Underemployed (and Disillusioned) Young Adults, New Survey Finds

Posted on by
Reply

Many underemployed young adults regret their college decisions and are frustrated in their jobs, according to a recent survey of 1,279 young people aged 21 to 35 by the Accrediting Council for Independent Colleges and Schools (ACICS). The respondents were either currently underemployed (working in a job for which they are overqualified); unemployed, or in a job but seriously considering changing jobs soon.

Today’s competitive job market favors those with practical skills and experience, the authors of the report argue, and too many young people are not coming out of college with those kinds of skills.

“This research,” says Al Gray, executive director of ACICS, in a press release, shows how “educational institutions can better produce graduates who ultimately secure professional, technical and occupational positions in the workplace.”

Among the key findings:

• 51% of respondents say they would have chosen a different educational path in retrospect.

• 60% of those with only a high school degree would have chosen a different path, as would have 53% of those with a two-year degree and 48% of those with a four-year degree.

• Only 27% of employed respondents say they’re very satisfied with their current job.

• An overwhelming 81% of employed respondents say they’re interested in changing jobs in the near future – and 66% say they’re willing to relocate to a different part of the country to do so.

• 51% of employed respondents say they’re not in their preferred field of work, and 41% say their current job is “for the time being with no real future.” That said, three-fourths felt they were prepared with the skills to find a new job.

Today’s job market favors those with practical skills and experience:

• Only 32% of those with a liberal arts degree say the job market is “easy,” compared to 58% of those with a health-related degree that is potentially more applicable to a specific field of work.

• 59% of those who completed a paid internship or apprenticeship describe the job market as easy – while 61% of those who did not describe it as difficult.

    • 54% of employers said it was hard to find an applicant with the necessary skill set.
    • The underemployed generation underestimates the hard skills and professional capabilities employers are seeking in applicants. One-third of young adults thought hard skills were important in hiring decisions, while 56% of employers did.
    •  Young adults overestimate their skills – especially their written and problem-solving skills – compared with feedback provided by hiring decision-makers

For more information about the survey, visit www.acics.org.

 

 

College Success for Low-Income Students

Posted on by
Reply

 

We spend $1 billion each year on helping disadvantaged students succeed in college. Yet we are left with “mostly failed programs interspersed with modest success,” write Brookings Institution’s Ron Haskins, and Princeton’s Cecilia Rouse (a Network member) in the policy brief accompanying the latest edition of The Future of Children.

It is time for a new approach, the issue argues. The existing four major college-readiness programs focused on low-income students–Upward Bound, Upward Bound Math and Science, GEAR UP, and Talent Search– offer some “hints about what could make a difference,” they write. “These may be the threads from which we can begin to weave together a new kind of intervention program.”

Attending college, whether two-year or four-year, is a passport to higher earnings, and the authors argue, to reducing the stark inequality that has taken hold since the 1980s. As Lisa Barrow and colleagues write in the opening article of the journal, “individuals with a bachelor’s degree earn 50 percent more during their lifetime than individuals with no more than a high school diploma, and their unemployment rate is less than half as high.” Unemployment rates, even during the recent deep recession, are significantly lower as well.

Yet far too many never make it to graduation day. Half of all students who enroll at a postsecondary institution fail to complete a degree or a certificate within six years. Part of this is failure on the part of schools and the students themselves in preparing for college-level work. According to research by Sean Reardon, the rich-poor gap in test scores is about 40 percent larger now than it was 30 years ago.

The authors in this issue argue for taking that $1 billion that the government spends annually on four college-preparation programs and consolidate them into a single grant program. To keep the federal funding, organizations must show, based on rigorous analysis, that they are helping disadvantaged students graduate from college. This kind of accountability, they argue, is imperative. Applicants must demonstrate they were using evidence-based interventions, and they must prove they have a history of success, and good data showing that success. The more rigorous the evidence, the more likely the group will qualify for funding.

They also call for funding of a broad variety of successful approaches (for example, summer programs, mentoring, tutoring, help with financial aid) to establish a “set of evidence-based methods that other organizations could replicate.”

The Department of Education, they argue, should use up to 2 percent of its annual funds ($20 million) to plan a coordinated program of research and demonstration to determine whether well-defined interventions or specific activities such as mentoring or tutoring, for example, increase college enrollment and completion. Without investing in this R&D, “college preparate programs are likely to continue their poor performance,” Haskins and Rouse write.

“Some will think our recommendations harsh. But social policy should be based on evidence, and everything we know leads to teh view that many, if not most, social programs produce modest or no effects. The Obama administration’s reform of Head Start shows that a major ingredient of evidence-based policy is to reform or terminate ineffective programs. We should apply the same tough-minded approach to college preparation.

 

Without it, too many youth will continue to flounder on the path to adulthood. Despite its costs, college is still a door-opener to a job and (eventual) good earnings. While there are numerous stories of high debt and pinched futures of recent college grads, the real story is with those who never go on to school after high school.

The numbers don’t lie.

  • Since the 1980s, the median family income of adults in their prime earning years has increased only for those with a four-year or advanced degree.
  • The odds of a young black man without a high school degree being in prison are higher than him having a job. African American men born in the mid-1970s who dropped out of high school have a two in three chance of being incarcerated.
  • The number of “disconnected youth” — those neither working nor in school is at record highs.
  • Young adults from families earning $20,000 or less (the bottom earnings quintile) with a college degree are nearly 80 percent less likely to wind up in the bottom fifth themselves than their peers who do not have a four-year degree.

While college is still worth it, it is not a decision to enter lightly, or without preparation. See Lisa Barrow and coauthors’ article  and Philip Oreopoulos and Uros Petronijevic’s article for a sound assessment of the value of college (and its drawbacks for the less-than-strategic). Helping students prepare for college, including understanding the necessity of being strategic about which schools, which majors, and how much to borrow, are critical not only to the students’ own futures, but to the nation’s as a whole.

Liberal Arts Majors Cause Wages to Fall, or Do They?

Posted on by
Reply

 

In the immortal words of Hustle and Flow, “it’s hard out here for an English Lit major.” Wages for college grads have been stagnant or falling since 2000, and some are blaming liberal arts majors for flooding the market and dragging down wages.

James Pethokoukis, whose blog post, “Harvard, we have a problem: Too many liberal arts majors” says it all, argues that

1) “Over the past 25 years, the total number of students in college has increased by about 50 percent. But the number of students graduating with degrees in STEM subjects has remained more or less constant”; and

2) “In 2009, the United States graduated 89,140 students in the visual and performing arts, more than in computer science, math, and chemical engineering combined and more than double the number of visual-and-performing-arts graduates in 1985.”

Ergo, liberal arts majors are flooding the market and driving down wages.

But Lawrence Mishel, at the Economic Policy Institute, looked more closely at this trend, and tried to add some science to the claim that STEM (science, engineering, and math) wages are suffering because.

As he argues, there hasn’t been a surge in liberal arts majors, so the prospect of a sudden flood is unlikely.

If the 2009 composition (across 18 different majors) of employment across fields prevailed in 2001 at the  wages of each  field in 2001, then the average wage would have been … drum roll … 0.1 percent higher. That is, the impact of changes in the composition of fields over the 2001 to 2009 period was ABSOLUTELY NOTHING. The drop in entry-level wages happened within the particular fields of study, not because of the fields that students studied.

Math aside, others are asking kinda the same question. Tim Cook in Pittsburgh, for example, is asking, why don’t more people leave college with both intellectual foundations and practical skills?  Cook wants kids to focus on both the humanities and a trade.

Cook, with an English Lit degree, has started the Saxifrage School, which upends the notion that you have to learn in a classroom on a campus–and the costs that come along with it. He is offering classes for $395 a piece, with courses taught by working professionals and craftsmen as well as adjuncts and Ph.D students. The conceit is–which also lowers costs–that all classes take place across the city, at the local libraries, YMCA, mechanics’ shops, and other spots. No desks, no quads, no ivy-covered walls.  A graphic-design course is taught in a coffee shop. A course on organic agriculture uses the boiler room in an abandoned city pool house for its seed-starting workshop.

He’s snagged the attention of local foundations in Pittsburgh and hopes to have 500 students within a few years, according to an article in the Wall Street Journal.

It seems a little redundant to the community college and trade school ecosystem, but it could perhaps burnish the reputation of “the trades,” which get little respect these days, despite decent jobs awaiting those with such skills. If a hipster like Cook does it, it’s bound to gain some traction among young adults, who are particularly enamored–at least in Brooklyn and Portland–with hands-on, back to basics, do-it-yourself everything, from brewing beer to raising chickens.

And, I can’t help but notice this kind of innovative thinking is coming from a liberal arts major.

 

Will student loan debt curtail future growth?

Posted on by
Reply

The Center for American Progress calls on Congress to do something about student loan debt or risk a slowdown in the housing sector and consumer purchases in the future. As debt burdens rise for young families (and their parents in many cases), they may put off buying homes, forming their own households (and further delay marriage), and even impinge on their retirement.

As the Center notes, student debt is rising rapidly–and it’s not just young adults.

According to the 2010 Survey of Consumer Finances, 45 percent of all American families hold outstanding student-loan debt, up from 33 percent in 2007. While the majority of student debt is held by borrowers under the age of 35, the rise in student debt also affects older Americans. Thirty-six percent of families in a household headed by someone ages 45 to 54, 29 percent of families in a household headed by someone ages 55 to 64, and 13.3 percent of families in which the head of household is between the ages of 65 and 74 hold student debt.

Not only the number of people with debt, but the amounts are not insignificant. As Chris Herbert, research director at the Harvard Center for Housing writes, “the total value of outstanding student loans nearly quadrupled between the start of 2003 and the third quarter of 2012, from $241 billion to just under $1 trillion.”

Student-loan delinquencies and defaults have likewise risen. Banks wrote off $3 billion in student-loan debts during January and February of this year alone, a 36% increase, according to Reuters. And “about 17 percent of the nearly 40 million student loan borrowers [were] at least 90 days past due on their repayments, a February report from the New York Federal Reserve Bank showed.” The tough economy is the main reason for the spike.

The result of this increasing debt burden, the Center for American Progress argues, is a slower launch into adulthood, including starting families and buying homes. The number of young people living with their parents has been on the rise since 2010 and the beginning of the Great Recession. When they’re living at home, they’re not out spending on their own housing and set-up, which contributes, according to Moody’s Analytics estimates,  $145,000 of economic activity.

Moreover, the delay in household formation and the financial challenges for adults in their twenties and thirties may alter the future of the U.S. housing market. The Bipartisan Policy Center estimates that Echo Boomers—those born between 1981 and 1995—will drive 75 percent to 80 percent of owner-occupied home acquisition before 2020, when Baby Boomers begin to sell off their homes. Yet homeownership rates for young people are among the lowest in decades.

Not to mention it’s simply harder to get a mortgage today for those with little credit history, although that seems to be easing.

One point that very few have raised is the long-term effect on retirement security. The Boomers are already behind the curve when it comes to saving for retirement, and despite Suze Orman’s pleas otherwise, they’ve often put aside their own retirement savings to help out with their children’s college loans. On top of that, as the Center reports,

“according to the Center for Retirement Research at Boston College, 62 percent of workers ages 30 to 39 are projected to have insufficient resources in retirement”–a far higher number than even for Boomers. It’s hard to save for retirement when you have a student loan bill every month.”

That said, the median student loan bill is still quite reasonable at $11,000, and the cost of not having a degree is even higher. But there are indeed young adults with extremely high debts. As Herbert at the Housing Research Center notes, “Among those under 30, the share of borrowers with outstanding debt exceeding $50,000 increased from 5 percent of borrowers to 10 percent, and for those 30-39 this share jumped from 14 to 19 percent.” Ultimately, then, the debt is concentrated in a smallish number of households. It seems that if policies to alleviate the burden are put in place, they should be targeted in some way– and in such a way as to not encourage people to take out high debt because they know there’s a write-off down the road.

One point that has been raised lately and that may continue to be a problem as young adults delay their path into adulthood is the number of households with mortgages at retirement. Advisers have long argued that the mortgage should be paid off by then. But Boomers are bucking that trend already, and it seems that it might only grown as young people delay the start of their careers while they gain more education (and debt), and push buying a home down the road even farther.

In the end, it’s a “wait and see” about the effect on homeownership among the Echo Boom and Millennial generations. As Herbert says:

“Overall, while the rise in student loan debt is certainly a cause for concern, it may not be as significant a drag on the ability of young adults to move into homeownership as many fear, since the typical borrower has not seen a significant jump in the amount of debt incurred and seems to have a manageable monthly payment. On the other hand, with much of the increase in student debt among both those age 30-39 and even older households there may be more need for concern about the impact of these loans on the ability of existing homeowners to balance their household budgets and save for retirement.”

 

The Center for American Progress recommends the following to better manage student debt going forward:

  • Develop a well-designed refinancing program for student-loan borrowers.
  • Promote broader access to income-based repayment programs, which offer affordable payment schedules that correspond to the borrower’s income.
  • Consider including private student loans under bankruptcy protection.
  • Require school certification for private student loans.
  • Encourage broader adoption of the college scorecard by postsecondary-education institutions.


Helping Low-Income Teens Find the Right Path to College and Careers

Posted on by
Reply

Several smart projects are underway to encourage low-income young adults from underserved communities to not only attend college, but attend the college that best matches their ability and interests.

Far too many high-achieving young people from limited means end up in less selective colleges. One of the main reasons is their perception that they can’t possibly afford Northwestern or Yale, even though their grades put them in the running for acceptance to elite schools.

But a new study by Caroline Hoxby and Sarah Turner shows that the simple act of mailing some targeted information to prospective high-achieving students during the selection process boosts enrollment in well-matched selective colleges.

The study focused on teens who had SAT scores high enough to make it into the top 200 most selective colleges in the country. One group was mailed a packet of information that spelled out many of the big unknowns about college among this group, and specically tried to dispel the myth that they couldn’t afford it. They pointed out, for example, that elite schools typically offer ample scholarships, and other assistance.

The students who received the packet were significantly more likely to apply to colleges matching their abilities than those who did not. They also achieved first-year grades as good as the students who went to lesser schools.

As the researchers write:

The ECO-C Intervention causes students to applyto and enroll in colleges with higher graduation rates, greater instructional resources, and curriculum that is more geared toward students with very strong preparation like their own. Put another way, the ECO-C Intervention closes part of the college behavior”gap”between low-income and high-income students with the same level of achievement.

One would think that someone would have thought of this before–it’s just so simple and basic. But as the authors write, where’s the incentive?

No one postsecondary institution would have the incentive to conduct such an intervention since many of the benefits would accrue to other institutions. That is, the ECO-C Intervention produces benefits that are largely public. Thus, a natural host for such an intervention would be a pan-collegiate organization or other organization with social goals.

Also helping lower-income students is a program that MDRC and Bloom Associates have launched called the ECCO (Exploring College and Career Options) curriculum. Activities such as field trips to colleges and workplaces, lessons in what employers expect, and talks from professionals who came from similar backgrounds, motivate and inspire young adults. The curriculum focuses on helping students prepare for both college and career and exposes them to real-world experiences.

More broadly, the Lumina Foundation has outlined several policies that states can work toward to ensure that more Americans graduate from college. These include:

  • Set a specific state goal for attainment, and develop interim measures of progress. Promising measures include, according to their website, “creating a unified student unit record systems that link K-12, higher education, and workforce data; and to collect, publicly report, and use at the campus and state levels common metrics that measure progress in attainment, completion, costs, and affordability.
  • (My favorite) Focus scarce state resources on higher education productivity and completion–that is, rather than funding streams that reward only enrollment numbers, reward graduation rates also.
  • Align K-12 and higher education standards and assessment (the Common Core is a big step in this direction).

Lumina is also partnering with Innocentive to “crowdsource” solutions for increasing higher educational attainment.

There are many other efforts underway to help teens from less stellar schools, low-income families, and underserved communities. These are but a handful. But what makes these stand out is their commitment to evaluating their progress with high-quality methods.