Student Lending Analytics Blog

Why Is Five And Six Years The New Normal For College Completion?

I was just having this conversation about this very topic and thought it was important enough to include "Finish in Four" as part of my 140-character tweet about advice on paying for college.  So, how does the NY Times Freakonomics blog answer the question "Why Does College Take So Long These Days?"

"American college students, particularly male students, have been slower and slower to finish college over the past 30 years.  A new working paper by John Bound, Michael F. Lovenheim, and Sarah Turner suggests the trend is due to rising costs of education.  Demographics and academic preparedness don’t explain the trend, but the authors found evidence in support of the increasing cost hypothesis: both increasing student-faculty ratios and cohort size are linked to increasing time-to-degree, particularly in “non-top 50 public sector” schools.  The authors also found that students are working more hours in response to rising costs.  Low-income students and students at less-selective institutions are particularly vulnerable to the trend."

Details on Student Aid Bill Emerge (Update)

Here is the fact sheet:  http://edlabor.house.gov/documents/111/pdf/publications/20100318StudentAidandFiscalResponsibilityAct.pdf

Here is the bill out of the Rules Committee:  http://docs.house.gov/rules/hr4872/111_hr4872_amndsub.pdf

Here is how the $61 billion in savings (I assume rounding explains why the totals come closer to $62 billion) identified by CBO in their recent estimate would be spent in this bill:

	Amount
Program	(In Billions)
Pell Grant	$    36.0
Investment in HBCU	$      2.6
Community College Grants	$      2.0
Income-Based Repayment	$      1.5
College Access/Completion	$      0.8
TOTAL	$    42.8
Deficit Reduction	$    10.0
Transfer to Health Care	$      9.0
TOTAL	$    61.8

Another Reason Truth in Education is Needed...And Fast!

I had a cup of coffee with a public market investor recently who lamented the lack of pricing transparency in the for-profit education market and the difficulty students have knowing what they are going to pay.  Compound that with the great difficulty in determining outcome metrics (graduation rates, placement rates, wage data) and you have a consumer who not only doesn't know what they are going to pay but also doesn't have a clear picture of the return on their investment other than what the company provides them in a one-on-one meeting.  (Note:  the government does collect much of this data and makes it available at the College Navigator site). 

Well, an enterprising reporter from the Arizona Republic decided to find out how transparent the schools were and here is what she found:

Alliance of 17 States Focused On Improving College Completion Rates

From the Associated Press:

"More than a dozen states have formed an alliance to battle dismal college completion rates and figure out how to get more students to follow through and earn their diplomas.  Stan Jones, Indiana's former commissioner for higher education, is leading the effort with about $12 million in startup money from several national nonprofits including the Bill and Melinda Gates Foundation.  About one in every two Americans who start college never finish, said Jones, who founded Complete College America, a Washington, D.C.-based nonprofit, last year." 

The group has set a lofty goal:  "Make sure 60 percent of adults between the ages of 25 and 35 hold an associate or bachelor's degree by 2020, up from the 38 percent that now claim this status."

• See earlier SLA Blog post about the most important unknown statistic

White House To Host Video Chat on College Affordability and SAFRA On Tuesday

Thanks to James for making me aware of this upcoming video chat on Tuesday, March 2nd:

WHAT: Live Interactive Video Chat on College Affordability and the Student Aid and Fiscal Responsibility Act (SAFRA)

WHO: YOU, Secretary of Education Arne Duncan, and White House Domestic Policy Advisor Melody Barnes.

WHEN: Tuesday, March 2 from 5:30 to 6:00 PM EST.

WHERE: On the White House website HERE or Facebook HERE

Secretary Duncan and Melody will share information on the Student Aid and Fiscal Responsibility Act and talk about how you can help in making higher education affordable and accessible to everyone. The conversation will be moderated by William Jawando from the White House Office of Public Engagement. At the end, you will have the opportunity to ask Secretary Duncan and Melody questions – so we hope you think of some good ones! (Note that this web chat is closed press and for background purposes only.)

How Many Schools Have Loan Default Rates Higher Than Completion Rates?

Many of you might recall this earlier post that suggested this warning label might be appropriate at some schools: 

"Warning:  This education can be hazardous to your financial health.  At this institution, you have a higher probability of defaulting on your student loan than you do of completing this program."

Well, I never did get around to calculating how many schools might need such a warning label.  The good news is that someone else did.   CBS MoneyWatch's The College Solution Blog, citing a recent Education Sector report on student loan defaults, counts almost 400 schools in their Student Loan Hall of Shame, which they describe as schools where "you face a greater chance of defaulting on your student loans than graduating."

Who Is Offering Three-Year Undergraduate Degrees?

I first saw this on the NY Times The Choice blog:

"The University of North Carolina at Greensboro is announcing today that it will allow “highly motivated students” to graduate in three years, beginning with the freshman class that will be seated this fall.

Specifically, the program will be offered to incoming freshmen who already have at least 12 college credit hours, either through Advanced Placement or community college classes, or other accelerated work. By paring a year off their undergraduate experiences, those students would save an estimated $8,000, or 22 percent, in tuition, room, board and other fees, compared to their peers in four-year programs."

Education Sector Report: What Are Best Practices For Managing Student Loan Defaults?

Education Sector is out with a report titled "Lowering Student Loan Default Rates:  What One Consortium of Historically Black Institutions Did to Succeed"

Here are the highlights:

• Argues that serving low-income student population does not make high default rates inevitable:

"But the experience of the Texas HBCUs, along with a new statistical analysis of cohort default rates, suggests that dangerously high default rates for institutions that serve at-risk students are not inevitable. From the initial financial aid package to providing individual counseling on loan repayment when students leave, institutions can take steps to help students avoid default. Schools can also maintain contact with students after they leave campus, communicating with them about when they need to begin repayment and where they should send their repayment checks."

Want To Raise College-Going Rates? Provide Individualized FAFSA Counseling

Thanks to David Levy of Scripps College for making me aware of the findings from a National Bureau of Economics Research working paper:

"In The Role of Simplification and Information in College Decisions: Results from the H&R Block FAFSA Experiment (NBER Working Paper No. 15361), co-authors Eric Bettinger, Bridget Terry Long, Philip Oreopoulos, and Lisa Sanbonmatsu consider how to provide application assistance in a practical manner that would truly increase college attendance rates and aid receipt. Overall, their analysis suggests that individuals who receive help completing a simplified FAFSA -- the federal application for financial aid -- are substantially more likely to submit the aid application, to enroll in college the following fall, and to be awarded more financial aid. These results suggest that assistance and simplification could be effective ways to improve college access. However, only providing aid-eligibility information without also giving assistance with the application form seems to have no significant effect on FAFSA submission rates."

Demos Study Highlights Economic Value of One and Two Year Certificate Programs

Here is the executive summary for the report "Graduated Success: Sustainable Economic Opportunity Through One- and Two-Year Credentials" released today.  It ostensibly makes the argument that investments in higher education (such as community colleges) pays off through job creation (see article from The Hill):

"We often assume that a higher degree guarantees earning a higher salary and having greater economic opportunity. This assumption is not always the case. One- and two-year credentials can represent a viable path to economic prosperity, particularly for those graduates who, for whatever reason, do not earn more advanced degrees.