The Economic Impacts of Global Strategies to Increase Graduation Rates on MSIs and Minority Communities The Big Picture (3)

PREFACE This study grew out of the author’s concern that many educators adopt strategies to raise admissions standards, as a first resort, for increasing graduation rates, perhaps because it is the easiest and least-cost strategy to implement In December 2005, one of only two Florida Universities that accepted remedial students also made the decision to raise admissions standards, despite its acknowledgement of the adverse impact of this decision on access for minorities The recent report by Tom Mortenson (May 2006) entitled, Inherited Opportunity for Higher Education, demonstrates the need to increase participation and completion rates of minorities in higher education in order to maintain the global competitiveness of the U.S economy Therefore, both Minority Serving Institutions (MSIs) and Predominantly White Institutions (PWIs) must be seriously engaged in strategies to increase both the graduation rate and the number of minority graduates in order to promote the global competitiveness of the U.S economy, and the economic development of minority communities Selecting the best global strategy for increasing graduation rates and the number of graduates at MSIs requires an understanding of the role of higher education in economic development, i.e., the big picture In this role, increasing graduation rates at MSIs is not an end in itself, but a means to increasing the number of graduates in order to achieve the ultimate end of promoting sustained economic development in minority communities Therefore, the main purpose of this study is to analyze the economic impacts of global strategies for increasing graduation rates on MSIs, minority students, and minority communities Similar economic impacts apply for the national economy as well Herman I Brann, Ph.D Associate Vice President for Institutional Research Florida A&M University E-mail: herman.brann@famu.edu OIR Web Site: www.famu.edu/oir i CONTENTS Page Preface …………………………………………………………………………… i Executive Summary ……………………………………………………………… iii Summary of Results ……………………………………………………… ix Conclusion ………………………………………………………………… xii Recommendations …………………………………………………………xiii 1.0 Introduction ………………………………………………………………… 2.0 Economic Development and Economic Impacts …………… …………… 3.0 Economic Impacts of Alternative Global Strategies for Increasing Graduation Rates …………………………………………………………… 3.1 Global Strategy 1: Raising Admissions Standards …………………… 3.2 Global Strategy 2: Reporting the Graduation Rates of College-Ready and Remedial Students Separately …… …………… 4.0 On the Costs of Remedial Education at MSIs………………………………… 12 5.0 External Environmental Scan for Increasing the Recruitment of Highly Qualified Minorities to FAMU………………………………………………… 14 References ………………………………………………………………………17 FIGURES & TABLES Figure Sequence of Impacts Associated with Enrollment Reducing Policies … Table 1: A Summary of the Economic Impacts of Global Strategies to Increase Graduation Rates ……………………………………………… 11 Table 2: External Environmental Scan for Increasing the Recruitment of Highly Qualified Minorities to FAMU ………………………………………… 14 ii THE ECONOMIC IMPACT OF GLOBAL STRATEGIES TO INCREASE GRADUATION RATES ON MSIs AND MINORITY COMMUNITIES: THE BIG PICTURE Executive Summary The main purpose of this study was to examine the economic impacts of different global strategies for improving graduation rates, in the context of the dual mission of MSIs to provide educational opportunities to both college-ready and remedial students, in order to promote sustained economic development in minority communities, and improve the relatively low economic status of minorities This analysis is conducted with the understanding that it is the number of qualified minority graduates, and not necessarily the graduation rate, that is more important in promoting sustained economic development in minority communities Therefore, the graduation rate is not seen as an end in itself, but a means to achieving the ultimate end of promoting sustained economic development in minority communities, by increasing the number of qualified graduates Remedial students were defined as those required to complete at least one college preparatory course, while college-ready students are not required to complete any college preparatory courses Global strategies were defined as broad strategies for improving graduation rates that not require specific interventions such as academic advising, tutoring, etc Two types of global strategies were analyzed: (1) Raising admissions standards; and (2) Reporting graduation rates for college-ready and remedial students, separately These strategies were analyzed from the perspective of promoting sustained economic development in minority communities The concept of economic impact measures the changes in economic activity - incomes, employment, and the output of goods and services - - associated with any significant changes in spending by students, faculty, staff, and the MSI Global strategies may affect student enrollments, which, in turn, may affect revenues and employment at MSIs, and spending by students, faculty, and staff Therefore, the best global strategies will provide the greatest economic impacts, or the least adverse economic impacts on iii student enrollments and the number of graduates; MSI revenues; faculty and staff employment and incomes; and employment, investments, and output of goods and services in the local communities The diagram below illustrates the economic impacts of any global strategies that significantly affect student enrollments, such as raising admissions standards Sequence of Impacts Associated with Enrollment-Reducing Policies e.g., Raising Admissions Standards Decreased Student Enrollments Decreased MSI Revenues (State & Tuition Revenues) Decreased Student Spending on Books & Supplies, Food, Housing, Personal Items, Entertainment, etc Decreased Decreased Employment & Spending by Faculty & Staff on Food, Housing, Entertainment, etc.) Incomes, Investments, and Employment in the Local Community The use of economic impacts as the criteria for evaluating these global strategies is justified by the critical role of higher education in promoting sustained economic development in minority communities, and the relatively low economic and educational status of minorities as reported in the iv National Urban League Report entitled, The State of Black America, 2005 For simplicity, the concept of economic development is measured in terms of increases in per capita incomes over time, that is, average incomes per person Descriptive analyses of the economic impacts of these global strategies were conducted on: (1) student enrollments, the number of graduates, and student spending; (2) faculty and staff employment and spending; (3) employment and investments in the local communities, and (4) MSI revenues The table on the next page summarizes the main findings on the economic impacts of global strategies to increase graduation rates on students, faculty and staff, MSIs, and the local communities v Summary of the Economic Impacts of Global Strategies to Increase Graduation Rates Global Strategies Economic Impacts On: _ (1) Students (2) Faculty & Staff (3) Local Community (4) MSI Revenues Enroll Grads Spending Jobs Spending Jobs Investments State Tuition _ Raising Admissions Standards Reporting Grad Rates for College-Ready and Remedial Students Separately Down1 Down1 Down1 U-n–c–h–a–n–g–e– d Down2 Down2 U-n-c-h-a-n-g-e-d Down3 Down3 U-n-c-h-a-n-g-e-d Down1 Down1 U-n-c-h-a-n-g-e-d Student enrollment, spending, and MSI revenues will decrease, unless there is an increase in the number of better-qualified students to offset the loss of less-qualified students If student enrollment declines significantly, faculty and staff employment and spending will also decline, unless investments of similar magnitudes are made to offset the spending lost by retrenched faculty and staff Employment and investments in the local community will decline if either student enrollment or university expenditures to offset the loss of faculty and staff spending decline vi Since strategies to raise admissions standards will require the replacement of lessqualified minorities by more-qualified minorities, an external environmental scan was conducted to examine the prospects of recruiting more qualified minorities to an MSI such as Florida A&M University (FAMU) The table below provides the summary of an external environmental scan that supports the view that the prospects for increasing the recruitment of highly qualified minorities to offset the loss of less-qualified minorities at FAMU are not very promising Other MSIs that recruit a high percentage of low-income minorities may realize similar outcomes This type of external environmental scan, supported by an internal environmental scan, can also be used to provide the context for developing Enrollment Management Plans for MSIs MSIs are at a competitive disadvantage for attracting highly qualified minorities through financial aid strategies given their relatively low endowments However, there are some opportunities to compete based on an improved image Nevertheless, while the loss of better-qualified, minorities to Predominantly White Institutions (PWIs) is likely to have a negative impact on the graduation rates of MSIs, this loss may have a positive economic impact on the ultimate goal of promoting sustained economic development in minority communities, if these students achieve at least similar success rates at the PWIs Since the pool of highly qualified minorities is very small, in the absence of increased financial aid, MSIs must be prepared to work with large numbers of lessqualified students in order to continue to maximize their contributions to the ultimate goal of promoting sustained economic development in minority communities Again, it is the number of qualified graduates, rather than the graduation rate, which is the driving force in promoting sustained economic development in minority communities This has implications for the types of global strategies that MSIs must select to increase both the graduation rate and the number of qualified graduates vii Summary of an External Environmental Scan for Increasing the Recruitment of Highly Qualified Minorities to Florida A&M University (FAMU) External Opportunities Implications 1.0 Growth in the number of Florida public high school graduates, in general, and Black high school graduates, in particular Growth in FAMU’s prospect pool of Florida public high school graduates 2.0 Growth in the number of Florida public community college graduates, in general, and Black community college graduates, in particular Growth in FAMU’s prospect pool of Florida public community college graduates 3.0 Florida Board of Governors (BOG) diversity initiatives While this initiative is intended to improve access and success of minorities, its success will depend on the ability of universities to report the graduation rates of collegeready and remedial students Separately External Threats Implications _ _ 1.0 Tuition increases offsetting increases in financial aid Reduced access and retention of lower income minorities in higher education 2.0 Approx one half of the African American at FAMU come from families with incomes of $30,000 or less Given the positive correlation between family incomes and student success, FAMU will continue to be at a competitive disadvantage for recruiting highly qualified minorities 3.0 SAT/ACT scores for AfricanAmericans at FAMU are declining Among Florida State Universities, FAMU has the lowest percent of new students (38%) passing all three subjects viii FAMU must increase competition for college-ready minorities based on image, and be prepared to work with more remedial students on the Florida College Placement Test 4.0 Tuition increases for out-of-state undergraduate students are reducing the quality of the pool of students applying to FAMU While this is likely to reduce FAMU’s graduation and retention rates, and increase hours to degree, FAMU must compete for in-state students more aggressively 3.0 Tuition increases for both in-state and out-of-state graduate students seem to be reducing the enrollments of both in-state and out-of-state graduate students This will affect FAMU’s graduate programs and research capabilities, and the ability of FAMU to meet the BOG goals relating to Building World Class Capacity _ _ Summary of Results 1.0 In order to improve the relatively low economic status of minorities, MSI educators must begin to view the role of higher education in the larger context of providing the improved human resources (graduates) required to promote sustained economic development in minority communities This is particularly important for MSIs whose dual mission require them to serve both college-ready and remedial students from communities with relatively low incomes, high poverty levels, and inadequate investments in public schools and community infrastructure Increasing the number of minority graduates is also a national imperative if we are to maintain the global competitiveness of the U.S Economy 2.0 The recent report by Tom Mortenson entitled, Inherited Opportunity for Higher Education, reveals that minorities and minority high school graduates are increasing at a much faster rate than Whites and White high school graduates, while college participation and completion rates for minorities have been relatively low This has serious implications for the global competitiveness of the U.S economy; therefore, the burden of educating the rapidly increasing numbers of minorities cannot be left to MSIs and ix community colleges alone PWIs must become seriously involved in assisting MSIs and community colleges in promoting access and support for minorities in higher education 3.0 In the context of the critical role of higher education for MSIs and minority communities, graduation rates cannot be viewed as an end in itself, but as a means to maximizing the number of qualified minority graduates required to promote sustained economic development in minority communities Therefore, MSIs must select strategies to increase graduation rates that not significantly reduce the number of minority graduates Appropriate global strategies for increasing graduation rates at MSIs will be those that maximize enrollments, the number of graduates, and economic activity in the MSIs and local communities 4.0 FAMU’s six-year graduation rates for college-ready and remedial students were 50% and 34%, respectively, for the 1998 FTIC cohort The composite graduation rate was 46% In order to maximize economic impacts, this study reveals that the best global strategy for increasing graduation rates and the number of graduates is to report the graduation rates of college-ready and remedial students separately This is the only global strategy in which the economic impacts on MSI revenues, student enrollments, the number of graduates, spending by students, faculty and staff, and employment in the MSI and local economies are likely to be unchanged by the strategy 5.0 Reporting the graduation rates for college-ready and remedial students, separately, may also encourage Predominantly White Institutions (PWIs) to promote diversity, since their graduation rates are not penalized for doing so This conclusion is supported by the recent decision by one Florida University to increase admissions standards, and, in effect, abandon its diversity policy, while acknowledging the adverse impact on minorities 6.0 More important than graduation rates is the number of minority graduates produced for promoting economic development in minority communities In this regard, FAMU ranked first, among all colleges and universities in the nation, by awarding 1,522 baccalaureate degrees to African-Americans during the academic year 2003- 2004 This x Perhaps, the most important lesson here is that promoting economic development requires increased investments in business and economic activities yielding higher incomes The higher incomes earned by the better-skilled human resources will generate increased economic activity in the form of increased spending, savings, future reinvestments, gainful employment, output and incomes Therefore, the larger the number of skilled graduates (not necessarily the graduation rates) produced by MSIs, who can engage in more productive activities, and earn higher incomes, the larger the potential economic impact on improved output, incomes, employment, and economic activity in minority communities For simplicity, we will measure economic development in any sector of the economy in terms of increasing per capita incomes, i.e., increases in the average incomes earned in that sector of the economy (total incomes divided by the total population) Therefore, any strategies that decrease total incomes among minorities (the numerator) are likely to decrease per capita incomes and economic progress among minorities, unless the total population of minorities (the denominator) decreases by a similar proportion, which is unlikely One must also understand that no sector of an economy operates in isolation Changes in spending or investments in any sector of an economy will affect economic activity (output of goods and services, incomes, and employment), not only in that sector, but in to other sectors which use the output and services from that sector, and provide resources to that sector We can define the economic impacts on output, incomes, and employment as the sum of the economic activities generated on each of these variables, in all sectors of the economy, due to the change in spending or investment in the initial sector There is also a secondary multiplier effect of increased spending on economic activity in the economy, in addition to the primary impact of the initial spending Therefore, the total impact may be as much as twice as great as the primary impact The main problem for minority communities is that much of the primary and secondary impacts of the increased spending may be lost outside of the local community, since most of the spending on big-ticket items usually occurs outside of the local community Therefore, minorities must strive to maximize their spending in local minority communities, as much as possible, in order to benefit from the maximum economic impacts Also, with more incomes in the hands of a larger number of minority graduates, the potential to finance the education of future minority students increases, thus promoting a cycle of increased incomes to improve the relatively low economic status of minority communities It is also important to note that the multiplier effect of spending or investments on economic activity is reversible Therefore, any decisions that reduce the number of minority students and graduates will produce a similar multiplied reduction on spending and economic activity within both the MSI and the local community, and increase poverty in the already poverty-stricken minority communities This may occur unless the lost students can be replaced, and the incomes saved by retrenched faculty and staff are reinvested in similar educational and economic activities within the MSI Businesses and community agencies that provide services to the MSIs may also be affected adversely To summarize, therefore, while increasing graduation rates tend to be treated as an end at many universities, it is really a means to achieving the ultimate goal of promoting the economic development of any sector of the economy In the absence of adequate access to other public and private capital resources for promoting economic development in minority communities, MSIs must maximize the number of qualified graduates (improved human resources), subject to an acceptable graduation rate, as the means for generating higher incomes for promoting economic development in minority communities This is the only part of the economic development process for which MSIs have some control 3.0 The Economic Impacts of Alternative Global Strategies for Increasing Graduation Rates Having discussed the ultimate role of higher education in promoting economic development, and improving the economic, educational, and poverty status of minorities, we are now ready to examine different global strategies for increasing graduation rates in the context of the economic impacts of these strategies on minorities and minority communities This analysis assumes that other specific interventions like academic advising, tutoring, etc., to increase graduation rates remain unchanged 3.1 Global Strategy 1: Raising Admissions Standards Perhaps the most popular strategy proposed by educators for increasing graduation rates at many colleges and universities is to increase admission standards Such strategies are easy and least costly to implement, and intended to reduce the enrollments of less qualified students, thereby improving the probability for success of the remaining higherqualified students Since the graduation rate is the quotient of the number of graduates (the numerator) and the number of students in the cohort (the denominator), this strategy assumes that a higher number of graduates will result from a lower number of betterprepared students, thus yielding a higher graduation rate However, this strategy may carry the highest cost in terms of adverse economic impacts, especially for the lowincome students and communities served by MSIs The adverse economic impacts of the decreasing enrollments associated with raising the admissions standards were illustrated in Figure Higher admissions standards may lead to decreased student enrollments, which may lead to decreased state and tuition revenues to the MSI Decreased student enrollments may also lead to decreased student spending at the MSI and the local community on books and supplies, food, housing, entertainments, personal items, etc This reduced spending by students may decrease incomes, investments and employment in the local communities This loss of economic impact due to the reduction in student spending can only be replaced by recruiting an equal number of better-qualified students to replace the less-qualified students lost by raising admissions standards This is unlikely for MSIs like FAMU Decreased student enrollments may also lead to decreased employment and spending by faculty and staff at the MSI This may lead to a second round of decreases in incomes, investments, and employment in the local communities that provide services to the MSI This loss in economic impact associated with retrenched faculty and staff can only be replaced by increased investments on activities that can generate similar levels of incomes at the MSI Therefore, the losses in economic impacts associated with increased admissions standards will be a high price for minorities in order to achieve increased graduation rates, especially when there are other options with better economic impacts 3.2 Global Strategy 2: Reporting the Graduation Rates of College-Ready and Remedial Students Separately The economic status of minorities requires educational strategies that can maximize both the graduation rates and number of graduates, at all levels of post-secondary education - - technical schools, community colleges, and universities - - in order to promote sustained economic development in minority communities One way to demonstrate higher graduation rates at MSIs, without reducing the number of graduates, MSI revenues, student spending, or faculty and staff employment and spending, is to report the graduation rates of college-ready and remedial students separately This is also true for promoting the global competitiveness of the U.S Economy By state mandate, FAMU was afforded the opportunity to enroll remedial students in its cohorts This decision addresses the economic and educational disparities in minority communities to some extent In addition to the findings in The State of Black America, there is an abundance of research that demonstrates the negative correlation between economic status and student’s performance on SATs and ACTs However, the average graduation rates reported for FAMU is composed of the rates for both collegeready students and remedial students This composite rate is a mixture of apples and grapefruits, especially when it is used for comparisons with other universities that may have little or no remedial students in their cohorts The most recent data for the 1998 First-Time-in-College (FTIC) cohort at FAMU report an average six-year graduation rate of approximately 46% If reported separately, however, the six-year graduation rate for college-ready students is 50%, while the sixyear graduation rate for remedial students is 34% Based on the composite rate of 46%, FAMU ranks 5th in comparison with other Florida State Universities, and tied for 3rd in comparison with four-year, public, HBCUs nationwide Using the 50% rate for collegeready students only, FAMU ranks 4th among Florida State Universities, and in sole place for 3rd in comparison with four-year, public, HBCUs nationwide These performances should be widely publicized by FAMU Many of FAMU’s current students, faculty and staff, and prospective students may not be aware of these achievements FAMU and other MSIs may need to a much better job of marketing their achievements on their web sites and other media, in order to attract better-qualified students MSIs may wish consider running a ticker tape on their web sites highlighting their achievements Many of FAMU’s students are aware that FAMU’s graduation rates are low This is true for the four-year graduation rates, and was explained earlier; however, the author believes that less than one percent of FAMU’s students, faculty, or staff knows that FAMU ranks 5th among the eleven universities in the SUS on the six-year graduation rates This suggests that FAMU’s students, while not well-prepared initially, are able to catch up with the other students in the SUS These are simple examples in which the students, faculty, and staff at MSIs can market the achievements of their institutions to attract better-quality students FAMU may not be able to compete with other universities for better-qualified, minority students based on financial aid This is understandable Low-income, minority students are likely to be more sensitive to increases in financial aid awards than higherincome minorities In fall 2004, almost one-half of FAMU’s students came from families with annual incomes of $30,000 or less Approximately two-thirds came from families with annual income of $45,000 or less These income levels fall within the two lowest income quartiles in the U.S economy (Tom Mortenson’s report) With these groups of students, an additional financial aid award of $200 to $500 from a competing university could mean the difference between attending FAMU or the competing university Similar family income distributions may exist at many MSIs While MSIs may not be able to compete for better-qualified minorities based on financial aid, MSIs can compete on image by widely publicizing all of their important achievements Reporting the graduation rates of FAMU’s college-ready students, separately, is an image booster, which compares FAMU’s graduation rates in a consistent manner with other universities, while recognizing FAMU’s broad (dual) mission This is achieved without reducing the number of graduates, and, at the same time, maximizing the economic impact at FAMU and the local communities Moreover, comparing FAMU’s composite graduation rate with other institutions is comparing apples and grapefruits More importantly, FAMU presently ranks first in the nation in the contribution of improved African-American human resources (graduates) for promoting economic development in minority communities During the academic year 2003-2004, FAMU awarded 1,522 baccalaureate degrees to African-Americans This was followed by Howard University that awarded 1,154 This achievement should also be widely publicized, in addition to the graduation rates of the college-ready students Again, FAMU and other MSIs must a better job of promoting their images by identifying and marketing all of their positive achievements to current and prospective students There is a wider justification for reporting the graduation rates for college-ready students separately This concerns the attainment of the diversity goals proposed by the Florida Board of Governors (BOG) Since there is a relatively small pool of collegeready minorities, achieving the diversity goals of the BOG requires universities to compete aggressively for this small pool of college-ready minorities, and admit a large number of less qualified minorities However, including the less qualified minorities in the cohorts with the other college-ready students reduces the composite graduation rate, and, in effect, penalizes universities for promoting diversity Given the priority to increase graduation rates, many of the Predominantly White Institutions (PWIs) are likely to abandon or minimize their diversity efforts In December 2005, one Florida University decided to increase its admissions standards and compete for the better-qualified minorities based on financial aid, while acknowledging that this decision will affect minorities adversely This means that additional burden will be placed on MSIs to enroll and graduate minorities affected by the decisions of PWIs to increase admissions standards Therefore, it is also in the best interest of the Florida Board of Governors to report the graduation rates of college-ready students separately, in order to encourage PWIs to promote diversity 10 Table A Summary of the Economic Impacts of Global Strategies to Increase Graduation Rates Global Strategies Economic Impacts On: _ (1) Students (2) Faculty & Staff (3) Local Community (4) MSI Revenues Enroll Grads Spending Jobs Spending Jobs Investments State Tuition _ Raising Admissions Standards Reporting Grad Rates for College-Ready and Remedial Students Separately Down1 Down1 Down1 U-n–c–h–a–n–g–e– d Down2 Down2 U-n-c-h-a-n-g-e-d Down3 Down3 U-n-c-h-a-n-g-e-d Down1 Down1 U-n-c-h-a-n-g-e-d Student enrollment, spending, and MSI revenues will decrease, unless there is an increase in the number of better-qualified students to offset the loss in less-qualified students If student enrollment declines significantly, faculty and staff employment and spending will also decline, unless investments of similar magnitudes are made to offset the spending lost by retrenched faculty and staff 3Employment and investments in the local community will decline if either student enrollment or university expenditures to offset the loss of faculty and staff spending decline 11 4.0 On the Costs of Remedial Education at MSIs Some legislators have expressed concern about the costs of remedial education at MSIs Any discussion on the costs of remedial education at MSIs must be conducted within the context of the need and importance of increasing the number of minority graduates in the local, state, regional, and national economies 4.1 Increasing the Number of Minority Graduates: A National Imperative Tom Mortenson’s report on the past trends in the participation and completion rates of minorities in higher education, and the associated adverse impact on the global competitiveness of the U.S economy suggest that increasing the number of minority graduates is a problem of national urgency This problem does not appear to be solvable by MSIs and community colleges alone, and must involve all of higher education Also, the National Urban League reports on the relatively low economic status of minorities suggest that increasing the number of minority graduates is also a prerequisite for increasing the low economic status of minorities and promoting the economic development of minority communities These data justify the need and importance of educating minorities as a national imperative for higher education Having justified the importance of educating minorities for the state and national economies, the costs of remedial education at MSIs can be justified in terms of: (1) the benefits, (2) deferred investments, and (3) alternatives to education 4.2 Cost/Benefit Considerations Any discussion of the social costs of remedial education at MSIs must also be accompanied by a discussion of the social benefits of remedial education to minority communities and the national economy It is extremely likely that the long-term social benefits of remedial education at MSIs and PWIs will grossly exceed any short-term social costs 12 Moreover, legislators must realize that the costs of remedial education at MSIs are deferred public costs or, preferably, deferred public investments Much of the public costs that MSIs must incur with remedial students are due to the inadequate public investments in the K-12 public school system in predominantly minority communities, and associated social and economic infrastructures In the words of my automobile mechanic: “You can either pay now, or pay a lot more later.” MSIs are facing the situation of having to pay later, because public officials did not pay earlier In the interest of promoting the economic development of minorities and the national economy, MSIs and PWIs must engage in two strategies in dealing with the costs of remedial students First, they must continue to support and advocate for policies to increase public investments in the K-12 public school system in predominantly minority communities Second, they must earmark some of their public and private funds to provide remedial support for these students The second strategy is very critical for the lives and careers of remedial students, whose schools and communities were largely ignored because of their low-income status, and are now relying on the decisions of state, federal, and institutional policy-makers for remedial support Some legislators will say, “Send them to the community colleges.” Certainly some of these minority students will be better served in the community colleges; however, the main problem with this strategy is that many of these students come from communities that are not supportive of academic pursuits, bearing in mind that most community college students live at home Therefore, some of these students are likely to perform better by direct entry into universities that are prepared to provide the nurturing and special support that these students need It is partly for this reason that some MSIs are able to a better job of educating minorities In this regard, PWIs can perform another role by making some of their dormitory spaces available to low-income minority students from nearby community colleges who could benefit from the social and academic environment of the university Much of the research conducted by Tinto, Terenzini, Pascarella, Astin, etc., demonstrates the importance of a supportive university 13 environment, and student integration into the social environment as important factors in promoting student success Promoting sustained economic development in minority communities and the global competitiveness of the U.S economy will require all of higher education, and particularly MSIs, to maximize the participation and completion rates of low-income minorities In doing so, the question of acceptable graduation rates for college-ready and remedial students must be guided, first, by the input characteristics of the students at each institution, and not by the graduation rates at peer institutions or state university systems Such acceptable graduation rates can be easily determined by utilizing one of the short formulas developed by Astin and Oseguera of the Higher Education Research Institute in their report entitled: Degree Attainment Rates at American Colleges and Universities 5.0 External Environmental Scan for Improving the Recruitment of Highly Qualified Minorities to Florida A&M University Since strategies to raise admissions standards will require the replacement of less-qualified minorities by more-qualified minorities to offset the potentially adverse economic impacts on MSIs, minority students, and minority communities, an external environmental scan was conducted to examine the prospects for recruiting more qualified minorities to FAMU by raising admissions standards Table below provides the results of an external environmental scan that support the view that the prospects for increasing the recruitment of highly qualified minorities to FAMU to offset the loss of less-qualified minorities are not very promising Table External Environmental Scan for Increasing the Recruitment of Highly Qualified Minorities to Florida A&M University External Opportunities Implications 14 1.0 Growth in the number of Florida public high school graduates, in general, and Black high school graduates, in particular Growth in FAMU’s prospect pool of Florida public high school graduates 2.0 Growth in the number of Florida public community college graduates, in general, and Black community college graduates, in particular Growth in FAMU’s prospect pool of Florida public community college graduates 3.0 Florida BOG diversity initiatives While this initiative is intended to improve access and success of minorities, its success will depend on the ability of universities to report the graduation rates of collegeready and remedial students separately External Threats Implications _ _ 1.0 Approx two-thirds of the minority students at FAMU come from families with incomes of $45,000 or less With tuition increasing at a faster rate than financial aid, access and retention in higher education for these students will be increasingly difficult, unless financial aid increases 2.0 SAT/ACT scores for AfricanAmericans at FAMU are declining Among Florida State Universities, FAMU has the lowest percent of new students (38%) passing all three subjects on the Florida College Placement Test FAMU must increase competition for college-ready minorities based on image, and be prepared to work with more remedial students 3.0 Tuition increases for out-of-state undergraduate students are reducing the quality of the pool of students applying to FAMU While this is likely to reduce FAMU’s graduation and retention rates, and increase hours to degree, FAMU must compete for in-state students more aggressively 4.0 Tuition increases for both in-state and This will affect FAMU’s 15 out-of-state graduate students seem to be reducing the enrollments of both in-state and out-of-state graduate students graduate programs and research capabilities, and the ability of FAMU to meet the BOG goals relating to Building World Class Capacity _ _ MSIs are at a competitive disadvantage for attracting highly qualified minorities through financial aid, although there are some opportunities to compete based on an improved image However, while the loss of better-qualified minorities to PWIs is likely to have a negative impact on the graduation rates of MSIs, this loss is likely to have a positive economic impact on the ultimate goal of promoting sustained economic development in minority communities, if the number of minority graduates at PWIs increases Therefore, the net impact may be better for minority communities MSIs must now be prepared to work with large numbers of less-qualified students in order to continue to maximize their contributions to the ultimate goal of promoting sustained economic development in minority communities Again, increases in both the graduation rate and the number of graduates are required to promote sustained economic development in minority communities 16 REFERENCES Astin, A.W (1993) What Matters in College? Four Critical Years Revisited San Francisco: Jossey-Bass Black Excel “Comparison of Undergraduate Degrees Awarded at HBCUs by Gender (2003-2004).” Diversity Online Black Issues in Higher Education “FAMU’s Rank as a Top Producer of African American Baccalaureate Degrees.” www.blackissues.com Brann, H.I “Third World Cities in the USA: The Need for New Initiatives for Promoting Development.” Paper presented to the National Research Conference Institute on Black Life, University of South Florida, Tampa, Florida, Sept 1992 Brann, H.I., and Baldwin A.L.B (1997) “The Economic Impact of Miami-Dade Community College on the Local Dade County Economy.” Paper presented to the 37th Annual Forum of the Association for Institutional Research, Orlando, Florida, May 1997 Florida Dept of Education “Performance on the Common Placement Test Florida Public High School Graduates.” www.flbog.org Integrated Post-Secondary Data Systems (IPEDS) Data on Graduation Rates of HBCUs National Center for Education Statistics (NCES) Mortenson, T.(2006) Inherited Opportunity for Higher Education AIR Forum, Chicago, May 2006 Office of Institutional Research Florida A&M University (Dec 2005) Data on Graduation Rates of College-Ready and Remedial Students Palm Beach Post (12/8/2005) “FAU to Bar Students who Need Remedial Classes” 17 18 ... strategies to increase graduation rates on students, faculty and staff, MSIs, and the local communities v Summary of the Economic Impacts of Global Strategies to Increase Graduation Rates Global Strategies. .. graduates The main purpose of this study is to examine the impacts of global strategies to increase graduation rates, in the context of the dual mission of MSIs to educate both college-ready and remedial... graduation rates and the number of graduates is to report the graduation rates of college-ready and remedial students separately This is the only global strategy in which the economic impacts on MSI