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91探花

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Changes to the SAT Likely

The announced today that it would begin the process of overhauling the SAT. While no details have been published yet, David Coleman, the new president of the College Board, has indicated that the test would be adjusted to more closely mirror鈥攁nd better prepare students for鈥攖he expectations of a college classroom. In the past, Coleman has been critical of the SAT writing section, introduced in 2005, saying that the opinion-based writing style the test demands is not comparable to the evidence-based style required in college. Coleman also claimed that changes to the test would improve the transition from high school to college, better align the test to the core high school curriculum, and increase equity and fairness.聽

Some experts believe the SAT is being revamped because of increased competition from the ACT. This year, for the first time since the tests were created, the number of students taking the ACT exceeded the number taking the SAT by about 2,000 students. The ACT has traditionally been favored in the Midwest, and by students who do well in rigorous courses but have more trouble with high-stakes aptitude tests. Now, many students take both tests, and students from all regions are considering the ACT as an option. The SAT overhaul may therefore be an effort to make the test more relevant and re-establish the SAT鈥檚 dominance in the college admissions testing field. 聽

Check out Inside Higher Ed鈥檚 on the potential new SAT, or read for more information.

Is All Merit Aid Meritorious?

Although there are many types of financial aid, it is typically awarded on the basis of either need or merit.聽Need-based aid is largely a result of a federal calculation and is somewhat predictable: 聽to ensure access, students with more financial need receive more financial aid of various forms.聽And, although there is no universal definition of the merit aid, it traditionally describes scholarship money used to attract top academic achievers. However, Kevin Carey, director of education policy at the New America Foundation, asserts in a for The Chronicle that a significant portion of merit aid is actually used to attract 鈥渁cademically marginal students with wealthy parents.鈥

Carey cites evidence of this trend. A found that of the full-time students at four-year institutions who received “merit” aid in 2007-08, almost 20 percent had entered college with a combined SAT score of less than 700 and 45 percent had scored below 1000 (out of a possible 1600). The study also shows that although the percentage of private college students receiving need-based aid showed a slight decline from 1995 to 2007 (going from 43 to 42 percent), the proportion receiving 鈥渕erit鈥 aid nearly doubled during that time span (from 24 to 44 percent).聽聽 At public universities, the percentage of students getting need-based aid increased from 13 to 16 percent, but the growth in merit aid outpaced it, going from 8 to 18 percent.聽 Thankfully, as discussed in a previous , a group of private-college presidents has been calling on its peers to limit the amount of financial aid awarded on criteria other than need.

The National Association of State Student Grant and Aid Programs鈥 (NASSGAP) and Brookings鈥 provide corroborating evidence that merit-aid is becoming more prevalent, while need-based aid is diminishing.聽 However, neither discusses the academic strength of the students receiving merit aid.

So why is this happening? 聽If a college offers good scholarships and financial aid packages to an affluent family, it may incentivize them to choose that school.聽 Even though that family鈥檚 son or daughter may be a low academic achiever who has a decent chance of dropping out, it is still lucrative for the school to attract those students. 聽, a higher ed consulting firm, revealed that one of its client colleges was able to generate over $10,000 more per low-achieving student than they could per top-achieving student.

Carey hopes that as taxpayers, the news media, and affiliates of universities become aware of this trend, their vigilance will keep institutions in check.

White Paper Focuses on Reforming Tax-based Aid

Many of the white papers sponsored by the Bill & Melinda Gates Foundation’s Reimagining Aid Design and Delivery project have focused on modifications to the Pell program and/or student loans and repayment (including the two I summarized previously, found and ). However, the released on Wednesday by the Center on Postsecondary and Economic Success takes a different approach.聽 It argues that by making tax-based student aid more beneficial to low and middle-income students, the federal government could save billions of dollars, direct those savings to the Pell program and improve the financial aid system as a whole.

Current tax-based financial aid provides high-income families with much larger tax deductions, since the value of the deductions is linked to a family鈥檚 marginal tax rate.聽As notes, 鈥渁 $100 tax deduction, for example, is worth early $40 to a high-income household but only $10 to a lower-earning family.鈥澛 To remedy this issue and refocus the benefits of aid onto low-income families, the Center proposes increasing the refundable portion of the American Opportunity Tax Credit (AOTC).聽The Center also recommends eliminating nonrefundable tax credits, such as the Lifetime Learning Credit (LLC), since they do not benefit households that pay no income tax (i.e. low-income families).

The table below shows the percent distribution of student aid by type and income category in 2013.聽As you can see, Pell Grants (in blue) primarily benefit low-income families, whereas tax-based student aid (in purple) does the opposite.聽 Another interesting table from the Tax Policy Center can be found .

The paper includes three alternative proposals for making tax-based aid more helpful to low-income students and simultaneously boosting college access and completion.聽 It also discusses three options for improving performance measures used in student-aid policies.

President Obama Releases “College Scorecard”

On Tuesday, February 12, President Obama discussed higher education briefly in his State of the Union Address. The President repeated a popular refrain, calling on colleges to restrain soaring tuition costs in light of the fact that Americans with some higher education are more likely to maintain steady employment and earn a comfortable income (or, as the President declared, be part of the middle class). As have many others when discussing this topic, the President juxtaposed college access and affordability against college costs without making the important connection to overall funding. As is clear at the 91探花 (UW) and many of its public peers, public funding (both state and federal) that traditionally provided the financial backbone for such institutions has become unstable, showing precipitous declines. It is in this context that tuition and other forms of auxiliary support have increased to maintain some semblance of consistent funding.

After having evaluated the scorecard,聽 the following two key points are worth noting and exploring.

  1. Obama鈥檚 suggested HEA reauthorization policy that would tie federal financial aid to 鈥渁ffordability鈥 runs the risk of disenfranchising students studying in states that cannot or will not support higher education. It may also force institutions in those states to reduce the quality of their educational offerings in order to enable their students to maintain access to federal aid dollars.
  2. Although the 91探花looks relatively good in comparison to other institutions now, we cannot be comfortable with the comparison because we were advantaged by the particular time period for which data were available. The 91探花is vulnerable to faring poorly in these comparisons in the future as data from the past couple of years, in which we were forced to increase tuition at higher rates in order to compensate for dramatic reductions in state support, are used.

Please see a full Planning & Budgeting brief

Immigration Reform Back on the Table

After many years, immigration reform seems to be back on the table: both President Obama and Congress have indicated that they intend to take on immigration reform this year. A bipartisan group of senators released their , which focuses on increasing border security, giving DREAMers (children brought to the United States illegally at a young age) and agricultural workers a faster path for citizenship, and fixing the administrative processes that make getting visas cumbersome. President Obama released , and last summer issued an giving DREAMers temporary relief from deportation.

In Washington State, two bills have been proposed to reform Washington鈥檚 policies toward undocumented students. Washington鈥檚 undocumented student population has increased in recent years, as undocumented workers form a large part of the state鈥檚 agricultural industry. Currently, undocumented students in Washington are eligible for in-state tuition as long as they graduate from a Washington high school and have lived in the state for two years.聽 Republicans and Democrats in the Senate, however, have introduced competing bills concerning undocumented students who want to pursue higher education at Washington鈥檚 public colleges and universities. Don Benton, a Republican from Vancouver, introduced , which would prevent undocumented students from qualifying for resident undergraduate tuition, even if they graduated from a Washington State high school and have lived in the state for many years. , introduced by Ed Murray, D-Seattle, takes a different approach, making undocumented students eligible not only for resident tuition, but also for the State Need Grant and the College Bound Scholarship. Neither bill has yet been scheduled for a hearing. The first legislative cutoff date is February 22nd, after which all bills that have not been scheduled for a hearing are unlikely to progress.

TICAS Paper Proposes New Approach to Federal Financial Aid

鈥溾 is the Institute for College Access & Success鈥檚 (TICAS) white paper for the Reimagining Aid Design and Delivery project, sponsored by the Bill & Melinda Gates Foundation (see our 聽for more information). Some of the report鈥檚 suggestions have been echoed in other white papers and publications, such as simplifying the federal financial aid application process, making the Pell program a mandatory federal budget item, and fostering more understandable and comparable reporting of college costs. The paper鈥檚 others recommendations include:

  • Holding colleges accountable not only to the percentage of student borrowers who default on loans (represented by the currently-used cohort default rates), but also to the percentage of students who take out loans in the first place. TICAS proposes denying federal aid to colleges that score below a certain threshold on a combined index of the two measures. The group also recommends increasing federal aid to colleges scoring above a certain threshold. The amount of additional aid would be determined by how much Pell funding their students receive.
  • Shoring up the Pell Grant. TICAS proposes doubling the maximum Pell grant award, to about $11,000 a year, and extending the eligibility timeframe from 6 years to 7.5.
  • Creating a single federal student loan with no fees and a fixed interest rate. The rate would be low while students are in school and would rise, by a fixed amount with a cap, when they leave.
  • Streamlining repayment plans, replacing multiple options for income-based plans with only one. Delinquent borrowers would automatically be placed in the income-based plan; but, a non-income-based option would be available to other borrowers. TICAS wants to leave borrowers聽with a choice, but argues they need real counseling鈥攏ot just disclosure鈥攖o help them decide.
  • Eliminating higher education tax benefits and sending the savings to Pell Grants and monetary incentives for states and colleges. 聽If tax benefits are preserved, the group recommends restructuring them into an upgraded American Opportunity Tax Credit aimed at helping low- and moderate-income students.

TICAS鈥 paper outlines a few ways the government could fund these proposals in addition to potentially eliminating higher ed tax benefits.聽 As 聽nicely summarized, those options include, 鈥渓imiting the benefit of itemized tax deductions, taxing private equity and hedge-fund income like other income, and removing or reforming tax-exempt bonds for private nonprofit colleges.鈥

ACE Decides 5 MOOCs Deserve College Credit

Back in November, the 聽(ACE) revealed a 鈥渨ide-ranging鈥 project to evaluate MOOCs鈥 academic potential and determine whether some MOOCs should be eligible for college credit.聽Our previous provides additional background information. In the 11 weeks since that announcement, ACE reviewed five MOOCs offered by Coursera (one of the largest MOOC providers) and, today, announced it has recommended all five MOOCs for credit.

The endorsed MOOCs are:

  • “Pre-Calculus” and “Algebra” from the University of California at Irvine;
  • “Introduction to Genetics and Evolution” and Bioelectricity: A Quantitative Approach” from Duke University; ” and
  • “Calculus: Single Variable” from the University of Pennsylvania.

Courses were reviewed on their substance, quality of educational experience, and the value and security of their tests and assessments tools.聽To meet standards for the latter, Coursera established a series of identity verification measures and partnered with a remote monitoring service called ProctorU. Some MOOCs use peer assessments to score student work, a method which has been criticized for uncertain reliability. But given the STEM focus of these five courses, they all rely on objective scoring systems rather than peer assessments.

Although ACE鈥檚 validation of the MOOCs is noteworthy, it’s聽up to the Council鈥檚 1,800 member colleges to individually decide whether they鈥檒l actually offer credits for the courses.聽 For now, students at Duke, Irvine and Penn will not receive credit for taking their institutions’ ACE-approved courses.聽 reports that UC-Irvine does not consider its MOOCs to currently be worthy of its credit because neither the learning environment nor the academic commitment of a course鈥檚 thousands of students can be controlled. 鈥淭hose anybodies can influence negatively the learning environment of students who are serious about taking it,” said Gary Matkin, UC-Irvine’s dean of continuing education. Similarly, Duke believes its traditional courses offer “an entirely different kind of educational experience鈥 than MOOCS, including “substantial interactions between students and the faculty member.”

While other colleges decide whether to accept Coursera鈥檚 MOOC certificates for credit, ACE is reviewing courses from Udacity (another MOOC provider) for possible credit recommendations.

Washington Schools Leads Nation in Peace Corps Volunteers

As reported today, 鈥淔or the first time ever, three Washington colleges swept the nation in their respective size categories for having the most participants in the Peace Corps.鈥 The 91探花topped the large-schools list with 107 volunteers (tied with the University of Florida), Western Washington University led the medium-schools list with 73 volunteers, and Gonzaga University came in first on the small-schools list with 24.

Carrie Hessler-Radelet, acting director of the Peace Corps, traveled from D.C. to attend a news conference here on campus today. She personally congratulated the three schools on their rankings and said the achievement reflects Washington鈥檚 dedication to innovation and helping the poor.

The 91探花also topped the large-schools list between 2007 and 2010.

New America Paper Recommends Major Overhaul of Financial Aid System

The Gates Foundation has joined the nation鈥檚 financial aid conversation and is attempting to rethink how policies and practices can not only help maintain access (in the face of flagging state support and rising tuition prices), but also help students succeed. In September of last year, the Gates Foundation launched its project, which provided 16 organizations with funding to develop and publish innovative financial aid strategies aimed at encouraging college completion. One of the 16 organizations, the New America Foundation, recently released its , which recommends bolstering Pell Grants, limiting student loan options, and removing higher ed tax benefits.

To improve 鈥渂oth the effectiveness and sustainability of Pell Grants,鈥 the New America Foundation recommends:

  • Making the Pell program a mandatory federal budget item;
  • Increasing the maximum grant faster than is currently scheduled while restoring summer grant support;
  • Limiting Pell eligibility to 125 percent of a program鈥檚 length;
  • Providing additional federal funding to public and private-nonprofit colleges that have a large proportion of low-income students and high graduation rates; and
  • Requiring four-year colleges that enroll a small percentage of low-income students and charge more than $10,000 per year (after financial aid) to match some of the Pell dollars they receive with need-based aid from institutional funds.

The plan, which is intended to be 鈥渂udget neutral,鈥 recommends that the Pell Grant changes be funded by:

  • Eliminating the American Opportunity and Lifetime Learning tuition tax credits, tax-advantaged savings plans for education, and the student loan interest deduction;
  • Ending the Supplemental Educational Opportunity Grant program; and
  • Encouraging borrowers to refinance old student loans into direct lending.

The authors also recommend consolidating federal student loan programs into a single, 鈥渆nhanced鈥 Stafford Loan sys颅tem as a means of simplifying the student loan system and reducing the potential for default. This would involve:

  • Automatically enrolling all federal student loan borrowers in income-based repayment plans;
  • Eliminating subsidized undergraduate loans;
  • Setting student loan interest rates via a fixed formula that adjusts to market conditions;
  • Ending the Grad PLUS and Parent PLUS loan programs;
  • Increasing borrowing limits slightly to $40,000 total for undergrads and $25,500 per year for grads; and
  • Limiting federal student loan eligibility to 150 percent of a program鈥檚 length.

Although some (if not many) of these ideas are politically unpopular, the authors argue that their recommendations must be implemented together in order to be effective. However, it seems more likely that Congress will cherry-pick specific suggestions to pursue or perhaps ignore the report鈥檚 policy proposals altogether. The Gates Foundation hopes their project will, at the very least, stimulate discussion about reforming financial aid.

State Funding for Higher Education Increased in 30 States from FY12 to FY13

annual compilation of data on state funding for higher education shows that 30 states increased their appropriations for higher ed institutions and financial aid from FY12 to FY13. On Tuesday, the
researchers at Illinois State University and the State Higher Education Executive Officers released their tables summarizing initial allocations and estimates reported by states from September 2012 through January 14, 2013. As most states are in the midst of FY13, their budgets for the year are more-or-less finalized; however, some changes could occur due to reporting lag time.

Overall, states are spending just 0.4 percent less on higher education in FY13, compared with FY12鈥攁 relatively small decline given that state support for colleges dropped 7.5 percent from FY11 to FY12. The net decrease in this year’s budgets resulted from cuts in just 16 states, with the worst appearing in Florida (8 percent), Alabama (6 percent) and New Jersey (5.5 percent). Another 16 states, including Washington, are showing increases of less than 2 percent, which notes 鈥渨ill likely amount to a cut once inflation takes its bite.鈥 Budgets in the other 18 states indicate more sizable increases, all the way up to 14 percent in Wyoming.

Generally, however, the gains that some universities are receiving this year do little to make up for massive cuts since the recession. States are still collectively spending 10.8 percent less than they were five years ago, when the recession began, and thirty-eight states have decreased their overall higher ed appropriations during that time, according to a Grapevine . Among those 38, Arizona and New Hampshire cut their budgets by 37 percent and 36 percent respectively and a dozen states, including Washington, sliced funding by over 20 percent.

A news release accompanying the survey data, cited by , states, “Barring a further downturn in the economy, the relatively small overall change … suggests that higher education may be at the beginning stages of a climb out of the fiscal trough caused by the last recession.” However, even if state appropriations continue to stabilize, the Moody鈥檚 report discussed in our points out that federal spending, tuition revenue, endowment returns, and other traditional revenue sources for colleges and universities face major challenges in the coming year. We aren鈥檛 out of the woods yet.