Archive for October, 2012

October 31, 2012

Quick links – Higher education supports Obama, schools that recruiters love, Ann Romney on public education

by Grace

——  ‘Contributors affiliated with University of California, Harvard are Obama’s No. 1, No. 4 donor groups’ (The Daily Caller)

Individuals and political action committees affiliated with University of California system and Harvard University are collectively the highest and fourth-highest donors to President Barack Obama’s re-election campaign, respectively. That’s not just a ranking of colleges and universities. It’s a ranking of everyone.

The data come from the Center for Responsive Politics, a nonpartisan organization that tracks campaign contributions.

Individuals and PACs affiliated with the University of California system have given the 2012 Obama campaign $927,568 thus far. The grand total from Harvard is $535,405.

By way of comparison, the number-two collective contributor to Obama’s campaign is Microsoft Corporation ($680,769) and right behind it is Google Inc. ($661,996). Microsoft and Google are, respectively, the publicly traded companies with the third- and fifth-highest market capitalizations in the United States.

Romney lags in financial support from higher education

Of the organizations that saw their individual employees and PACs donate to Mitt Romney’s campaign, the top six are all financial institutions. No organization in the top 20 is a university or educational entity.

——  List of colleges with the most employable graduates

The New York Times has just released a list of schools with the most employable graduates…. 

Thousands of recruiters were chosen from the top companies in 20 countries, ranging from Mexico to Malaysia. The New York Timeswrites the survey was compiled by Paris-based human resources consultancy Emerging and Trendence, an company that researches employer branding, personal marketing and recruitment.

Top 5 schools

  1. Harvard University – U.S.
  2. Yale University – U.S.
  3. University of Cambridge – Britain
  4. University of Oxford – Britain
  5. Stanford University – U.S.

——  Ann Romney thinks we ‘need to throw out’ the public school system

It’s not surprising that she has no love for teacher unions.

I’ve been a First Lady of the State. I have seen what happens to people’s lives if they don’t get a proper education. And we know the answers to that. The charter schools have provided the answers. The teachers’ unions are preventing those things from happening, from bringing real change to our educational system. We need to throw out the system.

October 30, 2012

Does hybrid learning hold the most promise?

by Grace

Hybrid learning, combining online and face-to-face instruction, would seem to hold the most promise in incorporating technology into higher education.  A recent study supports this promise.

Monitoring 605 college students taking the same introductory statistics course at six public universities—including the University at Albany—SUNYSUNY Institute of Technology—Utica/Rome, the University of Maryland—Baltimore CountyTowson University,  CUNY—Baruch College, and CUNY—City College—during fall 2011, researchers split the students into two groups. One group completed the course in a traditional format, while the second group completed an online component complemented with an hour of in-class instruction each week.

Students were asked to complete a series of tests before and after the course, and researchers found that “hybrid-format students did perform slightly better than traditional format students” on outcomes including final exam scores and overall course pass rates, according to the report.

Interactive Learning Online at Public Universities: Evidence from Randomized Trials (Ithaka S+R, May 22, 2012, William G. Bowen, Matthew M. Chingos, Kelly A. Lack & Thomas I. Nygren)

The better performance of students in the hybrid-format group was not statistically different and the study did not control for differences in teacher quality.  Still, it’s easy to imagine how the powerful combination of a strong teacher with a well-designed online component would deliver superior results with lower costs.

Meta-Analysis: Is Blended Learning Most Effective? (2009)

The United States Department of Education reported recently that it’s found some evidence to support the notion that blended learning is more effective than either face to face or online learning by themselves. Further, between online and face to face instruction, online is at least as good and may even have the advantage in terms of improving student achievement and potentially expanding the amount of time (and quality time) students spend learning.

Blended Learning Models Generating Lessons Learned (2012)

Since blended learning exploded onto the K-12 scene with promises of personalized and student-centered learning, it has proliferated into dozens of different models, with educators continually tweaking and changing those methods to find the perfect balance of face-to-face and online instruction to meet the needs of their students.

Interest in blended education remains high, spurred partly by research offering support for advocates’ claims that blended learning is more effective than either online or face-to-face instruction on its own.

But more research is needed to determine the effectiveness of the evolving blended learning models, including best practices and which models work best for which types of students . . .

Related:  Hybrid learning breaks down geographic barriers for Northeastern University (Cost of College)

October 29, 2012

Even among recent college graduates, women earn less than men

by Grace

According to a report issued this month  by the AAUW, among new college graduates men outearn women by an average of nearly $8,000 a year.  Some of the reasons for this gap can be explained by easily quantified data, such as women working fewer hours and choosing less lucrative fields of employment.  Other possible reasons, such as discrimination and less willingness by women to negotiate salary, are not as clear.

A flaw in the AAUW analysis of salaries is lumping all business majors into one category for comparison.

Female business majors, for example, earned a little over $38,000, while men earned more than $45,000.

Within the general category of business studies, different areas of concentration generate different levels of compensation.  For example, according to, in the state of Virginia the average first-year earnings for graduates of four-year finance programs was $42,12 while general business management graduates earned $38,578 during their first year in the workforce.  I suspect men are over-represented in finance and under-represented in other areas of business such as human resources.

‘Equal pay for equal work’
Among the AAUW recommendations for eliminating the wage gap is new legislation to bolster current laws for equal pay.  Although I believe gender and other types of discrimination exist in the workplace, I do not support that recommendation.  Given the many nuances inherent in determining what “equal pay for equal work” is exactly, I would prefer not to work in an environment where a “fairness czar” is making those types of decisions.

Milton Friedman making the case against equal pay for equal work

Here is another unexpected wrinkle in the AAUW salary comparisons.

… male engineering majors are more likely than their female counterparts to work as engineers after graduation….

I remember one of other few females also studying geology when I was in college did not go on to work as a geologist when she graduated.  Although she had excellent grades, she opted to work in another field she found more fulfilling.  She was married to a higher-earning spouse.  On the other hand, some other male graduates went to work at lower-paying geology-related jobs after graduating with a four-year degree, planning to attend graduate school within a few years.

Graduating to a Pay Gap – The Earnings of Women and Men One Year after College Graduation (AAUW)

Related:  ’84% of working women want to stay home with kids’ (Cost of College)

October 26, 2012

A round-up of scary public pension stories

by Grace

This collection of stories about the public pension problem should get the attention of taxpayers and government employees relying on future pension payouts.  (Of course, these two groups are not mutually exclusive.)

Next School Crisis for Chicago: Pension Fund Is Running Dry (New York Times)

Illinois on the hook for $670 million more in teacher pensions for next budget (Chicago Tribune)

‘Exploding pension costs are the single biggest threat to local government’s ability to deliver needed services’ (Cost of College)

From the No Pension Bailout website:

State pension systems across the nation are dramatically underfunded.  Reasons vary, but in most cases state governments have failed to allocate sufficient money to their retirement systems. additionally states granted overly generous benefits to workers without proper regard for the cost of these benefits.

Recent calculations estimate unfunded pension liabilities to total roughly $2.5 trillion – creating state budget crises nationwide.  States are being forced to slash budgets for education, healthcare, and public safety to make room for the spiraling costs of pensions.  Some states are working to fix the problem, but others are not, instead content to wait for federal bailout of state pensions.  A bailout would force states with the resolve to fix their problems to subsidize those that prefer handouts – destroying state’s fiscal sovereignty and creating one of the largest transfers of wealth in the history of our country.

A problem with accounting methods used by state governments

State pension systems across the country are in a state of crisis. According to the Pew Center on the States, states estimated their unfunded pension liabilities at $757 billion in 2010.  Most pension experts, however, take issue with the standard actuarial methods used by most public pension plans, which lets state governments hide billions of dollars in pension debt. Under more reasonable accounting standards, states’ pension debt grows to more than $2.5 trillion.

Inflated discount rates hide true taxpayer liability

Economists Robert Novy-Marx and Joshua Rauh, for example, challenge the unrealistic investment targets and discount rates used by public pension systems to adjust their liabilities into today’s dollars. They found that the median discount rate used by the largest pension systems in the U.S. was 8 percent. This means that the pension funds anticipate earning 8 percent annual investment returns. Pension experts believe high discount rates encourage states to invest their pension funds in riskier assets in order to justify using inappropriately high discount rates.  In effect, using high discount rates allows government pension plans to hide hundreds of billions of dollars in pension debt from taxpayers.

These inflated discount rates have become so unreasonable that both the Governmental Accounting Standards Board and Moody’s Investors Service issued new rules in 2012 that require state governments to use more realistic assumptions. These new rules require governments to use discount rates closer to the yields from corporate and municipal bonds, which will provide a clearer look of pension finances. In Illinois, the new reporting rules will more than double the state’s officially-reported pension debt.

In the private sector, a guaranteed benefit must use risk-free returns in calculating future liability.  But for public pensions, the taxpayers are expected to meet the huge gap between overly optimistic promises and the reality of low investment returns.

As most experts explain, public pension funds should use lower discount rates to reduce the investment risk to taxpayers. This typically means that the discount rate should be based on risk-free returns, such as Treasurys. These discount rates would reveal that between half and three-quarters of all public pension debt is hidden by accounting gimmicks. If government pension plans were subject to the same reporting rules as private pension plans, their reported pension debt would nearly triple.

Do the math:
Median discount rate used by largest public pension funds – 8%
Current 10-year US Treasuries rate – 1.6%

Progressives Sour on Chicago Teachers (Via Meadia)

…[T]he city of Chicago most certainly can run out of money. Things like extra money for music and art teachers could be great ideas or could be bad ones depending on where it comes from. But it’s not as if Chicago Public Schools is sitting on some giant pile of money that administrations have just been refusing to use. On the contrary, it’s actually sitting on a large unfunded pension obligation. . .

In our local school district, pension costs are soaring to make up for unreasonably optimistic pension promises.

… pension costs have risen more than 50% over the last two years and now account for 7.2% of the total budget, up from 5.1% in 2010-11.  This has meant ongoing cuts in student services as taxes are diverted to pay for pensions.  The trend is up, and by 2015 pension costs are expected to eat up 35 percent of property tax collections.

October 25, 2012

Did your 529 plan earn a gold metal?

by Grace

In their annual evaluation of 529 plans, Morningstar awarded its top Gold rating to four plans.

In an annual review of the largest 529 college-savings plans, Morningstar analysts identified 27 plans that are likely to outperform their peers on a risk-adjusted basis over a full market cycle. These plans earned Gold, Silver, or Bronze Morningstar Analyst Ratings, which are forward-looking, qualitative ratings.

The 529 plans earning medals are a diverse group of direct-sold and advisor-sold plans, but all have a strong menu of investment options, solid management, and reasonable fees. The relatively large number of plans earning medals reflects meaningful improvements across the 529 industry in recent years. Very few plans still include options that have performed poorly due to weak management or extremely high fees. As such, only four of the 64 plans rated earned Negative ratings, with 33 plans earning Neutral ratings. Morningstar did not rate 22 of the industry’s smallest plans….

Gold Medalists
Among the plans earning Morningstar’s highest rating, two,  Maryland College Investment Plan and Alaska’s  T. Rowe Price College Savings Plan, feature T. Rowe Price’s topnotch investments. Morningstar has identified these plans as industry leaders for several years running because they offer high-quality active strategies at a reasonable price. The plans were largely unchanged in the past year, though each plan’s single age-based track now features more international equity and real-assets exposure, which should further diversify the plan’s returns.

The other two plans earning Gold medals from Morningstar feature passive investments from Vanguard. To be sure, indexing is increasingly common in direct-sold 529 plans like these, but fees vary dramatically from plan to plan.  Utah Educational Savings Plan and  The Vanguard 529 College Savings Plan of Nevada are well-established leaders at keeping costs low. In these plans, college savers have a number of low-cost age-based tracks to choose from that vary their asset allocation based on the savers’ risk profiles. A primary difference between these two Gold-rated plans is their respective minimum investment. While Vanguard requires $3,000 to get going in its namesake plan, Utah’s offering has no enrollment minimum.

You can start small.
If you or your child want to start saving for college but you only have a small amount to invest initially, the Utah 529 plan may be a good option.  Remember that in some cases there are tax benefits if you use your own state’s plan, but wherever you start your plan you can later exercise the option to move funds tax-free between 529 plans.

Related:  What you may not know about 529 plans (

October 24, 2012

Quick links – high school graduates not ready for college, college enrollment shrinks, unattractive female scientists

by Grace

—–   High school counselors know that kids are not being prepared for college

From a College Board survey conducted last year:

When it comes to getting students into college (and prepared to succeed there), school counselors have a unique vantage point — seeing firsthand the factors that hinder their students from moving forward. A national survey of counselors, being released today by the College Board, finds that these counselors generally think their schools are not succeeding in the areas that the counselors believe are most important to promote student advancement.

Meanwhile, high school teachers seem clueless about college readiness of their students.

—–  ‘It’s official: Higher education is shrinking, for the first time in at least 15 years.’ (Inside Higher Ed)

Total enrollment at American colleges and universities eligible for federal financial aid fell slightly in the fall of 2011 from the year before, according to preliminary data released Tuesday by the U.S. Education Department’s National Center for Education Statistics.

The data from the department’s Integrated Postsecondary Education Data System show that 21,554,004 students were enrolled in fall 2011, down from 21,588,124 in fall 2010. While that drop is smaller than two-tenths of one percent, it is the first such dip since at least 1996, according to officials at NCES.

In many ways the result is not surprising; college enrollments boomed in the late 2000s, as they often do during recessions, as workers lost jobs and sought to retool or opted to continue their educations because they didn’t like their prospects for employment.

So it’s possible that enrollments are leveling off (and shrinking slightly) now because the economy had begun rebounding enough by fall 2011 that some of those who had flocked to higher education during the recession began finding jobs. It’s also possible that college tuition levels — which have continued to rise in recent years, driven in part by cutbacks in state support and other traditional sources of colleges’ revenue — are pricing more students out of higher education.

Possible impact on ‘completion agenda’

Whatever the reasons, the data — if they persist — could pose a problem for the many policy makers and advocates seeking to increase higher education attainment. While many of those promoting the “completion agenda” are focusing on improving the performance of students who are already in college, they also strive to increase the level of college-going, particularly for those historically underrepresented in higher education.

HT College Insurrection

—–  Unattractive women scientists

A furor erupted after University of Chicago professor Dario Maestripieri posted on Facebook about the lack of attractive female scientists at a recent conference.

“My impression of the Conference of the Society for Neuroscience in New Orleans. There are thousands of people at the conference and an unusually high concentration of unattractive women. The super model types are completely absent. What is going on? Are unattractive women particularly attracted to neuroscience? Are beautiful women particularly uninterested in the brain? No offense to anyone..”

This reminds me of the popular University of Chicago slogan:  “University of Chicago: Where the squirrels are cuter than the girls”

During my early years working in the oil fields, many of us laughed at this 1978 letter to Ann Landers from the wife of an oil geologist who wrote to complain about her husband having to train a new female scientist.

 My husband is a geologist for a major oil company.  Recently he had to take a young woman geologist out to an oil well to train her.  They were together constantly for three weeks, traveled thousands of miles alone in the car, ate all their meals together, even slept out on the rig.

I’m not worried about the physical attraction, because most women geologists are so ugly they could go lion hunting with a switch….

Some things never change.

October 23, 2012

What you may not know about 529 plans

by Grace

Adam Zoll at Morningstar reports on some common myths about 529 plans.

  • Myth 1: You have to contribute to a 529 in your home state.
  • Myth 2: You have to send your kid to a school in the state where his 529 plan is offered.
  • Myth 3: You can only get a tax deduction if you contribute to your state’s plan.
  • Myth 4: If you save in a 529 account for your child, it will hurt his financial aid prospects.
  • Myth 5: If your child doesn’t go to college, you’ll lose the money.
  • Myth 6: All 529 plans are the same.

You can read the complete details on any of these points by clicking the Morningstar link above.  Myth 5 can sometimes be avoided if you spend 529 funds to pay for the education of other family members.  Financial planning can be complicated, and planning for college bills is no exception.  When you add in the complexities of how financial aid is awarded, it can make for a very stressful and confusing situation.  It makes sense to become more educated about saving and paying for college.

Related articles

October 22, 2012

New web tool shows salary data broken out by college and major

by Grace

CollegeMeasures. org has a new web tool that allows you to compare salaries of recent college graduates, “with data that is broken out by college and major”.  College applicants making decisions about schools and fields of study should find this data helpful.

For example, a bachelor’s degree-holder from George Mason University who majored in computer engineering can expect to earn $59,000 in his or her first year after graduation, according to the College Measures website, which is 56 percent more than the state average in that discipline. On the other side of the earnings scale, the average George Mason graduate who studied biology earns $32,000, still 15 percent more than peers from other Virginia colleges.

So far, this resource is only available for colleges in Arkansas, Tennessee, and Virginia, but plans to add more states are in the works. 

Choice of college makes a difference.

I spent some time looking at various salary comparisons, imagining myself as the parent of a kid in the process of applying to college.  The data shows that for a mechanical engineering degree there was not a huge difference in salary outcomes among the various colleges, ranging from $53,441 to $50,917.  However, salaries of graduates from several different electrical engineering tech programs showed substantial differences, ranging from $42,223 to $25,141.  This is good stuff to know.

For graduates with a bachelor’s degree in economics the average salary was $39,298.  But the range was signficant, from $42,895 at the University of Virginia to $29,532 at Radford University.  Similar differences were reported for business majors, depending on the specific areas of study and on the schools.

Choice of major makes a difference.

Comparing associate’s degree programs at Northern Virginia Community College, the data averages showed that dental hygienists earned over $59,000 their first year after graduation and radiographers earned about $46,000, but childcare workers only made about $32,000.  Meanwhile, EMT Paramedic graduates earned almost $60,000.  While other factors besides yearly salary, such as hours worked and previous experience/age of graduate, must be taken into account when making comparisons, this basic salary data is a good starting point.

The individual student makes a difference,

Students, with varying interests, strengths, and levels of persistence self-select themselves to particular schools and majors.  For example, a student who lacks the skills to pursue a rigorous quantitative-based major at a top-ranked college has already established the groundwork for the path to particular areas of employment and salary.  Within any given field of study, a person who works hard and is strongly motivated by financial success will usually do better than a slacker.

Some shortcomings of the web tool

  • Only first-year salary data is available, which fails to capture long-term earnings potential.  (How will the salaries of the dental hygienist and the engineer compare in 10 or 20 years?)
  • Only graduates employed in that state are included.
  • Data for federal employees and members of the military is excluded.

Even with these shortcomings, checking this website could be a valuable wake-up call for students  unaware of the consequences of taking on large student debt.

Related:  College ROI results by PayScale for Bloomberg Businessweek (Cost of College)

October 19, 2012

A university education is like the Super Bowl – you can see it live or on TV

by Grace

Three perspectives on the future of higher education from Vivek Wadhwa, Peter Thiel, and Lawrence Summers

College will be “free” in a few years, according to Vivek Wadhwa, tech entrepreneur and academic who serves as a vice president at the decidedly non-traditional Singularity University.

Wadhwa has unwavering faith in the power of technology to fix much of what is wrong with the world, and he believes that online courses will revolutionize higher education and cut the cost to near zero for most students over the next decade….

Yet if Wadhwa is right the student debt problem will take care of itself—at least as it relates to the next generation and those that follow. Online courses will proliferate to such a degree that acquiring knowledge will become totally free. There will still be a cost associated with getting a formal degree. But most universities, he says, “will be in the accreditation business.” They will monitor and sanction coursework; teachers will become mentors and guides, not deliver lectures and administer tests. This model has the potential to dramatically cut the cost of an education and virtually eliminate the need to borrow for one, he says.

Peter Thiel thinks skipping college altogether is often a better option.

Thiel has gotten a lot of attention for his view that higher education is broken, and that many kids would be better off saving their money and going straight from high school into a trade or developing a business. His “20 under 20” fellowship grants high school graduates with a sound business idea $100,000 if they agree to skip college and go right to work on their idea.

Lawrence Summers stresses the “value of the total university experience”.  I like his Super Bowl analogy.

There is a reason that people pay a lot of money to go to an event like the Super Bowl when it is free on TV, Summers offers. They get more out of it by being present. Something similar is true of an on-campus education, where you may attend extra-curricular events and engage more fully with faculty and other students.

All three – Wadhwa, Thiel, and Summers – see a place in the future for the traditional university experience.  But there seems to be agreement that high costs will make that a shrinking segment of higher education.  An open question is whether this will create a widening gap between the elites with traditional degrees and others with “cheap” online degrees.


October 18, 2012

Basic math problem: Too many college graduates and not enough high-paying jobs

by Grace

It may not matter how many more college graduates the United States churns out, many of them will be unable to get well-paying jobs.  The math simply does not work out, according to Richard Vedder.

… one-third is a larger number than one-fifth.  Roughly a third of adults have four-year degrees, but only one-fifth of jobs are in the relatively high-paying fields. That is why we have a small army (115,000) of janitors with bachelor degrees. Rather than adding two million more enrollees at community colleges (as President Obama advocated in the first presidential debate), maybe we should have two million fewer Pell Grants or student loans in order to help, in the long run, to restore balance between supply and demand for college graduates in high- paying fields.

It may sound distasteful to hear someone promote a public policy position that supports less education for low-income students.  On the other hand, encouraging young people who are at high risk for dropping out to take on burdensome debt may actually be the less charitable action in this case.  Even awarding grants to students unlikely to graduate from college may turn out to be more cruel than kind if the next generation will have to deal with the painful deficit generated by this generosity.  It’s a dilemma.

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