Let Us Disarm!
The economic crisis points to the need to change antitrust policies so that private colleges can agree on joint steps that would cut costs, writes William G. Durden.
It is high time for the federal government to adjust the antitrust laws to allow American undergraduate colleges and universities to “disarm” unilaterally from wasteful expenditures. Current law does not permit us to disarm because we cannot talk to each other about how to control costs without running the risk of being accused of what can only be considered anti-competitive trade collusion.
It is time for all of us in higher education to think about what it would be like to compete only on the quality of our academic programs and not on the excesses of our amenities. Why can’t we be bold and courageous enough to come to the common sense conclusion that not competing on amenities would in the long run be good for students and for those who have to pay tuition? Why can’t we temper our “capitalistic compulsion” to compete with each other in ways that only serve to drive up tuition costs? Wouldn’t we be in a position to render better service to the American public if we arrived at some common conclusions about how to reduce costs?
Colleges and universities are feverishly rushing to cut expenses because of the current and very real economic crisis. Witness all the presidents announcing hiring freezes, postponements of construction projects, furloughs, lay-offs, salary freezes and modest tuition increases. While none of my colleagues want these cuts to affect the quality of the academic program, it may, in fact, be an unavoidable result.
Yet with all this trimming and restraint, the public is not likely to see the price of an undergraduate education decrease any time soon. The traditional higher education business model does not permit it. At many, if not most, institutions the cost is significantly higher than the sticker price. At Dickinson, for example, it costs us $13,000 above the sticker price of $47,800 to educate a single student. What rational “business” begins with costs always being significantly higher than price and then tries to sustain that model by further increasing costs? The constraints higher education imposes upon itself now might well soften somewhat the threat of the current economic crisis by reducing marginally the gap between cost and price, but will do nothing to alter a business model that does not work because you cannot have your cake and eat it too.
The only way to control cost and moderate price is to perform radical surgery. Since the historic mission for many colleges and universities is to offer a liberal education that prepares students for informed participation in a democracy, the activities that undergraduate education has added over the centuries to this essentially academic intent are the most vulnerable to “the knife” -- residential life, student life, athletics. A combination of classroom and out-of-classroom experiences is now defining a distinctively American undergraduate education that is distinguished from classroom-only university programs in other countries. It is this very surgery that for-profit universities have already performed to keep tuition across their sector more affordable. Academic degrees are offered online (excepting short-term residencies on a host college campus or coursework in a modest office building); there are no residence halls; there is no athletic program; and, of course, there is no student life except conversation about coursework online. For-profit universities are already growing rapidly in enrollment and if tuition keeps rising among non-profits, this opportunity may become increasingly attractive to the American public.
I suggest that nonprofit education will be reluctant to go so far as the for-profits in altering what has evolved over the centuries as the American “model” of undergraduate education. That said, a viable first step to control costs without sacrificing the academic experience is for colleges and universities to pull back as a “sector” from the extravagances that have developed in the out-of-classroom amenities over the last few decades because of a compulsion to outspend the competition in what is most visible to the paying public -- sports palaces, fancy hotel-like accommodations, spa-like student unions, gourmet-style dining facilities, etc.
On behalf of the public and our own desire to remain a key contributor to the national ambition, we ought to disarm in at least one aspect of our activity. We should have a positive deflation of our ambitions and our competitive fever (regardless of the numerical ranking gimmicks) in those areas that are not historically related to our role in advancing knowledge.
What would happen, for example, if all of us came to the conclusion that it would make sense only to build residence halls that conform in design and purpose to the academic program of our respective college or university and to the pricing and construction standards of eco-friendly “low-income housing” that offer inhabitants perfectly livable, attractive space without extravagance? The initial cost may still be high (although not higher than luxury-hotel accommodations), but the long-term energy savings would be significant. What if we all agreed that students could, indeed, survive and even thrive in double rooms? What if we all scaled back our competition for student athletes? What if we pledged to reduce conference and meeting costs by relying more heavily on virtual technology? What stands in the way is not only antitrust laws but also our own attitudes and egos.
It is quite obvious that none of this radical change could be accomplished systemically by a single president or a small group of institutions; it would take a sea change across higher education. But even if we have the best of intentions and can overcome our reluctance to change, the antitrust laws stand squarely in our way. Right now, any discussion with the intent of disarmament cannot prudently be attempted.
The federal antitrust laws were applied in the 1990s to challenge financial aid meetings among colleges that had an “overlap” in the students they recruit. The aftermath of that litigation has had the unfortunate consequence of severely limiting discussion among colleges and universities about cost and competition, at great detriment to the public. I assert that if we, as a nation, are serious about reducing the cost while improving the quality of higher education, we in higher education need a “safe” space in which to talk candidly. Congress should revisit the law and permit such conversations for the benefit of the public. We can’t disarm if we can’t talk. That is Diplomacy 101!
Let me be clear. I am not talking about encouraging discussion among institutions about faculty salaries, annual tuition charges and the like. I do, however, believe we need the will and determination to try to achieve change in those current practices that have escalated our costs. As a first step we need change from the federal government that would give us the legal means to help the public with the cost of higher education. Not to entertain disarmament leaves us with an intolerable alternative -- escalating tuition without foreseeable limit.
Leadership is also required and that probably best comes from established associations. It is time for an organization like the American Council on Education to issue that call for us and to work productively with the federal and state governments to revisit the antitrust laws to allow us to work towards affordability.
There will, of course, be those who decry any form of cooperation among those who meet to discuss cost. They distrust us. This caution is understandable were it not for the intractable crisis in higher education. If we do not find ways to reduce the cost of our colleges and universities, students will potentially seek alternatives such as for-profit universities or study at foreign universities, or be shut out of higher education. And many of those who attend our colleges and universities will be saddled with increasing debt that will burden them and/or their families for years – all at the wrong time in our economic cycle. If “self-interest” is not a consoling safeguard for the skeptics, let us request a temporary exemption of two years to allow colleges to address the exorbitant tuition issue to demonstrate that there are benefits to the public in this approach. If there are such benefits, let the exemption be extended. If not, shame on us!
William G. Durden is president of Dickinson College and a member of the Board of Directors of Walden University.
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