In an attempt to rein in rising tuition fees and skyrocketing student debt, Barack Obama has announced a plan for performance-based higher education funding. Under his plan, colleges would be rated on affordability, graduation rates and graduate earnings.
While we applaud the president for raising concerns over rising tuition fees and student debt, concerns we share, this proposal will do little to solve the problem and will likely yield a decline in the quality of education offered to working-class and middle-class students, particularly affecting those from under-represented groups.
The president’s plan is based on the premise that if people understand what they are buying they will shop around for the best value. That sounds fine were education simply a commodity. In reality, however, meaningfully measuring the output of our highly diverse colleges and universities is impossible. The institutions do not only produce graduates, but also knowledge and learning.
The fundamental problem with the plan is that it does not get at the root cause of skyrocketing tuition, which is directly related to the escalating debt burdening millions of students and their families. Tuition fees rarely cover the full cost of education, which at public institutions is subsidised by state appropriations. The most important factor driving tuition increases at US public colleges and universities has been the decline in government support. According to one study, annual revenue per student adjusted for inflation was $11,084 in 1987 and $11,095 in 2012. Over the same period, however, the government’s contribution declined from $8,497 to $5,906, resulting in an average tuition increase from $2,588 to $5,189.
Were we truly interested in reducing tuition, we would increase public funding of higher education by taxing the rich
The second major culprit driving the increases is rising costs, although these are not escalating as quickly. Some blame the increases on allegedly higher salaries received by supposedly complacent tenured faculty, but faculty salaries have actually declined a bit. The average salary for a full-time faculty member at a public institution in 1999-2000 was $77,897. In 2011-12, the same figure in constant dollars was $77,843.
Moreover, tenured and tenure-track academics are now a minority: the majority today are contingent staff, who earn far less and rarely qualify for retirement or health benefits.
A more significant driver of cost increases has been the steady growth of administrative expenses. According to the US Department of Education, between 2001 and 2011 the number of employees hired by colleges and universities to manage or administer courses and regulations increased 50 per cent faster than the number of instructors. For example, at the University of Minnesota the administrative payroll has grown by 45.5 per cent since 2001 while the academic payroll increased by 15.6 per cent. This pattern is typical.
Students most “at risk” are often those who have no choice but to attend a local public college. Under Obama’s plans, if that institution “scores” inadequately, federal aid will decline and tuition will rise to fill the gap. Report cards based on graduation rates from often dissimilar colleges serving diverse student populations will drive public universities and non-elite private institutions to standardise curricula to ensure passing grades. Faculty, largely lacking the protection of tenure, will be compelled to teach students simply to take tests.
We need to concentrate less on testing and more on providing the resources necessary to give all students a high-quality education. Were we truly interested in increasing graduation rates, we would enhance funding for schools to ensure that students are better prepared for college. Were we truly interested in controlling or reducing tuition, we would increase public funding of higher education by taxing the rich, particularly the top 1 per cent who have benefited disproportionately from federal bailouts and received the lion’s share of income growth since the 1970s.
The solution to the crisis in higher education, characterised by rising tuition and student debt, is not a report card based on poorly defined metrics. As Albert Einstein reportedly said: “Not everything that can be counted counts, and not everything that counts can be counted.”