Paul on April 28th, 2016

Angel of DeathOnce upon a time in higher education, there was an ideal called “Need-Blind Admissions”.  It came with a promise that admission to college would be based upon talent and character and not the family’s financial status.  That never enjoyed full compliance but there were notable efforts that opened the doors of higher education to a much wider array of students of all backgrounds.  That dream has been significantly eroded for the vast majority of Americans and no one seems to care enough to weep over its demise or do anything to save it.  But there is more to the need-blind story than meets the eye.

There are two particularly lethal causes in play.  One (and most likely the coup de grâce for need-blind admissions)  is the new Department of Education plan effective for the school year 2017-18 to accept FAFSA’s (Free Application for federal Student Aid) not beginning January 1 of the student’s senior year in high school but, rather, three months earlier in October using the actual tax returns filed in the prior year.  The current system requires estimates and tax returns of the previous calendar year encompassing the second half of the student’s junior year and the first half of the senior year in high school.  For instance, under today’s rule, a student applying to college for the 2016-17 school year would use the 2015 tax year in the sections relating to income on the FAFSA.  But under the new rule, a student applying to college for the 2016-17 academic year would have filed the FAFSA in October of 2015 using the data on the completed 2014 tax return that reflected the family’s financial status during the second half of the student’s sophomore year and the first half of the junior year of high school.  The thinking is that then the colleges can receive early accurate, verifiable tax information on the FAFSA well before the admissions process begins in earnest.  Some will argue that this makes it easier for parents and students to file the FAFSA with known, documented numbers from a completed 1040.   Others might suggest that the real purpose is far more sinister.

Armed with this “hard” income information colleges can admit students based not solely on character and talent but, in many cases, on their verified ability to pay for college.  Low-income students will probably be no worse off than they are under the current system but the middle class is likely to be the primary victims.  Despite the predicted flood of denials of this assertion from college people, conditions on the ground will dictate their behavior and those conditions, most of which are not of the colleges’ own doing, will bring money back into play as an integral and often critical data point in the admissions process for the vast majority of our institutions of higher education. Enter plausible deniability.  The other somewhat understandable rationale for providing older, completed tax returns early is that those tax returns were likely submitted with no prior knowledge of the “ins and outs” of how to best present your finances in order to create a FAFSA for maximum financial aid outcomes under the rules governing the document’s completion.

Thus, the first interpretation of need-blind (Admissions) is being undermined by a system and an economy that cries out for obfuscation in order for colleges to simply survive.  But even if there were something called equitable, need-blind admissions that actually worked, it would still be compromised by a second interpretation of the term and a final step to attending the college.  That step is called enrollment, a process that is inexorably linked to a family’s ability to afford the college.

It is the lack of a federal requirement and any substantive oversight to ensure that colleges in order to have ongoing access to federal aid (student loans, work/study and Pell Grants, etc.) they must adequately address the entire demonstrated need of their students and families.  That inability or simple unwillingness to effectively manage its own program has given birth to another, more troubling meaning to the term “need-blind”.  This new meaning of the the term refers to the widespread failure of colleges to provide adequate financial aid to fill the demonstrated financial need of families.  So if no one is minding that store and since there are no penalties for colleges that fail to address the entire financial need of families, blindness to that need is pervasive from coast to coast.  But it is not simply the alleged greed of colleges (an unfair characterization) that is the cause.

The requiem dirge is very real, sad and dangerous in terms of our economy and national security.  Here are the instruments at play in this disheartening ensemble:

1.     The failure of our federal government to adequately fund its own program of financial aid is the primary concert master.  It’s “score” fails to keep pace with the full range of relevant factors such as the value of the dollar, the rising cost of colleges, the increasing numbers of college students and the fact that nearly 50% of those students take more than 4 years to get a degree.  Add to this mix the recent extension of eligibility for federal aid to accommodate a 6th year of college which, in the absence of adequate additional funding to cover the extra time, dramatically reduces the amount of federal support on a per-student basis leaving our colleges in a financially untenable position of having to make up for that shortfall by using their own funds.

2.    The federal government has abandoned anything resembling oversight of its own system.  Colleges are essentially left to their own devices in dealing with the financial aid issue and the shortfall of adequate federal aid.  Most of them simply “gap” the student (providing inadequate aid which in the end treats parents at any income as being far more affluent) because nothing will happen to the college that is blind to a hard-working family’s need.  There is something profoundly cynical about admitting a student and then preventing him or her to enroll because of blindness to the student’s financial need.  In the absence of sufficient financial support, students may not attend the college because the dream of aid too often turns out to be a cruel hoax and/or the family may have to cover the “gap” by invading retirement funds or taking out debt much of which may have to be repaid when the parents should be retiring.  Both of these scenarios will affect the economy by reducing the active consumer behavior of our senior citizens who have been financially neutered by unanticipated college costs.

3.    To compound an already troubling scenario, colleges will be forced to raise their rates to provide them with sufficient revenue to deal with the shortfall of federal and state aid.

4.    For reasons not fully explained, the EFC (Expected Family Contribution) which was once a dollar amount based upon a known federal formula that indicated how much a family would be expected to pay as their share of college expenses, is no longer considered to be a dollar amount.  It has morphed into “an index of eligibility” for financial aid.  Since no such overriding index exists beyond certain thresholds for specific grants and since it is no longer a dollar amount in terms of overall family contributions, it has no real dollar-related meaning.  Thus, if the EFC doesn’t mean anything specific, no family can tell whether their total aid is sufficient and no college can be held accountable for financial aid performance based on a meaningless standard.

5.    Families and students across the economic spectrum who have been “torched” by this new interpretation of “need-blind” often will seek other avenues to a higher education degree using online options or community college.  The former has been the object of many justifiable legal inquiries and the  latter has a dreary outcome record across the nation.  In California, for instance, fewer than 25% of the students enrolled in community colleges with the intent of transferring to a 4-year college will ever make that transition and the ones that do take an average of over 3 more years to actually get a degree.  So even for those few who make the transfer, the opportunity costs that are lost with the extra years required for a degree makes it a very expensive proposition for the student.  Low-income families choosing that option nearly always pay more for a degree than more affluent students who attend a 4-year college directly after high school.

So as our story began, we noted that admissions was trending “need-blind” and enrollment doors were adequately responsive to “need aware”.  As our story plods forward a half century later, that paradigm has seemingly been turned upside down to “need-aware” admissions and “need-blind” enrollment.  It is by any standard, a national tragedy of cascading import.

There are no doubt many other instruments in play like the practice of many colleges admitting students who are ill-prepared for college knowing that the college will at least get badly-spent, often substantial taxpayer-supported federal and state aid and parent contributions to cover the costs of that likely-to-fail student.  It is higher education’s version of a sub-prime mortgage.  But the truth is we all have a hand in creating this monster and we all are the losers in the long run.

The federal system of financial aid has been around since the mid-1960’s.  In the beginning it worked reasonably well but over the last 50 years it has suffered from benign neglect.  Nobody has lobbied to scrap it but tragically nobody in a position to effect change has been willing to serve as its champion.  To be sure, there have been a few tweaks in the processing of aid to make it easier for the consumer but the mother lode of per-pupil aid itself has dwindled as the need has dramatically outpaced resources over that same half century.  Fixing it is actually pretty easy and obvious but nobody seems willing to pick up the baton and lead the parade to redemption.

Recently, I had the pleasure of chatting with David Grusky, an engaging, insightful member of the Sociology Department at Stanford University and the Director of the Stanford Center on Poverty and Inequality.  In the course of our discussion he said, “It is true that the United States is a land of opportunity.  But it is also true that opportunity in our nation is for sale.”  Nowhere is that assertion more starkly validated than in the realm of creating access to higher education.

If you don’t think there are long-term implications associated with restricted access to higher education, spend just a few minutes of any day watching CNN, Fox or MSNBC.  Listen to the rhetoric coming from certain candidates for the highest office in the land and observe carefully those faces and countenances of their supporters in the crowds and their shallow and often childish, fact-free comments and slogans and then reflect on one of my favorite quotes from Thomas Jefferson, “If a nation expects to be ignorant and free, it expects what never was and never will be.”

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