Sunday, November 30, 2014

The Middle: A Response to Goldie Blumenstyk

Over the weekend, I read American Higher Education in Crisis, by Goldie Blumenstyk, because that’s how I roll.  It’s an accessible introduction to many of the major issues in higher ed, but it makes a claim in passing that I think needs a closer look.  Blumenstyk writes that

If there is a hollowing out in higher education it is more likely to happen at community colleges, regional state universities, for-profits, and other institutions that provide most of the educational opportunity for low-income and lower-middle class students. (p. 152)  

I don’t entirely buy it.

First, some context.  Blumenstyk notes, correctly, that the increases in costs of attendance for students over the past few decades have badly outpaced the growth of average household income.  Some of that is driven by cost-shifting from subsidies to students, some by Baumol’s cost disease, and, in other sectors, some by competition.  (Community colleges have been largely immune to that, since they tend to be defined geographically.)  When the Great Recession took simultaneous bites out of family income and appropriations to public colleges, the disconnect between what students had to borrow and what they could reasonably expect to pay back became too large to ignore.

As Blumenstyk notes, much of the disconnect is properly attributed to collapsing entry-level wages and opportunities, rather than to skyrocketing tuition.  Popular discourse also frequently fails to distinguish between graduates’ debt and dropouts’ debt, and often takes outliers as being far more representative than they actually are.  Still, the concern is real and valid.  Any college that asks students (and, frequently, their parents) to borrow five figures a year for four or more years is asking a lot, and it’s reasonable for the borrowers to ask about the likelihood of getting jobs that would make repayment realistic.

She also notes -- again, correctly -- that states themselves are pressured financially on multiple fronts, of which higher education is only one.  The same cost disease that afflicts higher education also afflicts K-12, corrections, and health care, for example, and neither K-12 nor corrections offer the kind of alternative revenue streams that higher ed does.  (Health care economics are far more complicated.)  As long as the political climate makes progressive taxation toxic -- again, a separate and complicated topic is its own right -- we can expect higher education to function as a sort of shock absorber in state budgets.

From that combination of factors, Blumenstyk concludes that non-elite public higher education -- here defined as everything outside of flagship research universities -- is in trouble.

It’s a possible outcome, but certainly not a necessary one.  The argument doesn’t consider the structure of the academic ecosystem, the sheer size of enrollments, or the weakness of alternatives.

Elite private institutions are largely above the economic fray, and can pretty much do what they want.  Elite public universities have research funding -- usually federal -- as well as prestige, visibility, and size.  They aren’t immune to cost pressures, certainly, but they’re in better shape than most.  But the two sectors combined aren’t nearly big enough to serve the population that wants education.  Indeed, they couldn’t expand much without giving up the exclusivity that drives their prestige.  

Which means that everyone else needs someplace to go.  Yes, a brave few will venture into the world of what Anya Kamenetz calls “DIY U,” but at this point, the do-it-yourself stuff is more about supplementing than supplanting.  As Peter Thiel himself noted in “Ivory Tower,” the autodidact model may work for a small number of hyper-capable, driven people, but it doesn’t scale.  (And the jury is still out even on Thiel’s cohort.)  Where will the masses go?

One possible answer is “nowhere.”  But I don’t see that selling, politically.  Young people still want good careers and, yes, even good educations.  And they should.  Say what you want about for-profits, but they would never have grown had they not identified a real demand.  The demand is there, and I don’t see it going away.  (Another possible answer is “prison,” and in some areas, that’s far too true.  But my sense is that we’ve passed Peak Incarceration.  And a good thing, too.)

My guess is that the sectors most likely to be hollowed out are the for-profits and the less well known privates.  The for-profits have come under sustained public scrutiny over the last few years, often with good reason.  And the privates have an increasingly difficult value proposition to sell.  As a parent, why would I spend $35,000 a year for a nothing-special degree when the same thing is available at a local public for $15,000?  An Ivy degree, sure.  But most privates aren’t Ivies, or terribly close.  Multiply that by four years per kid and multiple kids, and it adds up.  Unless the privates can answer that question -- which some can, in various ways -- I’d expect them to fall upon hard times.

Which means that the publics can actually turn a dilemma into an opportunity.  If they allow themselves to be commoditized -- to “sell” only interchangeable general education credits -- then I foresee an ugly race to the bottom.  But with more middle and even upper middle class students feeling compelled by economics to look more closely at public options, there’s a real opportunity for publics to start to fill the holes left by struggling privates. Gaining more traction with the middle and upper middle classes can bring with it not only more resources, as important as those are, but more political strength.  

In other words, the publics have a choice to make.  They can look only at their appropriations and start trying to shrink to meet them, or they can look at the larger ecosystem and start preparing to fill a niche that is slowly but surely being vacated.  With for-profits already falling away in large numbers, and many marginal privates carrying discount rates of half or higher, someone will have to do the heavy lifting.  If you can see some heavy lifting coming up, you should try to make yourself stronger.  

Admittedly, that’s a lot to put on a single sentence.  But the future matters.  Community and state colleges may be in a tight spot now, but they’re poised to become far more important if they play their cards right.  Here’s hoping they do...