Showing posts with label College Board. Show all posts
Showing posts with label College Board. Show all posts

Sunday, April 12, 2015

The Urban Institute's Sandy Baum: Is She a Bag Man for the Higher Education Industry?

My favorite scene in the movie Michael Clayton is a dialogue between Michael Clayton (played by George Clooney), who is a lawyer in a 600-person law firm, and Arthur Edens (played by Tom Wilkinson), a senior partner in the same firm.

Edens is a manic depressive handling a major piece of litigation for an international corporation accused of intentionally marketing a product that causes people to get cancer. During depositions, Edens has a manic episode and his continuing bizarre behavior threatens to expose the corporate client's skulduggery, potentially costing it billions.

The firm's senior partner directs Clayton to get Edens under control, and Clayton talks to him very persuasively, while implicitly threatening to have him committed to a mental institution.

But Edens is having none of it.

"Michael," Tom Wilkinson's character kindly says to George Clooney's character, "I have great affection for you and you live a very rich and interesting life, but you're a bag man not an attorney."

If I ever meet Sandy Baum, I'm tempted to say very much the same thing. Baum is a senior fellow at the Urban Institute and a highly respected analyst of higher-education finance. For many years, she has co-authored the College Board's annual publications Trends in Student Aid and Trends in College Pricing; and she has conducted studies on college costs for the Brookings Institution. She has a Ph.D. in economics and is a research professor at George Washington University, a position she holds while working with the Urban Institute. Very impressive.

Over the years, Sandy Baum has emerged as one of the leading apologists for the higher education industry. Everyone knows that college costs have skyrocketed and that the federal student loan program is totally out of control. Millions of people have defaulted on their loans and millions more have obtained economic hardship deferments that excuse them from making student-loan payments.

Nevertheless, Sandy Baum coos soothingly that college costs are really not as high as they seem to be and, in any event, rising costs are not the fault of the colleges and universities. In 2013, Baum co-authored a report for the College Board that actually argued that college costs have not gone up much at all. It is true, the College Board acknowledged, that the sticker price for attending college has gone up significantly over the past ten years. But when discounts, grants and tax benefits are calculated, the real cost that students pay has remained virtually steady over the past decade. In fact, according to the College Board (as reported in the New York Times), when adjusted for inflation, the net cost of attending college (looking only at tuition and fees) has actually gone down over the past ten years.

Indeed, as Sandy Baum told the New York Times, "I think the hand-wringing about the trend [in college costs] is greatly exaggerated."

And--if there has been an increase in college costs, it is because the states have cut back on their support for higher education. "So it's not that colleges are spending more money to educate students," Baum told NPR radio. "It's that they have to get that money from someplace to replace their lost state funding--and that's from tuition and fees from students and families."

So which is it, Sandy? Has college tuition gone up due to reduced state funding or have costs not gone up after adjusting for inflation, grants, and tax benefits?

And if everything is under control, why did Baum praise President Obama for encouraging students to sign up for long-term income-based repayment plans--plans that can extend the student-loan repayment period to 20 or 25 years? In fact, Baum even recommended that long-term repayment plans be the "default option" for college students who take out student loans.

Paul Campos, in a New York Times op ed essay, challenged the notion that the states' support for higher education has gone down, which is the standard reason the higher education industry gives for rising college costs. According to Campos, "[P]ublic investment in higher education in America is vastly larger today, in inflation-adjusted dollars, than it was during the supposed golden age of public funding in the 1960s." 

Campos thinks a major explanation for rising college costs is "the constant expansion of university administration." Campos cites data that administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which is reportedly 10 times the rate of growth for tenured faculty positions.

In my opinion, Campos' analysis of college costs is more accurate and helpful than the self-serving explanations that are offered by the higher education industry and the entities that issue reports that align with its interests--the College Board, the Urban Institute, and the Brookings Institution.

Campos is right. An increase in the number of administrators is at least part of the reason for rising college costs. And a lot of those administrators are making too much money, particularly when their salaries are compared to the salaries of the faculty members who are actually teaching students.

References

Sandy Baum & Michael McPherson. Obama's Aid Proposals Could Use a Reality Check. Chronicle of Higher Education, August 26, 2013. Accessible at: http://chronicle.com/article/Obamas-Aid-Proposals-Could/141265/

Paul Campos. The Real Reason College Costs So Much. New York Times, April 5, 2015, Sunday Review Section, p. 4.

College Board. Trends in College Pricing 2013. Accessible at: http://trends.collegeboard.org/college-pricing

Andrew P. Kelly(2013, October 24. New data on tuition prices: Is it possible it's even worse than we thought? AEI Ideas blog. Accessible at: http://www.aei-ideas.org/2013/10/new-data-on-tuition-prices-is-it-possible-its-even-worse-than-we-thought/

Richard Perez-Pena (2013, October 25). Despite Risking Stick Prices, Actual College Costs Stable Over the Decade, Study Says. New York Times, p. A14.

Note: Quotes by Sandy Baum come from the Perez-Pena article or the Campos essay, both of which appeared in the New York Times and are cited in the references.

Tuesday, October 29, 2013

Things Universities Don't Want to Talk About: It's Time for a Freedom of Information Act for American Colleges That Participate in the Federal Student Loan Program

LSU President King Alexander recently told a Rotary Club audience that the cost of attending Louisiana State University is very reasonable.  For the many students who receive one of Louisiana's TOPS scholarship, the cost is only about $1,000 a year for housing and other costs, according to President Alexander.
LSU President King Alexander:
It only costs a TOPS student a thousand bucks a year to attend LSU.  Really?
But that's not accurate. In a letter to the editor of the Baton Rouge Advocate, Elizabeth Welsh, a Baton Rouge homemaker, corrected LSU's president.  The true cost for a TOPS student attending LSU is between $2,000 and $3,000 per semester, Welsh pointed out--at least four times President Alexander's figure. 

How did Ms. Welsh figure out Alexander's numbers were wrong? By drawing on her family's own experience with a child in college and by looking at housing costs posted online at LSU's web site.

President Alexander's recent misstatement is just another example of the modern university's tendency to hide the truth.  LSU, after all, is the same university that refuses to disclose the names of people who applied for the LSU president's job that Alexander now holds.

Some more examples? George Washington University recently admitted that it had not told the truth when it represented that it had a needs-blind admission policy.  Sorry about that.

UC Davis refused to explain the circumstances under which Lieutenant John Pike, the guy who pepper-sprayed non-offending students in November,2011, left university employment.  Was he fired? Did UC Davis pay him off? Who knows? UC Davis won't talk.

And then there's Ohio State University, which was embarrassed to disclose how much it was paying OSU President Gordon Gee.  It took an Ohio newspaper about a year to pry that information out of the university after it filed a Freedom of Information request.

And remember Harvard Law School's refusal a few years ago to disclose which of its professors was a Native American, although it represented that one faculty member was an Indian? Why the reticence? I suspect it was because it was counting Professor Elizabeth Warren as a Native American, when in fact she is not.  Oops!

Finally, there's the College Board, which speaks for higher education in general.  In a report issued earlier this month, it actually represented that the cost of attending a private nonprofit college had  gone down over the past ten years, in spite of the fact that tuition at a private college has gone up almost every year for the past 30 years.

How did the College Board justify that whopper?  By distinguishing between the sticker price of attending college (going up) and the so-called net price, which the College Board said has gone down a bit after tax benefits, grants, scholarships, and inflation are taken into account. Of course not every student gets those scholarships, grants, and tax breaks.  You--Mr. and Ms. sucker--are probably paying the sticker price.

Why do colleges and their constituent organizations continually hide the facts about their activities? Two reasons.  First, they are accountable to no one and don't care if they get caught in a misstatement or an embarrassing activity. Do you think King Alexander cares about being corrected by a Baton Rouge homemaker?

Second, the upper echelons of American higher education are contemptuous of the American people.  Like Colonel Jessup who screamed "You can't handle the truth!" in A Few Good Men, they don't think Americans deserve to know the facts about the way their universities are being run.

That's why we need a federal Freedom of Information Act that requires all colleges and universities receiving federal funds to publicly disclose a whole range of their activities including the way they choose their executive leaders, their affirmative action practices, their admissions policies, and the way they distribute scholarships and student aid.

Until they are required by law to do so, American universities will continue to behave like Lois Lerner, the IRS administrator who assured Congress she had nothing wrong and then took the Fifth Amendment.
 
Lois Lerner of IRS
Not taking any questions

References

Koran Addo. LSU President calls for reinvestment in higher education. The (Baton Rouge) Advocate, October 17, 2013. Accessible at: http://theadvocate.com/home/7336360-125/lsu-president-calls-for-reinvestment

Elizabeth Welsh. LSU cost numbers don't add up. The (Baton Rouge) Advocate, October 29, 2013, p. 8B.

 

Sunday, October 27, 2013

Only suckers pay the sticker price. The College Board says college costs at private colleges went down over the past 10 years. Really?

I think the hand-wringing about the trend [in college costs] is greatly exaggerated.

                                                  Sandy Baum, College Board

Year after year, College Board faithfully delivers two messages.  First, college is a fabulous investment when you consider the life-time difference in earnings between college graduates and high school graduates. 

Second, a college education does not cost as much as most people think it does. In fact, last week the College Board issued a report that said the inflation-adjusted cost of attending a private college is actually cheaper than it was ten years ago!  That's right. Even though college costs have risen faster than the rate of inflation for the past 30 years, the cost of attending a private college actually went down over the past ten years, according to the College Board.

Sandy Baum of College Board
It is true, the College Board admitted, that the sticker price of a college education has gone up over the past ten years, but only suckers pay the sticker price. When grants and tax benefits are calculated, the so-called actual price is only 57 percent of the sticker price. Adjusted for inflation, the net price has remained virtually unchanged from what it was 10 years ago.

To put it another way, college costs haven't gone up that much for some groups of people.  Colleges grant huge discounts to preferred customers.  Applicants with high SAT scores get scholarships or grants, because these students help raise colleges' rankings by the various rating entities like U.S. News and World Report.

And low-income students are eligible for Pell Grants.  As Andrew Kelly pointed out in a recent blog, Pell grant spending more than doubled between 2008 and 2011, growing from $16 billion to $37.5 billion in just three years.  The number of Pell Grant recipients grew by more than 80 percent between 2006 and 2012. 

And let's not forget affirmative action.  Not only do the leading colleges give minority applicants preference for admission, they generally give these students scholarships and grant aid--particularly at the elite colleges.

Who then pays the sticker price--the sucker price--to attend all these expensive elite colleges?  If you are a white person from the middle class with lackluster SAT scores, it's you. Citing a federal study, the College Board acknowledged that families in the second highest quartile of family income saw the cost of attending a private college go up by 8 percent from 2003-2004 to 2011-2012 (as reported by NY Times).

References

College Board. Trends in College Pricing 2013. Accessible at: http://trends.collegeboard.org/college-pricing

Andrew P. Kelly(2013, October 24. New data on tuition prices: Is it possible it's even worse than we thought? AEI Ideas blog. Accessible at: http://www.aei-ideas.org/2013/10/new-data-on-tuition-prices-is-it-possible-its-even-worse-than-we-thought/

Richard Perez-Pena (2013, October 25). Despite Risking Stick Prices, Actual College Costs Stable Over the Decade, Study Says. New York Times, p. A14.