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The Dangerous Delusion of Free Tuition, Part 2

The New York Analysis of Policy and Government concludes its study of the free tuition concept with a review of why tuition is so expensive, 

Largely ignored is the question of why college tuition has become so unaffordable.

In a CNN study, Julia Freeland Fisher “Rather than ratcheting up aid to meet ever-increasing price tags, we must get at the root of the affordability crisis by addressing the most fundamental component of any organization: the business model. … a closer look at the traditional business model of higher education reveals a stockpile of embedded inefficiencies and warped incentives… Troubling inefficiencies have also arisen out of a subset of colleges’ attempts to compete on the basis of infamously indulgent non-academic offerings — rock climbing walls, lazy rivers and extravagant student housing facilities, to name a few — intended to lure students, …In 2012, there were at least 157 recreational projects in progress at 92 U.S. colleges, representing more than $1.7 billion in new construction and renovation. These costs are inevitably passed along to students…”

A Business Insider report found that the average annual increase in college tuition from 1980-2014 grew by nearly 260% compared to the nearly 120% increase in all consumer items.  A Brookings study revealed that: “Education costs have soared…College tuition, net of subsidies, is 11.1 times higher in 2015 than in 1980, dramatically higher than the 2.5 increase in overall personal consumption over the period.

The Brookings analysis also revealed one key reason why those costs have gone up: the extraordinary growth in the number of high-paid, non-teaching positions within universities. Brookings found that “In 1988, for every 100 full-time equivalent students, there were on average 23 college employees. By 2012, that number had increased to 31 employees, with a shift toward the highest paying non-teaching occupations. Managers and professionals now outnumber faculty, who comprise just a third of the higher education workforce.”

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“In 2011, the last year for which figures are available, 42 private college and university presidents received more than a million dollars each for their work.  Robert Zimmer (University of Chicago) was the best-paid, at $3,358,723.  At public colleges and universities, nine top administrators garnered more than $1 million each in 2012-2013, with the best-paid, E. Gordon Gee (Ohio State University), receiving $6,057,615…In addition to their formal compensation, college and university presidents receive some very lavish perks.  These include not only free luxury cars and country club memberships, but free university housing.

“The soaring incomes of campus administrators are paralleled by their soaring numbers.  Between 1993 and 2009, their numbers reportedly increased by 60 percent, to 230,000―ten times the rate of growth of the faculty.   According to a February 2014 report by the American Institutes for Research, between 1987 and 2012 the number of administrators at private universities doubled, while their numbers in central university system offices rose by a factor of 34.

While those nonteaching positions are a burden on tuition payers, they are good for the same politicians who push for more people to go to college. Sara Swann, writing for Open Secrets  reports “For the 2016 election cycle, the education industry had a record-high contribution total of almost $81 million. Nearly all of this money is donated by school employees… Democrats received 86 percent … Since 1990, the education industry has never given less than 58 percent of its contributions to Democrats, with an overall average of 77 percent going to the left.” The two most prominent presidential candidates advocating for college for all received extensive support from the education industry.  Published sources reveal that Hillary Clinton took in about $23.7 million, while Bernie Sanders  Her primary challenger pulled in $5.5 million. By contrast,  Donald Trump only received $778,000.

Photo: State University of New York at Albany (NY Analysis photo)

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The Dangerous Delusion of Free Tuition

The promise of free tuition has become a favorite campaign theme of many politicians.  New York’s governor Andrew Cuomo, facing a primary battle from a celebrity opponent to his left, is providing a version of that in his state.   The odds are it will cause more harm than good. The free tuition idea follows another political error, that of the federal government subsidizing student loans. That resulted in universities charging higher rates.

The appeal, not only to potential university students, but to young adults burdened with debts from unjustifiably high tuition for an education that failed to get them a well-paying job is obvious.  The politics, not just for Cuomo, but for presidential contenders such as Bernie Sanders who have made this type of program the centerpiece of their platform, are appealing, but the results for students and their cash-strapped families, far less so.

There has been little discussion about how a state that continues to produce underperforming students at the grammar and high school levels and that imposes a tax burden that is chasing residents to other jurisdictions will afford the idea. There has been inadequate acknowledgement that the push, over the past few decades, for every student to attend college has simply resulted in the replacement of the requirement of a high school degree with that of a college degree, without any commensurate increase in either the pay or prestige of those positions.

Making college free for all will certainly increase enrollment, which has already expanded significantly.   The National Center for Education Statistics reports that about 20 million people attended college in 2017, and that figure is expected to grow regardless of public financing schemes. Governing magazine  noted that former President Obama’s College Education for all Goal would have resulted in a stunning doubling of current enrollments. That would have required more personnel and more facilities, driving up costs even further.

The broadening of college participation brings only the illusion of greater learning.  As enrollment has increased, the quality of higher education has decreased. Marc Tucker, writing for Education Week,  noted: “…many community college teachers do not assign much writing at all to their first-year students because they cannot write…for close to 40 percent of our college students, the first two years of college add virtually no value at all, and ‘not much’ value for the rest…colleges are typically teaching most students what we used to teach in the high school college-bound track and are not doing it very well…What I have just described amounts to an across-the-board collapse of standards in American education over the last 40 to 45 years…”

A Burning Glass report found that occupations historically dominated by workers without a college degree now require one.  Employers now require bachelor’s degrees for a wide range of jobs, but the shift has been dramatic for some of the occupations historically dominated by workers without a college degree. The credential gap can amount to 25 percentage points or more for middle skill jobs in some occupational families, like Office and Administrative and Business and Financial Operations. For example, 65% of postings for Executive Secretaries and Executive Assistants now call for a bachelor’s degree. Only 19% of those currently employed in these roles have a B.A.

  • In some roles, employers prefer bachelor’s credentials even when that makes the position harder to fill. For example, Construction Supervisor positions that require a B.A. take 61 days to fill on average, compared to 28 days for postings that don’t require a bachelor’s degree.
  • In other occupations, such as entry level IT help desk positions, the skill sets indicated in job postings don’t include skills typically taught at the bachelor’s level, and there is little difference in skill requirements for jobs requiring a college degree from those that do not. Yet the preference for a bachelor’s degree has increased. This suggests that employers may be relying on a B.A. as a broad recruitment filter that may or may not correspond to specific capabilities needed to do the job.
  • Jobs resist credential inflation when there are good alternatives for identifying skill proficiency. Many health care and engineering technician jobs, such as Respiratory Therapists6 , show little sign of upcredentialing. That is likely because those positions are governed by strict licensing or certification standards, well-developed training programs, or by measurable skill standards such that employers do not need to look at a college degree as a proxy for capability.

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The Report Concludes Monday.

Illustration: Harvard’s Widener Library (NY Analysis Photo)

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Have Universities Harmed America? Part 2

The New York Analysis of Policy and Government concludes its two part review of the impact skyrocketing tuition rates and biased universities have had on America. 

A Consumer Reports study found that 45% of people with student loan debt said that college was not worth the cost. The detrimental impact on the U.S. economy has been dire. 44% of those in tuition debt have cut back on daily expenses, 37% have delayed saving for key financial goals, 28% delayed buying a house,  and 12% delayed marriage. “Step by step, one law after another has been enacted by Congress to make student debt the worst kind of debt for Americans—and the best kind for banks and debt collectors…and in one of the industry’ greatest lobbying triumphs, student loans can no longer be discharged in bankruptcy…”

Donna Rosato, also writing in Consumer Reports, notes: “To put the growing education debt crisis into perspective, many attendees at the conference drew parallels to the housing market bubble of the mid 2000s.  Rohit Chopra, [special adviser to the Department of Education and formerly the top student financial services regulator at the Consumer Financial Protection Bureau] pointed out that both going to college and owning a home are goals that people strive to reach. But when something good, like owning a home, involves toxic mortgages, it can quickly becomes a bad situation. Chopra says that we may now be at a similar point with student debt.”

But the problem looms beyond finances.

The American Association of University Professors notes that  “…even as colleges and universities have become the focus of increased attention from the general public and policy makers alike, these institutions themselves seem to have lost their focus on a mission of preparing an informed citizenry for participation in democracy and expanding knowledge for the benefit of all. Without a doubt, higher education still provides a transformative experience for the millions of individuals who take part in its many activities. Behind the scenes, however, American higher education is changing in ways that detract from its potential to enhance the common good.”

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As colleges become completely dominated by left-wing academics, (see the New York Analysis of Policy and Government study  which reported that Democrats outnumber Republicans by a greater than 10 to 1 ratio, and at many elite universities there was not a single registered Republican on staff) traditional, core beliefs in the unifying principles of America, especially respect for the Constitution and Bill of Rights, as well as adherence to an empirical method of thinking, diminished, reducing the ability to logically review and resolve national challenge.

There is, indeed, an increasingly incestuous relationship between the Democrat Party and the university establishment.  Rather than calling for a halt in excessive tuition rates, (a concept espoused by Democrats in many other pricing areas) Democrat presidential candidates are calling for “free tuition,” meaning that taxpayers would bear the burden. This, of course, would have the net effect of allowing colleges to continue raising rates, in a manner similar to the way that medical costs skyrocketed after third-party payments became commonplace.

The Great American Experiment in College for All, at devastating costs to all, has financially crippled students and their families, and is leading to a financial crisis that may make the housing bubble recession of 2007—2008 look mild. In return for all that burden and risk, a generation has endured significant unemployment and has been indoctrinated into acceptance of views that diminish the accomplishments and merits of their nation, and has inculcated them into acceptance of limitations on their freedom of speech.

Major reforms are needed.  Colleges should be required to explain to applicants and current students what the tuition costs pay for, in detail, with particular emphasis on how much is spent on non-educational salaries and activities.   There should be full disclosure of the percentage of graduates who obtain jobs that make use of a college degree. No federal support should go to institutions that charge excessive rates. Washington should get out of the tuition loan business, and the same consumer protections that apply to other debts should apply to tuition loans. State education departments should provide high-quality alternatives paths to careers that do not require college degrees, including vocational degrees in much-needed (and frequently lucrative) professions such as electricians, plumbing, carpentry, and mechanical fields.