Archive for ‘trends’

October 29, 2014

Moving toward competency-based college degrees

by Grace

A trend in higher education away from “time served” to “stuff learned” could mean significant savings in both time and money for many college students.

The trend seems clear.

According to Inside Higher Ed, more than 350 institutions now offer or are seeking to create competency-based degrees. So it’s a safe bet that we’ll be hearing more about this trend soon….

The “Flexible Option” at the University of Wisconsin currently offers five competency-based degrees. It’s the first public institution to receive permission to offer this kind of program….

The Lumina Foundation has been one of the most influential nonprofit groups pushing the idea of competency-based education….

Lumina is about to release the final version of a document called the “Degree Qualifications Profile.” It aims to provide a common basis for understanding the competencies required for an associate’s, bachelor’s or master’s degree in any field.

In its draft form, around 400 institutions from small liberal arts colleges to large community colleges have begun to use the document in their strategic planning.

The University of Michigan is one of the latest to join the movement.

The University of Michigan is now on course to become one of the first public higher education institutions to offer a degree that can be achieved not through credit hours but on demonstrated proficiency in the subjects studied. According to Inside Higher Ed, Michigan’s regional accreditor has just approved a competency-based Master’s of Health Professions Education. The program is designed to give health professionals training in “carry[ing] out the full range of responsibilities of a scholarly educator-leader.”

Rigorous oversight will be essential to the success of this new way to grant degrees.

Freed of the credit-hour constraint, competency-based programs need to be a lot more rigorous and transparent about designing assessments. Otherwise, they risk turning into diploma mills.

Employers may find this change produces more competent workers.

… The more schools have the freedom to grant degrees on the basis of proficiency rather than “time served,” the more relevant to the demands of today’s economy higher education will become.

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Anya Kamenetz, “Competency-Based Education: No More Semesters?”, NPR, October 07, 2014.

Walter Russell Mead, ‘New Degrees Challenge “Time Served” Model’, The American Interest, October 25, 2014.

October 28, 2014

Millenials expect to rely on work income during retirement

by Grace

Personal savings and income from work will become increasingly important to future retirees.

Working in retirement is likely to become even more commonplace as Generation Xers and Millennials eventually head toward their retirement years. While many of today’s retirees say they can count on Social Security and employer pensions to fund most of their retirement, future generations are far more likely to say they will need to rely primarily on personal savings and income from working during retirement (FIG 8).

EXPECTED SOURCES OF RETIREMENT INCOME

20141026.COCRetirementIncomeSources3

CLICK ON IMAGE FOR DETAILS.

 

Although I was initially surprised that 12% of Gen Xers and Millenials still expect pensions to fund their retirement, I realized these might represent the views of government employees, one of the few groups still covered by traditional pension plans.

And those who expect personal savings to cover retirement expenses need to start saving more.  The latest alarming news on this topic is that “middle-class people in the USA have a median of $20,000 saved for retirement, far short of the $250,000 they think they’ll need during that time of their lives”.

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Work in Retirement: Myths and Motivations, Merrill Lynch with Age Wave, June 2014.

October 27, 2014

Houston, Nashville, and Denver are hot cities for young college graduates

by Grace

Where are young college graduates choosing to live?  And as they age, will they flee to the suburbs as earlier generations have done?

When young college graduates decide where to move, they are not just looking at the usual suspects, like New York, Washington and San Francisco. Other cities are increasing their share of these valuable residents at an even higher rate and have reached a high overall percentage, led by Denver, San Diego, Nashville, Salt Lake City and Portland, Ore., according to a report published Monday by City Observatory, a new think tank.

And as young people continue to spurn the suburbs for urban living, more of them are moving to the very heart of cities — even in economically troubled places like Buffalo and Cleveland. The number of college-educated people age 25 to 34 living within three miles of city centers has surged, up 37 percent since 2000, even as the total population of these neighborhoods has slightly shrunk.

20141022.COCYoungCollegeGraduatesMoving2

 

These trends bode well for the top cities.

“There is a very strong track record of places that attract talent becoming places of long-term success,” said Edward Glaeser, an economist at Harvard and author of “Triumph of the City.” “The most successful economic development policy is to attract and retain smart people and then get out of their way.”

The economic effects reach beyond the work the young people do, according to Enrico Moretti, an economist at the University of California, Berkeley, and author of “The New Geography of Jobs.” For every college graduate who takes a job in an innovation industry, he found, five additional jobs are eventually created in that city, such as for waiters, carpenters, doctors, architects and teachers.

“It’s a type of growth that feeds on itself — the more young workers you have, the more companies are interested in locating their operations in that area and the more young people are going to move there,” he said.

Will millenials flee to suburbia as they start to have families?

How many eventually desert the city centers as they age remains to be seen, but demographers predict that many will stay. They say that could not only bolster city economies, but also lead to decreases in crime and improvements in public schools. If the trends continue, places like Pittsburgh and Buffalo could develop a new reputation — as role models for resurgence.

Not so fast.  According to New Geography, “the first group of millennials who are now entering their 30s … are beginning, like preceding generations, to move to the suburbs”.

Here’s how the geography of aging works. People are most likely to move to the core cities in their early 20s, but this migration peters out as people enter the end of that often tumultuous decade. By their 30s, they move increasingly to the suburbs, as well as outside the major metropolitan areas (the 52 metropolitan areas with a population over 1,000,000 in 2010).

This pattern breaks with the conventional wisdom but dovetails with research conducted by Frank Magid and Associates that finds that millennials prefer suburbs long-term as “their ideal place to live” by a margin of 2 to 1 over cities.

Based on past patterns, by the time people enter their 50s, the entire gain to the core cities that builds up in the 20s all but dissipates, as more people move to suburbs and to outside the largest metropolitan areas.

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Claire Cain Miller, “Where Young College Graduates Are Choosing to Live”, New York Times, October 20, 2014.

Joel Kotkin, “The Geography of Aging: Why Millenials are Headed to the Suburbs”, NewGeography.com, December 9, 2013.

September 17, 2014

GoFundMe can help pay your college tuition bills

by Grace

Education is the second-most-popular category on GoFundMe.

It’s easy to do.

… GoFundMe and other sites, like Crowdrise, let individuals pursue personal fund-raising. You create a profile, including a photo and an explanation of what you’re seeking the money for, and then spread the word on networks like Facebook and Twitter.

The rules are loose.

Unlike Kickstarter, which requires its users to meet a goal to get the money, GoFundMe and Crowdrise allow individuals to keep the donations whether or not the goal is met.

Crowdrise’s chief executive, Robert Wolfe, said his site had recently added an option for individuals — rather than recognized charities — to raise funds and that the educational category is growing….

Neither GoFundMe nor Crowdrise independently verifies the claims made in profiles.

Since most donors are friends and family, low-income students often find it challenging to raise substantial funds.  Another barrier is that contributions to individuals are not eligible for tax deductions.

Other similar sites, like ScholarMatch, use more stringent criteria and do not allow donations to specific individuals.

A dramatic story helps raise more money.

Heart-rending stories tend to gain the most attention and donations from beyond a student’s circle of friends. A Vanderbilt University student whose profile told of her mother’s suicide shortly before her freshman year raised $50,000, double her goal. And GoFundMe says its most successful campaign raised more than a million dollars for a child with a rare genetic disease.

For students who are willing to share their stories, crowdfunding seems like a no-brainer.  Given that young people seem eager to share many details of their personal lives online, I can see how this idea will continue to grow.

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Ann Carrnssept, “That Selfie Is So Good, It Could Help You Pay for College”, New York Times, Sept. 11, 2014.

September 11, 2014

Homeschool is more popular than private school in this state

by Grace

In North Carolina, the number of homeschoolers has now surpassed the number of students attending private schools.

That statistic may seem shocking if you’ve been a stranger to the growth of the homeschooling movement, which has rapidly increased in recent decades.

In 1973, there were approximately 13,000 children, ages 5 to 17, being homeschooled in the United States. But according to the National Center for Education Statistics, as of the 2011-2012 school year, that number has grown to almost 1.8 million or approximately 3.4 percent of the school age population. Other sources report numbers well over 2 million.

Homeschooling has grown 27% over the last two years in North Carolina.

Those are pretty impressive numbers for a movement considered “fringe” not that long ago and that has only been legal in all 50 states since 1996.

The top three reasons parents give for homeschooling their children:

A concern about environment of other schools
A desire to provide moral instruction
A dissatisfaction with academic instruction at other schools

Dissatisfaction with Common Core may be fueling the growth in homeschooling.

And my guess is when the figures are reported related to the past two years you’ll see the number of parents citing “dissatisfaction with academic instruction” spike with the growing uprising against Common Core and national standards. Those who run local homeschooling groups in North Carolina say Common Core is a big factor.

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Genevieve Wood, “In One State, More Children Homeschool Than Attend Private Schools. Why That Shouldn’t Shock You.”, The Daily Signal, September 08, 2014.

September 1, 2014

Will today’s families regret that they “grossly overpaid” for college?

by Grace

20 years from now, people who grossly overpaid for their bricks & mortar college experience and are still paying off their massive student loans, will feel like incredible chumps.

Looking at families digging deep into their pockets to pay exorbitant college tuition, this same thought has crossed my mind.  As college administrators ponder the rough road ahead, Stuart Butler of the Brookings Institution advises that it will take more than a few tweaks for some institutions to survive the coming years.

…  if today’s college leaders—even at the Ivies—believe they can merely tweak their business models to carry them into the future, then they are in for an even more unpleasant surprise. They should ponder the still recent experience of the music industry, film and television, booksellers, and news media. If they did, they would soon recognize that the higher education industry is encountering a multi-pronged and existential threat composed of successive waves of disruptive innovation. This disruption will force top-to-bottom changes in the very concept of higher education and its relationship with the broader economy.

Butler sees a pattern affecting many industries, including higher education.

1. The underserved consumers are targeted first, “leaving the upstarts to occupy a sector of the market of little interest to industry leaders”.  Online news aggregators looked to “young people with distinct tastes and only casual interest in the news”.

…Early versions of online courses appealed to students who could not easily maintain a regular schedule, or who needed more time to understand material….

2. The initial product is substandard.

… The Apple I, introduced in 1976, hardly seemed a harbinger of doom to the managers of IBM’s mainframe monsters. So it is no surprise today to read college presidents denigrating MOOCs and the cheap, no-frills degrees being rolled out in Texas and Florida….

3. Episodes of adaptation and refinement occur amid harsh criticism.

… The clunky Apple I sold just a couple hundred units, but the elegant Macintosh, introduced twenty years later, ransacked the computing industry.

That’s why the shortcomings of MOOCs today should be of little comfort to the higher education establishment….

4. Unbundling is to be expected, as both hospitals and newspapers have discovered.

As with hospitals and newspapers, bricks-and-mortar institutions of higher education are particularly vulnerable to unbundling. Universities are modular institutions, and lower-cost competitors can easily siphon off customers and revenue from individual modules. For instance, universities are partly a hotel and food service industry, and partly sports and entertainment centers. They have invested heavily in buildings and services that package these elements together at essentially one price. But this makes them vulnerable to competitors that find much less expensive ways to provide discrete modules like housing or even basic first-year classes—or that simply shed costly facilities like libraries or student centers, as online colleges have done.

While credentials are highly valued, academic information is priced at nearly zero.

Indeed, the most challenging and decisive feature of unbundling and competition for the low-cost parts of the college bundle of services comes from the fact that the price of academic information is falling nearly to zero. Why pay a ton of money to sit with 300 other freshmen, listening to a Nobel Prize winner you will never actually meet on campus, when you have access to everything he has written, maybe even video versions of his lectures, free of charge on the internet?…

Even the social part of college can be unbundled.

But what about the social “college experience”? Well maybe that can be unbundled, too. Does undergraduate college have to last four years, or could the residential, networking, or sports elements occupy just part of the period of study at much less total cost? Britain’s Open University has for years brought students on campus for just a few weeks each year. It retains a similar model today using online classes instead of its original televised courses. Yet it is number three in the UK for student satisfaction, tied with Oxford. Moreover, for many young people today online networking provides the relationship of choice for professional purposes, not just for social life. For them, Facebook, LinkedIn, and texting can be a more efficient and even more personal way of building and maintaining future career contacts than paying for a dorm or hanging out at a college gym.

How should universities respond?  Brooks recommends that they need to “price discriminate” in a way that supports what they are selling.  And “they will have to determine their true competitive advantage”.  So some schools, Ivies and other elite institutions, will be able to maintain high prices for the exclusive campus experience they are selling.  Other schools will drop their prices for the cut-rate learning experience they provide.

How should families respond?  Butler’s forecast is consistent with other predictions of sharper class distinctions and a  ‘growing bifurcation between elite universities and “trade schools”‘.  So families should be careful about paying premium prices today for what may be heavily discounted 20 years from now.

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Stuart Butler, “Tottering Ivory Towers”, The American Interest, August 11, 2014.

August 20, 2014

Enrollment in two-year colleges continues to grow

by Grace

As families seek ways to make college affordable, the percentage of students choosing two-year colleges continues to grow.

Enrollment by School Type, Over Time

20140805.COCTwoYearCollegeGrowth2

School choice may be a key driver in containing total average spending.

This year, families reported the highest enrollment in two-year public colleges since the survey began, 34 percent in 2013-14 from 30 percent the previous year. At the same time, enrollment at 4-year public colleges declined from 46 percent to 41 percent. Although the proportion enrolled at 4-year private colleges remained the same year-over-year (22%), the average spending at that type of institution appears to reflect a reduced cost to the families who chose them.

In 2013 the private college tuition discount rate – the amount of financial aid as a percentage of tuition and fees – was “again at an all-time high”.

Not surprisingly, the amount spent to attend four-year schools is higher than two-year schools. The average yearly amount spent for two-year public schools was $11,012, a slight increase of $344 from the prior year but $10,060

In affluent Westchester County, New York, more high school graduates seem to be “choosing community college as a way to save money”.

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How America Pays for College 2014, Sallie Mae & Ipsos Public Affairs, August 2014.

August 19, 2014

Families are finding various way to cope with rising college costs

by Grace

Sallie Mae reports that American families are finding various ways to cut college costs.  They are relying more on out-of-pocket contributions and less on student loans.

Cost-Saving Measures

How America Pays for College 2014 finds that families are adopting multiple strategies to reduce the cost burden of paying for college, such as opting for in-state tuition (69%), living closer to home (61%) or at home/with relatives (54%), filing for education tax credits (42%), getting a roommate (41%)6, accelerating the pace of coursework (28%), or not deferring payments on student loans (23%). Not only was the choice of an in-state school the most frequently mentioned response, it is also most likely to be mentioned if only one cost-saving measure is adopted by the family. Most families, however, are likely to adopt a combination of cost-reduction approaches, such as opting to go to school in state and living at home or with relatives (43%).

Paying from current income and savings increased while borrowing decreased.

Out-of-Pocket Contributions

A significant source of college funding comes from the income and savings of families known generally as “out-of-pocket” contributions. In 2014, American families reported that out-of-pocket spending from parents and student combined was $8,850, accounting for 42% of the total amount paid for college. This breaks a three-year trend in decreasing out-of-pocket spending (46% in 2010, 41% in 2011, 40% in 2012, and 38% in 2013). Compared to 2013, American families increased their contributions from income and savings by $839 while decreasing the total spent on college by $295.

 

How the Typical Family Pays for College, Year-over-Year

20140804.COCHowFamiliesPayForCollege2 20140804.COCHowFamiliesPayForCollege3 20140804.COCHowFamiliesPayForCollege4

Borrowing

Families’ use of borrowed money used to pay for college in 2014—a combined parent and student amount of $4,610— dropped to the lowest it has been in five years. Borrowed funds paid for 22 percent of college costs in 2013-14, a decline from 27 percent the prior year. Student borrowing (15%) accounted for twice as much as parent borrowing (7%).

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How America Pays for College 2014, Sallie Mae & Ipsos Public Affairs, August 2014.

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August 12, 2014

Interest in Ivy League schools continues to be strong

by Grace

20140731.COCIvyLeague2014Apps3

Despite a drop in applications at Dartmouth, Harvard and Columbia, overall interest in Ivy League schools continues to be strong.

The number of applications has risen steadily for over a decade (perhaps best shown HERE), so even small drops in applications won’t have a huge effect on admission rates at the Ivies. Harvard may have dropped 2% in the number of applicants, but their admit rate went from 5.79% last year to 5.90% this year, not a massive change. Columbia received 1.73% fewer applications from last year to this year, but the competition is not exactly wavering; their admit rate for the Class of 2017 was 6.89% and for the Class of 2018 was 6.95%. Want an even scarier number? Across all Ivy League universities plus MIT and Stanford last year 305,101 students applied and 26,758 were accepted (8.77% overall acceptance rate). This year? 313,981 students applied and 26,154 were accepted. So what’s that percentage tell us? It’s not easier to get in. 8.33% overall acceptance rate. Admissions is a numbers game and the numbers aren’t bending.

There seems to be a general consensus that even with the current downsizing trend in higher education, “elite colleges will continue to hold their value”.

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“Breaking Down the Numbers in Admissions”, Application Boot Camp, July 24th, 2014.

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July 24, 2014

Loans overtook grants as the main source of college financial aid in 1982

by Grace

In the early 1980s loans begin to exceed grants as the primary form of college financial aid.

20140720.COCLoansHistory2

Figure 3 shows the amount of financial aid provided in each major category since 1980, in constant dollars (institutional grants are excluded, as they are treated as a discount off of tuition). In the early 1980s, federal, state, and private grants were the largest form of financial aid. But beginning in 1982, loans began to outpace grants, and since then they have remained the largest form of aid available to students to help them pay their costs of attending higher education.

The federal government had first stepped up its role in college financial aid in the 1960s.*

… The United States has long had financial aid for students, awarded in different forms (loans, grants or scholarships, government-subsidized jobs on college campuses, and tax benefits) and from different sources (federal government, state governments, higher education institutions, and private entities). The federal government first began provision of broad-based financial aid in the forms of grants and loans to students with the passage of the Higher Education Act of 1965. This Act also had a provision, the State Student Incentive Grant program, which encouraged states to create their own grant programs. These programs, along with the continued expansion of institutionally-funded scholarships, have helped to subsidize the price paid by students for attending college and have also served to lessen the impact of rising “sticker” prices, or the amount charged by universities before any discount is provided.

*The G.I. Bill began offering federal education benefits to veterans in 1944.

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Geiger, Roger & Heller, Donald. “Financial Trends in Higher Education: The United States” (Working Paper), Peking University Education Review, January 2011.

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