In Focus
May 09, 2013 | Permalink »
Better Information Becomes a Priority in the Latest Round of TAACCCT Grants
By Patrick Reimherr, Tim Harmon, Julie Strawn, and Neil Ridley
In its newest round of Trade Adjustment Assistance Community College and Career Training (TAACCCT) Grants, the Department of Labor took a significant step toward transparency for students by requiring state-consortium applicants to develop an online Employment Results Scorecard. Originally enacted as part of the Health Care and Education Reconciliation Act of 2010, the TAACCCT grant program awards funds to institutions to expand and improve education and training programs that can be completed in two years or less. TAACCCT-funded programs support displaced and other at-risk workers in their pursuit of skills and credentials in “high-wage, high-skill” employment.
The Employment Results Scorecards will help students navigate the postsecondary environment by providing, at a minimum, information on the graduation rate, employment rate, retention rate, average earnings, and transfer rate, as well as other potential metrics, for all the consortium institutions’ programs of study, including those developed with TAACCCT funds. Ideally, a consortium will connect with other data initiatives and systems, such as the national Workforce Data Quality Campaign and the Unemployment Insurance (UI) program.
Research shows that access to data on labor market outcomes for students—both those who graduate and those who do not complete-is a critical unmet need, especially for low-income and first-generation college-goers.. Findings suggest that providing better information to students and parents on the labor market outcomes resulting from programs of study at individual institutions can improve the ability of students to select programs and colleges that best meet their needs:
- One study found that when parents were “provided with graduation-rate data, 15 percent switched their preference to the school with the higher graduation rate.” In addition, these effects were stronger among parents with lower educational attainment levels and lower incomes.
- A review of focus group studies of how students select colleges found that “the focus group findings with low-income, first-generation, and academically underprepared students were consistent with research on adult students in that these students also collapse the search and choice stages into one abbreviated step. They tend to focus on a single college or two, primarily due to cost considerations and the fact that their grades and test scores limit their choices.”
The initiative is similar in purpose to the recent College Scorecard in that it aims to supply students with more information about the institution and potential programs of interest. However, an important difference is that Employment Results Scorecard data will be collected at the state and institutional level, and reported at the program level, while the College Scorecard relies primarily on data from the Integrated Postsecondary Education Data System (IPEDS) and the National Student Loan Data System (NSLDS), and is reported at the institution level.
Making program-level data widely available has the potential to expand the range of program and institutional options students consider when investing in their postsecondary education. The Department of Labor’s inclusion of the Employment Results Scorecard is a step in the right direction and has the potential to help an especially vulnerable population access programs that better prepare them for the demands of the labor market.
May 02, 2013 | Permalink »
CLASP Urges Congress to Make Tax-Based Student Aid More Effective for Low-Income Students
By Patrick Reimherr and Julie Strawn
In preparation for possible comprehensive tax legislation, the House and Senate tax-writing committees have been reviewing options for reform. CLASP recently participated in briefings for members of the House Ways and Means Committee on reform of family tax benefits and of tax-based student aid. We also submitted written comments to both the House and Senate tax-writing committees, urging policymakers to consider reforms to make tax-based aid:
- More effective, in terms of increasing access to and completion of college by low-income underrepresented populations who not may otherwise attend,
- More efficient, in terms of maximizing the impact of limited federal dollars, and
- Simpler for students and their families to understand and use.
An increasing share of federal student aid takes the form of tax preferences and expenditures, rather than direct payments, such as Pell Grants. In fact, tax-based aid now accounts for nearly half of non-loan federal student aid. This expansion has happened largely under the radar, without much public attention.
Unfortunately, the vast majority of the benefits of tax preferences go to middle and upper-income households. This is because most tax preferences are designed as deductions, making them most valuable to taxpayers in the highest brackets and useless to households who do not have taxable income, or whose deductions are less than the value of the standard deduction. This is both unfair and inefficient. And tax credits, while potentially more progressive than deductions, also provide limited benefit to low and middle-income households that have little or no tax liability, unless the credit is refundable.
In addition, because the value of tax incentives is not realized until the household files a return the following year, the incentive is widely separated from the actual decision it is intended to influence, reducing its impact compared to a subsidy students can count on in real-time to help cover their tuition. Many low-income households simply cannot make a significant up-front expenditure of educational or child care costs and wait until the following year to be reimbursed.
As part of its recommendations, CLASP proposed a framework for reforming tax-based student aid with three pillars: make the partially refundable American Opportunity Tax Credit (AOTC) work better for low and middle-income students, simplify and better target current tax-based aid, and improve outreach and delivery of tax-based aid. CLASP then provided three fiscally responsible options for policymakers to achieve the above goals of effectiveness, efficiency, and simplicity. All rely on improving the AOTC and simplifying the array of available tax aid. Each proposal also adjusts the AOTC for inflation to provide a buffer against price increases.
Apr 23, 2013 | Permalink »
Separate and Unequal: College Board Pell Grant Proposal Tackles College Completion, Solutions Fall Short
By CLASP
Last week, the College Board Study Group released its proposal to redesign the Pell Grant program to meet changing student needs. The proposal, Rethinking Pell Grants, which was authored by a 14-member panel of national higher education researchers and leadership, puts forth a plan to restructure the Pell Grant program into two separate and targeted programs based solely on the age of a student: “Pell Y” for younger students and “Pell A” for adult students (defined as 25 and older). We commend the College Board Study Group for recognizing the needs of all students, both young and old(er), as well as recognizing that many students need additional supportive services beyond financial aid to successfully persist and complete their programs. Still, we remain concerned about the implications of a separate and unequal Pell Grant program that threatens to cut benefits for students based solely on age.
Importantly, a major proposed reform is that Pell A and Pell Y grants would be calculated differently. Among students in the Pell Y program, eligibility would be based on their parents' income as a percentage of the federal poverty level, whereas a student in the Pell A program would receive a flat grant (or partial grant) based (tentatively) on the average cost—including books and supplies—of community colleges. This would be a stark departure from the current Pell grant program, which considers a number of factors including the cost of attendance, income, and living expenses required to be successful in school such as dependent care, transportation, and other significant “indirect costs.” These indirect costs are particularly relevant for adult students who must continue to cover such costs while pursuing a degree or certificate. Instead of including allowances for these living expenses in the Pell grant calculation, the proposal relies on an unrealistic assumption that federal and state workforce and income support programs alone can shore up these students’ living expenses and dependent care costs while in school.
The authors claim that such a bifurcated Pell program will serve all students better. Yet increasingly, students no longer fall into typical traditional-versus-nontraditional or younger-versus-older categories. Is the College Board’s proposal going backwards by dividing students into rigid categories at a time when there are more “gray areas” between students than ever before? Will an age-based student aid system lead to “tracking” students and creating eligibility “cliffs,” limiting financial aid eligibility and potentially limiting future choices?
The College Board Study Group presented the report as a framework and hopes to engage stakeholders to explore the implications of such a proposal and work to refine details. As such, CLASP poses key questions below in areas that we believe the proposal would benefit from refinements.
Is age the most important characteristic related to student completion trends?
The rationale for this proposal, stated by the panel, is that younger and older students vary across numerous dimensions all highly correlated with age. They claim adult students have lower completion rates and are more drawn to occupational, shorter-term programs. Though older students may indeed be more focused on programs that are well-connected to job opportunities (as are many younger students), we disagree with the claim that age alone dictates completion rates. Read More >>
Much attention and effort has gone into increasing equity in higher education across various types of student characteristics from race to income to family background. In that spirit, the goal of the federal student aid system is to ensure access and equity across disadvantaged groups of students. But the report draws a bright line between students based solely on age and gives no consideration to need and credential goals. Drawing such an arbitrary distinction between groups of students does not serve all students better and actually introduces inequality into the student aid system at a time when we are trying to reduce inequalities in access and success in postsecondary education. Read More >>
Will this proposal reduce postsecondary access and affordability, particularly for adult students?
Current student aid law takes into consideration not only the cost of tuition, fees, books and supplies, but also a modest allowance for basic living expenses. This is designed to recognize that students, particularly those who are independent and may have children, face a myriad of costs associated with attending college which may include lost wages due to having to work fewer hours. But grant aid and the contribution low-income students can afford to make fall woefully short of high and growing college costs, and the vast majority of low-income students still have considerable unmet need (the amount they must pay above and beyond their expected family contribution and grant and scholarship aid). New analysis by CLASP shows that, while high percentages of low-income dependent and independent students have unmet need, over 98 percent of independent full-time community college students with incomes in the bottom three quartiles (≤$30,622) had unmet need in 2007-2008. Read More >>
The proposal hinges on an unrealistic assumption that Pell A students will have greater access to other training resources and income supports. However, public investments in education and training programs that might help to cover these costs – such as career-technical education, workforce development, and adult education -- have been slashed over the last three years alone by 16 percent, before the devastating impact of sequestration.
CLASP applauds the panel for beginning a conversation about how to improve student access to income supports such as the Supplemental Nutrition Assistance Program (SNAP), housing subsidies, Medicaid, and Temporary Assistance for Needy Families (TANF) cash assistance. However, these supports should be seen as supplements to the portions of financial aid that can be devoted to living expenses, not replacements for them. Relying on these programs as a main source of financial support for students is not realistic for a number of reasons. Read More>>
We commend the College Board Study Group for highlighting the importance of Pell Grants and other student aid for both younger and older students and for particularly thinking hard about the additional supports adult students need, such as increased college and career counseling and access to other supportive services. However, the proposals to redefine student aid eligibility based on age alone and to limit the types of college costs that adult students can include in their grant calculation sets up a separate and unequal student aid system. In helping low-income students – especially adults - obtain more financial resources for college, the solution is not to create an arbitrarily bifurcated system of aid that gives one group an advantage over another. The solution is to keep college costs from growing and to find ways to help students access a broader range of financial resources above and beyond student financial aid.