With a growing number of students facing big debts when they leave college, calls are increasing for educational institutions to do more to provide value for tuition dollars.
“Public-college tuitions just can't keep going up at the rate they have,” even though “the net prices that people actually pay haven't gone up as rapidly,” says Sandy Baum, a professor emerita of economics at Skidmore College, in Saratoga Springs, N.Y., and a longtime college-funding analyst for the College Board.
There's little doubt that many colleges are overspending and could cut costs, say many education-policy experts.
“When some people on a faculty are teaching only one course a semester, one obvious answer is to get them teaching more,” says Arthur M. Hauptman, an independent public-policy consultant in Arlington, Va.
Others argue, however, that cutting costs can be easier said than done.
“I'm skeptical about ideas for things that can reduce costs dramatically,” such as increasing online education, says Donald Hossler, a professor at the Indiana University School of Education, in Bloomington. For one thing, much online instruction would likely take place in introductory courses and at community colleges, where lower-income, less-prepared and younger students likely need “more personal intervention” to succeed, not less, Hossler says. “I think we will see pretty high dropout rates if that's all we can offer them.”
Recently, institutional spending has risen faster in a relatively small cost category dubbed “student services” than for the biggest-ticket spending items, such as teaching, says Douglas A. Webber, a doctoral student in economics at Cornell University and a researcher at Cornell's Higher Education Research Institute. Webber defines student services as “anything outside of the classroom that encourages student engagement” with school, such as counseling, tutoring, clubs and student publications.
While many see such services as potential sources of cost cuts, Webber says a solution that looks good in theory may be more complicated in practice. At current spending levels, extra dollars spent on student services pay off better in improved student retention and achievement than equivalent investments in teaching, especially at schools with many lower-income students, he says.
In the current system, states award funding to public colleges and universities based on cost lists that schools submit. But with prices skyrocketing, more discriminating judgment is required, says Hauptman. Lawmakers themselves wouldn't necessarily make the judgment calls but might instead assemble panels of academic experts to set reasonable compensation for different sorts of college investments, he suggests.
The rates would be based on how much those investments furthered such public goals as increasing the proportion of entering freshmen who complete their degrees, Hauptman says. Expensive institutions should also be required to make financial contributions, given the fact that taxpayers must pony up money in advance for loans and students must pay back those debts for years afterward, Hauptman argues.
Under current rules, a school's “sticker price,” which only a handful of the very richest students actually pay, determines how big a federal loan students may obtain, Hauptman says. Basically, a loan is capped at the difference between the school's sticker price and a student's estimated family contribution, calculated according to the government's Free Application for Student Aid (FAFSA).
An Iowa State University student reads the student paper. Institutional spending has risen faster for student services, such as clubs and student publications, than for big-ticket items such as teaching. (Getty Images/Steve Pope)
A student with $30,000 in resources who attends a school with a $50,000 sticker price is authorized to borrow $20,000 from the government, for example. To pressure colleges to think twice before pushing sticker prices sky high, students might instead be permitted to borrow half the difference — $10,000 — with the school required to discount its sticker price by the other $10,000, Hauptman suggests.
Furthermore, when colleges see the need to spend more to provide their services, “Why do they raise tuitions rather than increasing enrollments” to pay for it? Hauptman asks. Adding more tuition-paying students is just as valid a means to increase revenue as increasing individual tuitions, he says. But while community colleges and some other lower-tier public colleges are required to follow that course, higher-priced schools seldom do, he says. “The focus of faculty members is to keep enrollment down, but I think we need a more fundamental discussion” of how rising costs are funded.
School accountability “is really important,” says Deanne Loonin, staff attorney at the Student Loan Borrower Assistance Project at the National Consumer Law Center in Boston. With students accumulating ever-greater debt to attend college, “schools should care about their completion rates” and take more responsibility for ensuring that students who enter get what they're paying for, she says.
Higher-education groups say that figuring out exactly what colleges should be held accountable for, and how to measure that performance, isn't easy. “Effective assessment of student learning is complex and multifaceted,” said Christine M. Keller, executive director of Voluntary System of Accountability, a membership group of public colleges and universities. “A top-down approach that imposes a one-size-fits-all … method” of judging schools’ educational accomplishments would be “counterproductive.”
And while colleges are accused of engaging in a pricey institutional “arms race” in their quest for prestige and better students, more than just the institutions may be to blame.
“It would be nice to think that students are making their decisions about school on the basis of pedagogy,” but, in fact, many are not, says Robert K. Toutkoushian, an education professor at the University of Georgia. Instead, decisions about which school to attend often are influenced by factors that are costly for schools to accommodate. For students, it may be, “I have my own bathroom,” he says. And for parents: “The grounds are kept well.”
— Marcia Clemmitt