May 21, 2024 • 42 mins
Get behind the data and value of higher education as I engage in a focused conversation with Michael Itzkowitz of the HEA Group. Together, we dissect the College Futures Foundation commissioned "Golden Opportunities" report, delving into the intricacies of California's higher education investments and what they mean for students from low-to-moderate-income economic backgrounds. You'll emerge from this episode with a nuanced understanding of how data is revolutionizing both the transparency and the economic success rates of colleges and universities, offering essential guidance for students charting their academic futures.
The staggering $1.8 trillion student debt crisis is more than just a number; it symbolizes the delicate balance between education as an avenue to a better career and the financial burdens it imposes. This episode takes a hard look at the economic benchmarks and the heightened scrutiny on the value of higher education in the wake of skyrocketing tuition costs. Michael and I scrutinize the public's hefty $21 billion investment in California education, advocating for increased accountability from institutions, and consider the implications for learners and policymakers alike.
Lastly, the financial journey of students at Cal State Polytechnic, Humboldt serves as our case study, putting a spotlight on the true cost and potential returns of their educational investments. We explore the factors that sway these outcomes, such as the impact of degree completion and choice of major on post-graduation earnings. Moreover, we address the challenges faced by the 'some college, no degree' demographic, emphasizing the importance of clear pathways to success for all students. Tune in for an eye-opening exploration of how education pays off in the long run, and what that means for today's learners.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:10):
Hi, this is Eloy Ortiz-Oakley, and welcome back
to the Rant, the podcast wherewe pull back the curtain and
break down the people, thepolicies and the politics of our
higher education system.
In this episode, we get to takea deep dive into data the data
behind return on investment inpost-secondary education and
(00:32):
talk specifically about a recentreport that was published
through a collaboration betweenthe HEA Group and College
Futures Foundation.
The title of the report iscalled Golden Opportunities
Measuring Return on Investmentin California Higher Education
for Low and Moderate IncomeLearners.
(00:53):
I'll put a link to the reportat the bottom of the YouTube
page here and, for those of youwho are listening in on your
podcast platform, you can alwaysjust go to collegefuturesorg
and you can get the report there.
So with me to talk about thisreport and specifically return
(01:17):
on investment, or ROI, isMichael Iskowitz.
Michael heads the HEA group andhe has had a long history and
background in post-secondarydata.
We're going to talk about ROI,we're going to talk about value
in post-secondary credentialsand we'll talk about this report
specifically.
(01:38):
Michael's experience extendsall the way back to the Obama
administration, where he led theeffort to create the college
scorecard, something that wetake for granted now those of us
in post-secondary education.
But at that moment in time, thecollege scorecard was a new and
big deal and like that, we hereat College Futures want to make
(01:59):
this return on investmentreport the latest big deal in
how we think about measuringpost-secondary education,
because that's certainly how ourlearners think about it.
As I welcome Michael today,we're going to talk specifically
about that work and the workthat he is engaged in throughout
the country.
Before we get started, I do wantto take a moment and thank
(02:21):
College Futures Foundation, whohas decided to support the Rant
podcast as a sponsor, andparticularly as we roll out this
work.
That is, the collaborationbetween HEA Group and College
Futures Foundation.
This gives us an excellent timeto bring that partnership
together.
So I want to thank CollegeFutures Foundation for their
support and for helping us getthe Rant podcast out to hundreds
(02:45):
, if not thousands, morelisteners and viewers.
So, with that backdrop, let mewelcome Michael.
Michael, welcome to the Rant.
Thanks for having me, eloy.
Well, it's great to have you,michael.
Good to see you again.
Michael, you have been lookingat student-level data for a long
time.
As I mentioned, you wereinvolved in the design of the
(03:06):
college scorecard in the Obamaadministration and now at HEA
Group, you routinely dissectfederal student data.
What changes have you seen overthose years in terms of the
types and the availability ofdata today, and what are some of
the biggest changes that you'vewitnessed in the ability to
determine the return oninvestment, both at the
(03:30):
institutional level and also atthe program of study level?
Speaker 2 (03:35):
Once again, thanks for having me.
It's funny to hear when you sayonce upon a time I was involved
in something that was a bigdeal, but it's awesome to hear
that folks are still using itand it's exciting to think about
where we are today.
And to your point, back when Iwas a younger man, it was about
10 years ago that we actuallystarted to get actual employment
(03:59):
information on institutions ofhigher education across the
United States.
Way back in the day, I think wehad a general idea through the
Bureau of Labor Statistics.
You know, if you get somecollege, you're going to
typically earn more than someonewithout college, and if you get
a bachelor's degree, you'regoing to typically earn more
than someone with an associate'sdegree.
(04:19):
But we never really had actualstudent level data or student
data that showed us well, if youattend a specific type of
institution, how much are youactually making?
Or if you major in a specificfield of study, what are your
chances of economic success?
So I was at the department from2010 to 2016.
(04:41):
In my last couple of years, Idid get the opportunity to work
on the college tour card itselfand if folks aren't familiar
with that, it's basically themain database that provides
thousands of data points oninstitutions of higher education
about 6,000 institutions acrossthe United States and I would
say that it was about in theearly 2010s that the department
(05:04):
started to think about how canwe get actual student data and
this kind of spurred out of aregulation, something called the
gainful employment rule.
There was something in the lawthat said that graduates of
career education programs needto get some sort of gainful
employment after they attendthat specific type of program,
(05:24):
and at the the time that soundedgreat, but the department
didn't really know exactly howto obtain such information
without speculating.
So smart folks there ahead ofmy time decided to forge a
partnership with the SocialSecurity Administration and for
the first time, we were actuallyable to get student data at a
(05:45):
subset of programs that said howmuch are students earning after
they graduate from a specificcareer education program.
That was in the early 2010s.
(06:13):
Technologically, in 2013,president Obama announced the
college scorecard at a State ofthe Union address as a tool that
parents and students can use towhere they can figure out how
to get the best bang for theireducational buck, and at the
time this was a simple tool wedidn't have.
There wasn't much informationon it.
It was literally just what'sthe graduation rate, what's the
cohort default rate, how muchdebt are students taking out?
How much does college cost ateach institution?
And then there was a box downbelow that said employment
information to come at a latertime.
(06:34):
So it wasn't until 2015, withthe relaunch of the college
score course, college scorecard2.0.
That was the first time that wehad actual data on how much
students make after they attendan institution of higher
education.
So you can see if you went toUniversity of Florida, the UC
(06:54):
system, any school in the UCsystem, and you can see
specifically how much thosestudents make.
And we've come a long way sincethen.
In 2019, the departmentactually started to produce
actual data on every collegeprogram across the United States
.
So you can not just see if youwent to a specific institution,
but if I majored in sociology orengineering at a specific
(07:15):
institution, how much did thoseformer graduates make.
So that sort of brings us totoday, and there's been a lot of
great folks who are utilizingthis to create ROI metrics, like
Georgetown Center for EducationWorkforce Third Way that I
worked with before.
A lot of popular newspublications are also
incorporating this earnings dataas critical pieces to think
(07:38):
about how they evaluate colleges.
And obviously we're taking thenext step here in California to
think about how we can do thesame for low and moderate income
students.
Speaker 1 (07:50):
It's interesting that you bring up the work you did
in the Obama administrationbecause, as I think back to
those days, there was quite abit of controversy that you were
creating this scorecard.
Just the name the scorecardriled a few folks and ruffled a
few feathers in higher educationand the notion was how can you
(08:14):
boil down this great and nobleaspiration of going to higher
education, to economics?
Of course, what you all tappedinto in those days was that the
public in general that's howthey measured investments.
I mean, they certainly thoughtabout what they were investing
(08:37):
in when they bought a car orthey bought a home and in many
ways, and particularly forlow-income learners, their
higher education investment isgoing to be one of their largest
investments that they make intheir life.
So what do you think haschanged since those early days
in the Obama years till now,when everybody's sort of asking
these questions?
Speaker 2 (09:06):
not from college, consumer students and parents.
It was from institutionalleaders.
Right, and maybe rightfully so,I think.
When you put out any sort ofnew tool or piece of information
, you know people start toquestion and they want to
understand what it is Right.
And the way I described that atthe time was institutional
leaders sort of went through thefive stages of grief.
You know it was denial.
You know this information isn'treal, it's flawed, there's
(09:29):
something wrong with it.
Where are you getting this datafrom?
And eventually you know theymoved to bargaining.
You know well, if you're goingto use this graduation rate 150%
of the time it takes students,why don't you use this
graduation rate instead?
And I think that we are gettingto the stage of acceptance, Like
people understand where it'scoming from.
People have accepted that it'sa reality.
(09:50):
So I think we've come a longway since announcing it in 2015.
And, to your point, you knowwhy.
Why are people talking aboutROI?
I think it's kind of been theperfect storm.
Obviously, folks have alwaysthought about this for every
purchase that they make, andwhen it comes to college, it's
really a one-time purchase, butit's one of the largest
(10:13):
purchases and investments thatfolks will ever make beyond
getting a mortgage.
So it's a pretty big deal andover the past couple of years,
we've seen a lot of thingshappen at the same time.
We have college costs havecontinued to, and over the past
couple of years, you know, we'veseen a lot of things happen at
the same time.
We have college costs havecontinued to rise over the past
number of decades.
We've seen that nationally andwe hear stories from my parents
(10:35):
or others where it's like whenwe went to CUNY, it costs $50,
you know a credit and I was likethanks, mom, but you know
credit.
And I was like thanks, mom.
But you know that's certainlynot the case anymore.
You know we've seen these,these cut, these costs continue
to rise exponentially over thepast few decades.
We've also seen that.
You know we've.
We've heard a lot about thestudent debt crisis in higher
(10:57):
education and we're at about 1.8trillion now.
Um, it's become a very real.
Now most people are able to paydown their debt, but this has
become a talking point to wherepeople don't want to be flooded
with educational debt and ifthey are, they want to at least
be able to earn enough to paydown their debt over time.
(11:17):
We also saw the pandemic youknow, the unexpected pandemic to
, where a lot of folks who arelearning on campus eventually
had to pivot and learn from homeand, anecdotally, you know,
they were working from theirparents' basement while paying
the same tuition, and theystarted to ask again what am I
getting?
You know I'm paying the sameexact amount.
What am I getting?
(11:38):
What kind of ROI am I getting?
So you know we've seen foryears through the UCLA study
that the number one reason whystudents attend college nowadays
is for greater employabilityand to obtain a financially
secure future, and also,interestingly, the number one
reason why people don't attendcollege, the number one
deterrent, is affordability,right, so you sort of mesh these
(12:02):
two factors together and it'sobvious that folks are trying to
think if I'm going to spend thenext couple years of my life
and perhaps tens of thousands ofdollars, where and how can I
ensure that I get?
Speaker 1 (12:20):
a point here.
We've seen learners and theirfamilies asking a lot of
questions, demanding more andmore answers.
Learners today, in my view,have more agency than they've
ever had.
Learners walk into classroomstoday and specifically ask the
question what am I getting forpaying for this class?
(12:40):
Now, some of it is over the top, I get it, but these are the
questions that you wouldnormally ask whenever you invest
in something, whenever you'dpick up your Consumer Reports
magazine and figure out whichstovetop am I going to buy,
based on what is the greatestreturn on my investment.
Now, one audience that isasking these questions more and
(13:03):
more as well are policymakerslocal state government
policymakers, federalpolicymakers.
You mentioned the GainfulEmployment Act.
Of course, that was just awhole new round of gainful
employment conversations a lotmore focus on value In your work
(13:25):
.
Are you seeing policymakers,influencers, getting on this
return on investment or valuebandwagon and if so, what do you
think are some of the reasonsfor that?
Speaker 2 (13:38):
We've seen this starting to gain steam since the
earnings information wasreleased in 2015.
And I started, you know, Itransitioned from my role at the
department to actually beingable to analyze the data myself.
I was sort of managing aproject at the department, but I
never had the time or capacityto dig in and look at trends the
(14:02):
way that I can now to dig inand look at trends the way that
I can now.
So I started to put out reportsand in 2019, I put out a report
I think it was called HigherEd's Broken Bridge to the Middle
Class and essentially it lookedat college performance across
institutions and I looked atearnings outcomes six years
after students attended aninstitution, eight years after
(14:22):
students attended an institutionand 10 years.
Six years after students attendan institution, eight years
after students attend aninstitution in 10 years.
And it was kind of nervewracking to see, you know, after
six years, if you measure ourstudents just earning more than
the typical high school graduate, what percentage of institution
allows them to do so, and onlyabout half were actually meeting
that minimal economic benchmark.
(14:43):
Now, when you measure them 10years out, it came out to about
a third and, yes, there aretrends.
These are specific types ofinstitutions, often concentrated
in the for-profit orshorter-term certificate area.
But since policymakers havebegun to see these outcomes for
actual data, they're nowstarting to ask tougher
(15:03):
questions to help ensure thatstudents and taxpayers are
getting that taxpayer dollarsare being used efficiently and
effectively.
So, before you know this, weweren't sure of the outcomes.
Now that we have moreinformation, I think these
questions are being asked morebroadly and thought about.
Should we have strongeraccountability metrics, whether
(15:26):
that be at the local, state orfederal level?
Speaker 1 (15:30):
Agreed.
And if you think about it, ifwe just focus here in the state
of California, the last budgetthat was approved and signed
into law by the governorinvested more than $21 billion
in higher education here inCalifornia.
That doesn't even take intoconsideration the amount of
federal aid that went tolearners in the public higher
(15:55):
education system or the privatenonprofit system here in
California.
So it's a tremendous amount ofpublic investment, no matter how
you look at it.
And I think lawmakers,policymakers, people of
influence are starting to askthe question, because they've
seen the debt crisis, They'veseen the challenges between the
(16:17):
mismatch of what is happening atcollege and universities and
the workforce.
So there's also been a call formore accountability on behalf
of the institutions.
And look, I was aninstitutional leader.
I know that some of this can beover the top, over-regulated.
We are certainly over-regulated, but on these issues of
(16:39):
ensuring that there istransparency on how much I, the
institution, am charging andwhat my learners should expect
particularly since we marketthis to learners this whole
notion that they will be betterable to earn not just a living
(17:00):
wage but to be able to thrive inthe economy that is the selling
point for most institutions aswe transition.
Now let's talk about the report,specifically Golden
Opportunities.
You looked at 292 Title IVeligible institutions here in
California public, private,private, nonprofit, private
(17:21):
for-profit all the institutionsthat are on the main line to the
Title IV program.
Let's talk a little bit aboutthose findings and before we
jump into that, I want to focuson some of the assumptions and
the data that you use, just sothat people are grounded in
where that data came from.
My understanding is that it ispublicly available data and you
(17:46):
also made some assumptions aboutthe time it took to finish a
two-year degree or credential,or a four-year degree or
credential, and I will say thatwe know that it takes learners
much longer to complete thoseprograms, but I think we
intentionally began by being asgenerous as possible.
So can you highlight some ofthose assumptions that you made
(18:08):
and remind folks where the datacomes from?
Speaker 2 (18:11):
So it was an absolute pleasure to be able to work on
this project, and there's somuch that states individually
can do and to your point.
Having this informationavailable is really a critical
first step, and I think that'swhat you and I discussed is we
want this to be the beginning ofa conversation and we hope that
it provides as such.
(18:32):
So we got all of our data fromthe US Department of Education.
It does come from the collegescorecard itself.
We were able to look at 292institutions of higher education
in California.
As mentioned.
That includes private, publicand for-profit institutions.
It also looks at institutionsof all different levels, whether
(18:53):
that be an institution thatprimarily provides certificates,
associate's degrees orbachelor's.
So really as much of a scopethat we could possibly get as a
starting point for discussion.
We also decided to specificallyfocus on low and moderate income
learners.
So within the data, we haveinformation on the net costs
(19:16):
that students pay, and that'sessentially the cost.
After all, grants andscholarships are deducted,
whether those be statescholarships or federal
scholarships.
So how much are students whosefamilies earn between $0 and
$75,000 paying out of pocketeach year to attend one of these
institutions of highereducation?
(19:37):
Now we also looked at theearnings premium.
And the way that we defineearnings premium is are students
earning more than the typicalhigh school graduate with no
college experience?
Within California itself andthrough the American Community
Survey, we were able to see thaton average that typical student
(19:57):
between 25 and 34 year oldmakes around $26,000 a year.
So anything above that we wouldconsider an earnings premium.
If students come out of aspecific institution, they're
making $36,000.
That would be a $10,000earnings premium.
So we did make some assumptionsto your point and these are
(20:17):
critical.
But we tried to do this as fairas possible and there are
trade-offs in any assumptionthat you might make.
So we assumed that studentswould finish on time after
attending a specific institutionof higher education.
If they went to an institutionthat primarily awards
(20:39):
certificates, we assume theywould finish in one year.
Therefore, they would only haveone year of net costs that are
going into our ROI calculationfor low and moderate income
students.
If they went to an associate'sdegree grading institution, we
assume they would finish in twoyears and have two years of net
costs.
And if they went to abachelor's degree granting
institutions, we calculatedtheir costs as being four years
worth of costs.
(20:59):
So these two numbers, the totalnet costs and the earnings
premium, actually allowed us tobe able to think about how long
does it take students to be ableto recoup their educational
costs based off of this extraearnings premium that they're
obtaining by attending aninstitution within the state of
California?
Speaker 1 (21:20):
I want to highlight something that you mentioned.
The report focuses on low andmoderate income learners here in
California, and that was aspecific bias that we asked you
to focus on, because we here atCollege Futures that is a
demographic of students that weare focused on, students who
have been underserved in thestate of California and the
(21:41):
learners that we know make upthe bulk of working and
middle-class communities here inCalifornia and are critically
necessary for the health of thestate of California.
So this is true across everystate, across the country.
These are a demographic oflearners that not only need
(22:03):
access to higher education, butthey need to complete and they
need to have access to theeconomy in ways that allow them
to thrive and to create the kindof intergenerational wealth
that we want for these familiesand these learners.
So, as you looked at thesefindings in the report, what
(22:27):
were some of the things thatpopped out at you?
Speaker 2 (22:29):
Because California is such a big state, our sample
was gigantic right.
Sample was gigantic right, sowe really got a good sense of
how these low and moderateincome learners are succeeding
in the workforce.
There are actually 731,000 lowand moderate income earners that
we examined within the report.
(22:50):
These institutions in totalenroll about 1.9 certificate and
undergraduate learners everysingle year, and I would say
that we found some reallyencouraging news and, like any
report, we also found some causefor concern or reason to dig
deeper and learn more about.
(23:11):
So the first thing we saw isthat most California
institutions allow theirstudents to be able to recoup
their educational costs in fiveyears or less.
Actually, about 79% of allinstitutions across California
hit this benchmark for low andmoderate income students, and
31% actually allowed them torecoup their educational costs
(23:33):
in a year or less.
So these are great numbers.
I mean, these are things thatshould definitely be celebrated,
but with one side of the coin,we obviously have to look at the
other side of the coin, andthat also means that 21% of
institutions actually showed apayback period of more than five
years for these students.
(23:54):
So essentially, they're havingtrouble earning enough or their
education isn't as affordable,or both.
It's a kind of a mixture ofboth to where it's taking them a
little bit longer.
And one of the most troublingthings that we see in any of
these studies is that there were24 institutions about 8% of all
institutions throughout thestate of California where the
(24:16):
majority of students wereactually earning less than the
typical high school graduate.
This is even 10 years afterthey've enrolled in the
institution.
So essentially, these studentsenroll, they take classes and
they're still unable to earnmore than someone with no
college experience whatsoever.
So these are some of thefindings.
We also ended up breaking outthese numbers by the type of
(24:39):
degree that the institutionoffers and by the sector, if you
want to dig into that a littlebit.
Speaker 1 (24:46):
Yeah, let's talk about the sectors.
In the report several of theCal State universities pop out
at the top of the list of havingthe best return on investment
for low and moderate incomelearners.
Some community colleges I sawUC Merced in there.
Is that a common characteristicin this report or in other
(25:09):
reports you've done in the state, or is there something going on
at these public institutionsthat's a little different?
Speaker 2 (25:15):
So, as mentioned, we looked and we broke this down.
We disaggregated it on whetheran institution was public,
private, nonprofit or for-profit, and a number that really stuck
out in the state of Californiawas that 99% of public
institutions actually showedtheir low and moderate income
students able to pay down theireducational costs within five
(25:37):
years or less.
So when you get close to 100%,you think that that is unique
and I would say throughout myprevious research as well, this
is something that is a uniquefactor within California itself
due to the earnings premium, butalso a lot has to do with the
affordability factor.
We also looked at private andfor-profit institutions and saw
(26:01):
that they took a little bitlonger than public institutions
for those types of students torecoup their educational costs.
Almost a fourth of privatecolleges showed these students
taking five years or longer torecoup their educational costs
and more than half of thefor-profits in our study showed
the same result.
So I would say you know we didnotice concentrations depending
(26:26):
on the sector of institutionthat was offering the education
for these specific types ofstudents.
Speaker 1 (26:33):
The slice that you took was focused on institutions
that serve some of the highestpercentages of low and moderate
income learners, thoseinstitutions that really do the
heaviest work, the heaviest liftfor the largest number of low
and moderate income students.
What kind of institutions didyou see showing up in that
(26:55):
category?
Speaker 2 (26:57):
Yeah, so I think when we first ran the numbers,
looking strictly at ROI for lowand moderate income students,
what we saw at the top of thelist was a lot of more selective
institutions.
But then we noticed anothernumber next to it and we saw
that these students, while theymay offer an amazing ROI for low
(27:18):
and moderate income students,they really don't enroll very
many of them whatsoever,especially in comparison to
other kinds of institutions.
So for the few and the fortunatewho get in there, they're going
to have an amazing ROI, butreally they're not serving this
type of demographic.
And we were interested in ournext slice, as you mentioned, to
(27:38):
look at well, are there schoolsthat are actually enrolling a
broad base of low and moderateincome students but also serving
them really well?
So we looked at institutionswho were serving more than 50%
of Pell Grant students, which isa pretty good indication that
students are low and moderateincome, and we actually saw that
(27:58):
nine of these a lot of them,were concentrated in the Cal
State system itself.
Actually, these students wereable to recoup their educational
costs in one year or less, sothat's really just a phenomenal
attribute when you think aboutit.
These schools are servingmostly low and moderate income
students, providing them with anaffordable education and
(28:23):
providing them with a strongenough earnings premium to where
they're able to pay down, payback their educational costs
within one year time and,essentially, after they do that,
there's a strict return ontheir educational investment.
Speaker 1 (28:33):
Moving forward, Right and you know, from our
perspective here at CollegeFutures, you know we have
nothing against the moreselective institutions here in
California.
They're just not serving thebulk of the learners that we
care about, and you know lots ofkudos to all my friends who are
Stanford grads.
Stanford does very well as aselective university in terms of
(28:57):
return on investment, but forthe kinds of learners that we
care about there's so few.
So if Stanford wants to pop uphigher on our list, then enroll
many more low and moderateincome learners.
I'm sure you'll do a great jobwith them.
Let's take an example and sortof pick it apart, just so that
our viewers and our listenersunderstand how this works.
(29:17):
Michael, so in the report youhighlight one institution here
in California Cal StatePolytechnic, humboldt.
It states that the net cost toearn a credential at Humboldt is
$44,526.
Where does that number comefrom?
Who reports that number?
Speaker 2 (29:37):
So the institutions report that number themselves
and this is specifically basedoff of students whose families
are between zero and $75,000 ayear.
So at Humboldt we did see itwas about $44,500.
That's over a four-year period.
So if we average that out inour head, that's about $11,000
(29:57):
each year over four years.
Out of pocket, these studentsand families are paying $44,526.
Speaker 1 (30:06):
So we didn't make up that number.
That's a number that HumboldtState or Cal Poly Humboldt,
forgive me reports reports.
And so in your estimation, inyour calculation, $19,526 was
the earnings premium, whichequaled 2.3 years to recoup
(30:27):
their educational costs.
That's pretty good by and large, but that's essentially how you
did it.
You take the total net cost ofwhat the institution reports for
that demographic of learner tocomplete a four-year degree, you
look at the earnings premiumand you come up with that ratio
of how long it takes to recoupthe cost.
Speaker 2 (30:47):
Exactly, yeah, so we can see it takes $44,526 for the
typical student right.
These are averages that we'relooking at for the entire
institution itself.
These graduates are thenearning a bonus essentially a
premium of $19,500 more than thetypical high school graduate.
So they're able to use that$19,500 earnings premium to pay
(31:12):
down that $44,500 in just 2.3years time, and essentially we
ran that for all 292institutions within the state.
Speaker 1 (31:23):
Let's talk a little bit about what impacts these
numbers.
Clearly, cost of attendanceimpacts this number.
The amount of money thatlearners and families have to
actually invest in theireducation impacts how long it
takes them to recoup their costs.
So I would imagine that one ofthe benefits that California
(31:45):
public institutions have oversome of the others is the cost
of attendance at a Cal State ora community college.
Absolutely, I would imaginecompletion also matters In order
for learners to actually gainthe premium they have to
(32:06):
complete, would that?
Speaker 2 (32:07):
be accurate.
I would say that's veryaccurate.
I mean, we noticed that a lotof the benefits from attending
college ultimately wind up witha student earning their
credential over time.
We mentioned those stats fromthe Bureau of Labor Statistics
to start with.
These are for college graduates.
Just typically, if you earn anassociate's degree, you're going
(32:29):
to earn more than someonewithout any sort of college
education.
If you earn a bachelor's,you're going to typically earn
more than someone with anassociate's.
Completion is critical for thatspecific earnings potential.
Another thing that I would say,because we mentioned student
debt as being something that'son a lot of folks' minds
nowadays, on a lot of folks'minds nowadays.
(32:50):
A lot of the folks who are inmost danger of defaulting on
their loans really the worstcase scenario are those who
start college but never finish.
They're ultimately three timesmore likely to default on their
student debt.
So it's really critical as onefactor that students complete.
Another factor that we all knowis sort of correlated with
(33:11):
earnings potential is what youchoose to major in.
Now, this doesn't mean that weare knocking schools know that
some majors will ultimately havea different return in
(33:36):
comparison to others, and wereally want students to be aware
of that, especially low andmoderate income students who are
making this hefty investment tobegin with.
Speaker 1 (33:45):
So you hinted at some of the work that we're thinking
about doing next, and I thinkif there's a difference between
what we at College Futures arethinking about doing versus what
other organizations have doneis our role is specific here to
California and this, as youmentioned earlier, is the
beginning of a conversation.
We asked you to be relativelygenerous in how you do the
(34:08):
analysis of institutions.
We asked you to sort ofhighlight some of the important
issues related to return oninvestment, but there's also
several other layers ofinformation that we haven't
gotten into.
You mentioned one of themprogram of study.
So at this point, you feelcomfortable that you have enough
data to go into program leveldata and look at the return on
(34:33):
investment for various programs,regardless of the institution.
Speaker 2 (34:37):
Yeah, the US Department of Education has a
very big database that looks atthe specific major that students
had concentrated in at eachcollege across the United States
and how much students areearning after they graduate
within a specific field of study.
So it's definitely somethingthat we can look at.
(35:00):
In California this covers moststudents across the United
States.
The department is still lookingat smaller programs.
Sometimes we have to manage andprotecting the privacy of
students who may graduate from avery small program.
It may be more difficult to getthat information, but for most
students within the state ofCalifornia at most colleges,
(35:22):
this information is widelyavailable.
So I think it's critical forthem, but also for institutional
administrators, to have this intheir hands as thinking about
next steps and to ensure thatthey're providing good value for
the students who enroll.
Speaker 1 (35:37):
That's absolutely right.
We want policymakers to havemuch better information about
the value institutions thatthey're investing in in states,
how well they're doing.
We want parents, families,learners to have that
information and we also want tolook at where some of the lost
investment is and certainly,although your report doesn't
(36:01):
pick up specifically on it,there are millions of learners
in California who nevercompleted that credential, who
may be carrying the debt thatyou talked about.
So what is the lost investmentthat we've made in those
learners and how do we get themback?
How do we get them to completeis another angle that we hear
College Futures will eventuallytake.
(36:22):
In your experience thus far, isthat demographic of learner the
some college, no degree, nocredential population still a
difficult demographic to get anydata on?
Speaker 2 (36:34):
It is.
It's something that we've askedfor more disaggregation through
the department and right nowwe're not able to slice and dice
by this specific groups oflearners as much as we would
like.
So we would like moreinformation on whether or not
(36:54):
you attended a specificinstitution you didn't complete.
Then how much are you making?
We can look at graduation ratesand we are getting better
information on students whotransferred into an institution,
as well as part-time learnersand whether or not they're
completing.
So I think that we're makingincremental progress at the
federal level, but there's a lotof work to be done as well.
Speaker 1 (37:18):
Agreed and those two data points are going to be very
important to us because, as youknow and as we know, low and
moderate-income learners they'rethe ones who are going
part-time because they're havingto work, raise families.
They're also the onestransferring because they had to
begin at a community collegeand then had to transfer to or
for a university.
And while all those on-rampsare great on-ramps, we want to
(37:40):
make sure that we're lookingdeeply and broadly to make sure
that value is being created, andhighlight the practices and
institutions, the policies thatare actually leading to that
value.
Now let me ask you one lastquestion as we begin to wrap up,
and I'll put you on the spot alittle bit here.
(38:00):
Michael, you've seen a lot ofdata over your career and I know
we've got a lot of folkslistening in who are either
institutional leaders, who areadvocates for learners,
policymakers.
What are some of the thingsthat you've seen in the data and
over your time make some of thebiggest difference to
increasing return on investmentfor this demographic of learner?
Speaker 2 (38:24):
I think making the data widely available is one of
the most important things thatwe can do.
So you know, it's really a firststep in terms of shining a
light on things, providing itand making it publicly available
.
So having an understanding thatthis information is out there,
you know it's being published Ithink that institutions
(39:01):
themselves then start to reactwith understanding that there is
incentive to get better.
I've seen some more forwardthinkers I would say now as well
, who are not running awaycontinuous improvement purposes.
So, looking at the programmaticlevel, data is just critically
important for states andinstitutions themselves to
figure out which kinds ofprograms may be working really
(39:24):
well and which ones aren'tproviding students with good
economic value.
And once you see the latter, itkind of just is a dig deeper
sort of flag for leaders to lookat and start asking questions
about the department itself.
To think about the careerresource center Are we actively
(39:44):
matching these students withemployers in the area?
Are we providing students withthe necessary skills to where
they're able to succeed?
Or oftentimes there's also thequestion of are we actually
offering credentials at ourinstitution to where there
aren't necessarily jobs withinthe geographic region that we're
(40:04):
offering them?
So I've seen a lot of folks whoare now thinking about this a
little bit deeper and using thisinformation in productive ways
and thinking about longer-termstrategic efforts for
improvement, not just for theirinstitutions but obviously for
the students who enroll.
Speaker 1 (40:22):
Well, just hearing you talk right now, Michael,
just brings back memories ofwhen we started introducing
completion data widely.
You know, when completion dataabout institutions and learners
was first readily available,everyone cringed.
People weren't sure how thiswas going to impact institutions
(40:45):
.
I know in my experience atcommunity colleges the fact that
people knew how our studentswere doing was a sore spot for
many leaders in communitycolleges.
But now we use that routinely.
Institutions and leaders ownthat data.
They use that data to makeimprovements and we've come a
long way since the completionmovement started and I view that
(41:09):
very much the same way.
I'm hoping that this set of databegins to spur a whole
different conversation beyondcompletion Completion for what
purpose?
What's happening with ourlearners once they complete?
What is the economic return onthe investment that they're
making?
And how are we beingtransparent to the learner about
what they're getting into andwhat they should expect?
(41:31):
That doesn't mean that we'reselling a product.
That just means that we'regiving more and better
information to learners, toinstitutional leaders, to
policymakers, on how to makeevery public dollar, every
dollar that a learner invests,go further, farther and gives
them a better opportunity tothrive in this economy.
(41:53):
So, Michael, I reallyappreciate you coming on the
rant.
I appreciate the work thatyou're doing and the partnership
you have with College Futures.
So thanks for joining us.
Thanks, Sheila, I appreciate it.
All right, Well, thankseverybody for joining me here on
the rant.
I've been talking with MichaelLitzkowitz, who heads HEA Group.
We'll put their website in thepodcast here if you want to
(42:16):
visit and learn more about theHEA Group.
Likewise, if you want to learnmore about the College Futures
Report, Golden Opportunities,I'll link that here as well.
So thanks for joining me here onthe Rant.
If you enjoyed this episode,please hit the like button,
subscribe to this channel,continue to follow us on your
favorite podcast platform andwe'll see you all soon.
(42:38):
Thanks for joining us.
Thank you.
Hi, this is Eloy Ortiz-Oakley, and welcome back
to the Rant, the podcast wherewe pull back the curtain and
break down the people, thepolicies and the politics of our
higher education system.
In this episode, we get to takea deep dive into data the data
behind return on investment inpost-secondary education and
(00:32):
talk specifically about a recentreport that was published
through a collaboration betweenthe HEA Group and College
Futures Foundation.
The title of the report iscalled Golden Opportunities
Measuring Return on Investmentin California Higher Education
for Low and Moderate IncomeLearners.
(00:53):
I'll put a link to the reportat the bottom of the YouTube
page here and, for those of youwho are listening in on your
podcast platform, you can alwaysjust go to collegefuturesorg
and you can get the report there.
So with me to talk about thisreport and specifically return
(01:17):
on investment, or ROI, isMichael Iskowitz.
Michael heads the HEA group andhe has had a long history and
background in post-secondarydata.
We're going to talk about ROI,we're going to talk about value
in post-secondary credentialsand we'll talk about this report
specifically.
(01:38):
Michael's experience extendsall the way back to the Obama
administration, where he led theeffort to create the college
scorecard, something that wetake for granted now those of us
in post-secondary education.
But at that moment in time, thecollege scorecard was a new and
big deal and like that, we hereat College Futures want to make
(01:59):
this return on investmentreport the latest big deal in
how we think about measuringpost-secondary education,
because that's certainly how ourlearners think about it.
As I welcome Michael today,we're going to talk specifically
about that work and the workthat he is engaged in throughout
the country.
Before we get started, I do wantto take a moment and thank
(02:21):
College Futures Foundation, whohas decided to support the Rant
podcast as a sponsor, andparticularly as we roll out this
work.
That is, the collaborationbetween HEA Group and College
Futures Foundation.
This gives us an excellent timeto bring that partnership
together.
So I want to thank CollegeFutures Foundation for their
support and for helping us getthe Rant podcast out to hundreds
(02:45):
, if not thousands, morelisteners and viewers.
So, with that backdrop, let mewelcome Michael.
Michael, welcome to the Rant.
Thanks for having me, eloy.
Well, it's great to have you,michael.
Good to see you again.
Michael, you have been lookingat student-level data for a long
time.
As I mentioned, you wereinvolved in the design of the
(03:06):
college scorecard in the Obamaadministration and now at HEA
Group, you routinely dissectfederal student data.
What changes have you seen overthose years in terms of the
types and the availability ofdata today, and what are some of
the biggest changes that you'vewitnessed in the ability to
determine the return oninvestment, both at the
(03:30):
institutional level and also atthe program of study level?
Speaker 2 (03:35):
Once again, thanks for having me.
It's funny to hear when you sayonce upon a time I was involved
in something that was a bigdeal, but it's awesome to hear
that folks are still using itand it's exciting to think about
where we are today.
And to your point, back when Iwas a younger man, it was about
10 years ago that we actuallystarted to get actual employment
(03:59):
information on institutions ofhigher education across the
United States.
Way back in the day, I think wehad a general idea through the
Bureau of Labor Statistics.
You know, if you get somecollege, you're going to
typically earn more than someonewithout college, and if you get
a bachelor's degree, you'regoing to typically earn more
than someone with an associate'sdegree.
(04:19):
But we never really had actualstudent level data or student
data that showed us well, if youattend a specific type of
institution, how much are youactually making?
Or if you major in a specificfield of study, what are your
chances of economic success?
So I was at the department from2010 to 2016.
(04:41):
In my last couple of years, Idid get the opportunity to work
on the college tour card itselfand if folks aren't familiar
with that, it's basically themain database that provides
thousands of data points oninstitutions of higher education
about 6,000 institutions acrossthe United States and I would
say that it was about in theearly 2010s that the department
(05:04):
started to think about how canwe get actual student data and
this kind of spurred out of aregulation, something called the
gainful employment rule.
There was something in the lawthat said that graduates of
career education programs needto get some sort of gainful
employment after they attendthat specific type of program,
(05:24):
and at the the time that soundedgreat, but the department
didn't really know exactly howto obtain such information
without speculating.
So smart folks there ahead ofmy time decided to forge a
partnership with the SocialSecurity Administration and for
the first time, we were actuallyable to get student data at a
(05:45):
subset of programs that said howmuch are students earning after
they graduate from a specificcareer education program.
That was in the early 2010s.
(06:13):
Technologically, in 2013,president Obama announced the
college scorecard at a State ofthe Union address as a tool that
parents and students can use towhere they can figure out how
to get the best bang for theireducational buck, and at the
time this was a simple tool wedidn't have.
There wasn't much informationon it.
It was literally just what'sthe graduation rate, what's the
cohort default rate, how muchdebt are students taking out?
How much does college cost ateach institution?
And then there was a box downbelow that said employment
information to come at a latertime.
(06:34):
So it wasn't until 2015, withthe relaunch of the college
score course, college scorecard2.0.
That was the first time that wehad actual data on how much
students make after they attendan institution of higher
education.
So you can see if you went toUniversity of Florida, the UC
(06:54):
system, any school in the UCsystem, and you can see
specifically how much thosestudents make.
And we've come a long way sincethen.
In 2019, the departmentactually started to produce
actual data on every collegeprogram across the United States
.
So you can not just see if youwent to a specific institution,
but if I majored in sociology orengineering at a specific
(07:15):
institution, how much did thoseformer graduates make.
So that sort of brings us totoday, and there's been a lot of
great folks who are utilizingthis to create ROI metrics, like
Georgetown Center for EducationWorkforce Third Way that I
worked with before.
A lot of popular newspublications are also
incorporating this earnings dataas critical pieces to think
(07:38):
about how they evaluate colleges.
And obviously we're taking thenext step here in California to
think about how we can do thesame for low and moderate income
students.
Speaker 1 (07:50):
It's interesting that you bring up the work you did
in the Obama administrationbecause, as I think back to
those days, there was quite abit of controversy that you were
creating this scorecard.
Just the name the scorecardriled a few folks and ruffled a
few feathers in higher educationand the notion was how can you
(08:14):
boil down this great and nobleaspiration of going to higher
education, to economics?
Of course, what you all tappedinto in those days was that the
public in general that's howthey measured investments.
I mean, they certainly thoughtabout what they were investing
(08:37):
in when they bought a car orthey bought a home and in many
ways, and particularly forlow-income learners, their
higher education investment isgoing to be one of their largest
investments that they make intheir life.
So what do you think haschanged since those early days
in the Obama years till now,when everybody's sort of asking
these questions?
Speaker 2 (09:06):
not from college, consumer students and parents.
It was from institutionalleaders.
Right, and maybe rightfully so,I think.
When you put out any sort ofnew tool or piece of information
, you know people start toquestion and they want to
understand what it is Right.
And the way I described that atthe time was institutional
leaders sort of went through thefive stages of grief.
You know it was denial.
You know this information isn'treal, it's flawed, there's
(09:29):
something wrong with it.
Where are you getting this datafrom?
And eventually you know theymoved to bargaining.
You know well, if you're goingto use this graduation rate 150%
of the time it takes students,why don't you use this
graduation rate instead?
And I think that we are gettingto the stage of acceptance, Like
people understand where it'scoming from.
People have accepted that it'sa reality.
(09:50):
So I think we've come a longway since announcing it in 2015.
And, to your point, you knowwhy.
Why are people talking aboutROI?
I think it's kind of been theperfect storm.
Obviously, folks have alwaysthought about this for every
purchase that they make, andwhen it comes to college, it's
really a one-time purchase, butit's one of the largest
(10:13):
purchases and investments thatfolks will ever make beyond
getting a mortgage.
So it's a pretty big deal andover the past couple of years,
we've seen a lot of thingshappen at the same time.
We have college costs havecontinued to, and over the past
couple of years, you know, we'veseen a lot of things happen at
the same time.
We have college costs havecontinued to rise over the past
number of decades.
We've seen that nationally andwe hear stories from my parents
(10:35):
or others where it's like whenwe went to CUNY, it costs $50,
you know a credit and I was likethanks, mom, but you know
credit.
And I was like thanks, mom.
But you know that's certainlynot the case anymore.
You know we've seen these,these cut, these costs continue
to rise exponentially over thepast few decades.
We've also seen that.
You know we've.
We've heard a lot about thestudent debt crisis in higher
(10:57):
education and we're at about 1.8trillion now.
Um, it's become a very real.
Now most people are able to paydown their debt, but this has
become a talking point to wherepeople don't want to be flooded
with educational debt and ifthey are, they want to at least
be able to earn enough to paydown their debt over time.
(11:17):
We also saw the pandemic youknow, the unexpected pandemic to
, where a lot of folks who arelearning on campus eventually
had to pivot and learn from homeand, anecdotally, you know,
they were working from theirparents' basement while paying
the same tuition, and theystarted to ask again what am I
getting?
You know I'm paying the sameexact amount.
What am I getting?
(11:38):
What kind of ROI am I getting?
So you know we've seen foryears through the UCLA study
that the number one reason whystudents attend college nowadays
is for greater employabilityand to obtain a financially
secure future, and also,interestingly, the number one
reason why people don't attendcollege, the number one
deterrent, is affordability,right, so you sort of mesh these
(12:02):
two factors together and it'sobvious that folks are trying to
think if I'm going to spend thenext couple years of my life
and perhaps tens of thousands ofdollars, where and how can I
ensure that I get?
Speaker 1 (12:20):
a point here.
We've seen learners and theirfamilies asking a lot of
questions, demanding more andmore answers.
Learners today, in my view,have more agency than they've
ever had.
Learners walk into classroomstoday and specifically ask the
question what am I getting forpaying for this class?
(12:40):
Now, some of it is over the top, I get it, but these are the
questions that you wouldnormally ask whenever you invest
in something, whenever you'dpick up your Consumer Reports
magazine and figure out whichstovetop am I going to buy,
based on what is the greatestreturn on my investment.
Now, one audience that isasking these questions more and
(13:03):
more as well are policymakerslocal state government
policymakers, federalpolicymakers.
You mentioned the GainfulEmployment Act.
Of course, that was just awhole new round of gainful
employment conversations a lotmore focus on value In your work
(13:25):
.
Are you seeing policymakers,influencers, getting on this
return on investment or valuebandwagon and if so, what do you
think are some of the reasonsfor that?
Speaker 2 (13:38):
We've seen this starting to gain steam since the
earnings information wasreleased in 2015.
And I started, you know, Itransitioned from my role at the
department to actually beingable to analyze the data myself.
I was sort of managing aproject at the department, but I
never had the time or capacityto dig in and look at trends the
(14:02):
way that I can now to dig inand look at trends the way that
I can now.
So I started to put out reportsand in 2019, I put out a report
I think it was called HigherEd's Broken Bridge to the Middle
Class and essentially it lookedat college performance across
institutions and I looked atearnings outcomes six years
after students attended aninstitution, eight years after
(14:22):
students attended an institutionand 10 years.
Six years after students attendan institution, eight years
after students attend aninstitution in 10 years.
And it was kind of nervewracking to see, you know, after
six years, if you measure ourstudents just earning more than
the typical high school graduate, what percentage of institution
allows them to do so, and onlyabout half were actually meeting
that minimal economic benchmark.
(14:43):
Now, when you measure them 10years out, it came out to about
a third and, yes, there aretrends.
These are specific types ofinstitutions, often concentrated
in the for-profit orshorter-term certificate area.
But since policymakers havebegun to see these outcomes for
actual data, they're nowstarting to ask tougher
(15:03):
questions to help ensure thatstudents and taxpayers are
getting that taxpayer dollarsare being used efficiently and
effectively.
So, before you know this, weweren't sure of the outcomes.
Now that we have moreinformation, I think these
questions are being asked morebroadly and thought about.
Should we have strongeraccountability metrics, whether
(15:26):
that be at the local, state orfederal level?
Speaker 1 (15:30):
Agreed.
And if you think about it, ifwe just focus here in the state
of California, the last budgetthat was approved and signed
into law by the governorinvested more than $21 billion
in higher education here inCalifornia.
That doesn't even take intoconsideration the amount of
federal aid that went tolearners in the public higher
(15:55):
education system or the privatenonprofit system here in
California.
So it's a tremendous amount ofpublic investment, no matter how
you look at it.
And I think lawmakers,policymakers, people of
influence are starting to askthe question, because they've
seen the debt crisis, They'veseen the challenges between the
(16:17):
mismatch of what is happening atcollege and universities and
the workforce.
So there's also been a call formore accountability on behalf
of the institutions.
And look, I was aninstitutional leader.
I know that some of this can beover the top, over-regulated.
We are certainly over-regulated, but on these issues of
(16:39):
ensuring that there istransparency on how much I, the
institution, am charging andwhat my learners should expect
particularly since we marketthis to learners this whole
notion that they will be betterable to earn not just a living
(17:00):
wage but to be able to thrive inthe economy that is the selling
point for most institutions aswe transition.
Now let's talk about the report,specifically Golden
Opportunities.
You looked at 292 Title IVeligible institutions here in
California public, private,private, nonprofit, private
(17:21):
for-profit all the institutionsthat are on the main line to the
Title IV program.
Let's talk a little bit aboutthose findings and before we
jump into that, I want to focuson some of the assumptions and
the data that you use, just sothat people are grounded in
where that data came from.
My understanding is that it ispublicly available data and you
(17:46):
also made some assumptions aboutthe time it took to finish a
two-year degree or credential,or a four-year degree or
credential, and I will say thatwe know that it takes learners
much longer to complete thoseprograms, but I think we
intentionally began by being asgenerous as possible.
So can you highlight some ofthose assumptions that you made
(18:08):
and remind folks where the datacomes from?
Speaker 2 (18:11):
So it was an absolute pleasure to be able to work on
this project, and there's somuch that states individually
can do and to your point.
Having this informationavailable is really a critical
first step, and I think that'swhat you and I discussed is we
want this to be the beginning ofa conversation and we hope that
it provides as such.
(18:32):
So we got all of our data fromthe US Department of Education.
It does come from the collegescorecard itself.
We were able to look at 292institutions of higher education
in California.
As mentioned.
That includes private, publicand for-profit institutions.
It also looks at institutionsof all different levels, whether
(18:53):
that be an institution thatprimarily provides certificates,
associate's degrees orbachelor's.
So really as much of a scopethat we could possibly get as a
starting point for discussion.
We also decided to specificallyfocus on low and moderate income
learners.
So within the data, we haveinformation on the net costs
(19:16):
that students pay, and that'sessentially the cost.
After all, grants andscholarships are deducted,
whether those be statescholarships or federal
scholarships.
So how much are students whosefamilies earn between $0 and
$75,000 paying out of pocketeach year to attend one of these
institutions of highereducation?
(19:37):
Now we also looked at theearnings premium.
And the way that we defineearnings premium is are students
earning more than the typicalhigh school graduate with no
college experience?
Within California itself andthrough the American Community
Survey, we were able to see thaton average that typical student
(19:57):
between 25 and 34 year oldmakes around $26,000 a year.
So anything above that we wouldconsider an earnings premium.
If students come out of aspecific institution, they're
making $36,000.
That would be a $10,000earnings premium.
So we did make some assumptionsto your point and these are
(20:17):
critical.
But we tried to do this as fairas possible and there are
trade-offs in any assumptionthat you might make.
So we assumed that studentswould finish on time after
attending a specific institutionof higher education.
If they went to an institutionthat primarily awards
(20:39):
certificates, we assume theywould finish in one year.
Therefore, they would only haveone year of net costs that are
going into our ROI calculationfor low and moderate income
students.
If they went to an associate'sdegree grading institution, we
assume they would finish in twoyears and have two years of net
costs.
And if they went to abachelor's degree granting
institutions, we calculatedtheir costs as being four years
worth of costs.
(20:59):
So these two numbers, the totalnet costs and the earnings
premium, actually allowed us tobe able to think about how long
does it take students to be ableto recoup their educational
costs based off of this extraearnings premium that they're
obtaining by attending aninstitution within the state of
California?
Speaker 1 (21:20):
I want to highlight something that you mentioned.
The report focuses on low andmoderate income learners here in
California, and that was aspecific bias that we asked you
to focus on, because we here atCollege Futures that is a
demographic of students that weare focused on, students who
have been underserved in thestate of California and the
(21:41):
learners that we know make upthe bulk of working and
middle-class communities here inCalifornia and are critically
necessary for the health of thestate of California.
So this is true across everystate, across the country.
These are a demographic oflearners that not only need
(22:03):
access to higher education, butthey need to complete and they
need to have access to theeconomy in ways that allow them
to thrive and to create the kindof intergenerational wealth
that we want for these familiesand these learners.
So, as you looked at thesefindings in the report, what
(22:27):
were some of the things thatpopped out at you?
Speaker 2 (22:29):
Because California is such a big state, our sample
was gigantic right.
Sample was gigantic right, sowe really got a good sense of
how these low and moderateincome learners are succeeding
in the workforce.
There are actually 731,000 lowand moderate income earners that
we examined within the report.
(22:50):
These institutions in totalenroll about 1.9 certificate and
undergraduate learners everysingle year, and I would say
that we found some reallyencouraging news and, like any
report, we also found some causefor concern or reason to dig
deeper and learn more about.
(23:11):
So the first thing we saw isthat most California
institutions allow theirstudents to be able to recoup
their educational costs in fiveyears or less.
Actually, about 79% of allinstitutions across California
hit this benchmark for low andmoderate income students, and
31% actually allowed them torecoup their educational costs
(23:33):
in a year or less.
So these are great numbers.
I mean, these are things thatshould definitely be celebrated,
but with one side of the coin,we obviously have to look at the
other side of the coin, andthat also means that 21% of
institutions actually showed apayback period of more than five
years for these students.
(23:54):
So essentially, they're havingtrouble earning enough or their
education isn't as affordable,or both.
It's a kind of a mixture ofboth to where it's taking them a
little bit longer.
And one of the most troublingthings that we see in any of
these studies is that there were24 institutions about 8% of all
institutions throughout thestate of California where the
(24:16):
majority of students wereactually earning less than the
typical high school graduate.
This is even 10 years afterthey've enrolled in the
institution.
So essentially, these studentsenroll, they take classes and
they're still unable to earnmore than someone with no
college experience whatsoever.
So these are some of thefindings.
We also ended up breaking outthese numbers by the type of
(24:39):
degree that the institutionoffers and by the sector, if you
want to dig into that a littlebit.
Speaker 1 (24:46):
Yeah, let's talk about the sectors.
In the report several of theCal State universities pop out
at the top of the list of havingthe best return on investment
for low and moderate incomelearners.
Some community colleges I sawUC Merced in there.
Is that a common characteristicin this report or in other
(25:09):
reports you've done in the state, or is there something going on
at these public institutionsthat's a little different?
Speaker 2 (25:15):
So, as mentioned, we looked and we broke this down.
We disaggregated it on whetheran institution was public,
private, nonprofit or for-profit, and a number that really stuck
out in the state of Californiawas that 99% of public
institutions actually showedtheir low and moderate income
students able to pay down theireducational costs within five
(25:37):
years or less.
So when you get close to 100%,you think that that is unique
and I would say throughout myprevious research as well, this
is something that is a uniquefactor within California itself
due to the earnings premium, butalso a lot has to do with the
affordability factor.
We also looked at private andfor-profit institutions and saw
(26:01):
that they took a little bitlonger than public institutions
for those types of students torecoup their educational costs.
Almost a fourth of privatecolleges showed these students
taking five years or longer torecoup their educational costs
and more than half of thefor-profits in our study showed
the same result.
So I would say you know we didnotice concentrations depending
(26:26):
on the sector of institutionthat was offering the education
for these specific types ofstudents.
Speaker 1 (26:33):
The slice that you took was focused on institutions
that serve some of the highestpercentages of low and moderate
income learners, thoseinstitutions that really do the
heaviest work, the heaviest liftfor the largest number of low
and moderate income students.
What kind of institutions didyou see showing up in that
(26:55):
category?
Speaker 2 (26:57):
Yeah, so I think when we first ran the numbers,
looking strictly at ROI for lowand moderate income students,
what we saw at the top of thelist was a lot of more selective
institutions.
But then we noticed anothernumber next to it and we saw
that these students, while theymay offer an amazing ROI for low
(27:18):
and moderate income students,they really don't enroll very
many of them whatsoever,especially in comparison to
other kinds of institutions.
So for the few and the fortunatewho get in there, they're going
to have an amazing ROI, butreally they're not serving this
type of demographic.
And we were interested in ournext slice, as you mentioned, to
(27:38):
look at well, are there schoolsthat are actually enrolling a
broad base of low and moderateincome students but also serving
them really well?
So we looked at institutionswho were serving more than 50%
of Pell Grant students, which isa pretty good indication that
students are low and moderateincome, and we actually saw that
(27:58):
nine of these a lot of them,were concentrated in the Cal
State system itself.
Actually, these students wereable to recoup their educational
costs in one year or less, sothat's really just a phenomenal
attribute when you think aboutit.
These schools are servingmostly low and moderate income
students, providing them with anaffordable education and
(28:23):
providing them with a strongenough earnings premium to where
they're able to pay down, payback their educational costs
within one year time and,essentially, after they do that,
there's a strict return ontheir educational investment.
Speaker 1 (28:33):
Moving forward, Right and you know, from our
perspective here at CollegeFutures, you know we have
nothing against the moreselective institutions here in
California.
They're just not serving thebulk of the learners that we
care about, and you know lots ofkudos to all my friends who are
Stanford grads.
Stanford does very well as aselective university in terms of
(28:57):
return on investment, but forthe kinds of learners that we
care about there's so few.
So if Stanford wants to pop uphigher on our list, then enroll
many more low and moderateincome learners.
I'm sure you'll do a great jobwith them.
Let's take an example and sortof pick it apart, just so that
our viewers and our listenersunderstand how this works.
(29:17):
Michael, so in the report youhighlight one institution here
in California Cal StatePolytechnic, humboldt.
It states that the net cost toearn a credential at Humboldt is
$44,526.
Where does that number comefrom?
Who reports that number?
Speaker 2 (29:37):
So the institutions report that number themselves
and this is specifically basedoff of students whose families
are between zero and $75,000 ayear.
So at Humboldt we did see itwas about $44,500.
That's over a four-year period.
So if we average that out inour head, that's about $11,000
(29:57):
each year over four years.
Out of pocket, these studentsand families are paying $44,526.
Speaker 1 (30:06):
So we didn't make up that number.
That's a number that HumboldtState or Cal Poly Humboldt,
forgive me reports reports.
And so in your estimation, inyour calculation, $19,526 was
the earnings premium, whichequaled 2.3 years to recoup
(30:27):
their educational costs.
That's pretty good by and large, but that's essentially how you
did it.
You take the total net cost ofwhat the institution reports for
that demographic of learner tocomplete a four-year degree, you
look at the earnings premiumand you come up with that ratio
of how long it takes to recoupthe cost.
Speaker 2 (30:47):
Exactly, yeah, so we can see it takes $44,526 for the
typical student right.
These are averages that we'relooking at for the entire
institution itself.
These graduates are thenearning a bonus essentially a
premium of $19,500 more than thetypical high school graduate.
So they're able to use that$19,500 earnings premium to pay
(31:12):
down that $44,500 in just 2.3years time, and essentially we
ran that for all 292institutions within the state.
Speaker 1 (31:23):
Let's talk a little bit about what impacts these
numbers.
Clearly, cost of attendanceimpacts this number.
The amount of money thatlearners and families have to
actually invest in theireducation impacts how long it
takes them to recoup their costs.
So I would imagine that one ofthe benefits that California
(31:45):
public institutions have oversome of the others is the cost
of attendance at a Cal State ora community college.
Absolutely, I would imaginecompletion also matters In order
for learners to actually gainthe premium they have to
(32:06):
complete, would that?
Speaker 2 (32:07):
be accurate.
I would say that's veryaccurate.
I mean, we noticed that a lotof the benefits from attending
college ultimately wind up witha student earning their
credential over time.
We mentioned those stats fromthe Bureau of Labor Statistics
to start with.
These are for college graduates.
Just typically, if you earn anassociate's degree, you're going
(32:29):
to earn more than someonewithout any sort of college
education.
If you earn a bachelor's,you're going to typically earn
more than someone with anassociate's.
Completion is critical for thatspecific earnings potential.
Another thing that I would say,because we mentioned student
debt as being something that'son a lot of folks' minds
nowadays, on a lot of folks'minds nowadays.
(32:50):
A lot of the folks who are inmost danger of defaulting on
their loans really the worstcase scenario are those who
start college but never finish.
They're ultimately three timesmore likely to default on their
student debt.
So it's really critical as onefactor that students complete.
Another factor that we all knowis sort of correlated with
(33:11):
earnings potential is what youchoose to major in.
Now, this doesn't mean that weare knocking schools know that
some majors will ultimately havea different return in
(33:36):
comparison to others, and wereally want students to be aware
of that, especially low andmoderate income students who are
making this hefty investment tobegin with.
Speaker 1 (33:45):
So you hinted at some of the work that we're thinking
about doing next, and I thinkif there's a difference between
what we at College Futures arethinking about doing versus what
other organizations have doneis our role is specific here to
California and this, as youmentioned earlier, is the
beginning of a conversation.
We asked you to be relativelygenerous in how you do the
(34:08):
analysis of institutions.
We asked you to sort ofhighlight some of the important
issues related to return oninvestment, but there's also
several other layers ofinformation that we haven't
gotten into.
You mentioned one of themprogram of study.
So at this point, you feelcomfortable that you have enough
data to go into program leveldata and look at the return on
(34:33):
investment for various programs,regardless of the institution.
Speaker 2 (34:37):
Yeah, the US Department of Education has a
very big database that looks atthe specific major that students
had concentrated in at eachcollege across the United States
and how much students areearning after they graduate
within a specific field of study.
So it's definitely somethingthat we can look at.
(35:00):
In California this covers moststudents across the United
States.
The department is still lookingat smaller programs.
Sometimes we have to manage andprotecting the privacy of
students who may graduate from avery small program.
It may be more difficult to getthat information, but for most
students within the state ofCalifornia at most colleges,
(35:22):
this information is widelyavailable.
So I think it's critical forthem, but also for institutional
administrators, to have this intheir hands as thinking about
next steps and to ensure thatthey're providing good value for
the students who enroll.
Speaker 1 (35:37):
That's absolutely right.
We want policymakers to havemuch better information about
the value institutions thatthey're investing in in states,
how well they're doing.
We want parents, families,learners to have that
information and we also want tolook at where some of the lost
investment is and certainly,although your report doesn't
(36:01):
pick up specifically on it,there are millions of learners
in California who nevercompleted that credential, who
may be carrying the debt thatyou talked about.
So what is the lost investmentthat we've made in those
learners and how do we get themback?
How do we get them to completeis another angle that we hear
College Futures will eventuallytake.
(36:22):
In your experience thus far, isthat demographic of learner the
some college, no degree, nocredential population still a
difficult demographic to get anydata on?
Speaker 2 (36:34):
It is.
It's something that we've askedfor more disaggregation through
the department and right nowwe're not able to slice and dice
by this specific groups oflearners as much as we would
like.
So we would like moreinformation on whether or not
(36:54):
you attended a specificinstitution you didn't complete.
Then how much are you making?
We can look at graduation ratesand we are getting better
information on students whotransferred into an institution,
as well as part-time learnersand whether or not they're
completing.
So I think that we're makingincremental progress at the
federal level, but there's a lotof work to be done as well.
Speaker 1 (37:18):
Agreed and those two data points are going to be very
important to us because, as youknow and as we know, low and
moderate-income learners they'rethe ones who are going
part-time because they're havingto work, raise families.
They're also the onestransferring because they had to
begin at a community collegeand then had to transfer to or
for a university.
And while all those on-rampsare great on-ramps, we want to
(37:40):
make sure that we're lookingdeeply and broadly to make sure
that value is being created, andhighlight the practices and
institutions, the policies thatare actually leading to that
value.
Now let me ask you one lastquestion as we begin to wrap up,
and I'll put you on the spot alittle bit here.
(38:00):
Michael, you've seen a lot ofdata over your career and I know
we've got a lot of folkslistening in who are either
institutional leaders, who areadvocates for learners,
policymakers.
What are some of the thingsthat you've seen in the data and
over your time make some of thebiggest difference to
increasing return on investmentfor this demographic of learner?
Speaker 2 (38:24):
I think making the data widely available is one of
the most important things thatwe can do.
So you know, it's really a firststep in terms of shining a
light on things, providing itand making it publicly available
.
So having an understanding thatthis information is out there,
you know it's being published Ithink that institutions
(39:01):
themselves then start to reactwith understanding that there is
incentive to get better.
I've seen some more forwardthinkers I would say now as well
, who are not running awaycontinuous improvement purposes.
So, looking at the programmaticlevel, data is just critically
important for states andinstitutions themselves to
figure out which kinds ofprograms may be working really
(39:24):
well and which ones aren'tproviding students with good
economic value.
And once you see the latter, itkind of just is a dig deeper
sort of flag for leaders to lookat and start asking questions
about the department itself.
To think about the careerresource center Are we actively
(39:44):
matching these students withemployers in the area?
Are we providing students withthe necessary skills to where
they're able to succeed?
Or oftentimes there's also thequestion of are we actually
offering credentials at ourinstitution to where there
aren't necessarily jobs withinthe geographic region that we're
(40:04):
offering them?
So I've seen a lot of folks whoare now thinking about this a
little bit deeper and using thisinformation in productive ways
and thinking about longer-termstrategic efforts for
improvement, not just for theirinstitutions but obviously for
the students who enroll.
Speaker 1 (40:22):
Well, just hearing you talk right now, Michael,
just brings back memories ofwhen we started introducing
completion data widely.
You know, when completion dataabout institutions and learners
was first readily available,everyone cringed.
People weren't sure how thiswas going to impact institutions
(40:45):
.
I know in my experience atcommunity colleges the fact that
people knew how our studentswere doing was a sore spot for
many leaders in communitycolleges.
But now we use that routinely.
Institutions and leaders ownthat data.
They use that data to makeimprovements and we've come a
long way since the completionmovement started and I view that
(41:09):
very much the same way.
I'm hoping that this set of databegins to spur a whole
different conversation beyondcompletion Completion for what
purpose?
What's happening with ourlearners once they complete?
What is the economic return onthe investment that they're
making?
And how are we beingtransparent to the learner about
what they're getting into andwhat they should expect?
(41:31):
That doesn't mean that we'reselling a product.
That just means that we'regiving more and better
information to learners, toinstitutional leaders, to
policymakers, on how to makeevery public dollar, every
dollar that a learner invests,go further, farther and gives
them a better opportunity tothrive in this economy.
(41:53):
So, Michael, I reallyappreciate you coming on the
rant.
I appreciate the work thatyou're doing and the partnership
you have with College Futures.
So thanks for joining us.
Thanks, Sheila, I appreciate it.
All right, Well, thankseverybody for joining me here on
the rant.
I've been talking with MichaelLitzkowitz, who heads HEA Group.
We'll put their website in thepodcast here if you want to
(42:16):
visit and learn more about theHEA Group.
Likewise, if you want to learnmore about the College Futures
Report, Golden Opportunities,I'll link that here as well.
So thanks for joining me here onthe Rant.
If you enjoyed this episode,please hit the like button,
subscribe to this channel,continue to follow us on your
favorite podcast platform andwe'll see you all soon.
(42:38):
Thanks for joining us.
Thank you.
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