Thursday, October 20, 2005

 

Tuition and Batting Averages

It’s time for the annual wringing of the hands over tuition increases. The popular press will carry stories lumping elite liberal arts colleges, nationally-known research universities, local teachers’ colleges, and community colleges together, trying to generate maximum public confusion and outrage.

The causes for tuition increases are many, and most are poorly understood. (For examples of the blind men describing the elephant, see the current issue of the New York Review of Books.) Any labor-intensive industry will improve productivity more slowly than a capital-intensive one, so education will naturally have slower productivity increases (read: faster-rising costs) than the economy as a whole. Add to that the fact that education and health care are pretty much the only industries in which technology is a net financial drain. (Private industry adds technology when it thinks the technology will improve productivity. We add technology when private industry does, so the students will be able to use it. For us, it’s pure cost; it doesn’t speed up the teaching any, but it does require additional support staff to maintain it, upgrade it, etc.) Add to that the various unfunded mandates placed on education over the last few decades (ADA compliance, health & safety regs, etc.), exponential increases in underlying health insurance costs for (non-adjunct) employees, the unstoppable aging of the faculty (thanks, Justice Rehnquist!), decreased public-sector support, increased marketing costs...

This paragraph could go on for quite some time.

Yet much of it is also beside the point.

Tuition is an easy-to-grasp number, yet it’s a lousy indicator of actual cost. In a sense, it’s similar to batting averages in baseball. Batting averages are percentages (expressed in three digits, so 25% is expressed as .250), calculated by dividing at-bats by hits. In theory, the better the hitter, the higher the average. And, in fact, in the absence of any other numbers, it isn’t a bad place to start when evaluating a hitter. But it misses a lot, and misleads badly. It weighs every hit the same, so a single counts as much as a home run. It omits walks altogether, even though the ability to judge the strike zone well enough to draw a lot of walks isn’t evenly distributed among hitters, and a leadoff walk is as good for a team as a leadoff single.

Savvy baseball fans spend unfathomable amounts of time coming up with (and arguing the merits of) different metrics – slugging percentage (counts total bases, so a double is twice as good as a single), on-base percentage (hits plus walks), OBPS (on-base plus slugging), average with two outs, etc., to compensate for the important information that simple batting average fails to provide.

Tuition works the same way. It’s an easy-to-report number, yet it says much less than it appears to say. The relevant number should be something like cost-to-student, which fluctuates from student to student at the same school based on financial aid packages. If the nominal tuition at my kid’s school is 25k, but he gets a “presidential scholarship” for 10k, then the real tuition is 15k. If tuition goes up 3k and the scholarship goes up the same amount, then the real tuition hasn’t changed.

Proprietaries and some less-impressive private colleges have figured out that the lack of access to something like a ‘total cost’ number can actually work in their favor. They’ll quote tuition prices in the same way that GM quotes MSRP’s – numbers they don’t actually expect people to pay. Then, they’ll offer ‘deals.’ Gee, kid, you could go to the local cc for 3k, but you’d be turning down a 10k scholarship from us to do it! Why would you ever want to do that?

In academia, tuition can actually follow the ‘chivas regal’ rule. High tuition, for the uninformed consumer, can signal quality, and large scholarships to offset that high tuition can look like good deals. (Posting the low tuition upfront, on the other hand, just looks cheap.)

I’d love to see a truth-in-tuition rule, requiring colleges to provide something like a cost-to-student form for every student in some sort of standardized format, so kids and parents could actually compare them. Instead, we get gamesmanship within the system, and ignorant moralizing from outside. The only people with the incentive to really push for this are far too scattered; the only people who could actually do it now have every reason not to. Conservatives scream about undisciplined colleges, then cut public support for them, forcing even higher tuition (and giving conservatives more ammunition to cut even more). Liberals just call for more financial aid, and hope the problem will go away.

I’ll make a proposal for my conservative friends out there: if you’re really serious about controlling costs, let’s start by mandating legible, full, truthful disclosure of actual costs. Empower the consumer, if you want to look at it that way. Tuition is such a flawed indicator that it really isn’t worth taking seriously. Once we know what we’re actually talking about, then we can discuss changes. Until then, we’re all (in both camps) just blowing smoke. Make the statistics on college costs as good as the statistics on shortstops.

Your thoughts?

Comments:
Currently I attend the university of Colorado at Boulder, out of state students pay nearly
$35,000 for tuition, for a public college I might add. Thankfully, I am from CO and pay $18,000 for tuition but the frustrating thing is that CO is leading the nation for tuition increases that seem completely arbitrary and more like someone is trying to nickle and dime us, $18,000 is plenty for an in state tuition price tag, wouldn't you think so?
 
From what I've read, Colorado is one of the worst. TABOR is absolutely tearing you a new one.

Condolences. And good luck on the anti-TABOR referendum!
 
Your truth in tuition proposal is an excellent one, and I don't see why any conservative would oppose it.

The larger problem is that the cost of higher education no longer relates favorably to its benefits. When I went to Private Engineering School three decades ago, the cost was about $6,000 per year, which was a lot in those days. But graduates could reasonbly expect to start work at $12,000 to $18,000, and the school liked to point out how quickly the typical grad earned back the tuition investment.

For someone graduating in Colorado who paid $35,000 per year, what are the chances of landing a job at $70,000 to $105,000? Zero, I imagine. What are the chances of finding a job at even $35,000?

I understand the "cost push" on the price of higher education, but mismatch to benefits at the other end will, sooner or later, begin to drive prices back down or a large number of schools will go under.
 
I understand much of your post but feel compelled to comment on the following:

"Add to that the fact that education and health care are pretty much the only industries in which technology is a net financial drain. (Private industry adds technology when it thinks the technology will improve productivity. We add technology when private industry does, so the students will be able to use it. For us, it’s pure cost; it doesn’t speed up the teaching any, but it does require additional support staff to maintain it, upgrade it, etc.)"

It is not just implemented by universities so the students can use it. Here are a few areas where I would expect that technology should actualy be able to drive down costs:

- Admissions, Accepting the common application should reduce the human processing cost per application over the old method. Further, applications may be up along with the associated fees enabling more "revenue" for each of the schools.

- Grading, less copying from one form to another and less labor intensive.

- Homework submission and distribution of a course syllabus. The college print costs should be down dramatically because the school has outsourced the printing to the students.

- There are probably endless examples similar to these.

Technology should never be done for the sake of having it. It should be adopted because it makes your operation more efficient, i.e. using an old example, instead of traveling you can use the phone to talk to someone, a tremendous cost savings because of reduced travel costs and time savings.

On the technology side, those who build it should really be building use cases that show cost savings from to the adoption of technology. For example, is it better to have a computer and a word processor or a typewriter and white out? I think it can easily be shown that it is much more cost effective today to have a computer and word processor than the other way around . . . though this wasn't true when PC's first came out.

My suggetion is to look closely at how technology can be applied to drive down your cost of student acquisiton and associated ongoing expense per student as metrics against which to measure the adoption of any new technology. It should really make you less over-burdened and not an additional cost.
 
Anonymous -- the primary technological costs we face are for instruction. For example, a human patient simulator for the Nursing program costs 100k. It offers no financial gains of any kind. It requires a full-time person for its care and (virtual) feeding. The payoff is in the quality of education delivered, but we don't capture those gains; the students do.

We've already picked much of the low-hanging fruit to which you refer. The savings there, while real, are generally fairly minor. I'm all for saving where we can -- we're exploring VOIP to save money on long-distance calls, for example -- those tend not to add up to much.

When you teach technically advanced programs (graphic design, media production, IT), you need to keep the technology current, whether it saves you money or not. If all we ever taught was chalk-and-talk, your cost/benefit analysis could work.
 
I'd just like to add my two cents in response to anon...

(1) grading, in fact, takes me longer with "technology". Now I need to update online grade sheets, teach the students how to access the grades and other course info, still supply paper versions of grades (which means successful interfacing with the online course info and the printer - often a big failure and time suck) because student's don't "get it", and I still need a current backup copy in case of complete server failure.

Most of these problems plague the online submission of homework as well.

(2) Does anyone have students who actually do all of the necessary printing on their own?? Mine can't even get to a course chat room let alone be held responsible for getting imperative course info such as a syllabus. This means I am required to bring a number of copies of everything to multiple class sessions. This does not make my life easier, save any trees, or save any time for me. I can just as easily have 300 copies made as I can have 30.

(3) Let's not even get into the cost and time required to educate the educators on using the technology before trying to teach the students how to use it. I think that Dean Dad wrote a blog about this very topic. The instruction is just another time and money suck for schools.

I think there are certainly ways that technology has been an aid to the university in areas of productivity and streamlining. However, there are plenty of ways at the lowest level (professors, IT people, and students) that these savings are completely not true. These (little) technology introductions take time from each person's class or general work schedule add up to a lot of cost for a school.

I'm not really any kind of expert since I only have experience as an adjunct but from my view of the land, technology has been both a great help and a huge time suck... just depended on the particular situation in question. Outside of a text program (such as Word), I would say that it cost me more to use technology than if I hadn't. It was my own interest in introducing technology to the students that encouraged me to spend the time. It definitely cost the IT people time to help me and the students.

If an instuctor is busy doing technology-related business, it takes time away from committees, mentoring and outreach programs. That means more people need to be employed to cover these shortages. And, ultimately, more cost. Or, as we see more often, a lowering of the status quo across the board.
 
As a lecturer born in America but educated (uni and post-grad) in the UK, I find tuition a fascinating subject. Here, there's uproar among students because tuition now costs £1000 a year, wherever you go. That's right. Oxford and the local polytech community uni all cost the same. The bigger unis may start charging up to £3000 a year, but the national students' union is promising revolt. Parents in Britain don't understand the American way of starting to save for your child's education as soon as he or she is born. Education is paid for (almost entirely) by the state. My institution (Cambridge) has just recently started asking Alumni to donate...

By the way, all you US students looking for a good deal, COME TO EUROPE! A BA in England, Wales or Scotland costs (at present) £7,500 a year. But it's only three years! And it looks great on a job application. Post-grad funding is harder to come by, but not impossible, AND a master's in finished in one year, and a PhD in 3...and you aren't expected to be a dogsbody for your supervisor.

PSA over.
 
Mr Struan has the most important point.

It used to be possible to work one's way through college, at a blue-collar job--at 4-year colleges with no government subsidy. (My grandfather did; it seems to have been not uncommon in his generation.) TABOR may reduce the government subsidy, but it isn't driving up the underlying cost. It's the mismatch between those underlying costs and the benefits that is driving the dissatisfaction with college costs in general. (I don't know about other states, but in mine, the per-student subsidy has been going up--just not as fast as costs, so tuition has been sky-rocketing.)
 
Working through college with a blue-collar job was possible when good-paying, unionized blue-collar jobs were available to relatively unskilled laborers. Not the case anymore, and that's not the fault of higher ed.

As far as dissatisfaction with rising costs goes, I'd be more sympathetic if the generation currently cutting the subsidies hadn't been heavily subsidized, itself. Seems somehow, well, ungrateful.
 
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