Nov. 2, 2007

A College-Friendly Take on Rising Prices

You would think that a week after the College Board reported that college and university tuitions had risen at three times the rate of inflation this year, a Congressional hearing on the price of a higher education would result in tons of saber rattling and sky-is-falling rhetoric about how college is getting out of reach of the average American. Yet while a House hearing Thursday featured a few tough words and warnings for college leaders about the risks they and the country face if tuitions continue to escalate, the discussion centered on tactics that might help colleges cut their internal costs or shore up their budgets — notably, a proposal that would seek to ensure that state legislators provide adequate financial support to their public colleges.

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The hearing before the House Education and Labor Committee — conducted days before the committee’s Democratic leaders plan to introduce their version of legislation to extend the Higher Education Act — was a far cry from some of the discussions that took place in previous Congresses, when Republicans controlled the committee. That’s not to say that the panel’s current Democratic leaders are entirely soft on the college price issue. Rep. George Miller (D-Calif.), the committee’s chairman, issued a rare joint news release with his Republican counterpart, Rep. Howard P. (Buck) McKeon, in which they both warned that Congress can’t continue to pour money into increased student aid without seeing a slowdown in the rate of tuition increases.

And Miller expressed concern near the end of the session about evidence that seemed to suggest that college spending was increasing without a concomitant increase in how many students are earning degrees. “That’s very troubling,” Miller said. “You would think the mission of the system is degree attainment.”

Several of the panel’s Republican members were more vocal about rising tuition prices. “I don’t care how you cut it — the costs of higher education have gone up faster than the cost of living,” said Rep. Michael Castle (R-Del.). And Rep. Ric Keller (R-Fla.), who briefly headed the House’s higher education subcommittee before his party lost last November’s election, said bluntly: “I’m not saying we’re so frustrated we’re about to implement price controls, but I will say that it’s starting to tick people off around here.”

But if college leaders were expecting a tongue lashing, they did not get it. They were aided by the fact that all three witnesses invited to testify were “of” higher education; two of them are campus presidents, F. King Alexander of California State University at Long Beach and John E. Bassett of Clark University, in Massachusetts, and the third, Jane V. Wellman of the Delta Project on Postsecondary Costs, Productivity and Accountability, is a longtime policy education analyst who, while clear-eyed in her assessments and well-regarded by observers of all stripes, works closely with higher education leaders and associations.

Bassett focused his comments on the efforts that colleges were taking to control their costs, including being more transparent about how they were spending their money (through efforts like the National Association of Independent Colleges and Universities’ University and College Accountability Network) and increasing uses of consortial arrangements to cut back-office costs, like one among private colleges in Wisconsin.

Alexander repeatedly hit on a common plaint of public university officials: that the biggest driver of rising tuitions for public institutions is the instability — and in many cases the steady decline — of state support. “States haven’t been keeping up with their obligation,” Alexander said, forcing public colleges and universities to ratchet up their tuitions to keep pace with growing enrollments and the costs that accompany them. Wellman provided some data from her research project that largely backed up Alexander’s point, showing that public research and master’s level institutions increased their median tuition price by 35 to 40 percent from 1999 to 2005, despite small increases or even decreases in their overall spending. “The tuition increases were just to keep up” given the failure of state funds to keep pace, Wellman said.

Alexander said he believed Congress could change the equation by putting in place a new program that would provide grants to colleges based on the proportion of Pell Grant recipients that they enroll, retain and graduate — and would withhold funds from institutions in states that cut their financial support for public higher education and/or college students.

He recalled being told by a state legislator in Kentucky (where he headed Murray State University before moving to Long Beach): “Why should we just give you more money when you can get it from the federal government,” in the form of increased need-based aid and federal institutional support.

Miller and other lawmakers noted that provisions designed to ensure that states hold up their end of the bargain — known as “maintenance of effort” partnerships — are common in other federal programs, such as the primary funding for elementary and secondary education. Miller was also sympathetic to the idea that the federal government cannot continue to pour money into federal financial aid — as Congress just did in approving $20 billion in increased Pell Grant money in this fall’s budget reconciliation legislation — if state leaders are going to use it as an invitation to reduce their own contributions. “Otherwise we’re on a fool’s errand — we keep shoveling it in at the top and they keep shoveling it out at the bottom,” Miller said.

But if Miller seemed supportive of the colleges’ notion that declining state support is a major reason for rising public college tuitions, he seemed troubled by Wellman’s argument and data suggesting that “there’s no evidence that [the money colleges are spending is] going to pay for student success or increasing degree attainment.”

Wellman urged the federal government to do a better job collecting data on how colleges actually spend their money — which is likely to be a focus of the House committee’s Higher Education Act bill. Right now, that information is “way too shrouded in technical detail and not accessible,” and it needs to be “more readily benchmarked and put in the hands of trustees,” so they can determine “where you’re spending your money, and where you can do a better job.”

— Doug Lederman

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