by James A. Bacon
In 2009 President Barack Obama set a goal for the United States to have the highest proportion of college graduates in the world. To reach that goal, more than 65% of individuals between 25 and 34 need to possess a college degree. Things aren’t working out well.
Conclude the authors of a new report, “The Effects of Rising Student Costs in Higher Education,” by Ithaka S+R, a not-for-profit consulting and research service:
Declining state appropriations and increasing reliance on tuition revenue have substantially increased the cost of public education to Virginia students, and the trend has accelerated since the Great Recession that began in 2007. Rising costs have deterred students from remaining in college and completing their degrees, and the lowest-income students have been hit the hardest.
Drawing upon an exceptional richness of data in Virginia, the authors of the Ithaka report used the Old Dominion to illustrate trends that are national in scope. Like Virginia, other states have cut state support for higher education, and colleges and universities have increased tuition and fees aggressively to make up the difference. While higher ed institutions also have bolstered financial aid to lower-income students, that aid has not kept pace with the increase in tuition and fees. The inflation-adjusted net cost — defined as the difference between a student’s estimated cost of attendance and total amount of gift aid — has risen steadily.
Between 1997 and 2007, net costs for the poorest quintile of Virginia students actually fell, while it rose for middle-class and affluent quintiles. But the trend has reversed in the past five years, with net costs increasing more rapidly for the poor. (While the report does not emphasize this, the net cost for lower-income students is less than two-thirds that of the most affluent students, and their net costs have risen less rapidly over the entire 15-year period.)
The Ithaka report distinguishes between what it terms “Lower Dependence on the State” (LDS) institutions and “Higher Dependence on the State” (HDL) institutions. (The institutions deemed less dependent include The University of Virginia, College of William & Mary, George Mason University, Virginia Military Institute, Virginia Military Institute, Virginia Commonwealth University, James Madison University and Virginia Tech.) LDS institutions have more flexibility in their tuition strategies and have been more successful in recruiting out-of-state students willing to pay the full freight. HDS institutions are dominated by in-state students and have fewer resources to provide financial aid. Those institutions find the current environment especially challenging:
Tuition charges may be reaching their market limit at many of these institutions, and further increases could both adversely impact institutional finances and endanger the goals of ensuring quality and broad access for students across the state. HDS institutions, in particular, appear to have reached — or come close to — this limit, as they were unable to increase tuition charges enough to offset the most recent funding cuts and have thereby seen declines in total revenue per student. …
These financial strains may force institutions to choose between sacrificing either access or quality (or some combination of both), particularly for low- and middle-income students.
If the public goal is to educate and graduate as many students as possible from four year students and to reduce gaps between socioeconomic groups, concludes Ithaka, something has to change. Ithaka recommends increasing state support for higher education and targeting those funds to reduce net costs for lower-income students. Also, recognizing the limited ability of state legislatures to increase funding, the authors also urge colleges and universities to “re-engineer their systems to become significantly more efficient … which means that they have to find ways to adjust their own underlying costs.”
Bacon’s bottom line: The Ithaka study has many useful things to say, but I question the underlying premise — that it is feasible for 65% of future generations of Americans to graduate from four-year institutions of higher learning. I would advance the proposition, for purposes of stimulating discussion, that (a) the goal is unachievable given the current state of K-12 education in America today, and (b) it does a dis-service to lower-income students who lose income by attending college instead of working, rack up significant student debt and never end up acquiring the credential — a Bachelor’s Degree — that will improve their opportunities in the job market.
The fact is, Virginia high schools are graduating thousands of students who are ill-prepared for college. Poor students drop out at a disproportionate rates not only because finances are a burden, but because they often find the course work to be beyond their capabilities. Expanding college enrollment without addressing the disparities in education at the K-12 (or even the pre-K) level is setting up poor students for failure and a lifetime of indebtedness. Under the guise of doing good, this policy does great harm.