Do loans make college affordable?

In the President's radio address this week he announced or called for changes to make student loans available to cover the cost of college. Seems the credit crunch is causing some lenders to leave federal and private programs. The President says these loans will make college more accessible and affordable. Really?

If you can't afford something, does borrowing money make it more affordable? Forgive me if something has change since I graduated from the UW Business school, but in the old days interest was charged in addition to the principal. That means the cost of your education with loans will be larger than without loans. It may give you access that you might not otherwise have, with the expectation of future income streams that would cover the loan payments. Michelle Singletary, personal finance columnist, makes the point better than I ever could (she hates debt - I like her).

If you're going to treat college as a financial investment that pays off in the long, thereby justifying the costs of borrowing, then you need to treat it that way. Study in a program that offers a likely payback in terms of high paying jobs, don't waste time on stuff you don't need and don't screw around and take classes over again. Just use the same good judgment you exercised when you used margin borrowing to buy tech stocks in the late 90's and second mortgaged your home in '06. So how's that working for you?

Instead of student loan programs and new branch campuses we could use that money to reduce the cost of education, making it truly more affordable. Students at state colleges and universities have been hit from two sides. First, the cost of education has grown at rates exceeding both the per capita income and inflation. The Higher Education Coordinating (HEC) Board published figures showing tuition and fees growing at over 6% a year since 1996 while Washington per capita income grew at just over 4% a year and inflation averaged just 2% a year.

The second factor is the percentage of the cost of instruction that is covered by tuition has also grown over the same time period. (cost of instruction = tuition + state general fund subsidy.) If you were at the UW in 1995, your tuition cover 33.3% of the cost of instruction (with the State paying the remaining two thirds). Students attending last year had to pay tuition to cover almost 53% of the cost of instruction. (The preceding statistics come from the 2006/2007 Washington State Tuition and Fee report, starting on page 21.)

Which leaves with two options to make college more affordable, either cut the cost of instruction or increase the percentage the State funds. In my opinion, the $1 billion we are going to spend on a UW branch campus would go along way to reducing the out of pocket costs for students today and for years to come.

Tags: President Bush, Student Loans, Michelle Singletary, HEC Board, Cost of Education

Review Rep. Loomis Wrap Newsletter

Liz Loomis is a Representative from the 44th district, my district, and one of the representative that I sent an email regarding the UW North Sound. While I did not agree with her response, I did appreciate that she took a few minutes out of her busy day to send me a reply (no, serious, I did appreciate it).

I just received her 2008 Session Wrap newsletter in the mail and was pleased with some of her comments on education.

We need to give more people the opportunity to earn a college degree. The state budget includes funding for 10,000 more spaces at our colleges and universities, including more spaces dedicated to high-demand degrees in math, science, engineering and health care.

But that doesn't fully address the reality of our workforce. One out of three high schoolers will drop out. Part of the problem is that we send students the message that a college degree is the only option to get a good paying job.

Only 25 percent of high school graduates will earn a college degree. We need to focus on the other 75 percent, especially now when our state has such a shortage in the skilled trades that we're forced to hire folks from other states.

Rep. Loomis is right on target with that second paragraph. We have dismissed and demeaned the value of high school, through our perverse preoccupation with the bachelor degree. One extremely passionate speaker on the value of the high school education is Dr. Susan Quatrrociocchi, or Dr. Q as she is known. I've had the pleasure of listening to her twice, most recently being this past Fall at the Everett school district advisory board kick-off meeting. Her analysis of the income data would seem to confirm Rep. Loomis' statements. If you have a Sno-Isle library account you can access the WOIS/The Career Information System database and see Dr. Q's reports including "The Earning Value of that High School Diploma".

At the same time, the demand in the skilled trades for educated people is growing. Part of the problem is the aging workforce but lack of interest in younger people is also a problem, as noted in this Herald article from last September. Again, Rep. Loomis' comments are on the mark and her support of apprenticeship programs is appreciated.

Unfortunately, not everything in the newsletter was quite as insightful as the above. On page 2 she writes:

It isn't just Microsoft and Boeing who worry about the shortage of skilled workers. Every small business owner I know says that they have a hard time getting people with the right skills and training. It's a problem with out higher education system which doesn't have enough space to train people in high demand fields.

Sorry Liz, I was with you until the last sentence. I know that several of the high-demand programs at the local community colleges are still struggling for enrollment and that UW Bothell is still below its allowable limit, regardless of the off-ramp status. The problem with high-demand STEM programs isn't that we are turning people away, but we can't get them to show up. Our focus must remain on encouraging participation and preparation by students in their middle school and high school years. Maybe then we can "build" more space.

Tags: Liz Loomis, Susan Quatrrociocchi, UW North Sound, STEM, UW Bothell, Edmonds CC, Everett CC

HEC Board to clear logjam

The Everett Herald reports on plans for Higher Education Coordinating (HEC) Board executive Director Ann Daley to work to end the standoff between Everett and Marysville as the site for the UW North Sound branch campus. The state has allocated $100,000 that could have otherwise gone to education for the task. The article is an interesting read in general, but here's my favorite part:

Ideas that might prove easier to unite around are popping up. These included expanding classes of the University Center run by Everett Community College and setting up learning centers for upper-division coursework in places such as Oak Harbor and Arlington.

I wish I had though of that. ;-)

Tags: HEC Board, Ann Daley, UW North Sound Branch

Movin on up to a deluxe apartment in the sky

Lisa Albers over at crosscut.com questions our priority in higher education (Washington's Higher Ed Priority: Posh Dorms) given the announcement by Washington State University (WSU) that they would spend $26 million on dorm renovations and expansions. This comes on the heels of a University of Washington (UW) plan to spend $850 million on the same. I understand the value in rethinking living and education spaces based upon changes in the education environment that include online classes, online library resources and team-oriented, project-based class activities. In the end, however, I have to side with Lisa that we are doing a bad job of prioritizing the expenditures we make in higher ed. We seem to be spending more and more money on fewer and fewer students, even as we lament the lack of college graduates in our state.

If form follows function, and function is fundamentally altered, then that form should change too. Thirty years ago when I was in college classes were held in lecture halls, work was largely individual and the materials were at the library. Now classes can be online, even for residential students, and all of your study materials are too. I'm guessing that the average student now needs an internet connection, conference room and white board as much as I once needed a roll of nickels for the copier and a bottle of Liquid Paper.

So redesigning living quarters with that in mind seems like a good idea, no? Glen Hiemstra goes further and suggests in a recent post at the Futurist.com that "students will continue to seek out learning communities including residential ones. But, while in residence on one campus or in one community, students may obtain a third or half off their credits via the global information network. This means that colleges will need to adjust to providing high-end IT facilities, such as true telepresence (HP version, Cisco version), and change their credit granting and financial policies to enable locally enrolled students to get much of their education 'off campus' as it were." [watch his Beyond 2020 talk at the UW in 2000 where he talks about this and other ideas on the changing nature of higher ed.]

That, unfortunately, isn't what I hear from the university mouthpieces. It seems that the main concern is that students might have to share a bathroom. You can read the two pieces for yourself, but my first reaction was "well at least the tax payer won't have to foot the bill". That's the wrong attitude for me to take. If they push these costs out to the students - the only other option - you just make it more difficult for students to attend. Consistently, costs are the biggest barrier to education and we so desperately want more college graduates.

So is it possible to find a cost effective way to reshape spaces to fit current needs without cutting off access to educational opportunities. Probably, but I don't trust our civic, governmental and educational leaders to find the balance between better spaces and opulence. Let's face it, they are addicted to concrete - Portland Gray - and the name plates affixed to the buildings.

Tags: Lisa Albers, University of Washington, Washington State University, Dorms