Monday, February 06, 2012

Betting Smart on Higher Education

The state of Georgia recently revised its HOPE scholarship program. As originally set up, the program, funded by lottery proceeds, would provide full tuition to a Georgia state school to any resident student that maintained a B grade point average through high school. There were few caveats, one being that the scholarship would be lost if the student could not maintain at least a B average in college. The arrangement sounds more generous than it is. In-state tuition for Georgia colleges is a bargain when you consider the reputation that schools like UGA and Georgia Tech represent. The tuition is far less than the year’s room and board, which is not covered by the scholarship. Still, for many students it can and does make the difference.

In a sign of the times, however, Georgia has recently revised the plan. A two-tiered system is now in effect, with B average students and SAT composites 1200 and above keeping the full ride, and other B students receiving less. As time goes on, less will become progressively less. The lottery funds that once gave full coverage to the costs have now been outpaced by demand. In the four years following the introduction of HOPE, the number of qualifying students went up dramatically. There are on-going debates as to whether or not the GPA requirement led to widespread grade inflation, teachers being perhaps a bit too generous with borderline students in the hope (no pun intended) of giving them a chance at a better life. The incentive was certainly there.

The challenge of increasing scholarship costs is not unique to Georgia. Inevitably, all states will face difficult choices in how to allot their higher education dollars. By providing scholarships for the bulk of students who stood a chance of graduating, Georgia bypassed thorny debates as to who would benefit. With demand now outstripping supply, and expected to worsen, the issues can no longer avoided.

As the changes in Georgia’s HOPE scholarship became law, the rumblings began. The refrain was a familiar one: There will be fewer women and minorities in Georgia colleges. As currently written, that’s likely to be true. A host of factors is involved, but in general women and minorities do perform more poorly on the SAT in Georgia than white males. One objection is that while women tend to perform more poorly on the SAT, they make better grades in college. I have not researched that claim, but I somehow doubt it reflects the results in hard science and technical degrees that have much higher percentages of male enrollment. However, allowing that the statement could reasonably be true, what should be the course of action taken by the states? What is their responsibility with regards to the taxpayers and the public at large?

Over the last half century, the mission of colleges has changed radically, at least as expressed by many academics and politicians. Rather than a place of learning and improvement for the best and brightest, college has become an ideological counterweight, a means of balancing the social scales with regards to past wrongs both real and imagined. Far from taking stock of the already overburdened and underperforming sectors of higher education, many are demanding college for all. It is a cry without reason and with no chance of success. Between the worsening economy and the present rate of education cost increase, the system cannot sustain what it has.

The supply of education, like every other good and service, is limited. The question is how do we responsibly use what we can afford? With increasing frequency in the past decades, opportunity in higher education has been largely tied to increasing “diversity,” generally using race as a proxy. While many of us questioned the wisdom of adopting the policy in the first place, it is more important than ever to discuss and determine what our priorities will be in the future. For those who have argued in the past that there is no need to choose, the data tells a different story. To maintain a “diverse” number of African-Americans at elite universities, preferences amounting to a 300 point SAT advantage are given. While any attempt at correlating race and graduation rates is steadfastly resisted by academic institutions, the links between SAT performance and scholastic success are clear. The students that enter with lower scores tend to perform worse and graduate less. Though the number of students with B averages in Georgia skyrocketed after the HOPE scholarship was adopted, the SAT scores remained flat. In the most recently available data, less than fifty percent of HOPE scholars graduated college in six years. Seventy-five percent lost their eligibility at some point in college. The wasted funds in Georgia are huge. If you consider what is probably going on in the rest of the country, it’s mind boggling.

 In cases where unqualified students are admitted to STEM programs by affirmative action, the long terms costs are even greater. The U.S. is already producing far less than the number of Engineers, Scientists, and other technical degrees that are essential to support a robust economy. Every engineer that drops in the first or second year is one less graduate that we desperately need not only to support new technologies, but to maintain what we have already achieved. From a fiscal standpoint, it’s also an irreplaceable loss to future revenue in taxes and job creation. Contrary to popular belief, doctors, lawyers, and engineers pay large sums in taxes. Convenience store clerks tend to either pay little or act as a net drain. The implications for the future are obvious.

I’ve been known to enjoy a bit of recreational gambling from time to time. I observe two simple rules. I never bet more than I can afford to lose, and I only gamble with my own money. As it stands today, our higher education system is gambling not just with our money, but with the money of the next several generations. Worse, they are playing a lot of long shots. I think it’s past time that we pay a lot less attention to the color and gender of people going in to college and a lot more to who has the best chance to make it out. Anything else is a sucker bet.

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