Tuesday, February 23, 2016

The Cost and the Price of Higher Education

Responding to a recent KSN&C post, a commenter, Solarity, asked a good question.
"I graduated from UK in 1974. Sure would be nice to hear someone at UK explain why I could self-finance my entire education via summer jobs and part-time work back then. Graduated with zero debt. That's not even a remotely realistic possibility today."
Then Solarity went off the rails a bit, laying it all on administrative bloat - a contributing factor for sure, (caused by increased accountability, just as happened in the P-12 world), but hardly the primary reason for the problem.

When I entered the university as a freshman in 1969, (graduating from UK a year before Solarity) my middle-class parents were able to afford my room, and board. I worked full-time every summer, and part-time during the school year, to cover my tuition and additional expenses. I couldn’t afford a car, but I had a bus ticket home, and everything I really needed to get started in my chosen profession of teaching. I graduated in four years, without any debt…and have contributed to the state economy for four decades now.

In those days America was focused on increasing the percentage of baby-boomers who were college educated. Higher education was seen as having a direct correlation to economic prosperity, and Kentucky contributed as much as two-thirds of the cost of a college education in the belief that the state would realize a return in a more productive citizenry – and our GDP soared.

But for today’s students the circumstance has reversed. Revenue growth, which stood at 14% in the 60s, shrunk into the 2% range in the 2000s. The state now supports about one third of a college students’ costs, leaving Kentucky families to make up the other two-thirds. According to the National Center for Educational Statistics today’s average US college student graduates in just under 6 years and leaves school with an average debt of $27,000.

Whenever the state cuts funding, university boards are forced to choose between lowering the quality of the educational program and raising tuition. They almost always choose to raise tuition because the alternative is to surrender the institution to a state of decline. Even then universities have raised tuition at rates slightly less than the lost state support.

And it is not only more difficult to pay for college these days but coming out of the Great Recession the availability of jobs has been limited in many fields.

A bachelor’s degree is no longer a guarantee of lifetime employment. Meanwhile, the American middle class has been separating itself into two opposing streams of upwardly mobile college-haves and downwardly mobile college-have-nots.

The Kentucky constitution makes K-12 education a fundamental right, but not a college education. And I'm not aware of another state that makes higher education a right either. But perhaps we should. Since our constitution was written (1891) the technical requirements of the workforce has far outstripped the ability of a high school education to reasonably ensure the likelihood of a productive future. I don't know about you, but I would dred the fate of any student entering today's work world armed with no more than a high school diploma.

Here's some more recent, and more forward-looking data that underscores the importance of a highly skilled workforce for our future economy.

And Governor Bevin's proposed budget will make this data even worse...

But here is the answer to Solarity's question.

The cost of higher education in Kentucky has been relatively stable over the past decade and a half - moving from $14,915 in 2000-01, up only $808 by 2013-14. It is the price to students that has almost doubled over the same time period - and it has risen in inverse proportion to the state's withdrawal of support.

In the meantime, Kentucky colleges have more than doubled the number of degrees granted.



solarity said...

Richard, thank you kindly for taking at least a portion of my comment as worthy of a detailed and graphically impressive(!) reply.

Having said that, I pretty much have to disagree with the entire premise underlying your argument. That being, that reduced governmental funding of higher ed is the major factor driving up the costs to students. This is the line that is generally trotted out by school administrators whenever the subject is broached but it has been shown to be completely false by any number of studies. A good summary can be found in the New York Times article by Paul Campos last April.


State appropriations for higher ed grew steadily from the '60's all the way to 2009 when they peaked. They have declined slightly since then. Administrative bloat has eaten up nearly all of the increased funding. Salaries for the actual teaching staff (the heart and soul of any university) have been stagnant for years. You can throw up all the whizbang charts and graphs you like about GDP and job opportunities etc, but those are just distractions from the central problem. Universities have evolved into behaving like any other greedy corporate entity. Growth for the sake of growth, develop cushy lifetime jobs for as many like-minded people as possible, develop and expand your kingdom and to hell with the real needs of their customers (students). President Ramsey at UL earns $1.68 million a year. The ridiculous salaries of university presidents are all justified by comparisons to the business world and what CEO'S in comparably-sized entities earn. Such a notion would have been jeered at in the 70's but is now rarely questioned. All made possible by a state and federal funding system that rarely sticks its nose into how wisely the money is actually being spent.

I am not suggesting that ALL the price increase is attributable to administrative bloat and kingdom-building but your downplaying it damages your credibility and makes me believe you are likely too close to the forest to see the trees.

On top of all that, I daresay the education that UK provided to the average student in 1974 was very likely better than than today's product. And yeah, that probably makes me an angry old codger, but I don't care anymore :-)

Richard Day said...

So…you prefer your own opinions to the data I presented? OK. That’s up to you. But it’s not my credibility that I would worry about. Of course, there is no need to worry about your credibility either since you choose to post under an assumed name.

But facts are not distractions. They keep us from deluding ourselves, but only if we regard them.

I took your whole premise seriously, but as I indicated, I also thought you overstated your point of view. And if you have “any number of studies” that show the data and rationale I presented to be completely false, please list them.

The Campos article got passed around here too. The problem is, he’s more wrong than he is right.


Campos claimed that,
“In fact, public investment in higher education in America is vastly larger today, in inflation-adjusted dollars, than it was during the supposed golden age of public funding in the 1960s.”

Martin Kich with the AAUP (no fans of big admin) debunked the Campos argument thoroughly, calling out what he got right, and what he got wrong.


"He provides no sources for these numbers, but using 1960 as a baseline is very problematic for several reasons: (1) none of the baby boomers had yet entered college; (2) to accommodate the baby boomers in the 1960s and 1970s, every institution is the country dramatically increased the size of its facilities and its faculty, many new institutions were established, and the public community college system was dramatically expanded; (3) to keep college affordable, very inclusive federal grant programs, such as the Basic Educational Opportunity Grants (BEOG), were established. All of these things dramatically increased the expenditures on higher education. If the G.I. Bill opened college to many veterans, the expectation in the 1960s had become that anyone who wanted to attend college would be able to afford to do so. In a very real sense, using 1960 as a baseline for tracking increases in spending on higher education is comparable to using 1935 as a baseline for tracking increases in defense spending…

1980 was actually the high-water mark in terms of the percentage of the costs at public colleges and universities that were covered by state subsidies. The Carter-Reagan recession of the late 1970s and early 1980s, the Bush recession of the early 1990s, the Bush recession of the early 2000s, and the Great Recession of 2008, each accelerated what were otherwise steady declines in state spending on higher education as a percentage of the total cost. It is very widely documented and simply unarguable that the increase in costs being borne by students has been the inverse in the decline in support being provided by the states.

Moreover, state support for higher education has been declining even as the demand for higher education, by percentage of the population—and, in particular, by percentage of the traditional college-age population—has been increasing. In the early 1980s, the reductions in state support may not have been in real revenues but, instead, in the sizes of the increases that the institutions had requested, but since the early 1990s and certainly since the 2008 recession, the cuts have been in real dollars. To cite just a very salient example, Bobby Jindal has been cutting state support for higher education year in and year out since he was elected. Because of very ill-conceived state tax cuts, higher education may have to absorb $300-$400 million of the projected $1.4 billion budget shortfall that the state is currently facing. If some miraculous fix is not found, those cuts will have a devastating impact of public colleges and universities in the state. That situation simply has nothing to do with how the institutions are spending available revenues."

Richard Day said...

But that brings us to what Campos does get right. He rightly emphasizes that any increases in spending on higher education have not gone to faculty compensation or even to an increase in full-time faculty, despite the steady increases in enrollment:

“Interestingly, increased spending has not been going into the pockets of the typical professor. Salaries of full-time faculty members are, on average, barely higher than they were in 1970. Moreover, while 45 years ago 78 percent of college and university professors were full time, today half of postsecondary faculty members are lower-paid part-time employees, meaning that the average salaries of the people who do the teaching in American higher education are actually quite a bit lower than they were in 1970.”…

Even though he lays out many of the relevant elements, what Campos doesn’t really get at is that, regardless of who is footing the bill, the “real cost” of higher education–that is, expenditures per student–has not risen much since 1970. But what have changed dramatically are the percentages of the institutional revenues that are being allocated to administration and to instruction. The rise in the exploitation of both part-time and full-time contingent faculty is directly related to the transfer of allocations from tenure-track faculty lines to administrative budget lines.

Then there was this from Chris Newfield at Remaking the University:


Last week's prize for most offensive higher ed article went to a University of Colorado law professor named Paul F. Campos, who had a New York Times Sunday Review tell-all about college costs. ‘The Real Reason College Tuition Costs So Much’ turned out to be "not because states have cut funding for higher education." Prof. Campos came to this conclusion by replacing the standard funding metric--inflation-adjusted funding per student with the total dollars being appropriated all the way back to 1960…"

...and so on.

Newfield further debunks Campos, and like Kich, also points out what he got right. (That’s one indicator that you are getting reliable information. It’s balanced and based on facts.)

I will not defend Ramsey’s salary, or much else related to the apparent corporate mentality at UofL. And I can accept your argument that certain institutions have tended to act secretively and are susceptible to your claims of corporatism. But those examples do not automatically extend to all campuses.

Don’t believe everything you think.

As for our education at UK in the early 70s, like you I suspect, I felt well-served by my college career. It fit what I needed at the time (Pre KERA, low-stakes, no school data shared with the public). I don’t know about your major, but comparing teacher preparation then to teacher prep now requires honest reflection. Prior to walking into a classroom for student teaching, we had very modest requirements to even be in the schools. Truth be told, I don’t really remember being in front of kids before student teaching. My preparation was almost all theoretical, with next to no classroom experience. It’s a much different effort today, and better preparation for teaching in most respects.

Bringyoursaddlehome said...

Though I agree that post secondary education is increasingly becoming less accessible to students due to increasing tuition over the last few years, I don't think you can make a very convincing comparison between experiences in the 70's and those currently. Expectations and the conditions under which those elements exist for students, faculty and even universities have changed.

In the early 70s campus' were smaller as was student enrollment. Extended campus or engagement beyond the confines of the university town were almost non existent with the exception of a few ag. field offices. Marketing was simpler and generally focused on state students. Infra structure was simpler to maintain as not only was there no need to support things like massive telecommunication/IT systems (seems like I recall sharing a pay phone among all the other guys on our hall which Ma Bell maintained) Heck, I don't even think some of the dorms even had air conditioning. No mega rec center's to maintain 24/7 with the latest exercise gizmos, no multi vendor cafeterias all across campus (yeah,no Starbucks), no content specific tutoring services, no residential learning communities, no counseling services, no internship/career placement offices and certainly not the level of security that now exists. Similarly, I can't even imagine how cheap all aspects of liability, medical, professional insurance was back then.

One could make the same sort of argument for cars. A new 1970 Ford Mustang would have set you back about $4500 and its V8 engine would have probably gotten you less than 15 miles to the gallon - No air conditioning, GPS, air bags, anti lock breaks, power window, etc. (maybe an 8-track if you were lucky) and only recently Fed required seatbelts. A Mustang today would cost you at a minimum 25 grand but it comes with a plethora of standard options that you would never have imagined back in 1970's. You really can't compare the two if solely focusing on cost.

I agree that administration has grown and in a number of cases I do believe that some of those salaries are bloated. At the same time, we have created structures which are supposed to provide a much more expansive product than you received in 1970's. Similarly, a significant shift in the legislative, accreditation and legal requirements has not only created a need for employees to support these external expectations but it has added a similar burden to faculty, many of whom have become pseudo administrators in their director, coordinator, etc roles. The resulting "release time" for these responsibilities has pushed educators into administrative roles they sometimes are not well suited for as well as moved good instructors out of the classroom only to be replaced with the adjuncts. Sorry I don't buy into the greedy self serving administrator pathos, I think it is more complicated than that.

solarity said...

I agree with both of you that "it is more complicated than that." Both of you make excellent points as to the enormous growth of ancillary aspects of the core university mission. And far be it from me to question Richard's extensive analysis of the trendlines in government funding of higher ed. He knows that data far better than I ever wanted to know it. I am but a poor taxpayer completely unassociated with the world of academe other than having two children recently graduate with a third getting close.

My views on the matter are more than a little influenced by my rather simplistic observations regarding input and outcome. In 1974 I was able to self-finance a good college education and graduate with zero debt. In 2016 my son graduated with essentially the same number of hours and a huge debt. A debt that will literally take many years to payoff. The only significant difference between my college experience and his is the cost. Why is that? Sure, perhaps the state isn't subsidizing quite as much as in my day but that cannot explain the enormous debt he now has. UK's enrollment has gone up since the 70's and one would think that economies of scale would have worked to keep costs in line.

I have heard from reliable sources that at university meetings determining annual tuition increases, the only real question is "How much can we get away with?" State and federal aid are viewed, according to this source, as money for the taking. Tuition is set high enough to capture those funds and whatever else they think can be extracted from parents. I have read where 55 to 65 cents of every dollar received via a Pell Grant or subsidized loan is swallowed up by increased tuition. I am just so grateful that all of my children went the STEM route. I feel for the poor buggers incurring massive debt in order to major in Medieval Russian Studies or somesuch. Too bad that no in the higher ed system seems to care about them.

Always remember Cicero's first law of economics: Debt expands to meet the money allotted to it.

Anyway, I suppose we will have to agree to disagree on these matters.