The 2013 Forces for Change in Education

Forces for change in education will produce more choice for consumers, and that is good news.  What we need, of course, is not just more educational choice but better choices that produce a labor force with greater knowledge and skill sets.  The forces for change will lead us in that direction, but education remains a faculty- and teacher-driven industry that is less market-focused than society needs.

Despite lingering economic challenges in the US and Western Europe, the global economy is slowly recovering.  With that recovery, businesses will start to increase hiring of new talent.  What they will find in the labor market, some believe, is a talent base that is improving too slowly in terms of business-needed knowledge and skills.  We see that slow improvement reflected in the frustration of many young people and their parents with underemployment and long-term unemployment.  One reason for low level jobs and the lack of jobs for many people is their lack of the knowledge and skills needed by business.

In 2013, business is likely to effect change in education as it increases its demands on the education industry for graduates of K-12 and colleges with the skills and knowledge to meet its needs.  Businesses are likely to pressure educational institutions to be more market focused, and that is a good thing.  What will be needed are collaborative efforts between business people and educational institutions to define more market-driven knowledge and skills along with the internal will of educators to drive change into curricula and pedagogy that is responsive to this force for change.  This force for change is likely to increase the demands on traditional educational institutions and to produce more choice in education.

Sunday’s New York Times provided the last in a series of articles about New York’s K-12 education.  Although not focused on common core standards, it unintentionally makes the case for another force for change in American education – the common core standards.

This last article was about classes for gifted and talented students and the disproportionate enrollment of whites in those classes.  The writer made clear that the vast majority of students and most non-whites are receiving an education that fails to challenge students to think and problem solve.  Previously on this site I noted that common core standards are producing pressure for change in teaching methods that increase students’ problem-solving skills.  The sidelining of non-white students to education that is deficient is further evidence that common core standards will increasingly provide a force for change.  And that change will demand teaching methods that place greater pressure on students to think creatively.

Pressure for change on education in 2013 will also come from the transformation in the telecommunications and information technology industries.  The transition from desk-based devices to mobile devices will grow stronger in 2013.  With it, telecoms will move even more vigorously from voice to data in their source of revenue and from land lines to cellular as the medium.  These changes to the telecom industry will provide another force for change to education.  Students will increasingly want readily available mobile, digital access to learning materials.  Use of iPads and their devices will grow and with that growth will come expectations from students that will provide a force for change to education.

Can traditional K-12 and higher education respond to these forces?  The answer is only if educators are willing to be more market driven.  The evidence is not very supportive that traditional education can make the changes necessary, i.e., providing more pragmatic knowledge and skills, altering curricula and pedagogy to raise problem-solving capabilities, and responding to students’ desires for mobile access to learning.

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New York Times on Loan Repayment

The recently released data from the Department of Education demonstrate what many people have repeatedly said; for-profit schools are disproportionately educating Americans from the working class with lower incomes, and lower income students have higher default rates on their loans than students from higher income families.  The data include loan repayment rates and loan default rates.  Repayment rate is calculated as the 2009 institutional repayment rate of students from the prior 3.5 fiscal years.  Yesterday’s New York Times education supplement summarized the Department’s data for the 2007-2008 loan repayment rates for large colleges and universities.  The focus was on large schools from three sectors: (a) for-profit, publicly traded; (b) private, nonprofit; and (c) public.

What the data appear to disclose is a relatively lower institutional repayment rate by students from for-profit schools that are publicly traded.  Upon closer analysis, however, the data really disclose what many have said; the for-profit schools are disproportionately educating Americans from the working classes who qualify for Pell grants at much higher rates.  The average percentage of students from large public schools who qualify for Pell grants is 21%.  By contrast, the percentage is double for large for-profit schools; 42% of their students qualify for Pell grants.  The for-profit sector is serving substantially higher proportions of students from lower income families.

The data do demonstrate higher default rates and lower loan repayment rates from the for-profit sector.  But what lies beneath this superficial observation is instructive as policy decisions are made by the Department of Education.  In order to understand the data better, a more narrow comparison of more similar large institutions across the three sectors was used.   This comparison looked only at institutions with somewhat comparable Pell grant qualification rates between 20% and 39%.  The analysis does not include for-profit schools with much higher Pell eligibility and apparently concomitant poorer loan repayment behavior nor does it include private and public schools with much lower Pell eligibility.  That approach does show a higher loan default rate and a lower loan repayment rate in the for-profit sector.  The default rate was 7% for students from for-profit schools; whereas it was 4% for students from the other two sectors.  The loan repayment rate of 41% for this slice of for-profit schools was lower than the 56% and 57% rates respectively for private, nonprofit and public schools.  Of course, even in this slice of large schools, we do not have comparable institutions in terms of student income; the for-profit sector had a much higher Pell-eligibility average of 37% compared to an average of 28% among private, nonprofit schools and 25% among public schools.  .

While the analysis of this narrower slice of schools still shows more problematic repayment behavior among students in for-profit schools, it also suggests that students may be behaving in ways that are driven more by their income than by the type of school they attend.  In order to pursue the question of why loan repayment rates differ using the same public data, another analysis was completed.  The private, non-profit schools and the public schools were split into two groups – those schools within the same 20-39% slice of Pell-eligibility and those schools with Pell-eligibility rates below 20%.  For the large public schools, the loan repayment rate was substantially higher (68% versus 57%) for those schools with lower percentages of Pell-eligible students, and the loan default rate of 2% was half of the 4% rate for those public schools with higher Pell-eligible rates.  The same relative comparisons were evident for the private, non-profit sector.

For at least this group of large schools, the New York Times data demonstrate what we would expect; students from lower incomes – whether in for-profit schools or more traditional schools – have a harder time repaying their student loans, and disproportionately, for-profit schools are educating a higher percentage of students with lower incomes.

Gainful Employment Rule Coming Out Today

The Department of Education is set to release the Gainful Employment rule today according to several news sources:

Chronicle of Higher Education – Education Department Takes Aim at For-Profits With Student-Debt Rule

Inside Higher Ed – Splitting the Difference on Gainful Employment

Associated Press – Proposed federal rules target for-profit colleges

Wall Street Journal – U.S. to Scrutinize For-Profit Career Colleges

Washington Post – Administration proposal aims to tighten oversight of for-profit colleges

Reuters – U.S. rule would force education cos to show work

New York Times – U.S. Releases Rules on For-Profit Colleges

USA Today –  Plan would crack down on for-profit college industry