More than 40 years ago, I started working at Price Waterhouse (now PricewaterhouseCoopers, or PwC). Even though I was on the consulting track, I was encouraged to sit for the Certified Public Accountant (CPA) exam and become a licensed CPA. Having this license, along with an MBA, boosted my career and I subsequently served as CFO at five different companies over the years.
Matt Schifrin and Carter Coudriet of Forbes wrote an article about the financial ratings of private colleges, Dawn of the Dead: For Hundreds of the Nation’s Private Colleges, It’s Merge or Perish. The authors refer to Forbes’ analysis of the finances of 933 private, not-for-profit colleges with 500+ enrollments, stating that the majority of these institutions are in a precarious situation with their high tuition, tuition-dependent financial model, declining overall enrollments, and competitive landscape in higher education. It’s unsurprising that the wealthiest private colleges are doing well and in Forbes’ ratings, score a GPA of 4.5 and an A+ rating. However, the number of schools receiving a GPA of 1.5 or lower and a D has swelled from 110 in 2013 to 177 in 2019. Only 34 schools earned A+’s, with a total of 498 colleges earning C’s, an increase over 434 in 2013.
In addition to the previously cited contributing factors to the financial decline, there is excess capacity in higher education. According to Kevin Coyne of Emory University and Robert Witt of the University of Alabama System, there is a 6.4% excess capacity among public colleges, but a 12.4% excess among private institutions. Interestingly, the smallest privates have an overcapacity of 28%. As president of a very scalable, online institution, I believe that Coyne and Witt have not considered the vastly scalable operations of institutions with large online populations like APUS. Those considerations would certainly expand the overcapacity numbers immensely.
Tom Vander Ark, CEO of Getting Smart and former executive director for education of the Bill & Melinda Gates Foundation, recently wrote about changing criteria in considering college education versus other pathways pursued by high school students and their parents.
Vander Ark cites Dr. George Kuh’s October 2019 piece in the Harvard Business Review in which Kuh defends the long-term benefits of a liberal arts degree. Vander Ark shares my view in stating that price hikes in higher education have made the risk of debt without a degree the new worst-case scenario for Generation Z students. He cites Ryan Craig’s book, A New U, noting that the new rule for young people is to attend a good selective school for free if possible and so motivated. If not, look to stay debt-free and sprint to your first job.
On November 20, 2019, the Department of Education released its long-awaited update to the College Scorecard, revealing median debt, earnings and other data for graduates of specific programs of the represented schools. The Wall Street Journal was given an exclusive look at the data before publication, and provides some comparisons of the data among schools and a handy tool for sorting the dataset by school, degree level and degree type to show the median debt for graduates and median income level the first year after graduating.
I commend the Department for providing more consumer transparency. As I have written previously, the Scorecard will only be relevant when it posts data on all students, not just students using Federal Student loans. And even then, there are reasons why some institutions have dramatically different data. In this update, the Department has published both graduate and undergraduate data, some of which is revealing. For example, the Journal writes that dentists graduating from New York University had a median debt of $387,660 but only earned $69,600 in their first year after graduation. Dr. Robert Kelchen, a professor at Seton Hall, reports that the highest earners were dentists graduating from Ohio State with a first-year salary of $231,200 and debt of $173,309. While there may be regional differences why NYU grads earn less than OSU grads one year after graduation, the difference in debt is likely due to one being private and the other public.
I am no fan of the Department of Education’s College Scorecard, primarily because it is incomplete and may be misleading for some metrics. Much of the data is derived from students using Federal Student Aid (FSA) only and some of it is from those who are first-time, full-time students using FSA loans. At APUS, most of our students are part-time, working adults not using FSA to fund their education. I first wrote about the Scorecard in 2016 and reported about others like me who criticized its incomplete data.
Despite the flaws of the Scorecard, I understand why Georgetown University’s Center on Education and the Workforce recently attempted to create a return on investment (ROI) for all colleges using this data. First, it’s the only published source that uses IRS data to match earnings with students who have attended those specific institutions and who received FSA. With access to earnings, institutional costs and debt incurred, the researchers can calculate a rudimentary ROI.
Anthony Carnevale, Ban Cheah, and Martin Van Der Werf of Georgetown University’s Center on Education and the Workforce issued a report ranking the ROI of all 4,500 colleges and universities listed in the College Scorecard.
Included among the researchers’ notable findings:
- Community college and many certificate programs have the highest ROI in the short term (10 years).
- Colleges that primarily award bachelor’s degrees have the highest ROI in the long term (40 years).
- Public colleges have higher ROI than private colleges in the short term.
- Degrees from private nonprofit colleges generally have a higher ROI in the long term than public universities.
One of the frequently covered topics in higher education is the cost of college and specifically, the reduction in state funding for their public institutions. Less covered nationally is adequacy of the cost of K-12 education. In 2016, the Maryland governor and legislature jointly formed the Commission on Innovation & Excellence in Education, also known as the Kirwan Commission after its chair. The goal of the bipartisan Commission was to research successful school systems globally and make recommendations to make Maryland’s world-class. Governor Larry Hogan appointed two people to the commission, and the state senate president and house speaker appointed five persons each. There were an additional eight members appointed by the State Board of Education, Maryland State Education Association, Baltimore Teachers Union, Maryland Association of Boards of Education, Public School Superintendents Association of Maryland, Association of School Business Officials, Maryland PTA, and the Maryland Association of Counties.
The Commission issued two interim reports and one preliminary report before presenting its findings in October 2019, recommending that Maryland increase its annual spending on education by $3.8 billion to be phased in over the next decade. While a precise funding formula has yet to be negotiated between the state and counties, the Commission has recommended that it be split approximately 50/50 between the state’s portion and that covered by Baltimore City and 23 counties. On the surface, it’s hard to argue against recommendations such as requiring higher credentials for new teachers and increasing teacher pay, funding for pre-kindergarten, and funding for schools with many children living in poverty.
An article by Pamela Wood in the Baltimore Sun discusses fifth-generation wireless, or 5G, the latest and perhaps the greatest innovation for wireless devices. The technology will deliver data and video faster to consumers’ phones and also enable broader Internet of Things (IoT) technology usage like smart street lights, self-driving vehicles, etc. Our current cell technology utilizes tall towers located every mile or two in large metropolitan areas and further away in rural ones. The 5G technology will incorporate smaller antennas located much closer together, say every few blocks in a large city.
Cell phone operators are seeking standards that allow them to scalably roll out the new technology. Local governments, in Maryland and elsewhere, are attempting to protect their ability to regulate rights of way along streets and to charge fees and taxes as with other utilities. To expedite the process, the Federal Communications Commission (FCC) ordered that cities and counties approve applications within 90 days and cap associated fees. According to the Sun, dozens of cities and counties have sued the FCC, but the order stands while the court cases play out. Baltimore began working with cell operators in 2010 and expects that five companies will be installing these new cell facilities in 2020.
Note: This article was originally published on In Military.
United States military veterans hold a special place in the hearts of Americans. Certainly, the sacrifices that veterans make on behalf of all Americans are worth celebrating and as a nation, we have been honoring our vets for over 100 years.
We may honor those servicemembers who paid the ultimate sacrifice on Memorial Day; Veterans Day is for the living — a celebration of life, camaraderie, esprit de corps and triumph in the face of hardships.
On October 29, the NCAA Board of Governors voted to allow Divisions 1, 2 and 3 to permit athletes to receive compensation for their personal brand or celebrity, while not also becoming employees of their university. The three divisions must change their bylaws by January 2021 and with those changes, ensure that athletes will not be classified as professionals. This change of NCAA policy is likely in response to bills like California’s Fair Pay for Play Act, which mandates that athletes receive fair compensation for their work and will take effect in 2023.
The NCAA has been under siege for years. As the governing body for college sports, it has reaped the rewards of sponsorship contracts for broadcasting rights and shared little with the athletes performing on the field, court, track, diamond, course, or arena. Universities belonging to the Big 5 athletic conferences are additional beneficiaries, awarding multi-million dollar contracts to successful coaches and few benefits beyond college scholarships to their athletes. The NCAA’s dual role as regulator and enforcer is arguably influenced by the value of those big network contracts as evidenced by the verdict of no punishment for the University of North Carolina’s athletic program for steering athletes into “paper classes.” On the surface, one can only assume that the NCAA ordered its attorneys to find a loophole to avoid punishing one of college basketball’s perennially strongest programs.