OPBlog: Higher Ed Junction
The University of Washington (UW) and Washington State University (WSU) (along with eight other top universities) have been selected by the National Science Foundation to participate in the Graduate 10K+ program, a $10 million initiative to increase graduation rates in STEM fields, particularly engineering and computer science. The UW will receive $970,000 and WSU will receive $700,000 over five years to fund their projects. The initiative is funded by the Intel Corporation, the GE Foundation and prominent hedge-fund manager and White House adviser Mark Gallogly. While the funding for this program is limited, experts hope it will encourage innovative pilot projects at the selected universities and prompt other companies and individuals to donate.
The UW, in collaboration with WSU, will use its funds to implement an “academic redshirt” program for engineering. The program will enroll low-income high school graduates in a five-year engineering degree program. The first year will focus on solidifying students’ math and science skills. Students will receive individualized advising as well as assistance with acclimating to university workloads. This will help them to be better prepared for the rigors of engineering study at the UW and will remedy learning gaps they might have from high school, hopefully increasing freshman retention and degree completion. After successful completion of the first year, the students will be accepted into one of the UW’s engineering departments. UW and WSU each hope to enroll 32 freshmen in the program, reaching a total of 320 students in five years.
Accenture, a management consulting firm, recently conducted a survey of 2011/2012 college graduates and 2013 pending graduates. The survey focuses on the 2011/2012 graduates’ job search experience, and asks them about their current jobs, salaries, and future education plans. Accenture then contrasts their responses with the employment expectations of pending 2013 graduates. Some interesting findings include:
- While more than 77 percent of 2013 grads expect to receive employer-provided training at their future job, only 48 percent of 2011/2012 grads actually received such training from their employer.
- 50 percent of 2011/2012 grads who are currently unemployed claim that they cannot find a job because companies believe they do not have enough experience, even though 72 percent of 2011/2012 grads participated in an internship during school.
- 41 percent of 2011/2012 graduates believe they are underemployed, meaning their job does not require a college degree.
- Yet despite the still-sluggish economy, 81 percent of 2011/2012 graduates report they found a secure job within 6 months of graduation.
- Of 2011/2012 graduates, 42 percent expect to pursue a graduate degree, but only 18 percent of 2013 grads expect to do so.
Accenture’s report points to the disconnect between employers’ and graduates’ expectations of employment, particularly when it comes to experience and training. The report encourages employers to hire based on potential and a broad skill base, not on specific expertise or perfect qualifications. Furthermore, it recommends that employers provide increased on-the-job training for recent graduates so they can gain necessary experience and job skills to supplement their educational qualifications. Finally, Accenture advises that employers work more closely with educational institutions to help better align their needs with university curriculums, and to provide more internship opportunities for students.
The 105-day state legislative session officially ended this Sunday, April 28th. Unfortunately, the state legislature was unable to reach a compromise on the budget by the end of the session. A significant cause of the impasse is the Washington State Supreme Court ruling that requires the legislature to fully fund K-12 education. The House budget proposal repeals eleven tax exemptions and extends several other taxes, diverting $1.17 billion into education, while the Senate version cuts several social programs to fund education with $1 billion. Governor Inslee has called a special session, to begin May 13th, in order to pass a compromise budget and to pass legislation on other issues such as universal background checks for gun purchases, the state DREAM act, tougher DUI laws, and the Reproductive Parity Act. When special session begins, all bills that have passed out of the house of origin will be reintroduced in that house and placed on third reading. Budget writers will stay in Olympia to try to work on a compromise in the next two weeks. As always, we will post any updates on their progress to this blog. Be sure to monitor the UW State Relations blog for updates as well.
Of the nearly 900 schools that received federal money for research and development (R&D) in FY 2011, the UW ranks first among public institutions and second overall in terms of federal research funding. According to a study by the National Science Foundation (NSF), approximately 20 percent of all federal R&D support went to just 10 universities. 24/7 Wall St. reviewed those universities, Table 1 summarizes their findings.
Johns Hopkins University, a private institution, topped the list with nearly $1.9 billion—more than doubling what any other university received that year. The majority of Johns Hopkins’ federal funding came from the Dept. of Defense and NASA. The university also brought in billions via fundraising efforts.
The UW came in second with almost $950 million in federal R&D funding—the most of any public school. The majority of the UW’s money came from the Dept. of Health and Human Services; however, the University was the top beneficiary of NSF funding, receiving more than $145 million in 2011.
Year after year, the same schools consistently receive the most money, said Ronda Britt, a survey statistician with the NSF. 24/7 Wall St. quotes her as saying, these universities “have big research programs that receive a lot of support year after year, and have a lot of infrastructure that helps them keep the money stable.” This holds true for the UW, which has ranked first among public schools since 1974. Having large endowments was another commonality of the top 10 schools, yet federal funding covered the bulk of R&D expenditures in all cases.
As these universities rely heavily on the federal government to support their research, many are concerned about the sweeping cuts of sequestration. The UW and other universities are preparing for a range of possible impacts. As described in our joint brief, the sequester could reduce the UW’s federal grant and contract support by an estimated $75M to $100M during FY13. The UW community is encouraged to remain cautious and conservative in spending federal awards and in planning for future federal funding.
On Monday, Governor Rick Scott of Florida signed a bill that gives special status and increased funding to Florida’s top two universities. The bill designates the University of Florida and Florida State University as “pre-eminent” universities and provides them with an extra $15 million per year, for five years, to help them become two of the top ten research universities in the nation. The money pays for increased faculty salaries and more research funding. In addition, legislators are considering restoring $300 million in funding that was cut in the 2012 legislative session. The bill also relieves the two universities of certain onerous reporting requirements. Eric Barron, president of Florida State, claims the increased funding will not only improve the quality of education at his university but also improve the return on investment of state money, because prominent faculty members will not be “raided” by other institutions were they would be paid much more.
The bill also provides $10 million more in funding for online degree programs this year, with $5 million appropriated in subsequent years. Tuition for online programs is capped to 75 percent of tuition for on-campus programs. The legislature would like to see increased out-of-state enrollment in these online courses, as online degree programs have already provided an additional $70 million in revenue a year for the University of Florida.
To read more about the Florida legislation, check out the Chronicle’s article here. To read about current proposals for higher education funding in Washington state, please see our recent briefs on Governor Inslee’s budget priorities or the Senate and House budgets.
The American Association of University Professors (AAUP) recently released its report on faculty salaries for 2012-2013. Salaries for full-time faculty members rose by an average of 1.7 percent in 2012-2013, which offsets inflation (estimated at 1.7 percent in 2012-13). However, increases varied widely across institution type—pay at private universities was much higher than salaries at public institutions, and professors at doctoral universities made significantly more than faculty at baccalaureate institutions. Furthermore, the survey counts only faculty members who are employed full-time; part-time adjuncts, whose pay is generally significantly lower than that of full-time professors, are excluded.
Inside Higher Ed has compiled a list of the highest-paid full professors in academia. Based on the average salary of full professors, Columbia University ($212,300), Stanford University ($207,300), University of Chicago ($203,600), Harvard University ($203,000) and Princeton University ($200,000) are the top five highest-paying institutions. Of the ten universities with the highest average pay, not a single institution is public. The highest-paid full professors at public institutions are at University of California, Los Angeles, ($167,000), New Jersey Institute of Technology ($166,700), University of California, Berkeley ($158,900), Rutgers University at Newark ($154,700) and Rutgers University at New Brunswick ($151,000).
Detailed information about the UW’s submission to AAUP can be found here. In addition, OPB has prepared a table that compares UW average faculty salaries to those at our Global Challenge State (GCS) peer institutions. UCLA and Rutgers University, whose full professors are some of the highest paid in academia, are both in the GCS peer group. According to our analysis, average faculty salaries (of full, associate, and assistant professors combined) would need to increase by 11.4 percent to equal the GCS peer average. The average salary of full professors would need to increase 16 percent and that of associate professors would need to increase 9.2 percent to equal the peer average. As can be seen on the graph below, the UW’s salaries moved closer to those of the GCS peers between 2003 and 2008, but this progress reversed in 2009, when the legislature imposed a four-year salary freeze.
House Ways & Means Chair Ross Hunter released the House budget proposal today. Please see the OPB Brief for a complete analysis. Table 1 shows the total funding the UW would receive under the House chair budget, divided into three standard categories: the carry forward level, the maintenance level and the performance level.
The House assumes that the UW will increase undergraduate resident tuition by 5 percent each year, thus making more revenue available. However, the House Chair budget requires that $2 million go toward the College of Engineering, $12 million be used to create a Clean Energy Institute, and a total of $16.5 million of the appropriation be used to support enrollments in Computer Science and Engineering.
As shown in the table below, once recognized additional operational needs are met and once dedicated funds are removed from the equation, the UW is left with almost $10 million less in net new state funding in 2013-15 compared to the previous biennium under the House budget. Once the potential additional tuition revenue is taken into account, however, the UW fares better under the House budget, even with its spending requirements. Moreover, the Senate relies on a draconian 20 percent surcharge on international student tuition to generate this additional funding amount. As mentioned in our previous brief, given that the majority of international students in Washington are enrolled at the UW, this amounts to a tax on UW students. It is expected that the surcharge will lead to a decline in international student enrollments, which could lead to an overall reduction of revenue for the UW.Comparison of House and Senate Budget Proposals (in $1,000s)
w/o 1-Time $UG Res Tuition Increase (FY14, FY15)
0%, 0%2011-13 Funding
$421,505Total 2013-15 Funding
$47,888Carry Forward & Maintenance Needs
$34,391Required – Engineering Enrollments
-Required – Computer Science & Engineering
-Required – Clean Energy Institute
-Net New State Funding
$13,497Incremental Revenue, UG Res Tuition Incr
-Total Net Funding Change
We are still reviewing the potential impacts of this budget proposal and will provide revisions to the brief as more information becomes available. Once the House chair budget passes the floor (which is expected later this week), leaders of the House and Senate will begin negotiations to reconcile the differences between their respective approaches. It is likely that the UW will not have a clear sense of its actual anticipated state funding level until the end of this month at the earliest.
For the first time since “9/11”, the number of Chinese students applying to American graduate programs has declined significantly. According to a Council of Graduate Schools report released today, the number of graduate applications from China is down 5 percent this year, after having risen by 19, 21 and 20 percent in the previous three years.
The drop in graduate applications from China was offset by increases from India and Brazil, resulting in an overall increase of 1 percent in international student applications. However, this figure remains concerning: international graduate applications had increased by 9, 11 and 9 percent in the previous three years.
This news comes as the Washington State Senate contemplates imposing a 20% surcharge on tuition paid by international students to fund higher education in the state. The UW has already warned the such a surcharge would drive away top talent, reduce positive externalities associated with diversity, and generally make the UW less competitive compared to its peers. Today’s report merely strengthens the argument: even without the surcharge, the UW will be competing for a shrinking pool of top international talent.
To follow developments regarding the surcharge proposal (SB 5893), visit BillTracker.
Tuition: The Senate Chair budget contains language allowing the Regents to set tuition and fees for all student categories other than resident undergraduates. The budget bill assumes no tuition increases for resident undergraduates; however, UW Regents retain the authority to set tuition rates under HB 1795. It is crucial to note that the budget states that these tuition provisions will be nullified if SB 5883 passes. SB 5883 would require a 3 percent decrease in resident undergraduate tuition for 2013-14.
Compensation: The budget deems the UW’s collective bargaining agreements (CBA) to be financially feasible and restores the 3 percent salary cut imposed on state agencies in the last biennium. We assume the budget lifts the current salary freeze for state employees as it makes no mention of extending it. In addition, the budget assumes savings by changing the definition of “full time” employee to align state employee healthcare eligibility with the federal standard set out in the Affordable Care Act. This is a significant change in policy, and we expect it to become a serious topic of public debate in the weeks to come.
Other policy changes affecting the UW include:
- Funding for the Joint Aerospace Initiative with WSU;
- Appropriations for a new Center on Ocean pH Balance;
- One-time, performance-based funding;
- Operation and maintenance funding for MolE and Dempsey Hall;
- Funding reductions related to administrative efficiencies;
- An international student surcharge; and
- A fund transfer from the UW Hospital Account.
The Senate chair budget proposal is one of a series of budgets released as part of the biennial budget process; the House is expected to release its budget proposal next week. It is likely that the UW will not have a clear sense of its actual anticipated state funding level until later this month.
On Thursday, Governor Inslee released his budget priorities for the 2013-15 biennium. OPB released a comprehensive brief on the plan, but below is a quick summary of the major points in the Governor’s budget.
Governor Inslee’s plan would fund all of higher education, including financial aid, with nearly $3 billion (8.4 percent of the total budget), of which the University of Washington would receive just over $232 million per year. This funding level represents about $3.6 million more per year than the UW would have received under Governor Gregoire’s “New Law” budget. Governor Inslee’s plan also:
- Authorizes tuition increases of up to five percent per year for resident undergraduates at UW and WSU (three percent at other four-year universities). While the UW still has tuition setting authority, it must provide increased financial aid if it raises tuition above five percent.
- Provides the UW with $6 million per FY to create a Clean Energy Institute with the purpose of researching energy storage and solar energy.
- Appropriates$1 million per FY to the UW’s College of Engineering to support increased enrollments.
- Funds the joint Aerospace Initiative and the Center on Ocean Acidification at levels consistent with Governor Gregoire’s budgets.
- Gives additional funding to financial aid to keep pace with tuition increases and to fully fund the College Bound scholarship program.
Governor Inslee’s plan restores the 3 percent salary cut imposed on state agencies in the last biennium, but includes no mention of the current salary freeze for state employees, which is set to expire on June 30, 2013. We assume this means the freeze will be lifted, however the Governor’s plan does not provide explicit funding for wage increases.
Governor Inslee’s capital budget plan is identical to Governor Gregoire’s, and includes money for the UW’s top capital priorities such as minor capital repair, the UW Tower Chilled Water System Replacement, and Magnuson Health Sciences Center Roofing Replacement.
While Governor Inslee’s budget blueprint is an important step in the budget process, we expect the UW will not have a clear picture of its actual FY14 and FY15 funding levels for at least another month. We will post updates to this blog when the Senate and House release their budgets. Please also monitor the State Relations website for information.
The U.S. Supreme Court has agreed to consider whether a 2006 Michigan referendum to ban public colleges from using race or ethnicity in admissions is constitutional. This is the second affirmative-action case on the court’s docket —the first being Fisher v. University of Texas at Austin (discussed in a previous blog). If the Supreme Court declares the ban, known as Proposition 2, unconstitutional, similar bans in Washington and five other states could also be invalidated.
Inside Higher Ed nicely summed up the difference between the two affirmative action cases: “The Texas case is about the extent to which public colleges and universities may consider race and ethnicity in admissions, while the Michigan case is about the extent to which voters can bar such consideration.”
The Supreme Court accepted the Michigan case, Schuette v. Coalition to Defend Affirmative Action, after the state’s attorney general, Bill Schuette, appealed a November ruling by the U.S. Court of Appeals for the Sixth Circuit. The appeals court struck down Proposition 2 in an 8-7 vote, on the grounds that it “undermines the Equal Protection Clause’s guarantee that all citizens ought to have equal access to the tools of political change.” Under Proposition 2, minority citizens who want public university admissions to consider race must launch a burdensome ballot campaign, whereas groups seeking other university policy changes are free to simply lobby.
Schuette argues that Michigan’s measure and the Equal Protection Clause both protect a fair political process, whereas “preferential treatment based on race (which necessarily means discrimination against other races)… focuses entirely on achieving a particular outcome (here, an admissions outcome), even at the expense of making the process discriminatory.” Michigan’s measure, he says, “does not endorse race-based policies; just the opposite, it stops discrimination based on race.”
The Supreme Court will hear the Michigan case in its term starting in October. Its ruling in the Texas case is expected this spring or summer, but could occur at any time.
On Wednesday, March 20, the Washington State Economic & Revenue Forecast Council (ERFC) released its quarterly update of State General Fund Revenues. Revenue from an anticipated increase in Washington housing permits and real estate excise tax receipts is expected to offset higher federal tax rates and spending cuts than were previously assumed. Overall, revenue projections for both the 2011-13 and 2013-15 biennia remain relatively stable, with a slight net gain of about $40 million across the two biennia. However, this net gain is negated by the roughly $300 million in additional Medicaid caseload costs. The state and its lawmakers now face a $1.3 billion deficit along with court-mandated funding for K-12 education, which could cost another $1 billion. Their upcoming budget proposals will have to reconcile these demands on the state purse.
We anticipate that the Senate Majority Caucus Coalition will release its operating budget proposal sometime next week, while the House will likely release its budget by early next month. Until that time, any specific impact on the UW cannot be assessed. Please see the full OPB brief for more information.
Legislation was introduced in the California Senate on Wednesday that would require the state’s 145 public colleges and universities to grant credit for faculty-approved online courses taken by students unable to register for overenrolled, on-campus classes. If the bill passes and is signed into law by Gov. Jerry Brown (who has been a strong supporter of online education), online courses could go mainstream much more quickly than predicted. At the moment, however, Senate Bill 520 is just a two-page legislative placeholder, or “spot bill,” to be amended with details later.
According to Inside Higher Ed, the bill’s sponsor, Democrat State Senate President Pro Tem Darrell Steinberg, said the bill is meant to “break the bottleneck that prevents students from completing courses.” In Fall 2012, more than 472,000 of the 2.4 million students in the California Community Colleges system were put on waiting lists and at the California State University system, only 16 percent of students graduate within four years. Theoretically, increasing capacity to meet student demand for key, gateway courses could improve on-time graduation rates and more efficiently use state funds. The debate, of course, is whether online courses are actually effective and thus appropriate substitutes for traditional courses.
Under the proposed legislation, a nine-member faculty council representing the state’s three public higher ed systems would determine which 50 introductory courses are most oversubscribed and which online equivalents should be eligible for credit. When reviewing online courses, the panel is to consider whether a course:
- Offers instructional support to promote retention;
- Provides interaction between instructors and students;
- Contains proctored exams and assessment tools;
- Uses open-source text books; and
- Includes content recommended by the American Council on Education.
MOOCs provided by Udacity and Coursera, as well as low-cost, self-paced courses from StraighterLine could all be up for consideration—several of which have already gained ACE approval.
Senator Steinberg emphasized at a news conference that the legislation “does not represent a shift in funding priority” for higher education in California, and is not intended to introduce “a substitution for campus-based instruction.” Nevertheless, for the many faculty and university administrators concerned about SB 520’s consequences, the devil may be in the yet-to-be-determined details. We’ll keep you apprised as those details are fleshed out.
The State Higher Education Executive Officers (SHEEO) released their annual report, State Higher Education Finance FY2012, on Wednesday. According to their analysis, the cost of public higher education throughout the United States is now almost equally split between students and states. In 2000, tuition revenue made up less than 30 percent of total educational revenue. Ten years later, in 2010, the percentage of total educational revenue at public higher education institutions made up by tuition revenue was 40.6 percent. By 2012, students funded 47 percent of their education while state funding made up 53 percent. At the same time, total funding per student has declined in all but two states; in fact, average state funding per student FTE (in real terms) was lower in 2012 than in any year since 1980.
At the UW, this trend has been even more pronounced: state funding comprised just 31 percent of total educational revenue per student in 2011/2012, down from 50 percent in 2009 and 82 percent in 1990. At the same time, total funding per student at the UW has declined by $1000 (in real terms) since 1992. For further analysis on the UW’s state funding level relative to our peer institutions, please read these recent OPB briefs: Ratio of State Funding to Tuition Revenue: UW and Peers and Updated UW Per-Student Funding Comparisons.
Some fear that the combination of less funding per student and the greater cost of higher education for families will undermine educational quality, access, and competitiveness, particularly as other countries are moving to boost their investment in higher education.
Sequestration will take effect tonight at midnight. While the cuts will be smaller than originally mandated ($85 billion instead of $109 billion), the impact in federal FY13 will be higher since the cuts must now be applied to only seven months instead of nine. Immediate and long-term impacts on the UW and Washington State are difficult to predict. However, during the remaining months of federal FY13, we estimate that the sequester could reduce the UW’s federal grant and contract support by an estimated $75 million to $100 million and cut Build America Bonds (BABs) subsidy payments by $500K to $700K. Additionally, the UW is projected to lose about $33,000 in work study funds for 2013-14. The potential impact on Washington State includes $11.6 million less for primary and secondary education, $11.3 million less for education of children with disabilities, and 1,000 fewer children receiving Head Start services.
The College Board announced today that it would begin the process of overhauling the SAT. While no details have been published yet, David Coleman, the new president of the College Board, has indicated that the test would be adjusted to more closely mirror—and better prepare students for—the expectations of a college classroom. In the past, Coleman has been critical of the SAT writing section, introduced in 2005, saying that the opinion-based writing style the test demands is not comparable to the evidence-based style required in college. Coleman also claimed that changes to the test would improve the transition from high school to college, better align the test to the core high school curriculum, and increase equity and fairness.
Some experts believe the SAT is being revamped because of increased competition from the ACT. This year, for the first time since the tests were created, the number of students taking the ACT exceeded the number taking the SAT by about 2,000 students. The ACT has traditionally been favored in the Midwest, and by students who do well in rigorous courses but have more trouble with high-stakes aptitude tests. Now, many students take both tests, and students from all regions are considering the ACT as an option. The SAT overhaul may therefore be an effort to make the test more relevant and re-establish the SAT’s dominance in the college admissions testing field.
The National Student Clearinghouse recently released an interactive map that illustrates the experience of students who were first time freshmen in 2006. The map shows six-year graduation rates broken down by institution type, student age, and part-time or full-time status. Washington’s level of college completion was higher than average—Washington’s six-year graduation rate for the 2006 first-time freshman cohort, across all types of institutions, was 66.3 percent, while the national average was 60.6 percent. Interestingly, full-time students at four-year public institutions in Washington had a much higher six-year graduation rate, at 86.4 percent, compared to 81 percent nationwide. Unfortunately, Washington students who enrolled part-time had completion rates below 19 percent at four-year publics and below 13 percent at two-year schools. Furthermore, non-traditional students (first-time freshmen 25 years old or more) were much less likely to graduate in six years than their younger counterparts.
Although there are many types of financial aid, it is typically awarded on the basis of either need or merit. Need-based aid is largely a result of a federal calculation and is somewhat predictable: to ensure access, students with more financial need receive more financial aid of various forms. And, although there is no universal definition of the merit aid, it traditionally describes scholarship money used to attract top academic achievers. However, Kevin Carey, director of education policy at the New America Foundation, asserts in a recent commentary for The Chronicle that a significant portion of merit aid is actually used to attract “academically marginal students with wealthy parents.”
Carey cites evidence of this trend. A 2011 U.S. Department of Education study found that of the full-time students at four-year institutions who received “merit” aid in 2007-08, almost 20 percent had entered college with a combined SAT score of less than 700 and 45 percent had scored below 1000 (out of a possible 1600). The study also shows that although the percentage of private college students receiving need-based aid showed a slight decline from 1995 to 2007 (going from 43 to 42 percent), the proportion receiving “merit” aid nearly doubled during that time span (from 24 to 44 percent). At public universities, the percentage of students getting need-based aid increased from 13 to 16 percent, but the growth in merit aid outpaced it, going from 8 to 18 percent. Thankfully, as discussed in a previous post, a group of private-college presidents has been calling on its peers to limit the amount of financial aid awarded on criteria other than need.
The National Association of State Student Grant and Aid Programs’ (NASSGAP) Annual Survey Report on State-Sponsored Student Financial Aid and Brookings’ Beyond Need and Merit: Strengthening State Grant Programs provide corroborating evidence that merit-aid is becoming more prevalent, while need-based aid is diminishing. However, neither discusses the academic strength of the students receiving merit aid.
So why is this happening? If a college offers good scholarships and financial aid packages to an affluent family, it may incentivize them to choose that school. Even though that family’s son or daughter may be a low academic achiever who has a decent chance of dropping out, it is still lucrative for the school to attract those students. Noel-Levitz, a higher ed consulting firm, revealed that one of its client colleges was able to generate over $10,000 more per low-achieving student than they could per top-achieving student.
Carey hopes that as taxpayers, the news media, and affiliates of universities become aware of this trend, their vigilance will keep institutions in check.
Many of the white papers sponsored by the Bill & Melinda Gates Foundation’s Reimagining Aid Design and Delivery project have focused on modifications to the Pell program and/or student loans and repayment (including the two I summarized previously, found here and here). However, the white paper released on Wednesday by the Center on Postsecondary and Economic Success takes a different approach. It argues that by making tax-based student aid more beneficial to low and middle-income students, the federal government could save billions of dollars, direct those savings to the Pell program and improve the financial aid system as a whole.
Current tax-based financial aid provides high-income families with much larger tax deductions, since the value of the deductions is linked to a family’s marginal tax rate. As The Chronicle notes, “a $100 tax deduction, for example, is worth early $40 to a high-income household but only $10 to a lower-earning family.” To remedy this issue and refocus the benefits of aid onto low-income families, the Center proposes increasing the refundable portion of the American Opportunity Tax Credit (AOTC). The Center also recommends eliminating nonrefundable tax credits, such as the Lifetime Learning Credit (LLC), since they do not benefit households that pay no income tax (i.e. low-income families).
A table showing the baseline distribution of students receiving Pell Grants, the AOTC, and the LLC by adjusted gross income in 2013 can be found here.
The paper includes three alternative proposals for making tax-based aid more helpful to low-income students and simultaneously boosting college access and completion. It also discusses three options for improving performance measures used in student-aid policies.
On Tuesday, February 12, President Obama discussed higher education briefly in his State of the Union Address. The President repeated a popular refrain, calling on colleges to restrain soaring tuition costs in light of the fact that Americans with some higher education are more likely to maintain steady employment and earn a comfortable income (or, [...]
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