Essay challenging article that said Cal State more expensive than Harvard

By now you probably have read in the news that, according to the Bay Area News Group in San Francisco, an average Harvard University education for a family earning $130,000 annually is less expensive than a California State University education.

As an individual who spends a great deal of time delving into the world of higher education finance, I feel compelled to clarify this very misleading report. The published report stated that due to Harvard’s vast $30-plus billion endowment and substantial tuition discounting practices, a student from a family earning an average of $130,000 per year would pay only $17,000 to attend Harvard, not the listed tuition cost of $36,300. This was compared to the overall cost of a Cal State education, which was listed in the report at $24,000 per year, and to a University of California education, listed at $33,000 annually. 

Now for the facts. Despite the fact that we have had to rapidly increase Cal State tuition fees due to unprecedented state legislative budget reductions in previous years, Cal State and CSU-Long Beach remain among the most affordable universities in the nation.

At Long Beach, for example, students in 2011-12 paid $6,240 annually (Cal State average: $6,519) for Cal State system and campus-based tuition fees, plus an additional $10,658 for full campus-based room and board. This means that a full year at CSULB (with room and board) for a student from a family earning $130,000 annually actually costs $16,898 as opposed to the reported $24,000.

Furthermore, when comparing the cost of two different universities, it is common practice to compare tuition and fees of one campus to the tuition and fees of another campus and not to include the additional cost of room and board for only one of the institutions in the report. In fact, in making the basic assumption that a Harvard student also has to eat and sleep and therefore pay room and board, as does a CSU resident student, Harvard’s full price jumps to over $56,000 -- not the $36,300 listed in the report and published in newspapers throughout California.          

Additionally, according to recent Delta Cost Study data, when assessing the average tuition and fees, excluding room and board, collected by both Harvard and CSU campuses for students from all family incomes, CSU institutions actually collect around $5,000 for educational purposes while Harvard collects over $20,000 per student -- despite having the world’s largest university endowment of $30 billion.      

Finally, do not fall victim to misleading and inaccurate reports regarding actual college and university costs. For students and families making difficult college and university cost comparisons, it is important to find out what the average family pays to attend, the “net tuition” charged per family. It is also important to find out the average student debt load upon graduation and the percentage of students graduating in debt.

As a national leader in making this information available, CSULB and the entire CSU have developed websites as part of our College Portrait and “Public Good” pages where this information can be viewed by all prospective students and families. The CSU and CSULB are proud to be among the nation’s best in having the lowest student loan indebtedness upon graduation, and we hope that all Californians will invest in our students to keep it that way. 

Good information in the hands of all consumers will prevent them from falling victim to sensational headlines that have more power to mislead than to educate.

F. King Alexander is president of California State University at Long Beach.

University of Pikeville seeks to join Kentucky public higher education system

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U. of Pikeville will probably face political headwinds in push to become a public university in Kentucky.

Louisville Seminary will eliminate master's tuition by 2015

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Louisville seminary, concerned about debt burden for graduates entering low-paying fields, will give full scholarships to all master's students by 2015.

Cooper Union weighs charging tuition, raising questions about viability of tuition-free model

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Cooper Union debate about charging tuition points to the challenges of maintaining tuition-free higher education.

It's Not Me. It's You.

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After three years of appropriations cuts, public colleges use tuition increases to draw attention to what the state is no longer providing.

Starting to Worry

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Despite strong fiscal positions, elite liberal arts colleges have started to question the long-term viability of the sector's financial and educational models.

Price Points

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Finance officers try to change the conversation about tuition discounting and push for more integration of budget and enrollment functions at their annual meeting this week.

Who Gets In, What It Costs

One confusing thing about the higher education industry is the conflict between social goals and economic choices. The trend toward universal access to higher education has led to the notion that everyone should be able to find a route into higher education that matches interest, preference, ability and economic circumstance. This in turn has focused attention on the student selection and pricing structure of higher education, a topic of infinite interest, controversy, and confusion.

Q: Why do colleges and universities that all give the same degree with the same general requirements have such different prices?

A: Like other consumer industries, colleges and universities serve different markets and tailor their products to appeal to different segments of the market. This is not unlike the auto industry, where all cars do pretty much the same thing -- get you to the store and back -- but they come in an endless variety of styles, sizes and luxury, with differentiated prices as a result.

Q: Is education a social service that should be available to all?

A: Partly no. Higher education is a subsidized and regulated industry that in total provides almost universal access, but that in the case of individual institutions carefully selects the market niches they serve. Subsidies provide education only to a certain number of individuals, not everyone who applies or need support.

Q: Why are higher education prices so high?

A: Some higher education prices are high, some are low, and some are virtually free.  The published price of higher education is often far from the actual price.  

Q: Why do colleges and universities charge different amounts to different students even when they quote the same price to everyone?  Is that fair?

A: Maybe not fair, but effective. The college?s goal is to select the highest quality student body possible. The college also wants a diverse population with students from different parts of the country and the world, with different skills, with the right balance of male and female, and with the right ethnic diversity. All these characteristics, whether demographic or test score based, reflect various forms of merit a college believes desirable. To get the right mix, colleges discount tuition, fees, and other costs through scholarships, grants, loans and other support to attract those students with the merit characteristics it needs to achieve these goals. Some students will pay the sticker price, some students will pay less, and some students will attend free.

Q: What are merit qualities, and which ones earn a discount?

A: Merit characteristics are basically anything that is not random. Those that earn students an edge in admissions include high scores on standardized tests (SAT), high grades from elite high schools, athletic talent, musical talent, ethnic background, extensive community service, international background, and a few others.

Q: Does the emphasis on these merit qualities give an advantage to rich people?s children over poor people?s children?

A: Yes. The cost of preparing a child for admission to a selective college is high, and this is a form of indirect price required for admission to selective institutions. Parents who have the resources or make the sacrifice to pay this price do so to ensure that their children will have every merit advantage to improve the children?s chances for admission to a selective college. The highly invested parents are a strong lobby for merit-based selection processes and the price discounting that follows.

Q: Then how can the admission and discount criteria be fair?

A: That depends on what we mean by fair. If it means selecting based on clear objective criteria, for the most part the criteria are fair because colleges apply them the same way to everyone. If fair means that the criteria take into account the disadvantages high school students from poor inner city schools experience, the answer is, sometimes the criteria are fair. Most colleges include in their criteria the ability to subsidize students whose merit indicators of grades and scores are not up to the level of the majority of the students in order to create access for promising but underprepared, and in particular underrepresented, students. Of course, this takes an admission opportunity away from a better-prepared student, so whether it is fair depends on whether you apply social criteria or merit criteria.  

Q: What would a truly fair system look like?

A: A truly fair system, in a statistical sense, would do the following: It would assume that all students with SAT scores of 1000 and above and high school grade point averages of 2.5 and above have the ability to succeed in college. Although on average, students with higher SAT?s and higher GPA?s will have more success, students with the lower scores can succeed. To be fair, the college would allocate places in the freshman class by lottery and provide financial aid to any student selected in this random fashion who needs it.

Q: Will colleges and universities ever do this?

A: Most parents and students do not think this is fair because they think that college admission should be awarded based on an assessment of merit, not on a lottery, and so they prefer to argue about the criteria that determine merit rather than seek to implement a statistically fair system based on random selection.

Q: What is the effect of declining amounts of state support for public higher education on cost, price, and access?

A: As state support declines, the price of public higher education rises to compensate.  The public institutions will discount the higher price with scholarships, subsidized loans and grants of various kinds. The range of discounting in public institutions will grow as their sticker prices rise. They will become more and more like private institutions in constructing their student population profiles through various subsidies and discounts. Students will choose institutions based on their desirability and on the discounted net cost to each student. 

Q: What are the advantages and disadvantages of this subsidized and regulated free enterprise educational system?  

A: It provides a college opportunity at some level and at some price to every student who wants to attend college. It is endlessly flexible, it responds to students and parents, and it reacts quickly to changes in government subsidies and regulatory environments.  

At the same time, it produces a highly stratified set of institutions with different levels of competitive quality and different levels of resources devoted to undergraduate education.  

If you believe that students who attend college in America should have the same opportunities and same level of instructional and institutional quality, the system is a failure.  

If you believe that students should have the opportunity to select an institution that matches their ability, their means, and their aspirations, and if you believe that competition among institutions for high quality students is a method for achieving high quality education, then the system is a success.

John V. Lombardi
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Predictability and Its Costs

The chancellor of the State University of New York proposed Thursday that the state adopt a new tuition policy: Each year, tuition would go up for freshmen by the rate of the Higher Education Price Index (an inflation measure for colleges), and then be frozen for those students for four years.

The proposal, modeled on a 2003 Illinois law, is likely to be popular politically. Students and parents hate the unpredictability of tuition increases. In New York, as in many other states, tuition may remain relatively level for a few years, followed by years of double-digit increases. Pure luck can determine whether a family gets by with relatively flat rates or massive bills.

SUNY's chancellor, Robert L. King, says his plan would "protect" students and their families from such increases. But a look at the history of state tuition policies  suggests that the protection may not be all it appears.

States regularly adopt tuition policies, limiting the rate of increase or even freezing tuition, and lift those policies during the same kinds of financial crises that prompt states to adopt double-digit tuition increases. If King's policy wins approval, it could easily be undone the next time the state faces a deficit and the governor doesn't want to raise taxes (a not infrequent event).

More broadly, the Illinois plan prompted some concern in that state that colleges would seek to set their rates artificially high, so they could cover unanticipated expenses during the four years that a given class would be assured the same rate. Colleges have many set expenses: Professors must be paid, libraries stocked, buildings heated and maintained, etc. In theory, King's plan would also require the state to keep up support for the university system. But if that doesn't happen, does the university system cut back or renege on its pledge to students?

And there's one other question, too: Tuition predictability is great for families with decent levels of income and savings. But does a plan like this really do anything for those for whom the only thing predictable about tuition is that they can't afford it?

It will be interesting to see how this plays out in New York. Judging from
this report,  the debate will be fun to watch.

Scott Jaschik
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Letting Down the Soldiers

These are challenging times for members of today’s military. Not only are servicemen and women called upon for extended combat tours in Iraq and Afghanistan, some on the home front are being asked to lengthen their careers or return to active duty from the Reserves.

Given the sacrifices that they are being asked to make, it is disturbing that many military families can’t seem to get fair treatment on tuition at state colleges and universities.

In Virginia, a state legislative committee recently rejected a measure designed to improve the quality of life for military employees and their families who are stationed in the Commonwealth. Introduced by Del. Viola O. Baskerville, the bill included a provision to extend in-state tuition benefits at public colleges and universities to active-duty members of the armed services, their spouses and dependents. Many of these military service members and their families are either stationed in Virginia for a period that is too short to qualify for residency or they move so often that they prefer to keep their residency in either their state of birth or state where they plan to eventually return.

Those who opposed the bill generally cited fiscal concerns,  but the impact in terms of a total state budget would be miniscule.

Unfortunately, when it comes to the question of whether in-state tuition is made available to military families, the current answer is a patchwork quilt of different policies from state to state when, pardon the pun, a uniform policy should be in order.

In 2002, a U.S. Army-formed working group examined the in-state tuition policies of states and found that most, but not all, provide in-state tuition rates to military families when they are stationed in state.
The working group recommended an "ideal" in-state tuition policy that would provide:

  • in-state tuition for service members and their families in the state of legal residence;
  • in-state tuition for military and family in the state of assignment; and
  • continuity for the duration of a student’s degree program once a student has started (even if his or her parent is reassigned to a base in another state or outside the country).

A slim majority of states, 26 in all, have adopted all three components of the recommended policy. In 18 others, in-state tuition is available to both military residents and assignees, but continuity of the benefit, once started, is not always available. And in five states -- Massachusetts, Vermont, Michigan, Indiana and South Dakota -- policies are left up to individual public colleges and universities to decide, creating uncertainty and stress for military families.

That leaves only one state, Virginia, which as a matter of policy does not offer assigned military families the opportunity for in-state tuition at any public college or university. This situation deserves special scrutiny because Virginia ranks No. 2 in the nation when it comes to military dollars invested, trailing only California. Military bases are a key part of Virginia’s economy, with spending exceeding $34 billion a year and 208,000 people employed at 147 installations.

Doesn’t it seem odd that, of all the states in the top 10 for military investments, only Virginia does not follow all three of the recommended guidelines?

Six of the top 10 states in military investment -- Texas, Maryland, Georgia, Alabama, Connecticut and Washington -- have changed their policies within the past two years, in order to comply with the recommended guidelines. Two other highly ranked recipients of military investment, Florida and Arizona, were already in compliance with the recommended policies. The largest state in terms of military investment, California, follows all three guidelines, though its continuity program is weak, offering only one year of in-state tuition after reassignment out of state.

The men and women of our armed forces risk their lives in service to our country. These families should not be asked to bear a greater economic burden in educating their children than their civilian neighbors across town.

Now is the time for all states, especially Virginia, to adopt a consistent, three-pronged policy that would mandate in-state tuition for military families, as well as offer continued in-state tuition once higher education has begun. This seems the least we can do back on the home front for the millions of men and women who are serving our country in uniform.

James A. Boyle
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James A. Boyle is president of College Parents of America, a national, nonprofit membership organization dedicated to empowering parents to best support their children on the path to and through college.  Headquartered in Arlington, Va., College Parents of America reaches more than 25,000 current and future college parents.


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