A few “why is college so expensive” links (and my own theories on that)

One of the clear motivations behind MOOCs (not to mention earlier distance ed technologies like correspondence courses, radio and television courses, and traditional online courses) is to do something about the costs of (and also access to) college. So naturally, I’ve been interested in the series of articles and blog posts that have come out lately speculating about why college is so expensive. I suppose most of this is in response to Paul Campos’ New York Times piece “The Real Reason College Tuition Costs So Much,” though as I mentioned in my last post, affordability and access is also at the heart of the motivation to Kevin Carey’s “University of Everywhere,” too. So more than I originally intended to write on this, and a lot of this is sort of MOOC book prewriting, too (at least that’s what I’m telling myself):

 

Campos (who, btw, is a law professor who also made headlines a few years ago with his controversial book about obesity, The Diet Myth) argued that the reason why college has gotten so expensive is not because of cuts from states to higher education but because of bloated administrative costs.

I’ve read through several responses to this. There’s this from Confessions of a Community College Dean, “Dear New York Times.” Among other things, Matt Reed complains about Campos’ conflation of different sectors of higher education, increased enrollments, and Baumol’s Cost Disease.

Jordan Weissmann sugar-coats it (not) in his Slate essay “The New York Times Offers One of the Worst Explanations You’ll Read of Why College Is So Expensive.” Besides bringing up the cost of instruction argument…

(“Until someone comes up with a brilliant strategy for making teaching a more efficient endeavor, the fact that states provide colleges with a smaller sum of cash per student than they did 25 years ago will mean that, for all intents and purposes, education subsidies have been cut. Academia is simply not prepared to do more with less.”)

… Weissmann just points out how major the state cuts have been– though he also agrees with Campos about the rise in administrator costs.

Then there’s this from Robert Hiltonsmith at Demos, “A Terrible Explanation for Rising College Costs.” He pretty much agrees with Weissmann, though Hiltonsmith also argues that while administrative costs have risen, they haven’t risen as much as Campos argues they have risen.

I think my favorite response from Campos comes from “Ed” at the always entertaining Gin and Tacos, “Can this 900 Pound Gorilla Pay Tuition?” I tend to agree that (despite what Hiltonsmith might argue) that it’s pretty obvious to everyone that there are a lot more administrators now than there were 20 years ago and they are much better paid. But while there are some administrative positions that seem pretty pointless, there are at least two good reasons that explain most of this increase. First, it’s pretty well-documented that universities of all shapes and sizes have improved amenities on campuses to attract students, and those fancier/better/more elaborate dorms, gyms, food courts, and whatever else don’t run themselves. Second, we’re admitted a lot of students to college who aren’t necessarily as prepared for the experience as they should be, and, simultaneously, there’s a lot more pressure to retain those students. As Ed sums it up in the end of his post:

There definitely are too many administrators and they have a terrible habit of paying themselves too much. But some of the growth has been of necessity, as more and more students need more and more help to have any hope of succeeding at this academic level. That isn’t cheap. College costs a lot more than it used to. But “used to” didn’t include paying half a million bucks to bring Katy Perry to campus and having to teach high school graduates how to do math involving fractions.

I could probably find ten times as many similar kinds of responses, but you get the idea. A few thoughts on all this:

  • I think all of this speaks to the complexity of the problem because the answer to the question “why is college so expensive” is just not that clear. It certainly seems a lot less clear than it should be, at least to me.
  • While I also think Campos is mostly wrong, it is true that it is probably an oversimplification to say that college has become so much more expensive because state governments have more or less ended their funding of their state schools. “Public” universities are only now sorta/kinda public. EMU received something like 75% of its funding from the state of Michigan a generation ago; now they receive somewhere in the 30% or less, and that’s pretty typical despite Campos’ odd math. That said, this doesn’t account for the same high rise in tuition at private institutions.  Why are costs rising so rapidly at the Harvards of the world?
  • One thing is very clear though: the rising costs of instruction are not driving up the costs of tuition. Oh sure, that’s part of the problem– all it takes is a 2% raise per year to drive up your salary for a professor 20% over ten years. Of course, that rate of pay increase is just keeping pace with the cost of living generally (more or less), there’s pretty decent evidence that universities have dealt with increased enrollment by hiring more adjunct instructors rather than more permanent faculty (tenure-track or at least full-time with good benefits and the like), and the money we pay those part-timers for teaching is about as shitty now as it was 20-25 years ago.
  • So if we can’t lower costs significantly by lowering instructional costs, what are the financial benefit of MOOCs? How do they (and Carey’s “University of Everywhere”) lower the bar for access to higher education and save money at the same time? The short answer is they don’t. Sure, there are potential institutional cost savings because MOOCs don’t require fancy dorms and football teams and all of that. But at the same time, MOOC providers like Coursera have been relying on traditional (and expensive) universities to actually develop and teach these courses, and one thing that I’ve already learned from the interviews I’ve done with MOOC professors is there are a lot of largely hidden costs in teaching MOOCs.
  • And again, the “cost disease” with education generally is because of what I think is an inescapable fact: education is very labor-intensive/human-to-human interactive dependent. Robots are great at building cars; not so great at teaching first year comp. Furthermore, that labor is expensive. Higher ed has been trying its darnedest to cut those costs by hiring adjuncts, but besides being ethically dubious, there’s a limit to the kinds of teaching and advising you can reasonably expect part-time employees to do. I mean, not even Starbucks is completely run by part-timers and robots– yet. As I’ve said before and as I will say again, I think that those who are looking at MOOCs as some kind of solution to the costs of higher education are confusing “content” with the apparatus of “education,” and while content scales well (e.g., books), education (e.g., teachers, tutors, student support folks, etc.) does not.
  • Really, if we want to use technology generally to try to curtail costs in higher education, then it seems to me that the two most promising places to look are at are “brick and mortar” facilities and administrative costs. To a certain extent, higher ed has tried that with more traditional online courses (with “mixed results” at best) and there have been some administrative “savings” with things like scheduling software (I recall having to physically stand in line to get into classes) and other tools to manage grading and transcripts and the like. But I haven’t read too many articles about finding ways to develop “Massive Automated Administrators” (MAA!) software. The cynic in me says a lot of associate deans/directors/provosts/etc. could probably be replaced by robots.

Anyway, what’s my somewhat informed/ill-informed view as to why college costs so much more now than it used to, why the increase has grown so much faster than things like health care in the U.S.?

Well, for starters, like a lot of these kinds of debates, there is some “truthiness” in all of the various claims.  I think Campos is mostly wrong– but not entirely wrong– and I think his critics are mostly right– but not entirely right. It’s also important to remember that the increases in tuition are not uniform: places like EMU have worked very hard at keeping costs low, and I think we’ve been reasonably successful at that. Community colleges are still reasonably affordable and, depending on where Obama’s initiatives on paying for community colleges goes, they could become even more affordable.

Also, like I wrote about a few weeks ago, even though everyone agrees that tuition is unreasonably high and the debt that comes from borrowing to pay high tuition is unquestionably bad, the fact of the matter is the cost is not a major factor students (and their families) consider when deciding on where to go to college. Rather, folks pick colleges (or at least this is what they say) based first on good academics, second on job prospects, third on social opportunities and scholarships, and then on tuition costs.

So the first reason why I think universities charge what they do for tuition is because they can. That is, while tuition has gone up to obviously cover the expenses, I think the rate of that rise is based on the educated guess of university administrators based on what they know about the students applying to their university. This is why the University of Michigan can charge more and raise its tuition at a faster clip than EMU can. The UM folks know academics, job prospects, and social opportunities are a much higher priority for their applicants, and they also know they get far more students applying than they could ever accept. EMU knows that costs are a major factor for our students, which is why EMU so vigorously promotes that it’s a university that is keeping costs down.  But EMU also knows that we’re going to get fewer applications and thus accept a higher percentage of the students who apply.

A closely related second reason why tuition is as high as it is: quality–both based on feelings and data– often (though not always) correlates to price.  There is a perception among the American public that more expensive universities are more exclusive and selective (like the right kind of “club,” I suppose), and therefore, they are better schools. Kevin Carey (of all people!) wrote a good piece for the New York Times back in February called “How to Raise a University’s Profile: Pricing and Packaging,” which is about how George Washington University was transformed from a modestly priced commuter school to a much more exclusive one with high tuition. The former GWU president, Stephen Trachtenberg, is praised (or blamed) for this transition, and among many other things in this article, here’s what he and Carey say about all this:

[The modern university] had come to inhabit a market for luxury goods. People don’t buy Gucci bags merely for their beauty and functionality. They buy them because other people will know they can afford the price of purchase. The great virtue of a luxury good, from the manufacturer’s standpoint, isn’t just that people will pay extra money for the feeling associated with a name brand. It’s that the high price is, in and of itself, a crucial part of what people are buying.

Mr. Trachtenberg convinced people that George Washington was worth a lot more money by charging a lot more money. Unlike most college presidents, he was surprisingly candid about his strategy. College is like vodka, he liked to explain. Vodka is by definition a flavorless beverage. It all tastes the same. But people will spend $30 for a bottle of Absolut because of the brand. A Timex watch costs $20, a Rolex $10,000. They both tell the same time.

The Absolut Rolex plan worked. The number of applicants surged from some 6,000 to 20,000, the average SAT score of students rose by nearly 200 points, and the endowment jumped from $200 million to almost $1 billion.

I see the point here, but this isn’t entirely true. There are often tangible differences between “average” and “luxury” versions of the same product. Take vodka, for example. I buy super-duper cheap vodka as a cleaning/disinfectant agent in the kitchen– I make a roughly 70% vodka/30% water solution, put that in a spray bottle, and use it to wipe down my granite countertop– but I’d never drink that shit. It’s nasty. I have nothing close to a Rolex, but my $120 or so Citizen watch is much nicer than any Timex in that it’s going to last longer, keep better time, and look nicer.

And full disclosure here, my son is going to be attending the University of Michigan next year despite the fact that EMU would have been cheaper. Why would we do that? Trachtenberg et al are correct in that both schools offer the same kinds of bachelors degree programs– that is, they’re both vodka, they’re both watches. But besides the fact that U of M is a much better fit in terms of what my son wants to study, what kind of student he is, what kind of college experience he wants to have (and what experience we want him to have), it’s also a brand of education vodka that we think tastes better and it’s also a much more recognizable “brand” of degree watch we think will take him further in his career plans.

Really, all the up and coming universities that are charging high tuition are doing is imitating the most elite institutions. If Harvard, Princeton, Stanford, MIT, etc. didn’t charge tuition at all or if they didn’t have comfy amenities and the like, then the George Washington Universities of the world wouldn’t be trying to compete with them by charging outrageous amounts in tuition and building luxury dorms.  So sure, we have in this country come to associate “quality education” with high costs, and there are lots of ways that this association is both a self-fulfilling prophecy and as bullshitty as a Kayne t-shirt. But there are other ways– some of them subtle, some of them very entrenched– in which the best institutions really are the most expensive ones.

In any event, two last paragraphs to bring this all back to MOOCs for a moment: when people go to college, they are paying for something very tangible, a degree and one that has some sort of value in the marketplace. Higher Education is about granting credentials, and “learning” and the abstract ideals of education are actually very important by-products of what we do. Most academic-types (at least in my field) place a much higher premium on the abstract ideals of education than they do on credentialing part of it, but if we did all the things we do in our teaching and didn’t give recognizable degrees to students for experiencing our teaching, we’d be out of “business” in a hurry. Students come to college because they want to enter some kind of career that requires a degree and/or because they want to continue to be in and/or enter middle-class to upper-middle-class American which requires some kind of job that now requires a college degree.

This is why MOOCs will almost certainly never take off as an alternative to higher education as we know it, why the alternatives to traditional college degrees never took off. Too many employers right now have a bachelors degree as a required educational credential for too many positions. So the only way that students will leave higher ed in favor of Coursera (or whoever) certificate or badge programs is if a lot of employers change their minds on the value of a bachelors degree. That ain’t likely to happen, not at least in my lifetime.

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