The first installment of the series featured Philip DiSalvio, dean of the College of Advancing & Professional Studies at the University of Massachusetts Boston, interviewing Carnegie Foundation ...]]>

In April, NEJHE launched its New Directions for Higher Education series to examine emerging issues, trends and ideas that have an impact on higher education policies, programs and practices.

The first installment of the series featured Philip DiSalvio, dean of the College of Advancing & Professional Studies at the University of Massachusetts Boston, interviewing Carnegie Foundation President Anthony Bryk about the future of the credit hour; the second featured DiSalvio's interview with Fastweb.com and FinAid.org Publisher Mark Kantrowitz about student debt; the third, DiSalvio’s interview with Lumina Foundation President and CEO Jamie P. Merisotis about Lumina’s commitment to enrolling and graduating more students from college; and most recently, his interview with American Council on Education (ACE) President Molly Corbett Broad about the efforts ACE is making to raise educational attainment in the U.S. and around the world.

In this installment of the series, DiSalvio interviews Carol Geary Schneider, president of the Association of American Colleges and Universities (AAC&U), on why liberal education is essential to America’s global future.

The context

From its founding in 1915, AAC&U has focused on advancing and strengthening liberal education for all college students, regardless of their intended careers. AAC&U sees liberal education as a philosophy of education that empowers individuals with broad knowledge and transferable skills and prepares them to deal with complexity, diversity and change. This liberal education approach, characterized by challenging encounters with important issues, is more a way of studying than a specific course or field of study. AAC&U maintains that this can be achieved at all types of colleges and universities.

While some argue that the best possible preparation to meet the challenges of the 21st century is a liberal education, others say that liberal arts colleges and the concepts behind the usefulness of a liberal education have been falling short in communicating the purpose of a college education, what a good education looks like and how education should fit into the higher education fabric of the nation.

Proclamations about “the death of liberal arts,” and reports about student debt and the unemployability of those with an undergraduate liberal education abound. Others ask how practical versus idealistic college should be. In a recent New York Times interview, Hunter Rawlings, the president of the Association of American Universities, stated: “You just don’t know what your education is going to result in. Many of the kids graduating from college these days are going to hold a number of different jobs in their lives, and many of those jobs have not yet been invented. For a world like that, what’s the best education? It seems to me it’s a very general education that enables you to think critically.”

Carol Geary Schneider provides a perspective on the state of U.S. liberal education today.

The interview

DiSalvio: The broad goals of liberal education have endured even as the courses and requirements that comprise a liberal education have changed. How has liberal education changed over the years? Is it relevant today considering the rapid pace and complexity of change in today’s global economy?

Schneider: There are three broad goals of liberal and liberal arts education that have endured not only just over the years, but over the millennia. In each era, we rethink the meaning, the content and the approaches through which we address those goals, but the goals themselves endure. I’d also argue that there’s a 21^st century addition to liberal arts education.

The first enduring goal of liberal education is the acquisition of a broad understanding of the society of which individuals are a part; this requires broad knowledge about science, culture, society, history and the kind of knowledge needed to navigate the world. For a long time, liberal education was restricted to very few people, and those people were leaders in society. Now we have a more expansive understanding of who needs this kind of broad knowledge. Understanding the world of which one is a part is the first core goal of a good liberal education.

The second enduring goal of liberal education is developing the powers of the mind. In earlier centuries, these powers included grammar, rhetoric, logic and dialectic. Today, we use the vocabulary of critical inquiry or communication skills. But when we talk about capacities like critical thinking or information literacy or communication fluency, we are talking about powers of the mind—the adaptive capabilities that enable people to reason through complex questions and to use evidence-based analysis to inform their choices and actions. Fostering these capacities is absolutely essential to a liberal or liberating education.

The third enduring goal is ensuring that learners acquire, through their studies and through the mentoring that’s part of those studies, a strong sense of ethical responsibility to themselves and to society, as well as a strong sense of their responsibilities as citizens. Thomas Jefferson and Benjamin Franklin and the founders of this republic all understood civic virtue as necessary for sustaining a just and self-governing society. Ethical and civic responsibility is as essential today as it was in their time.

These enduring goals are addressed in new ways today. Knowledge has changed. The skills we are discussing have certainly changed, especially in the age of digital revolution. And our understanding of civic responsibility has evolved as we have become more conscious of the challenges and responsibilities of living in a diverse democracy—not just a democracy, not just a republic, but a society that really respects all people and all perspectives.

I think those are the three big goals of liberal and liberal arts education over the millennia. I would argue that in the 20^th and 21^st centuries, there is a fourth goal. AAC&U describes it as integrative and applied learning. Other people may have other language for it—flexible learning, adaptive learning—but it is the notion that students need to learn how to integrate their knowledge, their powers of the mind and their sense of responsibility and to apply that learning to real problems in real settings. That kind of knowledge can then be used to work through problems encountered in the economy and problems we face as a globally engaged democracy.

To my mind, teaching students to apply their learning to new problems and contexts needs to be signature achievement of liberal education in the 21^st century. The focus is not just on what we know and understand, but on what we can do and how well we take responsibility for the application of knowledge in real-world settings. When it’s described in that way, liberal education is not only relevant, but indispensable. It’s the most relevant and powerful form of education we’ve ever developed—that any society has developed—because it places such strong emphasis on teaching people to use their intellectual faculties and their knowledge of the complexities of the wider world in order to reason through new problems and make contributions both to their workplaces and to our democratic society.

So for all these reasons, AAC&U has taken the position that liberal education is not only our most powerful form of learning, but that it is, in fact, the best form of learning for all students—not just for some students. That is the final way in which liberal education is evolving today. In the 20th century, we thought of liberal education mainly as something that was done in liberal arts and sciences disciplines. The academy itself constructed a very clear dividing line between liberal arts learning, on the one hand, and professional and career fields, on the other. AAC&U’s approach to liberal education says that those dividing lines need to be erased and that the forms of learning I am talking about apply to learners in all fields—career and technical fields as well as the arts and sciences. We owe it to every student who comes to higher education to make sure that, in ways appropriate to their career goals and their choice of academic discipline, they actually acquire all the hallmark capabilities that characterize liberal education in the 21st century.

DiSalvio: Under your leadership, AAC&U launched Liberal Education and America’s Promise (LEAP), a public advocacy and campus action initiative designed to engage students and the public with what really matters in a college education for the 21st century. With the LEAP initiative, AAC&U has set out to champion the importance of a 21st century liberal education. How will LEAP accomplish the goals of that initiative?

Schneider: The LEAP campaign is organized around a robust set of "Essential Learning Outcomes"—all of which are best developed by a contemporary liberal education. Described in College Learning for the New Global Century these essential learning outcomes and a set of "Principles of Excellence" provide a new framework to guide students' cumulative progress through college

Today, and in the years to come, college graduates need higher levels of learning and knowledge as well as strong intellectual and practical skills to navigate this more demanding environment successfully and responsibly.

Other areas of work around the LEAP initiative are campus action, public advocacy and evidence. In many ways, campus action is the centerpiece of the LEAP effort. LEAP now formally involves 350 colleges, universities and community colleges working in ways appropriate to their individual missions and their own students.

In addition, we have a formal partnership with the Council of Public Liberal Arts Colleges and with the New American Colleges and Universities, a consortium of private colleges and universities interested in the blend of liberal arts, career programs and civic learning. All these institutions and systems have adopted some version of the LEAP Essential Learning Outcomes.

In terms of public advocacy we wanted to test out advocacy strategies in local contexts with local state priorities. Rather than trying simply to make the case for liberal education as an invaluable resource for everyone from 30,000 feet above ground level, we prefer to connect liberal education with the growth agenda in Wisconsin, for example, with the access to excellence and equity agenda in California, with work already going on in Texas as they rethink their core curriculum, with efforts to improve educational performance in Indiana, and so on.

We have tried hard to ensure that LEAP’s work intersects with the college completion agenda, which is probably the dominant public priority at both the national and state levels across the nation. But we go beyond the completion agenda by focusing, not just on whether students have achieved the right number of credits in a timely fashion, but on whether students are completing with high levels of “demonstrated achievement” on the Essential Learning Outcomes.

The work we have done on what are called “high-impact practices” has demonstrated that when students frequently participate in forms of learning that ask them to do significant analytical, creative, problem-solving work, they are more likely to complete college as well as more likely to achieve the Essential Learning Outcomes. The high-impact practices include first-year seminars and experiences, common intellectual experiences, learning communities, writing-intensive courses, collaborative assignments and projects, undergraduate research, diversity/global learning, service learning, community-based learning, internships, and capstone courses and projects. There is new evidence emerging about additional high-impact practices that also result in higher rates of completion and better learning for students; we will undoubtedly revise the list of high-impact practices as we go forward.

Especially successful as a form of advocacy is our work with employers. Employers are urgently requesting that higher education do a better job of preparing students with the full set of Essential Learning Outcomes that LEAP advances. We have tried to get out of the way and let employers speak about this in their own voices and using their own vocabularies through a series of national surveys we have done.

Another form of advocacy is the LEAP President’s Trust. This includes over 100 college, university and community college presidents who care passionately about the educational and public value of liberal education, and who have committed themselves to use the pulpits that presidents routinely command in order to make the case for liberal education.

The employment of authentic evidence is another area of work in the LEAP campaign. We have been working on employing the evidence in two ways. One way is to build tools and resources for faculty to use in assessing the extent to which students are, in fact, achieving the learning outcomes that LEAP advances. Secondly, we are providing syntheses from various available national studies of what the evidence shows about students’ current progress, or lack thereof.

The portrait that we have put together is not an encouraging one. It shows, for example, that only about one-third of students report that they’ve made significant gains in college on global learning, an outcome that everybody today would agree is an essential part of the knowledge one needs for 21st-century competence. Only about 50% of students report that they’ve made significant gains in college on learning to engage perspectives different from their own. And ETS data have been showing us for years that on their tests for critical thinking, mathematical competence and writing, only about 10% of graduating seniors are proficient. Taken together, these and other studies indicate that we have a long way to go in order to achieve the goals that LEAP is promoting.

DiSalvio: Some argue that the best possible preparation to meet the economic development challenges of the 21^st century is a liberal education. Is that realistic, given the rising tuition costs and burdensome debt and the labor market itself?

Schneider: I think we have to make a very clear distinction between an educational strategy that is focused on short-term costs and one that is focused on the long-term interests of our entire society and the individuals within it. We believe with Tom Friedman that liberal education has historically been America’s “secret sauce.” It has cultivated, for at least a segment of the population, those innovative, adaptive, creative capacities that are so central to an innovative economy.

While it’s always been true that the U.S. economy has prospered through innovation and resilience and adaptability, in the current highly competitive global economy—with many nations now rising through their own new forms of economic creativity—it really matters that we invest in forms of learning that allow us to remain the world leader in terms of economic innovation and creativity. So to focus educational investment on short-term training for immediately available jobs, with no attention to whether or not graduates have the intellectual skills and knowledge needed to adapt to the next job and the next industry is to shortchange such individual learners and to shortchange America’s competitive future.

Yes, the kind of education we’re talking about cannot be done on the cheap. But the U.S. made its way to world standing, economically and as a democracy, by taking investment in education seriously. I think we need to recognize the historical sources of our strengths as a society and make sure that those strengths are being reinforced rather than eroded as we go forward.

I would also add, of course, that there are many ways that we can reduce costs within higher education. For example, we’re spending a lot of money on courses that never were designed to help students. If the only point of a course is to “deliver content” and see whether students can pass multiple-choice tests on that content, we can indeed “deliver” such courses via technology much more efficiently and cost-effectively. But, our top goal should be to ensure that all college students have frequent opportunities to go way beyond “content recognition” to meaningful competency development. You learn evidence-based reasoning by actual practice with evidence-based reasoning. I believe that higher education should do “content delivery” as inexpensively as possible while redeploying resources to high-quality competency development.

DiSalvio: Those who look at the intellectual benefits of liberal education may be saying that learning for learning’s sake is its most significant benefit. But aren’t the public and politicians and policymakers more likely to be swayed by other arguments that they deem more practical?

Schneider: When we launched LEAP, AAC&U made an official determination that defending liberal education as “learning for its own sake” was a non-starter in persuading skeptics. The notion that the liberal arts are primarily intended to cultivate a love of learning and personal development, leaving it to the individual to decide how that learning and development can be applied once they left college is a 20th-century idea. The argument we make today is that liberal education, when it is done well, is actually developing practical intelligence. Of course, we do hope that students will come to love learning for its own sake and we definitely want them to become people who are committed to continuous lifelong learning.

But in making the case for the long-term value of liberal learning, you do not start with “learning for its own sake.” If you are talking about an 18-year-old, you start with the fact that the student is struggling to understand why she is in college in the first place. You need to help her understand how what she is studying connects to the life she hopes to make for herself and that it is contributing to her development of an adaptable, portable set of capabilities and a flexible, adaptable base of knowledge. And you do that by getting her really involved in making connections between what she is learning and real-world problems that she can see need to be solved. Some of those problems will be enduring ones, such as those concerning identity and religion and social justice. Others will be contemporary problems, such as sustainability and climate change and what we do about hunger in our own communities or about HIV/AIDS.

Novice learners must be helped to see connections between the world they are living in and the lives they hope to make for themselves, on the one hand, and what they are studying, on the other. If you do that well, then I think they will also come to love learning for its own sake. But we start with their need to make connections between life and learning. And the same is obviously true for all those students who are coming to college as returning adults. They’ve already learned a lot from being out there in the real world. We need to connect their informal learning to the studies they will pursue. We need to recognize what they’ve already achieved through other means. We need to be prepared to validate forms of liberal learning that didn’t happen within formal academic settings. And all of this is intended to ensure that liberal learning is practical and useful and that it helps people make better lives, create better societies, and do better work. Once you describe it that way, then I think it’s easier to make the case to policymakers.

DiSalvio: In the 2010 AAC&U "Quality Imperative" report, the AAC&U Board of Directors states that, "It should not be liberal education for some, and narrow or illiberal education for others ... access to educational excellence is the equity challenge of our time." Yet, according to the National Center for Education Statistics, first-generation and disadvantaged students are less likely to take courses in the humanities, foreign languages and the arts, and are more likely to enroll in institutions and programs that provide narrow training. What must happen to equalize access?

Schneider: First of all we need to shine a strong, searing spotlight on the inequities. One of the things that’s so striking to me is that we recognize that our K-12 system was built along highly stratified lines. Some students are moved into college prep courses and tracks, while other students are moved into work tracks that are much less demanding educationally and much less likely to prepare them for college.

K-12 policy has been trying to undo this stratification and has been emphasizing the importance of high-quality, internationally competitive "common core standards" for all students—not just for some students. The goal of the No Child Left Behind program was to provide access to excellence for everyone, but it was deeply flawed in its tactics. Within the K-12 framework, we’ve had a dawning realization that our future as a society and our decency as a democracy depend on creating equal opportunities for students to learn at high levels as they go from preschool through high school.

Oddly, we’re not applying much of any of that to the discussion of higher education. People have been perfectly happy to accept a tiered system, or tracking, within higher education. In fact, many of the public policy priorities in several states deepen and accelerate and accentuate inequities and stratifications that already exist. For example, I’m thinking of policies—in states from the South to the North—that focus on getting students into certificate and short-term credential programs with the ultimate goal of getting them quickly into the workplace and, thereby, reducing the unemployment rate.

Questions are not being asked about whether those programs are helping students develop the broad knowledge, strong intellectual skill sets, anchored sense of responsibility and demonstrated capacity to deal with new complex problems that characterize a liberal education. We’re just asking whether they can manage computerized records; if they can, then they can have a job. AAC&U is trying to take dead aim at that deepening stratification by getting employers to acknowledge that people who are locked into mental cubicles are not promotable. And if people know how to do only one set of tasks and one job, then they will be employable only as long as that particular set of tasks needs to be done and as long as that particular job exists. If people want to be promotable and adaptable, they need a broad skill set, not one that has been narrowly tailored to meet the needs of a specific job.

Our surveys have repeatedly shown that employers do not recommend study in one particular field alone. Sixty percent of them recommend that college students pursue a combination of broad-plus-specialized learning, and 20%of them recommend that students pursue broad learning only. So just one in five employers—and we’ve asked this question several times in our surveys—would say that the right strategy for a young person or a returning person is to zero in on one field and become competent in it, much less to zero in on one set of skills that are a subset of a field, and then hope to make a career or an income-generating set of career choices on that foundation. It won’t work.

I think the right strategy is to focus on where the job market is going broadly. It’s churning out 30 million jobs every year that didn’t exist the previous year. We want to prepare people to succeed in those newly emerging jobs, not to be left in the jobs that are being outsourced or are simply disappearing. It is important to get employers to say that we need people who have portable, adaptable, resilient skills—not people who just know how to do one thing. And we need to rally as a higher education community around a commitment to inclusive excellence and against the stratification of opportunity that we already have in our educational system.

The first installment of the series featured Philip DiSalvio, dean of the College of Advancing & Professional Studies at the University of Massachusetts Boston, interviewing Anthony Bryk, ...]]>

In April, NEJHE launched its New Directions for Higher Education series to examine emerging issues, trends and ideas that have an impact on higher education policies, programs and practices.

The first installment of the series featured Philip DiSalvio, dean of the College of Advancing & Professional Studies at the University of Massachusetts Boston, interviewing Anthony Bryk, president of the Carnegie Foundation, about the foundation’s efforts to study alternatives to the current system and the possibility of recommending revisions to the credit hour.

In this second installment of the series, DiSalvio speaks with Mark Kantrowitz, publisher of Fastweb.com and FinAid.org and author of “Secrets to Winning a Scholarship,” about what some say is a looming student loan bubble.

The context

The public has begun to question whether the high cost of a university degree is worth the price, especially at a time when more and more graduates with crushing student-loan debt cannot find jobs after college.

Student debt burdens have reached $1 trillion this year, according to the Consumer Financial Protection Bureau, up from $200 billion in 2000.

A recent study by Sallie Mae, showed that 70% of families are eliminating college choices based on cost. At the same time, three of four students ages 14 to 23 have “some” or “major” concerns about how they’ll pay for college, according to a new study released by the Northwest Education Loan Association.

Concurrently, the annual price tag for a college credential has risen dramatically with no sign of slowing down. The cost of college rose 440% between 1982 and 2007, compared with the cost of living rising by 106% and family income growing 147% during the same period.

Exacerbating what Kantrowitz refers to as "widespread struggling to repay loans" are the job prospects for graduates. Growing numbers of college students are ending up in relatively low-paid jobs traditionally held by people with modest levels of educational attainment, or worse, unemployed. Current figures show that more than 30% of recent college graduates are employed in low-skilled jobs.

Kantrowitz points to the increasing number of college graduates burdened with excessive debt. And when the debt is out of sync with incomes, he notes, the problem reaches critical mass. He envisions a legacy of debt, where today's graduates will still be paying back their own student loans when their children are in college—with the debt burden on the next generation that much greater.

These issues pose significant challenges to students, parents, college leadership and higher education policymakers. For students and parents, it will be making wise choices and hard decisions about the future. Alternative pathways to a higher education without the burden of strangling debt might be an option for many.

For higher education institutional leaders, it will mean a greater awareness of the debt levels incurred by their graduates and an understanding of the implications those debt levels will have on their graduates’ lives. Differential pricing, programmatic strategies and an institutional commitment to minimizing student debt will have to be considered.

Policymakers will need to break down access barriers to a quality higher education without breaking the financial backs of students and their families.

The interview

DiSalvio: Some see a looming student loan bubble with student debt burdens adding $110 billion in new debt last year and America’s overall student loan burden hitting $1 trillion this year. Student debt is piling up so quickly; it now outpaces credit card debt growth. Do you see this rapidly rising debt burden trend bursting? 

Kantrowitz: I don’t think we are in a student loan or higher education bubble as much as a severe decline in college affordability.

For there to be a bubble, you have to have a disconnect between the price and value of an asset, fueled by an oversupply of liquidity, i.e., easy access to credit. When that easy access is withdrawn, the bubble bursts and the price of the asset drops back to the intrinsic value of the asset.

Higher education is different than the real estate market. You can’t flip an education the way you can flip a house. There isn’t really much of a disconnect between the average price of a higher education and the intrinsic value. One method of valuing an education, at least financially, is in the income that it enables. Currently, the average income of a college graduate is sufficient to repay the average debt of a college graduate. Individual students may vary from the averages. Some may borrow more to go to a more expensive college and earn less. But on average most students who graduate from college with a bachelor’s degree are able to repay that debt. The average debt at graduation for bachelor’s degree recipients is around $27,000 and the average income is $35,000 to $45,000.

You can define excessive debt in various ways. I tend to define it as when the total student loan debt at graduation exceeds the student’s annual starting salary. If your total debt is less than your annual income, you’ll be able to afford to repay your student loans in 10 years or less. You could also look at debt-service income ratios where 10% or lower is affordable, where 15% is a stretch, and above 15% the borrower will struggle.

I find comparing total debt to total income is something that students and parents are much more capable of doing than trying to remember a debt-service-to-income ratio and what that means. Also, when a borrower’s student loan debt exceeds their annual income, they are going to qualify for income-based repayment.

For the most part, less than 10% of borrowers currently graduate with excessive debt by any definition of excessive debt. The income-based repayment plan has less than 3% of borrowers participating in it. It’s a safety net for people who have too much debt. It bases payments on income instead of the amount owed. Looking at the distribution of student debt at graduation at around 10%—a conservative estimate—many are struggling. For there to be a bubble forming, we’d have to have at least a quarter, maybe a third of borrowers with excessive debt. We are not there—at least not yet. But, fast forward 20 years, we may very well be.

Another part of the definition of a bubble is the bursting of the bubble. In order for a student loan bubble to burst, you would have to have new loans evaporate. Currently, 93% of new education debt comes from the federal government, with the remaining 7% comprising private student loans and state loan programs. The private student loans are all credit-underwritten for the most part and consequently they are not lending to sub-prime borrowers. Federal student loan programs as a whole are profitable for the federal government. The subsidized Stafford Loan may be unprofitable, but the unsubsidized Stafford and Plus loans compensate for the losses from the subsidized Stafford loans.

Reaching a $1 trillion milestone may be impressive, but it is a natural consequence of the nature of student loans. Student loans are repaid over decades, not months to years like credit cards and auto loans. Each year, there are new students borrowing new loans, ensuring continued growth in the outstanding debt levels. The failure of government grants to keep pace with increases in college costs are a primary driver of the growth in student loan debt.

DiSalvio: A recent study by the Federal Reserve reports that 27% of the 37 million student-loan borrowers in the U.S. are delinquent on their loans. Will this growing tendency affect higher education enrollments? If so, which sector of the higher education industry will it impact most?

Kantrowitz: I dispute the Federal Reserve numbers. The Federal Reserve relies on Equifax data and the Equifax data has been wrong in the past and I think it’s wrong this time.

Let’s compare this with the 90-day delinquencies as reported by Sallie Mae, the largest private student lender and still the largest holder of federal education loans outside of the direct loan program as reported in recent 10-K filings. They have a 4% 90-day delinquency rate on private student loans and an 8% 90-day delinquency rate on federal loans. Admittedly, they haven’t made a new federal loan since July 1, 2010 when the Health Care and Education Reconciliation Act switched over to 100% direct lending. The aging of a portfolio does have an impact on the delinquency rate, but we’re talking about a factor of four difference between what Sallie Mae is reporting and what the Equifax data is claiming. I think they may be mis-classifying the six-month grace period as though it were part of a delinquency period.

The delinquency rates may affect enrollments somewhat. Increases in delinquency and default rates have the potential to change the public’s impression of the value proposition and that may impact enrollments. The news media coverage makes people more wary of debt.

The affordability of a college education will have a much greater impact on enrollments. The failure of grants to keep pace with increasing college costs causes declines in college affordability. Decreases in college affordability forces students to borrow more or shift their enrollment from higher-cost colleges to lower-cost colleges. For example, they shift from nonprofit colleges to public colleges and from four-year colleges to two-year colleges and—especially among the low income students —to not pursuing a college education at all. Low- and moderate-income students are increasingly being priced out of getting a college education.

Fastweb.com conducts an annual survey of high school seniors about how they select where to apply and where they choose to enroll. We identified—in our 2011 survey—some students as being “switchers” if the initial set of colleges to which they were applying were predominantly public colleges and they ultimately enrolled in a private nonprofit college or vice versa. What we found is that 24% of students who preferred private nonprofit colleges ended up enrolling in public colleges, and 9% switched in the other direction. In both cases, the primary reasons for the switch all had to do with money. The switchers from private nonprofit to public colleges couldn’t afford the private nonprofit colleges. For the students who switched from public to private nonprofit colleges, the primary reason for switching was the receipt of a generous financial aid offer from the private nonprofit college.

DiSalvio: Will these issues around affordability for a college education change the way higher education will do business in the future? 

Kantrowitz: Families are becoming increasingly price-sensitive and more sophisticated in their understanding of college costs. Rather than looking at the sticker price, middle- and upper-income families are looking at the net price, much more so than low-income families.

The net price is having an effect on college choice. If the difference in net price between two colleges is $1,000 or less, families are choosing the colleges they perceive to be the better quality or the better fit, or whatever their criteria may be. If the difference is more than $5,000, then they are choosing the college with the cheaper discounted sticker price. In between these two extremes, they are agonizing over the decision. A $5,000 difference in net price multiplied by four years is the equivalent of $20,000 that they must either pay out of pocket or borrow. It’s a significant amount of money. It increases the $27,000 average student loan debt up to $47,000. You’re taking something that would have been an average amount of debt all the way up to more debt than 90% of their peers.

They are becoming increasingly price-sensitive, especially as the new U.S. Department of Education disclosures have come online and are providing families with clear, correct and comparable information on college costs and affordability. First there are the net price calculators, which may have some teething problems, but are still a step in the right direction. The net price calculators help families make more informed decisions about the trade-offs between college affordability and the other factors they typically consider. Then, there are the financial aid shopping sheets. They standardize the financial aid award letters and provide families with more clarity. Right now, adoption of the financial aid shopping sheet is voluntary. Only about 10% of colleges by enrollment have adopted the standard. These are mostly public colleges who look a lot better than private nonprofit colleges as to college costs and college affordability.

There are proposals in Congress to make the financial aid shopping sheet mandatory. The next time families complain to their members of Congress about how college costs continue to rise, making the shopping sheet mandatory is a very easy solution for Congress to pursue. It doesn’t cost the government anything to implement this. So I think it will eventually be mandatory either by Congressional fiat or by peer pressure. If you have a critical mass of colleges using it, families will begin to ask: “What does the college that doesn’t use the shopping sheet have to hide?”

DiSalvio: In this time of rising student loan debt with decreases in household income and the sense that a college degree no longer guarantees a good job, is there a value gap in higher education? 

Kantrowitz: We have to distinguish the current economic downturn from the long-term trends. During periods of high unemployment, college enrollment increases. This is known as the countercyclical effect. More borrowers also struggle to repay their student loans—a temporary scenario.

Nevertheless, baseline college affordability continues to decline, especially because the federal and state governments, despite rhetoric to the contrary, continue to cut their support of postsecondary education on a constant dollar per student basis. This has been the trend for the last 40 years and it will probably continue for the next 40 years. That is, unless there is some sort of a watershed event that changes the thinking of policymakers.

Cutting investment in student aid is shortsighted, because college graduates pay more than twice as much in federal income tax as high school graduates. It’s an investment not only in the future of the particular student, but an investment in the future of the United States of America. Members of Congress and state legislators don’t seem to realize that now, but eventually they will. The pendulum doesn’t swing in the other direction very quickly.

Over the next 20 years, the spending per student on a constant dollar basis will continue to decrease despite increasing total dollars spent on higher education. The failure of grants to keep pace with increases in college costs will cause ever-increasing debt.

In addition, about one-third of the students graduating this year with bachelor’s degrees have enough debt that they can qualify for a 20-year or longer repayment term. That means they will still be repaying their own student loans when their children—the next generation—are in college. They won’t be able to save for their children’s education and they won’t be willing to borrow to help their children pay for college because they’ll still be up to their eyebrows in debt. Accordingly, the burden on the next generation is going to be that much greater and they will be forced to borrow more.

The problem occurs when debt is out of sync with income. Overall, family incomes have been stagnant for a decade and their ability to pay for college has not improved. Starting salaries have continued to increase somewhat. The average starting salary for a bachelor’s degree, depending on the data source, is about $45,000. Some say $35,000, but it’s somewhere in the range of $35,000 to $45,000. The average debt at graduation is $27,000 and that goes up by about $1,000 a year. So if income is not increasing by much and debt at graduation is increasing by about $1,000 a year, $45,000 minus $27,000 yields about 18-year’s worth of debt increases before debt catches up with incomes.

DiSalvio: Where are these trends leading higher education? What is in store for the academic enterprise and how can higher education leaders and policymakers prepare for the future? 

Kantrowitz: Twenty years from now, we’re going to reach the point where the debt at graduation will routinely exceed starting salaries. So borrowers will struggle to repay their student loans on a widespread basis. There are always going to be some students who vary from the averages. Some students will always enroll in the most expensive college and major in a field of study that doesn’t pay very well. In contrast, students who graduate with a bachelor of science degree in nursing, with a $60,000 to $70,000 starting salary, will be fine regardless of whether they fall at the 90th percentile or just the median amount of debt.

We’re going to have many more students each year graduate with excessive debt, so I think the one thing that policymakers, presidents and financial officers of the institutions need to start doing is monitoring the situation of their graduates.

Institutional leaders need to know what percentage of their graduates are graduating with excessive debt—by whatever measures they choose. That means they will need to survey their recent alumni to ask about their employment status and starting salaries. This information would add to our understanding of which majors have high levels of debt. This would give institutions a greater awareness of the trend as it occurs, enabling them to watch as it gets worse. By monitoring the trends, they may be able to do something about it. One alternative is to adopt a differential tuition policy with lower tuition rates for the less lucrative fields of study. In some states, they’ve been proposing to do the opposite to encourage students to go into the STEM fields (e.g., Florida). I don’t think you’ll get a student who isn’t attuned to STEM fields to go into it—the National SMART Grant tried this approach and had only limited success—rather, reducing the cost of education for STEM majors may be a recruiting tool to get more STEM students to enroll in Florida colleges. An awareness of the problem will help people think about possible solutions.

The convergence of forces driving change in higher education is transforming the academic enterprise—reinventing what a university is, what a course is, what a student is and what the value of higher ...]]>

NEJHE’s New Directions for Higher Education series examines emerging issues, trends and ideas that have an impact on higher education policies, programs and practices.

The convergence of forces driving change in higher education is transforming the academic enterprise—reinventing what a university is, what a course is, what a student is and what the value of higher education is.

One significant sign of change could be the end of the credit hour—higher education's prevailing unit of measure. This century-old, time-based reference for measuring educational attainment used by American universities and colleges is under serious scrutiny by its creator, the Carnegie Foundation for the Advancement of Teaching.

In this first installment of the series, Philip DiSalvio, dean of the College of Advancing & Professional Studies at the University of Massachusetts Boston, speaks with Anthony Bryk, president of the Carnegie Foundation about the foundation’s efforts to study alternatives to the current system and the possibility of recommending revisions to the credit hour.

The context

The Carnegie Foundation’s scrutiny of the credit hour and the recent decision by the Department of Education clarifying and outlining a process for providing federal aid to students enrolled in “competency-based” programs could represent a re-thinking of how colleges might award “credit”—based not on time spent in class but what students actually know. Up until now, the federal financial aid system has generally run on the credit hour.

Since 2003, the federal government has been examining the idea that federal financial aid could be awarded based on the amount of learning a student had achieved, rather than the amount of time spent in class. However, the recent decision by the department outlining a process for providing federal aid that utilizes direct assessment of student learning could have a sweeping impact on higher education.

Jeff Selingo of the Chronicle of Higher Education sees the “breaking free of the tyranny of the academic calendar” and offers the scenario where undergraduates mix the direct-assessment approach with the seat-time approach. This would allow students to increasingly take advantage of such experiences as study abroad, apprenticeships and research.

While some in the higher education community are already engaged in an effort to move away from the credit hour toward the development of more meaningful evidence about students’ competency, complications will certainly arise.

In the book How the Student Credit Hour Shapes Higher Education: The Tie That Binds: New Directions for Higher Education, editors Jane Wellman and Thomas Ehrlich observe that the credit hour measures everything from student learning to faculty workload. It shapes how time is used, how enrollments are calculated, and underpins cost and performance measures. Wellman and Ehrlich note that examination of the rationale for the metric is long overdue and the measure itself may be “perpetuating bad habits that get in the way of institutional change in higher education.”

As the basis of a measurement that knits together our otherwise disparate system of higher education, it is conceivable that the credit hour is an outdated artifact. However, thoughtful reflection by higher education leaders will be required to align internal institutional processes and procedures with new measures of attainment and the new directions transforming the academic enterprise.

Carnegie Foundation President Anthony Bryk.

The Interview

DiSalvio: The Carnegie Foundation has a legacy of educational leadership. Its work as an initiator, innovator and integrator to improve teaching and learning has had enormous impact on higher education. What was the original motivation in creating the credit hour as a time-based reference for measuring educational attainment?

Bryk: The Carnegie Unit emerged in the early 20^th Century, when only 10% of students completed high school and a very small number attended college. Standards were low or non-existent in many secondary and postsecondary institutions and the boundaries between the two sectors were blurry. It was a very different educational landscape than today’s.

Andrew Carnegie believed professors to be “the poorest paid and yet one of the highest of all professions” and sought to support them financially in their retirement. But in an era of widely varying standards, creating a pension system for professors required a definition of what constituted a legitimate “college." The foundation's key criteria included a requirement that institutions had to have no fewer than six full-time professors, offer a four-year course of study in the liberal arts and sciences, and require for admission “not less than the usual four years of academic of high school preparation” This last standard suggested that four years of high school should total 14 “units” of instruction, each unit representing 120 hours of class time with an instructor.

Because colleges wanted to participate in the Carnegie pension system, they worked hard to meet the foundation’s eligibility criteria, causing the credit hour to be widely implemented in higher education. And because high schools wanted their students to be eligible to attend Carnegie-eligible institutions, they quickly adopted the credit hour as a standard for high school graduation.

So, in its time, the Carnegie Unit was a progressive reform of the American education system. Over time, however, its uses have moved far beyond those originally intended.

DiSalvio: The Carnegie Foundation for the Advancement of Teaching has announced it would use a $460,000 grant from the William and Flora Hewlett Foundation to study the Carnegie Unit. Why is the Carnegie Foundation interested in putting this higher education measuring stick for academic quality, accreditation and access to federal financial aid under scrutiny?

Bryk: The Carnegie Unit helped standardize course requirements. But it was never intended to measure the quality of teaching or learning, and it isn't well-equipped to do so.

As a result, many in higher education (and secondary education) have called for new measures of student progress tied more closely to what individual students know, measures that can more effectively than the current Carnegie Unit strengthen teaching and learning.

There is also a growing body of research suggesting that students learn in different ways and at different paces, and that organizing schools and colleges to reflect these realities might enhance student learning.

And others suggest that the Carnegie Unit impedes the introduction of new technology-delivered instruction and assessment that could increase access to higher education by reducing costs and giving students great flexibility in where and when they learn.

We want to hold up the Carnegie Unit to the light of these and other emerging perspectives, especially given our focus on improving the quality of teaching and learning.

DiSalvio: Some have observed that there is a growing opposition to the credit-hour status quo and some have said that the credit-hour model is outdated and inefficient. What is the Carnegie Foundation’s view?

Bryk: The project is a broad exploration of such issues. It doesn’t start with any preconceived notion about what a better solution would look like. It’s open to whether there are alternatives or supplements to a time-based unit of measurement, but there’s much terrain to explore and many conversations to organize to answer that question.

DiSalvio: The federal government has signaled support for the nontraditional credit-earning model. In rethinking the value of the Carnegie Unit, would a likely alternative be a standardized unit of measure around competency, rather than time spent in class? How will this shift help advance competency-based higher education?

Bryk: The most obvious way to shift away from a seat-time-based measure of student progress would be to measure their mastery of material regardless of the where and when they achieve that mastery. So a competency-based model is certainly one of the topics we will be exploring. But there are substantial challenges to implementing competency-based systems at scale. There’s a groundswell of enthusiasm about the potential of competency-based models. Our job is to dig deeply into all of this, asking questions such as: Who sets the standards for competency? What kind of infrastructure would be necessary to create and sustain a competency-based system? What would we lose if we moved away from a time-based metric?

A re-envisioned Carnegie Unit sounds exciting, but it becomes very complicated when you think about implementing a change of that magnitude.

DiSalvio: The effects of changing the credit hour as a time-based measurement of student learning could be considerable since the credit hour drives student and faculty workloads, schedules, financial aid and degree requirements. What impact will a possible change have on American colleges and universities?

Bryk: The effects of changing the credit hour as a time-based measurement of student learning could be considerable. As you’ve noted, student and faculty workloads, institutional accreditation, access to federal financial aid and other critical elements of the higher education system are linked to the Carnegie Unit.

Our goal over the next year is to broadly engage experts and critical actors in colleges, universities, school districts and professional organizations—those who endorse change and those who point to the current Carnegie Unit's strengths—to explore the future prospects of the Carnegie Unit. Understanding how a change in something so deeply embedded in the fabric of secondary and postsecondary education as the Carnegie Unit is the challenge.

If change does occur we must be extremely thoughtful about what we are doing.  We could do both harm and good. It’s difficult to introduce change into complex systems like secondary and postsecondary education. It will be important to anticipate and fairly evaluate all of what could likely happen if a change of this magnitude were put in motion. Being thoughtful about all sides of the issue is a critical approach we plan to take.

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