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Wednesday, December 03, 2008

Education costs

The most-emailed article on the New York Times website right now is about the inexorable growth of college costs over the last couple decades. (It was at college, incidentally, that I learned to use the word "inexorable.") The news peg is a new study that compares increases in higher education costs to increases in family income; the study also makes useful calculations of "net college costs," which factor in financial aid grants.

I could quote the numbers, but you know...it's really expensive. What are we getting for these increased costs? At the high end, which includes my education at Carleton, there are big building projects, substantial investments in technology, lowering the faculty to student ratio, and probably many other things that I'm unaware of. Most of which are very worthwhile. But I would submit that at least a portion of these increasing costs are driven by the competition surrounding U.S. News and World Report-style rankings. Criticizing these rankings is pretty much cliche by now, but I suspect they really do drive a focus in college administrations (mostly unconscious, probably) on the trappings of high quality education as measured by those indexes, as opposed to the intangibles that really make a high quality education. (Plus, if all your peer institutions are charging a lot more, low tuition almost seems to cast doubt on your own school's prestige.)

Another factor: There has been very little downward pressure on college costs. As the article mentions, middle class families generally decide that college is extremely important, and that they will finance it with debt if needed. While I appreciate all those subsidized federal loans, one of their main effects is probably to increase colleges' pricing power. If people didn't have access to all that cheap financing, schools would be under more pressure to keep costs in check because otherwise their students wouldn't be able to pay.

Not that I know what to do about this, since insisting on more efficient spending is easier said than done. I guess the increases in cost wouldn't be much of a problem if admissions were need-blind and institutions met 100% of need with grants. That would take a whole lot of money, but I know I'd give more generously to Carleton if it were toward that explicit goal.

3 comments:

Zach said...

What we have here is a education bubble. Like every bubble, the education bubble will pop. I'm just not sure of what a popping education bubble looks like. Massive dropout rates as people go back to hunting and gathering?

lj said...

This is going to be a long comment, for which I apologize. You just happened to hit something that's been stewing in my mind for the last year, as reunion happened and the college passed the collection plate.

I would also feel more generous if I knew that need-blind admission was truly a top priority. I've long been confused by exactly what Carleton's policy is: I thought I remembered something about being need-blind from when I was looking at colleges, but people who worked in admissions told me this was definitely not the case (plus there's the apparent counterexamples of certain filthy rich plagarist drug dealers). I just did a little search on Carleton's website, some links are below. The short story is that Carleton was actually need blind until around 1994, then was "85% need blind" until 2005 [1] when they adopted a more complex but flexible system [2]. Of the class of 2012, "98.5% were admitted on a Need Blind basis." [4]

First of all, claiming that a certain percentage of your students are admitted need blind seems misleading and almost totally absurd to me. In order to admit a particular number of students you necessarily have to deny admission to a similar number of other students. So if you're picking *any* of your students based on their ability to pay that has effected the admissions process for all of the applicants, including the "need blind" ones.

That said, I'm glad that "98.5%" of recent students were admitted need blind, whatever that means. I do understand how it is financially difficult to provide truly need blind admissions, especially now that the general financial sitution is lousy, and I appreciate that the college seems to be keeping it in mind as a general principle and are doing the best they think they can given the fiscal reality. However, I find it really frustrating that the people in charge of these policies seem to be just taking the restrictions as given, and are not speaking out about how bad this is for the college (and, extrapolating, for society at large). Thiboutot, for instance, seems to brush it off as not greatly effecting the makeup of the student body, and says only that "The applicant pool has revealed a slight shift toward students from upper-income families." [1] It is very striking to me to compare this with the results of the diversity study we alums were recently emailed about, which identified "institutional classism" as the "first challenge" facing the college (in regards to diversity):

"Numerous student respondents underscored the socioeconomic difference among the student body, and an overall sense of elitism on campus. Twenty seven percent of students reported experiencing harassment on the basis of their socioeconomic status and that the most common source of that harassment were other students." (Executive Summary, page 3)

Shrugging your shoulders at truly need blind aid is not the way to confront issues like this. My frustration at things like this at Carleton puts me in a logical double-bind: I'm not convinced that the college is handling these matters as well as it should, so I'm inclined not to give them money. But the root of any solution has to be for people, primarily alums like me, to give them more money to increase their endowment. I'm not sure what to do.

Carleton links:
[1] Voice story from spring 2003 (PDF)
[2] Admissions and Financial Aid Committee (AFAC) report to College Council, May 2007
[3] Student reaction, May 2007
[4] AFAC report to CSA, April 2008

As a final note, I'm glad I was able to find this information pretty quickly on Carleton's website, but I'm annoyed that the process isn't more transparent. The main page listing tuition costs is Orwellianlingly titled "Affording Carleton," but doesn't directly give much information on doing just that. It has the Comprehensive Fee amount listed (which is shocking--I hadn't seen the number in a while), and says that "the college is committed to providing financial aid that meets the full demonstrated financial need of students for all four years." (A committment I certainly benefited from and am grateful for) A similar college gives what I think are some useful financial aid figures along with the price tag.

teague said...

Thanks for the links, LJ.

Yeah, I think I'm basically on the same page as you on this issue. I realize that it would be very expensive to make admissions truly need-blind, but it's central to both the richness of the campus community and the role that Carleton likes to see itself as playing in society. The folks in the college administration are being responsible by being careful stewards of the school's finances, but it feels as though they aren't placing quite enough emphasis on the imperative to be need-blind. For example, if the choice were presented to me as whether to build the new arts complex or have need-blind admissions, I would choose the latter. The benefits of need-blind admissions are pretty intangible, so I can see how it would be extremely difficult for administrators to look at all the things they would like for the college and trade off a whole bunch of them just to hold to this one principle 100% of the time instead of 85% or whatever.

Assuming that the quoted $500,000 figure is the annual incremental cost to make each class need-blind, it would require about $2 million more annually to have need-blind admissions. (There's also the issue of how many loans people are taking on...some are appropriate, but I think one of those links referenced an average of $20,000 for each graduate. Considering that a decent number of people don't have any, some people have an awful lot of debt considering they're just finishing their undergraduate educations. Since federal loans are counted as meeting need, any attempt to trim these would be above and beyond ending need-blind admissions.)

I couldn't easily find any info on what the Alumni Annual Fund has taken in per year recently, but I think it's in the ballpark of $3 or $5 million. So it would take a substantial, but not inconceivable, increase in annual alumni giving (which I know from my time in the Development Office is separate from big one-time gifts, which go to the endowment) if that were what you were looking to as a funding source.

Given how expensive need-blind is, and the uncertainties involved (especially when the economy goes south and more students are likely to need aid), I'm not surprised that the college's leadership is reluctant to tout need-blind as a goal for fundraising. But I also think they might underestimate the commitment alumni have to it -- a fundraising campaign earmarked specifically for working toward need-blind admissions would raise a good amount of additional money beyond an unrestricted capital campaign, I suspect. Like I said, I know I would contribute more...or even pledge to give a certain (still modest) amount annually for a number of years to increase the certainty of the funding stream.