Cutting Our Way to Greatness

Last week I challenged David Levy’s Washington Post column that argued that faculty should teach more as a way of reducing the costs of higher education.  The crux of my argument was the importance of providing faculty with the time to engage in discovery so that they had interesting things to say in class, insights that would change students’ perspectives and help differentiate them in the marketplace and life.

People have questioned the value of scholarly work since at least Plato’s time, but Mr. Levy’s column is part of a wider narrative that argues that higher education costs too much, that costs have been rising uncontrollably, reducing student access and forcing people to mortgage their futures in pursuit of degrees that no longer guarantee financial success in life.  This narrative is simply wrong.  It is wrong on every count. I fear that if it is not debunked, it will lead students and policy-makers to make very poor decisions that will limit all of our futures.

Most news stories on the costs of sending a son or daughter to college report the highest private school tuition rate they can find (currently more than $45,000 per year or $180,000 for four years).  Yet, the national average in-state tuition for four years of college is $33,300—the cost of a Toyota Avalon.  This is less than a year’s tuition at the most expensive schools and just 18% of the cost of getting a diploma from the priciest institutions.

Tuition is rising sharply at most institutions, but the cost of providing higher education is not. People confuse the two because tuition is the share of higher education costs that students pay.  But students are paying more largely because state support for higher education is falling. At UNLV, we have seen a decline in state support of more than 40% in four years.  Rising tuition has not fully compensated for this revenue loss—spending is down.  The same is true across U.S.: average total cost per student is less now in real terms than in 1980, but students are paying a much higher share of the total (36% now; 22% in 1982).

And while students are paying more, CNN reports that from 2008 to 2010, enrollment went up by 4 million students—an increase of more than 20 percent.  There are both more students and more student loans, but student loan debt as a percent of total household debt remains below 10%.  There is no student loan crisis. Some students have made bad loan choices, but not all student debt is bad debt—you are purchasing an asset that will on average generate much higher income for you over your lifetime.  There are no guarantees in life, but the numbers clearly show that expecting a financial return on your college education is still a very good bet, especially if you obtain a professional degree.  Oh and Peter Theil, the guy who claimed there was an education bubble and wanted to pay students to skip college and start a business? He is now teaching a course at Stanford. LOL Maybe he will pay students to drop his course.

So why does this false narrative persist?  Because it benefits those who have a financial stake in selling solutions to some part of the “higher education problem” (many of these same people, by the way, have fancy degrees from expensive schools). I consider myself a reformer and believe higher education needs to innovate to remain a source of competitive advantage for the country. It is by no means problem-free or immune to criticism.  But this false narrative suggests that we are over-investing in higher education. That a decline in our societal commitment to higher education will fuel economic prosperity; that we can cut our way to greatness by divesting in higher education and providing cheaper alternatives to college.  Really?

 I could cite studies by reputable sources (not pseudo-science), that show links between higher education and regional prosperity, personal income and job performance, but this is a blog post not a scholarly article. So, instead let me ask you a few simple questions: Do you really want your heart surgeon, bridge builder or accountant to get their education by just watching YouTube videos on their iPad?; Which states do you think have better prospects for future economic prosperity: Mississippi, Arkansas and West Virginia (states with the lowest percent of college graduates) or Massachusetts, Colorado and Connecticut (states with the highest rates of college graduates)?  And, which state or country has made it a goal to reduce the number of people with a college education as part of their economic development strategy?  Yep, I thought so.


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