55 in Ohio, 1.6 per cent of returners have doctoral degrees while 2.6 per cent of non-returners have doctoral degrees. This difference is statistically signifi cant over a 95 per cent confi dence interval.
universities. In 2002–3, the grant was worth only $1038 for any Ohio resident attending a private school in state (Ohio Board of Regents, 2004).
One caution, however, is in order. The Georgia Hope Scholarship program was extremely expensive. Georgia has spent over 1.4 billion dollars giving scholarships to over 625 000 students. While part of the purpose of Georgia’s program was to increase college access, one of the other stated purposes was to decrease brain drain. Georgia likely would have retained half of these students regardless of the scholarship program. Moreover we are still awaiting evidence on whether Georgia was able to stem the long-run outfl ow of talented students. In any case, there may have been a much cheaper way to identify the top students and infl uence their long-run mobility decisions.
Innovative Programs after Undergraduate Years
Keeping students in state after graduation from college is the underlying goal of brain drain prevention. A study by the American Institutes for Research found that 161 programs exist in 43 states which cover college costs or repay loans for students agreeing to work in certain occupations or regions. About 75 per cent of these programs are loan-forgiveness programs, providing fi nancial aid while in school in exchange for a future work commitment, while the rest of the programs repay existing debt (Schmidt, 2004). Most of these programs do not consider fi nancial need, but many do require state residency or take academic merit into account. While the report found little evidence that the programs reduce workforce shortages or attract those who might not otherwise have entered the occupation, it is unclear whether they can be implemented to keep students in-state successfully. Also most of these programs focus on nurses or teachers, rather than students in high-tech fi elds or those with advanced degrees.
Recently Governor Bob Holden of Missouri announced a plan to forgive up to $10 000 in student loans for Missouri college students who pursue math or science degrees and work for life science-related companies in Missouri after graduation. The loan repayment incentive is part of the Jobs Now program to create new jobs in the state (Samuel, 2004). The program would repay up to $2500 a year for four years, and hopes are that it would send a message to companies that Missouri has a highly qualifi ed life sciences workforce.
Not only are states developing programs to attract top students, but legislation has been introduced in the Federal government to help recruit the
‘best and the brightest’ into government service. The proposed legislation, the Generating Opportunity by Forgiving Educational Debt for Service (GOFEDS) Act would allow federal agencies to offer tax-free student
loan forgiveness. Currently loan forgiveness offered to federal employees is taxed. Tom Davis, the Government Reform Committee Chairman feels that the cost of the program is minimal, whereas the benefi ts could be great.
Davis said, ‘For too long, the federal government has been bleeding highly trained and skilled workers to the private sector. This legislation will help the government acquire 21st-century skills for a 21st-century workforce.’
Within Ohio, most public initiatives focus on job formation. However the Third Frontier does have components that aim at student retention. For instance, money from the Third Frontier supports the Greater Cleveland Growth Association in Northeast Ohio which has formed iCleveland (formerly the Graduates Council). This organization has formed a network between high-achieving college students and area professionals to try to keep the ‘best and brightest’ minds in Northeast Ohio. Whether the formation of this network and the ties that students make to area business leaders prevent migration after graduation is unclear. Additionally there have been efforts to improve technology transfer between academic institutions and potential entrepreneurs. The fi ndings in this chapter suggest that this type of program may effectively retain entrepreneurs.
Innovative Programs after Graduate School
Ohio is especially concerned with losing its students who earn advanced degrees. New legislation proposed in October 2003 may address this concern.
The proposed legislation would offer loans to students with advanced degrees in engineering, computer science, chemistry, physics or biomedical technologies which would be forgiven if the student worked in Ohio or started a business in a high-tech fi eld after graduation. If the recipient leaves the state, the loan must be repaid in fi ve years (Sheban, 2003).
If passed, the new legislation may mark a change in the way Ohio lawmakers approach the problem of brain drain by encouraging and providing fi nancial assistance to students who undertake to live and work in Ohio for a period of time. Keeping students in the state will also have the effect of strengthening individuals’ familial and business relationships in Ohio and, thereby, improve Ohio’s ability to retain students.
Round Trippers
Bringing people back to Ohio is another factor in the brain drain problem.
In order to attract people back to the state, the quality of communities and schools is important and should be a top priority for improvement in order to reduce brain drain. States should keep track of those who leave and use
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recruitment techniques to let them know Ohio welcomes them back. Very few policies focus on this level and data are scarce.
CONCLUSION
This chapter attempts to describe brain drain in Ohio, focusing on the four key exit points at which students leave Ohio: undergraduate school attendance, transition after undergraduate studies, transition after graduate studies and migration later in life. The chapter provides a review of literature on brain drain. It also provides a brief model that characterizes how indi- viduals make decisions, including the role of public policy in individual mobility decisions. The chapter also provides brief evidence from the 2000 US Census on the nature of brain drain at these key exit points, and discusses some innovative programs within and outside Ohio which attempt to infl uence individual decision making at each point.
The chapter contributes to the existing literature on brain drain in two key ways. First, it provides some discussion of the role of fi nancial aid, together with some suggestive evidence that fi nancial aid may infl uence students’ decisions to stay in the state for an additional few years. In these extra years, students may start families or businesses. Having children and, to some extent, marriage reduces the likelihood that students will stay in the same state. Particularly strong, however, is the role of self-employment.
Students who start their own business are much more likely to stay in the same state. To the extent that fi nancial aid preserves students’ relationships with a given state, entrepreneurial students are more likely to start their business in that location.
Another contribution of the chapter is to identify the patterns of mobility implied in the most recent US Census. According to US Census data, Ohio fares better than the national average in retaining its college graduates. Ohio, like other states, tends to lose students who receive doctoral degrees. The census data are also limited in showing whether individuals with high ability or earnings potential return to the state. Ohio, however, does experience a return of college graduates much higher than the national average between the ages of 25 and 35.
While most of the policy debate on brain drain in Ohio has focused on job creation, this chapter suggests that encouraging entrepreneurial activity among young college graduates may be an effective way of stemming brain drain. The chapter also provides some perspective on the role and the ways in which fi nancial aid may affect long-run mobility decisions.
COMMENTARY
Robert Sheehan
The authors of this chapter present as their main thesis that state fi nancial aid increases the likelihood that college students will remain in Ohio.
This causal link between receipt of fi nancial aid and staying in Ohio is suggested through a decrease in student mobility and an increase in the time students will spend in Ohio while concurrently participating in Ohio-based ‘life events’.
The authors introduce a helpful ‘cycle of mobility’ for understanding the stages in a young person’s education when they might leave or enter a metropolitan region: (a) students enter college, (b) students exit with undergraduate degrees, (c) students enter and exit graduate school, (d) students leave Ohio, with or without a college degree, then return as round trippers. One suggestion I make to the authors is that they enhance their model with a preliminary stage: students exit high school. This suggestion is made in recognition that Ohio has an above-average high school graduation rate and a signifi cantly below-average high school to college matriculation rate. A component of brain drain is the state’s persistent lack of success in developing its own college-educated workforce from its own high school graduate population.
The authors are to be commended for placing the focus of their analysis on a metropolitan area such as the Cleveland metropolitan area. The authors could just as easily have identifi ed Greater Toledo, Greater Columbus or Greater Cincinnati. Metropolitan regions are certainly the geographic areas where brain drain issues become evident.
In contrast, there is no reason to believe that the entire state of Ohio is experiencing a disproportionate loss of high school graduates or indeed college graduates. Several sources of data indicate that, as a state, Ohio’s out-migration of individuals pursuing a college degree, or of recent college graduates, is at or below national levels. One way to measure mobility is to examine young adults, the most mobile of college-educated individuals.
Mortenson (2004) reports US Census data showing that Ohio has the lowest percentage (22 per cent), among all states in the nation, of young adults aged 25 to 39 who are single college graduates who lived in-state in 1995 and had moved out of state in 2000.
These data were reviewed (Sommers, 2003) at a briefi ng entitled ‘Brain Drain or Weak Attraction?’ to Ohio Governor’s Taft’s Governor’s Commission on Higher Education and the Economy. As Sommers reports, migration is common, especially among young individuals. Ohio has a net loss of college graduates, not because too many individuals left Ohio, but because too few
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individuals with college degrees migrated into Ohio. The statewide pattern is too little brain gain, not too much brain drain. In addition to Sommers’
presentation, available from the Ohio Board of Regents, see Paul Gottlieb’s working paper entitled ‘Brain Drain Policies in the US States: Treating the Symptom Instead of the Disease?’ (April 2003)
The authors note that Ohio imports more out-of-state students to its colleges and universities than it exports. In 1998, 10 424 Ohio high school students left to study out-of-state but they were replaced by 11 960 students entering Ohio to pursue a college degree (Mortenson, 2002). The authors ask, ‘Are we exporting our brightest?’ The answer to this is probably yes, high school students who attend college out-of-state are quite possibly attracted by the abundance of complete scholarships for students with excellent high school performance.
The authors might pose a related question: ‘Are we importing brighter students from out-of-state than we have in-state?’ The answer to that question is defi nitely yes. I recently analyzed the college grade point averages (GPA) of all 4500 fi rst-year Ohio university students, for Fall 2002, comparing the GPAs of the non-resident students to their Ohio counterparts’. The out-of-state students studying in Ohio had an average GPA of 2.7, signifi - cantly higher than their in-state peers (2.5). When looking at all 12 public universities serving undergraduates, this trend was evident at eight of them (HEI, 2004).
The authors suggest to state policy makers that public fi nancial aid is one tool to retain Ohio students, much as Georgia’s Hope Scholarships are intended to keep Georgia students in the state. Unlike Ohio, far more Georgia high school graduates were leaving Georgia for college study than were entering from out-of-state. I caution the authors that, in Ohio, fi nancial aid policies are historically created to affect an entire state, not just metropolitan regions that might be experiencing true brain drain. Even though increased state fi nancial aid might attract students to rural campuses (for example, Athens, Ohio, the home of Ohio University), it is unlikely that fi nancial aid policies will cause students to remain in a region that does not have a workforce infrastructure to employ them after graduation.
The authors might wish to examine the Ohio statewide practice of charging a tuition surcharge to out-of-state undergraduate students. This concept has its origins in the state policy of providing no state support for undergraduate out-of-state students.
The surcharge was initially intended to replace missing state support for out-of-state students. In the 1970s, when many surcharge rates were being established, Ohio was providing state support equal to or greater than the tuition charged to students. Accordingly many universities set their out-of-state surcharge at equal to the cost of in-state tuition and this was
added to in-state tuition rates. By 2004, state support for undergraduate education had dwindled to approximately 35 per cent of the total cost of educating a student – a dramatic decline. Put differently, state subsidy for freshmen and sophomore students might be as little as $1000 per full-time student whereas campus out-of-state surcharges might be as high as $7000.
The net effect is that few out-of-state students can afford to study at public universities in Ohio. A change in surcharge pricing for metropolitan-located campuses might have even more impact on brain gain than any statewide fi nancial aid program or policy.
In Ohio, the past two decades are noteworthy as an era of signifi cant cost shifting from taxpayers to students, while keeping infl ation-adjusted college expenses equal. The authors suggest that, over time and barring changes in state funding policies, the trend of students attending college outside of Ohio will likely continue to grow. In-migration and out-migration of college students in Ohio has varied over the years but the 1986–2000 time period reveals a net gain of 804 more students coming to Ohio for college study than leaving (Mortenson, 2002). The authors might wish to explore an alternative hypothesis: As state funding for public universities continues to decline, with corresponding rise in tuition to offset the loss, there is likely to be an increasing enrollment of students at independent institutions in Ohio where the net tuition paid by students is becoming much closer to public tuition.
To understand why state policies are driving public and independent universities’ tuition to converge, one must go beyond the stated tuition prices of independent universities and consider the discounting that is common at most independent universities. Price discounting to entering students of 30 per cent to 40 per cent is common throughout Ohio.
Consider John Carroll University in University Heights, Ohio, whose stated tuition for 2003–4 was $20 906. Looking a bit further, US Department of Education data (COOL, 2004) reports that 94 per cent of entering undergraduate students received institution awards of $8663 (41 per cent discount) in addition to any additional fi nancial aid that students receive.
If a student had maximum fi nancial need, the student might be eligible for federal Pell grants of approximately $3500 and their state-based need award, the Ohio Instructional Grant (OIG) is more than doubled, from
$2190 to $5466, for students choosing to enroll at an independent university (Ohio Board of Regents, 2004). The state of Ohio provides another $1000 Choice Grant, unrelated to fi nancial need for the same student. The net effect is that stated tuition of $20 906 could become as little as $2277. A public university charging $7000 would result in net tuition of $1310. The public university tuition is lower than the independent college tuition but the difference is not especially competitive.
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Note that John Carroll University is mentioned as one example of many that would make the same points. Case Western Reserve University reported that 62 per cent of its entering undergraduates received institution-funded aid (functional price discounts) of $13 462 from its stated tuition price of
$24 342.
The fi nancial aid programs receiving greatest statewide interest today are need-based aid for students who are quite limited in their mobility.
It may be unrealistic to believe that absence of fi nancial aid will decrease the chances of a student leaving Ohio; however it is completely realistic to assume that absence of fi nancial aid will cause fewer students to enter college at all – thus resulting in a statewide failure to develop the workforce with college-educated workers.
In closing, I offer the following comments. The authors are conducting their research in an area of critical statewide importance. They are encouraged to be sensitive to the diffi culty of solving regional problems with statewide solutions. The authors might wish to consider how state fi nancial aid policies can be applied regionally for maximum impact. As noted, while state funding may result in a decline in an in-state college- educated population, the causal factor may be that too few Ohio students can afford to enter higher education. Addressing the accessibility of higher education to fi nancial needy students may have greater statewide benefi t than fi nancial aid programs to all students.