Higher Ed Research Roundup

At annual gathering of scholars of academe, researchers discuss a potpourri of topics, including the state of for-profit colleges and the impact of no-loan policies.

November 21, 2011

CHARLOTTE, N.C. -- With much of the potential drama of the annual meeting having unfolded before it began -- with the cancellation of a planned session on the validity of the National Survey of Student Engagement -- there was no obvious center of gravity as the members of the Association for the Study of Higher Education gathered here. Instead, the conference offered its usual dizzying array of topics for exploration -- from student access and persistence to the changing role of the faculty to countless sessions on diversity.

Below are a few highlights of the meeting, at least through the eyes of one observer:

Pros and Cons of For-Profits

For-profit colleges have become a growing force in higher education, with their enrollments surging (this year’s totals notwithstanding) to a proportion of all postsecondary students that almost begins to equal the share of all negative higher ed-related headlines that they generate.

But the scholarly scrutiny of the institutions has lagged, from a combination of lack of interest and understanding on the part of researchers educated in traditional institutions and the historical difficulty in studying private institutions that have few requirements to open their doors and their data.

That is beginning to change, with several universities (including the State University of New York at Albany and the University of Southern California) developing research specializations in for-profit higher education and the number of sessions and presentations on the topic edging up slowly at meetings like this one.

A pair of papers by California researchers at the ASHE meeting provided a fascinating one-two punch in macro- and micro-level analyses of the role of for-profit colleges in the current higher education universe.

In her paper, Su Jin Jez, an assistant professor of public policy and administration at California State University at Sacramento, assessed the role that for-profit institutions are playing now -- and should be playing in the future -- in expanding access to and completion of higher education in her state, which has seen drastic cuts in budgets and enrollments in public higher education.

Jez told that story with data, showing that for-profit colleges enroll more Californians than all sectors other than community colleges (at 380,000 students, far less than the California Community Colleges’ 970,000 but more than third-place California State University at 332,000), greater proportions of black and Latino students than any other sector, and greater proportions of Pell Grant-eligible students than any sector but (surprisingly) private nonprofit colleges.

The institutions have increased the number of certificates and associate and bachelor’s degrees they award, such that in 2008 they approached the number awarded by Cal State (which in turn was second to the community colleges) before dropping off sharply in 2009. The commercial higher education providers are a major provider of job-oriented certificates, Jez said, and are especially productive in many of the fields (health sciences, consumer services and apparel, visual arts and design, computer and information sciences) atop the California’s list of employer needs.

“I was shocked to find that for-profits are producing one in five of California’s undergraduate awards,” Jez said. She acknowledged that her analysis did not focus on some of the thorny questions being raised about for-profit colleges -- about why students (and especially minority students) are enrolling there, about the quality of the degrees the institutions award, and the debt their students accumulate. (Another presenter, Donald E. Heller, director of the Center for the Study of Higher Education at Pennsylvania State University, raised many of those issues in a presentation based on a critical article he wrote about for-profit colleges for Change magazine this year.)

But Jez argued that the enrollment and completion numbers alone mean that the institutions “need to be a player in state-level strategic planning” in the state. California, she said, cannot reach its goals for postsecondary completion without for-profit colleges playing a role.

Another paper presented at the session examined the for-profit-college role through a much narrower prism: the needs of one student. The presentation by William G. Tierney, Wilbur-Kieffer Professor of Higher Education and director of the Center for Higher Education Policy Analysis at the University of Southern California, focused on Manny, his barber’s son. (There were numerous jokes about the appropriateness of the hairstyling theme from a professor in Los Angeles.)

Manny, Tierney said, graduated from high school with a so-so academic record, lives at home and works part-time, and wants to become a cosmetologist. Living in South Pasadena, the USC professor said, Manny has three viable options, all of which he explored this month.

The local community college, Pasadena City College, would charge him about $5,000 for an 11-month curriculum, and with a $2,700 Pell Grant and two forms of state aid, Manny would emerge from that program with no debt. The college won’t enroll its next group of students in the program until February – and Manny would not find out until then, Tierney said, whether it will have space for him, given budget constraints.

Manny’s other two nearby options are proprietary schools run by the manufacturers Aveda and Paul Mitchell. Both of them would provide Manny the same credential he’d earn from the community college, but charge roughly $20,000 for it. (After a $5,500 Pell Grant, he would emerge from each with about $14,500 in loans, for a job that will pay $19,000 to start.) Graduates of the programs pass the state licensure exam in cosmetology at roughly comparable rates, about 90 percent at the community college and several points higher at the two for-profit colleges.

He would be able to start classes at Aveda in early December, and at Paul Mitchell within a week.

Tierney, who co-wrote a 2007 book, New Players, Different Game (Johns Hopkins University Press) on for-profit higher education and calls himself a "loving critic" of the sector, asked the audience members where they would advise Manny to go; they were torn, with many suggesting the lower-cost community college but others recognizing the practical considerations that might point him to the for-profit alternatives.

"It seems irrational that if your salary is going to be $19,000, why would you choose an institution where you'll be $15,000 in debt and scot-free in the other?" But that assumes a level of choice that Manny may not have, Tierney said; he "may not get into the [Pasadena City College] program even in February," given the prospect of yet more budget cuts in the state.

"For those who wish to kill for-profits, where do we put the students who want degrees in cosmetology? If we had a vibrant public sector, I would probably agree [that the institutions might not be the ideal choice]," said Tierney. "But we do not.... I think it is necessary in America, if we want to increase capacity in the manner in which President Obama and others want, that we have to have [for-profits] exist."

In an interview after the panel, Tierney acknowledged that the arguments for a key for-profit role are strongest in many technical and job-related fields that other sectors of higher education shortchange, and that more aggressive state regulation in consumer protection is necessary to guard against abuses that have characterized some elements of the sector.

And the panel's moderator, Kevin Kinser, associate professor in the State University of New York at Albany's department of educational administration and policy studies, said that Jez's and Tierney's comparisons of the credentials earned and debt accumulated by the students who complete programs at nonprofit and for-profit institutions did not account for what happens to those who fail to finish the programs.

Given the significantly higher expense of the for-profit programs, he said, students like Manny who do not earn credentials from the program will find themselves in far worse shape than if they had entered but failed to complete a lower-cost program at a community college.

Impact of No-Loan Policies

Several dozen highly selective public and private colleges have eliminated loans for low- (and some middle-) income students in recent years, and the institutions have sometimes trumpeted the policies as boosting access to higher education for needy students.

A study discussed at the ASHE meeting found that the policies have clearly increased the number of low-income students at the colleges and universities in question -- but concludes that there is little evidence that the policies have had a meaningful impact on the higher education access problem.

Nicholas Hillman, an assistant professor in the department of educational leadership and policy at the University of Utah, examines the 52 institutions that, from 2005 to 2008, dropped loans from the financial aid packages awarded to students under certain income levels and replaced them with outright grants. Hillman's study compares changes in the enrollment of Pell Grant-eligible students at those institutions with the trend at a group of 63 peer colleges.

The peer institutions started the period with significantly higher numbers of Pell-eligible students (2,454 on average, vs. 1,650), but the "no loan" institutions saw much sharper gains than did their peers, with the averages rising to 2,502 vs. 2,393, respectively. The public universities that adopted no-loan approaches saw particularly large increases in the number of Pell-eligible students, rising from about 4,500 to more than 5,200 on average, Hillman found.

Those outcomes are undoubtedly "desirable" for the institutions and students in question, Hillman writes, but he questions the impact of the colleges' policies on the larger issue of higher education access. Even with the increases, the institutions enroll relatively few low-income students, and "the fiscal reality is that very few institutions have the financial resources to offer similar pledges to students," Hillman writes.

"Based on college choice literature, it is likely that students in elite higher education are already college-bound and no-loan policies are probably improving choice (rather than access) for these students. Accordingly, this analysis does not posit that no-loan policies expand 'access' per se."

The question for policy makers, he said, may be whether federal and state governments might be able to provide incentives to encourage colleges and universities without big endowments to adopt no-loan policies, or to target appropriations "to institutions that pledge to reduce prices for Pell recipients and other low-income students as a way to increase educational access and success in terms of socio-economic status."


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