College Cost Time Bomb

As another college semester nears an end, the Department of Education continues to assemble commissions to provide solutions to perceived problems with college education. Recently, the Secretary of Education’s Commission on the Future of Higher Learning gathered to discuss ills within the system and to develop possible cures. Ahead of the commission’s official report the Cato Institute decided to hold its own panel, complete with government officials, college administrators, journalists, and analysts, to discover troubles and answers. What is certain is that higher education is expensive and gets more so every year. Average Americans are uneasy about the cost of college and continue to ask questions, including “Why does tuition rise relentlessly?” or “What’s the payoff of higher education,” without many answers. Charles Miller, Chairman of the Commission on the Future of Higher Education, Christopher Nelson, President of St. John’s College, Anya Kamenetz, author of Generation Debt, and Neal McCluskey, policy analyst for the Cato Institute, all hoped to enlighten the general public with answers to the repeated questions.

Miller declined to go into depth concerning his commission’s findings, but was willing to go into problems that he personally believes exist within higher education. However, first he offered a paradox, “The gains in U.S. economic productivity in the last decade have been exceptional…however, this has not been the case in higher education.” Miller attributes this to the “dysfunctional nature” of higher education finance, which includes a lack of transparency regarding pricing. That said, the poor pricing does not looked to be solved without benefits to each side. “There’s a lack of incentives necessary to affect institutional behavior,” explains Miller. The nature of education, lack of transparency, and poor information systems combined with no accountability “leave higher education in a dangerous position.” Miller recognizes a need for new structures within higher education and feels confident that “higher education will undergo a major transformation in the coming decades from the same forces which are changing the world in other economic sectors and in other institutions.”

Nelson shares Miller’s concern over higher education, but thinks the problems may lie, not with the finance administrators, but with the students who are enrolling from year-to-year. “We want classrooms teeming with energy and conversation that comfort students who wish to learn because learning is desirable for its own sake.” However, Nelson contends that he observes very few students that fit his mold. Furthermore, according to Nelson, the perfect student is one that enrolls in college in order to find introspection. “Our students might as well be dead if they’re not asking themselves who they are, what kind of world they inhabit, and what their place should be in the scheme of things.” In fact, Nelson suggests “using the desire to learn as criteria for admission to our colleges.” He recommends shifting the focus from baseless rankings and test scores to this “desire” criteria in order to find better students.

Kamenetz argues that there is a community of students that refrain from enrolling in universities, which would support Nelson’s theory. Unfortunately, the reason these potential students avoid college is because they think it is unaffordable. Indeed, Kamenetz provides examples of students that intentionally wait until they are declared independent students, so that financial aid can kick in, before they enroll in universities. However, this tactic puts students behind the curve, and since most have debt aversion, Kamenetz concludes that “students who work hard are getting screwed.” Her solution involves the “need for more need-based aid,” but she admits that reform is difficult. “Very large companies make very large amounts of profit off of growing student loans.” Therefore, companies with successful lobbies would work to prevent any change in the student-loan system because they benefit from major student loan defaults. This acts as a massive roadblock to the type of change that Kamenetz advocates.

McCluskey is wary of any government control that could possibly reign over higher education. “Imposing new federal controls [would] make it more like our elementary and secondary system.” McCluskey argues that international students flock to America and enroll in universities, but asks if that happens with American elementary and secondary education. He believes that federal control will ultimately work to lower standards just as it has in other areas of education. A federal data collection effort, which could solve the supposed lack of information, would allow government officials to “cherry-pick statistics to show the supposed need for further federal action to fix problems.” McCluskey suggests that there actually is an abundance of information on universities, but that people are not doing enough research to find the information for which they are searching. He agrees with the need for more need-based aid, but claims, “The commission stopped short of saying that aid should be focused on the poor and eliminated for all other students.” McCluskey insists that if there is a problem with higher education that a national strategy is not the answer.

He provided some interesting numbers. “While the average cost of tuition fees, room, and board is up roughly 80 percent at four-year schools over the past twenty years, aid per full-time equivalent student is up 163 percent.” Indeed, where most of the panelists felt the problem with higher education fell with the financial aspects, that may not be entirely accurate. Meaning, if the problem doesn’t lie with the student-loan system, then the types of students that attend universities may be at fault. Nearly all the panelists acknowledge that some sort of need-based aid is required to establish a level playing field, but most want strict language when granting that aid. Ultimately, the solutions provided fell down ideological lines. Miller and Kamenetz felt the federal government should take more control over higher education, and Nelson and McCluskey advocate less control by the government, but rather changes within the system. The federal government has yet to make sweeping changes in higher education, and no person is sure they will.

Matthew Hickman is an intern at Accuracy in Media.