Education Archives - Page 32 of 37 - Progressive Policy Institute

Course Correction

Posted on June 3, 2014 by The Progressive Policy Institute

Community colleges should be matching students to jobs, not funneling everyone into a four-year degree. A response to Richard D. Kahlenberg.

The United States is facing one of the greatest workforce challenges in recent history. Wages have been stagnant for a decade and middle-skill jobs have evaporated—and yet unfilled vacancies for high-wage computer and tech jobs are at record levels. Few have been as badly affected by the shifting landscape of the labor market as young Americans, who must adapt to the global competition for jobs with no guarantee of a secure retirement. Already a wealth gap exists relative to older generations at their age, and lower net worth, alongside rising student debt, will inevitably leave lasting economic scars.

In his recent Democracy essay [“Community of Equals?,” Issue #32], Richard Kahlenberg correctly points out that the failure of our nation’s community colleges is partly to blame. He rightly emphasizes the important role community colleges play in the well-being of our nation’s workforce, writing, “Their success or failure will help determine whether America remains globally competitive and whether American society can once again promote social mobility in an era of rapidly changing demographics.”

So ineffective have community colleges become that they are hardly considered a viable pathway into the workforce. In fact, a four-year credential seems to be the only acceptable postsecondary pathway; you either earn a bachelor’s degree or accept a fate of underemployment and low pay. It follows that since 2000, the number of two-year colleges has remained flat while the number of four-year institutions has increased by more than 400, or 17 percent. There are now about 2,900 four-year colleges in the country, or roughly one four-year institution for every U.S. county.

Kahlenberg wisely advocates reforming the entire community college system. However, his analysis and proposed solutions are flawed in three important ways. First, community colleges are failing not because of de facto segregation, as Kahlenberg insists, but because they don’t adequately prepare students for the workforce. The best way to fix this is through private-sector engagement, not heavy-handed government intervention. Second, the goal of community colleges should be to prepare students for the workforce, not just to pave a path to a bachelor’s degree, as Kahlenberg suggests. Finally, failure within the postsecondary education system is not confined to two-year colleges. Four-year colleges are also facing serious challenges.

The first flaw in Kahlenberg’s analysis is his foregrounding of socioeconomic segregation as the main problem facing community colleges. He writes, “[O]ur higher education system, like the larger society, is increasingly divided between rich and poor, an arrangement that rarely works out well for low-income people.” He suggests that the demise of community colleges stems from a vicious cycle of reinforcing racial and low-income stratification, where only poor people go to community colleges while better-off people get an automatic pass to attend a four-year institution.

Kahlenberg offers the fact that four-year colleges enjoy greater government support as proof of inherent preferential treatment toward more affluent Americans. He laments that “direct federal aid to higher education disproportionately benefits four-year over two-year colleges” and that “wealthy four-year universities receive large public subsidies in the form of tax breaks that are largely hidden from public view.” Yet this is hardly proof of income or racial bias. Four-year colleges are more expensive, and provide a longer, more comprehensive service than community colleges, so it’s not surprising that more federal aid goes to four-year institutions. Moreover, if private nonprofit schools are able to use tax-supported donor funds to defray rising costs instead of increasing tuition or relying on students to take on more debt, then that should be applauded, not assailed.

By focusing on segregation, Kahlenberg misses the fact there are other factors at play. For example, our nation’s K-12 education system bears much of the blame for perpetuating the failure of community colleges. Too many young Americans graduate from high school without rudimentary skills, forcing community colleges to retrain students in basic education. For instance, the Northern Virginia community college system—an exemplary system by Kahlenberg’s definition because it grants automatic admission to Virginia state universities upon completion—offers a course in learning “whole numbers.” But I found no courses specifically in SAS, STATA, Eviews, or other statistical analysis software that high-wage employers are looking for. By being forced to offer mainly remedial courses, such community colleges disserve the many students who do have basic skills and prohibit the integration of people from different backgrounds that Kahlenberg strives to encourage.

In reality, our community colleges are failing for a reason more obvious than a socially ingrained elitism. It’s because they aren’t providing students with a positive return on investment. They are not adequately preparing their students for the workforce with dynamic training programs that align with local employer demands.

Indeed, the best way to promote economic and social mobility is to prepare our workforce for jobs that match such demands. The key is to engage the private sector: the employers. They must be an active partner to community colleges, participating in curriculum design and engaging with prospective hires. Nowhere in his essay does Kahlenberg mention the role of the private sector, leaving a rather large hole in his analysis.

Instead, the author’s proposed reform of reallocated government spending will only preserve the status quo. Worse, it would exacerbate the skills mismatch, as community college administrators would have little incentive to work with local employers. His focus on bringing in more middle-class students to community colleges would also do little to help millions of struggling young Americans of all backgrounds.

Real reform of community colleges would also engage the education-technology revolution that is passing too many postsecondary education institutions by. Low-cost, high-speed broadband has the potential to transform workforce training, creating enormous economic and social opportunity by including people of all socioeconomic backgrounds. For example, the University of Colorado’s College of Engineering and Science recently launched a program to help its students master communications technologies to collaborate with engineers from around the world. Designed to teach students the online skills they need to succeed in business, the program saw a diverse student body—50 percent female, 30 percent Latino—in its first year. The emergence of massive open online courses and customized education is also of great promise, and could even encourage higher completion rates—an area of concern in the postsecondary education industry.

If community colleges realigned their mission to prioritize workforce preparedness, the growing socioeconomic divide Kahlenberg writes about would likely be to a certain extent reversed. Perhaps more students of varied backgrounds would want to enroll if they knew the associate degree held more clout in the workforce. The segregation that plagues today’s system would improve organically, in a virtuous cycle, without heavy-handed government mandates.

A second problem with Kahlenberg’s essay is his assumption that the end goal of the community college system is for everyone to get a four-year degree. Here Kahlenberg is not alone; it seems as if the bachelor’s degree is seen by the entire postsecondary education industry as the Holy Grail for the economic woes that afflict young Americans.

This is simply not true. Not every job requires a four-year degree and not everyone needs one. For example, according to the Bureau of Labor Statistics, over the next decade new jobs requiring either an associate degree or a postsecondary non-degree award are expected to grow faster than jobs requiring a bachelor’s degree. Many of these jobs—such as those for medical or engineering technicians, or for computer support specialists—pay well and are vocational or technical. This suggests some four-year students could probably get a better return on investment from a two-year credential or non-degree certification.

The fact is that when it comes to a bachelor’s degree, it matters where you go to school and what you study. While on average those with a bachelor’s degree earn $1 million more in their lifetime than those without, the variance in return on investment is large.

There is no question that some form of postsecondary training or education is necessary in today’s economy. Young Americans without education beyond a high-school diploma are dropping out of the labor force at an alarming rate, or working less, unable to compete for decent jobs. But the question we should be asking is: What type of postsecondary credentials do we need? We must design postsecondary education policies that reflect the reality on the ground by promoting more alternative pathways into the workforce outside of a bachelor’s degree.

This brings us to the third flaw in Kahlenberg’s analysis. By wanting to funnel everyone into four-year schools, he ignores the fact that the four-year model is already beginning to implode. It turns out that the recent building binge of four-year colleges may not have been the greatest idea, as we are now saddled with many ineffective four-year schools. A painful truth is that the failure of postsecondary education is not confined to community colleges, and many four-year institutions are also facing tough questions from students and parents.

Young college graduates know all too well that having a bachelor’s degree is not a guaranteed ticket to financial success. They have seen their real average annual earnings drop by 15 percent over the last decade, as the hollowing out of middle-skill jobs over that time has forced more graduates to take lower-paying jobs that do not require a four-year degree. In fact, my research has shown that college graduates are forcing those with less education and experience out of the labor force—what I call the “Great Squeeze.” At the same time, they face rising student debt levels, now more than $29,000 per borrower. Too many young Americans are leaving the postsecondary education system with thousands in debt and little to show for it.

In his essay, Kahlenberg argues that four-year institutions provide a better service because they spend more per student than community colleges. He notes that “stunningly, over the past decade, inflation-adjusted spending on public research universities has increased roughly $4,200 per student, compared with just a $1 per student increase for community colleges.”

But this just shows how much more expensive it is to provide everyone with a four-year degree. Further, it wrongly assumes that because four-year research universities spend more per student, the student is getting a better education. The most recent data shows in that 2011, public universities spent more on “auxiliary enterprises,” which includes bookstores, dorms, and dining, than on academic support and student services.

Moreover, public funding for postsecondary education has been decreasing across the board, with four-year colleges also feeling the pinch. In Colorado, for example, annual public funding for postsecondary institutions is expected to decrease to zero by 2022. As state spending falls and tuition rises, the federal government has shouldered the burden of ensuring equal access. This includes the expansion of federal student aid and programs like income-driven repayment. According to the College Board, Pell grants are up 118 percent over the last decade. It turns out the increased spending per student at public universities is being paid for in large part by the student and the taxpayer.

By encouraging everyone to get a four-year degree, we will add more debt on the backs of young Americans and put greater strain on the federal aid system. This is especially true if more young Americans feel obligated to pursue graduate school to stand out to employers, taking on even more debt in the process. We need to have other viable pathways into the workforce that don’t require major time and financial commitments.

What we need is a community college system that can stand on its own. It should be a standard, if not common, pathway into the workforce. Its success should depend on how many students are able to achieve a decent standard of living upon completion, with transfers into four-year colleges as one possible option. Certainly, some colleges are getting the formula right, leading the way with innovative practices and programs that integrate local employers to the benefit of their students. Yet such cases remain the exception rather than the rule.

The goal of the postsecondary education system should be to facilitate America’s workforce preparedness. Only when we realize that multiple pathways are needed to reach this goal—rather than a one-size fits all approach—will we undertake the radical reforms we truly need.

This article was originally posted by Democracy.

Missing the Mark on Federal Student Aid

Posted on May 2, 2014 by The Progressive Policy Institute

Two of today’s biggest proposals aimed at solving the student debt crisis – refinancing and expanding income-driven repayment – are well-intentioned but miss the mark. Better reforms would address the real problem of an outdated postsecondary education system, and would use the billions already spent annually on federal student aid more effectively.

The first proposal, refinancing student loans, is not new but is gaining fresh momentum. Last week, Sen. Elizabeth Warren (D-Mass.) announced plans to introduce legislation in the coming weeks that will refinance all outstanding loans to today’s subsidized Stafford loan rates, or 3.86 percent. The costs of refinancing will be paid for by the controversial “Buffet rule” tax increase on millionaires.

Taxing the wealthy to reduce interest rates may help relieve high interest rate payments, but does nothing to address the underlying debt. The Department of Education informally estimates a refinancing scheme could cost upwards of $100 billion over 10 years, a high price to pay for a plan that does not hold schools accountable. And if the ability to refinance extends into the future, it would be cheaper to just offer all federal student loans at the subsidized Stafford rate.

Moreover, refinancing all student loans will mostly benefit graduate students and those with very high debt levels. This may not be the intended target for relief, as it allocates more funding to borrowers who made poor borrowing choices as opposed to those under the most financial stress. A more effective way to deal with graduate loans would consist of capping loan limits, and using those savings to launch a financial awareness campaign complete with labor market expectations data before people borrow.

The second proposal, being explored by Sen. Tom Harkin (D-Iowa), calls for making income-driven repayment (IDR – also known as “Pay As You Earn”) the automatic repayment plan for all borrowers. Under IDR, borrowers pay up to 10 percent of discretionary income regardless of loan amount, for a maximum repayment term of 20 years after which all outstanding debt is forgiven.

The costs of IDR are only beginning to come to light. New CBO estimates for expanding IDR as proposed in the president’s budget show an estimated cost of $8.2 billion over the next 10 years, although independent estimates range as high as $14 billion annually. Because this form of IDR is so new, the true cost will likely depend on programmatic details and implementation.

Similar to refinancing, IDR stands to benefit graduate students and high debt borrowers the most. In fact, there have already been documented cases of IDR abuse. Without accountability, expanding what was designed to be a temporary solution for the neediest borrowers simply hastens the transfer of the crisis of college affordability from the borrower to the taxpayer. It does nothing to address rising tuition. This suggests a one size fits all approach for loan repayment, or at least IDR in its current form, may not be the most cost-effective.

A better approach to reforming federal student aid would help students young and old by modernizing the postsecondary education system. Right now, there are too few acceptable pathways into the workforce after high school. The mentality that everyone needs a four-year degree is not only exacerbating the strain on the federal aid system, but it is enabling poor performing postsecondary institutions to stay in business.

One possible way to target industry reform is by experimenting with Pell Grants. The scope of Pell Grants could be expanded to include more non-traditional training programs. This would encourage alternative pathways into the workforce, for example, apprenticeships or online-based credentials.

Another experiment could be to change the eligibility criteria for schools receiving Pell Grants. Grant money can be block allocated to schools by completion and post-graduate success metrics to start; later allocated by success metrics of recipients. This forces us to collect data on grant recipients over time while encouraging schools to better serve students. Such experiments can be done cost-effectively, by tightening eligibility criteria, reducing the eligibility period, and tying individual funding to progress benchmarks.

The effectiveness of Pell Grants is currently unknown, leaving room for improvement. We do know that emphasis on enrollment over completion and post-graduate success does little to help the recipient or taxpayer in the long run. Yet the program has a significant footprint: recent research shows about 9.4 million students received Pell Grants in 2012, up from 5.2 million in 2006. According to the CBO, the cost of Pell Grants simultaneously skyrocketed by 168 percent.

The interconnectedness of federal student aid programs with the postsecondary education system should be seized by policymakers as an opportunity. Focusing on effectively using existing funds to help borrowers, and modernizing the postsecondary education system, is the best way to address the student debt crisis now.

This Op-Ed was originally published in The Hill.

Senate hearing on student loans did not HELP

Posted on March 28, 2014 by The Progressive Policy Institute

Yesterday’s hearing of the Senate Health, Education, Labor and Pensions (HELP) Committee on student loans seemed to clearly answer the question of who is to blame for our $1.2 trillion and climbing student debt debacle. The only problem is, it was inaccurate. That makes the conversation unproductive regarding making federal aid policy effective.

If you believed the hearing, private lenders, loan servicers (TIVAS), and greedy state guaranty agencies (GAs) are to blame. During the hearing Sen. Patty Murray (D-Wash.) prided her role in passing recent cuts to GA-collected fees, as “providing relief to struggling borrowers.”

This is little more than politically charged rhetoric. There is no question young Americans are struggling more than any other age group, and this is exacerbated by student debt. But in reality, the finger-pointing for whom to blame is not so cut and dry, and any real improvement to the student aid system must reflect that.

Just as with the subprime mortgage crisis, everyone involved played a role in driving our student debt burden. States have decreased funding for public universities (for example, Colorado is expected to stop all funding by 2022), schools have increased tuition to fill the difference, borrowers have little incentive to make smart borrowing decisions, for-profit institutions have a less than stellar track record, and funding has been readily available regardless of credit backgrounds to enable equal access and opportunity. Of course, there is also the epidemic lack of financial literacy of student borrowers. Lenders, school counselors, parents, or the borrowers themselves could all be to blame.

Moreover, the underlying dominance of four-year college model is also partly to blame. The fact is not all four-year degrees are created equally, and not all jobs require a four-year degree. Yet the lack of other viable options for workforce success could explain why everyone is encouraged to pursue a four-year degree. It could partly explain the astonishing rise in graduate school over the last decade, as poor employment prospects force college graduates to find ways to stand out, and the rising student debt that comes along with it.

Certainly some private loan servicers are not completely innocent, and may not always put student interests above their own short-term goals. But the harsh tone taken by Sen. Elizabeth Warren (D-Mass.) yesterday does not address the larger issues at play. Her comment, “Sallie Mae has repeatedly broken the rules and violated its contracts with the government, and yet Sallie Mae continues to make millions on its federal contracts,” even prompted the Department of Education to come to Sallie Mae’s defense.

Indeed, not all private-sector participants among the accused are approaching borrowers with mal-intent. Take for example state guaranty agencies (GA), the legacy administrators of the Federal Family Education Loan Program (FFELP) for a given state. Left out of the hearing discussion seemed to be the important fact that GAs are non-profit companies designated by the Department of Education. Their fees are used for an important cause – for extensive financial literacy training programs set up across state networks. The more their fees are cut, the fewer financial literacy services they will be able to provide.

The demonization of private loan servicers might lead one to think that federalizing student loan servicing would solve the problem. However, isolating TIVAS is counter-productive. Not only are student loan servicers not the greedy profiteers they are made out to be, but there is no reason to believe the government would be more cost-effective at loan administration. Further, there is no evidence that expanding the federal role in student loan administration would do much to relieve the existing student debt burden.

Instead, Congress should work with TIVAS and GAs as partners as they work to reform the federal student aid program. Just as the issues surrounding the student debt burden are systemic, so too must be the solution. Pointing fingers at a select few accomplishes little, even if it does sound good during election season.

If there is any take-away from yesterday’s hearing, it is that student loans have become the latest issue in need of greater awareness and education concerning all of the aspects. There are over 80 million young Americans under age 20 that are counting on policymakers to get the federal aid system right for when they invest in college. Luckily, since the re-authorization of federal student aid programs is almost certain to get postponed for yet another year, it is not too late.

This article was originally posted by The Hill, read it on their website here.

College – Worth it or worth less?

Posted on March 26, 2014September 18, 2024 by The Progressive Policy Institute

College has never been worth so much – or so little.

New research from the Pew Center shows the wage gap between those with a college degree and those without is at an all-time high. Moreover, the college wage premium has actually been widening. Yet at the same time, real average earnings for young college graduates are at historic lows – down 6 percent from 2007 levels, even as the labor market recovers. Average student debt per borrower has climbed to a staggering $29,400.

Does this double-sided truth about the “value” of college mean that today’s four-year model is sustainable, or is it a sign that change is coming?

At first blush, one might conclude that going to college – specifically a four-year college – is a necessity. But that misses the point of what’s actually driving the wage gap between college and non-college grads, something that young college graduates already know – that not all of this boost is because of a lift-off in the bachelor’s degree job market.

In reality, a college degree is worth “more” in large part because a high school diploma is worth so much less. My research shows college graduates, particularly recent graduates, are increasingly taking lower-skill jobs at the expense of their less educated peers. Because many new jobs being created are low-skill instead of middle-skill, college graduates are getting first dibs, squeezing those with less education from the workforce.

Even worse, the price to compete for these lower-skill jobs is getting higher. As college becomes less affordable, and the labor market less generous, fewer people are able to buy the seemingly only ticket in town for success. New Fed data shows outstanding student debt increased $53 billion in the last 3 months of 2013 alone, with student loans dominating all new borrowing by young Americans under 30 in 2013. Succeeding in today’s higher education model allows for little margin of error: either you make the sacrifice and get the four year degree, or it’s game over.

No group epitomizes the failings of the current college system more than those who enrolled in college but failed to graduate – college drop-outs. Though often left out of the conversation, the latest figures show that the average four-year completion rate for those entering four-year colleges was 38.6 percent and that the six-year completion rate is still just 58.8 percent (rates are lower for two-year schools, but many transfer to other institutions). Minorities and low-income Americans are even less likely to complete college, exacerbating already growing inequality.

College drop-outs face the worst struggle of all. On average, they make little more than those with a high school diploma but are still saddled with thousands in student debt. They are at the highest risk of defaulting on their student loans, by some estimates up to four times more likely than graduates. They are the most vulnerable in terms of financial security, from slipping into a hole they cannot climb out of.
The large share of college drop-outs is evidence that the current structure of postsecondary education as the main vehicle for workforce preparation isn’t working.

Their fate is also an indication that the future of college may – and should – look very different. The ongoing revolution of low-cost, high speed broadband makes education more accessible, affordable, and customizable. This, coupled with decreasing returns on the four-year college model, should lead to more post-secondary pathways into the workforce (such as German-style “apprenticeships”). These alternative pathways have the potential to be just as effective at preparing people for the world of work, except at a lower cost. The nature of today’s innovative data-driven economy means preparing for tomorrow’s high-skill, high-wage jobs will naturally include digitally-oriented training and a dynamic curriculum.

The ideal post-secondary system of the future should correct some of the biggest workforce challenges facing Americans today. These are Americans who are unable to afford college, or who don’t want to take on thousands in student debt to succeed.

One way this could happen is if the current four-year model of college becomes one of several options after high school. Instead, what we could see is employers becoming better integrated into the workforce preparation process, as current workforce demands are unmet and training becomes a lower cost proposition that can be virtually administered. We may also see a renaissance in vocational training, which can cost-effectively prepare workers for well-paid technical and even computer and data-driven jobs. Industry certifications could take the place of a degree. It may be that only a few will pursue a four-year degree, much like a doctorate-level credential is pursued today, in specialty fields.

Still, wholesale change is unlikely to happen quickly, so long as the generous federal student aid system in place prolongs the current college model. The federal government administers more than 90 percent of new student aid – to the tune of more than $100 billion annually – but demands little accountability on the part of institutions and borrowers in terms of graduation rates and employment success.

For the millions of young Americans who’ve already been left behind, reform can’t come soon enough. That’s why the conversation to rethink college must begin now.

This piece is cross-posted from Republic 3.0.

Cuomo schools De Blasio

Posted on March 10, 2014 by The Progressive Policy Institute

“We will save charter schools,” New York Gov. Andrew Cuomo (D) assured thousands of students and their families at a recent rally in Albany. Save them from whom, you wonder? From another Democrat, New York Mayor Bill de Blasio.

The rift between these bull elephants of New York politics isn’t personal. Rather, it illuminates simmering tensions between the Democratic Party’s reform and “populist” camps.

De Blasio thrilled the latter by campaigning last year against the Big Apple’s growing inequality, and vowing to tax the rich to pay for pre-school for low-income kids. Many on the Democratic left see him as just what they’ve been waiting for — an unapologetic champion for a new politics of economic and racial justice.
When it comes to charter schools, however, de Blasio sounds more like the paleoliberals of the 1970s and 1980s, whose distaste for reforming broken public sector systems — urban schools, welfare, public housing – did much to discredit Democrats in the voters’ eyes.

The flap began last week when the de Blasio administration withdrew permission (granted by its predecessor, Michael Bloomberg) for three charter schools to share space with schools run by the school district. The target of this eviction notice is Success Academy, a nonprofit network of charter schools, all of which are co-located with district schools. It’s run by Eva Moskowitz, a sharp-elbowed former city councilwoman who has opened 22 schools in mostly poor neighborhoods over fierce resistance from the city’s education establishment and its political allies.

De Blasio objects to co-location because he sees charters as free riders on the traditional school system. During the campaign, he said Moscowitz’s schools must “stop being tolerated, enabled, supported” by the city’s Education Department. And it’s not just space; the mayor also has shifted $210 million from a charter school expansion fund he inherited to other purposes.

De Blasio’s visceral aversion to the city’s charters is strange on several levels. First, it ignores the fact that, far from being invasive parasites on the district schools, charters are public schools too, even if they aren’t controlled by the central bureaucracy. They must take all comers (space permitting) and they receive significantly less in public money per each student ($13,527) than the district schools ($19,000). The mayor apparently believes that because charters solicit funds from private foundations and philanthropists, they aren’t truly public schools, and they are rolling in dough. Most aren’t, but in any case what’s so terrible about using private donations to improve urban schools?

Second, whereas the city provides buildings to all of its traditional schools, charters must find and pay rent on their own space. The facilities challenge, in fact, has been a major constraint on charter growth nationally. Take Washington, D.C., where nearly half the students are enrolled in charters. As a D.C. charter school authorizer, I was struck by how much time and energy school leaders spend on trying to find suitable and affordable space — even though the city is awash with vacant school buildings.

Third and most important, many charters are giving impoverished minority students what they’ve been denied too long — a quality education. Success Academy Harlem, one of the charters de Blasio wants to expel, had the highest-performing 5th graders in New York’s state math assessment last year. At the district school it shares space with, only five percent of the students passed the test.

So why do self-proclaimed “progressives” want to punish schools that are doing a good job of educating disadvantaged kids? The conventional answer is that they are carrying water for the adults in the traditional system — especially teachers unions. That’s often true, but there’s another explanation: Populists have a genuine ideological bone to pick with charters, because they inject market concepts of choice and competition into public education.

Progressive education reformers are more pragmatic. What matters to them is closing achievement gaps, not preserving the centralized, one-size-fits all model for school governance. For them, the “public” nature of public education lies not in a uniform school system, but in a commitment to uniformly high standards for all students. What charters offer, reformers say, is room for innovation and diversity within public education. Above all, they offer accountability for results. When charters don’t succeed, they can and should have their charters yanked. De Blasio, on the other hand, wants a moratorium on closing failing district schools.

The progressive reform camp, fortunately, has some formidable assets: Bill Clinton, who first put charters on the national agenda two decades ago; President Obama and Education Secretary Arne Duncan; lots of Democratic mayors, governors and legislators in the 42 states that have charter schools; and, legions of black and Hispanic parents who are demanding better schools for this kids.

Oh yes, and Andrew Cuomo, who vowed to make sure the city’s charters have “the financial capacity and physical space and government support to thrive and grow.” Thus did the governor school the new mayor in what it really means to be a progressive.

This article originally appeared in The Hill, you can read it on their website here.

Financial Times: Barack Obama battles a sense of drift on State of the Union goals

Posted on January 28, 2014 by The Progressive Policy Institute

Barney Jopson writing for Financial Times quoted Michael Mandel, PPI’s Chief Economic Strategist, this morning. Jopson’s article reflected on the President Obama’s accomplishments of 2013 in an effort to project the substance of tonight’s State of the Union address. The article discusses the President’s successes and failures at passing legislation since his last address, Mandel comments that:

Michael Mandel, chief economic strategist at the centrist Progressive Policy Institute, says the president should get credit for the result regardless of how it was achieved.

Read the entire Financial Times article here.

How Young People are Being Left Out of the Economic Recovery

Posted on January 27, 2014 by The Progressive Policy Institute

The latest unemployment figures seem promising for the young, but peeling back the numbers reveals that those without college degrees are being left out of the job market.

From the looks of it, young Americans are finally on their way to economic recovery. The latest jobs figures show unemployment for young Americans—those age 16-34—fell to 10.5 percent in December, down from a high of 15.1 percent in November 2009 and by a full 2 percent since last summer.A closer look, however, reveals not all young Americans are sharing equally in the labor market recovery. In fact, some young Americans are hardly experiencing a recovery at all. And many that are seeing a rebound in their economic fortunes still have a long way to go.Happily it doesn’t have to be all doom and gloom. There are ways policymakers can help struggling young Americans reclaim their future, starting with making their plight a bigger priority in 2014.As it has been for years, young Americans with a college degree are much better off than those without one. The stark contrast is evident when looking at labor force participation rates, which is the share of the population that is counted as employed or unemployed. For young Americans with a post-secondary degree, labor force participation rates have been stable since 2010, but for those with some college or only a high school diploma, rates continue to fall. For young Americans without a college degree, it appears unemployment is falling at the expense of labor force participation.Still, as young college graduates are all too aware, a four-year college degree is no longer a guaranteed ticket to financial success. It turns out that those with a college degree are finding jobs, but increasingly ones that are lower-skill. The result is a rise in underemployment and historically low real earnings. In 2012, young Americans age 18-34 working full-time with a bachelor’s degree earned about $54,300, in real terms. This is only slightly higher than the 16-year record low set in 2011, and in annual terms remains $3,300 below where it was pre-crisis in 2007.

Adding insult to injury is the rising student debt burden, about 90 percent of which comes from a decades old federal aid system that needs reform. Under the current system, college students are essentially stuck in the middle of a game of chicken between generous federal aid and rising college tuition. For example, the “historically low” increase in college tuition last year was still three times the average increase in real earnings for young college graduates in 2012. With average debt levels now at a staggering $29,400 per borrower, many young Americans and their parents are understandably rethinking the value of a college education.

As tough as young college graduates have it, this is still far better than the reality of young Americans without a degree. New PPI research finds that the unemployment rate for young Americans age 16-34 with only a high school diploma, though falling, remains over 14 percent, compared to 5 percent for young college graduates. Worse, real average annual earnings for young Americans with only a college degree were just $32,900 in 2012, still about 4 percent lower than real earnings in 2007.

Fortunately, opportunities exist for policymakers to help. With a concerted effort, we can design policies that directly target young Americans in and out of school and encourage better alignment of the skills of young Americans have with the needs of employers. This may include comprehensive education reform, redefining post-secondary education and training, addressing the rising cost of college and student debt, and promoting investment and asset building activities.

For example, over the next year, the Higher Education Act (HEA) is coming up for reauthorization. HEA could provide policymakers with an opportunity to reaffirm the value of college, by using the administration of federal student aid to encourage alternative forms of higher education. Going to a four-year college is so ingrained in society it seems to be the only acceptable option after high school; there is now almost one four-year college for every U.S. county. As a result, poor performing colleges get a free pass that doesn’t do anyone any favors—especially their graduates.

The first step to helping young Americans in 2014 is to convince policymakers to take their economic struggles seriously. If policymakers use the start of a new year as a new start for young Americans, 2014 could be a better year for all 80 million young Americans. Moreover, it could lay the groundwork for economic growth and prosperity in America for years to come.

This piece was originally published by The Daily Beast, you can read it on their website here.

Young Americans: Is Recovery Coming?

Posted on January 16, 2014 by The Progressive Policy Institute

Young Americans – the 80 million Americans age 16-34 – have had a rough recession and an almost non-existent recovery. This is reinforced by the latest jobs report, which shows unemployment falling at the expense of labor force participation, now a historically low 70.9 percent. For young Americans age 16-24, labor force participation is just 54.8 percent. Looking ahead, is recovery ever coming?

Four telling facts about jobs and wages for young Americans suggest a labor market recovery is coming, although it will be gradual and uneven by educational attainment. Specifically, young Americans with a postsecondary degree are more likely to be employed, but the nature of their employment suggests they are taking lower-skill jobs at the expense of their less educated peers. These facts also suggest there is more that policymakers could be doing to boost young Americans’ long-term economic and financial well-being.

Read the full brief, including three charts and a table on young Americans in the recovery, here.

Is PAYE Paying for the Wrong Higher-Ed Model?

Posted on November 1, 2013September 18, 2024 by The Progressive Policy Institute

Universal adoption of today’s high-speed, low-cost broadband could move the current higher education model into the 21^st century. But are federal student aid programs like Pay As You Earn (PAYE) – a student loan repayment plan based on borrowers’ annual incomes – delaying the industry’s transition?

Quite possibly. One potential consequence of Pay as You Earn (PAYE) is that it enables colleges to transfer the cost of less effective industrial organization to taxpayers, allowing them to maintain status quo practices. The result of less effective higher-ed administration, during a time of rising enrollment, is higher costs. As I explain in my new FAQ sheet, PAYE gives colleges and universities no incentive to curb excessive increases in tuition, because there is no accountability.

Instead of managing tuition, through harnessing the power of broadband to provide mass education and workforce training at lower cost, more colleges are relying on federal aid and debt repayment programs like PAYE. That’s why we are starting to see more schools like GW admitting to “need-aware” admissions policies, and schools like Georgetown taking obvious advantage of the current federal student aid system and income-based repayment plans. And that’s why we are seeing the dramatic rise in outstanding student debt, along with reports of the long-term financial strain it is placing on young Americans.

This week, I spoke on a panel at the Urban Ideas Forum 2013 on “Advancing a Broadband Agenda for Urban America,” that covered the importance of broadband in spurring economic growth and innovation. The key takeaway was that the power of broadband, and the tremendous potential economic and social benefits it can facilitate, will only be possible if adoption is universal.

But realizing the full potential of broadband means the post-secondary education industry must buy-in through systemic adoption. The post-secondary education industry is fast approaching a fork in the road: either it can maintain its role as the premier workforce preparation vehicle, or it can lose competitiveness to alternative sources of post-secondary training provided at lower cost. The first requires the industry to realign itself more closely with the needs of employers, and to cut costs by integrating the power of broadband into its education model. The second is inevitable if the industry maintains its status quo practices, most predominately at second and third tier four-year institutions.

Decision-making time for U.S. colleges and universities is coming, in spite of federal student aid and programs like PAYE. The latest report from the College Board shows average tuition at four-year public universities for this academic year rose at twice the current rate of general inflation, and the difference was even greater at four-year private universities. With rates like this, how long will it be before another provider of workforce training swoops in at lower cost, or before consumers – students – look elsewhere?

Real Earnings for Young College Grads Rose in 2012

Posted on September 18, 2013September 18, 2024 by The Progressive Policy Institute

Finally some good news for young college grads – in 2012 their real average annual earnings increased for the first time in six years. New data reveals average annual earnings for college graduates age 25-34 working full-time increased 0.9 percent in 2012, in constant dollars.

The turnaround could represent a major shift in the fortunes of young grads, who have seen their real average annual earnings fall by 15 percent since 2000. A bottoming out of this precipitous decline is welcome news to current and recent college graduates struggling to balance paying off student loans with gaining financial independence.

However, this good news should be met with cautious optimism. The same data also shows that real average annual earnings of all college graduates continued to fall in 2012. As shown in the chart below, real average annual earnings for people age 18 and over working full-time with a Bachelor’s degree only fell 2 percent last year, now almost 10 percent below 2000 levels. The fact remains that people with a college degree (and only a college degree) continue to have a tough time in today’s labor market.

That real earnings for all college graduates continued to fall suggests young college graduates aren’t yet in the clear. Young college graduates epitomize the today’s middle-class – they typically work in middle-skill jobs that pay average wages. It follows that young college grads were one of the groups worst affected by the financial crisis and the decade-long hollowing out of middle-skill jobs. Since their wages have fallen significantly more than their older college graduate peers, the turnaround could be an early indicator of labor market recovery for the middle-class or it could simply reflect they have much further to climb. Continued downward pressure on earnings of all college graduates won’t help sustain this momentum.

That means many challenges remain for young college graduates, in spite of this turnaround in earnings. The most recent figures show over half of recent college graduates are underemployed or unemployed, a historical high. The downward pressure on earnings from “The Great Squeeze” – the economic reality that college graduates are increasingly forced to take lower skill jobs for less pay – was exacerbated by the recession but started well before. Once a college graduate starts on a slow-growth career trajectory, it can be very hard to catch up financially.

The economic obstacles afflicting young college graduates will be difficult to truly reverse unless there are fundamental changes in how we prepare and train our workforce. Given how much lost ground real earnings for young graduates still have to recapture, and the importance of investing in a college education in today’s economy, that means policymakers would be well-served to make such reforms a bigger priority.

Can Obama Redefine the Role of College?

Posted on August 23, 2013September 18, 2024 by The Progressive Policy Institute

President Obama’s speech in Buffalo yesterday launched a new conversation on the role of higher education as a platform for social and economic mobility. The speech represents a major policy shift on higher education policy toward a performance-based funding approach that holds colleges accountable for how graduates do in the job market. Though it is true such a formula for assessing college performance may be imperfect, changing how colleges think about their role in workforce preparation is essential. For young Americans to succeed in today’s global economy we must smartly invest in higher education that will enhance our competitiveness.

In the speech, President Obama finally acknowledged the current structure of the federal student aid program – a structure that now doles out over $100 billion in new loans annually while asking few questions – is unsustainable. In this context he unveiled a new proposed strategy for federal student aid distribution that holds both colleges more accountable by creating a new ranking that rewards schools for low student debt levels and high job placement rates. Students will also be held more accountable by having to show good grades from the year before to get next year’s loans.

President Obama is right to propose drastic changes to the federal student aid program. Federal aid for higher education has quadrupled in size over the last decade, yet the program itself remains essentially unchanged from its establishment in 1965. And now is the right time: the Higher Education Act, the legislation that determines eligibility criteria for federal student aid programs, is set for reauthorization at the end of this year. Hopefully this new proposal sets the tone for a serious review of current programs.

The current federal student aid party cannot go on forever. Doling out essentially unlimited federal aid to colleges will only delay an industry reorganization and consolidation that is both necessary and inevitable, especially at second and third tier schools. In its current form federal student aid subsidizes ineffective schools and transfers those costs to its graduates, who likely will struggle most to repay the average $26,000 per borrower student debt. The fact that President Obama reckoned the government would end up footing the bill for these schools shows he probably agrees. It’s time for higher ed to fully embrace the cost-saving education technology revolution that is finally gaining traction.

Early dissenters of the proposed changes to federal aid distribution, including the American Council on Higher Education, a major higher ed lobbying group, are concerned the ranking will overemphasize college’s role in job preparation. But isn’t that exactly what college’s major role is, and what colleges should be held accountable for? Perhaps such dissenters should explain their view to the 50 percent of young college graduates who are currently underemployed or unemployed and try again.

Can US Hold Its Lead on 3D Printing?

Posted on August 23, 2013September 18, 2024 by The Progressive Policy Institute

Everyone is abuzz about 3D printing. President Obama gave it a shout out in his most recent State of the Union address. The Economist hailed it as a harbinger of a “3rd industrial revolution.” UPS is putting 3D printers in its retail stores. Some analysts think it’s the key to reviving advanced manufacturing in America.

With 60% of the global market, there’s no doubt that U.S. firms dominate the fledgling market for 3D printers. But as with other breakthrough technologies hatched in America, there’s no guarantee that our competitors – yes, especially China – won’t catch up and eventually surpass us. After all, China is a manufacturing powerhouse that desperately wants to move up the value chain, and has few scruples about filching U.S. technology.

Although 3D printing is still in its infancy, Washington needs a strategy for maintaining U.S. leadership as other countries strive to catch up. Its key elements should include robust public investment in 3D research, and beefed up safeguards against intellectual property theft. Continue reading “Can US Hold Its Lead on 3D Printing?” →

Unpaid Internships Aren’t so Black and White

Posted on August 8, 2013September 18, 2024 by The Progressive Policy Institute

Does having a paid internship make the difference between getting a job and sitting home after college? It depends.

Unpaid internships have been criticized as a waste of students’ time, effort, and money. Now it appears holding an unpaid internship won’t even help a student on the job market. An upcoming study from the National Association of Colleges and Employers (NACE) on the graduating class of 2013 found 63.1% of graduating college students who had paid internships received a job offer, compared with 37.0% of those who took only unpaid internships and 35.2% of students who had taken no internships.

However, although job offers may seem like a straightforward measure of an internship’s impact, but the reality is not so black and white. There are many factors that influence whether a college graduate has a job offer at graduation, of which internships are just one. Moreover, there is also a wide variety of internships, and an equally diverse number of reasons students chose to take them.

Certainly not all internships are created equal. For some employers, internships are explicitly used as a screening process for new hires. These employers may invest more time and effort to see which interns would make good employees, and so provide interns with substantive tasks and compensation.

Such ‘screening’ internship programs make the most sense for employers who continually need new hires with a technical skill set. So it is little surprise that the majority of paid internships are for majors who are typically hired in large numbers at entry-level. As the chart below shows, engineering majors, computer science majors, engineering technology majors, and business- related majors were far more likely to have a paid internships- with comparatively high wages- than other majors. The data is from Intern Bridge’s 2012 survey of college students.

But by itself this chart can be misleading. Some majors’ career paths are inherently different than others, and this is not reflected in either the Intern Bridge or NACE data. For example, neither one reports the percent of students who intend to go straight to graduate school rather than enter the workforce. For some students, the primary purpose of an internship is not to receive an immediate job offer, but rather to build a professional network or explore a particular field of work.

The reality is the payoff for participating in an internship – whether paid or unpaid – varies from student to student. The greatest benefit of an internship is not measurable in wages, but by how much it furthers a student’s career aspirations. It would be a mistake for college students to use the NACE and Intern Bridge survey results as an excuse to sit home and do nothing. That will almost assuredly hurt their job prospects.

No Recovery for Young People?

Posted on August 5, 2013September 18, 2024 by The Progressive Policy Institute

In July 2013, just 36 percent of Americans age 16-24 not enrolled in school worked full-time, 10 percent less than in July 2007. It’s no secret that young people are struggling economically, but my analysis of Friday’s BLS release sheds light to what extent. The fact that so many young people are not realizing their true earnings potential in these formative years could have serious long-term consequences.

Friday’s numbers are the latest sign the recovery is passing young Americans by. The below chart shows the share of young Americans not enrolled in school working full-time fell with the recession and have yet to return to 2007 levels. This is true even if we divide it by age – that is, for both young Americans age 16-19 and age 20-24 not enrolled in school in July.

While the initial drop in full-time employment is not surprising, what is startling is that is that either age group is showing much, if any, improvement since the recovery began four years ago. The same trend holds even if we look at months where more students are enrolled in school (i.e., January). The non-recovery is also true if we look at total employment and overall labor force participation.

What’s more, education matters in how likely young people are to work full-time. As shown in the next chart, for those with less than a high school diploma, 14 percent worked full-time, compared to 66 percent with a Bachelor’s degree or higher. This re-emphasizes the importance of higher education in successfully finding full-time work in today’s economy.

Of the 17 million Americans age 16-24 not enrolled in school or working full-time in July 2013, 5.6 million were working part-time, 3.2 million were unemployed – a 17.1 percent unemployment rate – and another 8.4 million were not in the labor force altogether.

Together, these charts suggest the problem facing young Americans is structural. If worsening labor market conditions were a temporary effect of the recession, we would have expected to see improvement with the recovery. Instead, young Americans appear stuck in their post-recessionary state.

What could be behind the stubborn labor market for young Americans? One explanation is the Great Squeeze, which I’ve written about before. The dearth of middle-skill jobs is forcing workers unqualified for today’s high-skill, high-wage jobs to take lower skill jobs for less pay, squeezing those with less education and experience down and out of the workforce.

The struggles facing young Americans should not be ignored. It’s clear the policies in place now to prepare and integrate young Americans into the workforce are not sufficient. If we are serious about moving from a slow-growth economy to a high-growth economy, it’s something policymakers will have to address.

Note: For those interested in the effect of rising college enrollment on overall labor force participation of young people, there are several points to consider. One, in July most college students are not enrolled, and would be counted here. Second, the number of young Americans age 16-24 not enrolled in school and not working continues to rise. In July 2007 labor force participation for this group was 73.3 percent; in July 2013 it was 68.8 percent. Third, college enrollment has actually been falling for the last two years, with the decline actually accelerating. Finally, many college students also work. According to the same BLS data 42 percent of people age 16-24 enrolled in school also were in the labor force in July 2013.