I read yet another article today attempting to explain "what's behind America's soaring college costs." These articles have proliferated, especially since the economic crises that began in 2008. The problem with many of these articles is that they are brimming with faulty assumptions and often end up misinforming those who don't have a firm grasp of higher education finance. I'm going to pick apart this latest article, which appeared in The Atlantic on Friday. In response to Mr. Keenan, I say: "No, you don't understanding 'soaring' college costs." My point here is to suggest that journalists either stop writing these sweeping "explanatory" pieces on higher education finance, or do better research to truly understand its complexity and contribute to reasoned dialogue.
1. The article begins by claiming that concerns over America's $1.1 trillion debt burden have been "subdued." This may be true, if you have been living under a rock. Student debt is a major educational and, as the article notes, economic issue, and it is has received mounting attention from a range of stakeholders. No one with any connection to higher education would argue that the financial aid system is functioning well, nor would they naively say student indebtedness is a non-issue. Of course, this first point is somewhat trivial, so let's move on to some of the more flagrant problems with the article.
2. According to the author, we should care about student indebtedness because it will hinder the ability of college graduates to spend in the future, negatively affecting the consumption on which America's economic growth depends. I don't contest this point, but I think it emphasizes the wrong reason why student indebtedness matters. We should care about college affordability because access to higher education is a cornerstone of American democracy. Even though sociologists have pointed out that the higher education can metaphorically be more of a sieve that stratifies society than a pathway to social mobility, we know that colleges helped build a thriving middle class as part of a postwar academic revolution that ended roughly, and not coincidentally, around the time Ronald Reagan became president.
3. The article's main argument is that students are in debt because they take on loans, which have grown in order to pay rising tuition. Rising tuition, in turn, is caused by indulgent spending. The author blames institutions for student loan debt, although we should remember that the federal government made the decision to give financial aid directly to students (a type of voucher in a quasi-market) in the 1970s and has shifted from grants to loans. Institutions have had no control over these decisions. The author also contends that colleges are actually spending more because they know students have access to all the federal loans they want. Let's look at this closely and try to be clinically precise with our terminology. When we talk about "college costs," we must clarify whether we are referring to institutional costs or costs to students. Institutional costs are basically all the things institutions must buy to fulfill their missions, and we typically track this through measures of spending. Costs to students encompasses tuition, fees, and all other costs associated with pursuing a college degree.
The Delta Cost Project tells us that, as a result of the recession, most four-year institutions actually cut spending in recent years and redirected spending to instruction. There has certainly been an overall trend of rising institutional costs, but these increases are in part due to swelling enrollments and the student services personnel required to provide a quality education. Costs to students have increased, not only because of rising tuition, but also because of the massive consumer market that has developed to prey on college students. What the author fails to mention--and this is of crucial importance--is that rising tuition is principally a factor of declining subsidies. The price of college is subsidized by an endowment at private institutions and state appropriations at public institutions. No one pays the full price for a college degree. Thus, college costs are not the culprit for student indebtedness. Shrinking subsidies are to blame, and shrinking subsidies at public institutions are a direct product of nearly four decades of government disinvestment in education.
4. The idea that federal loans are pushing up tuition basically states what we in higher education researchers call the Bennett hypothesis. Named after former secretary of education William J. Bennett, the hypothesis goes something like this: "increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that federal loan subsidies would help cushion the increase." The hypothesis has not been validated by empirical research, though it has not been completely discredited. We hear nothing of the controversy surrounding this hypothesis, or the mixed research results, probably because the author is unaware of the debates. The reader is led to believe that this relationship is fact, not a hypothesis that has yet to be confirmed.
5. Greedy colleges, in the view of the author, have been using student money to take part in a positional arms race, building "lavish" facilities and expanding administration. The salaries of university presidents were raised as evidence of out of control spending. Two notes on this, again coming from excellent work done at the Delta Cost Project. In 2005, 15% of all new buildings in higher education were dedicated to student life, such as dinging halls, recreational facilities, and student centers. Half of new construction was for academic buildings, and a quarter for residential space. However, what is more alarming than new construction is what colleges aren't spending on facilities. Many institutions cut spending on facilities, creating a backlog of deferred maintenance that will have huge cost implications in the future. Like the Delta Cost Project said, fancy buildings "are easy targets, maybe even fair game, but they aren't what's behind the rising price of college." As for president pay, the author is right to pick up on the importance of personnel spending in higher education. Employee compensation accounts for as much as 70 percent of college spending. We can absolutely argue over how much presidents are making, but their compensation is a small slice of a huge pie. Administrative "bloat," in general, needs some qualification. Executive administrative hires have increased in step with enrollment. The explosion of administration can be traced to student services personnel.
6. Finally, the article states that "administrative bloat fueled by excessive spending seems to be diminishing what college is supposed to be about." He then cites a study which, I gather, is meant to suggest that faculty are spending less time teaching. Let's set aside the fact that this is a patent abuse of causation that makes little sense. The idea that faculty are teaching less is far more complicated than the author makes it seem. The study he cites shows that the number of faculty survey respondents (and we don't know how the study defines "faculty," how many respondents there were, etc.) saying they spent 9 or more hours teaching has declined. I read the report from the Higher Education Research Initiative at UCLA, and the author does not indicate that these are 9 hours preparing for courses. The actual time spent in the classroom has also declined slowly, but the report argues that these changes are due to the increasing use of part-time faculty, as well as "furloughs and reduction of course sections, which institutions have implemented to respond to budget constraints."
What can we take away from this analysis? I don't believe journalists and writers should stop writing on college costs entirely. However, I do think they should give up on trying to explain in brief articles remarkably difficult topics in higher education finance. If they want to dig into these topics, they should do their research and recognize the diversity of institutions in American higher education. There has been much research on higher education finance, though you wouldn't know that from reading this piece. The public relies upon journalists to help them understand issues of vital importance. At the moment, much of the writing on higher education does a public disservice.
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