Tag Archives: tuition

Should We Charge Different Fees for Different Majors?

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In the first couple weeks of any survey course in the
principles of economics, students are taught that prices are determined by the
interactions of consumers (demand) and producers (supply). Prices for many
things, such as oil, or of common stocks, constantly change with the frequent
shifts in the willingness of consumers and producers to buy or sell the good or
service in question.

Yet the price of college–tuition fees–seems to be
determined differently. For starters, tuition fees change but once a year, not
constantly. Universities are like restaurants, with “menus” giving prices for a
variety of different offerings, with the menu changing once a year.  For many schools, however, the listed price
is not what economists call an “equilibrium” price–a price equating quantity
demanded with quantity supplied. Rather, thousands are turned away at the
listed price at selective admission universities.  Also, massive price discrimination exists, so
many customers–often a majority–pay less than the stated or sticker price.

Amidst all of this, schools typically charge students the
same regardless of their major. A committee advising Florida Governor Rick
Scott has recommended a move to differential pricing–majors would pay
differing amounts. The goal is partly to entice students into the STEM
disciplines (science, technology, engineering and math) on grounds that our
future would be enhanced by having more scientists relative to, say, English
majors or anthropologists. By making STEM tuition fees lower, we will encourage
enrollment expansion in those fields. Ohio University’s Board of Trustees
recently considered (but did not yet adopt) a multiple-price approach, and
other schools are doing so. 

Continue reading Should We Charge Different Fees for Different Majors?

We Can’t Fix Higher Ed Through Public Policy

Is it true that only some recipients of student loans are getting their money’s worth–those with “majors closely aligned with actual occupations” such as engineers or computer scientists? Daniel Foster of National Review Online makes that argument in The American Spectator. These students, he says, are more employable and earn more upon leaving college than Humanities majors. Based on existing economic data, the engineer can more reliably pay back the loan. The unemployed and newly indebted Humanities graduate can’t realistically expect to do that. Nor can the federal government expect to collect from that graduate.

Therefore, Foster wants federal loans granted not on neediness, but on the likelihood of a student to finish college and get a good job. He quotes his colleague Jay Hallen at the National Review Online, who wants “to implement a sliding scale of loan rates that favors students committed to majoring in fields such as computer science or nursing, where the demand for new employees exceeds the supply. For fields where employment demand is weak, loans would be progressively more expensive.” The outcome Foster hopes to achieve is to “push marginal college prospects into vocational schools and other career paths, reducing demand for higher education, and thus tuition inflation.”

There’s a problem here, however. Foster is proposing right-wing social engineering, and the problem with all social engineering is the classic inability to anticipate how individuals diverge from predicted behavior. The first hint of trouble appears when Foster denounces the “dangerous fantasy of college as ‘supervised adulthood’ that leads too many prospective undergraduates to choose their ‘dream school’ based on amenities, the social scene, or any of a hundred other variables that have nothing to do with bang for the buck.”

But there’s a reason why such amenities exist and how closely related they are to “supervised adulthood.” Students expect a given set of attributes from their college–a bucolic campus, a fitness center, palatial dorms, and–soon enough–nap pods. The arms race in amenities is an effort to achieve a high ranking, and students peg their station in life on the ranking their college reaches.

Once a college has admitted the most competitive students it can attract, administrators create an insulated world for them. As Mitchell Stevens explains in Creating a Class, part of what the high tuition buys, in addition to the credential, is the collection of surrogate parents housed in administrative offices. “Parents can go to sleep at night knowing that their children’s potential friends and lovers have been elaborately screened,” he writes. In other words, parents want their children to buy supervised adulthood, and to get it, they are willing to pay a premium or put their children into debt.

The reason has to do with rising in social station. As Stevens explains, admissions officers obsess over admitting the right mix of students, and that mix depends on the right students applying. If all goes well, then students achieve a station that allows them to identify their place in American life, and that station enables graduates to marry a partner of equal educational background and fit into a social scene among peers with similar educational backgrounds, and–most importantly–their parents can put “Duke” or “Stanford” stickers on their SUVs.

Students use loans in higher education to join a class of people they otherwise could not. If incurring six-figure debt means graduating from Cornell, then students (and parents) anxious about their standing might attend, despite having a full ride at a state college. If the possibility of rising in station begins to shrink and, with it, the opportunities to belong to the right social class, many students and their parents will take the risk of going into debt if it gives them a better shot. Tinkering with incentives won’t work. Indeed, to call such loans “investments” at all is no longer true. They are gambles, and Foster is right when he says that the odds are increasingly not in anyone’s favor.

We can’t underrate the importance of social status embedded in rock-climbing walls and vegan menu options. The solution is not in rejiggering Sally Mae, since economic incentives do not reach the heart of the issue. No policy can, because the solution is in the hands of the students: they can take the gamble, attend the less prestigious but more affordable college, or they can exit.

Three Pell Grant Scams

Many politicians, including senators such as Tom Harkin and Dick Durbin, have grown indignant over the allegedly vast amounts of higher education money captured by for-profit institutions via the Pell Grant program. In fact, they consider this something of a scam. The truth, of course, is that throughout its history, including now, the vast majority of Pell Grant funds—at least 75 percent– have gone to students attending not-for-profit colleges.

The implication of the criticism, of course, is that for-profit institutions (or at least many of them) are diploma mills, whereas the educational experience offered by institutions untainted by the corruptive influence of profits is of high quality, and provided by selfless individuals working for the public good. I think that is hogwash, but that is a subject for another day. Suffice it to say that there are documented instances where for-profit institutions pressured relatively unqualified students to enroll using Pell Grants, but there are numerous examples of not-for-profit schools doing similar things. The scam here is much broader than the good senatorial critics claim.

Continue reading Three Pell Grant Scams

Some Hope for Higher Ed Reform

The current conversation on higher ed reform coming is unusually platitudinous even for an election year. This was clearest earlier this year during the battle between Barack Obama and Mitt Romney on the proposed federal student loan interest rate, a subject fairly inconsequential in larger problem of sky-high college costs. In his Democratic nomination acceptance speech, President Obama claimed he would work to “cut college tuition in half” in the next ten years. How he would do this, or if he truly grasped what he was saying, is anyone’s guess.

But Senators Ron Wyden (D-Oregon) and Marco Rubio (R-Florida) have shown a great deal of care in crafting the “Know Before You Go Act.” The bill, currently under consideration in the Senate, will “support statewide individual-level integrated postsecondary education data systems.” More specifically, under the proposed bill the federal government will help states coordinate student educational and postgraduate employment data. The bill’s aim is to help consumers make better choices about the products they are considering. Per a press release from Wyden’s office, the bill focuses on making the following metrics more accessible to consumers:

  1. Post-graduation average annual earning;
  2. Rates of remedial enrollment, credit accumulation, and graduation;
  3. Average cost (both before and after financial aid) of the program and average debt accumulated;
  4. The effects of remedial education and financial aid on credential attainment and a greater understanding of what student success can mean.

We should praise the Know Before You Go Act for several reasons. First, instead of trying to instituting IPAB style price-control to help reform educational choices and costs, it respects the consumer’s volition to make his or her own determinations as to what is best for their particular circumstance. As Rubio said, “We want people to know what the new jobs, skills, careers in the 21st century are. The reason you need to know what your professional prospects are is that you have to weigh that against how much you will borrow.” He continued, “I graduated with $125,000 in student loans. That’s nobody’s fault – it was an investment for me. We want kids to have access to information before they make this investment.”

Secondly, the bill does not create a new federal database to obtain data by tracking students. Instead, its coordinates already extant data gathering mechanisms in the states. In describing this aspect of the bill, Wyden sounded like a Republican. “The new database is state-based and individually considered. The states can do this on their own but there’s a problem. There’s no uniform standards. If there’s no standards…then the system is failing families.”

Lastly, of concern to many conservatives, Wyden emphasized that the bill would produce a glut of computer science or accounting majors, to the neglect of the liberal arts. “This legislation is about empowering students to make their own choices. Are we going to miss out on opportunities for rich liberal arts education? I reject the either/or choice. A lot of universities are starting to pick up on labor trends – after 9/11 and Arabic for instance. Is it liberal arts or an education for a high paying job? That’s a false choice.”

Granted, it still seems Congress is far from addressing the main driver of college cost inflation – federal subsidies in the form of loans for anyone who wants them. Said Wyden, “Federal education policy is at a fork in the road. Historically it is about access. I want to keep that focus – support Pell grants, Stafford Loans, and all of the assistance that ensures access.” Nonetheless, a respected Democratic policy thinker is supporting a bill that is conservative in its temperament. By supplying greater amounts of data to consumers, the Wyden-Rubio bill is the right move in reforming an industry badly in need of more transparency and accountability.

Wake Us Gently–We’re Students

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It probably had to happen. The conversion of campuses into luxurious spa-like retreats started at elite and well-heeled institutions and has now spread to smaller, lesser-known colleges.

The newest student residence at Saint Leo University in Florida houses nap pods, an electronic gaming area with four flat-screen televisions, a workout area and an arcade complete with skee-ball, pinball machines, and air hockey tables. (This is a residence hall, not a student center.) Any student, not just those living there, can drop by to take a nap in one of the nap pods, which–according to Inside Higher Ed–feature an ergonomic design, a shield to block light, soothing sounds, and a gradual wake-up system so nappers can awaken as gently as possible.

The building houses 154 students in suite-style rooms – each suite with four single bedrooms, two bathrooms, and a common room with a television. Another residence hall, set to open next fall, has a multipurpose room that can be used as a theater or a classroom, and a 2,100-gallon saltwater aquarium that is home to 25 lion fish, chosen because of the university’s mascot, the Saint Leo Lion.

One commenter on the Inside Higher Ed site said, “Meanwhile tigher Ed site sad he numerous adjunct instructors have not a single room available in which to meet their students.” Another said the students may enjoy their nap pods but after graduating, the nappers could be back in their parents’ home, sleeping on the sofa.

Real Costs and Sticker Price

Concordia University in St. Paul made news by cutting regular tuition costs by a hefty 33.7 percent–$10,000–leaving students to pay $19,700 if they receive no assistance or discounts.

But the reduction disguises a fact true at Concordia and at most every other private schools: up to half of undergraduates don’t pay the full fee.  At Concordia, the "discount rate" ("the amount it gave in institutional grants, compared with gross tuition revenue") was 48 percent in 2011-2012.  The article also notes that 99 percent of students that year received some grant or scholarship support from the school averaging $12,654.

This isn’t unusual.  Right now, according to a report by the National Association of College and University Business Officers, the national average for discounts was 43 percent last year. Given the bad publicity of rising tuition costs, combined with sagging enrollments, the report states that "this strategy is no longer working effectively at a large number of colleges and universities."

Cost, too, is no longer a guarantee of distinction.  In the old days, a high tuition fee signalled a superior education.  People thought that they got what they paid for.  But, according to a higher ed cost expert in the story, all colleges charge a lot, and "There’s no advantage of charging more if you can afford to charge less."

We’ll see how many other colleges follow that advice.

Wesleyan Abandons Need-Blind Admissions

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The
vast majority of American colleges and universities make admission decisions
without considering the financial need of applicants. Only a handful of private
institutions admit their entire first-year class need-blind and then fully meet
the financial need of all of their admitted students through a combination of
grants, loans and employment opportunities. These institutions tend to be our
nation’s most selective, in terms of entrance test scores, and wealthiest, in
terms of their endowment per student levels and their flows of annual giving.
 

Why
do these selective private institutions pursue such policies?  In part it is because as nonprofits they are
major beneficiaries of federal and state tax policies that reduce the federal
and state income tax liabilities of donors who make contributions to them, thereby
increasing the contributions they receive. These policies also exempt them from
having to pay federal and state income taxes on their endowment earnings,
exempt their property that is used for educational purposes from local property
taxes, and allow them to borrow funds for educational facilities at lower
tax-exempt interest rates.  Because of
all of these tax benefits, the public at large is subsidizing these
institutions to the tune of literally billions of dollars of lost tax revenue a
year and the willingness to do so is based upon the belief that the selective
private academic institutions are yielding benefits to society as a whole.  Because many of the leaders of society are
graduates of these institutions and a well-functioning democratic society
requires that leaders come from all socioeconomic backgrounds, these
institutions have long understood that they have a special obligation to admit
and enroll students from all socioeconomic backgrounds.

Continue reading Wesleyan Abandons Need-Blind Admissions

Why President Obama Can’t Lower Tuition

In his acceptance speech at the Democratic National
Convention last night, President Obama promised that he would “work with
colleges and universities” to slow the steady rise in tuition we have experienced,
cutting the rate of increase in half. Inside Higher Ed has the
story
.

Naturally, the president’s statement drew applause from the
Democratic faithful, but is there the slightest reason to think that Obama can
slow the rise in tuition any more than King Canute could roll back the tide? I
think not.

First, the executive branch of the federal government has no
constitutional authority over higher education. The president can “jaw-bone”
college leaders, imploring them not to increase tuition, just as President
Kennedy pleaded with steel executives not to raise prices in 1962, but he can’t
command either private college officials or state university leaders to keep
tuition at any level.

Second, there are reasons
why tuition has been increasing and it’s hard to see how President Obama is
going to change the underlying reality. He continues to encourage more young
people to go to college and has facilitated that by getting Congress to
increase Pell grant amounts.  More
students with more money to spend – that’s a perfect recipe for college
officials to increase their revenues. Why wouldn’t they take advantage of the
situation, just because the president made a speech?

Third, it’s possible that Obama might resort to asking
Congress to enact some kind of price control over higher education, threatening
to take away federal dollars unless the schools keep their price increases down
to “reasonable” levels. The Republicans threatened to do that back in the Bush
years, but the bill never went anywhere, and for good reason. Price controls
are blunt, clumsy instruments that are easy to evade.

Finally, merely halving the rate of increase in college
costs, assuming that could be done, wouldn’t be much of a victory. If indeed
college and university administrators felt pressured to cut costs, there is
little reason to think that they would start with the most needless of budget
items. In California, for instance, where the state’s budgetary woes have
required cuts in university budgets, the sacred cows of “diversity”–academic
programs and administrative offices – have been spared.

Lower tuition sounds good, but what Americans should want
from higher education is increasing value. We’ll only get that through more
competition.

Pundits Wrong on the GI Bill

As part of its series on higher ed issues in
the 2012 campaign, the Chronicle of Higher Education has a long opinion
piece
in the form of a news article accusing Republicans of hypocrisy.

In “Self-Sufficient,
With a Hand From the Government
,” author Scott Carlson claims to find “a
striking dissonance” between the moving “pull-oneself-up-by-the-bootstraps
narrative” a number of speakers at the Republican Convention told of their
fathers’ and their benefitting from the GI Bill, “one of the biggest federal
programs in recent history.”

This “irony,” Carlson reports, “wasn’t lost
on liberals. Paul Begala, the Democratic strategist and consultant, jumped all
over the remarks on his Twitter feed
on Tuesday night: ‘Christie: Dad went to Rutgers on the GI Bill. Dems built
that.'” Begala thinks these Republican fathers did not succeed “on their own,”
in President
Obama’s now famous words
. They did not succeed because they were “just so
smart” or because they worked hard. They were successful only with the help of
a “hand from the government.”

Carlson finds it “interesting to ponder …
whether Governor Christie’s father would have been able to get that degree
today, given the recent history of receding state support and inflating costs.”
Seen from Carlson’s and Begala’s angel, Republican calls to scale back the size
and scope of government amount to biting the government hand that fed them.

What this complaint of hypocrisy ignores,
however, is a crucial distinction between government programs to which
beneficiaries have contributed, such as the GI Bill, and open-ended entitlement
programs that require no such contribution. Assume for a moment that after the
Civll War all freed slaves received “40 acres and a mule.”
Would anyone, even President Obama or Paul Begala, seriously claim that former
slaves who had become successful later in life owed their success to the
government program and not to their own sacrifice and hard work? Well, maybe,
but would anyone listen to them if they did?

The GI Bill, like the hypothetical 40 acres
and a mule, was not an entitlement or an example of beneficent government
generosity. It was partial compensation for sacrifices made for and services
rendered to the nation. Finding an “irony” in Republican proposals to scale
back massive federal borrowing and debt, including funds for higher education,
even though the fathers of many current party leaders benefitted from the GI
Bill requires assuming that if one limited government program compensating one defined
group of people for a limited time is good, all government benefits are good;
that if some spending at one time was good, more spending all the time is
better.

That “narrative” is more mythical than
anything coming out of the Republican convention.

Another College Cost: Lower Birth Rate

Originally posted at Open
Market

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The Washington Times takes
note
of the burgeoning higher
education bubble
in a recent editorial:

The
cost of a college education has soared far in excess of the cost of health
care. This is in spite of — or, more accurately, because of — massive
government involvement in subsidizing and running schools. . . Doing more of
the same isn’t a realistic answer. America is in the midst of what University
of Tennessee Prof. Glenn Reynolds calls the “higher education bubble.” As with
the housing bubble, cheap credit is the primary culprit in inflating the price
of schooling. Federal student loans subsidized by taxpayers have made learning
more expensive, not more affordable.

The
Cato Institute’s Neal McCluskey estimates federal student aid increased by 372
percent between 1985 and 2010, from just under $30 billion to almost $140
billion. To put it another way, as Mr. McCluskey explains, “Taxpayer-funded
outlays per degree rose from $58,755 in 1985 to $78,347 in 2010.” This flow of
cheap money corresponded with rapid growth in tuition at rates well above
average inflation. Mr. Reynolds reports that college tuition grew at almost 7.5
percent annually between 1980 and 2010, when average inflation was 3.8 percent.
At less than 6 percent annually, even health care costs grew at a slower rate
than the university tab.

Young
people aren’t getting much in exchange for this huge outlay. While enrollment
has increased, completion rates remain dismal. Barely a third of students
complete their degrees in four years, and less than 60 percent earn their
degree in six years, according to Mr. McCluskey. That means at least two out of
five enrollees don’t finish and fail to reap the benefits of a post-high-school
education. Even those who complete their programs of study and are fortunate
enough to find employment find that in one out of three cases, their degree
isn’t required for their work.

Continue reading Another College Cost: Lower Birth Rate

When Universities Raid Their Law Schools

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Earlier this month Annette Clark,
dean of Saint Louis University’s law school, abruptly
resigned
from her job via e-mail after only a year. She left after accusing the Jesuit
university and its president, Rev. Lawrence Biondi, of looting the law school
in order to fund other, non-law-related programs on the Saint Louis campus. 

This
was not the first time that a law dean has quit in a dispute over the
“tax”– the premium that law schools and business schools, which
typically charge higher tuition than other campus programs, must hand over to
their host universities. In July 2011 Philip Closius, dean of the public
University of Baltimore School of Law, quit his job under administration
pressure after asserting that the university kept–and used for its own
purposes–some 45 percent of the revenue that the law school generated from
tuition, fees, and state subsidies. In 2009 De Paul University in Chicago fired
its then-dean, Paul Weissenberger, apparently because Weissenberger complained
to the American Bar Association that De Paul had siphoned off more than the 25
percent of its law school’s revenues that the law school had agreed to
contribute.

Continue reading When Universities Raid Their Law Schools

Student Voices
Ryan’s Plan is Good for Higher Ed

Now that Paul Ryan has joined the Republican ticket, it’s worth considering how his much-discussed budget changes higher education.

Ryan wants to cap the maximum amount of Pell Grant awards at the current level of $5,550, eliminating the automatic increase according to inflation. Ryan would also shore up the eligibility requirements, adding a maximum income cap (leaving undefined exactly where that cap would begin) and excluding students who attend school less than part-time. On the Federal Student loan front, Ryan proposes ending federally-subsidized loans, wherein the government pays the interest on behalf of students. Instead, students could take out unsubsidized federal loans and pay an interest rate of 6.8%, giving them an immediate, healthy financial stake in their own education.

Ryan’s plan follows the logic of the Bennett Hypothesis. Developed by former Education Secretary William J. Bennett, for whom Ryan worked as a speechwriter, it states that though federal subsidization of higher education aims to reduce tution, easy access to federal money actually increases it. Federal money increases students’ ability to pay and, subsequently, their demand for higher education, which raises the price of college education. Colleges, confident that federal money will cushion any tuition increase, can artificially increase tuition in an attempt to capture some of that federal money.

The problem is especially evident when middle class students who could afford college education without aid receive it nonetheless. Colleges desire to capture both the federal aid money and the initial amount these students can afford to pay. Ryan would reduce federal aid primarily for these students. Therefore, in contrast to President Obama’s promise to lower the cost of education by increasing Pell Grants and preventing Federal Student loan interest rate increases, Ryan’s plan could indeed cut back on the source of artificial tuition increases and contribute to the sustainability of the higher education market.

For himself, Romney has been largely quiet on higher education, though his white paper “A Chance for Every Child” does acknowledge that “a flood of federal dollars is driving up tuition.” His remedies are nonspecific: “simplify the financial aid system,” “welcome private sector participation” in the student loan market, and “replace burdensome regulation with innovation and competition.” While Romney has already made it clear that his campaign runs on his budget plan, not on Ryan’s, Romney could benefit from the hard numbers and policy prescriptions that Ryan’s plan affords.

________________________________________________________________________________

Rachelle DeJong is a rising senior at The King’s College and an intern at Minding the Campus.

UCLA Offers Low-Cost College for Leftist Illegals

How to attend UCLA on the cheap? Be an illegal immigrant. Actually, be a leftist illegal immigrant. 
UCLA’s Center for Labor Research and Education and the union-subsidized National Labor College in Maryland have teamed up to establish “National Dream University” for the undocumented. The tuition is low: just $65 per credit hour, in contrast to $396 per credit hour that California residents pay for regular classes at the UCLA. The admissions standards are easygoing: a 2.7 grade-point average in high school or elsewhere. Contrast that to the highly competitive UCLA, where 70 percent of entering freshmen this fall have grade-point averages of 3.7 and higher, and 50 percent of entering freshman have at least 4.0 averages.
There is one proviso: Unless your political views are sufficiently progressive, you won’t be admitted to NDU. According to NDU’s website, all applicants must “demonstrate a commitment to immigrant/labor rights and social justice.” Yes, unlike regular UCLA, National Dream has an ideological litmus test for admission. No College Republicans at National Dream!
            
NDU now offers a limited program of six courses that add up to a one-year, 18-credit-hour certificate and hopes to offer associate and bachelor’s degrees in the future. About 35 students in total are expected to enroll in the program starting in January 2013. All six courses will be taught online, with mandatory visits to both the National Labor College and UCLA. UCLA professors will teach five of the courses and National Labor Center’s campus in Silver Spring, Maryland will teach the sixth at $270 per credit hour. The course titles are what one might expect from an unabashedly leftist institution: “Immigrant Rights, Labor and Higher Education,” “Race, Gender, Sexuality, Class and U.S. Labor,” and so forth. The National Dream website promises to offer the undocumented “the opportunity to learn from influential Civil Rights leaders like Reverend James Lawson and Tom Hayden, Immigrant Youth Movement leaders, and academics and scholars from across the country.” 
           
An Aug. 1 article in the Huffington Post headlined “Dream Act College” stated–incorrectly, as it turns out–that credits earned at National Dream could be automatically transferred to UCLA proper — UCLA administrators have been trying to back off from any implication that illegal immigrants can obtain University of California degrees at a lower total cost and via easier admissions standards than citizens and legal residents. The Breitbart Report calculated that students who transfer all 18 National Dream credits to UCLA can wind up paying $4,728 less than the $7,128 California residents will pay for 18 credit hours earned on campus this academic year. A recent statement from UCLA declares that transfers of credits are not automatic, and that the credits must come from a regionally accredited institution. But since the National Labor College is accredited by the Middle States Commission on Higher Education, the UCLA administration didn’t exactly rule out such transfers.
You might be asking to what extent California taxpayers might be picking up the tab for the UCLA Center for Labor Research’s public-service adventures in discounted college for  the undocumented, especially given the UC system’s chronic budget woes and budget cutbacks these days. The answer is: substantially. In 2007 California put an end to several decades of direct funding for the Center for Labor Research and its parent academic department, the UCLA Institute for Research on Labor and Employment. Now, the UC system itself (which translates at least in part to taxpayers) pays some of the $2.6 million or so annual budget for the Institute (and the Center), according to Breitbart, aided by hefty contributions from unions, such left-leaning philanthropies as the Ford Foundation and George Soros’s Open Society Institute, and the city of Los Angeles, which donated $50,000 to the Institute in 2010. UCLA might be trying to distance itself from NDU. But as a public institution supported by hefty public subsidies, it can’t escape responsibility for the fact that one of its own centers staffed by its own professors is offering advocacy courses to illegal immigrants chosen on the basis of political ideology, not academic merit. 

Higher Education’s ‘Obesity’ Problem

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Open a marketing brochure for any college or university
in the United States and you’ll find an info-graphic touting the variety and
number of degree programs that the institution offers.  The more options, the rationale goes, the
more likely a student will find a desired specialty.  The distinction between programs can be
subtle, for instance “Music, General” versus “Musical Theatre,” or
Agricultural Engineering” versus “Agronomy and Crop
Science.”

But the dreary fact is: higher education is in the midst
of a major financial crisis. 
Institutions’ bond ratings are falling and resources are in short
supply.   Boards of trustees must  figure out how to do more and better with
less. While administrative costs have to be examined, they are only part of the
problem.  According to former president
of the University of Northern Colorado and co-founder of the Lumina Foundation
Robert C. Dickeson, “[t]he failure of governing boards to focus on academic
programs is arguably the single greatest cause of overspending.”

This month the American Council of Trustees and Alumni
(ACTA) is sending Dr. Dickeson’s guide,
Setting Academic Priorities: A Guide to
What Boards of Trustees Can Do
to ACTA’s network of more than 13,000
trustees around the country. It provides governing boards with a framework for
establishing academic program review policies that direct resources to
mission-critical areas of their institutions without neglecting students’ needs.
 Of course, achieving this goal must
entail consolidating some academic programs into larger, more cost-effective
units or eliminating them.  

Continue reading Higher Education’s ‘Obesity’ Problem

Elite College ($50,000 a Year) or Good State School ($20,000)?

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The new Sallie Mae-Gallup survey of attitudes toward higher education, “How America Pays for College 2012,” shows that Americans are becoming increasingly resistant to rising college prices. Some people who were saying “I want the best college money can buy” a few years ago, are now saying “We aren’t going to pay sky-high tuition when there are much cheaper colleges nearly as good.”

Continue reading Elite College ($50,000 a Year) or Good State School ($20,000)?

The 12 Reasons College Costs Keep Rising

When asked the question, “Why do colleges keep raising tuition fees?” I give answers ranging from three words (“because they can”), to 85,000 (my book, Going Broke By Degree). Avoiding both extremes, let’s evaluate two rival explanations for the college cost explosion, followed by 12 key expressions that add more detail.

Continue reading The 12 Reasons College Costs Keep Rising

The Higher Ed Bubble–Not as Big as You Think

Cross-posted from Big Think.

When even the judicious George Will is chiming in on an important policy issue, you just know the concern must be serious and supported by all the right studies.

THE HIGHER EDUCATION BUBBLE, the thinking goes, is just like THE HOUSING BUBBLE.

Continue reading The Higher Ed Bubble–Not as Big as You Think

Uh-Oh–The First Loophole in Student Loan Debt

Carol Todd of Nottingham, Maryland, persuaded a bankruptcy judge in Baltimore to “discharge”–that is, wipe the slate clean on–nearly $340,000 in student loan debt. The grounds were that she has Asperger’s Syndrome, a mild form of autism that apparently prevents her from getting or keeping a steady job. U.S. Bankruptcy Judge Robert Gordon ruled on May 17 that Todd, now in her mid-60s, had met the rigorous “undue burden” exemption from the usual rule that student loans can’t be discharged in bankruptcy.

Continue reading Uh-Oh–The First Loophole in Student Loan Debt

Cheaper Student Loans–A Bad Idea Whose Time Has Come

student-loan-debt.jpgWhen Victor Hugo claimed that all the world’s armies are powerless against an idea whose time has come, he probably had in mind good ideas. But the time can come for a bad idea also. Low-cost student loans, embraced by President Obama, Governor Romney, and Congressional leaders of both parties, is a bad idea. Students and prospective students love the prospect of paying less for college, and so do their parents. Moreover, some economists say that investing more in educating youngsters from low-income families will increase the ability of American workers to compete in the global marketplace.

But students don’t need cheaper loans. What they need are loans that give them an incentive to get good enough college educations to qualify for jobs – well-paying jobs that enable them to pay off their loans. The flaw in the federal guaranteed student-loan program – from its beginning in 1965 – has been its exclusive concern with whether or not students came from families with low-incomes, not whether loans would help launch careers.

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The Hidden Cost of University 2.0

university 2.0.jpgWe have entered a new digital era that appears to have made the traditional trappings of higher education–e.g., fixed curricula, going to lectures, even physically attending a college or university–about as necessary to getting a college degree as the telegraph is for sending messages. Out with hierarchy, structure, and the top-down approach to higher education. In with collaboration, more student input, and above all else, greater interactivity.

Let’s call this disruption University 2.0, which promises to be every bit as revolutionary to higher education as Web 2.0 has been to the Internet.

In the old days (Web 1.0), the Internet was largely a passive medium through which users viewed web sites created by others and had little or no input on content or design. In the new era of Web 2.0, users interact, share information, add or modify content, and collaborate in communities, such as social networking sites, blogs, Twitter, and wikis.

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The Drive to ‘Privatize’ Community Colleges

santa-monica.jpgSanta Monica Community College, a public two-year institution on the Pacific coast not far from Los Angeles, has a reputation as the jewel in the crown of California’s 2.9 million-student community-college system. Known for academic excellence, Santa Monica has one of the highest transfer rates in the state to California’s elite four-year colleges public and private, and nearly ten percent of its 34,000 students hail from abroad. Young people from such countries as Korea, China, and Sweden are willing to pay Santa Monica’s $275-per-credit non-resident tuition rate–more than five times as much as California residents pay–to study there.

But when Santa Monica’s trustees last month decided to deal with
drastically reduced state funding by extending the concept of
“differential tuition” (different rates for different groups of
students) so as to charge higher tuition for the college’s most
sought-after classes, the result was a strategic and public-relations
debacle: pepper-sprayed protesters, cries of favoritism for better-off
students, an opinion from the California Attorney General’s Office that
two-tier tuition violated the state’s education code, and, finally, the
trustees’ abandonment of the idea about three weeks ago.

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Does Tuition Go Up Because State Funding Goes Down?

Gary Fethke’s recent op-ed Why Does Tuition Go Up? Because Taxpayer Support Goes Down in The Chronicle of Higher Education is an enjoyable read. Rather than dismiss the opposing side’s argument with straw men, as is so common these days, Fethke presents it faithfully and gives it due consideration, which is a breath of fresh air.

Having said that, I have to disagree with Fethke’s main point. He argues that “rising tuition is the obvious consequence of declining state appropriations…” and that “Students are required to pay more because taxpayers are paying less–it’s that simple.”

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The Loan Defaults Are Coming–Here’s What to Do

coins for college.jpgNo modern-day Paul Revere is taking a midnight ride to warn about this, but the defaults are coming. Many are already here. They are coming from student loans given to the wrong students for the wrong reasons. The portfolio of federally guaranteed student loans passed the one trillion dollar mark in early 2012, and it continues to grow. The portfolio consists not only of loans for students from low-income families currently in college but also of hundreds of millions of dollars of education loans taken out by students who graduated from college or quit before graduating that have not been fully repaid. Such loans were extended either by the Department of Education directly or by financial institutions like Sallie Mae and banks and guaranteed by the United States Treasury. The total size of this loan portfolio exceeds the total credit card debt of the American population.

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The Tuition Story That Never Dies

student-loan-programs.jpgSome commentaries on higher education appear year after year, almost unchanged. One of these hardy perennials is the story that tuition and fees don’t come close to paying for the actual cost of educating college students. In his popular book, The Economic Naturalist, Cornell University economist Robert Frank claims that tuition payments cover only a fraction of the total cost of students’ education. The Dartmouth College Fund defends what it refers to as a wacky business model: selling its product at a discount, and then–begging for money. Similar articles are here and here.

Last week The Chronicle of Higher Education ran one of these stories “Hey, Students, Your Education Costs More Than You Might Think,” referring to Hamilton College.

First, some background. From the story:

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On “The Birth of Critical University Studies”

The first sentences of Jeffrey Williams’ essay in the Chronicle
of Higher Education
, “Deconstructing Academe: The Birth of Critical
University Studies”,
sounds like an introduction to the many conservative and libertarian critiques
of higher education that have appeared in recent decades, starting with Allan
Bloom’s The Closing of the American Mind, Martin Anderson’s Imposters
in the Temple
, Roger Kimball’s Tenured Radicals, Dinesh D’Souza’s Illiberal
Education,
and Richard Bernstein’s Dictatorship of Virtue.  The
sentence reads:

“Over the past two decades in the United States, there has
been a new wave of criticism of higher education. ” 

But the second sentence dispels them all.

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