Archive for May, 2012

May 31, 2012

Distracted by digital devices

by Grace
A survey of 500 college students has found that 67 percent can’t go more than an hour without using some sort of digital technology, and that 40 percent can’t go more than 10 minutes. The independently conducted survey was prepared for CourseSmart, which sells e-textbooks on behalf of leading publishers. The survey found that students today are more likely to bring a laptop to class than to bring a textbook.
… 


Ugh, but aren’t many of us older folks in the same boat?  I was attending a live music event last week, but I noticed both my husband and I each felt compelled to check our smartphones a few times during the hour-long performance.


Related:

May 30, 2012

Millenials’ declining financial literacy skills

by Grace

Studies show that a majority of young people in the United States have poor financial literacy, a trend that has been consistent over the past decade and shows few signs of improving. This at a time when young adults face a difficult job market and more personal debt, and yet must take greater responsibility for their financial future.

Today’s twentysomethings hold an average debt of about $45,000, which includes everything from cars to credit cards to student loans to mortgages, according to a PNC  financial independence survey released last month. Unemployment for those 18-29 is 12.4%, well above the national rate of 8.2%; and young people face an increasingly complex global economy that is credit-driven and puts more responsibility on individuals to plan for and manage their retirement accounts….

How bad is the problem? The Treasury Department and Department of Education have teamed the past three years to assess financial literacy in U.S. high schools, and the results haven’t been pretty: the average score of almost 76,900 students in 2010 was 70%. Last year’s testing of about 84,000 students and this year’s of about 80,000 students were both a point lower: 69%….

The problem has been a long time coming. A biennial survey by Jumpstart Coalition for Personal Financial Literacy, conducted from 1997 to 2008 (when many Millennials were in high school) showed high school seniors doing even worse. In 1997, the average score on a 31-question financial literacy exam given as part of the survey was 57.3%. In 2008, the average score was at its lowest ever, 48.3%.

Surveys show that parents, not teachers, have the greatest influence on a child’s financial literacy….

“Today’s parents are concerned, busy, overwhelmed, trying to keep kids off drugs and alcohol. They do not wake up in the middle of the night in a cold sweat thinking, ‘Oh my God, I didn’t teach them about money,’ ” she says.

Parents may not be teaching their children about personal financial planning, and in fact may be over-indulging them and shielding them from the realities of living within their means.  Schools have so far taken a limited role in teaching financial literacy.  Only 13 states require a personal finance class, and fewer than half mandate economics instruction.

CLICK ON THE IMAGE FOR MORE DETAILS

… Students who had taken such courses were more likely to go on to save money and pay off a credit card bill in full each month, and less likely to be compulsive buyers, max out credit cards and make late payments.

New York State requires a one-half semester economics class that focuses primarily on personal finance.  My son, who took the course in high school a few years ago, tells me he learned the basics of interest rates, mortgages, investments, and other similar topics.  I’m glad he took it, but other resources like the free online FoolProof program are also available to help educate young people about money, financial responsibility, and the realities of the free enterprise system.

You can test yourself with some sample questions from a financial capability test given to high school students each year.  When I saw question 4, I realized that poor math skills could be a factor in declining financial literacy.  Click the link below to take the quiz.

Financial Literacy Quiz

May 29, 2012

A recommended schedule for taking the SAT, ACT, and AP tests

by Grace

The Princeton Review published a High School Testing Timeline, with recommendations for when to take what tests.  Keep in mind that PR is in the business of selling test prep.

Here are key parts of the Princeton Review Timeline, with brief explanations of our local high school’s approach* to testing posted in blue text:

THE FRESHMAN YEAR

The Princeton Review philosophy is to not take tests during the first year in high school. We don’t even think it’s a good idea to take a PSAT as a 9th grader, because the scores seem to create more, not less, stress for the freshmen and their families. The one consistent exception to this is if a freshman is doing very well in her (or his) 9th grade Biology class, and is planning to take AP Biology before the end of the Junior year. If these two factors are in place, then we think it is a good idea for that student to take the Biology Subject Test (formerly known as the SAT II) in Ecology.

Our Local School —
Similar to above, except that many accelerated science students take AP Environmental Science in eighth or ninth grade as an alternative to biology.

THE SOPHOMORE YEAR

October: Take the PSAT or the PLAN
These tests during the sophomore year are opportunities for risk free practice that should not be missed. We do not recommend intensive preparation …

May: If you are in an AP class, then you will have the chance to take the AP in May. Some students take an AP class, but then do not take the AP exam. You do not want to be one of these students. College admissions people tend to frown upon students from AP classes who duck out on taking the AP exam.

June: Take any appropriate Subject Test
Traditionally, if a Sophomore is going to take a Subject Test in the 10th grade, it will be in either World History or Chemistry….

Our Local School —
Similar to above, with the opportunity to take the PLAN only recently becoming an option.  I’m glad they now offer the PLAN because it sets the stage for taking the ACT, which is a better choice than the SAT for some students.  Students taking AP classes are required to take the AP exam.

SUMMER BETWEEN THE 10TH AND 11TH GRADE YEAR

If you have the time, the inclination and the resources, this is the time frame best suited for test preparation. The students have learned the vast majority of the material that will appear on the SAT (and if they’ve completed Algebra II, they’ve learned all of it), and it’s a considerably less stressful time to be doing this work….

Our Local School —
Most students are advised to defer any test prep until after they’ve taken the SAT in their junior year.  According to guidance counselors, at that point a student will be in a better position to decide if he wants or needs tutoring.

JUNIOR YEAR

While many different scheduling strategies can satisfy individual student’s needs, the majority of students fall into two distinct categories: “Aggressive” and “Regulars”.

AGGRESSIVE
(Includes high academic achievers, kids with proactive parents, students who had a lot of time to prepare during the previous summer but who anticipate being extremely busy in the spring, students who want to try to achieve some flavor of National Merit status, very weak testers who may need extended preparation to achieve acceptable scores, and students who will apply as Early Decision candidates).
October – SAT followed by PSAT (may not be appropriate for weaker testers)
November – Language listening subject tests for native speakers
Winter – Refresher preparation
Mar – The second crack at the SAT, if necessary
April – Try the ACT
May – AP’s/Subject Tests
June – Subject Tests

REGULARS
Sep/Oct – Light prep (PSAT Clinic)
October – PSAT
Fall/Winter – Intensive prep (can do extended prep starting in November or begin in January, both in preparation for the March/April test in either the SAT or the ACT)
May/June – Subject Tests (if needed) or a second attempt at the SAT

Our Local School —
Similar to above recommendations on Subject and AP tests, but less aggressive on other testing matters.  Our high school generally recommends waiting until the spring of junior year to first take the SAT, followed by the ACT if the SAT score was lower than desired.  On the subject of test prep, our school appears slightly schizophrenic in their outlook.  Guidance counselors do not recommend extensive test prep for the vast majority of students, but the school administration sends the message that the highest test scores are the result of test tutoring.  My guesstimate is that at least half the students pay for some type of test prep.

SENIOR YEAR

The Senior year can become complicated because it is so late in the cycle, and the permutations are very dependent upon the individual student. From the broadest perspective, if you’re “Aggressive”, then October should be your last ACT/SAT/Subject Test attempt. The “Regular” students may take these exams up to, and including, December of their senior year and still make it in time for most colleges’ admission deadlines (including the UC schools).

Our Local School —
Similar to above, with a general recommendation to complete testing sooner rather than later.

* This is based on my experience and observations, so I make no claim that this is a comprehensive representation of their official policy.

Related:  College application timeline

May 28, 2012

Number of employed high schoolers at lowest level in more than 20 years

by Grace

The American job market is no place for students as the number of employed high schoolers has hit its lowest level in more than 20 years, according to new figures from the National Center for Education Statistics.

In 1990, 32 percent of high school students held jobs, versus just 16 percent now. Blame their elders.

Sectors that traditionally have offered teens their first paying gig — fast-food chains, movie theaters, malls and big-box retailers — have now become the last resorts for out-of-work college graduates or older Americans forced back into the labor force out of sheer financial necessity. The resulting squeeze has left students on the outside looking in.

The recession and an increasing focus on school can be blamed for the high teen unemployment rate.  It’s important to make good grades a priority, but lack of work experience can make it harder to find a job after college graduation.

In the long run, the trend could produce more and more young adults who lack the basic skills, such as how to interact with a customer, gained while working early in life. The longer a young person goes without a job, Mr. Sum said, the less attractive he or she looks to employers.

“There’s only one way you can learn how to work — you’ve got to work,” he said.

Related:  College grads need ‘real-world’ skills before they can get ‘real’ jobs

May 25, 2012

‘there has been a severe contraction in the quality of higher education’

by Grace

In writing about the higher education bubble, Jerry Bowyer had this observation.

Furthermore, there has been a severe contraction in the quality of higher education in America. Did we really think we could open the floodgates and not affect the quality of graduates? Can you turn college into the new high school, and not get high school-like results?  Grade inflation will only keep the problem concealed for so long before the general public becomes aware that outside of a few highly challenging programs and majors, the quality of American higher education is plummeting. Graduates are mastering fewer facts, can’t think critically about the facts they have mastered, and can’t express whatever ideas they have mastered in clear, cogent, grammatically correct sentences. Employers already know this.

Professor Mark Perry thinks most college professors would agree with Bowyer.  As others have, Perry compares the housing bubble to the higher education bubble.

Similarity between ‘good renters’ and ‘good high school graduates’

It seems clear now that because of dual political obsessions, we have “oversold” both homeownership and college education to the American people, by artificially lowering the costs through government intervention and subsidies.  As economic theory tells us, if you subsidize something you get more of it, and that’s what happened with both homeownerhip and college education – but we got too much of it, and that has led to twin bubbles.  Just like government policies turned “good renters into bad homeowners,” it’s now apparent that government policies have turned “good high school graduates, many of whom should have pursued tw0-year degrees or other forms of career training, into unemployable college graduates with excessive levels of student loan debt that can’t be discharged.”  Perhaps economics textbooks in the future can illustrate the concept of “government failure” with these two examples of government-induced, unsustainable bubbles?

Just as too many unqualified home buyers took on mortgages in the run-up to the housing bubble, maybe too many unprepared high school graduates are enrolling in college.


Related:  Typical undergrad ‘could not write a paper or solve an algebra problem’

May 24, 2012

Higher selectivity brings ‘ethnic shift’ in college population

by Grace

At CUNY, Stricter Admissions Bring Ethnic Shift

More than a decade after the City University of New York ended open admissions to its four-year colleges, a marked shift has occurred at its top institutions as freshman classes now enter with far better academic credentials and also a different demographic mix.

By “ethnic shift”, they mean more Asians and fewer Blacks and Hispanics

At the same time, black representation among first-time freshmen at those colleges dropped, to 10 percent last fall from 17 percent in 2001. Over the same period, the Hispanic share rose slightly for several years, then fell once the recession began, to 18 percent, while the white portion fell slightly, to 35 percent.

Asians are now entering the top colleges in the greatest numbers, composing 37 percent of those classes, up from 25 percent a decade earlier.

CLICK TO SEE THE GRAPHS IN BETTER DETAIL

As expected, the CUNY colleges have risen in status but lost black and Hispanic students.  I’d like to know if any change in gender distribution has also occurred.

Public universities in other states have also become more selective, but any resultant “ethnic shift” is unclear.

Across the country, the most selective public colleges have been growing more so for decades, with many of them seeing a notable shift in the past few years. The share of entering freshmen who were in the top 10 percent of their high school classes rose to 73 percent last fall from 69 percent in 2007 at the University of Texas at Austin, to 57 percent from 49 percent at Binghamton University and to 80 percent from 76 percent at the University of North Carolina at Chapel Hill, to name a few.

“There is plenty of evidence that our flagship public universities have been growing more selective for 30 years, with a decided uptick in this recession,” said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers.

Whether there has been a resulting demographic change is unclear, because most colleges have changed the way they record racial data, and in some states, new laws banning affirmative action have influenced enrollment.

______________________

For almost 30 years, beginning in 1970, CUNY admitted any high school graduate to at least one of its colleges, though that meant admitting many who needed remedial courses. Enrollment surged, graduation rates dropped, and more high-achieving students went elsewhere.

Pressed by Mayor Rudolph W. Giuliani, CUNY’s senior colleges stopped accepting students who needed remedial work, and generally required applicants to meet minimum standards for SAT scores and other measures.

I first learned of CUNY’s poor reputation when I was working in the oil field back in the late 1980s and a newly hired geologist who had received his degrees from CUNY felt compelled to explain he graduated before the negative effects of the open enrollment policy took hold.  Without that explanation, his fellow New Yorkers working in the Texas oil business (and there were many) would have been inclined to look down their noses at his scientific expertise.  It’s sad to think that a school’s good reputation was harmed by this action, causing it to lose strong applicants who felt their education would suffer if they enrolled in their local public university.

May 23, 2012

More on the ‘bifurcation’ of higher education

by Grace

Nicholas Lemann argues that elite colleges are actually priced too low.

Where higher education is actually underpriced is in the top-tier schools. That may sound offensive, but price is determined by what people are willing to pay, and the top twenty-five or so schools in the country could charge even more than they do. The number of applications to those schools continues to grow faster than their cost. (Ivy League colleges will charge about sixty thousand dollars next year.) That’s because the perceived value of their degrees continues to rise. Now that we know that either Obama or Romney will be President next year, we also know that, from 1989 through at least 2017, every President of the United States will have had a degree from either Harvard or Yale or, in the case of George W. Bush, both. That could be a three-decade accident, or it may be a sign of something lasting—the educational version of the inequality surge, elevating “one per cent” institutions far above the rest.
… 


The trend in higher education may be in the direction of sharper class distinctions, and Lemann thinks pumping more taxpayer money into more colleges will improve opportunity and help society.

In higher education, the United States may be on its way to becoming more like the rest of the world, with a small group of schools controlling access to life membership in the élite. And higher education is becoming more like other areas of American life, with the fortunate few institutions distancing themselves ever further from the many. All those things which commencement speakers talk about—personal growth, critical-thinking skills, intellectual exploration, breadth of learning—will survive at the top institutions, but other colleges will come under increased pressure to adopt the model of trade schools. Student loans open access to students, and give colleges more freedom. Obama and Romney will have plenty to disagree about, and it’s good that the interest rate on student loans isn’t on the list. For the federal government to pump extra tuition money into the system, in the form of low-cost loans, in order to spread opportunity more widely, and to allow more schools to provide more than skills instruction, seems like a small price to pay for the kind of society it buys.

I don’t think simply pumping extra tuition money into the system will bolster the growth of rigorous institutions that produce intellectual graduates with strong critical thinking skills.  The problem I see is a scarcity of high school graduates adequately prepared for those types of colleges.  Unless that changes, we’re likely to continue to see the growing bifurcation between elite universities and “trade schools”.

May 22, 2012

‘bifurcation of student demand favoring the highest quality and most affordable’ colleges

by Grace

Moody’s Investor Services gave favorable ratings to colleges and universities that offer the highest quality and most affordable higher education options, noting the increasingly strong consumer interest in these types of schools.  Moody’s sees a bifurcation of demand, with declining interest in expensive, mediocre schools.

Lower-tier schools charging $50,000 or more annually are beginning to look like dinosaurs, soon to be extinct and possibly replaced by less expensive online alternatives.

Moody’s Investors Service, in a report earlier this year, said it had a favorable outlook for the nation’s most elite private colleges and large state institutions, those with the “strongest market positions” that had multiple ways to generate revenue. Ohio State, for instance, received a stable outlook from Moody’s last fall, though the report cautioned about the school’s debt and reliance on its medical center for revenue.

But Moody’s issued a negative outlook for a majority of colleges and universities heavily dependent on tuition and state revenue.

“Tuition levels are at a tipping point,” Moody’s wrote, adding later, “We anticipate an ongoing bifurcation of student demand favoring the highest quality and most affordable higher education options.”…

“We know the model is not sustainable,” said Lawrence T. Lesick, vice president for enrollment management at Ohio Northern University. “Schools are going to have to show the value proposition. Those that don’t aren’t going to be around.”

May 21, 2012

Mark Cuban on the higher education bubble

by Grace

MARK CUBAN ON THE HIGHER EDUCATION BUBBLE:

This comparison between higher education and the newspaper business seems apt.

The Higher Education Industry is very analogous to the Newspaper industry. By the time they realize they need to change the costs to support their legacy infrastructure and costs will keep them from getting there.

Easy loans

Its far too easy to borrow money for college.  Did you know that there is more outstanding debt for student loans than there is for Auto Loans or Credit Card loans ? Thats right. The 37mm holders of student loans have more debt than the 175mm or so credit card owners in this country and more than the all of the debt on cars in this country. While the average student loan debt is about 23k. The median is close to $12,500. And growing. Past 1 TRILLION DOLLARS.

We freak out about the Trillions of dollars in debt our country faces. What about the TRILLION DOLLARs plus in debt college kids are facing ?

The point of the numbers is that getting a student loan is easy. Too easy.

You know who knows that the money is easy better than anyone ? The schools that are taking that student loan money in tuition. Which is exactly why they have no problems raising costs for tuition each and every year.

Purpose of college

As far as the purpose of college, I am a huge believer that you go to college to learn how to learn. However, if that gaol is subverted because traditional universities, public and private, charge so much to make that happen, I believe that system will collapse and there will be better alternatives created.

Reading this on Cuban’s blog, I was amused by his writing errors.  I’m sure he writes quickly and eschews basic spell checking.  Somehow, it’s entertaining to see “its” and “thats” with missing apostrophes in a billionaire business magnate’s writing.  The lesson might be that perfect grammar and correct spelling are not always essential for good communication.  There are probably a few other self-made billionaires who can’t be bothered to know when to use “it’s” instead of “its” *.

* Actually, I think the more common mistake is to add an unnecessary apostrophe.

May 18, 2012

The student loan problem: ‘I’m not going to worry about it right now. I had to take that plunge.’

by Grace

SOME HIGHLIGHTS FROM THE NEW YORK TIMES FRONT PAGE ARTICLE ON STUDENT LOANS

Statistics show it’s a growing problem, but not a crisis.

* About two-thirds of bachelor’s degree recipients borrow money to attend college, either from the government or private lenders, according to a Department of Education survey of 2007-8 graduates; the total number of borrowers is most likely higher since the survey does not track borrowing from family members.

By contrast, 45 percent of 1992-93 graduates borrowed money; that survey included family borrowing as well as government and private loans.

For all borrowers, the average debt in 2011 was $23,300, with 10 percent owing more than $54,000 and 3 percent more than $100,000, the Federal Reserve Bank of New York reports….

Students and their families are often clueless, failing to consider the ramifications of their actions.

Even discounted, the price is beyond the means of many. Yet too often, students and their parents listen without question…

Many students and parents don’t have a firm understanding of the cost of attending college, or the amount of debt they will incur….

“Ultimately with everything in financial aid, from start to finish, the student and their family need to take responsibility and monitor their aid,” Melanie K. Weaver, the director of financial aid at Ohio Northern, said in an e-mail. “With over 3,000 on aid it is difficult for our office of 10 staff members to stay on top of every student.”…

“As an 18-year-old, it sounded like a good fit to me, and the school really sold it,” said Ms. Griffith, a marketing major. “I knew a private school would cost a lot of money. But when I graduate, I’m going to owe like $900 a month. No one told me that.”…

Ms. Potter figured she would have to borrow about $10,000 a year. But the tuition increased every year, and because she didn’t declare a major until her junior year, she needed five years to graduate.

A social worker, she now owes $80,000…..

“Maybe at the time I was a little naïve,” said Mr. Frank, 22, a senior who owes $80,000. “Everyone was like, ‘You can get grants, you can always get loans.’ I wanted to play football really bad, and I hoped eventually I’d get a football scholarship.”…

“I didn’t quite think in terms of money”…

“I kind of ignored the fact that I had to pay all these loans”…

An opaque pricing and financial aid system adds to the problem.

Instead, college pricing is complicated by constant tuition increases, a vast array of grants and loans and a financial-aid system that discounts tuition for most students based on opaque formulas. “No one has a vested interest in simplifying the process but families,” said Mark Kantrowitz, the founder of FinAid, a Web site devoted to explaining college financial aid. “It obscures the price of a college and makes the choice of college not depend on the price but other factors.”

Factors contributing to the growth in student loans

… as with the housing bubble before the economic collapse, the extraordinary growth in student loans has caught many by surprise. But its roots are in fact deep, and the cast of contributing characters — including college marketing officers, state lawmakers wielding a budget ax and wide-eyed students and families — has been enabled by a basic economic dynamic: an insatiable demand for a college education, at almost any price, and plenty of easy-to-secure loans, primarily from the federal government.

Until recently, college administrators might have ignored the problem.

“I readily admit it,” said E. Gordon Gee, the president of Ohio State University, who has also served as president of Vanderbilt and Brown, among others. “I didn’t think a lot about costs. I do not think we have given significant thought to the impact of college costs on families.”

The goal of “college for all” means more taxpayer funds for student loans

To that end, the Obama administration has given out more grants and loans than ever to more and more college students with the goal of making the United States first among developed nations in college completion. The balance of federal student loans has grown by more than 60 percent in the last five years. And in 2007, Congress made sure the interest rates on many of those loans were well below commercial rates; currently, a debate over keeping those lower rates from doubling in July is roiling lawmakers.

While the student loan problem is not a crisis, it is a drag on the economy.

Economists do not predict a collapse of the student loan system, which would, in essence, mean wholesale default. And if there were one, it would be unlikely to ripple through the economy with the same devastating impact as the mortgage crash. Though now larger than credit card and other consumer debt, the student loan balance remains smaller than the mortgage market, and most student loans are issued by the federal government, meaning banks wouldn’t be affected as much.

Still, economists say, growing student debt hangs over the economic recovery like a dark cloud for a generation of college graduates and indebted dropouts. A study of recent college graduates conducted by researchers at Rutgers University and released last week found that 40 percent of the participants had delayed making a major purchase, like a home or car, because of college debt, while slightly more than a quarter had put off continuing their education or had moved in with relatives to save money….

State government spending on higher education has increased, but not as much as in other areas.

In the late 1970s, higher education in Ohio accounted for 17 percent of the state’s expenditures. Now it is 11 percent. By contrast, prisons were 4 percent of the state’s budget in the late 1970s; now they account for 8 percent. Federal mandates and court orders have compelled lawmakers to spend more money on Medicaid and primary education, too. Legislators could designate a greater percentage of the budget to higher education by raising taxes, but there is no appetite for that….

Colleges aggressively market themselves as affordable.

Colleges are aggressively recruiting students, regardless of their financial circumstances. In admissions offices across the country, professional marketing companies and talented alumni are being enlisted to devise catchy slogans, build enticing Web sites — and essentially outpitch the competition.

Affordability, or at least promising that the finances will work out, is increasingly a piece of the pitch.

After all, colleges are not in the business of turning away students.

… And most colleges aren’t much help. Student debt is not their primary concern in the end — the loan money usually gets deposited directly with the colleges, so they get paid either way — and the main job of the admissions staff, after all, is to admit students.

One recommendation:  a standardized form

While there are standardized disclosure forms for buying a car or a house or even signing up for a credit card, no such thing exists for colleges.

For-profit schools are a particular problem, but keep in mind they serve more disadvantaged students.

… Students at for-profit colleges are twice as likely as other students to default on their student loans. Moreover, among students seeking a bachelor’s degree, only 22 percent succeed within six years, compared with 65 percent at nonprofit private schools and 55 percent at public institutions. (For-profit students, however, tend to do better at obtaining associate degrees and certificates.)

Leaders of the for-profit industry defended themselves, saying they were providing higher education for lower-class students that traditional colleges had left behind. “The reality is the type of students we attract have no other opportunity,” said Steven Gunderson, head of a leading trade organization. “We are the ones that provide a path to the middle class.”

It ultimately comes down to the students’ responsibility.

But even with more information, students and their parents seem willing to pay the ever-escalating price of a college degree, which remains the key rung up the ladder of economic mobility.

Denise Entingh, 44, dropped out after two quarters at Columbus State Community College because she didn’t want to wait any longer to get into the nursing program. So she signed on at the Hondros School of Nursing, a for-profit college that advertises “No Waitlist!” on a billboard a few blocks from Columbus State.

Ms. Entingh said she expected to borrow about $45,000 to get a bachelor’s degree in nursing from Hondros, which costs more than three times as much as Columbus State.

“It scares the hell out of me,” she said of her debt load. “But I think it will be all right. I’m not going to worry about it right now. I had to take that plunge.”


Whew!  After all that, I may not want to write anything else about student loans for the next six months!
(But I probably will.)

* CORRECTION:  The original article misstated the percentage of students who had borrowed as 94%.

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