Inside Higher Ed. September 20, 2013. Ever since President Obama presented his bold plan to reduce college costs in late August, higher education groups have been patient but puzzled about what is coming down the road of reform. Some may be uneasy because they think the presidential plan will threaten business as usual for colleges and universities, especially with their receipt of federal student financial aid funds.
My response is the opposite. I welcome the president’s reform goals to increase affordability (for students) and accountability (for colleges). He promises his plan will be driven by data. But I have doubts that the tour guide, road maps and traffic signals President Obama has put in place will be adequate to avoid being derailed by predictable conceptual potholes and dead ends.
Mixed Feelings About Multiple Goals: The president, along with parents of students, is understandably concerned that college costs (what a college spends) and college prices (what a student or consumer pays) are out of control . To construct a reform agenda, then, consider a multiple-choice format that asks, “Which of the following goals do you find worthwhile?”
A. Reducing college costs
B. Reducing college tuition
C. Reducing student loan indebtedness
D. Increasing student retention and graduation
E. All of the above
The temptation is to circle “E” -- “All of the Above.” However, under the Obama Plan, “All of the Above” will result in “None of the Above.” Bundling may work well for home service on cable TV and the internet. It’s not compelling, however, as a strategy to reform all higher education’s problems, especially if one relies on penalties and rewards of federal student financial aid as the linchpin to achieve simultaneously both accountability and accessibility.
Who is the Adviser and Tour Guide on the Road to Reform? The day after the president delivered his Buffalo speech about his college costs plan, one report indicated that a key adviser about it was James Kvaal, a White House aide. Is this a good choice? Perhaps – but who outside a small circle in Washington, D.C. knows one way or the other?
What I do know is that the topic of college costs has attracted an outstanding roster of analysts nationwide. I find Ronald Ehrenberg of Cornell, author of Tuition Rising; and, Bob Archibald and David Feldman of William & Mary, authors of Why College Costs So Much, especially impressive. And these are only a few of many highly qualified candidates.
Do we know if President Obama or James Kvaal have read their works and consulted them? If not, why not? I try to read a lot about college costs – but do not recall any published articles or books on the topic by Kvaal. All the more frustrating was that in the aftermath of the Obama talk, Kvaal refused to grant an interview about the college cost reform plan This distance from the public forum does not foster respect or confidence.
College Graduates and the National Economy: Example of contradictions in bundling are the following talking points emphasized by President Obama:
- More young adult Americans should complete bachelor’s degrees because this is crucial for them to get good jobs – and for the overall good of the nation.
- Many recent college graduates cannot get good jobs.
Each statement by itself makes sense. Together, they signal a basic conflict in reform goals. I worry that the Obama plan seems to have accepted and accelerated the orthodox liturgy about higher education and economic development that university presidents and governors have been reciting for years – namely, that higher education is crucial to the nation’s economic development.
That may be true – but it also is a truism because the relations of higher education to the economy are diverse and complex. Young Americans who complete a bachelor’s degree seldom create jobs. Most often, they are good at having the credentials, education and energy that allows them to fill jobs.
One only has to consider Obama’s speech in Buffalo in which numerous unemployed or underemployed college graduates in the audience provided graphic examples that completing a college degree is wise, good and desirable for individuals and for society, but is not necessarily the key to creating a robust national economy.
The Conceptual Clash of College Costs and College Prices. Let’s say that the Obama matrix gives high marks to colleges that charge low tuition – a proxy for affordability and accessibility. This brings to mind the historic example of the University of California, which for many decades prided itself on charging no tuition to students who were state residents. This might appear to be the optimal fulfillment of affordability.
But on closer inspection, it is a silly and dysfunctional policy. Why shouldn’t students pay some reasonable tuition for part of the costs of their education provided by the college? What common good is achieved by charging no tuition to students from affluent families? What assurance is there that low price promotes access and admission? Also, an artificially low price for tuition may be a poor exchange if it means that a college forfeits adequate revenues it really does need to provide a quality undergraduate education, Offering small classes taught by full-time professors may be relatively expensive – but also may be very effective for student learning and retention.
Consumerism and Creeping College Costs: Does compliance with the Obama Plan’s emphasis on future jobs and earnings of alumni cause college costs – and, perhaps, the price of tuition -- to rise? A good example of this quandary is the recent case of Wake Forest University, which has enhanced its office of personal and career development, including hiring a vice president whose annual salary is $350,000 to lead its “College to Career” program that starts in a student’s freshman year and continues until graduation – and, one would, hope with job placement! It’s expensive – and no one knows yet whether it is effective. A college with an affluent student body and/or a large endowment may be able to absorb such new costs. Elsewhere, such a new expense and an increase in tuition charges will be problematic.
Student Loan Indebtedness: President Obama leads the chorus that deplores student loan indebtedness. Even though I share that concern, I also know there is an obvious political explanation for how we as a nation got ourselves into this mess. The expansion of federal student loans soared in 1978 with creation of the Guaranteed Student Loan Program – a program applauded by members of congress up for re-election, by bankers, and, yes, by students and their parents.
They got their wishes. I doubt dependency on federal student loans is going to disappear – and it certainly is not going to be replaced by expansion of federal grants. So, how might one promptly alleviate some of the pain of student indebtedness?
If there were one decisive innovation I recommend it would be to revive and extend the notion of professional work that qualifies for federal student loan forgiveness – let’s say, at a rate of 20 percent per year. This approach was used years ago to attract and assist educated new professionals in such understaffed fields as health care in selected regions and locales. Why not expand the qualified fields to those indebted graduates who go into, e.g., teaching, social work, legal aid, and other genuine service professions.
Conclusion: The president has promised a “datapalooza” to rate and reward colleges for good performance. This is well-intentioned but problematic. Most likely Americans will find what some very able scholars already know – reforming college costs is going to be more difficult than reforming health care as a national initiative.
A more attractive, realistic option in higher education policy would be to settle on accomplishing one important reform – such as reducing college costs. Data from the Delta Costs Project have documented over several years that college revenues from tuition and state subsidies consistently decline in the proportion that goes toward educational programs, with commensurate increase in administrative costs. Facing – and changing – that syndrome is a focus I would find timely and satisfactory.