President Obama sent a shot across the bow of higher education in his 2012 State of the Union Address when he said, "Let me put colleges and universities on notice: If you can't stop tuition from going up, the funding you get from taxpayers will go down." Was this a well-researched policy statement intended to increase the competitiveness of our nation, or an appeal to young voters and their parents during an election cycle?
Whatever the reason, it has started an active and heated dialog about the costs of higher education. Let me put my bias on the table: I believe deeply in the economic and human value of high-quality education at all levels. So, of course, this thinly-veiled threat of government intervention (price controls?) caught my attention. Yes, it was bound to happen sooner or later: just a few years ago, the escalating cost of healthcare was the public scapegoat. Higher education was due its turn at the political whipping post.
There is no sidestepping the fact that the cost of a college degree is a major financial stressor for most American families. Next to your home, a college education for your child is one of the most expensive "investments" you will likely ever make. So is it worth it?
Critics have actually begun to question the financial value of a college degree. The cost has indeed increased significantly over the years. But rather than just examining the cost, a better question would be to evaluate the return on the investment that this advanced education provides. Here the economics get a little murky, but under reasonable assumptions, a university degree still pays off handsomely. Some rough math provides insight: the "all in" sticker price for a four-year degree varies widely, from $75K at, say, Florida State to more than $200K at Harvard.
Typically, the costs to families are much less when aid and merit support are factored in. So what does this investment get you? Individuals with a Bachelor's degree can expect to earn $2.27M over their lifetimes, while those with only a high school diploma will earn $1.3M, according to US News.
I've seen these statistics before but (once again) I have to disagree with your conclusions. Poor health and dietary habits, criminal behaviour and genetic predisposition will severly impact morbidity statistics. Pointing to these statistics as proof that we have poor quality medical care is not the correct assessment.
PS: Why do you speak so often about "Hannity" and "Hate Radio", etc. ? This isn't supposed to be a forum for airing your political views.
Well, here's just one site. Of course, many will question the veracity of an organization so radical as the New England Journal of Medicine-what would they know compared to, say, Sean Hannity?
http://www.nejm.org/doi/full/10.1056/NEJMp0910064
Just one sentence from this report: "Despite the claim by many in the U.S. health policy community that international comparison is not useful because of the uniqueness of the United States, the rankings have figured prominently in many arenas. It is hard to ignore that in 2006, the United States was number 1 in terms of health care spending per capita but ranked 39th for infant mortality, 43rd for adult female mortality, 42nd for adult male mortality, and 36th for life expectancy."
@LSSMaster: Great post. I might point out that we already have a working example of what you propose: community colleges. Community colleges, for the most part, don't do research; all they do is teach. As a result, tuition is 5 - 10 times lower than it is at four-year universities. Since most community colleges do not require instructors to hold a doctorate, many community college instructors come from the "real world." And community college students don't spend their time partying in dorms; most of them have full- or part-time jobs.
The idea of going to college in order to "find yourself" -- rather than to gain useful knowledge and skills in order to contribute to society -- is a holdover from the days when colleges were finishing schools for the rich. Students who were assured of a comfortable job at daddy's oil company regardless of their grades could easily afford to spend four years partying. Their college degree just confirmed their membership in an elite club which they were born into; it was not evidence of academic achievement. If we're willing to be ruled by a mediocre aristocracy, this is fine. On the other hand, if we want to live in a democratic society where success is determined by talent and determination, we can't afford this outdated version of the "college experience."
Why not demand tha textbook publishers reduce their costs by using Lean practices, like the automobile industry does with its suppliers?
The auto industry doesn't do this, the consumer does. That is the whole point. Unless you get rid of subsidized money, there are no market forces in play. If the consumer had to pay for college (without any outside funding assistance), they could only charge what the consumer could afford. Institutions would be forced to get the cost of their product in line with what the consumer could pay, or go out of business.
"But tuition should be at a level that working students or their families can reasonably afford."
If market forces controlled the cost of college (i.e. if government were completely out of the system), the price would be what families could afford, or it wouldn't exist.
In a normal business you are forced to price things based upon what the market will bear. When you have a new product or service that is in great demand, you can charge based upon a perceived value of the product or service. Over time, competitors recognize that the product or service you are selling has a high profit margin, and they start providing similar products or services, which over time causes price erosion because of the competition. At some point the selling price of any good or service settles at some margin that is slightly above the actual cost of providing the goods or service.
In subsidized situations, like colleges, competitive forces between providers are greatly diminished by the ability to charge prices that aren't based so much on cost as the availability of funding. If government backed funding were not available to consumers, they (the consumers) would not be able to afford the prices that are being charged, and the colleges would run out of customers. As they (the colleges) recognized that they had priced themselves out of existence, they would have two choices: 1) go out of business, or 2) get their costs in line with the competiton.
I agree with many of the comments that have been made - the cost of a college education is enormously high and rising steadily. The debate concerning the value of a college education can be argued on may levels and from a variety of viewpoints.
Having spent a very large amount of time in the academic environment, both as a student (BSME, MBA, PhD) and as an instructor, I can state with a high level of confidence that there is enormous room for institutions of higher learning to lower their costs by adopting Lean methods.
The fundamental reason that folks attend college is to obtain and education. The assumption being that the college has a staff that is qualified to provide that education. However, the pupose of the institution is to make money and they do that through research grants. To obtain the grants, they have to present the researchers' CVs and research/publishing accomplishments. Thus, the best, most knowledgeable staff are devoted to performing research and/or applying for grants. The cost of this is further amplified by having to have state-of-the-art facilities and equipment with which to perform the research.
The education is provided by teaching assistants (grad students), or recent graduates, who transitioned from learning as students to teaching without ever having had a job or any experience in the field. Let alone the fact they their ablity to speak the language was deplorable. Herding 300 students into an auditorium and presenting a lecture on an engineering topic using a PA system and a PowerPoint presentation is not an effective method of teaching. And certainly not a reflection the the cost that is being charged for the experience.
Having been a "late bloomer", I had more practical knowledge and experience that most of my professors. I found it a challenge to take what they were presenting and match it up with what I knew from experience. They kept referring to "the real world" of engineering and manufacturing. It was patently obvious to me that they had never seen "the real world".
What would the cost of a college education be if the students were truly being educated as a first priority of the institution, and all the research was being done by a separate division of the inrtitution? What if the institutions reduced/eliminated their enormous staffs as we have done "in the real world"? What would happen if they had to play by the same rules that we have to play by "in the real world"? Why not demand tha textbook publishers reduce their costs by using Lean practices, like the automobile industry does with its suppliers? Why not have the educational experience incorporate periods of "hands-on" work as interns in organizations, for which the students would earn money to fund their education and gain "real world" experience? Yes, that would make earning a degree require more time, but we would have graduates that were better prepared to enter the job market and provide value from the start, not after an extended period on the payroll.
There is a lot of discussion about "the college experience". It is a time of discovery, a time for a young person to "find themselves. It must provide a "well-rounded" educational experience, with time for social activities and recreational opportunities. I can agree with that, to a certain extent. But why can't they "find themselves" and decide what they want to do with their lived prior to entering college, so their time at college is spent preparing for their career, not "finding themselves"? How many college students change majors and wind up with a degree in :general studies"? They paid the full price for that degree, have a large student loan, and can only find a job in a fast food restaurant. Sure, they are "well rounded", had fun at all the parties, and had a great social life while at college. But now, they want someone to bail them out and provide help in paying back the student loan.
Many graduates of high school read at an eigth grade level, cannot tell time unless the watch has a digital readout, cannot make change or balance a check book. They were pushed through that educational system, which is broken, and move onto a higher education at an institution that is also broken.
Lets focus on fixing the root cause of the problem and not waste time the future of our students, and the future of our country by debating the effects.
@Patrick Harris: Most state university systems have multiple tiers. An annual tuition of $6500 seems low for any but the bottom-tier schools. At a mid-tier state school, you could easily pay that much for one semester. Still, let's accept the $6500 a year number and compare that with what you paid when you went to school.
If you made $12,000 a year and paid $1500 a year in tuition, you spent 12.5% of your income on tuition. I'm sure that wasn't easy, but it sounds like a manageable amount. Someone who pays $6500 a year in tuition would need to make at least $52,000 a year in order for their tuition bill to represent the same percentage of their income. Do you know of any part-time jobs which pay that much?
I agree that it's good for students to be able to work at least part-time while going to school. I worked full-time while going to school. But tuition should be at a level that working students or their families can reasonably afford. These days, the annual cost of attendance at top-tier state schools is more than 50% of the median family income. The cost of attendance at some private universities (like Dean Orsak's school) exceeds 100% of the median family income. This is totally unreasonable.
I do not agree with the president on too many things, but on this subject he is correct. Universities around the country have been on a tuition feeding frenzy for decades. When I graduated in 1979 tuition was around $30 per credit hour (typically 3 - 4 credit hours per quarter per course). Today it is well over $200 per credit hour. In addition the cost of books and other fees have skyrocketed. This was a state university which is partially funded by the taxpayer. Private universities throw the entire cost on the students. Over the years I have noticed that the school that I attended has raised tuition costs an average of around 9% per year with no end in sight. There is absolutely no excuse for the size of these increases. I attribute the increases to government subsidies. The schools simply view this as free money. Well folks the party is over. Schools have had their way for so long that the costs of higher education has become unaffordable to many. It is about time someone stepped in to put a stop to the insanity that has pushed a decent education out of reach.
Student loans are the real culprit in high costs. Once everyone is entitled to a degree (sound a little like housing?), demand goes up and so do costs. If you want to go to college and can't afford it, get a loan or part-time job. If you want to get a loan, that is a private matter between you and your bank. The government needs to get out of the student loan busisness, just like the housing business. My state's schools are $8,655/year in tuition. Anybody could make that with a part-time job. I made $12,000/year in college 25 years ago when tuition was $1,500/year.
Note: I originally said $6,500/year, but that was two-year old data. Being a government worker, since my salary hasn't risen in two years, I expection tuition to remain stagnant. If you live at home and commute like I did (free university shuttle), you have minimal expenses. Of course, at this rate ($1,000+/year increase) when my daughter graduates in 11 years, tuition will be $19,655+/year. I made that much my last year of college 25 years ago, but it is still manageable. Plus, her parents and grandparents will kick into the cost. The point is, get Uncle B.O. out of the picture and universities will drop their tuition or go out of business.
(I also did the math, since I graduated 22 years ago the tuition ratio is 5.77 [8,655/1,500]. I made $32,000 in my first job, so graduating seniors should make $184,640 [5.77*$32,000]. Uncle B.O., will you please raise my GS-13 salary to compensate?)
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