More Flexibility to Raise Tuition?

Central to debates over the New Badger Partnership is the question of whether additional flexibilities that make it possible to raise tuition are desirable.

Evidence can and must be used to make these decisions. A robust, evidence-based debate on our campus is obviously needed but to date has not occurred. Instead, to many of us outside Bascom it seems as though administrators have mostly relied on the input of a few economists and some other folks who work in higher education but are not scholars of higher education. It also seems like seeking advice from those mostly likely to agree with you. (Please--correct me if I'm wrong--very happy to be corrected with evidence on this point.)

It would be wonderful to see a more thorough review of existing evidence and the development of an evaluation plan that will assess positive and negative impacts of any new policy in ways that allow for the identification of policy effects-- not correlations. (Let's be clear: comparing enrollment of Pell recipients before and after the implementation of a policy like the MIU does not count.)

A few years ago I blogged about studies on the effects of tuition and financial aid on individual decision-making. To summarize-- effects of each are relatively small (especially when compared to effects of academic under-preparation, for example) but usually statistically significant. Also, what we call "small" reflects our value judgments, and we must recognize that.

Effects of "sticker shock" are thought to accrue early, such that the "shocked" students end up academically unprepared for college (for example don't even graduate high school) and thus are omitted from the eligible population of students on whom effects of aid and tuition are usually estimated. So hypotheses about sticker shock are very hard to test, partly because a good test requires measuring both the initial "shock" and the resulting behavior many years later (when college enrollment decisions are made).

There are other ways to think about these questions, beyond individual-level analyses. For example, we could contemplate possible effects of tuition hikes and aid increases on overall enrollment (which results from the aggregation of behaviors of many individuals). We could also look at evidence on how common it is for institutions like ours that hike tuition and raise aid to sustain the commitment to that aid over time.

Let's start down that path by examining one study that sheds light on the first of those questions. I will review more such studies in the coming days. My goal is to help facts and figures replace fear as the driving force behind our campus decisions.

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In "Rising Tuition and Enrollment in Public Higher Education" Hemelt and Marcotte examine the relationships between tuition and aid on the one hand, and enrollment on the other. Essential to this discussion, for most of their analyses they disaggregate by type of institution, making it possible to isolate effects on universities comparable to UW-Madison.

Using national IPEDS data on public 4-year colleges and universities from 1991 to 2007, the authors find that on average a $100 increase in tuition and fees (in 2006 dollars) would lead to a decline in enrollment of a little more than 0.25 percent. Since we rarely raise tuition by $100, let's instead consider that a $1,000 increase in tuition would result in an enrollment decline of 2.5 percent.

But most relevant to this discussion, these economists find that the tuition elasticity of enrollment is largest at Research I universities-- and they specifically give the example of UW-Madison. According to these scholars, freshmen at universities like Madison's are "much more" affected by tuition increases than students at other kinds of institutions (for example, freshmen at UW-Stout). (The tuition elasticity is -0.24 at Research I's compared to -.107 on average). And, the average amount of aid received has the smallest effects for students at Research I universities, compared to other colleges (.06 on average, compared to .01 at Research 1's).

In plain English, what does this mean? The consequences of raising tuition are greatest for students at places like Madison, and the benefits of increasing aid are smallest.

Why is this? The authors consider the possibility that students at Madison are not weighing the price of Madison relative to the price of Stout or Eau Claire, nor the price of other Big 10 schools writ large, but rather the price of comparably elite Research I institutions. Restricting their analysis to the top 120 public universities in the country, then, they again find that these students are particularly price sensitive, and particularly aid insensitive.

A few words from the authors: "These patterns in price and aid sensitivity are consistent with students opting out of “top 120” schools for competitors as price rises, while finding a way to pay tuition bills at other state schools where students may have fewer options....The evidence...of higher price sensitivity but lower aid sensitivity at “top 120” and Research I institutions raises general questions about enrollment patterns at public four-year colleges and universities, beyond the implications of tuition on enrollment at single institutions. One implication may be a shift of students from higher income families to private institutions or public universities in other states, along with a shift of students from lower income families to less expensive public universities within the state. This would suggest a redistribution of students across public colleges and universities within a state, with those most financially able leaving the system, and others scaling back to enroll at more affordable
institutions. Obviously, student-level data are needed to test this."

Distributional consequences of tuition policies are too rarely considered, and are not addressed in the NBP.

Sure, consequences and benefits should be put into context-- for example considered against the consequences of not raising tuition. But this paper by respected economists clearly indicates that it is not appropriate to assert that increasing financial aid at institutions like UW-Madison will effectively hold students harmless from the negative effects of tuition increases. Enrollment will be affected, and distribution of enrollment across institutions may be particularly affected. Who will measure those effects? And who will care?

The Stories We Tell Ourselves

Once upon a time, college students could pay their tuition with a mix of family support, financial aid, and perhaps a little work. Today, family support and aid are woefully inadequate for a broad swath of undergraduates, and full-time work is common.

Is working while in college truly necessary? Are the earnings used for academic expenses related to postsecondary education, or are they frittered away on life's pleasures? Since a handful of studies indicate a negative association between working long hours and rates of degree completion, these questions have taken on broader significance.

Unfortunately, few studies track students' income and expenditures in systematic ways. To better understand spending patterns, and attempt to tease out the reasons for those patterns, one would ideally have longitudinal data collected for a large sample of students, and complemented by in-depth interviews with a sub-sample of students to delve more deeply into the reasons underlying decisions, and validate the measures employed. Now true confession: Together with Doug Harris, I am conducting just such a study right now, the Wisconsin Scholars Longitudinal Study. But that's not why I'm writing this-- we don't yet have data to report on.

But apparently someone else does. A few weeks ago, a news outlet reported the headline "Will Work for Beer," covering the release of a new study from the Bureau of Labor Statistics, published in the Journal of Population Economics. In that study the authors used national cross-sectional data and determined that the earnings students make from work are not enough to replace contributions from their parents, or cover tuition costs. According to the report, "We test several hypotheses regarding the financial motives for and academic effects of college student employment and find empirical support for the hypothesis that a decrease in parental transfers increases the work hours of four-year college students. We also find that an increase in the net price of schooling increases the number of hours worked by both four-year and two-year college students."

Ok. So the decision to work may have something (but not everything) to do with how much support parents provides and how expensive college is. Unsurprising. Not particularly newsworthy.

But the lead author didn't stop there. Instead, she waded into popular stereotypes about college students, telling the reporter that the results mean that the drive to work isn't coming from a need to really make ends meet-- instead, "students...work to have ‘beer money,' money for entertainment, money to pay other expenses, just not their tuition."

Huh?

Her conclusion took a gigantic interpretive leap from her data. Notably, it's not a conclusion found anywhere in the actual research paper. All her evidence suggests is that students' work isn't generating income equivalent to parental contributions or in line with college costs. This could mean many things, including that students have a hard time finding enough work to generate sufficient earnings. Of course it suggests they likely need to find other ways to make ends meet-- including loans. But it says nothing about what they use their work earnings for, how they prioritize expenses, what they go without, etc. With her statement to the press, the author did little more than simply impute meaning to meaningless results.

Why mention "beer money"? It's not uncommon for an academic paper to simply say what it shows-- and conclude that while we need to know more about explanations for patterns in the data, we just don't have the information in the dataset to tell us what we need to know. Why step outside those bounds, and lend fodder to the fire? In what way is this helpful-- to policymakers, to students, or frankly, to anyone?

Working students are often struggling students. There's good qualitative evidence on this, even if the quantitative evidence isn't yet available. Professors dislike them because they tend to fall asleep in class, having been up serving on the graveyard shift instead of studying. Their classmates often don't know them well, since student-employees have little time left for socializing. Their grades are lower than average, their stress levels high, and their chances of degree completion relatively low. So why do we feel the need to minimize their need to work, to mock them for it, to enforce a stereotype that their earnings are spent at bars? It seems nothing less than classist-- in the absence of providing students with sufficient financial supports to make working during college truly optional, we try and make ourselves feel better by telling stories that students work not out of true financial need, but rather a desire to imbibe.

Maybe that helps some fraction of folks sleep at night, but I seriously doubt it's grounded in any kind of truth.

Update: Madison Initiative for Undergraduates

Todd Finkelmeyer at The Capital Times offers this update ("UW-Madison chancellor's proposed tuition hike elicits little pushback") on the Madison Initiative for Undergraduates.

At first glance, a key premise of Chancellor Biddy Martin's undergraduate initiative seems absurd. In an effort to make the University of Wisconsin-Madison "affordable to all," she is proposing a tuition increase.

Yet Martin's Madison Initiative for Undergraduates -- the first major proposal of her eight-month-old tenure -- has met with little organized resistance from students, who, in the past, have howled at any attempt to raise the cost of a college education.

"There is a lack of critical thought and a lack of sifting and winnowing, and I'm not sure why," says Noel Radomski, director of the Wisconsin Center for the Advancement of Postsecondary Education, a higher ed think tank based on campus. "Perhaps it's just a reflection, quite frankly, of the lack of true involvement by faculty, staff and students on significant issues on the Madison campus."

The UW System Board of Regents will vote on the proposal at its meeting later this week.

For background on the Madison Initiative from the Education Optimists, click here.

Why I Voted Against the Madison Initiative, by Guest Blogger Dakota Kaiser

Today we feature a post from an undergraduate student at UW-Madison, Dakota Kaiser. Dakota is a rising senior, and recently distinguished himself as the sole member of the ASM (Associated Students of Madison) to vote against the Chancellor's Madison Initiative for Undergraduates. While many if not all students and faculty can find something to like in the proposal, Dakota has taken a stand for reasons that only he can best articulate. Therefore, today he becomes the first-ever guest blogger on the Education Optimists, here to share his views. Welcome, Dakota!

Why did I vote no? First and foremost, as a student representative on ASM, I could not ethically endorse a tuition increase. As a representative from a rural working class background and a transfer student, I don’t believe my constituency supports this proposal. Higher education is on a path to pricing students out of college every year, and I don’t want Wisconsin to follow the trend. The largest piece of evidence provided for this money is the classic bar graph of funding and financial aid for the big 10. I don’t believe pointing to other schools with high tuition and wanting to fit in is a real argument. Pointing to others actions to justify your own didn’t work on the playground as kids, and it shouldn’t work now. We should take pride in our affordability not be embarrassed and quick to change it. I also question whether or not the BIG 10 is really our peer group. When the average Wisconsin high-school student looks at college choices, it's not between UW-Madison and Penn State, it’s between UW-Madison and other UW schools and community colleges.

While this proposal argues that it will increase economic diversity on campus, I believe it will do just the opposite. Low income, first generation, and other students from disadvantaged communities are likely to suffer from sticker shock when seeing the high tuition on a website, pamphlet or other promotional material. Those students who most need the financial aid that this program is designed to create are those students who will not take it into account when making their post-secondary choices. While the administration just released their report (by no coincidence I’m sure) stating that family income has no impact on acceptance to UW-Madsion, I believe that it does affect who is applying in the first place.

Tuition is the last place a public institution should look to solve its problems, not the first. If the administration has spent a serious amount of time trying other methods to fill the gap and accomplish these same goals and then finally had to turn to tuition, this may be a different story. I also believe that many of the goals and proposals in the initiative can be solved with out such a large increase in funds. More funding doesn’t mean better advising, counseling, or instruction. We have no evidence suggesting that these areas are actually damaged, or that more funding will fix them. All we have are some anecdotal accounts, not solid data. Students were rushed to make a decision on this as it was rolled out, followed by only 6 weeks of an all out marketing, and lobbying blitz, with little time to let these ideas actually settle.

We also have been shown no evidence that changes in the area’s proposed will actually provide a better education, and there are no accountability measures or goals to judge success by. When I asked an administrator about how they will judge success in four years, I was told that they will have more faculty members, more advisers, and more services. When I responded that those are all means to the end of a better education, and asked how they would know that those things are actually making a difference, they had no answer.

In the end I believe that this proposal will not produce the intended results, and may harm our institution. In my opinion the average student doesn’t support this initiative, but they have been given no outlet to speak against it. In the one survey produced by ASM less than 20% of students supported the initiative, while over 80% were neutral or opposed. While the rest of student council was able to ignore that fact, and argue that the educated students were in favor of it and that as time goes on more will be too, I could not.

How Much Can Hiking the Sticker Price Hurt Poor Kids?

They just give up. Period.

My husband drew my attention to a new study published in the April issue of Psychological Science in which researchers provided low-income Chicago 7th-graders in two randomly selected classrooms with one of two kinds of information: Classroom A received information about need-based financial aid opportunities, indicating that college was a possibility for them while Classroom B was provided information about the enormous costs associated with a college education, indicating that college was not a viable option (specifically they were told that the average college tuition costs $31,160 to $126,792).

The researchers then assessed students' motivation levels and mentality towards school using questionnaires about goals, grades, and time usage.

The students in Classroom A expected to do better in school and planned to put more effort into studying and homework, compared to the students in Classroom B, who did not view college as a realistic possibility.

In a sensitivity analysis the researchers repeated the study with Detroit classrooms, and changed the second condition from info about college costs to no info at all. Results again indicated that students provided financial aid information had a more open mindset toward their future.

The authors conclude "part of the reason children begin to fall behind is that effort in school is understood to have meaning only when it leads to a path to the future. When the path to college feels closed because of a lack of financial assets, school-focused aspirations and planned effort suffer."

For more, see the work of Daphna Oyserman, University of Michigan.

The Great Debate

What's a university to do in a recession? Use the opportunity to learn how to do less with more? Use it as a convenient excuse to privatize? Stand by your constituents and struggle along with them to build political support?

Right now we're seeing it all. A few examples--

From the Chronicle: Public Colleges Consider Privatization as a Cure for the Common Recession.

In Baltimore: Regents approve tuition freeze for Maryland undergraduates, Out-of-state, graduate students to see increases

But what I'm looking for is a state or university that's using the recession as a chance to focus in on the core questions, which include:
1. What are we doing that is working? At what cost? Given that cost, is it worth it?
2. What are we doing that by no measure is having any impact? What's that costing? Do we have the stomach to stop doing it?

In other words, use this as a time to get focused on cost-effective ways to educate college students--not as a time to grow bigger and broader. Get back to your core mission. As the NY Times pointed out yesterday, right now you've got to live in the house you're in--there's no trading up. There's no upgrade in a recession, especially not one that comes at the expense of students and families.

Postscript: As I finished typing, the following news rolled in. We have a WINNER! Temple University has managed to cut its operating budget by 5% (by consolidating programs, leaving some staff positions vacant, and freezing salaries for nonunion employees) and give half of the savings (nearly $20 million) to financial aid. Tuition will rise only minimally (less than 3%). You go, Temple!

Speaking Of Colleges...

President Obama weighed in on the issue of college affordability and making universities more efficient on Friday, as reported by the New York Times's Caucus Blog ("Obama Chides Colleges To Curb Spiraling Tuition").

President Obama challenged college and university officials on Friday “to put affordability front and center as they chart a path forward.” The president’s not-so-subtle message was that America’s system of higher education should cut waste and inefficiency, just as he has urged America’s government to do, to counter spiraling tuition costs.

Mr. Obama also promised to keep battling to do away with a long-standing federal student-loan subsidy program that he said “lines the pockets of the banks” while costing American taxpayers billions of dollars a year that could otherwise go to direct student aid. His plan has run into serious opposition in Congress, with both Republicans and some Democrats concerned about its ramifications.

The president spoke after meeting with Stephanie Stevenson of Baltimore, a University of Maryland junior, and her mother, Yvonne Thomas. The university of Maryland, the president noted pointedly, has been able to freeze tuition by cutting energy costs and streamlining administrative functions, among other measures. He called on other places of higher learning to do the same.

Photo: Aude Guerrucci-Pool/Getty Images

Bigotry Rears Its Ugly Head

Proposed laws to allow undocumented students to qualify for in-state tuition rates have generated such controversy in recent years that it's downright embarrassing. Legislation like the DREAM Act is intended to make the American Dream possible. Work hard, go to school, and college-- along with a ticket to middle-class society-- will be in your reach. That's what we tell our kids, that's what the president tells the nation, and it's on every billboard and magazine everywhere you look.

Face it: we live in a college-for-all society. Everyone believes it should be easier to get into the college of their choice, and easier to afford it. EXCEPT when it comes to the poorest of our citizens. To them we say: No college for you! (Read it as if the Soup Nazi is speaking).

The 1996 PRWORA welfare reform did this, making it near impossible for moms of young children who need financial assistance to participate in higher education. Now we witness these 'dream' statutes in states like California and Oklahoma, among others. Despite solid evidence that we can increase the college-going rates of Latinos in this country simply by allowing the undocumented among them to enroll in college at in-state rates, too many of our fellow citizens are up in arms about the very idea.

These "college is for SOME, not for all" people are missing a key cause of this recession. Income inequality is not good for the country. It doesn't make you safer, or help you sleep better. Keeping people out of college helps ensure they'll make the lowest of wages, depend on the government for benefits, and have more trouble raising healthier, happier kids. Our goal should be to find cost-effective ways of moving more residents out of poverty-- and giving them a small price break on tuition seems a good way to do that.

Let's be clear--undocumented immigrants aren't going to leave America just because they can't get in-state rates at local colleges. Because of jobs and family ties, they'll continue to live here. But the odds are good that they will never be college graduates. As a result, they'll contribute far less to our economy, and drain government resources more.

But they will STILL BE HERE. Think about it....

UPDATE: Madison Initiative (redux)

Students and families are continuing to weigh in. Here's the latest from Madison-land...

In "Tuition increase simply robbery" James Farrell (class of 1988) writes: "...The proposed tuition surcharge would be better named ...“Martin’s Increase in Undergraduate Debt.” As a parent of a non-resident student, and as a UW alumnus, let me comment on the chancellor’s talent for doublespeak.... although I have been a regular donor to the University since the year of my graduation, I will for the next decade or more consider Chancellor Martin’s “surcharge” as my contribution to the annual fund."

In response to "Taking the Initiative," a generally positive Badger Herald editorial, several students write anonymously:

"According to this, the majority of students will be affected by this tuition hike to bring more faculty and enhance the undergraduate experience. The reality of it is the people hired with this money will do minimal teaching, optimal research, and then the undergrads are out $2500 each year for something that really doesn't affect them. No thanks."

"Maybe you come from a rich family, but many of us don't. Even for families making just over $80,000, this initiative is going to be difficult to pay. Stop judging other people's problems. You just make yourself sound like a spoiled little rich kid. You're probably one of those people who own like 20 pairs of Ugg boots and Northfaces. Honestly, I have no idea who would want to pay over $30,000 to come here from out of state. That's a significant increase and unfair to people who came here thinking tuition would remain significantly less. I would never go to a public university in another state for $32,000 a year!"

UPDATE: Madison Initiative

UW-Madison's chancellor is in the midst of spreading the good word about her Initiative for Undergraduates. On the surface, much of the campus seems supportive.

In private, it's a different story. I received nearly 30 unsolicited emails from students today. Here, is an excerpt from one:

"I went to the Madison Initiative Forum tonight...[The Chancellor] said early in the forum that students should claim independence from their parents (to get financial aid)-- not even considering the tax implications for the parents. One of the administrators walking around during the small groups part heard my group talking about that and got her to correct her statement....There weren't many students present and most of them seemed opposed to the plan. Engineering students were especially vocal on account of their already having to pay differential tuition and all of the faculty benefits going to Letters & Sciences. A lot of people were also skeptical that their additional funds would go to hiring new faculty that would actually interact with undergrads. I came away from the Forum less impressed with the proposal..."


I think the voices of students are quite important in this discussion, and I urge those for the program and those against to make their opinions heard. This is, after all, one of the last remaining universities of the people.

Keeping you posted....

BACKGROUND: "Sifting and Winnowing"

Sifting and Winnowing

UW-Madison Chancellor Carolyn "Biddy" Martin’s Madison Initiative for Undergraduates, pitched as a way to improve both the quality and affordability of undergraduate education, is a deceptively appealing policy. On its face, it appears to be an efficient way to increase UW’s resources while decreasing inequities in access. It does this by taking a substantial step towards a “high-tuition/high aid” model that asks middle and upper-income students and families to pay more of the University’s costs.


In practice, this policy sacrifices equity for excellence, and puts one of the nation’s premier public flagship campuses in jeopardy. Make no mistake: it passes the burden of funding public higher education onto the shoulders of working families and students—in the midst of a financial crisis. While purporting to “hold harmless” lower-income students with increases in financial aid, it employs a poorly justified income cutoff that will make successful implementation near impossible. By raising the sticker price in the midst of a recession it is likely to have trickle down effects that effectively steer the low-income students elsewhere, while increasing the resource disparities between Madison and other System campuses. In effect, this initiative will make UW-Madison both more desirable and less accessible.


To demonstrate her sincere commitment to UW’s undergraduates, Chancellor Martin should move quickly to ensure that all consequences of her proposal—intended and unintended—will be carefully measured and considered. Under President Obama’s leadership the nation has moved toward an era of greater transparency, accountability, and data-driven decision-making. Part of Martin’s commitment to undergraduates should be to do the same.