropists, and policymakers are well aware of the problem of measuring complex outcomes. That awareness disappears when we talk about policy experiments. We act as if testing these programs will lead to some empirical, objective truth about what work bests.

Sociologists talk about manifest and latent functions – for all of you Sociologists, I am not suggesting a functionalist approach to education policy, the concept is illustrative. A manifest function is what something is supposed to do. For example, the manifest function of prisons is to incarcerate people. Things also have latent functions – effects that they have in addition to the stated objective. Prisons provide jobs, for example. That is a latent function.

Policy experiments are supposed to tell us empirically how good a program or approach is. They don’t do this very well. Randomized experiments are expensive, difficult, and rare. Most policy “experiments” aren’t really experiments. They are a trial run of a program with data collection. Even then, the data is often collected haphazardly or to highlight program success and minimize failures. Politics and research also operate in different time frames – solid evaluations often take years. In short, well-funded policy evaluations take too long to actually affect policy, and ad hoc evaluations don’t produce reliable findings. If you want to read more about these issues, I recommend Education Research on Trial.

If policy experiments don’t succeed in their manifest function, why are they still around? Because they are brilliant at their latent functions.

1) Building networks of people who support a particular reform and placing many of them in administrative positions.
2) Funding the intellectual development of a new policy.
3) Political advantage. If a program is in place, opponents can’t say the program is radical, impossible or to predict catastrophe -- few social programs have immediate and obvious consequences.
4) Taking the debate out of the political realm -- what should we do -- where citizens play a role and putting them in the technical, “expert” realm -- what works.

“Experiments” is not the correct word for this process. The scientific language of experimentation trips us up. Seeding is a more accurate description.

I’m not much of a gardener, but I know that I planted the plants that grow in my backyard, and I know that their success depends on what was planted there before, the quality of the soil, and the weather. Not everything that I plant grows. Some grow for a bit and then wither. Some flowers are hearty but ugly. But none are there because they’re empirically the best possible plants to be growing in my garden.

We need to think of experimental programs as planted seeds rather than clinical experiments. We learn which of the programs that we plant thrive and which fail. We can uproot the plants that are thriving but are poisonous to the plants around them. Rather than talking about outcomes and “yields” in some Sisyphean effort to find the thing that “works best,” we should talk about program results. We should talk about the actual plants, instead of pretending that our “experiments” will one day yield a perfect plant. We should talk about whether a specific goal was met. We should talk about how the goals relate to our values. And we should keep trying to get better measures for the outcomes we care about.

Talking about “policy experiments” as what they really are – seed programs for social policy – would help us see more clearly that billionaire philanthropists have become policy makers. The power of the economic elite currently hides behind the language of science, which seems to legitimize their actions and prevents us from asking questions. If Bill Gates is funding “research” and gathering “evidence” in “experiments” that he is funding, this seems normal. If he’s funding a seed program that will help the government set education policy, the privatization of policy becomes more obvious. We must not allow the language of science to obscure the power of the economic elite. Policy seeding is an effective political strategy

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What We're Reading: New Thinking on Financial Aid

Welcome to another new miniseries of the Education Optimists. Once in awhile we get a chance to sit and read-- it's rare, but when it happens it's crazy fun. Here's a taste of what we've liked lately.

For those pondering the reform of financial aid programs, I want to draw your attention to two papers--one very new, and one a year old.

In Postmortem for the Current Era: Change in American Higher Education, 1980-2010, Penn State historian Roger Geiger cogently tackles the many dismal trends of the last several decades. Among my most favorite of his observations is the following:

"The four vectors of the current era—-the financial aid revolution, selectivity sweepstakes, vocationalism, and research intensification—all bear an underlying signature by invoking private, as opposed to public or social, interests. They do not necessarily contradict public interests. On the contrary, to significant degrees, financial aid has allowed students with limited means to pursue postsecondary education; the selectivity sweepstakes has sorted students by academic ability so that the most able benefit from the most ample educational resources; vocationalism has prepared students for productive employment; and academic research has helped to revive and sustain the competitiveness of U.S. industry. Rather, these worthy social purposes have operated through incentives to private advantage. Thus, although public policies are involved to a greater or lesser extent, these vectors have derived their force from the market preferences of individual actors. But market relations can bring unplanned and sometimes unwelcome consequences."

*********************

Second, a new paper from a young economist just entering the job market, who tackles a critical question: how much Pell are students REALLY getting? In other words, to what degree are Pell dollars being supplanted and/or supplemented by institutions through a kind of crowding out? Leslie Turner tackles these questions, and more, in The Incidence of Student Financial Aid: Evidence from the Pell Grant Program

On average, Turner finds that colleges and universities reap the benefits of about 17% of Pell grants--but that the institutional variation is wide, and some schools are actually supplementing Pell with additional dollars, seemingly to attract more low-income students.

Both papers are worth a read in full. Enjoy!

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