Monday, December 08, 2008


Affordability and Sustainability

One of my favorite aphorisms (I think it's Stein's law) states that anything unsustainable, won't be.

Several alert readers sent me links to this article from the Times, which, in turn, cites a report from the National Center for Public Policy and Higher Education. The headline, ripped from the Department of the Obvious, states that college is becoming unaffordable. Unlike many reports, it looks at the true cost of college (that is, after financial aid), and measures it as a percentage of family income. Since the true cost includes housing, transportation, and books, even community colleges come off as relatively pricey. (Most cc's don't provide housing or meal plans for students, which is one reason that the sticker price is so much cheaper. Including those costs decreases the relative price advantage of cc's, though we're still cheaper.)

The method of this study strikes me as more useful than many. Lazy studies just look at the sticker price, which often gives a very misleading picture, since many students don't pay full freight. I'm not sure that counting the cost of living at home is entirely helpful, either; I tend to prefer measures of marginal cost. If you're already living at home anyway, the marginal cost of the local cc is truly lower. That can apply as well to four-year colleges with commuter populations.

Still, a few thoughts.

First, taking 'family income' as the baseline measure – an eminently fair real-world approach for most people – suggests a perfectly obvious rejoinder: the real issue is less the growing cost of college than the stagnation or decline in average family incomes. There's a much larger political and economic issue here that has little to do with higher education per se. The growth and acceleration of income and wealth inequality over the last few decades has put the squeeze on millions of people; college tuition is only one case of that. (Judging by what the obscenely wealthy are willing to pay in tuition for their kids, there's a great deal of running room here.) Reverse the New Gilded Age polarization of wealth, re-establish a stable middle class, and much of the sting of tuition will go away.

Still, even with saner macroeconomic policies, higher ed has some serious issues to face.

On a short-term, pragmatic level, I think it's painfully obvious that the various states need to become much more deliberate and focused about allowing students to transfer seamlessly from cc's to four-year public colleges and universities. Having fought this battle for years now, I can attest that real progress won't happen without legislation. It has to be mandated, or the four-year schools will foot-drag and sabotage the process, just as they have for decades. On the ground, this would have the effect of greatly reducing the effective cost of a four-year degree for the people who most need it.

On a longer-term level, I see two adjustments coming, both of which will bring pain.

First, I don't see a way around a shakeout. The nothing-special private colleges that subsist on high tuition and high discount rates are going to have a tough time surviving much longer. In a national market, many of them don't really have a compelling reason to exist. The elites will be fine; they sell exclusivity, and there's always a market for that. The publics serve a clear purpose, and as more upper-income kids are priced into the publics, they're losing some of their historic stigma. Colleges with clear and specific religious identities or programmatic niches can at least answer the question of why they exist. But the older, fair-to-middling private colleges and universities charge premium rates for average product. With online education making geography less determinative of access than it once was, I just don't see what some of these schools offer to justify their prices. And they don't have the resources to survive without those prices. Antioch was just the tip of the iceberg (although one could argue that it at least had a niche, in its way).

The other is that we'll start to see a decoupling of 'hours' or 'semesters' from 'credits' or 'degrees.' If you accept the definition of economic productivity as money generated over a given period of time, then there's simply no way (other than real inflation, or continued adjunctification, or just stuffing the rooms fuller) to increase the economic productivity of a three-hour class. As long as the product is defined in units of time, rather than, say, documented competencies, we'll be stuck in a productivity trap. (Even degrees are denominated in time -- “two-year degrees,” “four-year degrees,” and the like. We all know that these terms often don't describe reality, but they survive as normative anyway.) When the rest of the economy increases its productivity and we don't, our costs will spiral disproportionately. So far, higher ed has dealt with this by overproducing graduate students, then hiring them into the same old system for what amounts to tips. This eat-the-young strategy has allowed the system as a whole to procrastinate on serious structural change, but it hasn't solved the underlying problem, and it won't.

There's no easy or graceful way to re-denominate an entire system built on 'credit hours.' But 'credit hours' weren't handed down from God; they're just a bureaucratic construct, developed at a particular historical moment to solve a particular problem. (As we used to say back in the 80's and 90's, they're 'socially constructed.') That's all. They can be changed, and they'll have to be.

That's not to say that the change won't be wrenching. Collective bargaining agreements are built on credit hours, as are transfer agreements, faculty workloads, and tuition. Path dependence is real, and changing paths isn't easy. But to assume that we can just keep asking the middle class to take on greater and greater amounts of debt for the next fifty years simply denies reality. Even with saner public policy, we're probably at the outer limits of what the market will bear already.

It will take a tremendous amount of ingenuity to redefine higher education in ways that preserve its real value, rather than simply reducing it to on-demand job training. On good days, I imagine that a bunch of minds as clever as the American professoriate is uniquely well-suited to the task; on bad days, I gaze in wonder at the fetishization of the past, and the complete lack of self-awareness on the part of some otherwise brilliant people. It may be that what will change is the dream of widespread access, as higher ed retreats to its historical province as a privilege of the wealthy, and proprietary job-training becomes the norm for everyone else. I hope not, but that's where inertia would take us. My continuing hope is that crises like these will shift the conversation enough to break our inertia. It's a longshot, admittedly, but given the awfulness of the alternative, it's a longshot worth taking. The current system is unsustainable and, therefore, won't be.

I think you're dead on here, DD. I like it when you combine brutal honesty with your idealistic side.

I am trying hard right now to tamp down the mild anxiety about my job. I'm pre-tenure in a small field at a small, regional SLAC. I'm a bit scared about my job security when times are good.
I agree about the small, nothing special, liberal arts colleges. They have no justification for their high tuition -- and they should be worried now.

I disagree about the credit-hours proposition. It sounds to me as if the idea might be to have a series of achievement tests or other assessments to justify granting a degree. Somehow, this will let colleges grant a higher number of degrees using the same faculty and facilities.

In Fall 09 I'll have 240 students in five sections. In order to increase my prodctivity, I'd need to have more students per semester. I'm not sure how I could do that and have meaningful assignments of student learning. To be honest, I'm not sure I'll have a meaningful understanding of how much each of my 240 students learn.

Sure, I could create an on-line quiz about which philosopher said what -- BUT, that does not satisfy the course outline and thus does not satisfy our state transfer-curriculum agreement. With these agreements come the duty to uphold them.

Also, what about the students who fail to learn -- for whatever reason -- since they seem to only be paying once they pass the learning assessment, they could keep taking my classes over and over again until they "get it". At that point, either the assessment will become so easy as to be meaningless OR the instructor will simply let the student waste time in their class.

The fact of it is, the credit hour system is in place for a reason -- it takes both the time it takes to learn things AND slacker students into account.

Perhaps the real issue is the productivity of mostly "research" positions? I have to wonder about the value of producing articles that are only read by reviewers, the author and the author's mother. When I hear about someone's high salary for a 2/2 load, I get a bit jealous and I also wonder about the justification of that salary in real benefit to the society.
"If you accept the definition of economic productivity as money generated over a given period of time"

Do we have to accept that the university should be defined by economic productivity? That seems like a very narrow definition of education, the kind that implies we can measure the value of an education by comparing salaries (produced by the "documented competencies" you mention). Before I accept that I'd want to see how you're measuring the "money generated" from public goods (like having a clue about what goes on in American politics or the world).

It's also a no-brainer that you don't see value in small liberal arts colleges because your definition of value excludes the sort of "personal development" stuff that liberal arts colleges stress, but which doesn't readily translate to a "documented competency." The question is, do kids/parents share your definition or do they value the liberal arts idea. My personal impression is that your defintion is winning them over.
In response to 'rubashov' -- you're conflating two unrelated definitions of productivity.

As any regular reader should know, reducing my stand on education to some sort of bare utilitarianism is doing fundamental violence to my position.

The definition of productivity I used -- lifted straight from Econ 101 -- applies to the internal budget of the institution. It is not a measure of social worth; it's what determines whether our budgets balance or not. Those are not the same issue.

To put it differently, we charge the same for effective teaching and for ineffective teaching. That's not because we don't see value in effective teaching; it's an artifact of how we're organized. That's why there has been an amply-documented trend over the last thirty years towards going with adjuncts. I'm suggesting that the drive is so widespread, and so hard to stop, precisely because it's structural. If we want to stop it -- and I do -- then we have to look at underlying structures, which include cost.
I think the argument is that because production is measured in strict hourly terms, quality is viewed as irrelevant.

I think DD is wrong, but for an interesting reason -- most students do not demand quality; they demand ease and lack of expense. This is entirely rational.

In a world where a BA is required to be a legal secretary, students rationally seek to gain their meaningless degrees as painlessly and inexpensively as possible. The problem isn't at the higher ed end, it's at the combination of societal forces and educational malaise which has made a high school degree a nonterminal degree. This leads to the "13th grade" phenomenon, where students who are seeking jobs that should only need high school diplomas demand classes that only require the amount of effort that high school diplomas require.

I don't know what higher ed can reasonably do to solve this problem, other than to point out that the existence and popularity of the AP program and tests is strong evidence of the uselessness of senior year of high school for most students.
The nothing-special private colleges . . . are going to have a tough time surviving much longer.

Probably, but it depends on the timing. What could happen first is an implosion of the publics in weaker states: Tennessee is the first of these. Recognize that the rumour that MTSU would be closed was credible enough that it spread and had to be officially denied. If in many states universities close campuses and shift to an on-line only model, then the nothing-special privates can offer "a real college education."

It's worth pointing out that big publics (including CCs) have boxed themselves into a corner. They are so heavily adjunctified that there are no major cost savings available from personnel cuts. Firing adjuncts doesn't save real cash. You can't fire tenured folks until you've fired all the adjuncts in those departments. So you have to slash course offerings to get relatively small cost savings. Which are outweighed by the tuition losses.

Tennessee is the place where they have 5-5 adjuncts making $15K/yr. They've already taken all the personnel savings they're going to get. Now they have to cut another 15%. No wonder people believed they'd close MTSU.
Riffing on PuditusMaximus' point: Even if a liberal-arts education is valuable for its mind-stretching qualities, there is a practical maximum to the amount that most people can afford to pay for it. We are now in a situation where (as jim notes) most of the personnel savings have already been realized, but the majority of customers (i.e., middle-class students and their parents) have reached their limit of ability to pay. Personally, I think we're in for a paradigm shift.

One of my side interests is medieval textiles. I spent several years learning how to do 13th- and 14th-century English styles of embroidery, which are amazingly flashy and intricate. If you were a big shot in 14th century Europe, you had to have at least one garment worked in English embroidery. This demand supported a very large industry of professional embroiderers, who had extremely long apprenticeships (7 years) so they could learn all of the techniques. Difficult, demanding work, and consequently very, very expensive. Productivity gains were also impossible, because the work was being done by hand.

Then, at the end of the 14th century, two things happened:

1) The aftereffects of the Black Death significantly changed financial structures in Europe, and

2) The brocade loom was invented in Italy. Brocade cloth was designed to imitate the products of the English embroiderers, and while it was not a perfect substitute (too regular, patterns somewhat more crude), it still looked pretty darn good from a distance of 10 feet.

Guess what had happened to the English embroidery industry by 1500. Turns out that most of their potential customers just wanted flashy clothes that looked good. Some embroidery was still being commissioned in the succeeding centuries, especially by the Church, but the volume and (by and large) the sheer quality of the workmanship fell off dramatically.

Incidentally, you are reading this on a brocade loom. Most of our students just want flashy clothes: i.e., to get a decent job. The cost of hand-crafted and individualized instruction may be more than the market can bear except in niche markets.
One thing I noticed about that chart in the NYT article: the trendline that looks the most like higher ed is the health care cost increase line.

Which I take mean that if labor is 80% of higher ed costs, and (presumably) health insurance is a meaningful chunk of that, then the problems of health care funding have a severe impact on the problems of higher education. Any "productivity" gains are instantaneously eaten by the costs of providing health insurance.

Admittedly, that's not the only reason, but that's what jumped out at me.
the trendline that looks the most like higher ed is the health care cost increase line.

Part of what drives increasing healthcare costs is increasing personnel costs because of severe workforce shortages in nursing and other allied health fields. The most recent stock implosion has granted us a temporary reprieve but it won't last. In my field, starting salaries have gone up 25% in the last five years. These workforce shortages exist in part because of a lack of state funding for sufficient training seats in allied health programs (and because of inadequet reimbursment from federal and state payors of healthcare costs which squeeze the ability of hospitals to offer internships required for state licensure). In otherwords, taxpayers trying to save money by decreasing their contribution to education funding and healthcare have helped create workforce shortages in health fields that drive up healthcare costs which drive up the cost of education for everyone. Brilliant!
This is not a problem that will get solved in one day in the flash-in-a-pan blog world, or by an article in a newspaper that ends up in a recycling bin the next day. It has taken decades to get to where we are today. Can it be un-done in a few years? I doubt it.

The problem is not ItPF with 240 students. If you are teaching at Penn State, you are generating $130,000 in tuition each semester (assuming only in-state lower-division students). That ought to be enough to pay your salary and benefits. The cost structure at a CC is nothing like what it is at large universities.

What has changed so that it now costs over $15,000 to get what cost $9,600 (tuition plus state funds, corrected for inflation) when I was a student? It isn't class sizes. Ours were comfortably small. We even had access to technology that cost a small fortune compared to today. It has to be salaries, teaching loads, and administrative overhead. These are not things that can easily be undone.

What can be done is speak the truth to the legislature, and you are close to the level that has both a duty and an obligation to do so. You must compare what the State pays per class for freshmen at the university to what it pays for freshmen at your college. You must compare the qualifications of your faculty to those of the adjuncts and grad students teaching at the university.

If the legislature wants to fund research with its own line item, they should do so. But they should be under no illusions that they are actually paying for education at the universities. Why are taxpayers shelling out so much more for the exact same class, perhaps with the exact same instructor*, at the university.

* Not an exaggeration. I know of several instances of this locally. In one case, the adjunct teaches a class at the university that we wouldn't trust him with at our CC. In another, the adjunct left the university because its standards were lower than ours.
1. If you aren't measuring relevant before-after knowledge increase (vis a vis desired learning outcomes) in students going through your program, you are just performing a highly educated and arrogant form of masturbation;

2. If you aren't measuring (starting student salary)/(total cost of attending your institution) as your *primary value added measure of performance* you are a fraud.

O.K., so the vast majority of higher ed as practiced in the US currently are masturbating frauds . . .

And we don't even care?

We *deserve* every budget cut/program termination we are facing.

I mean, C'MON PEOPLE!!!!!
I do need to apologize here . . . upon sober reflection, I totally ignored that substantive segment of the academy that sells "infotainment" to a willing public.

Infotainment courses/programs are those for which there are either no measurable outcomes rooted in knowledge, and/or for which there is no increase in the market value of the individual student (neither expected nor desired).

However, there are a lot of people who are willing to spend money (frequently someone else's money, but never mind) on just hanging out on campus reading about/discussing "interesting" things.

As long as they can 100% support themselves using freely given tuition payments, they are obviously demonstrating their value to society as much as any other enterprise on campus.
For Ivory: I'm not sure the lack of training slots was the whole story. Back ten or so years ago, before the more recent salary runup, I knew several ex-nurses. They had left the field when they figured out that they could get paid as much or more for a job that didn't require them to work double shifts, carry urine around, and be condescended to by physicians all day.

Now that the medical system has been forced to raise salaries and treat their non-MD staffs better, I don't meet many ex-nurses. That extra money had to come from somewhere, though, as did the salaries of the extra IT staff required to comply with HIPAA regulations.
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