Postsecondary Education www.futureofchildren.org The Future of Children Postsecondary Education in the United States VOLUME 23 NUMBER 1 SPRING 2013 3 Postsecondary Education in the United States: Introducing the Issue 17 An Overview of American Higher Education 41 Making College Worth It: A Review of the Returns to Higher Education 67 Financial Aid Policy: Lessons from Research Volume 23 Number 1 Spring 2013 93 Student Supports: Developmental Education and Other Academic Programs 117 Transitions from High School to College 137 For-Profit Colleges 165 E-Learning in Postsecondary Education 187 Access and Success with Less: Improving Productivity in Broad- Access Postsecondary Institutions A COLLABORATION OF THE WOODROW WILSON SCHOOL OF PUBLIC AND INTERNATIONAL AFFAIRS AT A COLLABORATION OF THE WOODROW WILSON SCHOOL OF PUBLIC AND INTERNATIONAL AFFAIRS AT PRINCETON UNIVERSITY AND THE BROOKINGS INSTITUTION PRINCETON UNIVERSITY AND THE BROOKINGS INSTITUTION The Future of Children promotes effective policies and programs for children by providing timely, objective information based on the best available research. Senior Editorial Staff Journal Staff Sara McLanahan Kris McDonald Editor-in-Chief Associate Editor Princeton University Princeton University Director, Center for Research on Child Wellbeing, and William S. Tod Jon Wallace Professor of Sociology and Public Affairs Managing Editor Princeton University Janet M. Currie Senior Editor Brenda Szittya Princeton University Managing Editor Director, Center for Health and Wellbeing, Princeton University and Henry Putnam Professor of Economics Martha Gottron and Public Affairs Managing Editor Ron Haskins Princeton University Senior Editor Lisa Markman-Pithers Brookings Institution Outreach Director Senior Fellow and Co-Director, Center on Princeton University Children and Families Acting Director, Education Cecilia Elena Rouse Research Section Senior Editor Reid Quade Princeton University Outreach Coordinator Dean, Woodrow Wilson School of Public Brookings Institution and International Affairs, Katzman-Ernst Professor in the Economics of Education, Regina Leidy and Professor of Economics and Public Affairs Communications Coordinator Princeton University The views expressed in this publication do not necessarily represent the views of the Woodrow Isabel Sawhill Wilson School at Princeton University or the Brookings Institution. Senior Editor Tracy Merone Brookings Institution Administrator Copyright © 2013 by The Trustees of Princeton University Senior Fellow, Cabot Family Chair, and Princeton University Co-Director, Center on Children and Families This work is licensed under the Creative Commons Attribution-NoDerivs 3.0 Unported License, http://creativecommons.org/licenses/by-nd/3.0. Authorization to reproduce articles is allowed with proper attribution: “From The Future of Children, a collaboration of the The Future of Children would like to thank the Bill and Melinda Gates Foundation and the Woodrow Wilson School of Public and International Affairs at Princeton University and the David and Lucile Packard Foundation for their generous support. Brookings Institution.” To purchase a print copy, download free electronic copies, or sign up for our e-newsletter, go ISSN: 1054-8289 to our website, www.futureofchildren.org. If you would like additional information about the ISBN: 978-0-9857863-0-4 journal, please send questions to [email protected]. VOLUME 23 NUMBER 1 SPRING 2013 Postsecondary Education in the United States 3 Postsecondary Education in the United States: Introducing the Issue by Lisa Barrow, Thomas Brock, and Cecilia Elena Rouse 17 An Overview of American Higher Education by Sandy Baum, Charles Kurose, and Michael McPherson 41 Making College Worth It: A Review of the Returns to Higher Education by Philip Oreopoulos and Uros Petronijevic 67 Financial Aid Policy: Lessons from Research by Susan Dynarski and Judith Scott-Clayton 93 Student Supports: Developmental Education and Other Academic Programs by Eric P. Bettinger, Angela Boatman, and Bridget Terry Long 117 Transitions from High School to College by Andrea Venezia and Laura Jaeger 137 For-Profit Collegesby David Deming, Claudia Goldin, and Lawrence Katz 165 E-Learning in Postsecondary Education by Bradford S. Bell and Jessica E. Federman 187 Access and Success with Less: Improving Productivity in Broad-Access Postsecondary Institutions by Davis Jenkins and Olga Rodríguez www.futureofchildren.org Postsecondary Education in the United States: Introducing the Issue Postsecondary Education in the United States: Introducing the Issue Lisa Barrow, Thomas Brock, and Cecilia Elena Rouse ince the introduction of the GI preparation but also those who were not Bill in 1944, college has been well served in the nation’s elementary and part of the American dream, in secondary school system and need a second large part because it is viewed chance. This range is reflected in the differ- as a ticket to economic secu- ing degrees of “college readiness” among Srity. Currently, about 21 million individuals entering postsecondary students and in attend a postsecondary institution, and the the increasing proportion of students who vast majority of high school students aspire are “nontraditional” in that they are older, to earn a bachelor’s degree or higher.1 While from less advantaged families, financially the popular image of college may be domi- independent of their parents, parents them- nated by Ivy League schools, flagship state selves, or working while going to school. universities, and elite liberal arts colleges, in fact only a minority of students attend As enrollments in postsecondary education such institutions. Many go to less-selective have increased, so have private and public regional four-year colleges and universities investments in education. Federal, state, and vocational institutions, and nationwide and local governments combined contrib- close to 40 percent are enrolled in open- ute about 1 percent of the nation’s gross access community colleges. A small but grow- domestic product ($160.9 billion in 2011) to ing number of students are working toward postsecondary education, largely predicated college degrees mostly or entirely online. on the belief that it addresses long-standing economic inequalities and leads to economic Students pursue postsecondary education growth.2 Namely, investment in education for a variety of reasons. Some are look- benefits the individual in many forms, includ- ing for a broad liberal arts education, while ing higher lifetime income, and benefits others are more career focused. Still others society by increasing labor force productiv- enroll to take only a class or two to keep up ity, which in turn generates faster economic their skills or simply for the joy of learning. growth. Growing evidence backs these claims. U.S. postsecondary institutions serve not For example, individuals with a bachelor’s only those students with the best academic degree earn 50 percent more during their Lisa Barrow is a senior economist at the Federal Reserve Bank of Chicago. Thomas Brock is director of Young Adults and Postsecond- ary Education Policy at MDRC. Cecilia Elena Rouse is dean of the Woodrow Wilson School of Public and International Affairs and the Lawrence and Shirley Katzman and Lewis and Anna Ernst Professor in the Economics of Education, Princeton University. VOL. 23 / NO. 1 / SPRING 2013 3 Lisa Barrow, Thomas Brock, and Cecilia Elena Rouse lifetime than individuals with no more than a Others agree that postsecondary educa- high school diploma, and their unemployment tion may not be worth it, but their reasons rate is less than half as high.3 Research also primarily concern the relationship between suggests that college graduates have higher the high price of postsecondary schooling job satisfaction and better health outcomes and the future return, especially in the form than those without a college degree. Finally, of employment and income. For example, economists such as Enrico Moretti have based on the Consumer Price Index, overall documented significant benefits to the prices increased by an annual average of broader society: workers earn more in cities 2.4 percent between 2001 and 2011, while with higher proportions of college graduates, college tuition and fees grew by an annual suggesting that more educated workers gener- average of 6.8 percent—the highest among ate positive “spillovers” to other workers. all major expenditure categories, includ- In fact, he documents that cities with more ing energy (6.6 percent) and medical care highly educated populations are hubs of inno- services (4.3 percent).7 Many critics argue vation and experience faster economic growth that much of the increased cost of post- than those with less educated populations, secondary education is unnecessary and again generating positive spillovers to all resi- the result of institutions becoming “inef- dents.4 Increased globalization and advances ficient” in the sense that they could provide in production technology suggest that post- a better quality education for the cost or secondary education will become even more could provide the same quality education important to the economic security of indi- at a lower cost if they simply reorganized. viduals and society in the future, as suggested Critics contend that, among other factors, by the work of economist David Autor. He this inefficiency arises because most states has documented that the occupations that finance their public institutions according have grown over the past