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[Katherine:] Welcome everyone. My name is Katherine Magnuson and I am the Associate Director of The Institute
for Research on Poverty. On behalf of the Wisconsin HOPE Lab, and my WISCAPE colleagues.
I am pleased to welcome you here. We're having a discussion today between two of our esteemed
affiliates, Steven Durlauf who is professor of economics and Sara Goldrick-Rab, a professor
of educational policy studies and sociology. The discussion is being moderated by Dr. Stephanie
Roberts of the School of Social Work. At this point I will hand it off to Stephanie, who
will tell you more about the format. [Stephanie:] Good afternoon. So the format
we are going to use today is we are going to start with a short clip of the president's
announcing the initiative and then Sara will have 15 minutes to make a statement then Steven
will have 20 minutes to make a statement and provide our response and Sara will have five
more minutes for response and then after that I will moderate and open Q&A from all of you.
And I will remind you this at the time, but we're taping this so don't ask your question
until I bring you the mic. {President Obama's announcement of Free Community
College plays https://www.youtube.com/watch?v=d-QDfEMXAgk} [Sara:] Good afternoon. Thank you all for
being here today. I'm going to talk about why I believe that what the President did
in that announcement is worthy of support. First I want to start by saying that I asked
Steven to join me in this conversation today, because I believe that any proposal worth
making is worthy of sifting and winnowing. And here at the University of Wisconsin that
is one of our finest traditions of something that we must uphold and something that I believe
that we demonstrate to the rest of the country as to how it's done, so I'm hoping that what
we'll do here today as colleagues is to work through what we believe are the merits and
the problems with this plan. I believe that this will be informative not only for those
here today, but for those around the country who are trying to figure out exactly what
this means that the president just said or what the next steps could or should be. So
I am going to pick up one little logistic and let you all know that we were originally
going to be live streaming today which we could not do because there was just scheduled
legislative hearing down the road there. But we do have people following us on Twitter.
And if you are tweeting, you should tweet at #freecc. Hashtag freecc. That's my Twitter
handle up there in case you want to use that. Okay, so let me go through the proposal today,
as currently as it's known for at least from the White House, and note that there are forthcoming
proposals for multiple senators, who will be bringing out variations on this proposal,
but we are going to primarily focus on this today. As the President said, the plan here
is to make two years (and he has spoken about it in terms of years of community college)
free- what that means is the lowering of the upfront price of attending. It's a the lowering
of the sticker price--what we and financial aid would refer to as a first dollar scholarship
rather than one that for example in Tennessee is the last dollar model which essentially
applies all existing financial aid and then only covers the remaining need that exist
if it does exist in order to make it free. And I can discuss in greater detail why those
two things are very different. This is the first dollar program. The second thing is
that in order to be eligible for this program, the students have to enroll at least halftime.
That may sound like a minimal amount but it's worth noting that a substantial fraction of
community college students today do not even enroll at halftime so that is a requirement
here. It is not a means-tested proposal and as it was originally made, it's not intended
to require an application and therefore it could in theory, apply to Bill Gates' children-
were they to pursue a community college education. With that said, I got little asterisk in there
because at some point someone slipped in a $200,000 income cap into this that folks have
been trying to stay away from ever since that's been mentioned, so I think that it'll be clear
to you today that I would oppose the introduction of such a cap because it moves away from universal
model. Continued receipt, although not initial eligibility and those are two very different
things, continued receipt of the free program requires a student to obtain a 2.5 grade point
average. For those of you who are unfamiliar with today's standards for the Federal Pell
Grant program requires obtaining a 2.0 GPA. And there is a growing body of evidence that
approximately 25 to 40% of all first year students not only those receiving the Pell
grant actually struggle to meet the 2.0 criteria as it stands now. In terms of which colleges
would be eligible the president talked about high quality community colleges and what he
was referring to is those who offer transfer programs or high quality occupational programs
that lead to degrees of certificates. Now here in Wisconsin, we don't have community
colleges so I want to note that under this definition, it is very likely that our UW
colleges, which is our two year branch campuses that have transfer and our Wisconsin technical
colleges, which very demonstrably have strong returns to the occupational programs, both
of which is very likely to be included in such a program.
Finally the way that the funding is supposed to work for this program, and I'll talk about
the pay-for, is covered by the Federal government and 1/4 covered by the states. For those of
you who don't know how community college funding currently works- the most important thing
you need to know is that the vast majority of funding for undergraduate education at
today's community colleges comes from states and local entities. It comes from local taxpayer
support, bond referenda and that sort of thing- so this would be a major change.
To start off, I am going to make two points. I believe that this is a proposal worthy of
support for two reasons. First, I believe that it is likely to have significant substantial
positive impacts on college attendance and completion that will primarily accrue to those
from low to moderate income families and therefore increase equity in higher education outcomes.
Secondly I'm also going to argue that this is a good policy to pursue at this time and
is worthy of investments with current resources and that's going to have to deal with a sense
of economic and political contacts as I believe must be accounted for when assessing the viability
of any policy. Further I'm going to talk a bit about time horizons. Now I'm going to
tell you a bit about myself for those of you who don't know who I am, because as one of
our speaker talked about in IRP several months ago, Chuck Manski, our conclusions reflect
both our data and our assumptions. And I want to lay out a bit about my assumptions in case
you're not familiar with them. My work has been devoted to studying undergraduates
for the last 15 years. I haven't only focused on low-income students, but I predominantly
focused on them. I have examined their transfer behaviors, their college choices and yes,
their finances. And at the Wisconsin HOPE Lab, which I now direct, we're entirely focused
with issues of college affordability and seeking any which way possible to try to reduce the
very strong link that exists today between family income and the chances of obtaining
a college degree. I am a sociologist by training and I tend to think of things in that context
and tend to think about intersections between institutions. So, for example, I tend to think
about education policies as social policies and I like to think about this historical
moment not just in terms of what is happening today in education but also what is happening
today in workforce policy and with regard to the rest of the social safety net. I also
believe that my thinking today reflects both quantitative and qualitative research. For
example, my team has conducted rigorous experimental studies of the impacts of need-based financial
aid but we're also in the field right now with a multi sited ethnographic study of undergraduates
and so a lot of what I think about how students will respond to this policy is also grounded
in that foundational research. Finally the way that I think especially about this particular
moment reflects my engagement with local state and Federal policymakers including the Domestic
Policy Council around these particular issues and a judgment call that we will all have
to discuss about what the current situation looks like and its viability for a pursuit
of a policy of his time. I did release a paper last year with my colleague Nancy Kendall,
who is really sadly away at a conference today and wishes she could be here. It is referenced
out there in case you would see the kinds of arguments we lay out they are aligned but
not entirely reflected in the proposal that we're discussing today. There are some very
important distinctions that we could talk about in Q&A, but Steven and I also agreed
that we would focus on the president's proposal, but I want to note that everything I'm saying
today really has been a strongly influenced by those relationships and conversations that
Nancy and again, I really wish she could be here.
So the first thing I think we need to get on the table is that the cost of attending
community college, we would argue, is definitely an impediment to community college students
and I think it has to be laid out in some detail because there's a common assumption
out there that our community colleges are already very affordable as you might have
heard tuition is already very low. In fact there are some who will say that net tuition
is virtually free today for low-income students. Now at am these are reasonable things to states
and in some ways they reflect an understanding of higher education financing that is about
10 years old. The Great Recession did a great deal of harm to college affordability in this
country so the data that I have here is the most recent available here. It's from 2012-2013.
And what I'm showing you is the net price--the federal definition of attending community
college. What that means is there is a cost of tuition, fees and living expenses, as well
as books supplies, and transportation on an annual basis minus all grants and scholarships.
This is what students have to come up with it in order to actually be in school. What
you can see here is that even for low income students and I'm showing you the average family
income for those in the federal data set for that and for calling low-income, and you can
see for dependent students who were traditional age. It's about $21,000 a year to attend community
college in this country, they face a net price of $8,300 a year that announced to 40% of
their families' income. You can see it goes up from there but it's worth noting that some
moderate and even middle income families, those percentages get rather high and they
are astoundingly high for independent students who actually the majority of community college
students today. The average entering into community colleges is 28 years old. For a
low-income student, they are facing a net price of attending community college today
of over $11,000 a year. What happened? States disinvested and we are all familiar in that
here in Wisconsin with that phenomenon. Real family income declined and our investments
in grant aid- what we have increased the Pell overtime have not increased at nearly the
same rate as the cost of college. What do students do when faced with this? Our research
indicates they do a variety of things but most importantly, they borrow students loans
just to attend a community college and in fact they cannot cover $8000 or more year
Federal loans because the maximum is $5500 so they turned to Federal loans, they work,
and in fact, 75% of today's undergraduates are working- many of them at night, many of
them during the graveyard shift and they are making changes to their academic course taking
behaviors as a result. We are seeing literally talent loss. So if we compare two cohorts
of high school graduates for 1992 and 2004. I'm going to focus here on the academically
prepared and what these changes in the red bars show you is an increasing numbers of
them are forgoing college, not going anywhere. That's a major change. That's a reversal of
trends from prior decades. Secondly, for those who enter community college, you're seeing
their persistence rates declined for those from low- to moderate-income families and
again, here I am holding constant high academic levels of preparation. And these are trends
that I am concerned about. Now, what's likely to happen to these if we go with President's
Obama's proposal. First we have to admit, there's been nothing like this done before.
I believe that CUNY in the early 1970s, we can discuss in Q&A is the best approximation.
I don't think of what happened California's really very telling in terms with this policy
would look like or do. But there are three types of recent studies that we can examine
and in advance of this we share the list to gather up the studies and agreed upon that
body of evidence and you can see and hear the kinds of things that we've examined. Now
importantly, now I'm talking about a grand total of 10 studies. And two of them came
out in the last year. So I want to highlight those two I think that
are the best and most relevant evidence. One of them is conducted by an economics doctoral
student, Jeff Denning at the University of Texas- Austin under Sandy Black. It examines
recent changes in Texas community college pricing and he identifies the $1000 decrease
in the cost of attending a community college increased enrollment by about seven percentage
points. That's just the enrollment margin, however, he also finds that more students
are likely to actually complete college and very importantly to even obtain bachelor's
degrees, so there is a literature that suggest some routes to students being diverted, for
example, to community colleges instead of four-year schools. His evidence suggests that
if this exists, we still see an uptick in bachelor's degree attainment. Secondly, a
nice paper that was presented this year at The Association of Educational Finance & Policy
looks at Knox Achieves Program, which predates the Tennessee Promise and again finds admittedly
using a less rigorous design that doesn't deal with unobserved heterogeneity as well.
They find very substantial increases in high school graduation rates, community college
attendance rates, and college persistence rates associated with the offer of free community
college. Importantly even for students who did not see their price reduced, which suggests
that messaging matters. Now I believe that these estimates may be overstated on the other
hand, because they were not done at scale, these programs, they may in fact be understated.
I apparently only have one minute remaining so I'll just say the following about the likely
impact and address the rest after Steve speaks. I believe that we're also going to see other
very important effects beyond the state level. I believe that we'll see stabilization and
the funding sources for community colleges which are currently how l just like their
involvement. As soon as they need money, the funding for them goes down. That should change.
I believe it will improve school quality partly as a result and partly because one reason
we see poor outcomes of today's community colleges is a significant resource constraints
of their students and their faculty's difficulty in dealing with those constraints. I also
believe that introducing the state maintenance of effort requirement which comes under this
policy will help to stabilize and perhaps reduce costs at these institutions. And I'll
stop there and turn it over to Steve. [Steve:] I have to admit, I was a little intimidated
by the Obama clip, because I didn't hear quite correctly and when he said he wanted to persuade
Congress. And I thought persuade economists. First of all, let me thank Sara for both inviting
me and initiating it. I much think of this as a structured discussion. It's not a debate.
There is certain to extent empirical evidence and think about policy and the object of my
hope is that it is mostly for the thinking through the policies that to the facilitates
the off the enhancement of opportunity. From really what I want to do is we explain why
someone think shares most of the ethical commitments of Sara would come to different conclusion
about this particular policy. And I want to emphasize that more than once that I think
I'm right to take the position but that doesn't mean that Sara is wrong. The objective is
the largest right away I think about policy valuation for better or worse identify where
the disagreements are some that will simply be almost philosophical. Others will have
to do with the way we are to interpret empirical evidence. Other ones are going to have to
do with what we know going into the exercise, which helps me by the way. So the first place, this is something we actually
have something of a disagreement. It wasn't for me to support the proposal. It isn't a
vacuous for questioning the reason for that is, if you asked question, do I want to see
enhanced opportunities for education for the disadvantaged? I say, yes, but I think that
that anyone could say, any reasonable person would say the same thing. And so really when
somebody ask about a policy, of course, the commitment be a beacon of this until a particular
policy. I think that this for three things that have to be done. First, to simply evaluate
the merits of wealth in isolation and others on some terms. The second is to consider all
the alternative plan to similar approximate goals and what I mean by that is the detail
matters. The third is to think about opportunity costs and what I mean by that is that the
resources are going to be employed for this particular up program. We have to ask whether
or not given the finite budget isn't the way to proceed. So the only comment I want to
make, going into that is that the size of the program isn't a trivial matter. In other
words, if it's $12 billion per year, we can compare it to some rather large programs that
have fundamental social welfare programs in which orders of magnitude are not all that
different. I do want to stipulate that we are giving a substantial amount of money and
that's not something I think we cannot we can necessarily ignore the issue associated
with resources. Now opportunity cost is a little bit of a dangerous argument. And the
reason for that is if I say to her, "Oh Sara- if I spend all the money on vaccinations in
the third world," it would be impossible for her to justify a policy imaginable. In contrast,
I don't think the opportunity cost is zero so what it places me as in position that gives
something that is reasonable. And so what I am going to claim as reasonable, and the
way I want to think about it is I have $60,000,000,000 miraculously to help the disadvantaged. Where
would I place the money and in order to pick up the argument, in other words I am going
to stipulate that the resources simply exist and not care about where they came from. Furthermore,
I claim that it wouldn't be sufficient either. I have to have a pretty big difference between
the spot and otherwise another was alive and well is an excellent difference between this
policy and other ones, and that's not a sufficient argument against it. Alright and so, I'll
have time to get to since, Sara it's 15 vs. 20--that's a problem, and I want to say something
about the opportunity cost with respect to politics. It is one thing to advocate the
policy, another thing is feasibility. Second thing I want to say is a background
issue is how to think about policy evaluation. We want two things on the table. One is how
we vision of how the outcomes we care about are determined and that means if we could
have substance social science disagreement with the like. And the second, we have to
substitute the evaluative criteria, and so there is a lot of algebra one can put in something
like that. I think some outcomes are going to depend
on the policy, and the assumptions, data, and what I think as the unknown. Those are
some things we have to agree upon in the time of uncertainty of the policy. Now those are
logically distinct than in the second data and it's a report of the fact that matter.
And the second is that we have some notion of how we're with a positive light of this
uncertainty and so what the algebra says is the following- is that we have to have to
have stances on the nature of that uncertainty and the easiest way to think of this is probability
density associated with that. How would that matter so supposed what I said to her, I am
not sure how spotting economics 101 is how people behave. Sara said, I don't like that
assumption, that should be in the unknowns. She could take a different position, sociological
approach. Because we don't want to be dogmatic on that issue, so that theme that comes up
again- is that issue. So this is what we can disagree, and we can
some levels that have to with commitments, that has to do with how we think about models.
The second is what we have to do with what is unknown. And it has something with our
empirical philosophy, it also going to have something to what we call our prior beliefs.
Or shouldn't take whatever the legal position. In other words, we go into the exercise, and
the analysis knowing things. And the final thing is that there might be something about
the differences in evaluated criteria. That's where we are and the crumbs are on the table
and teach you in the barrels and it might be possible that you may be mistaken to put
this on, because it'll be wrong to interpret anything I say too dogmatically. I think I
have good reasons to believe these things, but they're all subject to reputation.
Final is background. The way I think about community college is that it's in the context
of life course. Individuals are perceiving from birth through their life course trajectories,
and there is a particular moment call community or possible range of moments. And the simplification
of that issue- and this is not going start at people starting at 28, is that you have
people going from birth to age 18, and at age 18, there is one of three things they
can do: enter the labor force, go to community college, go to four-year college.
What it is that I think we can think about paths as outcomes. There is one path from
a high school, go to a four-year college and into the labor force. Another path could be
GED, your two year college, enter the labor forces and so forth. And so at the end, one
ends up even the over simplification of the fact that you could move back and do things
at different ages, with a fairly complication of what's going to be happening. And so I
put this on the table because this is going to be how I think about the problem and how
I want interpret the proposal. So what are the ethical commitments. There are not really
going to be controversial. I want opportunities to be rich and I am sure she strongly disagrees.
And the second is some notion of a flourishing life, and so I distinguished those, because
the first one is non-consequential. I care about the rules being fair. So how do I evaluate
the policy- its defense? So I want to call the micro-level effect, how do I think about
it and that is I have this life course, and this particular moment or particular moment
that when going to community college, the price has been changed. It's been set to zero.
The tuition price not the net price. That's the change and I want to think about life
courses bout this particular price having been altered. So from that perspective we
sorta say, why do I want to use? One reason is that when we think about price effects,
they should have two sides to them. One is called an income effect. If I want to buy
something, that's trickier at hand. In terms of defending the proposal, because of fairness
issue, because if I want to help disadvantaged people, I could argue that why should I help
the disadvantaged ones that elect to go to community college? Now I may do that because
I care about education. It's a separate point and that's called a substitution effect, in
other words, there is an idea of changing relative opportunities with the respect of
the implied cost to them. And that's the distinguishing thing that I want to have on the table.
Now, here is the thought experiment and notice that I keep simplifying, getting rid of richness,
supposed what I want is to have many four year graduates as possible. It's not fair,
because it ignores the first order rules of community colleges, which is training for
certificates. But I am putting this on as a way to think. So what are the paths? We
could imagine that the policy and the people who have entered labor force, but go to community
college. Another one could be that if the requirements
for community college are different from four year colleges, you could imagine that the
people could graduate, would shift to GED that's sufficient for community college. I
don't question whether the evidence as a logical possibility. A third possibility is that high
school graduates or GED--recipient shift from a four year to two-year college. The reason
why I put this on the table is the first one is thinking about the intuitive as clear as
there. The other two is little bit less obvious and has this implication which is a possibility
that if I really care about the four year graduation rates, maybe it'll be counter-productive.
Strange enough by changing the role the price paid focusing on this one node, we may not
be enhancing the objectives we care about with respect to the life course. And that's
the part we are going to disagree, how strong is the evidence for these of the two factors.
There is no evidence that is positive. We are going to judgments here. So there's background,
let me just say why do I worry about these things. One piece of evidence is pretty clear
that there's a big difference between completing high school and the GED in terms of the knowledge
that people have and how they do in labor markets and so this table gives some evidence
of that. Also, it's a lot harder to complete schooling to work for if you have a GED. I
just want that on the table as something to think about. Setting comment is that, Sara
mentioned this, there is considerable evidence that completion rates at community colleges
are not high. Completions rates for four up for four years are also pretty low. And that's
going to be important in thinking about the evidence she gave like the Denning study.
But those are just going to be two ideas on the table. So we are talking about evidence,
so I picked six studies. Some background is when Sara initiated this, I asked her--she
knows the literature I don't. I knew some of it to be, but I was on board with her in
terms of what we're going to talk about. So I picked. I didn't do great. Here are six
studies that found something on community college enrollment associated with $1,000
dollars drop in tuition. I want to be careful that in some of these studies have to do with
any college. For the purpose that is sufficient. This quasi-experiments means is that there
is a case change in the price and see what behaviors that are manifested in it, so if
you want to net off all problems in was cut on board with her in terms of what over the
of studies and find something of a community called a role in search of $1000 drop in to
wish and a lot below the careful that, all in some of the studies and had to do with
any college of the purposes that a sufficient witness who have. That is often the devils
in the details and interested in examining it has done a lot of attention of the reason
idea why is that they receive in different communities that bargain to drawing community
college districts in that though prosecutors and when you're eligible for a lower tuition
to deliver the district and secondly, you raise your taxes of up to help support it.
So from my perspective as a social scientist this doesn't work for me as an experiment
to be blunt and the reason for that is a there's always this deep issue of self selection.
You probably all know that if you are over the age of 70, you are going to the hospital.
You're more likely to die, then if you don't. Well that's because sick people go to the
hospital, that's self selection in a very extreme form. This is a more subtle type of
self selection. We have this dynamic state in which community districts are more or less
dynamic, and these communities are choosing to join community college districts. Self
selection larger something we called fixed effect. It's an error that appears in empirical
work, we can't blame for that. But nevertheless, in my judgment, is a first order reason that
I read the evidence with skepticism and the final thing is just made the observation.
And notice that they aren't the same policy. This is a self financing one so to speak.
I just want to keep that in mind. It doesn't mean it's a bad paper. It is simply why I
don't put much evidentiary weight on policy. Alright. I am going to go much faster. I am
going to skip two other papers. I only did pick economists' ones by the way. I do want
to say one final thing about the data. There are controversies in social science about
them. And these papers often study some things that I think are important. I mentioned one
and three. The first one is the statistical analyses have functional forms in them typically,
and they used something called a linear probability model. Who cares? Linear probability models
ignore something important to the interactions in things in terms of probabilities of things
occurring. The second thing, the third one is called model uncertainty. The reason I
focus on that these are studies that still have control variables in them. You put in
race, ethnicity, measures of socioeconomic status. None of these are the theories as
to which variables learn how to measure them and in tying case after case after case is
turned out that there's fragility to these types of results.
That doesn't mean this one is fragile. I am saying when I read this paper in isolation
that's going to be an issue with me. So, I am going to skip over given the time. I'm
really screwing up, let me see if I can go back. No, I can't. There is only one way forward.
There is separate issue which is what happens to people in community college and whether
not it indeed has an effect of so called displacement effect etc. At some level it's a simple criticism.
They are looking at women who enrolled against the national representation of a sample of
women. And in the bottom line is all the women in the CUNY study. They enrolled in CUNY and
that self selection is not addressed in the book. Now I put all that on the table and
I want to end with one important comment, the logic that I gave you may or may not be
empirically important and that's what I have a huge comparative disadvantage in the analysis.
I don't do ethnographic work. I am conversant with the individuals in the system. Sara came
back and want to make an argument that the type of selection I'm worried about is a factual
matter is not first order, you should believe her. This is where I am on theory. In other
context were self selection and disadvantaged about training programs as turns out the effect
is largely (???). And there were ambitious people enrolled in them. But at the end of
the day, that's why you can have principle disagreements. The macro level I am going
to skip. I want to make a comment about segregation and that is I worry about plans in general,
which might enhance the social status in institution resource socioeconomics status. We were debating
the Goldrick-Rab/Kendall plan. I would spent the whole time on that, because she wants
to fund the privates. That's what I would focus on. And I put on the table some concerns
that Bill Gates children start to decide where to go where there may be more disadvantaged
people. That may enhance socioeconomic situation. And in other works I call this membership
theory. The quality where you think about individuals going through life family school
and neighborhood later, college and all that. And we have to be extremely careful about
that. Okay. So what about alternative plan formulations? I think that any economists
would say why are you paying for info-marginal people? The people who aren't going to be
affected? Once two years are completed. Do you know what that would do? Set the incentives
to get the four-year degree. So I put that on the table is that it might be a more radical
change. Now an opportunity cost, I want to say is that there is very strong evidence
of high returns to early childhood investments, programs between ages three and five. And
again on the slide, we give the evidence there. Now you might my response, there might be
something special about zero tuition. That's not so clear to me, and the reason I say that
is that people pay more money, because it raises expectations of what they are going
to get. I want those community college is say that they are share holders and they are
going to bud the teachers so that they don't pay enough attention to them so on and so
forth. It's an issue of loans and grants. Two comments,
in which we will move to the Q&A since we didn't get to that. So the bottom line is that on the face I don't see
the evidential good. I don't think it's strong or effective. My preferences. I am very worried
about these, what I say, possible adverse effects. Segregation or displacement- it doesn't
mean that I have strongly. The third comment is that I do see different ways to structure
the policy that I think are non-trivial. And the final thing, and this is where we do have
a little bit of an ethical difference I think, which is that my view on opportunity is not
equalization is that people have a certain reason chance. The bottom line, to be blunt,
is that what I want-I don't like downward mobility. It's great parents can lock their
kids in, is simply if the parents isn't affluent and success. And that distinction is not structural.
And I have some lovely quotes from Mill and Lincoln, but I don't have time for them.
[Sara:] We originally discussed making this two hours and now I don't know. Let me think
a minute here, so first let me make a few points in the slides that don't fit in because they were not relevant.
On the empirical issues, I think that it's important--I highlighted Denning, but it's
one study in a set of studies. And I think the rest of the slides actually showed you
that the vast majority of the alternative studies that we might look at go in the same
direction. In other words, they tend to find that lowering the cost associated with the
community colleges do tend to find a similar effects. And some, I want to note, that one
of the studies is on the quasi-experimental study slide is actually an experiment. And
there is a set of these, and there is another one that Drew Anderson and I are in the midst
of right now that I don't think, I don't want to put into this body of evidence, because
it's not even a working paper yet. But in other words, there is experimental work, and
there is quasi-experimental work. I think that the most important thing to say at this
point and then to move forward in the empirical evidence is the piece of the decision here
around supporting the policy and I believe that many times we are faced with decisions
and I think Washington is faced with decisions that we would love as academics to believe
are entirely informed by rich and robust the body of evidence is at the moment and yet
at the same time, in some ways it's not the only thing that's relevant. And I think this
is very much one of those cases. I think that we can all see out there the cries from families
for some sort of relief when were some sort of relief when it comes to their concerns
about, not only whether they are going to fall down in terms of mobility, but whether
there is any point in teaching their children that it's important to finish high school,
that it's important to get academically prepared for college, if in fact we're going to see
in the future what we're seeing today. I want to be clear about what we're seeing today.
We're seeing two things. We are seeing very hardworking programs and people encouraging
students to get ready for college successfully getting them in the door and watching them
drop out after year or two as literally there's a lot of college left the end of money. And
this is something we're saying over and over. Every practitioner reports that the number
one stated reason for dropping out is money. We can still assume that some of that is tie
up in academics but we actually cannot separate those two as clearly as we would like to,
both either in the data and in reality since the academic performance that we're seeing
especially in community colleges, who have obtained some college, but no degree. But
most importantly they have debt. And the consequences of that debt, I think are poorly estimated
at this point. I don't think there is a study on there, I think that shows a causal effect
of the debt, so much there is a causal effect with the lack of affordability. But the concern
that I have is, and I believe we have a graphic evidence, we believe it strongly points to,
is the strong likelihood that these individuals moving forward in their lives will hesitate
before sending their children to college of any type. And I think that that's a cycle
that will not be virtuous one for us and it will be paying. And I think that therefore,
Washington is concerned about these sorts of things. There are other particular moments
that I want highlight for us in terms of history that should shape our thinking about whether
this is the right policy at the right time. The first one is, we are now at the 50th anniversary
of the Higher Education Act of 1965 and so we've now been doing the current system and
only one system. We've only tried one way of making college affordable during the period
of massificiation of higher education, and we've been doing that now for 50 years. It
is a voucher based system. Pell grant is all about choice and actually you it's a means
test system to get us. So I just want to point out at Michigan. So I want to show you the
first cohort by family income during the period time when we have the current and I take at
this chart as you can see here, that in fact low-income folks are essentially running in
place. So yes it increase from five to nine percent, it is actually rather substantial
in calculated in percentage points term. As you can see, the poor has fallen further behind
under the current system, which cost an enormous amount of money. And we can argue over whether
what is too much, but I do think in Washington that if we added up the total cost of the
current Federal Financial Aid System and we look at the $100,000,000,000 number and we
look at this, we would have some real concerns. Andrew Kelly and I wrote a book that I will
refer to later. Another thing to remember that there is evidence bipartisan interest
in affordability of this moment. This state that the president traveled to Tennessee is
governed by a republican who put forth a free community college plan following actually
on the hills of Mississippi which was also interested in this. At the same time that
the former governor now John Kitzhaber of Oregon a Democrat was also pursuing it. I
think those things are relevant. I believe while we should consider opportunity cost
of policies, I don't think that there actually at play in the decision-making process in
the way that we would perhaps as academics like them to be. There was literally no one,
I can assure you, sitting there saying there is X pot of money to spend on the disadvantaged,
let's choose among the following things. If you want to see what this looks like we should
look at President Obama's budget bill which includes spending for all of the things that
we might like to see perhaps leading out a few but in fact includes all of that and I
believe that the best thing we can do it if we were going to strengthen universal early
childhood education and improve our K-12 system is to ensure that the other end lie out the
opportunities that people can actually take advantage of by also showing the community
college system. I am also extremely unwilling to write off the future opportunities of adults
who are long past those other reforms that we might not be investing in. I believe that
we do have the capacity in every which respect of political and economic capacity to act
in all forms and I believe that one of the lessons that we have seen and this is, you
know again, this is something we can debate on something Scotch Poll has written about
and talking about lately, that universal policies are going to be sustained over the long-term
far better than policies that are targeted to only the very poorest. I believe that the
transition and rhetoric from talking about Pell grant recipients as hardworking individuals
to those who are at likened to welfare recipients something that Katie Broton is actually going
to hopefully look at in her dissertation. I think that is a highlight that we cannot
look past, that the federal Pell Grant program is in grave danger already and that we're
going to have to take some sort of action to shore up the affordability for these folks
over the long haul. I think there many pay-fors here that are potentials. I think that the
numbers that Steven put up, we went back and forth, what numbers to use, we don't know
what numbers to use, because some of it is about how you going to actually do this. My
proposal with Nancy highlights, what I would call to as waste in the current, he recalls
it as private school attendance. I am not saying that they are not a bad place to go,
they're fine. I don't understand why we, as federal taxpayers, subsidized attendance at
institution that directly compete with ours and drive up our cost. UW-Madison today would
not be in the situation that it is in seeking to raise its tuition, if frankly, our private
school counterparts would not be showing us how much money one could spend on undergraduate
education. This is now happening to our community colleges, to UW-Parkside, to Stout, etc. I
also would say that if I if I had known that he was coming on the segregation piece, I
would show you a fabulous part, it's hard to get more segregated than we are today.
Today's higher education system is so intensely segregated between opportunities that private
and public colleges, is that in fact, the concern I have is on the quote, low end, which
is the segregation into the for-profit colleges and universities because the publics are unaffordable.
There is actually a very nice study that shows what happens when make a good investment in
the public sector is that the profit sector takes a downhill slide in terms of its enrollment.
That something that I think we need to enhance. The discussion and debate are indeed this
is happening on Washington is about how to do this before and Helen back to make this
program work if the state and now there is high as ever and for improvement and this
is what I've been spending my time right now is what can we do to make this a better policy.
First it needs to be a simpler. The GPA requirement work against the effectiveness of this policy.
If it's going to be means testing, you are going to lose my support for this policy.
It needs to be more inclusive. I think we should add the public four years and the best
argument for that is that there is substantial numbers of students who are sitting on the
margins between those four year and for profit institutions. And there is a growing body
of evidence that in fact they may be harm by pushing them towards the first year colleges.
Although, that is sort of taking the status quo in terms of what the community colleges
can deliver and I think this will enhance their performance. I also believe it should
be more flexible. Two years is simply not the way students think about college today;
they think in terms of credits. And so I think that we need to do 60 credits even if it's
spread over four years of whatever else like that.
In terms of who you're likely to see thinking about this, like I said before, there are
legislators who are getting in this next, including I believe that we are our own senator
here in Wisconsin, Tammy Baldwin. We're going to see versions of this coming out from states
and they need advice about how to do this well at the state level which is a very difficult
thing to do without the federal resources and frankly the thing we are most hoping for
is the demonstration, because that is something that we have been lacking all the money we
spent in higher education. We very rarely get any sort of waiver authority to do any
sort of demo. And so I'm going to leave that out. I'm very excited to hear about your questions
and answers and this was a blast. [Steven:] Do you mind if I take a couple of
minutes on universalism? [Katherine:] How many can he take?
[Sara:] He can take two minutes {laughter}
[Sara:] Well he asked me. [Steven:] Universalism- so there this is something
we have a disagreement. My reading of the Skocpol work, is that I am not persuade by
the history that she's ratified. And what I mean by that is that it was motivated by
the Reagan administration, Reagan coming to office, and Reagan's hostility to welfare.
One of the many slides I skipped shows the per capita increases or the growth of the
social welfare programs despite the Reagan Revolution. And I think some of Skocpol's
worries did not show the case historically. Second comment and this is where we would
have a specific disagreement on the price and what rich people is willing to pay for,
and I think. I put this ability to create an ethical consensus on something. Besides
the word of opportunity, there is another concept, and that is deserve, as is whether
people deserves. And I worry that a program that gives Bill
Gates' kids to give people something that is under deserving. There are good arguments
that starts in science. They have argued that the failure of egalitarian policies to prevail
has to do with the given evolutionary psychology interpretation that I don't agree. The idea
that people have to be adverse to policy. They think that they are being cheated in
some sense and that people are not fulfilling their obligations. One can also identify empirical
evidence for that. The U.S. Army is often said to engage in supply side instead of the
demand side. And the affirmative action, there is resentment in education among white soldiers,
so these policies have to do with the fact that there is a co-payment in addition to
these studies. Charles Mossco (sp?), and Butler have argued that. Again, this is not simply
a proof on this issue. The final things I will grumble about is not about you, but about
President Obama. The reason why I called it an empty proposal in that newspaper ago was,
a couple of years ago, everything was about ECI. This was going to be the place where
the publicity came. I think it's easier to get an ethical consensus on protecting the
children, because the same issue of desert and responsibility, all of that. It tends
to attenuate with age. My judgment is that this where the political feasibility is strongest
at. That's all. Again, this is bringing up the history.
[Stephanie:] Okay we have a lot of people in the room and we have about 20 minutes.
You have to speak into the mic, and so what I'm going to do is have people on this side
for a few questions, a couple questions, and I'm going to move to that side. Who's got
questions over here? [Katherine:] Howdy y'all. I'm Katherine and
I'm a fourth year in the economics department. I don't know anything about community college
so, Sara, I was wondering if you can talk about what kind of heterogeneity or the quality
of community college within certain geographies, because one of hesitation from being a big
liberal and being in this plan, you know, we have universal high school, but it's an
incredible unequal production process, deliberately so, if you think of public finance. What would
be the difference with community colleges and the way that they are structured that
we wouldn't just be extending really unequal high school experiences for another two years?
[Sara:] Sure. I think that it's a great question. I think that the comments about our current
system are also important to address. Our current system is highly unequal and in many
ways it is being denigrated for not doing a great job. I still think that there are
many, who would argue, it is still highly performing. We do still achieve quite a bit
in our K-12 system. There is still a long way to go and we achieve different amount
for different people. In terms of the variation in quality among community colleges, I would
say, it is not fabulous. The state field is not strong and those of you who are students,
who might want to jump into this field, I urge you to do so, because it's a very small
and shallow water right now. So it's really difficult to distinguish the characteristics
and organizational practices of our colleges from the people who populate them. And the
data sets we have available have very few variables of which to measure these things.
There are certainly people, who I would say, are ethnographers of the community colleges,
who would say that there is a great deal of variation, but many of them have a hard time
disentangling the organizational practices from those schools from the fact is that the
quote on quote "worst performing, low-quality," community colleges in this country are located
in highly segregated communities. They receive very little funding and so there have been
sort of high flyers studies, right? - where they try to find two schools that looks demographically
the same. One of them beats the other, but again, I find these studies to be very unconvincing.
They're typically the case that somebody is overlooking some really important forms of
heterogeneity. You know, it's possible sure that we would engage some students in some
lousy schools, but I think overall in the whole, we are not going to do that more than
we sort of doing it now. I guess that's part of what I'm arguing.
[Don:] Hi Don, La Follette School. I think this is directed to Steve. Steve, you made
the claim whether the zero is different as a price point, you seem to cast some doubt
about it. I like to push against that idea a little bit, because we know something about
what would work in effect, so you announce that there are some new policy people who
didn't know about it before- just sort of come out of that would work, even they previously
would be eligible. We also know from the Hoxby and Avery work on missing one off that, especially
poor people tend to have very low level of knowledge about the actual cost of going to
college. And so having this big Obama free community college label might pull out some
of the those people in a way that is different from choosing the cost of community college
by a thousand dollars or giving someone better financial aid.
[Steve:] So one people with the slide is that I made a guess about what Sara was going to
say and in addition to what her arguments were, these were the other factors, so, I
agree that this is worth arguing about. A different argument, the argument that Sara
has made as the credibility of financial aid promises is not high for people who are disadvantaged
and have experiences a plethora of injustices in the course of their lives. So what I would
like to have on the table are two questions or two points. One of them is the possibility
of creating incredible changes, and that's what I refer to as the graduated tuition plan,
and that's we have negative tuition. If you are disadvantaged enough, you get subsidy,
but everything was kind of fixed by law. The second point is, what I want to say, is the
issue of zero, there are different ways to think about it. One of them is that it is
salient. A different is that the act of making a financial contribution may change the way
the interactions transpire between the students and the college. So I just want those on the
table and in my mind, what know from the experiment economics literature, is the place, I don't
have a way of priorities tilting one way or the other.
[Nino:] My name is Nino Amato. I want to thank you both for having this forum. I wish it
was a the state capitol...might of appreciate it more. By the way of disclaimer, I serve
as chair on the HOPE Lab board, I am alum of the School of Education, did my master's
at the La Follette institute, worked in the University System as assistant director of
business outreach and technology transfer, served on the Board of Regents and was President
of Technical Colleges Board. Let me take the empirical data, your global competitive effect,
followed by what you called and I think you mentioned earlier, the income cost effect.
And what should be called an income substitution effect. Empirical data. Germany, strongest
economy in the European market, stronger than Eastern European. They provide free education.
Japan, one of the strongest economies, in the Asian market, their education is much
more affordable, and much more accessible. You take Finland, free education, if you take
Denmark, they actually provide $900 a month for every eligible student to go to school
for six years, living costs. My point is this. if you look at the U.S., what we do is we
charge students loans 10x of what we charge bankers. We then if you don't pay those student
loans off, we garnish your wages, and many of those kids have parents who co-sign, who
are now in retirement and now they are garnishing their wage. And then if you have the gall
to have bankruptcy, you would still have to pay that off. So in essence, we are creating
a generation of indentured servants for the next 15 to 20 years. Cost effect. If you look
what is going on in this country in 1952, over 32% of the federal revenues came from
major corporations. Last year, less than 10%, and one out of four major corporations didn't
pay any income taxes, which is general electric. Fact and income effect, Governor Doyle, and
Governor Walker, both have failed this university. He kept the budget $150 million dollars, raised
tuition by 37.5%, and Walker cut it by 25% followed by $300 million. Governor Doyle appreciate
college education, I don't know if this governor does from dropping out of school. My question
is why not bring the economics department, the school of education, La Follette institution,
and the sociology department to craft a program that will work for Wisconsin, and for the
feds and match up state street like what we used to do decades ago and make our class.
And we could get our people involved. [Sara:] Do you want to respond?
[Steven:] It's hard to respond to be honest, because I don't actually agree with a lot
of the facts you put on the tables, at least your interpretations. The fact that Denmark
and Finland have free education, it tells us in my view, about the United States. Why
do I say that. Typically, you hear Finland, Denmark are extremely mobile compared to correlations
of parents and offspring. Well, you take those countries, you introduce immigrants for the
way we have done for 100-200 years, and you tell if they have had that much success. And
it's not to be disrespectful but the heterogeneity. [Nino:] Take Germany for example, they have
immigration that is better than ours. And Germany is a strong economy, there is huge
set of differences. [Steven:] And if we were having this discussion
1987, Germany and Japan don't sit here with the United States. They have been relative
successes. They moved up and down and I just.. I have a stake in this. I have heard read
many papers on cross country behaviors, they tend to be negative, so that they tend to
be so much heterogeneity in these countries that we can't really draw that many conclusions
from them. I'm sorry. I don't want to be rude, but the facts just don't agree that they speak
to policy here. [Sara:] I think what is interesting about
where we do agree on this a bit is I think one of the struggles this country is having
around affordability is driven by its composition. Right? It's not just immigrants, right. It's
the whole history of racial inequities in the country. I think that that piece of who
we have in the country, and the struggles to take care of other people's children in
every which way- coupled with the fact that we have a much more inclusive higher education
system, one of which it offers a lot of second chances, which Germany system does, and other
systems do not make this a difficult thing to sort of finding the right kind of financing
and gets political support, right. In other words, a lot of what Germany does that I think
is relevant here, is a lot of sifting of people well before higher education, and I think
that goes to your point, as to the degree to which people viewed them as deserving,
therefore, once they get there, they sort of question in the same way, should finance
this person which all they have done is passed through, essentially barely got through high
school, and have entered our colleges. I think the similar sort of conversation is to sort
of why did understand that living costs should be covered, when we sent our GIs to college
under the original GI bill and today when anyone talks about, should living cost be
a part of what is packaged in financial aid, people say, wait why is that? Why would we
ever do that, because they are really clearly deserving and they have earned something.
I think what is fruitful is that Nino is reflecting a very common sort of thinking among our policymakers,
which I also hear. It's something we should continue to speak to.
[Nino:] The fact is imperative. And somehow they can do...
[Steven:] So let me clear. I don't have any sort of reason to believe that Sara's policy
and Obama's, that these would make the economy less competitive. All I want to put on the
table is that things are sufficiently complicated. There is no lesson to draw from the cross
country comparison. For what it's worth, I am also very nervous about them for a different
reason. I think the case for reforming financial aid, which of course involves loans that less
predatory, not just free, and that reducing costs, levels, etc. All of that, the strongest
cases to me are unethical. We have a vision, a consensus in the United States about opportunity,
and it worries me to introduce a fact. I think it is contestable as in you make these reforms,
the rates will increase or decrease. I think the ethical argument we can win. The empirical
ones, I have enormous skep.. the literature on these things is not succeeded.
[Sara:] And what is fascinating of course, is that the president went down the other
road with pitching this. He turned time and time again to the global competitiveness,
cross country competiveness, all the race that we are in, not to be ethical when making
these arguments, so yeah. [Francois:] Francois S, Professor Emeritus
in Sara's department, I think this question is more for you, Sara. I see the need for
the 2.5 for retention, but I am worried about two things. One is that does this give an
incentive to the community colleges? To inflate their grades, to keep getting the money? or
the problem is, won't the most challenged students, the ones from the toughest backgrounds
be the ones who are not going to return for the second year and would increase the segregation?
[Sara:] I believe that he instituted the 2.5 in order to use the word hardworking when
pitching the plan and again, it has everything to do with deservingness. So I don't think
if you look at the body of evidence that we have from both quantitative and qualitative
work, you would not put a GPA requirement like that into place. Number one is because
there's a fairly strong evidence that yes of course, it will essentially take financial
assistance away from the students who most needed it in order to get good grades, rendering
them far less likely to complete school. Second, there is very little evidence that such requirement
actually increased motivation in higher education. Partly, I would argue because students are
very unaware of the requirements and when they know what they are, they don't know what
to do about them. So this has to do with the plethora of choices in higher education. The
degree to which we tell students that they should explore their options and take multiple
majors and things, they have a very hard time juggling credits and grade tradeoffs. One
of my very favorite studies out there is by colleagues at the University of Georgia that
had looked of what happened under the Georgia HOPE program, which is a merit program that
does have this requirement in there that students get a 3.0 in order to keep getting money and
in fact they found two different things. Number one is that students will respond by taking
easier courses and majoring in easier subjects so this program that was introduced by conservatives
is actually seems to have reduced success in STEM, which I'm sure the state of Georgia
can't be happy about, and secondly yes it does provide incentives to institutions and
the faculty maybe not so much proactively to respond by saying I will be easier but
to respond to the begging and pleading of students who will rightfully come to them
and say that you will cost me my financial aid. And I know it already happens among our
colleagues on campus. They already hear this sort of thing. I think the lessons that we
will get from the growing body of research on SAP, which is satisfactory academic progress,
a standard in place for the Pell Grant is going to add to this. Hopefully, I would love
to see that thing taken out of there. I worry though that politically, that any consensus
around this starts to fall apart when you lift performance requirements.
[Luke:] Hi I'm Luke. I am an undergraduate sociology major. My concern has to do more
with the greater political and budget constraints that we have. Professor Goldrick-Rab, you
mentioned this has some bipartisan support. And I was thinking about that and the program
in Tennessee, for instance, follows massive cuts to their higher education system, their
four-year universities, Governor Haslam pursuing neoliberal education reform in the K-12 system
...particularly because the proposal has a significant portion from state funds, what
is the effect going to be on a lot of other programs that we care about?
[Sara:] I think that is a great question. I don't like that the Tennessee program is
funded with a lottery, just like I don't like the idea of stabilizing higher education funding
using a sales tax. I think we should worry about those things. I think some of what you're
seeing there is the behavior of states is when they want to do something ambitious and
they don't have the money to do it. And the federal government, unfortunately have been
unwilling to partner with them to give them what they need, waiver authority, to enable
them to use existing fund different funds. So one thing I didn't get to is this time
horizon point here. I don't think the proposal have been introduced to be passed by with
our Congress right now with our resources. I think there was a really long road to making
public secondary education free, a road that I think is approx. 80 years long thanks to
my reading of my colleague, Bill Reese's study on this. We need to start now if want to see
anything like this, you know. Frankly, not even by my lifetime, but by the lifetime of
when my kids have kids. So I think that you are right, in terms of neoliberal trends in
education and you are right about reduction in state funds. But that is not uniform across
the country. I think that Wisconsin as its movement in a certain direction and a certain
opposition to many other states that are reinvesting. So I have to wonder if this creates a sort
of turn around. And also by the way, if we can engage more of the middle- and upper-
class in thinking about our public system and if that can contribute to momentum in
terms of investment back into that system. Okay we have time for one more short question
and Bob promises that it is short. [Steven:] and what about the answer?
[Bob:] Great presentations from both of you. I was surprised that the issue of for-profits
colleges didn't come up until late in the discuss. In my view, the biggest cancer on
both efficiency and equity grounds in the higher education system is the private for-profit
college sector. One of the impacts of this proposal is that it makes community colleges
more attractive relative to the private for-profit college option. And anything in my view that
can be done to (??) traffic away from for-profit. I should introduce myself. I am Bob Haveman,
La Follete School and Economics. [Steven:] Well that is an issue that I have
a harder line than you. For-profits are despicable, what I like to do is cut out and financial
aid that goes to them from the start. [Sara:] I would firmly agree with you, but
I would not say. If you want to kill the policy, keep saying it. But I can say to you that
it is one of the most single most best to activate the most powerful lobbying forces
in the country. These folks spend more on advertising more than Coca-Cola. I guess five years ago I would've shouted
out from the rooftop, but I won't anymore. ***
Well let's give them a final round of applause.
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