Report: Brain drain to damage NE economy

Alex Bloom

The economic future of Massachusetts and the rest of New England looks very bleak, according to a study recently released by the Nellie Mae Education Foundation. The reason, however, has nothing to do with the economy, the price of oil or inflation.

According to the study, entitled “New England 2020,” the decreasing percentage of workers in the New England workforce with a bachelor’s degree or higher will send the economy of the six New England states into a freefall.

At the same time, the rising cost of federal student loans is leaving students out to dry. The Campaign for America’s Future and Sen. Edward M. Kennedy, D-Mass., both decried Republican supported legislation that took effect last month, raising the interest on student loans.

The Nellie Mae Education Foundation’s study found that Massachusetts will see its percentage of those with a bachelor’s degree or higher drop to 40 percent by 2020, down from 43 percent in 1993, while Connecticut will decrease from 34 percent to 30 percent. While the percentages seem small, they represent thousands of people in the workforce.

“The trends are already heading that way,” said Joe Berger, the study’s co-author, noting that the numbers have been declining for more than a decade. “If we don’t start paying attention now, it’s going to be too late to correct it if it gets to be a significant problem.”

At the same time, the number of minorities in the workforce is on the rise. All six New England states will see dramatic increases in the amount of minorities in the workforce. For example, 28 percent of the Massachusetts working-age population will be minority by the year 2020, which is up from 15 percent in 2000. Additionally, nearly half the 25-29 year-olds in the three southern New England states will be minorities by 2020.

The study proposed that the region needs to do a better job of keeping students in the region after they leave college. The report finds that the in-migration rate, the rate of those who enter the region from other areas, for the college-aged is often more than twice as high as the rate of in-migration for the general population. In Massachusetts, for example, the in-migration rate for those aged 18-29 was 27 percent while the rate for all ages was just 10 percent.

Dr. Blenda Wilson, the president of the Quincy-based Nellie Mae Education Foundation, argued that the region needs to do a better of job of retaining its graduates.

“It shouldn’t be hard to do,” said Wilson “They’re a captive audience for four years while they are here for college.”

Wilson said that government officials and the business community need to work together to institute more summer jobs, scholarships, bridge programs and internships. If the two work together and act now, Wilson believes the trend can be reversed.

“I believe there is enough time if government, education and business take the problem seriously,” said Wilson. “If we increase the college-going population and do a better job of keeping people who come to college in New England here once they graduate, we could be a more robust economic driver as New England has enjoyed in the past.”

However, Wilson argued that governments must first adjust their views on education policy.

“Government has to take the lead in coordinating the policy on higher education with economic development and not see it as a separate thing,” said Wilson.

Both Berger and Wilson agreed that keeping in-migrants wasn’t the only solution and that education must be improved for minorities. Berger said that it’s going to take both in-migration and the education of current residents to reverse the trend.

“We can’t just rely on one or the other,” said Berger. “We have to do a better job of preparing and supporting our homegrown workforce and do a better job of using higher education as a growth end.”

Texas investor Charles Miller, the chairman of the Secretary of Education’s Commission on the Future of Higher Education, agreed with the study’s findings.

“You have to get higher education right if you’re going to get the economy of your region right,” said Miller. “It’s critical to the economic future of your region.”

Miller noted however that the community must do its part to entice businesses to settle in the New England region.

“What’s comfortable for the people there might not be comfortable for people who want to come in and do things,” said Miller.

“What’s good for business, good for profit, good for markets — those are the kind of things that attract people. It might not be popular in some academic circles, but that’s what really keeps people.”

Miller also agreed that the increasing minority population must be better educated.

“The groups that are there have to be educated up to a level that produces economic growth,” said Miller. “In public education, the closing of the gap has been the target [in Texas] for the last 15 years. The idea was, ‘We have to do better for everybody here.’”

The Campaign For America’s Future wants to see a decrease in the cost of higher education in order to answer the educational problems of the region.

Costs for student loans are on the rise nationally due to congressional legislation passed in January. Earlier this month, the legislation went into effect and rates on PLUS loans increased 6.1 percent to nearly 8 percent for existing loans and to 8.5 percent on new loans. For Stafford loans, interest rates rose from 5.3 percent to 7.14 percent on old loans and to 6.8 percent on new loans.

“The difference over a course of a few years is thousands of dollars,” said Bob Borosage, the organization’s president.

A vote on reconciliation in January took $12 billion from federally supported loan programs and left more of the financial burden for educational costs on the student. Sen. Dick Durbin of Illinois and Rep. George Miller of California collaborated on the Reverse the Raid on Student Aid Act of 2006, a bill that would cut the interest rate in half on student loans. However, the Republican-led Congress has been unwilling to budge. Borosage argued that Republicans must be voted down from the majority if the public is going to see a change.

“If they get away with cutting [tuition benefits] without paying a political cost, they’re going to keep starving the federal aid program and price more and more families out of sending students to college,” said Borosage.

Kennedy, a longtime advocate of education reform, also believes that the education system needs reform at the federal level as students bear more debt. Kennedy supports both the Student Aid Reward Act and the Student Debt Relief Act. The Student Debt Relief Act would cap existing loans at 15 percent and would forgive those in debt who have served the public for a specified amount of time, such as teachers or police officers. The Student Aid Reward Act, which Kennedy introduced with Rep. Miller, would create competition among the leading federal loan programs in order to drive down loan prices.

“The American Dream is at risk if we fail to make college more affordable,” said Kennedy in a statement released in early July. “Graduates should not have to choose between paying off their college loans and buying a home or having a family.”

Chairman Miller noted the criticisms of the system but refused to get involved in political fighting, saying that such fighting exacerbates the problem.

“Instead of looking at the whole thing and getting it right we get bogged down in one thing for the entire time,” said Miller.

Miller agreed that the higher education system needs correcting and would like to see more cooperation on a solution rather than politicking over the problem.

“We ought to step back and do the whole thing from the beginning,” said Miller. “It sure needs a lot of work.”