The New Badger Partnership is Not About Affordability

According to the Badger Advocates' new television ad promoting the New Badger Partnership, the number one reason this new policy is needed is "To keep tuition affordable and provide more financial aid."

This claim is echoed in speeches by Chancellor Martin and her Administration, and maintaining or enhancing affordability is a central goal for the NBP articulated by student advocates.

Can the NBP achieved its primary policy objective? Will it?

The strong likelihood is no. Here, again, is why.

(1) The value of financial aid depends on cost of attendance. The real cost of college attendance for students and families is the "net price" they pay -- that is, the cost of attendance minus financial aid. Since some students do not respond well to loans, many argue that net price is actually the difference between cost of attendance and grant aid.

(2) The New Badger Partnership makes statements about the need to "keep tuition affordable" but it says nothing about tying increases in financial aid to increases in tuition. This is one of the biggest myths going around right now-- please, look at the legislation-- there is not a word about increasing aid in proportion to tuition in there. In other words, the NBP says nothing about maintaining or reducing net price. While advocates for the NBP rightly note that some higher education analysts support a "high tuition high aid" model, they neglect the clear statements made by those analysts that in order to work -- e.g. in order to maintain or enhance affordability--increases in aid must always accompany increases in tuition. Furthermore, those same analysts insist that since states and institutions rarely behave in such a predictable, responsible manner, it's important that they be required to do so. Yet the NBP does not mandate this.

(3) The New Badger Partnership talks about keeping tuition affordable but says nothing about keeping room and board, or student fees affordable. The cost of attendance, and thus the net price, includes all of those things. And those non-tuition costs have been rising faster than tuition for a long time.

(4) Only if "net price" decreases substantially will affordability may be improved. I see nothing in the NBP that suggests that grant aid will grow much more rapidly than tuition or that such growth will always be sustained over time-- so I think the chances of a substantial decrease in "net price" and increase in affordability are slim to none.

(5) If "net price" does not change, affordability is at best maintained. That would be the true meaning of "hold harmless" (as in the Madison Initiative for Undergraduates). But again, I say "at best" maintained because it is also plausible that sticker price has an effect on student decision-making, apart from net price. In other words, some students and families may be "scared off" by the higher tuition, perhaps because they misunderstand discounting. In that case, affordability is eroded.

(6) Misunderstanding of discounting is widespread among all kinds of people, including those in the lower and middle-income brackets. It's a bigger problem among low-income people. Not a single "sticker shock" program has been proven effective-- including those at private institutions-- where research shows the percent of low-income students has not increased despite such campaigns.

Given these facts, why is the NBP being promoted as an effort to maintain or even enhance affordability? At best, this seems disingenuous. Instead, Advocates could talk about the other aims of the policy-- e.g. improving excellence and/or quality--and make the case that increases in those things offset sacrifices to affordability. But they are not making this case, and I suspect it's because they know the argument will not fly with much of their constituency. Instead they have adopted the rhetoric of affordability that appeals to liberals, and used it to paper over a campaign that is ultimately focused on the needs of the elite.

Finally, let's talk about the great fear: "the status quo."

It is true that UW-Madison has grown less affordable over time, that institutional need-based aid did not increase until Chancellor Martin's regime, and that we stand to get higher tuition even absent the NBP. All that is true, and affordability could erode as a result.

BUT THE NBP IS NOT THE ONLY POSSIBLE ALTERNATIVE TO THE STATUS QUO.

Instead of the NBP we could maintain or enhance affordability by doing the following:

(1) Require all undergraduates to complete a FAFSA before enrolling at UW–Madison, although an “opt out” option can be added for personal and philosophical reasons.

(2) Seek a change to the rules governing the use of tuition dollars. Right now we can't use them for financial aid-- instead of asking for the right to set tuition, why not instead ask for the right to use some of the dollars for aid? This is what we did with MIU-- and MIU is different from NBP in that it explicitly tied aid to tuition increases.

(3) Continue to fundraise for institutional need-based aid. The growth in fundraising for that cause under Chancellor Martin's regime came from new leadership at Foundation-- the NBP was not needed. Ask for more support in promoting that campaign.

(4) Gradually shift institutional merit-based aid to institutional need-based aid. Make it a priority-- take a stand.

(5) Lead hard conversations about cost-savings measures to reduce room and board and student fees, to reign in the cost of attendance.

(6) Collect the kind of data needed to measure the impact of institutional need-based aid (right now we do not do this, and we easily could). Document effects and use them for fundraising purposes.

(7) Experiment with a sticker shock campaign. Find a model that works for UW Madison and use it to gain the support for additional tuition increases.

(8) Rethink admissions criteria and their relationship to family income. Consider putting a "thumb on the scale" for family background in order to increase diversity at Madison.

Before you accuse me of putting forth good ideas too late in the game, know this: these are not new proposals. We have made them many times over many years. They have been ignored.

Whatever you think about it, the NBP is not about increasing affordability. It will not achieve that policy objective. Vote for it on other grounds if you must-- but do not do so thinking it will make UW Madison more affordable.

First, Do Your Homework

There's growing concern with higher education's affordability problem, as well there should be. It's hard to see how college will promote social mobility if a kid's ability to access it is increasingly linked to whether or not his family has money.

So it's heartening to see college leaders attempting to provide solutions. But it'd be even better if we first saw them earnestly attempting to understand where the real sources of trouble lie. I'm afraid that step's being skipped a bit too often, running the risk of making things worse.

Here's a recent example. At this month's Regents Board Meeting, University of Wisconsin System President Kevin Reilly was explicitly asked to name some solutions to promoting affordability at his institutions. There were many ways he could respond. To his credit, Reilly acknowledged the importance of growing the state's paltry support for need-based aid and he said that multiple solutions were needed--there's no one silver bullet. Fair enough. But then he took a bit of a flying leap, saying we also needed an informational campaign aimed at helping students and families understand that it's best to finish college in four years.

Huh? This one left me scratching my head.

More specifically, Reilly said that his administration needs to do a better job communicating with students and families about their educational "choices" and the financial implications of those choices. He suggested that students and families do not know that finishing in four saves money, and if they did, they'd make "better" decisons.

Based on what, exactly?

Was Reilly in possession of some new empirical evidence indicating that Wisconsin families don't perceive the returns to a college degree, or one earned on time? Had he or his staff done homework that showed students were taking longer to finish because they lacked a "focus on 4?" I wish this was the case, but I doubt it. The only data Reilly has publicly provided for his argument is this: he compared the completion rates of in-state students to out-of-state students and noted that the latter group pays more tuition and finishes degrees faster. Given the numerous differences between the two groups, this is an especially weak argument, and one that a decent analysis of the data could easily tear apart.

On the other hand, we have a new national report from the Gates Foundation about the most common reason for college dropout: students' overwhelming need to work. There's also a rigorous study from the National Bureau of Economic Research showing that declining resources for higher education (e.g. supply-side factors) contribute more to college completion rates than do student-side factors. In an earlier paper, the same authors pointed to how the overcrowding of non-top 50 public institutions (a category into which nearly all of Reilly's institutions fit) leads to increased time-to-degree. And within Wisconsin I am co-leading a team of researchers investigating precisely how and why affordability matters for college success. None of that work provides support for the idea that students don't know that finishing a degree faster will save them money. Instead, they have a hard time figuring out how to make that happen while juggling work, family, and school.

Of course, Reilly isn't alone in thinking that he needs to share this "money-saving advice" with students and families. The problem is that his assumption and his message aren't benign. In particular, both come across as out-of-touch and insensitive to the harsh realities of some students' lives. Just think about his words on the subject, which include these quotes: "You've got to realize how much more you're going to be paying unless you focus." "...Part of the problem clearly is students choosing to say, 'I don't want to take an 8 a.m. course' or 'I want to take my courses between 10 (a.m.) and 3 (p.m.) on Tuesday and Thursday.,," "We need to be clearer about results of choices that students and families make about college...There are ways that students and families, by planning ahead a bit and making some focused intentional choices, can hold the cost of an education down."

The assumption he's making-- that the choices made by low-income families are not "intentional" or even informed--rests on shaky, volatile ground. As I've argued elsewhere, the common sport of painting working-class students and families as irrational is off-base. In fact, taken in the context of significant constraints on their lives the decisions many students make about extending their time to degree are quite rational. As a former UW undergraduate told me, ‘It's not an issue of choosing to work when classes are available, but often an issue of you don't get to choose your schedule, especially as the number of hours you work increases."

I have a feeling that when making his suggestion, Reilly was referencing those picky students who want to sleep late and be choosy about their courses, a common rep given to the Madison undergrads (for example). The problem is, those aren't the same students not completing degrees in 4 years. In essence, he's drawing on impressions of an elite group of students to shape solutions to the problems of the non-elite. Not gonna work.

In the absence of any empirical support, one has to wonder-- why does this idea have any traction at all? I think its because it fits with American ideals-those who work the hardest and "focus" the most will get ahead. It places the blame squarely on individuals rather than institutions, even when purporting to share responsibility. Constraints be damned; if you "know" what's good for you, you'll do it. Plus, communicating to students what's good for them is far less expensive than providing the financial support they need to make their actual choices pay off.

Crafting solutions to policy problems without doing sufficient homework first can incur trouble. For one, you risk insulting and alienating the very folks you wanted to help. That's certainly what happened here. As the former UW student told me, "Very few people are oblivious to the fact that adding an extra year to your education costs more money... I'm disappointed that the UW-System seems absolutely unaware of the challenges faced by its students, and its president believes that it's due to personal choice or ignorance that a student would not graduate in four years...The system misunderstands the plight of students who have similar circumstances to the ones I experienced."

Whispered Policies

Friday's Chronicle reports on a new study that points out how difficult it can be to identify which colleges and universities have no-loans policies designed to enhance affordability. Author Laura Perna and her colleagues find that the majority of elite institutions with these policies fail to advertise them in ways that are accessible to low-income students and families-- effectively maintaining their status as "bastions of privilege." The researchers then go on to make several helpful suggestions about how colleges could change their tactics to increase awareness and uptake of their progressive efforts.

But they could've gone one step further and discussed the incentives colleges have to maintain the status quo-- that is, to continue making their current and former students and staff feel good with liberal actions, garnering attention in elite venues such as the New York Times, without fundamentally changing their overall enrollment demographics or costing too much money. Call me cynical, but as a sociologist it strikes me that this is exactly how power is effectively maintained in the face of pressure for socially responsible actions from powerful institutions.

According to another recent study by economists Waddell and Singell, of the just-over 384,000 Pell Grant recipients attending 4-year institutions in 2000, only 0.3% were enrolled at Ivy League institutions (which disproportionately possess these no-loan policies). Across elite private institutions, Pell recipients rarely amount to more than 1% of the entering class. In 2000, there were only 108 Pell recipients in the freshman class at Harvard, and just 50 at Princeton. These are tiny, tiny numbers. So if no-loans policies actually resulted in massive increases in applications from low-income students, we could see many consequences for those schools. For one, their institutional aid budgets would have to grow-- if low-income students managed to get past the admissions hurdle. Second, depending on how exactly admissions dealt with the increased applicant pool (e.g. whether a 'thumb' was placed on the scale so as to ensure a reasonable proportion were admitted-- an action recommended by Bill Bowen), graduation rates might be affected. Third, you'd see a larger, more visible contingent of people on campuses from different family backgrounds, affecting social dynamics. Many of these outcomes could be interpreted as both positive and negative, depending on your perspective.

Simply put, right now colleges with small numbers of low-income undergraduates can afford to adopt no-loans policies. Based on the two studies discussed here, this is likely because their policies are only weakly communicated to the groups who'd be affected (I hestitate to call these the "targeted audiences" however) and the effects on enrollment are small and subtle. For example, Waddell and Singell conclude that such policies do not increase the overall number of needy institutions at institutions but do have some effect in skewing the composition of that group toward somewhat lower-income students who've traveled longer distances to attend college. Since positive publicity generated by laudatory articles in the elite press may well generate enough new alumni donations to offset current costs, the whole thing may be close to a "wash" --under current circumstances. More effective publicity and outreach to families who do not read the mainstream liberal elite newspapers or visit websites like finaid.org to get their information about college, might change the game. Under those new conditions, I have to wonder-- would no-loans policies continue to be so popular in elite higher education?

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.