11 posts categorized "Education"

College enrollments falling in Ninth District, nationwide

Something is happening on college campuses across the country—or rather, not happening.

Despite all the messages encouraging college attendance—not to mention job and other data that demonstrate its utility—higher education enrollments have been dropping steadily in recent years, according to data from the National Student Clearinghouse Research Center.

Every state in the Ninth District has witnessed an enrollment drop at degree-granting higher education institutions for at least two consecutive years. The drop from fall 2012 to fall 2014 was highest in Montana, at almost 6 percent, while North Dakota and Minnesota were also above the national average (see chart). In fact, save for South Dakota, enrollments have declined in every other district state for at least three years running.

Some of the reason behind the drop is a cyclical economy. Joblessness, for example, tends to push people into school to obtain better skills for the job market, and enrollments swelled during the Great Recession. A stronger job market is likely pulling many students away from their books.

Demographics are also playing a key role. When national higher education enrollment peaked in 2011, people in their so-called prime college years (18 to 21 years old) were also at their peak and have since declined, leading to lower enrollments.

College enrollments -- 2-26-15

Higher ed endowments rebound in 2013 in district states

Higher education budget officials got a bit of good news this year as endowments at many universities posted strong gains in assets in 2013, according to an annual report from the National Association of College and University Business Officers (NACUBO) and Commonfund Institute.

Nationwide, assets in 835 endowments tracked by the report grew by 12 percent to almost $450 billion. Assets declined slightly in 2012.

There are 40 higher education endowments of at least $20 million in Ninth District states. In 2013, their combined assets grew by 14 percent to $10 billion. Sixty percent of these endowments benefit private institutions, but they hold of minority (40 percent) of assets. The two biggest, by a considerable margin, support the University of Minnesota ($2.8 billion) and the University of Wisconsin ($2 billion). Both had strong results in 2013, but Minnesota’s assets leapt by more than 21 percent (see Chart 1).

Endowments typically grow by both investment returns and donations, though the NACUBO report does not detail these different asset streams. Growing endowments mean more resources for universities because IRS regulations require that foundations disburse at least 5 percent of assets annually—a minimum of $500 million this year alone from endowments in Ninth District states. This disbursement rule is also one reason some endowments have struggled to return to prerecession levels.

The strong asset increase last year at the University of Minnesota (which, technically, is two separate endowments) belies a long road to asset recovery, as asset levels are still slightly below their peak 2007 levels (see Chart 2).

Most other endowments have been doing better. Among 24 other foundations (with available figures from 2007), assets grew 15 percent over this period. Three endowments saw zero or negative growth, but 10 had asset growth of 20 percent or more since 2007, including those benefiting the University of Wisconsin and the College of St. Scholastica, a small private college in Duluth, Minn., which saw its endowment nearly double over this period to $54 million.

Endowments -- 4-9-14

Foreign students helping to meet demand for STEM graduates

Nationwide and in the district, there’s widespread concern that colleges and universities aren’t producing enough STEM (science, technology, engineering and mathematics) workers.

Whether or not the district faces a STEM crunch—an inadequate supply of STEM graduates to meet employer demand—students from other countries account for a significant and rising share of STEM degrees awarded by higher education institutions in the region.

In 2012, about 7 percent of bachelor’s degrees awarded by district institutions in STEM fields such as computer science and engineering went to international students, according to the National Center for Education Statistics (see chart). There was marked variation among states, with North Dakota posting a foreign-awards rate almost five times higher than South Dakota's. The U.S. average was 5 percent.

The share of STEM bachelor’s degrees earned by international students has increased since the Great Recession, outpacing overall growth in foreign four-year degrees. The proportion of STEM master’s degrees and doctorates earned by foreign students is much higher—about 40 percent districtwide—but has declined slightly over the past decade.

International college enrollment has risen in the district since the mid-2000s, slowed only briefly by the recession. Many foreign students, including those from countries such as China and Korea that score high in math and science on international tests, opt to pursue STEM majors. U.S. students are less likely to declare majors in STEM fields—hence, efforts by educators, employers and others to increase the number of homegrown STEM graduates.

For much more on STEM education and international students, watch for the upcoming April issue of the fedgazette.

Foreign STEM degrees -- 3-12-14

Student loan defaults widespread, and rising

First, the good news: According to the National Association of Colleges and Employers, U.S. firms expect to hire almost 8 percent more class of 2014 grads than they hired from the class of 2013.

The bad news: It can’t come fast enough for many attending college, because many are facing unsustainable debt and defaulting on their student loans.

Nationwide, the student loan default rate jumped this year to 14.7 percent (for those starting loan repayments in fiscal year 2010), a significant increase from 13.4 percent (for those starting repayment in 2009; for default rate background and methodology, see description at the end). Every district state saw its cumulative default rate also increase for the 2010 cohort group, though rates are typically much lower than the national average (see table, left). North Dakota’s rate of 5.6 percent for the 2010 cohort group is a small fraction of the national rate and has risen comparatively little over the past two years.

But other district states have witnessed large jumps in their default rates, and all but North Dakota are now above or approaching 10 percent, led by South Dakota’s 13 percent. Higher default rates are widespread among institutions; for the roughly 250 district schools with students in the 2010 repayment cohort, 182 saw their default rate rise; for 110 schools, it grew by 2 percentage points or more.

In most states, proprietary and two-year schools are bearing the brunt of higher default rates. In Minnesota, for example, default rates have gone up across the board, but the increase and overall rates at four-year public and private universities are a fraction of those seen among public two-year and private, proprietary schools (see chart, right).

Student loan defaults -- 2-20-14

Default rate description and methodology: Student loan defaults at the institutional level are tracked and released annually in the fall by the U.S. Department of Education. Data were gathered for 273 higher education institutions in Ninth District states, including all of Wisconsin. The agency uses a three-year default rate, which tracks those entering repayment (whether graduated or not) at any point during a federal fiscal year (Oct. 1 to Sept. 30) and defaulting by the end of the third fiscal year. Student loans are not in default until they are 270 days late. In essence, default rates measure those ex-students who have fallen more than nine months behind in loan repayments at some point within 24 to 36 months (depending on how close to the end of the fiscal year they started repaying loans). The agency also tracks two-year default rates, but will be phasing this measure out in favor of the three-year default rate.

More Montana students staying in school

The Montana Office of Public Instruction released a report this week showing a fifth consecutive annual decline in the state’s high school dropout rate, during which it has gone from 5 percent to 3.6 percent. In student terms, the improvement means that more than 700 students stayed in school in 2012-13 compared with five years earlier (see Chart 1). This has translated to a higher graduation rate for cohort classes that started high school four years earlier. In just five years, it has increased from about 81 percent to more than 84 percent.

Along racial lines, there is good and bad news. The good news is that dropout rates for American Indians in Montana have declined almost three percentage points. The bad news is there continues to be a significant gap in dropout and subsequent graduation rates between American Indians and other student populations. Despite significant improvement, the current 9.5 percent dropout rate for American Indian students is about two and a half times the statewide average and means that only 65 percent of these students are graduating with their original freshman class.

Montana dropouts -- 2-5-14

Mixed results on 4th and 8th grade assessments in district states

Recently available scores from the National Assessment of Educational Progress (NAEP) showed mixed results in district states on fourth and eighth grade assessments from 2011 to 2013 (see Chart 1).

In Minnesota, fourth graders made notable gains in both math and reading assessments. In fact, the remainder of assessments are rather sobering, declining a majority of the time across both reading and (especially) math for most district states, except Wisconsin, which saw test scores remain essentially level.

NAEP scores CH1 -- 12-11-13

Minnesota now ranks among the nation’s higher scoring states in fourth grade math and reading. In fourth grade math, Minnesota’s average score is higher than 48 states and is tied, or within the margin of error, with two states. (See Charts 2 and 3, which show the number of states that have higher scores than the district state, lower scores and scores that fall within the margin of error and therefore are not considered statistically different.) Minnesota’s fourth grade math average scores consistently ranked in the nation’s top 10 highest-scoring states over the past 10 years; however, Minnesota’s fourth grade reading scores were more sporadic during this time. For example, in 2011, Minnesota’s fourth grade reading assessment reliably outscored only 15 other states, while in 2013, it outscored 30 other states.

Although assessment score rankings in other district states generally slid slightly from 2011 to 2013, district rankings were either close to the middle (ranking 25th) or higher in most categories. However, assessment score rankings were below the middle in South Dakota’s fourth grade scores, particularly so in reading.

NAEP scores CH2-3 12-11-13

The NAEP assessments are part of a congressionally authorized project within the U.S. Department of Education. The reading assessment measures reading comprehension by having students read selections and answer questions based on what they read. The mathematics assessment measures grade-appropriate knowledge and skills in number properties and operations, measurement, geometry, data analysis and algebra.

Higher ed enrollments leveled off last year in district states

As college students head back to school, administrators will have their clickers out taking head counts in hopes of keeping classrooms full, but not too full.

Statewide enrollment data are often not released publicly until the following summer (or, in some cases, at the request of the fedgazette). These data show that 2012 was a bit of an enrollment breather for colleges and universities throughout the district. Last year, undergraduate enrollments across public college and university systems fell in three of five district states (see Chart 1). Graduate enrollments also dropped last year in three states (see Chart 2).

Higher ed CH 1-2 -- 8-29-13

Despite the pause in growth, enrollments have grown significantly since 2008, particularly in the Dakotas and Montana. Enrollment growth is even more pronounced over the past decade; South Dakota, for example, has seen undergraduate and graduate enrollments increase about 20 percent since 2003. North Dakota’s graduate population is up by 54 percent over the same period.

Since the recession, 2-year schools have seen the strongest growth in many states, including Minnesota (see Chart 3). But that’s not the case everywhere. The 13 percent increase in students at North Dakota’s 2-year schools was outstripped by head counts for 4-year undergraduates (24 percent) and graduate students (20 percent).

Higher ed CH 3 -- 8-29-13

Two-year enrollments are also slipping in some states. Wisconsin saw 20 percent enrollment growth of full-time-equivalent students at its popular technical colleges from 2005 to 2010, topping 82,000. But FTE enrollment in 2011 dropped by 5 percent. (Fall 2012 figures were not available, according to system officials.) 

But nowhere are the numbers more bleak than for private career (or trade) schools (see Chart 3). These programs have been hard hit by the recession, comparatively high tuition and rising student loan levels (read more about these topics here). In Minnesota, enrollments in 2-year career schools peaked in 2009 at 36,700, only to fall by more than 11,000 students by the fall of last year.

William Thomas, fedgazette intern, contributed data for this article.

Poorly endowed: Higher ed suffering from inconsistent markets

In a time of tightening budgets, higher tuition and rising student debt, many large universities are looking to their foundations to provide resources to pad institution budgets and offer some financial help to students. But volatile markets have meant many are unable to do more than they could before the recession, based on annual endowment figures from the National Association of College and University Business Officers (NACUBO) and the Commonfund Institute.

Ninth District states, including the Upper Peninsula of Michigan, are home to more than 40 higher education endowments with over $5 million in assets, and 18 with over $100 million in assets in 2012 (and the subject of this post). The two largest endowments—by far—are those attached to the University of Minnesota and the University of Wisconsin, with $2.4 billion and $1.8 billion in assets, respectively. But a small majority of all endowments—including among this subset of larger endowments—lie with private colleges and universities.

Like anyone else invested in equity markets, the large majority of these 18 larger endowments at Ninth District higher education institutions have had a rough go of late. Among the group, two-thirds saw asset levels decrease in 2012 (see table, first data column); of the six that increased, only two saw a rise of more than 2 percent.

However, there might be more than immediately meets the eye here, because changes in endowment assets are the result of more than investment returns (which were not reported by NACUBO). Endowments are not static accounts; they regularly seek contributions from alumni and others, and are typically required to distribute up to 5 percent of their assets annually (and neither variable is reported by NACUBO).

Suffice to say that endowments are not in the business of getting smaller, and investment gains plus contributions have not been high enough to offset annual distributions at many higher education endowments. In fact, more than half of the endowments have lower asset values now than in 2007 (see second data column in table; asset values for three endowments in 2007 were not available). And it can happen to the best. Even Harvard University’s endowment—easily the nation’s largest at $30.4 billion—has struggled. Last year the fund’s assets shrank by 4 percent and stood well below the fund’s 2008 peak of $36.5 billion.

But endowment performance since 2007 among the 18 large endowments has varied wildly—from a 16 percent loss for Lawrence University, a small liberal arts college in Appleton, Wis., to a 33 percent gain for the University of South Dakota Foundation, whose success must lie outside of its investment prowess. While investment returns for the USD Foundation have consistently outperformed market benchmarks, according to foundation records, neither are they high enough to explain its outlier performance.

Endowments in higher ed -- 2-12-13

Some oil for the kids, too

Oil has meant many things to North Dakota over the past decade. Along with reversing the state’s population decline, it has pumped new life—students, workers and revenue—into many of the state’s K-12 schools.

The state’s K-12 population has risen from 94,000 in 2007-08 to 99,000 in the current school year, according to the state Department of Public Instruction. Some of the strongest growth has occurred in the 17 western counties in or near the Bakken oil patch. The school district of Williston, the heart of the Bakken, has seen its enrollment rise from 2,100 to 2,800 students over this period.

As a result, school districts are hiring more teachers and other staff. A fedgazette survey of North Dakota school district administrators (with 65 respondents out of about 180 districts statewide) found that more than half added staff last year (see left chart). Employment gains were realized in every quadrant of the state, but were more prevalent in the west. Among 18 respondents in the northwest part of the state, 15 reported employment gains and three reported no change.

ND school administrators -- 1-25-13

School officials have more modest employment expectations for this year—about one-quarter believed they will add school workers (see right chart).

But regardless of location, the large majority are expecting higher revenues. That comes, in part, from higher enrollments, which are part of the education funding formula. But it’s also due to a state education trust that, thanks to fast-growing taxes on oil activity, has grown from $1 billion to $2 billion over the past three years. This after it took more than 100 years to earn the first billion dollars, according to a state source.

The so-called Common Schools Trust Fund distributed about $92 million to school districts in the 2011-13 biennium—about 5 percent of statewide education expenditures—and trust fund officials have said they expect that figure to go up considerably in the next biennium.

Smarty pants: College attainment, bachelor's degrees conferred mostly growing in Ninth District

It’s widely accepted that a college education is a prerequisite to a better (financial) life. But that sentiment is embraced differently across the country.

In Ninth District states, the percent of population with a bachelor’s degree continues to increase overall. But individual states are performing differently against the national average. For example, Minnesota ranks 11th in the nation for the percent of population age 25 and older with a bachelor’s degree at 34 percent in 2011 (see Chart 1). But its college attainment levels have stagnated a bit in recent years, and its advantage over the national average has shrunk slightly (see Chart 2). 

  Education attainment CH1-2

In contrast, Montana, North Dakota and Wisconsin have historically been below the national average, but that gap has been closing for all three states of late. Each also ranks in the top half of states in college attainment (partially a function of high-population, well-educated coastal states pulling up the national average). South Dakota is the outlier; college attainment has been below the national average. It ranks in the bottom half of states and its achievement gap has widened slightly.

In concert with this trend, the number of bachelor’s degrees conferred also has been rising. But the rate of increase at district colleges and universities in recent years has lagged the U.S. benchmark by a considerable amount (see Chart 3), according to the National Center for Education Statistics. During the 1990s, growth in the production of bachelor’s degrees in Montana and South Dakota surpassed the United States, while other district states posted slower growth. During the past decade, growth slowed in Montana and South Dakota, but picked up in Minnesota. Some of the recent gains in Minnesota’s college degree production are likely due to growth in Minnesota’s private online universities, such as Cappella University and Walden University.

In 2010, Wisconsin colleges and universities conferred 34,110 college degrees, ranking 17th in the nation (see Chart 4). Meanwhile, Minnesota colleges and universities produced 31,952 bachelor’s degrees, ranking 18th. North Dakota, Montana and South Dakota, ranked 44th, 47th and 48th, respectively.

Among district states, North Dakota has the highest number of degrees conferred by colleges and universities relative to the 20-year-old state population (see Chart 4). This suggests that North Dakota has a relatively large capacity to produce college graduates relative to the primary college-age population in the state. All district states have a higher ratio of bachelor’s degrees conferred relative to the 20-year-old population than the nation, demonstrating a relatively strong presence of higher education in the region.

  Education attainment CH3-4