Since the late 1980s, colleges and universities have spent increasingly more per student across nearly every major spending category, according to a new report from a Federal Reserve Bank economist who says his findings indicate broad-based reasons behind rising college costs.
The report, an Economic Commentary released Wednesday by the Cleveland Fed and Senior Research Economist Peter Hinrichs, found inflation-adjusted per-student spending rising across categories at both public and private four-year institutions from 1987 to 2013. Private college and university spending growth outpaced that of publics in most categories, Hinrichs found.
Research spending experienced some of the highest growth, rising 62 percent, or $1,930 per student, at public institutions and 71 percent, or $3,647 per student, at private institutions. Student services also saw a high increase on a percentage basis, rising 54 percent, or $556 per student, at public institutions and 108 percent, or $1,881 per student, at private institutions.
Public university per-student spending only fell in operations and plant maintenance, where it dropped 8 percent, or $148 per student. Private university per-student spending only fell in public service, slipping 9 percent, or $131.
Hinrichs has previously found that the share of employees holding administrative positions in higher education has not changed substantially between 1987 and 2013, a finding many would consider contrary to popular belief.
We usually think of college as providing a boost up the class ladder. That is what it did for a generation or more of Americans, particularly from the 1950s through the 1970s. But since around 1980, college has actually calcified class in America.
That’s one upshot of Tamara Draut’s new book, Sleeping Giant: How the New Working Class Will Transform America (Doubleday, 2016). She explains how the central divide between the working class and the middle class now is college. Not that things are entirely rosy for those with bachelor’s degrees, but those without degrees have experienced a more severe pinch, with proportionately shrinking wages, degraded conditions, few job protections and general insecurity.
Moreover, contrary to college standing as an open thoroughfare for Americans wanting to rise, it has become a gated toll road primarily available to those from middle-class and upper-class families. Those who have gone to college beget those who go to college: if your parents didn’t go to college, you are much more likely to work at or near minimum wage. Only about 9 percent of those from the lowest quartile of wealth complete college degrees, whereas about three-quarters from the top quartile do.
A key impediment has been the exponential rise of tuition prices since the 1970s, at several times the rate of inflation, correlated with the reduction of public support, which in turn has brought the steep increase in student debt and student work hours.
This has produced what Draut called in an earlier essay “The Growing College Gap,” in Inequality Matters: The Growing Economic Divide in America and Its Poisonous Consequences. We usually think that we have seen great progress if not solved the problem of racial inequality, but the enrollment gap between white students and black students was about 5 percent in 1970, whereas it had more than doubled, to 11 percent, in 2000. Similarly, Hispanic students have seen the gap widen from 5 to 13 percent. Affirmative action gets headlines, but we have actually gone backward in attaining racial equality in higher education.
One of Draut’s key insights is that the class divide is not just a matter of money but also one of culture. As she remarks, “When once a steelworker and an accountant could live on the same block, drive the same car, vacation at the same place and eat at the same restaurants, over the course of the 1980s, 1990s and the first decade of the 2000s” those from higher classes have little substantive contact with those from the working class except when they ring up their groceries or take care of their elderly relatives.
That has precipitated a public and political blindness to the new working class, even though it constitutes 60 percent of Americans. Rather than a silent majority, it is an invisible majority.
The cultural divide has two daunting consequences. Because those who work in journalism and other news media come from the upper, college-degreed cohort -- as Draut adduces, in 1971 only about half of journalists had B.A.s, whereas 92 percent do now -- they have little direct sense of the working class. Nor is there a strong interest to represent it in the main news organs, like The New York Times or The Washington Post, whose audiences are largely college educated.
In Draut’s analysis, after the 2008 crash, about half of the news focused on the banks, a third on the federal response, a fifth on businesses and only a smattering on working-class people who might have lost jobs or their houses. Rather, the Post ran a feature on a banker getting by on a reduction of her salary -- to $300,000 a year. Hard times indeed.
Similarly, those who work as congressional staffers come almost entirely from college backgrounds. Of high-level staffers, about half “attended private colleges for their undergraduate degree, including 10 percent who went to an Ivy League school.” They are typically the ones who get the internships inside the D.C. beltway, as well as can afford to carry the expenses of internships.
That has effectively shut the working class out of public representation or political power, even though it constitutes a majority. For Draut, the key is to change the narrative, popping what she calls the “class bubble.” One corrective is simply that we are not all middle class: most Americans are working class.
In addition, Sleeping Giant shows that the present working class no longer fits the iconic image of the construction worker in hard hat who had a union to speak for him. Instead, it is largely female, about half Latino and African-American, usually nonunionized, and struggling to make ends meet at or near minimum wage while laboring in home health care, fast food and retail, which have gained the bulk of new jobs.
Since college is a key class marker, it’s easy to blame higher education itself as the problem. But for Draut the problem lies in the policies that have drained equal opportunity from it and segregated it, and in turn she advocates policies to enhance public higher education, notably reducing tuition fees and eliminating student debt. In this, she differs from the diagnosis of John Marsh, who argues in Class Dismissed: Why We Cannot Teach or Learn Our Way Out of Inequality(Monthly Review, 2011), that college has been overemphasized and offers a false solution, so we should pare back college attendance.
Draut herself was a working-class beneficiary of higher education: the daughter of a steelworker, she went to a public university near home in Ohio, which sent her on her way to a job in advertising, then with Planned Parenthood, and since 2001 with Demos, a progressive think tank, where she started as a researcher and is currently a vice president.
Demos was founded in the 1990s as a counterweight to the many conservative think tanks, and it has produced reports such as “The Great Cost Shift,” about the draining of public support for higher education, and “The College Compact,” about enhancing public support. Draut first worked on studies of credit-card and student loan debt, which spurred her earlier exposé, Strapped: Why America’s 20- and 30-Somethings Can’t Get Ahead (Doubleday, 2006).
She learned a lesson from the battle over credit cards. In seeking reform, as she recalled in an interview with me, “there’s a beltway mentality, ‘Well, that’s never going to happen; we’re never going to regulate the credit-card companies.’” But she proudly attended the 2009 signing of the Credit Card Act, which regulates rates and fees and has helped those in debt. As she quipped, “I got the last laugh on that one,” and she sees the same possibility for higher education: “Debt-free college is now a real idea and part of the political debate.”
That’s one salutary reminder we can take from Draut: it might be a long road, but good ideas that seem unrealistic at one moment can win their day. In academic scholarship, we typically focus on conceptual problems, commenting on one and moving onto the next, and in fact we are continually looking for what’s new or next. But in politics, change sometimes seems glacial, and one has to be dogged. It’s useful to keep in mind that massive student debt is only a recent development, arising since the 1980s, and 10 years ago, the idea of abolishing it or enacting free public higher education were considered pie-in-the-sky proposals. But they’re on the agenda now, and we have to keep working to accrue the data, build the narratives and devise policies that aim toward more equality.
Jeffrey J. Williams is a professor of English and of literary and cultural studies at Carnegie Mellon University. His most recent book is How to Be an Intellectual: Essays on Criticism, Culture, and the University (Fordham University Press, 2014).
Higher education is glutted with courses, many of which are marginal or associated with arcane, duplicative or outdated subjects. That is at the heart of tuition increases, student debt, budget shortfalls, legislative distrust, poor adjunct pay and too few tenured or tenure-eligible professors at typical colleges and universities.
Last year Forbes reported that more than half of American professors are part time or not tenure eligible. Contingent faculty members are hired to facilitate the ever-expanding curricula. Because they typically are not empowered to take leadership roles in departments, the service workload of continuing professors has increased, affecting research, advising and instruction.
Professors can debate the causes of budget shortfalls at their institutions. There is plenty of blame to go around.
An influential opinion piece in The New York Times Sunday Review, “The Real Reason College Tuition Costs So Much,” notes that public investment in higher education, when adjusted for inflation, is vastly higher than 1960s levels when government funding was deemed generous.
According to the op-ed, any argument about a lack of public support for higher education “flies directly in the face of the facts.” Rather, the piece cites the increase in administrative positions coupled with seven-figure salaries for presidents as the real reasons for budgetary deficits triggering higher tuition.
The Atlantic Monthly ended 2015 with a special report titled “Hope and Despair: What Is the Future of Higher Education?” It included interviews with leading scholars and advocates for higher education who spoke about the usual impediments: lack of public funding, declining student competencies and overemphasis on preparing graduates for the workforce.
In the wake of such an environment, the report noted, colleges resort to “an array of cost-saving measures, relying increasingly on adjunct faculty and student-tuition increases.”
Not once was curriculum mentioned, nor how it impacts the budget.
Many colleges and universities have adopted budget models called by many names, including responsibility-centered management or resource management models. Those practices are often tied to curricular development, allocating funds based on student credit-hour generation rather than on the number of majors.
In other words, a department with fewer than 50 majors may have a bigger budget than another with 1,000 majors, all based on the number of credits amassed via curriculum.
These budget models became prevalent in the last decade, spawning a tsunami of courses across disciplines as units promoted trendy topics or duplicated other departments’ popular classes. Budget models were not supposed to inflate catalogs. Initially, the hope was more relevant courses would be embraced and low-enrolled courses eliminated.
However, administrators overlooked a fundamental problem: the faculty owns the curriculum.
As such, presidents, provosts, deans and even chairs can do little to stop departments proposing new courses, retaining outdated ones, mandating prerequisites and creating sequences, options and tracks.
Professors and the organizations that represent them will have difficulty amending budget models, addressing top-heavy administration, reducing salaries of presidents, urging corporations to stop agenda setting and rallying legislatures for more funding.
But they and faculty senates can and should do something about glutted curricula. Otherwise, they can count on:
Slim to no raises each year because of tight budgets.
The more new courses, the more people will be required to teach them.
Adjuncts will probably be working even harder for lower pay because that is the only way glutted curricula can be serviced.
Assistant and associate professors will be teaching more with extra service and conducting scholarship less, potentially affecting promotion.
Degree progress will slow, adding to student debt.
Below you will find recommendations for the faculty to fight curricular glut, the sheer scope of which indicates the power of the typical professoriate in matters associated with curricula:
Require paperwork within your unit documenting why any new course is needed, what it will cost (equipment, software, licenses, subscriptions, graduate assistants, etc.), how it will affect degree progress and whether it will add to colleagues’ workload.
Create or use universal course titles, such as “seminar” or “workshop,” allowing different subjects each semester without expanding curricula.
Eliminate outdated courses that may have been important in other eras but less so now. (Often classes remain long after professors who proposed them have retired.)
Delete any course with the word “intermediate” in the usual triptych of classes titled “beginning,” “intermediate” and “advanced.” (Or with suffixes 1, 2, 3, as in Economics 1, 2, 3.) Those are often artifacts of the quarter system. Make beginning and advanced classes more rigorous so the same content exists in two rather than three courses.
Require no more than two cornerstone classes (introductory course work) for first- and second-year students and two capstone courses for juniors and seniors. Make as many as possible of remaining courses electives that any of your own majors can take, accelerating degree progress.
Remove as many prerequisites as possible, especially ones associated with silos (courses promoting one viewpoint or topic). Silos undermine degree progress if students must take one course to qualify for another when no new particular skill is required.
End sequences and tracks. If a genre of courses doesn’t appear on a diploma, it may be a silo. (Example: American Colonial History on a history diploma.) Make those classes electives, and let students decide whether to take them. Better still, reduce the number of courses in the silo so that it no longer is one.
Generate student credit hours strategically by offering large nonmajor principles courses, saving small classes for majors. (Example: a 200-seat Principles of Poetry class rather than 10 poetry workshops for the same number of students.) You will produce the same number of credit hours while reducing sections. And if your principles classes are good enough, you’ll recruit new majors.
Assess each course annually in your department to see if it emphasizes competencies or advances innovation and degree progress. If not, revise or eliminate it.
Work with deans to change promotion and tenure requirements that encourage curricular development, which often inspires unneeded courses, and instead promote curricular enhancement. (Example: adding a digital aspect to an existing class is considered enhancement.)
Faculty senates can also help in the effort. They can:
Create a curriculum policy for every academic unit outlining what each department should and should not be teaching. (Example: journalism creates content for a mass audience. Communication studies does not.) Departments need to stop duplicating each other’s classes in the competition for seats. A senate policy designating pedagogical areas is a shared governance way of doing so.
Create a Faculty Senate curriculum council that requires strictly adhered-to paperwork before any new course is approved. (Example: mandate sign-off by the faculty of another department for any related course work in addition to an impact statement documenting how the proposed course will affect student degree progress, the teaching budget and colleagues’ workload.) The council can reject or sanction new courses according to the assigned pedagogical area (No. 1 above).
In the end, we can wish for an academic environment in which public support continues to underwrite existing practices. We can post invectives on social media about administrative hiring or salaries, believing our opinions will inspire change. We can blame political parties, entitled students, helicopter parents, corporate interference or any number of excuses or justifications for the state of affairs.
Or we can understand the impact of curriculum on innovation as well as on practically every aspect of the higher education budget, take responsibility and do something about it.
For today’s enrollment manager, it’s nearly impossible to go a week without someone forwarding an article about another college trying a new way to describe the difference between its listed sticker price, the actual cost of attendance and the institution’s discount rate. The current funding model for higher education is broken and we can only blame ourselves for creating a norm of bargain basement pricing for those families in the know, opaque business models and unexplained annual increases based more on competitors’ current price tag rather than our actual campus needs. We continue to play a game of chicken as we wait for a so-called peer to do what we need to do.
On my own campus, we’ve been discussing this issue for several years and have yet to figure out what, if any, changes we should make, but we do know that honesty is a safe bet.
Gimmicks like so-called tuition resets and freezes, as well as “inflation +” models, are our industry’s desperate attempts to respond to critics and to try to appease the price police, when perhaps we should be discussing why we cost so much instead. These efforts are often undertaken in response to the chorus of calls for affordability, but they seldom illustrate for whom the experience will be more affordable.
Neither these efforts nor simply sticking with the status quo are acceptable over the long term -- families deserve additional information before they pay tuition or incur debt to cover campus costs. But any change has a substantial impact and cannot create spiraling financial scenarios for our campuses, either.
There are significant risks involved in changing how we discuss pricing, cost and value. Private colleges, as tuition-dependent institutions, are hesitant to try something new, especially if all of our peers stick with the currently murky language and approaches to cost and price.
As an industry, we need to work at getting it right for our students, which includes lowering actual costs for students and maintaining sufficient revenue to deliver on our mission. Meanwhile, we are muddling through how we describe our costs, often with too many apologies, and witnessing the shuttering of campuses across the country that didn’t find the right programmatic offerings, words or approaches to make themselves institutions of choice for students.
As best I can tell, there are no clear or easy solutions, but there are a few key elements we need to stress in future rhetoric and approaches:
A clear rationale for a new model. Families would benefit from an honest conversation with college leaders about why unfunded tuition discounting cannot continue at the current rate and why discounting has a negative impact on a college’s short- and long-term finances and bond rating. Further, colleges need to clearly describe their business model to their campus constituents, students and parents of current students and delineate how the annual operation is funded. Finally, leaders need to acknowledge that percentage increases in tuition costs cannot continue in perpetuity. At some point we will price ourselves out of the market and into bankruptcy.
Genuine reductions in cost to students. In too many cases, a clear illustration of exactly what has changed and how much less a student will pay is missing entirely from the launch of a new plan. Some institutions reference averages or scenarios for the financially neediest students while ignoring the middle class. Seldom is there a clear statement that all students will pay at least $XXXX less to attend the next year. I realize this is pretty tricky -- saying that the education offered is less expensive than the previous year -- but this is exactly what’s missing and why many of the efforts so far seem to miss the mark. Without a clear explanation to students and families of the financial benefits of a new model, colleges remain vulnerable to criticism that a new model really doesn’t change the cost of attendance to the student (a criticism that is fair in many cases). Colleges need to clearly articulate whether or not students will benefit.
Substantive changes to the business model and how we operate as institutions. One of the reasons many newly introduced models for calculating costs and how they are applied are viewed as gimmicky is because there is no clear explanation of what (if anything) has changed. Will changes in pricing result in a reduction of departments or student services? Is the college dependent on increasing the size of the student body to make up for lost revenue? Has the college become more efficient? Will the college open a new line of business to generate more revenue? How things will change is the key unanswered question, and our public is smart enough to want to know what changes -- and theoretically reductions -- will occur before they commit.
Sufficient marketing of any new model. While I’ve seen some clever YouTube videos and good press releases, strong marketing of a new model seems pretty limited. Some colleges don’t want to be seen “wasting money” on marketing when trying to prove to the world that they care about reducing costs to students. Additionally, many colleges view new models as highly risky, and they don’t want the hangover of a marketing rollout if it doesn’t work. However, the lack of a confident marketing plan results in most of these efforts being viewed as isolated, gimmicky or done with an ulterior motive, like lowering the price to attract more students because there is excess capacity to educate and house them on campus. An aggressive and comprehensive public relations and marketing campaign would have great benefit to a college if it really does want to transform the model and be a market leader.
Clear connection between price and return. Although there have been recent efforts to describe the return on investment of a college degree, historically speaking, connecting price with results and service has been inadequate at best and incredibly opaque at worst. There are so many questions to consider: What goes into a “comprehensive fee”? How does what a student pays for, and gets, differ from year to year in order to justify an increase or not? Are the services students receive as first-year students more comprehensive than as seniors? Should having a full-time faculty member as an adviser add value and cost? Colleges must do a better job connecting the price of attendance with what a student receives from year to year.
Even if a college committed to addressing these missing pieces, could it transform how we calculate cost of attendance for the student and the institution? I don’t know for certain. But a college that starts out willing to change the business model, reduce the actual price (and cost) for students, clearly describe what a student gets for what he or she pays, and aggressively market a new cost/price model -- that college would get attention. And that would be one of those articles forwarded to me that I would be interested to read.
W. Kent Barnds is executive vice president and vice president of enrollment, communication and planning at Augustana College, in Rock Island, Ill.