Submitted by Ryan Craig on October 15, 2015 - 3:00am
Can you name 50 U.S. colleges or universities that (i) don’t carry the name of a state and (ii) don’t have a Division I football or basketball team? If you can, you’re an elite reader of Inside Higher Ed.If not, you’re probably suffering from myopia like the rest of us.
Myopia in higher education is the tendency to mistake elite institutions -- the Harvard of Love Story (or really the Harvard of any of Kevin Carey’s favorite films) -- for the whole of our wonderful, diverse system. But this is not the only form of myopia afflicting our sector.
Conventional wisdom on postsecondary education says that the entire enterprise is indistinguishable from the work of colleges and universities. However, a recent report by Tony Carnevale and the Georgetown Center on Education and the Workforce serves as a corrective lens: colleges and universities represent $407 billion of the $1.1 trillion spent on postsecondary education and training, or only 37 percent of the total.
On the other hand, spending on training provided by employers is nearly 50 percent greater than all college and university spending. And broken down by age group, while colleges and universities dominate total postsecondary spending for young adults, they account for less than a quarter of total spending on adult education and training.
College and University Share of Total Spending on Postsecondary Education
It appears as if higher education is suffering from double myopia: the first misconception of the system is mistaking elite universities for all colleges and universities. The second is mistaking colleges and universities for all postsecondary education.
As we refocus our vision, the next big opportunity for growth in education may not be in attempting to “do college better,” but rather found in the yawning gap between what we typically conceive as postsecondary education and the world of work.
U.S. employers are developing a global reputation for wanting the perfectly qualified candidate delivered on a silver spoon -- or they won’t hire. As Peter Capelli of Penn’s Wharton School astutely notes, “Employers are demanding more of job candidates than ever before. They want prospective workers to be able to fill a role right away, without any training or ramp-up time. To get a job, you have to have that job already.”
He calls it the “Home Depot view of the hiring process,” where filling a job vacancy is “akin to replacing a part in a washing machine.” The store either has the part, or it doesn’t. And if it doesn’t, the employer waits. The result is that while there are over eight million unemployed workers, we have over five million unfilled jobs, and perhaps as many articles featuring employers whining about unprepared workers.
In his wonderful monograph “Why Good People Can’t Get Jobs,” Capelli says we have a “skills standoff,” with employers dissatisfied with the level of new hire preparation but unwilling to provide training or otherwise engage in skill-building activities with candidates. One major reason? Employers don’t want to risk investing in employees who may leave the company soon after.
And so the supposed skills gap is a byproduct of a trust gap. How can we get employers to trust new hires and engage in training and skill building? Likewise, how can we get candidates to invest in their own skill building -- perhaps even skill building specific to an employer -- so that employers find the “right part in a washing machine”?
Bridging the skills gap is not work that employers are prepared to do. In response, over the past several years we have seen a variety of intermediaries emerging at the intersection of higher education and the labor market in an area we call pre-hire training.
Some focus solely on training. Some focus on training and placement or matching services. Others focus solely on matching candidates with employers. In terms of revenue, some seek revenue from job seekers. Others generate revenue from employers. Still others attempt to charge education providers. The result is a matrix that looks something like this:
While these pre-hire training companies are diverse and include boot camps, online training providers, employment brokers, staffing companies, e-portfolio providers, and competency and credentials marketplaces, what they have in common is the following:
Pre-hire training is skill specific and often employer specific.
Employers are not asked or expected to bear the cost of pre-hire training, or engage in any way until candidates are trained. Rather, the cost of pre-hire training is borne by the candidate or the intermediary. (Even when the intermediary bears the cost of the training, the candidate hasn’t been hired yet, so the employee has skin in the game.)
Once intermediaries are successful in aggregating a pipeline of qualified candidates for employers, employers jump in with both feet and are willing to compensate intermediaries for producing employees who will be productive from day one as well as engage in developing and improving training curricula.
Fast-growing pre-hire training intermediaries like Galvanize, eIntern, Credly, ProSky and Portfolium are establishing structures and programs that encourage employers and candidates to trust one another. For example, pre-hire training companies that are confident in their ability to train and place candidates, and thereby attract employers, can guarantee some outcome to candidates to bring them in the door in the first instance. This could be a guaranteed interview, or even a job guarantee if they successfully complete the pre-hire training.
While some of this should be the province of colleges and universities, much of it won’t be. Higher education institutions should be in the business of equipping students with general skills like coding or reading a balance sheet -- tangible skills that are directly relevant to thousands of workplaces across the country.
However, I don’t see colleges and universities involved in matching students with employers at the level of the competency -- a proposition that requires institutions to assess students’ competencies and then match, rather than simply arranging job fairs and interviews. Nor do I see institutions engaging in employer-specific training on products, systems and process, so new hires can hit the ground running like an experienced employee. When we get beyond skills-based training to matching students with employers, intermediaries aggregating candidates from multiple institutions and providing matching and training services for multiple employers will be much more productive for students and employers than a single institution: scale matters.
Many institutions (and their students) will benefit from partnerships with these intermediaries. By connecting students with employers, students will have a better sense of the placement and salary outcomes from their program of study. But colleges and universities need to be prepared for the consequences: higher ROI programs will benefit at the expense of low ROI programs; shorter, less expensive programs with credentials that clearly convey competencies are likely to flourish.
The impact of this new generation of pre-hire training companies on students and employers is likely to be more profound. They will provide employers with visibility into a deep pool of future talent, along with the means to engage and attract this talent. And they will provide students with a much clearer road map of the education and training required in order to be considered by employers of choice. While our vision now is still quite cloudy, pre-hire training companies have the potential to restore it to 20/20, and dramatically improve the efficiency of our labor and postsecondary education markets.
Ryan Craig is managing director of University Ventures, a fund focused on innovation from within higher education.
Submitted by Don Francis on September 11, 2015 - 3:00am
On the presidential campaign trail, we’re seeing one so-called progressive candidate after another call for the federal government to enact major new spending programs to hold down tuition at public universities. Here’s the thing -- the results would be regressive: the prime beneficiaries of these proposals will be wealthier students who currently do not receive means-tested federal dollars.
Let me confess: I have spent the last 24 years of my life representing private colleges and universities in the Pennsylvania General Assembly and to the Pennsylvania congressional delegation. Because of that I know that the private four-year colleges and universities in Pennsylvania enroll a similar proportion of Pell Grant recipients as are enrolled at our state’s public universities, 24 percent versus 30 percent. I also know that with a few exceptions the average family income of students attending our name-brand public universities exceeds or approximates that of our private college and university students.
I get the politics of the candidates’ proposals. I understand that families are worried about paying for college. I understand that some students assume too much debt (though the average debt assumed for an undergraduate degree is a very worthwhile investment that returns far more value than a comparable loan for a new car). I understand that promising people they can attend a public university debt free is a popular political statement intended to help win an election. But let’s at least call this what it is: a cynical political proposal that is regressive in its use of government dollars to benefit upper-middle- and upper-income families.
I would like to believe that these “progressive” candidates are poorly informed about the realities of higher education finance and don’t realize that public colleges and universities for decades have been using their state-subsidized price advantage, their athletic programs and their investment in more amenities and “star” research faculty to become more selective and enroll higher and higher-income students. The correlation between income and test scores has been demonstrated repeatedly. In general, the more selective institutions become, the higher the family income of the students who attend.
Consequently, if you provide additional federal and state aid to a select group of public institutions and to the disadvantage of the private institutions with which they compete, then the government-favored institutions will ultimately become more popular, will have more students to choose from and will select the highest performers. From an institutional perspective, you are simply using your place in the marketplace to strengthen the quality of your institution by recruiting better students and making your faculty and alumni very happy. Perfectly reasonable approach for the institutions.
From a public policy perspective, however, this has many unfortunate consequences if your goal, as a country, is to increase access to quality higher education for low-income students or students who need extra preparation to make it through college.
First, those subsidies meant to make the public university more affordable will actually make it more difficult for lower-income and underrepresented students to gain admission, as they must compete with higher-income students (many of whom now attend private universities) seeking the generous government subsidy.
Second, these new federal and state government subsidies devoted to public universities will certainly result in the loss of students and tuition income at the vast majority of private colleges and universities. A relatively few private colleges and universities have enough wealth and national reputation to compete with an even larger government subsidy at the public universities. Many private colleges could be forced to close their doors if enrollment drops. Private institutions are performing a very important public service by educating hundreds of thousands of Pell Grant students each year -- 58,882 in Pennsylvania alone in 2012-13. If these institutions disappear, who is going to educate these low-income students? Not only will they struggle to get into some of the public universities, but many will struggle academically if they do get in, because the larger size and anonymity of public universities will make the learning environment less conducive for success.
Finally, all we have to do is to look at what happened the last time the federal government demanded that the states maintain their funding for the public universities to see how low-income students were hurt. As part of the stimulus package intended to shorten the 2007-8 recession, Congress required that states maintain funding to their public universities in order to receive federal stimulus dollars. As a result of this policy, several states -- including mine -- reduced their spending on need-based aid. Yes, upper-income students who didn’t receive need-based state grants received help through this increased government support to hold their tuition down. But the low-income students attending these same public universities saw their need-based grants cut and had to pay more for their college education.
These are regressive, not progressive policies.
In praising these “debt free” public university initiatives, one former Obama adviser spoke dismissively of vouchers for students, saying that the federal government needed to give money directly to public institutions. I believe that using institutional funding instead of vouchers to students (Pell Grants and state need-based aid programs) guarantees that taxpayer money will be wasted on those without need, while many with need will be left behind even further than they are today. Would a progressive even consider eliminating means-tested food stamps and replacing them with publicly subsidized grocery stores for all who want the government subsidy? Even worse, would they do this knowing that these grocery stores don’t have to allow all people to come in? In fact, that many of these grocery stores generally serve a population whose family income exceeds the national average?
Providing federal dollars to states to help subsidize low tuition at the public universities is a great idea if your ultimate goal is to pander to the public’s desire to have someone else pay for what is one of the most costly investments you can make in yourself or the members of your family.
However, it is also one of the most regressive economic stances you can take when put into practice, and we should stop pretending there is anything progressive about these proposals. Populist maybe, but not progressive.
Don Francis is president of the Association of Independent Colleges and Universities of Pennsylvania.
Employment and unemployment rates, much more than the number of high school graduates or other population trends -- which are important over time but very slow moving -- are the biggest factors driving enrollment for community colleges, for-profit colleges and some open-access four-year institutions.
Selective public and private colleges can control the size of their incoming classes by tinkering with admission criteria, and they tend to draw students whose decision is not whether to attend college but where. But community colleges accept anyone with a high school diploma who wants to enroll, and the size of that potential market varies depending on what the alternatives are.
For low-income students, especially at colleges where tuition is low and often covered by financial aid, the biggest cost of college is the opportunity cost -- the money a student could have earned by working instead of going to school.
In times of high unemployment, that cost for many is zero, and however hard someone might be struggling to make ends meet, going to college doesn't necessarily make it any harder. (Whether they can succeed in college without enough money for food or rent is the real question.)
But when unemployment is low and jobs are relatively plentiful, the choice to enroll is also the choice to leave money on the table, money students may need in the short term to cover basic necessities.
In that case, working in the short term also has its own long-term opportunity cost -- in the higher lifelong earnings available to college graduates.
For middle- and higher-income students, it is easy to choose the much greater long-term benefit over the short-term prospect of poor wages in a low-skill job. But for those with no savings or support from family members, and who may be supporting others with their income as well, work may seem like the only viable option.
So it is not surprising that when unemployment goes up, community college enrollments tend to spike, and when unemployment goes down, enrollments drop. (See image below.)
For every 1 percentage point change in the unemployment rate from May to May, community colleges can expect a 2.5 percent change (up or down) in fall full-time enrollment.
For this fall, if the past is any indication, the 0.8 percentage point drop in unemployment from 2014 to 2015 should translate into between a 1 and 3 percent enrollment decline. Regions hitting a rough patch -- say, the energy-producing areas of the country -- may see the opposite trend.
But with states, institutions, philanthropic organizations and the federal government all working to improve college access and attainment, perhaps one day this correlation will weaken, and low-income students will be able to make the kinds of long-term trade-offs and choices for the future that their better-off counterparts have always found so easy.
Nate Johnson is a higher education researcher and principal of Postsecondary Analytics, LLC.