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UW’s Impressively-Low Student Loan Default Rates Contrast with National Averages

Last Friday, the U.S. Department of Education released its annual on federal student loan cohort default rates (CDRs) and, although national CDRs are gloomily high, UW鈥檚 rates are impressively low. As the Department is in the process of switching to a more accurate three-year CDR measure, this year鈥檚 report includes both the FY 2010 two-year and the FY 2009 three-year CDRs. These rates represent the percentage of student borrowers who failed to make loan payments for 270 days within two or three years, respectively, of leaving school.

The Department provides breakdowns of its data by , and . Here are some key findings:

Nationally

  • The FY 2010 two-year CDR increased from 8.8 to 9.1 percent overall. Public institutions increased from 7.2 to 8.3 percent, private nonprofits increased from 4.6 to 5.2 percent, but for-profits decreased from 15.0 to 12.9 percent (though their two-year CDR is still the highest).
  • The FY 2009 three-year CDR is 13.4 percent overall (this is the Department鈥檚 first year reporting three-year data) with public institutions at 11 percent, private nonprofits at 7.5 percent, and for-profits at 22.7 percent.

Locally

  • UW鈥檚 three-year CDR is a remarkable 3.1 percent鈥攎ore than 10 percentage points below the national average.
  • UW鈥檚 two-year CDR increased slightly from 1.4 to 2.1 percent, but is still well below the national average.
  • The State of Washington鈥檚 three-year CDR is 11.3 percent鈥攂elow the national average, but still above approximately half the states.

Unfortunately, the Department does not release loan default rates disaggregated by student demographic (even though it collects this information), which prevents schools from identifying and catering assistance to students with the most need. While third-parties have conducted studies indicating that and are more likely to default on loans, schools and legislators need better data from the federal government in order to fully identify at-risk groups and mitigate rising default rates.

Just 43 Percent of College-Bound Seniors College Ready, College Board Finds

On Monday, the College Board released a report indicating that only 43 percent of the 1.66 million college-bound seniors taking the SAT in 2012 are 鈥渃ollege ready,鈥 as defined by achieving a score of 1550 or more on the SAT. The College Board claims a student scoring 1550 or higher on the SAT has a 65 percent chance of achieving a B- or higher average in their first year at a four-year college. The percentage of college-bound seniors scoring 1550 or higher in 2012 was the same in 2011, though about 17,000 additional seniors took the test in 2012.

Scores in the component sections have been slipping for some time: In critical reading, average scores dropped from 500 in 2008 to 496 in 2012; in writing, scores fell from 493 in 2008 to 488 in 2012, and average achievement in mathematics stayed constant at 514. The College Board blames this partly on the huge increase in students taking the test鈥攖he number of test-takers has grown by 6 percent since 2008鈥攁nd partly on an insufficient college-preparatory curriculum in America鈥檚 high schools. Seniors that took four years of English, and three each of math, science and social studies scored an average of 144 points higher than students that did not complete these core courses, indicating that college preparatory coursework significantly improves a student鈥檚 performance on the SAT.

Encouragingly, more minority and low-income students than ever are participating in the SAT. Forty-five percent of seniors taking the SAT in 2012 were minority students, and 36 percent reported their parents鈥 highest level of education was a high school diploma or less. In addition, twenty-two percent of SAT-takers took the test for free through the College Board鈥檚 fee waiver program. This represents the largest number of fee waivers used since the program began in 1970. Unfortunately, minority and low-income students, apart from Asian American students, still perform substantially worse on all parts of the SAT than white and middle/high income students do. On critical reading, for example, black students score 99 points lower than white students on average (428 vs. 527).

To learn more about this year鈥檚 statistics, check out Inside Higher Ed鈥檚 or read the .

Supreme Court Case Calls into Question the Use of Race in Higher Ed Admissions

On October 10th, the U.S. Supreme Court will hear arguments in (UT)鈥攖he first Supreme Court case on the use of race in higher education admissions since Grutter v. Bollinger in 2003. The case asks that the Court either declare UT鈥檚 admissions policy to be in violation of Grutter v. Bollinger or entirely overrule their 2003 decision that race could play a limited role in universities鈥 admissions policies. An overruling of Grutter could effectively end affirmative action at public universities.

Although around 80 percent of UT鈥檚 admissions decisions are made via a unique, race-blind method called the , the case challenges whether UT鈥檚 鈥渉olistic file review鈥 system (which is used to fill the remaining 20 percent of openings) exceeds their right to consider race and ethnicity. Under the holistic file review system, admissions officers and hired readers assess the full application submitted, reading essays and recommendation letters, assessing writing skills, and importantly, seeking to understand the context in which SAT scores and GPAs were earned. Race is one of many contextual factors considered. The 91探花adopted a race-neutral version of the holistic approach when it became clear, several years after the passage of , that a composite score admissions platform (which essentially scores applicants based on GPA and SAT or ACT scores) insufficiently accommodated diverse applicants. Over time, the UW鈥檚 holistic review, even without a race factor, was found to significantly increase the diversity of entering classes.

In fact, across the country use similar systems to foster diversity in their schools, and many have voiced their avid support for UT. In August, the American Council on Education filed a on behalf of itself and 39 higher education groups backing UT. The Obama administration also filed a UT-supportive , as did a group of U.S. senators, and a number of states (including California, where voters barred public universities from considering race in admissions).

However, last Friday, opponents of UT鈥檚 holistic review caught a break when the Brookings Institute, a nonprofit public policy organization based in D.C., presented suggesting that eliminating the consideration of race would have a lesser impact on minority students than some believe. In addition, their research implies that under affirmative action, minority students may actually achieve less academic success than they would otherwise. The studies received criticism for their methodology and lack of peer-review, but have still caught the attention of the media and public.

Debates will likely continue through next month. If the Court rules in favor of Fisher, the use of holistic review across the country may be called into question, although the UW鈥檚 race-neutral model should be significantly less vulnerable.

Possible Federal Sequester Will Harm State Budgets

The UW’s Office of Federal Relations posted information this morning detailing the federal sequester’s impact on state budgets. The grim summary is available .

The Offices of Federal Relations, Planning & Budgeting, and Research recently collaborated on a summarizing basic sequester information. Note that sequester updates are available on the Office of Federal Relations’ .

Is It All About the Money?

As a recent discussed, if you attend college, you are more likely to earn more money. But, as you might imagine, the financial value of higher education depends on what program you choose and where.

Information on the annual earnings of students from different programs and institutions is exactly what Sen. Ron Wyden, a Democrat of Oregon, and Sen. Marco Rubio, a Republican of Florida, hope to provide. Their recently-introduced “” proposes creating a state-based, individual-level data system linking the average costs and graduation rates of specific programs and institutions to their graduates鈥 accrued debt and annual earnings.

Although useful, Senator Wyden acknowledged that such information is limited and that focusing on financial indicators alone could undermine the importance of liberal arts鈥攚hose graduates may not earn large salaries right after college. He stated that the bill鈥檚 intention is 鈥渢o empower people to make choices.鈥 However, 鈥減eople鈥 include not just students, but policy makers鈥攕uch as Florida鈥檚 who sparked controversy last October when he asserted that state money should go to job-oriented fields, rather than fields like anthropology which, he said, do not serve the state’s vital interest.

Regardless of the bill鈥檚 success, about half of the states already have the ability to link postsecondary academic records with labor data. And some, such as , have already done so. Here in Washington, the is in the process of connecting certain employment and enrollment data for schools, such as the UW, to analyze in the coming months.

All this begs the question: Is college chiefly for personal economic gain?

A recent by the College Board highlights both the financial and nonfinancial payoffs of college. Additionally, David A. Reidy, head of the philosophy department at University of Tennessee Knoxville, stated in a recent Chronicle that four-year degrees, particularly in liberal-arts, are not solely for job training. “The success of the American democratic experiment depends significantly on a broadly educated citizenry, capable of critical thinking, cultural understanding, moral analysis and argument,” he wrote. Philosophy and other core disciplines help nurture such a citizenry, he continued, “And the value there is incalculable.”

WA Revenue Forecast Up Slightly

The Economic Revenue and Forecast Council (ERFC) released its September on the 19th. Believe it or not: Anticipated revenues for the current (2011-13) and upcoming (2013-15) biennia were slightly ahead of the previous forecast.

Although only eight months of the current biennium remain, revenues are running $29 million ahead of predicted levels due to better than anticipated employment numbers, construction activity, and real estate excise tax collections.

Projected revenues for the upcoming 2013-15 biennium (FY14 & FY15) were raised by $23 million; but, as the full forecast and note, the downside risks resulting from potentially stagnant employment gains, an extremely weak Washington export market, sovereign European debt crisis, and possible threaten these modest gains.

While ERFC will refine the revenue forecast again in November and the Governor will use it as a basis for her budget, she and the Office of Financial Management (OFM) have already committed any above current forecasted levels to K12. Revenue projections may have increased slightly with the release of this forecast, but required expenditures in the upcoming biennium will potential revenues. a $1 billion deficit out the gate.

 

Reseach Shows College is Worth It. Again.

The NY Times that researchers at the Brookings Institution have summarized why college is worth it. Their shows the percent of people at each income level who have various levels of educational attainment. Not surprisingly, the conclusion is that more education opens the gateway to better, higher-paying jobs.

A few findings to consider:

  • Of the Americans who earn over $150,000, 82 percent had a bachelor鈥檚 degree.
  • An individual with only a high school diploma is twice as likely, relative to someone with a college degree, to earn less than $40,000 per year.
  • Conversely, an individual with a college degree is 9 times more likely to make over $100,000 and 13 times more likely to make more than $200,000 per year when compared to someone with only a high school diploma.

Although half of all 91探花undergraduates graduate with zero debt, even when factoring in debt, college is still a great investment. The same researchers developed another showing the return on investing in one’s higher education relative to the return on investing comparable tuition money in the stock market, long-term Treasury bills, housing, corporate bonds or gold.

Once again, the numbers show that postsecondary education opens the door to higher-paying jobs and more opportunities.

2012 Democratic and Republican Higher Education Platforms

Now that both Democrats and Republicans have adopted party platforms at their respective conventions, what do we know about their plans for higher education? Below is a quick overview of each party鈥檚 higher education goals and associated action steps (past, present, or future) adapted directly from the parties鈥 formally-adopted platforms:

DEMOCRATIC PLATFORM

GOAL 1: To make college affordable for students of all backgrounds and confront the burden of loans.

  • Removed banks as student loan middlemen, saving more than $60 billion.
  • Doubled investment in Pell Grant scholarships.
  • Created American Opportunity Tax Credit of up to $10,000 over a 4 year degree.
  • Working to help student loan payments be only 10% of a student鈥檚 monthly income.
  • Pledged to incentivize colleges to keep their costs down.
  • Invested over $2.5 billion into strengthening our nation鈥檚 Minority Serving Institutions.

GOAL 2: To recognize the economic opportunities created by our nation鈥檚 community colleges.

  • Invested in community colleges and called for business-college partnerships to train 2 million workers.

GOAL 3: To make this country a destination for global talent and ingenuity.

  • Will work to help foreign students earning advanced degrees stay and help create jobs here.

REPUBLICAN PLATFORM

GOAL 1: Improve our nation鈥檚 classrooms.

  • Address ideological bias that is deeply entrenched within the current university system.
  • Protect the public鈥檚 investment in state institutions from abuse by political indoctrination.
  • Call on State officials to ensure that public institutions be 鈥減laces of learning and the exchange of ideas, not zones of intellectual intolerance favoring the Left.鈥

GOAL 2: To address rising college costs and get back to programs directly related to job opportunities.

  • Expand new systems of learning (online universities, community colleges, etc.) to compete with traditional 4-year colleges.
  • Advance the affordability, innovation, and transparency needed to make lower cost alternatives accessible to everyone.

GOAL 3: To get federal student aid onto a sustainable path.

  • Provide families with information necessary to making prudent choices about a student鈥檚 future.
  • Shift the federal government鈥檚 role in student loans from being the originator of loans to an insurance guarantor for private sector student loans.
  • Welcome private sector participation in student financing.
  • Reevaluate any regulation that drives tuition costs higher.

Voters鈥 choices on November 6th will determine which party, and consequently which platform, has the greatest impact on the UW. In the meantime, any relevant updates or changes will be added to OPBlog.

91探花Slips Slightly in US News Rankings: Here’s Why

released its annual college rankings Tuesday and聽the 91探花dropped from 42 to 46 in the National Universities category, and from 10 to 13 among public universities.

This drop isn鈥檛 as severe as it might seem. As noted by the , this change is a relatively small one. In the rankings, many universities may have equal scores and so share a numeric rank. This year, for example, there are five institutions that are ranked 46th.聽 Last year, there were several institutions ranked 42nd. Only one institution is now ranked above the 91探花that was not ranked above or tied with the 91探花last year: UC Irvine.

Ranks are calculated by weighting a number of factors:

  1. Undergraduate academic reputation
  2. Retention
  3. Graduation rate
  4. Faculty Resources
  5. Student selectivity
  6. Spending per student
  7. Alumni giving

Interestingly, the factor for which the 91探花shows the greatest deviation from other similarly ranked institutions is 鈥淔aculty Resources.” While the 91探花is ranked 46th overall, it is ranked 150th in terms of faculty resources. The two most heavily weighted measures in faculty resources are:

  1. The percentage of classes with fewer than 20 students, and
  2. Average faculty salary.

Given the recent economic situation faced by the UW, it is not surprising that these are problematic measures for us.

In summary, the UW鈥檚 ranking has dropped, but the significance of that drop is low. Moreover, the UW鈥檚 low ranking on the key 鈥淔aculty Resources鈥 factor is to be expected given the salary freeze and state funding cuts the 91探花has experienced during the Great Recession.

New to the OPBlog

Hi, my name is Becka Johnson. I recently joined the OPB as the Higher Education Policy Analyst and am excited to be contributing to the OPBlog as part of my new position. I earned a BA in Psychology from Whitman College and, this June, I received my Master of Public Administration (MPA) degree from the UW鈥檚 Evans School of Public Affairs. I look forward to putting my experience to use at the 91探花and to keeping the community informed of relevant policy topics.

Please feel free to contact me at jbecka@uw.edu if you have any questions or feedback. Thanks for reading!