Major: Debt

Students are told from a young age that the only way to get ahead is to go to college. And that’s bad advice, says writer Neil Swidey.

college_bannerEduShyster: You recently wrote an eye-popping report in which you challenge one of our most deeply held beliefs: that, as you put it, *the best route out of poverty runs through the college quad.* Explain.

Neil Swidey: What we have now is a decades-long consensus of advice that we give students, particularly low-income students, and it’s so widespread and accepted that it’s in the ether. Students, from a young age, are told that the only way to get ahead is to go to college, and not just to college but to a four-year college. But when you dive into the data, as I did for this project, what you find is that the low-income students who graduate, and graduate without a lot of debt, are outliers. And the ones who don’t finish are worse off than if they’d never gone to college at all. So we have to ask ourselves what it means when that good outcome we’re encouraging is statistically very unlikely to happen, and the negative outcomes are much more likely. Of course all students should be able to get ahead. But we can’t be giving students aspirational advice that ends up deepening their hole rather than helping them move ahead.

So we have to ask ourselves what it means when that good outcome we’re encouraging is statistically very unlikely to happen, and the negative outcomes are much more likely.

EduShyster: Inflated promises. Deceptive claims. Vulnerable students. Where have I heard this before??? The schools you focus on aren’t for-profit universities that bear the name of certain presidential contender, though, but the four-year private colleges that are a fixture of the New England landscape.

animal-house-college-sweatshirt-lgSwidey: What was astounding to me is that when I actually looked at the financial aid offers going to students whose total family income was under $30,000 a year, they were being asked to use that entire amount—nearly $30,000—to fill the gap for one year at a less selective four-year college. That for me, right out of the gate, should raise all kinds of eyebrows, and the colleges need to be held to account and asked *do you think it’s right to be giving a financial aid package to a student that isn’t sustainable when you know that by doing that, things are going to be really tough for them, just on the financial front?* That financial stress, by the way, makes it much more likely that students are going to get off track academically. I do want to distinguish between these colleges and the really notorious for-profit diploma mills that we hear so much about. What you find at many of these four-year colleges are people who believe deeply in the power of college to help students move ahead and make their futures better than their pasts—that’s why they went into education. They really want this to work, but when you get deep into the numbers you realize that it’s not working, and that it’s actually counterproductive because it’s putting low-income students deeper into a hole.

EduShyster: The squirmiest parts of your story are those where you corner various college administrators and ask them what kind of ROI, to use a beloved edupreneurial term, these students can realistically expect. What would a more honest accounting look like?

Swidey: What nobody tells low-income students is that if you go to college and you don’t finish, you’re worse off than if you’d never gone to college at all, because a little bit of college but no degree gets you nothing but debt. I think we need to have a much more honest discussion about that, and the people doing the counseling and giving advice to students, both at the high school and the collegiate level, need to be more in command of what the data actually show. We also need to make sure that our public policy debate is informed by what’s really happening on the ground now and not clouded by our aspirational notions around college. I think the person who summed this up the most powerfully was a former financial aid director who told me that *these kids are being duped when they’re told that this is the American dream.* She was the youngest of six kids raised by a single mother in a South Boston triple decker, so she knows from a personal experience that this could have been her. I think that what’s been missing from this issue is people stepping back and saying *if this were my relative, coming from this situation, what advice would you give her?* That really helps to clear away a lot of the theoretical and aspirational clouds and gets right down to the essential question: is this a good investment?

I think the person who summed this up the most powerfully was a former financial aid director who told me that *these kids are being duped when they’re told that this is the American dream.*

cap and gownEduShyster: You cite a statistic that I’ve heard at least a million times: that students who earn a bachelor’s degree will earn approximately $1,000,000 more than students who only finish high school. But it turns out that that number is pretty misleading.

Swidey: That’s part of the power of the persuasive argument that all students need to go to college. Who wouldn’t want to earn $1,000,000 more over your career? But those are averages. What the research that I cite found is that low-income students who earn their bachelor’s degree start out earning two thirds as much as an affluent graduate, and that by the mid-point in their career they’re only earning half of what the affluent grad does. If you’re low income and you get a bachelor’s degree, you’ll earn 91% more than your low income counterpart with just a high school degree. But if you’re an affluent college grad, you’re going to earn 162% over another affluent graduate with only a high school agree. College isn’t that great equalizer that we make it out to be, but is a kind of an engine, widening the divide. It ends up helping the students who are already coming from affluent families widen their lead over students who aren’t.

College isn’t that great equalizer that we make it out to be, but is a kind of an engine, widening the divide. It ends up helping the students who are already coming from affluent families widen their lead over students who aren’t.

EduShyster: I chronicle the unintended consequences of education reform on this page, but you opened my eyes to something I hadn’t considered before: how the push for *college for all* is intersecting with the disinvestment from public higher education, which then pushes low-income students to attend colleges that lack the resources to support them financially. Do I have that right?

Four-College-Students-with-DotsSwidey: Because we have underfunded our public higher education system, particularly in states where we have a lot of private colleges, like here in Massachusetts, those public institutions go chasing dollars elsewhere. They want to increase their ranking on US News and World Reports and they know that a good way to do that is to get affluent out-of-state students, and to take some of their scarce institutional dollars and give it to those students as non-need-based merit aid. They know that a few thousand dollars will make the difference in convincing some out-of-state student to pick your public college as opposed to some other state’s flagship public university. So they end up using that money for those students, leaving fewer dollars for in-state low-income students. Which means that those students have to find somewhere else to go, and that often means going to small, private colleges that face their own pressures and are eager to take these students. But these colleges don’t have the money to give these low-income students adequate funding so that they can go there without incurring a ton of debt.

EduShyster: You’re focused mainly on the financial toll that debt but no degree takes on low-income students, but I’m curious about the psychological toll. Did the students you followed talk to you about that?

Swidey:  Absolutely. There’s a financial vise that tightens when you go along this path, and there’s an emotional vise that tightens as well. These students feel embarrassed and there aren’t great resources to help them get back on track and do something with this investment. These are usually promising students who somebody saw something in and really encouraged, so they feel like they’ve let a lot of people down. But because it wasn’t made clear what they were getting into it, it was almost pre-ordained what was going to happen.

Neil Swidey writes for the Boston Globe Magazine and is a co-founder of the Alray Scholars Program, a non-profit that helps students in Boston who drop out of college return to college. 

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16 Comments

  1. I have to say that Mount Ida College is a very strange hodgepodge of programs and perhaps should close again (the first time it closed was during the Great Depression)

    One issue the article does not discuss is major choice. It may be that students from relatively poor families choose majors based on the people that they know who have college educations, and they might now know people in STEM fields. A good place to look at pay by major is here: https://cew.georgetown.edu/cew-reports/valueofcollegemajors/

    1. The Brookings research Swidey cites about how much more of a boost affluent students get from their degrees than their poorer counterparts is fascinating: http://www.brookings.edu/blogs/social-mobility-memos/posts/2016/02/19-college-degree-worth-less-raised-poor-hershbein The economist doing the research, which is ongoing, doesn’t mention major – although it pops up in the comments (which are worth reading, for once!) As one commenter points out, the major benefit of being affluent is that you can major in whatever you want…

    2. Boston’s edupreneurial powerhouse, Match, is “rethinking college” and steering students to a low cost online program being offered through SNHU: http://www.matchbeyond.org/ But if the real income boost from a college degree turns out to come from the networking opportunities that affluent kids get through their college experience (frats, acapella groups, etc), one wonders if this will turn out to be a better match for online education than for propelling low-income students into the middle class. Just saying…

      1. I do not think that income boosts come from social connections because the evidence is that going to prestige universities does not result in higher income for students compared to students who were accepted at prestige private universities but for some reason did not attend the prestige private university and went to a public university instead. I am traveling right now, so I can not give you the citation. I will post the citation when I have better internet access.

        1. The paper is:

          Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables
          Stacy Berg Dale, Alan B. Krueger

          Here is a link to the NBER working paper: http://www.nber.org/papers/w7322

          1. Thanks for this. I interviewed the guy from Brooking’s yesterday who is doing the research on the earnings gap between low-income degree holders vs. affluent grads. He and his colleagues are continuing to refine their analysis and I’ll be posting the interview later this summer. (I have a bit of a backlog). But one interesting finding he shared was that there appears to exist a “caring” gap. Low-income grads are disproportionately represented in “caring” professions like teaching, social work and counseling, while affluent grads are disproportionately represented in finance. Naturally I have a lot to say about this!

          2. I would categorize medical professions as being among the caring professions. Are low income graduates disproportionally represented as physicians and nurses as well?

  2. Thanks, Edushyster! Superb work by Swidey in that “eyepopping report”.

    “Although she’d paid a lot of money to Emmanuel, in the form of cash and loans, none of the course credits she’d earned were accessible to her. In effect, they were being held hostage. To transfer them, she needed an official transcript from Emmanuel. But the college refused to release it until she paid her balance in full.”

    Makes me wonder whether the legislature should and could address such withholding of transcripts, making it illegal.

    1. The response to that legislation would be, I think, to demand all payments in advance for courses. No more allowing students to take courses even though they do not have the money right now to pay for them.

  3. As discussed recently elsewhere on this site, these figures are derived from the Boston Opportunity Agenda Fifth Annual Report Card:

    Boston Public Schools (BPS):
    65% graduated within 5 years
    33.8% enrolled in college
    17% graduated college within 6 years of HS graduation

    Non-BPS public Commonwealth charter schools
    83% graduated High School in 5 years or less
    69% enrolled in college
    35% graduated college within 6 years of HS graduation
    https://www.tbf.org/~/media/TBFOrg/Files/Reports/BOA%20Annual%202016_FinalREV15th2.pdf

    By those measures, then, 34% of non-BPS public charter schools enrolled in college but failed to graduate in 6 years as contrasted with 17% of Boston Public School students. That, together with the understanding that Commonwealth charter school attendance substantially raises likelihood of attending a 4-year, rather than 2-year, college raises concern that Boston charter school students may be substantially more likely to be saddled with college debt while lacking a degree than their BPS counterparts.

    Such concern is partially alleviated by the findings of Angrist et al in “Stand and Deliver” http://economics.mit.edu/files/9799

    They write:

    “Beginning with the high school class of 2005, the state has used the MCAS to determine qualification for public university tuition waivers, an award known as the Adams Scholarship. Qualification for an Adams Scholarship requires an MCAS score in the Advanced category in either ELA or math, a score that is at least Proficient in the subject where the Advanced standard is not met, and a total MCAS score in the upper quartile of the distribution of scores in a scholarship candidate’s home school district.(10)

    Awardees qualify for a tuition waiver at a Massachusetts public college or university.(11) As can be seen at the bottom of column 2 of table 4, charter attendance increases the likelihood of qualifying for an Adams Scholarship by 24 percentage points. This finding is notable in view of concerns regarding racial imbalance in eligibility for some scholarship programs (Dynarski 2000). Attendance at Boston charter schools increases scholarship eligibility for a mostly poor minority population.”
    […]

    “While the estimates of overall enrollment effects are inconclusive, the results in table 7 show a clear shift from 2-year colleges to 4-year colleges. Specifically, in the 6-month enrollment window, charter attendance decreases 2-year attendance by 11 points, while increasing 4-year attendance by 13 points. The decline in 2-year attendance is again 11 points in the longer time window, while the estimated gain in 4-year attendance is an even larger 18 percentage points. Gains in 4-year attendance are large enough to generate highly significant estimates, with confidence intervals well away from zero.

    “The gains in 4-year enrollment documented in table 7 are driven entirely by increases in attendance at public 4-year schools, with no effect on private attendance. The last row of table 7 shows that most of this gain is generated by enrollment at Massachusetts public colleges. In fact, the Boston campus of the University of Massachusetts is the modal institution for former charter students in our sample. The Adams Scholarship likely contributes to this pattern, though college counseling may also play a role.”

    1. Did you notice the line from Angrist et all that “the estimates of overall enrollment effects are inconclusive?” (Contra the figures you cite above). That same study also found that Commonwealth charter schools actually decrease high school graduation rates. Arkansas education reform prof Jay Greene breaks it down here and talks about why it matters: https://jaypgreene.com/2016/06/14/the-disconnect-between-changing-test-scores-and-changing-later-life-outcomes-strikes-again/ As he points out, much of the reform experiment hinges on the assumption that schools that increase test scores will produce better outcomes for students down the road, but that hasn’t been borne out yet.

      1. “Did you notice the line from Angrist et all that ‘the estimates of overall enrollment effects are inconclusive?’ (Contra the figures you cite above)”

        Yes, thanks, Edushyster, I did notice that, but don’t think there’s any contradiction. The figures I cited above are ones that the Boston Opportunity Agenda team derived from Mass Department of Elementary and Secondary Education (DESE) graduation data for Boston Public Schools (BPS) and Commonwealth charter schools. The Angrist study was not comparing BPS and Commonwealth charter schools student bodies overall, but instead, if I understand correctly, taking those who won a Commonwealth charter school seat in a lottery and spent at least one subsequent day in a charter school and comparing them only with those others who had participated in the same lotteries, but not won charter school seats.

        Also, less significantly but for what it’s worth, Boston charter school graduation rates have continued to improve relative to BPS in recent times which is, I think, more effectively captured by the above most recent BOA Report Card data published January 2016 compared to the Angrist paper which, while published this year, was originally submitted for publication in 2013.

        Here were my responses when Diane Ravitch posted a link to Jay Greene’s piece which I did not find persuasive:
        https://dianeravitch.net/2016/06/16/jay-greene-do-higher-test-scores-predict-better-life-outcomes/#comment-2565739
        https://dianeravitch.net/2016/06/16/jay-greene-do-higher-test-scores-predict-better-life-outcomes/#comment-2565825

        1. You should put your methodological questions to Greene directly. I suspect he’ll say that those “modest self evaluations” that West et al relied on turn out to be the most accurate predictor of longer term outcomes we have – far more accurate than test scores. That Mass DESE data is self reported from the schools and the department has no process in place to verify it (which is what Auditor Suzanne Bump is always complaining about). The Angrist research, by contrast, is held up as the gold standard for research on charters in Boston. So I’m going to stick with that and continue to ask the same questions I’ve been asking since I started this blog now four years ago.

          1. You should put your methodological questions to Greene directly.

            The original West research he cited adequately answered any methodological questions I had.

            “That Mass DESE data is self reported from the schools and the department has no process in place to verify it (which is what Auditor Suzanne Bump is always complaining about).”

            I would agree that Bump’s office made a compelling case that there remains plenty of room for improvement in DESE data compilation efforts, though nowhere in her audit does she point specifically to any discovered inadequacies in graduation data.

            “The Angrist research, by contrast, is held up as the gold standard for research on charters in Boston”

            I find the raw DESE data and the Angrist research both useful, but for different purposes. They’re complementary. And keep in mind that Angrist et al rely on DESE graduation data. I would agree with your implication that the Angrist approach is better for making cross-sector comparisons of impact. While the DESE data is, for example, more useful for assessing what portion of charter school and BPS school students may enroll in, but not complete, college.

            “So I’m going to stick with that and continue to ask the same questions I’ve been asking since I started this blog now four years ago.”

            Perhaps, if you like Angrist’s methodology (as I do), you have found additional, at least partial, answers to some of the core questions you started with thanks to Elizabeth’s Setren’s research http://economics.mit.edu/files/11208, which used similar methodology?

            “This paper uses admissions lotteries to estimate the effects of Boston’s charter school enrollment on student achievement and classification for special needs students.”
            […]
            “Charters generate academic gains even for the most disadvantaged charter applicants. Special needs students who scored in the bottom third on their state exams in the year of the lottery experience large positive effects of over 0.22 standard deviations in math. English Language Learners with the lowest baseline English exam scores have the largest gains. Students with the most severe needs–special education students who spent the majority of their time in substantially separate classrooms and ELLs with beginning English proficiency at the time of the lottery–perform significantly better in charters than in traditional public schools.”

            “I also document striking differences in special needs classification practices in Boston charter and traditional public schools. Charter enrollment nearly doubles the likelihood that a student in special education at the time of the lottery loses this classification by the beginning of the following school
            year. Moreover, charters are three times as likely to remove an ELL classification. Charters are also three times more likely than traditional public schools to move special education students into general education classrooms. Classification practices are weakly correlated to charter gains, suggesting that special needs classification is not essential for special needs students to make progress.”
            […]
            This paper “documents that special needs students are now proportionally represented in charter lotteries. Even those with the highest need are close to proportional representation in charter lotteries. Furthermore, charters remove special needs classifications at a higher rate than traditional public schools and move special education students to more inclusive classrooms. These differences in classification practices make the proportion of special needs students in charters appear smaller.”

            In respect to that last item, she clarifies elsewhere that representation in lotteries doesn’t yet equate to representation in enrollment as there are residual sibling preference effect.

          2. You’ve inspired me to write something – if I can get my ducks in a row (always a challenge) – it could appear this week!

  4. Good luck with the ducks. I look forward to reading it. And thanks greatly for the info about Match Beyond. I hadn’t heard about that.

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