New Pell Grant, Federal Loan Data Reveal Changing Tides in Financial Aid

September 12, 2013
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New data published by the U.S. Department of Education and by the Congressional Budget Office reveal changing tides in the American higher education system. And they uncover some interesting – and previously unknown – facts about federal financial aid.

The Department of Education’s Federal Student Aid (FSA) Data Center recently released data on the number of federal loan recipients and the total amount of loans disbursed in the 2012-13 academic year. (You can see those preliminary data by school in our easy-to-use database, the Federal Education Budget Project.) For the first time, the FSA data contain a breakdown between how much undergraduates and graduate students are borrowing, rather than rolling graduate and undergraduate Unsubsidized Stafford loans into one figure.

It’s a very important distinction. The data show that a whopping 41 percent of loan issuance in AY 2012-13 was for graduate and professional students. Meanwhile, graduate students were only 17.5 percent of all student loan recipients.

gradloanrecips.png   gradloandisburse2.png

Sources: New America Foundation, Federal Student Aid Data Center

Most people typically have undergraduates in mind when they think about the federal loan program, but in reality, the program is nearly as much about financing graduate studies as it is about undergraduate programs. Sure, graduate school can cost more than an undergraduate education, but that’s not necessarily why graduate loans feature prominently in the breakdown. Actually, it’s because the federal government does not limit how much graduate students can borrow for PLUS loans (and limits Graduate Stafford loans to $20,500 annually), but it imposes annual caps as low as $5,500 on undergraduates.

There’s another reason worth separating out loans for undergraduates and graduate students in the data. Under a bipartisan bill passed earlier this summer, interest rates will no longer be the same for Unsubsidized Stafford loans for graduates and undergraduates (both loan types had been set at 6.8 percent prior to AY 2013-14). Instead, starting this year, undergraduates will pay much lower interest rates on their loans (3.86 percent) than will graduate students (5.41 percent).

And that’s not the only news in federal student aid. Remember the Pell Grant funding cliff? For years we've heard about an impending drop-off in funding for the program – and it’s still baked into the budget, albeit a few years further out than first estimated. The Congressional Budget Office (CBO) reminds us of that looming funding cliff in a new report called The Federal Pell Grant Program: Recent Growth and Policy Options.

The CBO uses data on Pell grant aid and recipients to give policymakers an idea of what has driven costs in the past, what types of changes would reduce costs, and by how much. (Heads up: the biggest single cost-saver would be to allow only the lowest-income of the current Pell grant-eligible population to receive grants by requiring that they have a zero “expected family contribution” [$10.0 billion in 10-year savings], while the greatest cost would be increasing the maximum grant to $6,400 in AY 2014-15 [$5.3 billion over 10 years]).

Another interesting point in the CBO paper looks at the skyrocketing costs of the Pell Grant program. The big cost increases in the program in recent years owe a lot to community colleges. Much of the increase in the number of Pell recipients is due to a growing share of Pell students, more so than other factors, like growing enrollment. We wrote about that in 2011 after arriving at the same conclusion. Even so, Pell students still make up a far smaller share of total enrollment in community colleges than in the for-profit sector.

Both sets of data offer interesting insights into the growing and changing beast of federal student aid programs. The FSA data show the dramatically oversized influence of graduate and professional students in the distribution of loans, while the Pell data show the evolving nature of undergraduate aid. Both are work a close look as Congress returns to Capitol Hill and gets back to legislative business, so check out the Federal Education Budget Project to find your state or college.

Child Care Workforce Lacking in Opportunities

September 11, 2013

Federal data suggest that in 2010, the nation’s nearly 1.3 million child care workers earned an average of around $9.28 per hour, or $19,300 per year. The lowest-paid 10 percent of workers earned less than $7.65 per hour. With statistics like that, it’s no wonder studies have found that child care workers leave the profession at high rates -- according to one study, more than half of teachers who left the centers at which they worked actually left the occupation entirely.

Plausibility, Politics, and Process: What We Can Learn from Indiana and Tony Bennett

September 11, 2013

Definition of Plausible

  1. superficially fair, reasonable, or valuable but often specious <a plausible pretext>
  2. superficially pleasing or persuasive <a swindler… , then a quack, then a smooth, plausible gentleman — R. W. Emerson>
  3. appearing worthy of belief  <the argument was both powerful and plausible>

Last week, a report commissioned by the Indiana state legislature provided more detail on just exactly what happened a year ago as then-Superintendent of Education Tony Bennett prepared to release the state’s first A-F school grades – one of many high-profile reforms Bennett and his staff championed. The emails uncovered a last-minute scramble to change grades for certain schools and, ultimately, led to Bennett’s resignation as schools’ chief in Florida. But many unanswered questions remained. Did last week’s report answer them?

Here’s what we knew before:

  • Emails obtained by the Associated Press showed that the final grade for Christel House Academy and a dozen other schools with nontraditional configurations (e.g. grades 5-9, K-10) were changed internally prior to the public release of the grades. The emails showed Bennett and his staff were particularly concerned about an initial ‘C’ grade for Christel House, founded by a prominent political donor and regarded as a top-performing charter school. Christel House had recently expanded to offer high school, in addition to elementary and middle grades.
  • After reading the emails and analyzing the data, I reported that the grading change was only possible once performance data from these schools’ high school grades were eliminated from the formula. And I had a problem with that. The changes were made thanks to a “loophole,” in secret and without a public explanation. This made it near impossible for parents and families to know that Christel House’s K-8 grades earned the ‘A’ grade, but its high school did not.
  • Further reporting found that another 165 schools, including Christel House, benefitted from a second tweak to the formula: removing a cap on the number of bonus points schools could receive for high rates of student growth. This allowed elementary and middle schools with high growth in one subject to compensate for low performance in another subject area.

And here’s what the new report says: “In the end, Authors found that the two adjustments administered to determine Christel House Academy’s final grade were plausible and the treatment afforded to the school was consistently applied to other schools with similar circumstances.”

This isn’t news. That’s because the question wasn’t whether the changes were applied consistently – dozens of schools benefitted from the two changes, and there was never any indication that this wasn’t the case. The question wasn’t even if the changes were plausible. Of course officials could make some reasonable-sounding explanation for increasing the emphasis on student growth in the grading formula, or for removing the high school data for some schools… just as officials could also make a reasonable-sounding explanation for limiting the emphasis on growth, or for using all available high school data for all schools. In fact, that’s exactly what officials did with schools that only serve grades 9 and 10 (they just didn’t apply the same plausible logic to schools serving grades 5-10).

In other words, just because Bennett’s decisions were plausible – “superficially fair and reasonable” – it doesn’t mean they were right or in the best interests of students and families. The decision to ignore these schools’ high school data in the A-F system is like telling parents their child is an honor roll student, but only after tossing out a failing grade in Spanish because it’s their first year taking the language. Sure, it’s a plausible argument, but is it the right call? That's debatable, and it's a debate that should have happened in public.

The larger takeaway here isn’t just about the plausibility of these changes. It's also the process by which they were made. Would we be having this conversation if Bennett and his staff had been open about altering the formula and removing the high school data or the growth caps from the beginning? Or at least once the emails were released?

School accountability systems cannot function without public trust. Anyone – from parents, to policy analysts, to reporters – should be able to determine how a school’s grade was calculated. Students can determine why they earned a B+ on a math test by looking at which questions they missed and how many points they lost for each, just as the public should be able to look at a school’s ‘B’ grade, understand how it was calculated, and note the school’s strengths and weaknesses. And if changes are made to the grading rubric or the weighting of components, they must be announced and explained publicly – not buried in Excel files or internal emails.

Predictably, friends of Bennett have been quick to forgive, just as his political foes were once quick to judge. But these black-and-white pronouncements overlook many of the valuable lessons that can be learned from the report – as the authors note, their work neither condemns, nor vindicates Bennett.

The report does confirm how the grading changes occurred. Moreover, it lays out several useful recommendations for Indiana’s A-F school accountability system, notably increasing the transparency of the decisionmaking process, improving capacity within the state education agency to handle the technical aspects of A-F development, and piloting school grades before full implementation. And as PoliticsK-12 reported, these lessons extend beyond Indiana to every state updating its accountability system under ESEA flexibility. Instead of judgment and vindication, let’s also talk about how these accountability systems can be improved. It’s time to focus on the process, not just the politics.

Gainful Employment Liveblog Day 3

September 11, 2013

We are back for the final day of the first session of negotiations on gainful employment. This session will only be a half day. Here are links to liveblogs from Day 1, Day 2 Morning, and Day 2 AfternooonA summary of the regulatory text under consideration is here.

Working Groups

After a half hour closed session, the committee has agreed to the following six working groups:

  1. Repayment rates--led by Jack Warner from the South Dakota Board of Regents
  2. Placement rates--led by Della Justice, from the Kentucky Attorney General's office
  3. Transition periods/opportunities to improve--led by Belle Wheelan from SACS and Marc Jerome from Monroe College
  4. Program level cohort default rates--led by Brian Jones from Strayer University
  5. Upfront requirements--led by Barmak Nassirian from AASCU
  6. Student consequences--led by Eileen Conner from the New York Legal Assistance Group

Groups will try to get materials in by September 30, but make no promises. The Department does ask that the extent to which thresholds are recommended that they be justified.

Gainful Employment Liveblog Day 2--Morning Session

September 10, 2013

After about a half day of negotiations yesterday (once process stuff got out of the way) we're now back for the second and last full day of negotiations for this first session. Below are occasional updates from the morning negotiation sessions. Yesterday's liveblog is here and the afternoon session can be found here.

Correcting Pernicious Myths About Dual Language Learners

September 8, 2013

Almost every discussion of dual-language learning students in the United States begins with statistics illustrating their growing numbers. This is understandable, since the number of districts that inadequately meet dual language learners’ needs dwarfs the number that adopt intentionally-crafted, research-based approaches. Language learning experts emphasize the size of the DLL population in order to demand attention.

Better Data Is the Backbone of Higher Education Ratings

September 6, 2013

When President Obama announced last month in a major policy speech at the University at Buffalo that he intends to rate universities and colleges, he was met with a barrage of questions from policymakers, researchers, students, families, and schools. Everyone wanted to know what a system that rated institutions of higher education might look like, and what metrics the Department of Education might use to score colleges.

As I wrote on National Journal’s Education Experts blog today, a truly valuable ratings system must have its roots in another policy proposal: a student unit record data system. Such a system would collect anonymous, student-level information that could be used to generate reports and analyses at the programmatic or institutional levels. It could answer many of the burning questions in higher education policy, like:

[A]re Pell Grant recipients and loan borrowers at Institution Y graduating? How quickly are that school’s students earning their degrees? If they transferred, did they ultimately graduate from their second or third institutions? How long did it take them, and how much debt did they rack up in the process? What did students from different programs earn two years, five years, or 10 years after graduation, and could they repay their loans on those paychecks? And the holy grail of higher education data, though it will require more than better data tracking: Did School X’s students even learn anything in college?

But a student unit record system is banned by “one of the worst laws in the modern history of higher education.” The ban was passed by Congress in 2008, and thanks to lobbyists for the higher education industry, nothing has changed since then—largely because it might bring to light plenty of information that colleges don’t want out in the open.

After President Obama’s announcement, industry lobbyists held the line. They charged that tying federal funding for institutions to the ratings would “have a profoundly negative impact on students.” But the real concern might have more to do with possible “profoundly negative consequences” for schools that do their students a disservice, saddling them with worthless degrees and a mountain of debt. In fact, the ratings could be a critical safeguard for students and families. I wrote:

…the White House has a responsibility to the taxpayers, students, and families who pay the ever-growing price for a higher education….The ratings system that the Department of Education develops—with significant input from higher education stakeholders—won’t itself be the perfect solution to our higher education problems. That’s why the White House’s plan also included incentives for innovation, cost control, and completion efforts on the part of institutions. But it is perhaps the most basic ask that the federal government could ask of schools: a little evidence that they’re doing right by their students.

Check out the full post here.

The Way We Talk: Equity

September 5, 2013
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This is the third in a series of posts reflecting on terminology pervading today’s polarizing debates about American education. In each post, we ask how various buzzwords—“professionalism,” “accountability,” and the like—influence the conversations we have. What are the strengths, weaknesses, and blind spots that come with framing our arguments in each of these terms? The hope is that assessing the implications of the way we talk will prompt more productive discussions about improving PreK-12 education.

"Professionalism" may be a newly fashionable alternative to the dominant hold "accountability" has on education debates today, but neither of these words makes sense without considering its relationship to "equity." When we talk of raising teachers' professional status or of dismissing ineffective instructors, it's almost always in the service of providing every American student a chance to succeed.

New K-12 Achievement Data Available from Federal Education Budget Project

September 3, 2013
The Federal Education Budget Project (FEBP) today announced new K-12 achievement data available on its website for the 2010-2011 academic year.  The data are available at the state level, as well as for each of the 13,776 traditional public school districts throughout the country. Specifically, we added in the 2011 percentage of students who scored at least proficient in mathematics and reading on state standardized tests in fourth grade, eighth grade, and high school.  
To check out your local school district, visit the FEBP database and begin typing your school district name into the PreK-12 search box. Once you’ve selected your district, check out the Achievement section of the page at the bottom. There, you’ll find the new student achievement data, with the state average listed below for comparison. Mouse over the title – “4th Grade Reading District NCLB” – for a definition and source. You can also compare each district to others that are within 10 percent of the same proficiency level on a number of variables – just click the “compare” button when you mouse over the title.
NOTE: Hilliard City School District (OH)
We have a five-year snapshot of state and school district-level performance in FEBP (stretching back to the 2006 school year in the downloadable files), illustrating progress toward the benchmark set by No Child Left Behind (NCLB) of 100 percent proficiency by the 2013-2014 school year.
Beware, though: Because every state has set its own benchmark for student proficiency, data are not comparable from state to state, at least until some states start reporting accountability under common exams.  Further, states periodically update their definitions for proficiency – often through adjusting the “cut scores” on their state standardized tests – which creates additional barriers for comparing the data longitudinally, even within a state. 
Data for the state of Michigan for the 2010-2011 academic year illustrate this challenge. Michigan tests students each fall for the previous year’s learning (for example, students were tested in fall 2011 to demonstrate their 2010-11 school year proficiency). In the 2010-11 school year, students’ proficiency levels plummeted. That’s because the state adopted “more rigorous ‘cut scores’” for the state exam, the Michigan Education Assessment Program (MEAP), that reflect a more rigorous college- and career-ready standard ( They also raised the cut scores for the Michigan Merit Exam, the state’s high-stakes high school assessment, so high school scores also declined in the most recent FEBP data. This is all in preparation for the state’s anticipated switch to the Common Core-aligned assessments in the 2014-2015 school year.
Those challenges will confront other states as well. As states adopt the Common Core-aligned exams, they’ll be starting over on these accountability metrics. Scores are expected to drop for many students under the new, more-rigorous standards.
And many more changes are coming to the data for states in the 2011-12 academic year, and even more for the 2012-2013 academic year. That’s because over the past two years, states began receiving waivers of many of No Child Left Behind’s accountability provisions from the Department of Education. So far, 39 states and a group of school districts (called the “CORE Districts”) in California have received waivers. In many cases, this will affect the way these states report their student achievement data by altering the definition of proficiency and redefining the groups of students on which states report. 
Tennessee is one of the many states that has made changes to the way it reports student achievement data. Under NCLB, states only count students in schools that are enrolled on or prior to the twentieth day of the school year; under Tennessee’s NCLB waiver, starting in the 2011-2012 school year the state will include all students enrolled at some point during the school year for federal reporting purposes. We have this complication, and more, to look forward to starting with next year’s data.
In the meantime, find out how your district has measured up over the years. The data are also downloadable in an open data file here.

Waiver Watch: Let the Renewal Games Begin

August 30, 2013

As Ed Money Watch previously reported, the U.S. Department of Education has placed three states – Kansas, Oregon, and Washington – on “high risk” status for their ESEA waiver plans related to new teacher evaluation systems.  If they don’t get up to speed by the end of 2013-14, these states could face a series of increasing sanctions, from losing state administrative or programmatic Title I funding, to losing ESEA flexibility entirely. With the latter, the state would again be subject to all of the requirements and provisions of No Child Left Behind.

Now, the Department has released initial guidelines for all states seeking to renew their waivers this winter. Waivers granted from the first two application windows (November 2011 and February 2012) expire at the end of the current school year. Without the two-year extension, the consequences for these 35 states are the same as for those on high risk: NCLB, in full effect, in 2014-15I won’t go into the details of the renewal process (yet), but for more analysis take a look at these thorough recaps from Education Week’s Michele McNeil and Politico’s Caitlin Emma.

Instead, I’d like to focus on the challenge the U.S. Department of Education faces in ensuring state compliance with flexibility. The Department has a few tools at its disposal to cajole states into cooperation, but these kinds of punishments are rare, if not unprecedented. Few states have lost Title I funding, administrative or programmatic, under NCLB. And several states have been placed on high risk for their Race to the Top plans, but the Department has yet to follow through on the warning and revoke a portion of states’ funding.

Further, is returning to NCLB even a viable option? After two years of waivers, it would be a nightmare to revert back to NCLB-style accountability. For instance, would a state’s AMOs be applied retroactively to determine which schools were in need of improvement and which sanctions to apply (e.g. corrective action, restructuring)? Or, would every school in the state start with a clean slate and need to miss AYP for two years before sanctions kick in?

So on the one hand, the Department’s recent actions demonstrate that they will, at least symbolically, hold states accountable for the promises they made in their waivers. On the other, as DFER’s Dom Giandomenico notes in this must-read post, it shows just how anemic the Department’s monitoring and enforcement plans are. There will be two official monitoring cycles completed by year’s end, but they don’t cover every component of states’ flexibility plans. And while the Department is gathering data to analyze how states selected schools for improvement under flexibility (and will ask states to respond in their renewals), the data may not be made public, at least initially. The renewals will not face a peer review either.

In short, it’s far from clear how the Department will evaluate the quality of state waiver implementation in the renewal process, or if they’ll have all the information they need to make an informed judgment. But would better information, or a more thorough review procedure, even make a difference?

Let’s play a little game. 

Assume that the Department wants states to comply with the flexibility policy and to gain this compliance through partnerships, not punishments. The latter is particularly important to the Department, since punishing waiver states for non-compliance (by revoking flexibility or rescinding Title I funds) could further hinder effective implementation of the reforms the Department would like to see. In other words, any scenario where the Department must force states to re-comply with NCLB is worse than any scenario where waiver implementation is just so-so.

Now, let’s assume that states with flexibility prefer to have complete control over standards, assessment, and accountability within their states. But their preference for waivers is even stronger. They don't want to revert back to NCLB and comply with its 100% proficiency target for all students and 20% Title I set-aside for school choice and tutoring. For states, any situation where they get to keep their waivers is better than one where they lose flexibility. But the best situation is one where they have as much discretion as possible within the waiver policy. 

Here’s how the game plays out:

Regardless of the monitoring process or the rigor of the renewal guidelines, the only feasible outcome of the game is for states to do what they want, more or less, and for the federal government to work with them and hope states make good choices. In any other scenario, someone could be better off.

What did we learn?

1. U.S. Department of Education: Don't be timid when it comes to asking states to justify the policies in their waiver requests. States will tolerate the paperwork, data analysis, and conference calls if it means keeping flexibility. Yes, states may eventually struggle to implement, or even undermine, the Department's preferred policies, but that doesn’t mean they shouldn’t try to get states to do the right thing.

2. States: Behave responsibly. If states go too far and blatantly ignore the federal guidance, the Department may lose their preference for waivers at all costs – and there could be serious consequences down the line. It may not affect the waiver renewal process, but if states misuse the flexibility and unravel the progress made under NCLB, policymakers will take notice… and the next iteration of waivers (or a reauthorized ESEA) may not be as friendly toward local control.

3. Education researchers and advocates: Pay close attention to the game. States have a lot of discretion within the waiver policy, and there will be significant variation between them in terms of quality and outcomes – especially without strong federal enforcement. Recent reports – like this one from the Campaign for High School Equity – are a good start, but much more analysis is needed to ensure the lessons to be learned from ESEA flexibility are not lost.

Stay tuned to Ed Money Watch for continuing coverage of ESEA flexibility and the upcoming waiver renewals.

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