Grand Old Ivy Gets More Expensive

Grand Old Ivy

When Shepherd Mead published “How to Succeed in Business Without Really Trying” in 1952 tuition at Harvard University was $600.00.  When the Loesser & Burrows musical rendition was produced on Broadway in 1961 Harvard tuition was about $2,370, and the tuition for a four year public institution was about $1825.00.

As the following chart demonstrates it was a whole lot easier to sing the Alma Mater 50  years ago than it is for middle income students today:

Tuition increases chartNote that the precipitous climb begins around 1984.   One factor involved in this fiscal situation is that from FY 1980 to FY 2011, with only two exceptions (Wyoming, North Dakota) all the states have reduced their financial support in a range from 14.8% to 69.4%. Colorado reduced support by 69.4%, South Carolina by 66.8%, Rhode Island by 62.1%, Arizona by 61.9%, Oregon by 61.5%, Minnesota by 55.8%, Virginia by 53.6%, and Vermont by 51.3%.  [ACEnet]

The Bottom Line: “Based on the trends since 1980, average state fiscal support for higher education will reach zero by 2059, although it could happen much sooner in some states and later in others. Public higher education is gradually being privatized.” [ACEnet]

“Down At the Bottom of the Heap, Where The Mud Is So Very Very Deep”

There are various and sundry explanations for this, and most critics start by contending that without showing inflation adjusted amounts the argument can’t be made that state support has been dwindling, or in some cases spiraling downward.  This would be a valid argument except that when inflation adjusted figures are used the results are essentially the same. [ChronHE]  State support is dropping and tuition and fees are increasing.

The next common refrain from the privatizers is that the universities are full of “administration bloat.”  This, too, fades when the numbers are crunched.  There’s a chart for that too:

College Admin What the actual numbers show is that for research universities what’s increased is the category of part time faculty. What’s decreased is the category including “executives and administrators.”  The same holds true for non-research based institutions. [Demos]  A rational explanation for the increase in professional positions might be found in additional numbers of individuals involved in information technologies, health care services, and security services.

One of the more self-serving arguments is that if you give students more student aid, the colleges and universities will simply raise their tuition to absorb more of the financial benefits.  This notion was popularized by Reagan appointee William Bennett, and while it’s been debunked almost entirely since, it’s an argument which simply won’t disappear.  The GAO was the most recent research to debunk the Bennett Hypothesis:

“The most recent, conducted by the Government Accountability Office (GAO) in 2011, took advantage of a unique “natural experiment” to test the Bennett hypothesis: the substantial increases in Stafford Loan limits between 2007 and 2009.22 In 2007, the yearly loan limits, adjusted for inflation, ranged from $2,925 for freshmen to $6,125 for upper classmen. By 2009, they had risen to $5,750 and $7,825, respectively. All told, the yearly borrowing limit for all undergraduates increased by an average of $2,340. However, average tuition at public 4-year universities rose by just $540 over the same two years, in line with recent historical averages, leading the GAO to reject the possibility of a relationship between the two. Additionally, these increases in borrowing limits were the first since 1993, meaning that the inflation-adjusted value of the limit had declined for more than a decade during which tuitions rose steadily. All told, both the empirical evidence and academic consensus deem the Bennett hypothesis false.” [Demos] [original GAO pdf]

Actually since the Demos Report there have been some more recent studies by the GAO.

The GAO looked at the possibility of increased tuition caused by the reforms made to the federal student loan programs and reported in February 2014: (pdf)

“Although college prices went up, we were unable to determine whether or not these increases resulted from the loan limit increases because of the interference of various economic factors occurring around the same time these loan limit increases went into effect. Specifically, when the loan limit increases went into effect, the nation was in a recession which created one of the most tumultuous and complex economic environments in recent history, affecting families’ employment, income, and net worth (see fig. 4). As shown earlier, the availability and types of federal and institutional financial aid available to students increased around the time the new loan limits went into effect (see table 1), also making it difficult to discern any effect those loan limits may have had. For example, the dollar amounts of Federal PLUS loans, federal tax benefits, Pell grants, and federal veterans grants all increased. Further, the amounts of state and institutional grants and loans also increased, while the amounts of state appropriations for colleges and college endowments decreased.”

In short, a direct cause and effect relationship cannot be discerned because there are simply too many other economic and demographic factors which have to be considered in the mix.  Not only is there not a way to establish causality, it isn’t possible to even propose a correlation.

Perhaps the most ear drum splitting whine from those who advocate for the eventual privatization of American public colleges and universities is the whinnying that those institutions are accepting people who “should never have gone to college in the first place.”  The inference is clear, these young people are a “waste.”  The American Enterprise Institute offers a softer, albeit more verbose, rendition of this complaint.

Brookings, more interested in BLS statistics on education and the labor force than in compiling survey based impressions of the value of education, offered this rejoinder:

“… it is indisputable that workers with more education typically earn significantly higher wages and are far more likely to be employed than workers who have no post-secondary education. For example, the latest figures from the Bureau of Labor Statistics show that workers with only a high school education are twice as likely to be unemployed as those with at least a bachelor’s degree. Among the employed, the median college educated worker earns 84 percent more than the median worker with only a high school education. Even those with just some college and no degree or an associate’s degree earn 16 percent more. College educated workers are also much more likely to be in the labor force.” [Brookings Edu] (emphasis added)

The correlation between education and employment thus secured, we can probably dismiss this complaint from the Conservatives as simply another layer of the anti-intellectualism all too common in that sector.

One thing that makes the Conservative arguments against increased funding for colleges and universities yet more incredible  is their interminable reference to “liberal elites;” note the Santorum jabs at President Obama for being a “snob” because he wants more young people to go to college, or charging that colleges are simply a form of “indoctrination.”

It appears that the one way to bring college tuition levels down, or at least to stabilize the situation, is to support increasing levels of state funding for both the research based and teaching oriented public institutions of higher education.   However, this advocacy will be faced by the forces of privatization (not an inconsequential element in Austerity Politics and Economics) and those who have found a way to increase their wealth through investments in SLABs (student loan asset based securities) – a topic for a post down the road.

1 Comment

Filed under conservatism, education, privatization

One response to “Grand Old Ivy Gets More Expensive

  1. DB: This is OT to this post, but is the only way I have to contact you. (I use FB only when necessary to sign in to certain blogs — including here, sometimes — and have made it a point never to check my whatever (wall?)where posts go. Purely personal, but I resent the way they go into my e-mail contact list to ask me ‘do you know…’ After the fifth time I was asked about someone I DID know, had never written to the same blog as, knew because she was my sister-in-law, and knew she had been dead for three years when they started asking, I will not deal with FB)

    But “Zandar versus the Stupid” — which is as good as its name — picked up a piece from WIRED and the Brookings Institute on the ‘unintended consequences’ of self-driving cars. They will, presumably, be safely driven, obey all traffic laws, etc. Which is great — except for making up the revenue that cities count on from traffic tickets, etc.

    Yes there will be some savings, emergency services will cost less, drivers’ ed classes can be cut back, but there still has to be spending on infrastructure — not to mention all the other services cities need, a substantial part of which are paid for be traffic tickets.
    Worth a post, no? (Btw, whether you think so or not, feel free to delete this, which is OT to an important topic as well.)