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The Price is Right

December 14, 2012

Anybody counting on college and university trustees to hold administrators accountable for lower costs, more graduates and greater efficiency might be advised to look elsewhere for a champion.

A survey released Thursday by the Association of Governing Boards of Universities and Colleges found that while board members generally think higher education costs too much, most think their institution is perfectly priced. And majorities at both public and private institutions believe that their own institutions can’t do much more to cut costs.

On price and several other issues, the survey reveals a large disconnect between what board members think about their own institutions and prevailing public sentiment as measured by surveys of other organizations. Since trustees at most private institutions and some public institutions hold ultimate authority for setting tuition prices, and since boards are generally responsible for holding administrators accountable and articulating institutional priorities, this disconnect could prove to be a major barrier to bringing about change.

“For colleges and universities to secure continued public understanding and support, there must be better alignment between the public’s needs and higher education’s actions, between the public’s perceptions and higher education’s reality,” the report states. “Currently, the gap between the public and higher education’s governing board members is much too great, as these survey results reveal.”

The report's authors say they hope this survey's findings drive trustees to reconsider their positions and more seriously weigh the concerns of the public; ask difficult questions about cost, price and quality; and better explain the value of a college degree, to help minimize the gap.

The largest disconnect seems to be between board members’ perception of the cost of higher education in general – which seems to track closely with national trends – and their perception of the cost of their own institution. While 55 percent of respondents said higher education in general costs too much relative to its value, only 17 percent said the same thing about their own institution. Most said their institution “generally costs what it should."

“I think it’s fueled in part by their closer understanding of their own institutional needs,” said Susan Whealler Johnston, executive vice president of AGB.

A fifth of survey respondents overall – and particularly those at public institutions (35 percent) -- said their institution was underpriced relative to its value. That does not necessarily mean a desire to increase prices, however; some board members might think an education at their institution is more valuable than what students pay, but might not be willing to raise prices. At public institutions, where state subsidies lower the price to students and families, this might be one explanation.

There also seems to be a disconnect between the recognition that college is priced too high and the ability to cuts costs to lower that price. At both public and private institutions, a majority of respondents said their institution is "doing all it can to keep tuition and fees affordable for students” or “already low-cost or reasonably priced.”

Board members at public universities overwhelmingly listed decreases in state support as a main driver of tuition increases, with campus infrastructure, health benefit plans, administrative costs, and faculty costs rounding out the top five. For private institutions, the latter four were also in the top five, along with institutional aid.

Overwhelmingly, board members said they believed their institutions prepared students for careers and to be happy and engaged in their communities, while ranking higher education as a whole slightly lower on the same metrics.

While the general sentiment pushed by the White House, philanthropic groups like the Bill & Melinda Gates Foundation and the Lumina Foundation, and research groups like the Georgetown University Center on Education and the Workforce is that the U.S. will have to increase the number of students going to college, a fifth of respondents said the United States did not need to increase the number of students earning degrees. That sentiment was lower at public institutions, where only 13 percent of board members said the country did not need more college graduates.

Johnston found that disconnect surprising, noting that you would rarely see a corporate board member saying they shouldn't be trying to increase the number of people using the product they offer.

 

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