The True Costs of College

Years ago, Eduflack attended a Lumina Foundation for Education conference on the cost of college.  Lumina’s Making Opportunity Affordable effort helped throw a spotlight on many of the costs associated with higher education, with effort calling on the education community at large to offer real solutions that could help address the concerns associated with the rising costs of college.

At the time, I was struck by one presentation in particular.  The head of a major public university got up to discuss what he was doing to reduce the cost of college.  His list of ideas was long, but all of them related to how to cut the cost of operating his institution.  He was discussing how best to reduce his overhead expenses, not the sticker price for students.  It was there that it truly struck me.  There was a disconnect between what is and what we hope for when it comes to higher education.

And I say this having been raised as a higher education brat.  My childhood was marked by my father’s rise up the higher education administration ladder, from dean to provost to president at three institutions (one private and two public).  I remember tuition costs and accessibility being an top concern for my father every step of the way, and I assumed that was the case for all college presidents … until listening to that one leader at Lumina’s MOA conference.  Working in higher education myself at the time, I was thumped upside the head that our organization was focused on scalability and ways to lower our own operating costs.  Student costs were an also-ran.

I’m reminded of this this morning, as USA Today offers its dueling opeds on the cost of college.  (  USA Today’s editors note that college tuition and fees have increased 439 percent since 1982-84.  Over the same period, healthcare costs increased 251 percent, consumer costs increased 106 percent, and household incomes increased just 147 percent.

Consider that.  College costs are increasing at three times the rate of household incomes.  Regardless of the current economic situation, it is no wonder that families are now gravely concerned about how they can afford to send their kids to college. Before last year, many a family was banking on home equity loans to complete the deal.  Not anymore.  And that $10K tuition the parents of today’s college-age students paid is now running $44K. 

As to be expected, the American Council on Education defends the current situation, attempting to heap praise on institutions of higher learning for instituting hiring freezes, stopping major construction projects, and restricting staff travel.  And, to be expected, they focus much of their attention of efforts to reduce institutional operating expenses. Again, little on the student, more on the institution.  

It is not cheap to run a college or university. In most communities, they represent the largest or second largest employer in the region.  Utility costs are rising, as are costs related to recruiting and retaining top faculty.  Those institutions wishing to be ranked by US News and others have to boost fundraising and spending in order to stay competitive among their peer institutions. And then you have some experts who believe the cost of college is not high enough yet.  The demand is still too great.  As long as you are turning away 60 percent of interested customers, the thought process goes, the price point is still too low.  A ridiculous concept, yes, but one many an “expert” hold in explaining the rising costs of college.

So what is an IHE to do?  How do we move the discussion from one of operational budgets to one of cost to consumers?  How do we shift to sticker prices and actual costs to families?  How do we ensure that every students capable of doing postsecondary work can gain access to a college AND afford to attend?

I’m no expert, but this also isn’t my first rodeo.  I know this isn’t about increasing the thresholds for available student loans or making more grants and aid accessible.  This is about reducing operating budgets and passing the savings on the consumer — the student.  This is about maximizing existing resources and doing things a little differently.  This is about operating costs, but it is also about what you do with the savings after the fact.  How?
* Increased competition — Higher education is one of the most regulated industries in the United States.  Between state boards and regional accreditors, it is nearly impossible for new competition to enter the marketplace, even if that new competition is looking to meet unmet needs or offer specific degrees today’s students need. We need to take a closer look to what EdSec Spellings’ higher ed commission recommended when it comes to the accreditation process.  More choices, as long as they are quality choices, are better for the consumer.
* Off-hours operation — Colleges are run on the notion that we still operate in an 8 a.m. to 3 p.m. world.  That leaves many college buildings empty for more than half the day, with lights on and HVAC running.  More attention should be spent on off-hours classes, offering evening and weekend sessions for students, particularly those students working full-time jobs to afford their full-time education.
* Virtual education — Many traditional colleges and universities are now offering virtual education options, in many cases charging more for online programs than they do for bricks-and-mortar learning.  Why?  Virtual options can serve more students at a lower price point. If students are motivated to study virtually, they cost savings should be passed on to them for not accessing the libraries, th
e student health centers, and the athletic facilities.  Virtual ed should be seen as a path to get more kids into college, not purely as a profit center for the institution.
* Faculty — If a student takes four years of classes taught by fully tenured professors or four years of courses offered by TAs, they pay the same tuition. When I was a student, I purposely selected my courses so I was learning from the best professors at the University of Virginia. If you are getting taught by teachers in training (TAs), shouldn’t there be cost savings?  I don’t mean to complicate things by offering a sliding scale tuition based on who is teaching, but it seems like a no-brainer.
* Low-interest programs — Too many institutions offer too many programs with little enrollment. Why?  Tradition.  We’ve always had a classics department or we’ve always taught Sandscrit or we’ve always provided students courses in the early learning styles of Mesopotamian farm animals.  Each of these low-interest programs requires faculty, administrative staff, and overhead costs.  Instead, let’s deliver the programs the people want.
* Remediation — The statistic is often thrown around that more than half of all college freshmen need to take remedial math or English upon entering their postsecondary institution.  Students need to leave high school prepared for college-level work.  It is the responsibility of our K-12 system, and not higher ed, to provide those skills.  The work, and the cost, should be borne by K-12 (and no, we shouldn’t just push it all on the community colleges).

Yes, I realize that most of these are again operational issues.  But these are big operational issues that IHEs across the nation are dealing with (or choosing not to).  Once we address such issues (and many others that I know are out there), we then move to phase two — passing the savings on to the student.  If colleges are making additional money by renting their dorms out to cheerleading camps during the summer, that savings should be passed on to the students renting those rooms during the academic year.  Does it really cost $600 a credit hour to deliver higher education at a private institution, or are we saddling students with the costs of unprofitable athletic programs or unused new facilities?  How much is too much to charge an out-of-state student to attend a public institution — 150 percent of the cost to educate them, 200 percent of the cost?  

At what point do we say we can do better with the resources we have?  At what point do we say it is unreasonable to charge an 18-year-old nearly $50,000 a year for four (or five or six) years to earn a BA?  At what point do we say it is unforgivable to saddle a 22-year-old with hundreds of thousands of dollars in student debt?

As luck would have it, tomorrow, Education Sector is hosting a forum on how colleges are using technology to make college more affordable for students.  Perhaps they’ll provide the answers so many are looking for.
Operational costs are important.  But the true cost of college is what the consumer is paying.  If we really expect every student today to go to college, if we demand postsecondary education in order to get a good job and participate in the 21st century workplace, then we have to do something about costs.  And I mean real, out-of-my-wallet costs.  Reducing overall operating expenditures so tuition rates simply increase 5.5 percent this year simply won’t cut it.

3 thoughts on “The True Costs of College

  1. “At what point do we say we can do better with the resources we have? At what point do we say it is unreasonable to charge an 18-year-old nearly $50,000 a year for four (or five or six) years to earn a BA? At what point do we say it is unforgivable to saddle a 22-year-old with hundreds of thousands of dollars in student debt?”- Excellent points raised!

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