Thursday, July 04, 2019

California Public College Bosses Still up to Hidden Money Tricks

“The California State University stashed away $1.5 billion in discretionary reserves,” the Sacramento Bee reports, “while raising tuition and lobbying the Legislature for more funds, according to a report released Thursday by California State Auditor Elaine Howle.” According to the audit, “CSU kept legislators, students and the public in the dark about the $1.5 billion surplus, which nearly doubled the cost of tuition from 2008-18.”

CSU Chancellor Timothy P. White called the report misleading and told the Bee, “reserve funds are like a family savings account” and “it is a strong mischaracterization to call it a surplus.” The CSU boss didn’t explain the relation of the hidden $1.5 billion to the increase in tuition. For California students, parents and taxpayers, Howle’s audit may revive some memories.

As we noted in 2017, University of California president Janet Napolitano, a former Arizona governor and Department of Homeland Security boss, was beating the drum for tuition hikes when another state audit came up with a surprise. The office of the UC president was hiding more than $175 million in discretionary reserves. As the audit revealed, the UC president hiked administrative spending by 28 percent over three years but deployed no method for tracking expenses. The UC president’s office also “intentionally interfered” with investigators and tampered with the responses of the various UC campuses, removing statements critical of the office of the president.

In November, 2017, Gov. Jerry Brown signed AB 562, which makes state employees who willfully mislead the California auditor subject to fines and criminal charges. By all indications, Janet Napolitano suffered no penalty for her deception and obstructionism, and she remains president of the University of California.

However the hidden CSU $1.5 billion shakes out, students, parents and taxpayers should not be surprised if tuition keeps rising and Timothy P. White keeps his job.


The Growth in Tuition Insurance

People buy insurance seeking protection from unanticipated events posing significant financial hardships. Most homeowners insure against their house being destroyed by fire or other natural calamities, and also against unanticipated illnesses or accidents requiring expensive medical treatment. An owner of a car worth, say, $15,000 or $20,000 usually has auto insurance providing protection from theft or destruction from an accident. Yet until fairly recently, most persons going to college did not even consider purchasing tuition insurance, even though a semester of fees (including room and board) at some schools costs far more than the value of a typical car. As college expenses become bigger, the case for purchasing insurance has grown.

With that in mind, a few days ago I chatted with Paul Richardson, an executive at a major national insurance company, Liberty Mutual, which entered into the tuition insurance business just a couple of years ago, motivated by increasing numbers of holders of other policies (e.g, auto or homeowners) inquiring about its availability. Mr. Richardson tells me a small number of companies sell their product directly to consumers, while others make arrangements with colleges to offer protection through the school.

What does tuition insurance protect the policyholder against? Mainly, dropping out of school in mid-semester owing to some totally unexpected circumstance, most prominently a health issue involving the student, or, in some cases, a parent providing substantial financial support. Most schools themselves provide modest protection; a student dropping out after only a few days at the beginning of the semester, for example, usually can get nearly a full tuition refund. While policies vary considerably from school to school, at most of them a student dropping out in the middle of the term, say, after seven or eight weeks, will get relatively little, maybe nothing, in refunds from the institution.

The risk to a typical healthy young person of unanticipated health issues is pretty small, and for affluent students who are not very risk averse, the cost of the insurance (perhaps around one percent of the tuition and fees) may not be worth it. But insurance is a way of providing some piece of mind as a significant amount of money is at risk.

I suppose disputes could arise. A student might get tired of school and want to run off with a friend on some adventure, for example, and claim that he/she is suffering from anxiety or depression or some mental health-related issue, requiring the insurance company to have the student examined medically. Or, the student is floundering academically and wants to cut his/her losses, so feigns an illness. But disputes of this sort are routine any time big amounts of money are involved, and insurance companies deal with them routinely, such as with damages to a home.

When tuition insurance was brought to my attention, I immediately thought of the multitude of unintended consequences the federal student financial assistance programs have had. The government makes low-interest loans available on terms no private lender would consider, enhancing the demand for colleges, which respond by vigorously raising their tuition fees. College financing becomes a much bigger issue in the lives of Americans, and that, in turn, spawns secondary impacts, such as the rise of tuition insurance.

There are other risks associated with attending college, most notably the possibility of dropping out—about 40% of students fail to graduate in six years. The financial consequences of this are potentially nearly devastating—no degree and perhaps $50,000 in college loan debts. In recognition of this, new forms of financing college are evolving, notably income share agreements, which shift most of the financial risk of college attendance from the student borrower to a professional investor who hopes to profit from the student’s postgraduate earnings. This is an idea whose time has come, and its use is growing.

Will the tuition insurance business grow and become a standard expenditure made with respect to college? Possibly. It appeals to the risk-averse and those attending more expensive schools—probably fewer insure over lost tuition fees at low-cost community colleges. Insurance companies, however, must face one reality: college enrollments are actually in decline and the pool of 18- to 22-year-olds will probably be smaller in 15 years than it is today.


In-Class Technology, Too Much of a Good Thing?

While teachers, parents, and politicians push for more technology in school, a new study by the Reboot Foundation offers a word of caution. As with much in life, the study suggests, moderation is king.

Most parents—66 percent according to a 2018 report by the global nonprofit, Project Tomorrow—say that regularly using digital tools, content, and resources in classrooms helps children develop essential skills.

Teachers seem to agree. A 2018 ed-tech teacher survey, Teaching with Technology, found that 81 percent of teachers surveyed favored the idea of schools providing devices to students. Teachers’ favorite technologies included laptops (37 percent), Chromebooks (14 percent), and mobile phones (14 percent).

Around the world, in-class technology use reflects these perceptions. The Cambridge International Global Education Census surveyed almost 20,000 teachers and students and found that 48 percent of students worldwide use a desktop computer in class, 42 percent use a smartphone, 33 percent use smartboards, and 20 percent use a tablet. The survey also found that more students in the U.S. use smartboards (59 percent) and smartphones (74 percent) in class than students in any other surveyed country.

“At school, I regularly use the desktop computers in the IT suite,” one 17-year-old U.S. student said on the survey. “There are whiteboards in lessons and I also use my smartphone and a pen and paper during class. I don’t have homework to complete every day, but when I do, I use a laptop or a desktop computer, my smartphone and a pen and paper.”

Those rates of technology use are likely to continue climbing as more states and localities integrate technology into the classroom. In New York for example, voters approved a $2 billion Smart Schools Bond Act to fund new school computer servers, interactive whiteboards, tablets, desktop and laptop computers, high-speed internet, and wireless connectivity. Alabama too has approved record levels of education funding, including $199 million for Advancement and Technology. And in San Jose, California, schools are undertaking millions of dollars in debt to procure Chromebooks for students.

But a new study by the Reboot Foundation suggests that we may be wrong about the value of technology use, especially in the classroom. Reboot, a Paris-based research organization devoted to elevating critical thinking, evaluated the performance of students from 90 countries on the Program for International Student Assessment (PISA) and the 2017 National Assessment of Educational Progress (NAEP). The study weighed student performance against how often students reported using technology in class.

The foundation found that internationally, students perform best with low or moderate levels of computer usage per day. In France for example, the study found that students who used the internet moderately, tended to perform best. Those who used the internet for a few minutes to a half-hour in school per day, for example, consistently scored higher on the PISA math assessment than those who spent more time online and those who spent no time online. On PISA’s reading test, French students who used the internet in class every day for more than six hours scored 140 points lower than those who reported no internet time.

In the United States, the study found that, generally, students who reported using a computer in some classes tended to outscore students who never used computers in class. Grade-specific results, however, were less positive. For reading, higher rates of in-class computer usage translated to worse scores on NAEP reading assessments. For mathematics, students who reported using a computer to practice math “once or twice a year” performed five points higher than students who used a computer or digital device “every day or almost every day.” The same trend proved true even in classes where teachers reported receiving appropriate training.

The study also suggests that technology in the classroom may prove more negative than positive for young students in particular. Fourth graders who reported never using tablets in their classes scored one point higher than those who reported using tablets in “some classes” and 14 points higher than those who used tablets in “all or almost all” classes.

“When teachers use computers or tablets to teach, we don’t find that there’s a gain in knowledge or an actual impact on standardized test scores,” Helen Lee Boygues, co-founder and President of Reboot told The Daily News. “And what our analysis shows is that in younger ages, in third and fourth grade, in all subject matters, there was no benefit to using technology to learn. And in reading, we found a negative benefit.”

As lawmakers, educators, and parents continue to make tough calls about where to invest precious education resources, Reboot’s findings suggest that they should be careful not to depend on their perceptions about the value of technology or pin their hopes or dollars on its use in class.


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