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University financial health check 2017: future prospects?

View/download full data on UK institutions’ finances, 2015-16

In what was probably its last annual report on the financial state of English universities before it morphs into the Office for Students, the Higher Education Funding Council for England did not pull any punches about the years ahead.

Given Brexit, challenges to student recruitment and cost pressures such as a rising pensions bill, the report, published in March and based on 2015-16 financial results, regards “the financial projections from some institutions in July 2016 as over-confident”. A relatively “sound” financial position overall, it warned, was obscuring a noticeable minority of universities with serious challenges.

These words did not go unnoticed by those who keep a close eye on the financial sustainability of universities. For Julie Mercer, global head of education at professional services firm Deloitte, the report was “one of the strongest warnings on the future finances for the sector that I have read” and represented “a step change” in Hefce’s “language and tone”.

So how have we reached this point? After all, some critics of UK universities claim that the trebling of fees to £9,000 in 2012 was a cash windfall for higher education: a point underlying the recently revived debates over the merits of fees and vice-chancellors’ pay levels. Lord Adonis, the former Labour education minister, for example, claimed in July that the current fees policy gave vice-chancellors “a licence to print money and pay themselves £400,000 salaries”.

To probe this issue, Times Higher Education, with the help of accountants Grant Thornton, has analysed UK universities’ 2015-16 financial data, provided by the Higher Education Statistics Agency. Although comparisons using some of the data are more difficult this year owing to new accounting standards, the picture that emerges is one of a sector as deeply divided, in financial terms, as many other sections of UK society.

In England, much of this divide can be attributed to success or failure in the market for students, fully unleashed in 2015-16 with the ending of caps on undergraduate numbers. This is because income from tuition fees and education contracts accounted, on average, for just under half (48.4 per cent) of UK institutions’ total income, tipping over 50 per cent if you exclude Scotland’s fee-free system. But when you look at individual institutions, the picture is ever starker. Fees accounted for more than two-thirds of total income at 42 per cent of UK universities, while 22 institutions depended on fees for more than three-quarters of their income in 2015-16.

Tuition fees as a proportion of total income

Fees as proportion of income, graph

Source: Hesa

The risks of this are obvious: a sudden drop in student demand, even spread over a few years, could be catastrophic: a peril highlighted by the strong correlation that now exists between changes in real-terms income for universities and real-terms income from fees.

Institutions seeing at least a 2 per cent fall in real-terms fee and total income, 2014-15 to 2015-16 

Institutions seeing at least a 2 per cent fall in real-terms fee and total income, 2014-15 to 2015-16, graph

Source: Hesa

Changing places: relationship between real-terms fee income and total income change, 2014-15 to 2015-16

Institutions’ real-terms fees income v total income change, 2014-15 to 2015-16

Source: Hesa

There is a growing list of factors that threaten student demand, sometimes all at the same time. A constant worry over the past few years has been whether a stricter visa policy may turn off the supply of overseas students, and the higher fee income that they represent. A shrinking pool of 18-year-old UK students is also a known issue. But there are two new major threats to add to the list: the teaching excellence framework and Brexit.

The government’s original intention that, in England, only universities with a gold or silver TEF award would be eligible to raise tuition fees by the full permitted amount has been postponed until an independent review of the exercise is complete. However, the TEF’s potential effect on student demand will have some bronze-rated universities in particular watching their application and acceptance rates nervously. And although the metrics underlying the TEF only cover undergraduates – and only partially include overseas students – it is highly likely that demand will be affected across the board by an institution’s TEF rating.

Most worried will be those bronze-rated universities that also have a heavy reliance on tuition fees. Comparing institutions’ proportional income from fees with their average TEF “Z-score” – which shows the average distance they are from meeting their benchmarks on the six TEF metrics: a good proxy for their overall performance – flags up where difficult discussions might be taking place among senior management teams and governing bodies.

Risk factors: institutions’ TEF performance plotted against reliance on fees

Institutions’ TEF performance v fees income

Source: Hesa

For Jenny Brown, chief not-for-profit operating officer at Grant Thornton, it is far too early to know how the TEF will affect the sector. But she predicts that it will “really kick in” for universities that were already struggling to stand out from the pack.

“Taking away the student [numbers] cap has been the biggest issue [such universities] have been facing. It raises the question of how they can distinguish themselves to make themselves attractive, and many have chosen to do this by highlighting their teaching and support.”

For other universities, a disappointing TEF score is likely to be less of an issue, particularly if they are a specialist university with a “niche” offer, or one that already has a strong international reputation, such as the London School of Economics. For such global-facing institutions, Brexit and visa policy is likely to be more of a preoccupation.

A total of 15 UK institutions, including the LSE and a number of other London universities, have an estimated combined fee income from European Union and overseas students representing more than a quarter of their total income. It is perhaps these universities that will be most concerned with the international student picture. A poor TEF result could amount to a double whammy for those among them that lack the LSE’s reputational gravitas.

Institutions’ reliance on overseas fees

Institutions’ reliance on overseas fees, graph

Source: Hesa

As Brown points out, the financial impact of Brexit stretches far further than potential lost fees from EU students. “If universities have a lot of international research and teaching staff there is some nervousness that these are the people who will be lost [due to Brexit],” she says. “So it is not just a [student] demand issue facing universities at the moment: it is a supply issue too.”

The financial knock-on effects of a sudden brain drain of EU staff would be multifaceted. Across the sector, it could hike up the cost of attracting top staff to replace the leavers and diminish the UK’s teaching reputation, hitting international student recruitment further. And, if individual institutions find themselves disproportionately affected by a brain drain, they may also lose ground in the scramble for nationally allocated competitive research grants and see reductions in their research block grants, which are determined on the basis of performance in the research excellence framework.

Another Brexit effect could be the shutting down of UK universities’ access to the EU’s research funding programme. When EU student fees and research money are combined, there are relatively few institutions that count on them both for a substantial share of their overall income. However, the raw sums involved are eye-watering for some research-intensive universities. Moreover, for research-focused institutions, the loss of EU grant money and the best EU nationals among their research staff would be a particularly big blow.

Euro zone: reliance on EU cash 

Institutions’ reliance on EU cash, graph

Source: Hesa

Phil McNaull, director of finance at the University of Edinburgh and chair of the British Universities Finance Directors Group, says that “it has been clear for some time” that direct income for research “does not cover the full economic cost of conducting it, and the net deficit is subsidised by other sources”, such as surpluses from teaching.

However, he adds, “after several years of capped fees…tuition fees…cannot provide that support; hence the drive by many institutions to [recruit] overseas students”.

The figures on this are stark. According to a presentation made at a conference held by UK higher education’s Financial Sustainability Strategy Group earlier this year, data for 2015-16 show a £3.1 billion shortfall in funding the full economic costs of research across the sector.

Nigel Brown, a former finance director at Hefce who is now an independent consultant on higher education, also points to this shortfall as a concern.

“If an institution starts to fail to recruit [students], it has nothing to draw on to keep [research] going,” he says. Moreover, there is growing pressure to invest any surpluses in more buildings, equipment and facilities, in order to keep attracting students.

The latest bout of political angst about whether universities should continue to be able to charge home undergraduates fees of £9,000 (or £9,250, as the cap will be from 2017-18) is only likely to be ramped up further if students and commentators cotton on that a portion of their fees is subsidising research. Therefore, it is arguably becoming even more important for universities to support academic scholarship from other income sources – especially given the constant threat to income from international fees.

That rationale explains why many universities are eyeing the government’s industrial strategy with interest. Associated funding streams, such as the Industrial Strategy Challenge Fund , aimed at bringing together “the UK’s world-leading research with business to meet the major industrial and societal challenges of our time” are among various alternative sources of income that many universities will have to tap into to remain financially sustainable, according to Deloitte’s Mercer. That is particularly true, she says, for institutions that do not have the option of falling back on their global reputation to buoy up student demand.

“There is a very small number of global brands that are of the scale and reputation to continue to be successful without substantial changes to their strategy and approach,” Mercer says. “It is unlikely that for this handful – and it is a handful – the current uncertainty will have a major impact on them in the medium term. However, for most universities, [it will].”

Another reason why it is paramount that universities diversify their income sources, experts say, is that there are scant opportunities to lessen spending dramatically given that staff costs still represent about half the UK sector’s expenditure.

The ticking pensions time bomb is another major factor: last month’s annual report of the sector’s largest scheme, the Universities Superannuation Scheme, revealed a deficit of £12.6 billion, which the scheme will be required to act to fill. Grant Thornton’s Brown says the major problem with the increasing pensions deficit is that addressing it requires contributions from employers and employees to go up, effectively adding another layer of staff costs on top of general pay rises. Indeed, changes since the last USS triennial review in 2014 mean that any pay increases in the sector already have to factor in that dimension: as Brown points out, higher pension contributions mean staff receive less take-home pay from any increase, and employers have to pay more on top of any pay rise. The only alternative – which has also been adopted – is to make the scheme less generous.

“If you think about it, some of those percentages [of total pay] in terms of employee and employer contributions are so high they are having an absolutely phenomenal effect on pay increases. And pay increases are an incredibly sensitive area,” Brown says.

So which universities have the diverse income streams and lower cost bases that will allow them to best deal with whatever may be thrown at higher education in the next few years?

In the money?: Distribution of surpluses and deficits as percentage of income

Distribution of surpluses and deficits as percentage of income

Source: Hesa

A look at a university’s surplus or deficit as a percentage of its income gives a few clues. However, these figures can be down to one-off factors that do not always reflect a university’s actual financial position. For instance, the University of Oxford had a deficit of 1.1 per cent of its income in 2015-16, but clearly the institution is not in difficulty and this may be linked to Oxford University Press income being reported only every three years (and not in 2015-16).

A better indicator, experts suggest, is the state of a university’s unrestricted reserves: the amount of surplus money it has built up and is able to spend on whatever it decides. According to Hefce, “in very broad terms [this figure] can be used as a proxy for the overall value of an institution”.

Share of total unrestricted reserves in UK sector, graph

Source: Hesa

The striking thing about these unrestricted reserves is that just 14 institutions – most of them Russell Group members – hold half of the total reserves for the whole UK sector. In part, this is due to their larger capacity to raise sums from donations, to license intellectual property and charge premium fees to overseas students.

According to Nigel Brown, who was also an adviser to the committee under Lord Dearing that first recommended the introduction of fees in the late 1990s, there have always been a small number of universities able to generate what he calls “free income”. But, 20 years ago, Hefce was able to use its grant allocations to shore up the rest of the sector. These days it – or its successor body – would be able to do little to compensate for sudden changes in fee income at particular institutions. Nor would it be able to compensate for any overall loss of income brought about by a political decision to reduce fees without increasing the teaching grant.

“If anything significant was done to cut undergraduate funding, that would put many institutions at risk. So if you wish to deal with the tuition-fee problem, it has major implications for institutions,” he says.

Grant Thornton’s Brown notes that it is precisely those universities with the biggest reserves that are the least likely to run into the kinds of economic difficulties that would require financial directors to draw on them. And she adds that the socio-economic makeup of their students gives the richest universities an extra advantage.

“It is not just that the wealthy universities stay wealthy,” she says. “It is also that they have the ability to tap into a more wealthy pool of alumni for donations and endowments. [This situation] is not just mirroring society: it is part of the problem.”

Old car

Happy returns: the cases of Swansea and London Met

One university that jumps out of the latest financial figures as having a positive story to tell is Swansea University.

It had one of the largest jumps in total income in 2015-16, a real-terms rise of 25 per cent, based in large part on a real-terms rise in fee income of 18 per cent.

For long-serving vice-chancellor Richard Davies, this is the result of a long-term strategy hatched in the early 2000s to grow the institution in terms of research capacity and quality.

“We were rather a small institution [back then]: too small to be cost-effective, [with] no economies of scale [and with] a lot of very small departments that were inefficient and unstable. One person could leave and the whole department would be destabilised,” he says.

So Swansea set about becoming big enough to achieve economies of scale and focused on driving up quality. Success on the latter criterion is demonstrated by Swansea’s performance in the 2014 research excellence framework, Davies says, in which it recorded one of the largest rises in grade point average.

“You recruit students because of [your] quality, at the end of the day. Our growing reputation has given us the chance to recruit more,” he says.

He also points out the importance of having a supportive governing body, which “as long as they were being shown that risks were being properly managed…would go along with really quite bold strategies”.

Meanwhile, at London Metropolitan University, which has had its fair share of financial challenges in recent years, there are hopes that the institution is finally turning a corner. Although London Met was in deficit again in 2015-16, vice-chancellor John Raftery claims that its financial results were £4.8 million “better than forecast”, with “healthy reserves in the bank and no borrowing – which is not something that many universities can claim”.

Although London Met was awarded bronze in the teaching excellence framework, with some of the poorest metrics in the sector, this was based on data going back to 2012. According to Raftery, more recent data on graduate outcomes and student satisfaction point to an improving performance.

“Since 2014, we have put a range of initiatives in place to improve student outcomes, and these are working,” he says. “Our latest graduate employment score is above 45 universities, including several big-hitters in the Russell Group, and we took difficult decisions to redesign our university, including letting people go, which has had a stabilising effect on finances.”

“We believe that financial sustainability follows academic stability, and our new structure is achieving that.”

Simon Baker

Article source:

Virginia is $660 million short on higher education funding, SCHEV says

RICHMOND — Tuition and other fees now account for 53 percent of the cost of higher education for families, compared to the 33-percent target set by the state in 2004. The state’s share of the bill has fallen to 47 percent, compared to the 67-percent target.

Virginia would have to find an additional $660 million to restore the balance in paying for a student’s education at a state college or university, according to a new report that said erratic state funding has shifted most of the burden onto families through rising tuition and fees.

The State Council of Higher Education for Virginia issued a report to state lawmakers Wednesday that calls for a fresh look at new ways of funding public institutions of higher learning in the face of state spending cuts in eight of the past 10 years.

The bottom line for students and their families is increased tuition fees, which now account for 53 percent of the cost of higher education, compared to the 33-percent target set by the state more than a dozen years ago. In contrast, the state’s share of the bill has fallen to 47 percent, compared to the 67-percent target established in 2004.

“If the next 10 years are similar to the last 10 years for Virginia public higher education, our system is indeed in peril and all options to improve its future should be considered,” SCHEV said in its annual report on tuition and fees.

The report was delivered to Gov. Terry McAuliffe and the General Assembly’s budget committees less than three weeks before they are to meet to evaluate the state’s revenue outlook. The state ended the fiscal year on June 30 with a projected revenue surplus of $132 million, but not in time to avoid an average 2.5-percent cut in spending on higher education in the current fiscal year.

For SCHEV, the volatility in state spending put a quick end to the optimism it expressed a year ago, after the state budgeted an additional $223 million for public colleges and universities in exchange for restraint on tuition increases that averaged just under 3 percent.

“Since the beginning of this century, it’s been an up and down ride,” said Dan Hix, director of finance policy at SCHEV.

For the state to restore the balance, it would cost $660 million, which would reduce the average tuition burden by $2,700 a student, or one-third of the expense now, the report states.

But cuts in state spending only tell part of the story, contend state lawmakers, who say public colleges and universities also have to take a hard look at costs that have played a big factor in runaway tuition for in-state undergraduate students.

“Expenses certainly have to be part of the equation,” House Appropriations Chairman Chris Jones, R-Suffolk, said Wednesday.

The appropriations committee heard a report from its staff in November that estimated that only half of the cost of tuition increases over the past 20 years were the result of reduced state spending on higher education and called for more transparency on how institutions spend tuition dollars.

The SCHEV report paints a different history, charting the ups and downs of state support for higher education through two economic recessions since the turn of this century.

“Since entering the 21st century, tuition charges to in-state undergraduate students in Virginia have been greatly influenced by the state’s economic conditions,” the report states.

“During a period of strong economic growth, the commonwealth provided substantial operating support,” it says. “In later years, the commonwealth allowed institutions to assess double-digit tuition increases to offset general fund reductions when growth in the economy slowed or declined.”

“The lack of continuity and predictability has limited the ability of students and their families to plan for the cost of college education.”

The effects are measurable, SCHEV’s staff says in the report, which shows in-state undergraduate charges — including tuition, mandatory fees, and room and board — accounting for 47.7 percent of a family’s per-capita disposable income in Virginia, compared to 43 percent nationally. In 2001-02, those charges accounted for just 31.4 percent of per-capita disposable income in Virginia.

This school year, in-state undergraduate students will pay an average of $546 more on tuition and fees, an increase of 4.8 percent. The increase is higher for four-year institutions, an average of $565, than two-year colleges, an average of $120.

William and Mary has the highest level of tuition and mandatory fees, at $22,044, an increase of $810, or just under 4 percent for incoming freshmen under the school’s four-year promise of set tuition. Virginia Military Institute follows at $18,214, an increase of $722 or 4.1 percent, and the University of Virginia is third at $16,068, an increase of $354, or 2.3 percent.

The solution to the funding dilemma is unclear, but SCHEV staff are exploring a range of options, such as tying both state general fund support and tuition increases for in-state undergraduates to the rate of inflation.

Other options being considered include reducing state support for graduate education and reallocating the savings to institutions for in-state undergraduate education, or allowing some institutions to increase enrollment of higher-paying out-of-state students while maintaining their current level of in-state enrollment.

In the latter case, the institutions would keep most of the additional revenue, while allowing the state to shift its share of the savings to other institutions that have less ability to generate additional tuition revenue.

Under a fourth option, the state could reduce its share of funding to some institutions — UVa, Virginia Tech, and William and Mary — to shift savings to other, less competitive schools.

The downside of this approach is the “admission that Virginia does not have sufficient public review or public will to support its institutions adequately and equitably,” the staff said in a report to the council in July. “It also would result in otherwise-higher tuition at those institutions.”

None of those options is a recommendation to the council, Hix said in an interview. “They’re options for the council to consider.”

Article source:

Why Republicans Don’t Trust Higher Ed

Not only do Republicans and Democrats have different levels of confidence in higher education, but they are coming at the issue by focusing on different issues, a new poll by Gallup shows. Republicans who distrust higher education focus on campus politics, while the smaller share of Democrats who distrust higher education tend to focus on rising college prices, the pollster found.

The data were released a month after a report from the Pew Research Center found that more than half of Republicans say colleges have a negative impact on the direction of the United States. The shift was dramatic. Two years ago, Pew found that 54 percent of Republicans said colleges had a positive impact on the direction of the United States, while this year 58 percent said colleges had a negative effect. Among Democrats, 72 percent this year viewed colleges as having a positive impact on the direction of the country.

Gallup set out to see if it would find similar partisan shifts in the view of higher education, and — if so — why members of the two major parties were splitting in this way. Gallup’s findings largely confirm those of Pew — a growing partisan divide on higher education.

First Gallup asked people if they have confidence in colleges and universities. (The question did not specify two-year vs. four-year, public vs. private, etc.)

How Much Confidence Do You Have in Higher Education?

Then Gallup asked those with little or no confidence in higher education to identify reasons for their lack of confidence. Here Republicans focused on political issues and Democrats focused on more practical issues (such as paying for college). The question here was open-ended and Gallup grouped similar responses and provided the top answers.

What Are Some of the Reasons You Do Not Have a Lot of Confidence in Higher Education?

Gallup also asked those with high confidence levels in higher education why they felt that way, again grouping together open-ended responses. The answers show that many Republicans seem to feel good about their own or their relatives’ experiences in higher education, and that they are more likely than Democrats to believe that earning a college degree is essential for career success.

What Are Some Reasons Why You Have a Lot of Confidence in Colleges and Universities?

To be sure, some Republicans have long criticized higher education for being too liberal. Jesse Helms, the late senator who was long a hero to the far right, once said of plans for a zoo in North Carolina, “Why build a zoo when we can just put up a fence around Chapel Hill?” And bashing universities — the University of California, Berkeley, or Harvard University, or the Ivy League generally — has long been a part of Republican rhetoric.

But perhaps more quietly, support for much of higher education — public and private — has been bipartisan. Democrats might have been more generous with funding in some years, or more focused on low-income students. But Republicans have been strong proponents over time of building up universities’ research capabilities. And support for community colleges and many regional institutions comes from lawmakers of both parties working to support local colleges.

In this context, the Pew and Gallup findings suggest a shift in attitudes in which Republicans have a much stronger aversion to the direction of higher education, which they see as too liberal. The questions asked in the Gallup study were so general (without any definition of “college”) that many may not have thought of parts of higher education (community colleges, evangelical colleges or professionally oriented online programs) that look nothing like the residential liberal arts colleges that are mocked — many times inaccurately — in the conservative blogosphere on a daily basis.

An analysis released by Gallup, while not endorsing the views of the Republicans surveyed, says that their attitudes could have a significant impact on higher education.

“The effect of this divide on views of higher education — a pivotal element of the American dream for so many — raises questions about the future of higher education in this country,” the Gallup analysis says. “To what degree will diminished confidence in higher education among Republicans lead to decreased public support and funding for colleges and universities? Or, will Republican families be less likely to send their children to traditional colleges and universities, and instead seek other ways to educate them? Will various colleges and universities begin to align their brands and curricula increasingly along party lines? Is there any hope that this partisan divide on views of higher education will diminish — and if so, what would bring that about?”

Indeed, regardless of what one thinks of Republican attitudes, Republicans control the White House and both houses of Congress. Of particular relevance to public higher education, 34 of the nation’s governors are Republicans.

Brandon H. Busteed, executive director for education and work-force development at Gallup, said in an interview that he thought it was important for colleges to think about their “marketing and communication messages” on a range of issues. For example, many competitive colleges consider race and ethnicity in admissions — and polls suggest majorities of white voters favor the end of such forms of affirmative action.

Busteed said that colleges need to think about the way many critics of affirmative action believe that admissions are based on a pure academic meritocracy, except for minority students. He said colleges should talk about the edge in admissions enjoyed by athletes, children of alumni, people from some parts of the country, and many other groups. This information might change attitudes about affirmative action, he said.

He also said it’s not likely to be enough for colleges to just assume that Republican attitudes are incorrect. Rather, colleges need to engage the discussion, he said. For example, many colleges bemoan that some prospective students and their families judge colleges by “sticker price” and don’t take into account the aid offered by institutions. Colleges are relentless in encouraging people to think about college prices beyond sticker prices, he said. They need to be equally active on qualities — real or not — that make many Republicans think they are liberal.

On the theme of rebranding, Busteed published an essay Wednesday urging colleges to stop using the term “liberal arts.”

“Putting the words liberal and arts together is a branding disaster, and the most effective way to save or defend the liberal arts may be to change what we call them. Note, the problem isn’t with the substance of a liberal arts education but with the words we use to describe it,” he wrote.

“Although there is certainly a difference between the meaning of a liberal arts education and being ‘liberal’ politically, it helps no one to fight to the death defending the term ‘liberal arts’ in the context of today’s climate. Let’s face it: other than people in higher education or liberal arts graduates themselves, who understands what the liberal arts are anyhow?” he added.

Busteed’s essay will probably rankle more than a few liberal arts professors. But it may be worth considering that Republicans are not the only ones who are challenged by the term “liberal arts.”

A 2015 study by Caroline Hoxby and Sarah Turner, professors of economics at Stanford University and the University of Virginia, respectively, asked academically talented, low-income high school students why they didn’t apply to certain kinds of institutions. With regard to liberal arts colleges, the answers suggested a lack of knowledge of what they are. Among the responses they heard from students about why they weren’t applying to liberal arts colleges:

  • “What is a private liberal arts college?”
  • “I don’t know what this is.”
  • “I don’t like learning useless things.”
  • “I am not liberal.”

Article source:

Zirpoli: Education imperative to job creation

If you want to understand our nation’s priorities, start by looking at how we spend our resources and where we plan to invest future resources.

It seems that the only place where federal budgets are targeted for significant increases next year is national defense. We already spend about $611 billion on national defense; the current administration is proposing to spend an additional $58 billion in 2018, and the initial 2018 budget out of the House proposes to spend over $700 billion. This is more money than the next eight countries in the world (China, Saudi Arabia, Russia, United Kingdom, India, France, and Japan) spend on defense combined, according to the Peterson Institute for International Economics.

Just as you can tell what is important by looking at where a nation invests, you can tell what is not important by looking at where it cuts. For the United States, education spending for all Americans is on the chopping block in a significant way.

Research tells us that education is the number one variable related to individual employment opportunity and stability. According to statistics from the Department of Labor, when unemployment hit 10 percent in 2009 during the Great Recession, it was only 5 percent for college graduates and about 2 percent for Americans with graduate degrees.

Georgetown University, “Of the 11.6 million jobs created after the Great Recession, 8.4 million (72 percent) went to those with at least a bachelor’s degree. Another 3 million (26 percent) went to those with associate’s degrees or some college education.”

In March, the U.S. Census Bureau reported that more than one-third of Americans age 25 and older had completed a bachelor’s degree or higher for the first time in decades of data.

Writing for in June 2016, Tami Luhby reported “Some 45 percent of Americans age 25 to 64 have an associate’s degree or higher … [and] some 42 percent of young adults age 18 to 24 are enrolled in higher education.”

If education is imperative to job creation in America, why is the federal government under Education Secretary Betsy DeVos proposing to cut our nation’s investments in education by about $10 billion? DeVos has proposed cuts that are specifically targeting after-school programs that, according to the journal American Educator, serve about 1.6 million children. She also wants to cut teacher-training programs by $2.1 billion, federal loans for college students by $700 million, career and technical education funding by $168 million and federal work-study programs by about $500 million. These cuts not only reduce the number of young children who will receive educational services they need, but the number of Americans who will be able to attend college.

Not all education funding, however, will see decreases if the administration’s budget is approved. DeVos has requested that $400 million of the cuts mentioned previously “be diverted to charter schools and vouchers for private and religious schools” according to the American Educator. Tamara Hiler of the think tank Third Way calls DeVos “tone deaf” as she steers money away from career and technical education programs that helps rural communities that elected her boss, to private schools that would not benefit rural communities who have few private school choices, even if they could afford the option.

If you want to “grow the workforce” says Alia Wong writing for The Atlantic, job training programs are not the place to save money. But education funding for preschool to adult education programs seem to be the newest target for many Republicans as their perception of the value of education declines. A recent poll by Pew Research Center found that 58 percent of Republicans view colleges and universities as having “a negative effect on the country” compared to 72 percent of Democrats who see higher education as having a positive effect.

When the Great Recession hit, guess who lost their jobs? According to Luhby, of the 7.2 million jobs lost between December 2007 and January 2010, 78 percent of them were “workers with no more than a high school diploma.” And these are the jobs that have still not recovered from the recession. These are the people who voted for presidential candidate Donald Trump, and these are the people his cuts in education and job training will hurt the most.

For the majority of Americans in today’s economy, education is a positive variable on any measure. Research has shown that it is the single most important variable related to job creation, job security and employment income for the American people.

Tom Zirpoli writes from Westminster. He is program coordinator of the human services management graduate program at McDaniel College. His column appears Wednesdays. Email him at

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Investing in higher-ed is a no-brainer

Thirteen years ago, the General Assembly made a promise to the Old Dominion’s schoolchildren and their families: If they chose to continue their education at one of the commonwealth’s public colleges and universities, legislators would put up the dollars to cover two-thirds of the tuition costs.

That promise came after more than two decades of dwindling taxpayer support for Virginia’s public colleges and universities. In the early 1980s, public dollars covered well more than half of the annual budget at the University of Virginia; today, they barely account for 10 percent. The percentage at other schools is higher than the well-endowed UVa, Virginia Tech and the College of William and Mary, but the downward trend is in place across the board.

The Assembly hasn’t been as faithful as it promised when it has come to fully funding those tuition costs.

Today, in 2017, the state isn’t even covering half of the in-state tuition costs legislators promised in 2004. To cover the gap and keep their word to Virginia students, it’s estimated the additional cost would be $600 million per year. And that’s in addition to overall budget mandated by the Assembly. In the 2017 state budget, higher education funding was cut 2.5 percent from the previous fiscal year.

So how are the state’s public universities and colleges to make up the lost tax support? Raise tuition and associated student fees. Boards of visitors from Williamsburg to Fairfax, Richmond to Harrisonburg and Charlottesville to Blacksburg have done just that. For example, the UVa board of visitors has raised tuition every year, both for in-state and out-of-state students. Over the course of five years, the in-state tuition at UVa rose from $12,000 per year to $16,000. Other universities saw the same trend.

Now before anyone accuses us of siding totally with the universities, hold on. We readily admit that some of the state’s schools, like any others across the nation, have unnecessary or even wasteful spending. A couple of years back, the trend at universities was to provide as many top-notch amenities as possible to attract top-notch students. One such luxury, in our opinion, was the over-the-top fitness center. Schools, including UVa, spent tens of millions to build recreation and fitness centers that rival Olympic training facilities. Then there was the college arms race, so to speak, to build the nicest and most luxurious dorm facilities, again under the assumption that the school with the most luxurious dorm rooms would attract the best students. That thinking, we would argue, is more than a little flawed.

Our legislators must come to view public higher education as one of the most important economic investments they can make in Virginia’s future, no matter if it’s UVa or WM, Norfolk State or Old Dominion. Study after study has shown that college students will settle down in the state where they attended school. If Virginia did more to make tuition affordable for more of its residents, more of those students likely would remain in the state, contributing to economic growth.

If a top high school student from Southside Virginia goes to Virginia Tech to get her engineering degree, remains in the state and eventually opens her own engineering firm, that is an outstanding return on the taxpayers’ investment. The same for a computer science graduate from Virginia Commonwealth University in Richmond or a physician from UVa. It’s really quite simple: By investing in our own, locally produced talent over a period of years, Virginia could benefit economically and socially for decades to come.

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RI’s new higher-ed commissioner wants to expand free college tuition plan

Brenda Dann-Messier, Rhode Island’s new commissioner of postsecondary education, hasn’t given up on the governor’s original plan to offer two years of free tuition at all three of the state’s public colleges.

CRANSTON, R.I. — Brenda Dann-Messier, Rhode Island’s new commissioner of postsecondary education, hasn’t given up on the governor’s plan to offer two years of free tuition to the state’s four-year colleges.

“I’m hoping we go back to the governor’s original proposal,” she said during an interview on Tuesday.

Dann-Messier, who was appointed to her post two weeks ago, said students are at greatest risk of dropping out at the end of their sophomore year. Offering free tuition to juniors and seniors at Rhode Island College and the University of Rhode Island is a great way to keep them on track.

She also wants to establish an adult version of Rhode Island Promise, which, starting this fall, offers two years of free tuition to students entering CCRI, provided they are 2017 graduates and attend full-time.  

Gov. Gina Raimondo has vowed to have 70 percent of adults attain some postsecondary education by 2025. But Dann-Messier said the state can’t reach that goal by focusing only on high school graduates because that population is declining.  

By 2032, the number of new high school graduates in New England is projected to decline by 22,000, to a total 140,273, according to the Western Interstate Commission for Higher Education. 

“We need to focus on adult students — those with some college experience, those who have a high school diploma and those without a diploma,” she said. “We’ve expanded our focus to look at veterans. How do we translate their military training into academic credits? We also want to look at immigrant professionals. How can we re-certify their home-country certifications? And we have to look at folks in registered apprenticeships.”

Dann-Messier is committed to closing achievement gaps between white, middle-class youth and those from low-income families. While Rhode Island’s overall college graduation rate is 45.8 percent (including private colleges), she said low-income students and students of color graduate at less than half that rate. Rhode Island has asked to partner with the University of Southern California’s Center for Urban Education to figure out how to close those gaps.

Rhode Island ranks low nationally in terms of state funding for public colleges. Dann-Messier said Raimondo is committed to change that, and the commissioner has been asked to develop a higher education funding formula by November.

Her next priority is finding fresh ways to educate students. Since two-thirds of the students she needs to reach are older adults, veterans and working adults, Dann-Messier would like to explore making more classes available online, citing Southern New Hampshire University, which offers 200 courses online for the older student and the working adult. 

“We want to make sure we have enough graduates in high-demand job sectors,” Dann-Messier said. 

She is also determined to revamp the current system for awarding free tuition to state college employees on a leave of absence. Former state Rep. Frank Montanaro Jr. received almost $50,000 in free tuition for his family while on leave from his previous job at RIC.

Dann-Messier is no stranger to Rhode Island. A graduate of RIC who later earned her doctorate at Johnson  Wales University, she served as the president of Dorcas Place Adult and Family Learning Center, in Providence, before leaving to work for the federal government. She was named U.S. assistant secretary of education under President Barack Obama, where she oversaw career, technical and adult education.


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Should public dollars help fund education at nonpublic schools?

“[T]he Government of the United States… gives to bigotry no sanction, to persecution no assistance,” President George Washington wrote to the Touro Synagogue congregation of Newport, Rhode Island in August 1790.

From Washington, D.C., to statehouses across the country, a robust public debate about private and religious school choice is occurring as K-12 education reformers are seeking legal means to expand educational opportunity and bridge socioeconomic achievement gaps in America.

Massachusetts has the best K-12 public, charter, and vocational-technical schools in the country, but also has among the nation’s largest achievement gaps. While the commonwealth’s public school kids perform well nationally, the 67,000 students enrolled in its Catholic schools do even better.

The story of religious liberty, church-state relations, and freedom of conscience on our continent dates back to the colonial era. In 1636, devout dissenter Roger Williams fled intolerant Massachusetts Bay Colony Puritans. He then established Rhode Island as a colony dedicated to religious freedom, or what one scholar termed “the first liberty.”

Like their Pilgrim, Puritan, and later Irish-Catholic immigrant counterparts, who escaped religious oppression in the British Isles, mid-17th-century Spanish and Portuguese Jews came to Rhode Island seeking religious freedom and safe haven from the sectarian bigotry and tyranny they encountered in Europe.

The Founding Fathers’ vision of primary education was grounded in 18th-century religious liberality. Across the early republic, government dollars moved freely between religious teachers, families, and schooling without objection.

Most notably, the 1780 Massachusetts Constitution, authored by John Adams, specifically directed localities to fund religious instruction and to have state government underwrite Harvard College, which prepared Protestant ministers. Adams certainly wasn’t the only Founder to affirm the public linkage between religion and civic virtue.

“Whatever may be conceded to the influence of refined education on minds,” President Washington said in his Farewell Address, “reason and experience both forbid us to expect that national morality can prevail in exclusion of religious principle.”

In the Founders’ educationally pluralistic vision, citizens’ receiving a grounding in English, math, science, and history was far more important than whether that education was acquired in a public, private, or religious school setting.

In the 1830s, French commentator Alexis de Tocqueville observed that local civic and religious institutions were crucial to understanding the wellsprings of American democracy.

But in early-1850s Massachusetts, that began to change. Violent nativists, the anti-Catholic Know-Nothing Party, passed the nation’s most restrictive “Anti-Aid” amendment, which prohibits disbursement of state and local tax revenues to parochial-school parents. In 1917, another nativist Anti-Aid amendment was passed.

Today, these bigoted amendments serve as legal obstacles to improving urban schoolchildren’s education.

The Know-Nothing, or Blaine amendments, prevent more than 100,000 families in Massachusetts cities with chronically underperforming schools from receiving scholarship vouchers, or education tax credits, that would grant them greater school choice.

These shameful 19th- and 20th-century amendments insult the integrity of our educational system; their infamous legacy endures in the constitutions of 36 other states.

By contrast, Jewish and Catholic groups in Rhode Island and New Hampshire have worked together to establish small education tax-credit programs that fulfill the Founders’ more open-minded vision of religious liberty, while providing underserved kids greater school choice.

If the Bay State repealed our Anti-Aid amendments, which were conceived in prejudice, it would help revitalize our urban educational landscape. In essence, state school funding would follow the student, as it does with government higher education loans across America. Then parents – not the state – could choose from a wide variety of private, parochial, charter, vocational-technical, and religious K-12 school options for their children.

“[T]he preservation of the sacred fire of liberty, and the destiny of the republican model of government,” reads President Washington’s First Inaugural Address, “are justly considered as deeply, perhaps as finally staked, on the experiment entrusted to the hands of the American people.”

The Founding Fathers established our state and national constitutions to protect, expand, and perpetuate human liberty. As a free and enlightened people, we should be ever wary of public officials who sanction only a rigidly secular view of K-12 education. It’s that illiberal, often anti-religious, attitude which walls off taxpaying religious families and their children from school choices better aligned with what Thomas Jefferson called the dictates of their conscience.

Jamie Gass is director of the Center for School Reform at Pioneer Institute, a Boston-based think tank.

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TSU’s President Remains Positive about the Future

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Austin Lane, president of Texas Southern University, awards a business degree to Ana Gabriela Cepeda Morales as she fulfills her dream of walking across the stage to accept her diploma with Calliope, her service dog.

Image: Courtesy of Texas Southern University

June 6 marked the anniversary of Dr. Austin Lane’s first year as president of Texas Southern University. With a year under his belt, Lane remains confident about the university’s future, while acknowledging some serious challenges: an unclear path forward for higher-education funding at the state level, and a federal budget proposal that poses a threat to student aid programs.

Twenty-three years of experience in higher education helped prepare Lane for the challenge of leading TSU, and he’s already achieved some early successes: The university has moved from a negative outlook to a stable one, according to Moody’s Investors Service, and Lane is currently prepping for the launch of TSU online, which he calls an opportunity “to really attract and dig into that non-traditional market of students that started a degree, but never finished.”

Lane was in the news back in February, when he was among a group of HBCU (historically black college or university) leaders in attendance at the White House for what was known as the “HBCU Fly-in.” The group faced criticism from the HBCU community for meeting with President Donald Trump and his administration, which had signaled it might try to end certain federal programs that provide financial assistance to historically black colleges and universities; some even called the meeting nothing more than a “photo-op” between the President and black leaders.

Lane, aware of the criticism, addressed the meeting in a letter he wrote to students back home at TSU: “My intent when receiving the invitation was to actively participate and advocate for TSU and [HBCUs] as a whole. As president, it is my duty to make sure we (TSU) have a place at the table and make our voice heard.”

The purpose of the HBCU Fly-in was less about meeting the president, he says, and more about speaking with his cabinet, giving HBCU leaders an opportunity to voice their requests and concerns to the new administration. The main items on the table for discussion? The reinstatement of year-round Pell grants and an increase in Title III funds.

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Lane, right, at TSU’s December 2016 graduation ceremony alongside Port Arthur businessman Roosevelt Petry, center, who was presented with the university’s Doctorate of Humane Letters, and Dr. Bobby Wilson, left, Interim Provost and Vice President for Research.

Image: Courtesy of Texas Southern University

President Trump delivered his proposed federal budget plan in May, with plans to greatly reduce student aid and loan programs while cutting funding for university-based research. Although the budget does include reinstating Pell grants, it significantly reduces their funding, eradicating aid that is crucial for some students, especially at universities such as Lane’s: During the 2015-2016 school year, 94 percent of TSU’s full-time first-year students received some form of financial aid and 77 percent received aid through Pell grants.

“We’re always mindful when things are reduced. That’s why we work so hard to have things like Fly-ins so we can educate our legislators on what it is that we do and the importance of the dollars we receive. They can advocate for us when it comes to those budgets,” says Lane. “You have to hope that they hear the message and that they act accordingly—that doesn’t always happen—and so you have to make your adjustments and keep moving forward.”

Such challenges have served to reinforce Lane’s mission. “I get that no matter how much we advocate for higher education, it’s never going to be exactly what we want,” he says. “Even if we hit the mark and we receive what we asked for, it’s still not going to be [enough] for a number of institutions, and it may be great for some. I think you just have to continue to educate folks, whether it be in the Trump administration or any other departments.”

Meanwhile, in June, Texas Governor Greg Abbott signed the state’s budget bill, which mostly avoided a much-discussed overhaul of the way Texas universities are funded—the state legislature ultimately rejected austere cuts to higher-education funding, to the great relief of Lane and his colleagues.

“I would say we dodged a bullet,” Lane says, though he’s already anticipating budget plans for the next biennium, where he hopes to see legislation that focuses on facilitating student transfers and preserving the practice of  “special items,” a budgeting tactic by which universities and colleges seek money for specific projects outside of standard funding formulas.

In the 2011 fiscal year, about 15 percent of TSU’s direct state support was the result of special items; these went to programs for leadership development, continuing school accreditation, and retention rates. The state Senate proposed removing all special items such as these from universities across Texas, which together total about $1 billion, a change that higher-education advocates hold would have dire consequences for independent institutions like TSU that rely heavily on special items to finance academic programs.

“Our special-item amount compared to the [University of Texas] is night and day, night and day—I mean it’s not even close,” says Lane. “We know [our amount] is used heavily on something that’s tied to an academic program, and if you cut it, you cut programs and then you cut people.”

In regards to facilitating student transfers, currently, TSU has a deal with the Lone Star College system that provides opportunities for students to enroll in the university, but Lane envisions a future with a “seamless pipeline” for students to transfer from community colleges to four-year institutions.

“Over the last year, we’ve been focused on really five things: one being student success and completion, two being academic-program quality and research, three is our culture, four is our partnerships, and five is our finances,” says Lane. “And so everything we do, or continue to do, has to be tied to one of those five areas where we’re showing signs of progress and success.”

The change in focus is already paying off, says Lane, who’s confident about what’s yet to come. “I would say we were very successful this year,” Lane says. “We continue to work on some things. We had a lot of organizational shifts, bringing in new people and new positions, so organizationally we’re changing as well; it’s worked out so far, so good.”

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UEA upgraded to gold in teaching excellence framework on appeal

The University of East Anglia has been upgraded to a gold rating in the teaching excellence framework, following an appeal against its original silver, but the other 17 appeals from institutions against their ratings have been rejected.

UEA was successful in an appeal to the Higher Education Funding Council for England, the university announced on 15 August.

The review “focused on misinterpretation of information relating to part-time students”, a UEA spokeswoman said.

But, in Hefce’s subsequent announcement on appeal outcomes, it emerged that UEA was the sole success among the 18 institutions to have appealed against a TEF rating.

Beyond UEA, the only other change listed by Hefce is that Durham University’s statement of findings has been revised. But the Russell Group institution’s silver rating remains in place.

That means all other appeals, including those by Russell Group members the universities of Liverpool (bronze), Southampton (bronze) and York (silver), were rejected by Hefce.

The outcomes of the appeals were announced just two days before many UK school-leavers get their exam results and confirm their university choice.

Neil Ward, pro vice-chancellor (academic) at UEA, welcomed the ruling on his institution.

“We are delighted our appeal has been successful as we believe UEA meets the gold standard for teaching excellence,” he said. “We’ve always maintained a strong focus on teaching, because that’s what really matters to students.”

In its statement on the appeal outcome, UEA highlighted its results in the National Student Survey, one element of the TEF’s metrics.

UEA “is the only mainstream English university to have been ranked in the top five for student satisfaction since the survey began in 2005″, the institution said.

Prior to the UEA ruling, a third of the 137 higher education institutions and alternative providers with university status assessed in the TEF received gold awards. Nearly half (49 per cent) got silver, with just under one in five (18 per cent) getting bronze.

Mary Leishman, UEA Students’ Union sabbatical officer for undergraduate education, said: “Great teaching is what the TEF was supposed to be all about and, given what students say about teaching at UEA, we’re thrilled that this has now been reflected in our gold grading.”

Hefce also said that four providers lodged appeals regarding their eligibility for a provisional award.

Three were successful, including for-profit St Patrick’s College, owned by the Global University Systems group that also includes the University of Law.

St Patrick’s previously undertook explosive growth in its numbers of students with public Student Loans Company funding on sub-degree Higher National qualifications awarded by Pearson.

St Patrick’s had been given a “requires improvement to meet UK expectations” judgement in two out of four areas in a Quality Assurance Agency Higher Education Review. But, following a partial re-review, it was given “meets UK expectations” judgements in all areas in October 2016.

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Affording college in Georgia getting tougher

By Sarah Butrymowicz and Meredith Kolodner

Alduha Leon and Jared Sanders, roommates at Savannah State University, dined on hot dogs in their apartment on Thanksgiving Day of their sophomore year. They had decided to skip feasting with family in Atlanta to pick up extra hours at their airport jobs loading luggage onto planes. Payday wasn’t until Friday, though, and Leon only had $5 left on his food stamps card.

During the three years they spent at Savannah State, Sanders and Leon struggled to pay their tuition, fees and living expenses. They accumulated more than $50,000 in loans between the two of them, despite working up to 40 hours a week. After exhausting themselves working late or overnight shifts so they wouldn’t have to miss class, and finding their grades suffering, they dropped out in 2015, joining a growing pool of Georgians who have debt but no degree.

More than 108,000 students who had taken out federal loans withdrew from Georgia’s public colleges and universities between 2013 and 2015, according to the most recent period measured in federal data. The problem is particularly acute for those seeking a bachelor’s degree. Median federal loan debt for these Georgia students has more than doubled over the past decade at most four-year schools, ranging from more than $18,000 at Albany State University to $5,500 at the University of North Georgia.

Without a degree, those who left college often can’t get decent-paying jobs to make a dent in their loans, hurting their economic futures and the state’s.

State actions have contributed to growing financial pressures on students. Budget cuts during the recession caused per-student funding to plummet, so Georgia students and their families have faced rising tuition costs. The HOPE scholarship program covers less than it did six years ago, and fees — which can cost thousands of dollars a year — have increased. Regulations prohibit state colleges and universities from spending money from the Georgia budget on need-based financial aid, and schools have limited campus-based resources to help.

This has happened as Georgia officials are pushing to increase the number of young residents who have some kind of post-secondary education. They say that by 2025, more than 60 percent of Georgia jobs will require such credentials, and today only 45 percent of the state’s young adults have them. But experts say dramatic improvement is impossible unless the government does something to make college more affordable.

“That can be funding the institutions themselves; it also can be investing in financial aid,” said Debbie Cochrane, vice president of The Institute for College Access and Success. “Folks aren’t just asking for higher education to be supported because it’s a nice thing. We know that our society, our workforce, our health – our societal health – requires that we have an educated population.”

Although tuition at Georgia’s public colleges and universities is relatively low compared to national averages, it has had some of the fastest growth. Since 2008, average tuition increased from $4,700 to $8,400. A December state audit found the annual average total cost of attendance grew 77 percent between 2006 and 2015, from $8,361 to $14,791, including mandatory fees and optional ones, such as room and board.

Many legislators have introduced bills in recent years that would require the Board of Regents to keep costs down, by limiting tuition increases to not exceed inflation, for instance.

The state has hired the Southern Regional Education Board to look at affordability in Georgia’s higher education system and how efficiently universities are spending state funding. The research is being paid for with a $380,000 grant from the Bill and Melinda Gates Foundation. (Disclaimer: The Gates Foundation is among The Hechinger Report’s many funders.)

The public has a perception that tuition is rising because schools aren’t managing their money well, said Claire Suggs, a senior education policy analyst at the Georgia Budget and Policy Institute. But the primary reason for the spikes in tuition and fees, she said, is declining per-student funding to the University System.

The recession in 2008 caused state tax revenue to plummet and accelerated a decline in higher education funding. State spending on the University System of Georgia fell from more than $15,000 per student in 2001 to about $6,000 during the recession, adjusted for inflation, and has only climbed back to $8,000, Sugg’s analyses found.

Other financial measures also show the cost-shift to students. In 2009, state appropriations made up 61 percent of the general funding for USG institutions, while tuition accounted for almost a third of it. By 2017, tuition brought in 46 percent of these schools’ general revenue, and state appropriations had shrunk to 43 percent.

“If we’re going to talk about affordability, we have to talk about the state’s investment in higher education,” Suggs said. “We have to acknowledge that there’s been this real disinvestment by the state.”

Many colleges agree, particularly those that face declining enrollments. “I don’t think there is a huge amount of waste on our campus,” said Kim Brown, senior associate vice president of business and financial services at Georgia Southern University. “Our operating budgets on this campus have not had an increase in more than 10 years, and staff haven’t had a raise in six or seven years.”

Leon and Sanders were caught in this downward trajectory. In their freshman year, tuition and fees at Savannah State were about $3,000 per semester, more than $800 higher than it had been in 2009.

Leon, the first in his family to go to college, enrolled as a marine science major and was getting mostly As and Bs.

He had a federal Pell grant for low-income students, but that barely covered tuition, let alone room and board, fees and books. His grades didn’t qualify him for a HOPE scholarship, so he had to turn to loans.

Georgia and New Hampshire are the only states without a need-based aid program for students attending state public schools. Schools must rely on their endowments and raising money from private donors to provide scholarships. Universities such as Savannah State, with lower endowments and less affluent alumni, have a harder time.

During the 2013-2014 school year, USG institutions awarded $28.8 million in need-based aid. Students’ unmet need totaled about $660 million, according to the left-leaning Georgia Budget and Policy Institute.

An analysis by the AJC of 11 universities that make such data available found that more than 83,000 students were determined by federal calculations to need help paying for school. Just two in 10 students received all the funding they needed through federal, state and institutional aid and loans.

Some students are forced to drop out when they can’t come up with their tuition and fees payments. In 2014 and 2015, about 13,000 students were removed – or purged, as officials say –from university rolls when they were unable to pay.

Other students make their payments, but have to take on jobs to do so, which can make it harder for them to graduate. Working for more than 25 hours per week can get in the way of passing classes, especially for low-income students, according to a new study by the Georgetown Center for Education and the Workforce.

“The best thing that schools and states can do is make sure that students who can’t afford the cost of college have a reasonable path toward paying for school so they don’t have to drop out and they don’t have to prioritize work,” Cochrane said.

Leon got a job at the Savannah airport. Breathing fuel fumes the first week made him so sick he wound up in the hospital and missed several days of class. Even when he was healthy, a draining work schedule – typically from 7 p.m. to 1 a.m. or as late as 3 a.m., Wednesday or Thursday through Sunday – made it hard to keep up with school.

He began dropping some harder classes, and his grades slipped.

“The more I had to work, the more I went downhill,” he said.

He thinks a need-based aid program is a great idea. “If it’s cheaper, people will take more initiative and go to school,” he said.

Georgia officials have been discussing a need-based aid program for at least a decade. In 2008, a Board of Regents study estimated the state could feasibly establish a need-based aid programs for $40 million that would benefit 26,000 students. The report was published during the height of the recession, however, and nothing was done with its findings.

State Sen. Fran Millar, R-Dunwoody, chairman of the Senate Higher Education Committee, views the coming college affordability study as a possible first step on the road to need-based aid. He says creating such a program in a state where 17 percent of the population lives in poverty is vital for Georgia’s economic future.

“I don’t think anybody’s against it,” Millar said. “It’s just a question of where we’re going to come up with money. We have to look at our priorities.

“I think we’ll get there eventually,” he added, but said that any need-based program would likely have some kind of academic requirement, such as students needing to keep at least a 2.0 GPA.

Kelly McCutchen, president of the right-leaning Georgia Public Policy Foundation, recommends that the state look at providing need-based aid for 11 industries identified as needing workers; or, Georgia should do a better job of recruiting students to technical colleges instead of four-year schools where they’re more likely to take on more debt to earn a degree that may not lead directly to a career.

“If you’re subsidizing that, you’re not really helping the student much,” he said. “I don’t think it’s one solution of ‘let’s just throw money at the problem.’ ”

The state does have a small, primarily need-based aid program funded through public and private dollars, called REACH. Five low-income middle schoolers in most school districts – and eight in larger districts – can enroll. If they keep up their grades in high school and meet other requirements they’ll receive a $10,000 scholarship for Georgia public colleges and universities. It serves 685 students and is slated to be expanded to more than 800 students next year.

In the meantime, it’s up to institutions to try to find money to help defray student costs. Valdosta and Columbus Universities are both in the middle of capital campaigns, some of which will go to need-based scholarships. Clayton State and Savannah State are mimicking a successful program created by Georgia State University that gives emergency grants to students who are close to graduation but needed a small amount, typically less than $1,000, to pay their final tuition bill.

Leon never made it to that point. By the end of his third year at Savannah State, he had earned just under half of the credits he would need to complete his degree and was already almost $30,000 in debt. He was starting to see older friends graduate and struggle to find jobs and pay back loans, despite having a bachelor’s degree.

“Do I really want to be $50,000 in debt?” he asked himself. The answer was “no.” He withdrew. Sanders did as well, for similar reasons.

Both have started their own businesses in the last year; Leon has set up an event planning company, and Sanders is establishing a video production business. They’re unable to pay back their loans right now, despite frequent calls from collection agencies.

They have no regrets about the decision to drop out and save themselves from even more debt. But both agree – they’d go back if they could afford it.

This story was produced by The Hechinger Report in a collaboration with The Atlanta Journal-Constitution. The Hechinger Report is a nonprofit, nonpartisan news organization focused on inequality and innovation in education. It receives support from a variety of individuals and philanthropies and works with news organizations across the country. Learn more at

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