Koch Blames Boards, Presidents for Tuition Hikes

Former Old Dominion University president and current emeritus professor of economics James V. Koch is willing to shoulder his share of the blame.  “I was president for fifteen years, so I sang some of the same songs that presidents and administrators sing these days.”

Those would be the siren songs sung when seeking major and continuous increases in university tuition and fees, Koch told The Chronicle of Higher Education in an interview on the issue.  It is the subject of his new book, “The Impoverishment of the American College Student,” just released by Brookings Institution Press.

What he is saying is hardly a fresh insight for Bacon’s Rebellion.  The message may resonate a bit because of who is saying it. 

The Virginia General Assembly has sought to take the issue off the front burner with its successful effort to freeze in-state tuition at the state schools for the term about to start.  But that follows the massive run up in fees over the past few decades, to the point of major economic harm outlined by Koch and others before him.

James V. Koch

In a recent guest column in the Richmond Times-Dispatch, he tweaked the best-known Virginia schools for their new economic segregation, with students from the lowest three of the family income quintiles receiving less than one quintile of the admissions. This despite the grants and need-based scholarships available, often financed now directly by the students paying in cash (or with debt.)

In fact, heresy of heresies, Koch harkens back to former Education Secretary William Bennett’s warning in 1987 that burgeoning federal subsidies would unleash corresponding price increases at the schools, a counterproductive outcome that is still highly disputed.

Ultimately, however, he blames the leadership at the institutions.  Here’s this from the article on his book:

How do we make college more affordable? Every tuition and fee increase at a public institution is approved by a board of trustees or regents. Usually the votes are unanimous. I was president for 15 years, so I sang some of the same songs that presidents and administrators sing these days [when they want tuition hikes]. Presidents end up co-opting their boards. They give them tickets to all the events. They do all kinds of things that make the board members feel good and make the board members feel this is really important and that they need to do what the president asks them to.

So you think boards should be doing a better job of holding the line on tuition increases?Yes. Part of the problem is they get appointed by governors or elected officials and think they’re supposed to be advocates for the institution rather than representing the public and taxpayers and students. They become advocates for the institution and perhaps even the president rather than saying: We’re here to represent citizens and taxpayers and make sure the university is doing what it should be doing for society at large.

He’s no fan of the proposals circulating among various Democratic presidential hopefuls to eliminate existing student debt. It would set into motion a series of behavioral disincentives that would maybe cause us to end up being worse off. If institutions know that student debt is going to get canceled, that reduces the inhibitions they might have toward increasing their prices. Why control prices if someone is going to come in and take care of the problem for you?”  he told the Chronicle of Higher Education.

It is always important to understand who you work for in any endeavor, who is the boss and who is the customer. For too long very few in higher education have put the student and the student’s family, if paying the bills, on top of the pecking order. With 20-20 hindsight on a long and successful career as teacher, administrator and then consultant, Koch now does and is recruiting others.

Having delivered on a plan to freeze Virginia tuition for one year, the question now is can the General Assembly do it again? In recent days Virginia House Speaker Kirk Cox, who first has to win his own seat in a newly difficult district drawn by a court, has promised to make that a high priority in the 2020 session if he’s there. Unlike most other issues to be fought over until November, odds are this won’t spark partisan debate but a chorus of me-too.

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15 responses to “Koch Blames Boards, Presidents for Tuition Hikes”

  1. Good post, Steve. You beat me to it. I’m about a fifth of the way through Koch’s book. It is very data intensive, with lots of graphs and tables, and proceeds in a logical and disciplined manner from point to point. In the material I’ve read so far, covering the rising cost of tuition and soaring student debt, Koch’s arguments are unassailable.

    However, I do have a quibble with the op-ed he published in the RTD the other day. He documents how the student body of Virginia’s elite public colleges and universities come disproportionately from affluent families. There is no question that he is correct about this. But here’s how he characterizes that socio-economic stratification:

    “Dare we label this for what it has turned out to be — a sophisticated form of segregation — not based on race, but instead based upon one’s ability to pay?”

    Well, no, we don’t dare call it that. Higher-ed may be a sophisticated form of segregation, but it’s based overwhelmingly (with a few exceptions for legacies) upon meritocratic criteria such as SAT and ACT scores, class rankings, and the academic prestige of the high schools the applicants attend. As it happens, those criteria are closely correlated with socioeconomic status, but they are not synonymous with socioeconomic status. I would rephrase Koch’s phraseology as follows:

    “Dare we label this for what it has turned out to be — a sophisticated form of segregation — not based on race, but instead based upon meritocratic traits that are correlated but not synonymous with socioeconomic status.”

    The fact is, Virginia colleges and universities are thoroughly imbued with politically correct thinking and bend over backwards to recruit a student body that is ethnically and socioeconomically diverse.

  2. Steve Haner Avatar
    Steve Haner

    I mainly wrote something because in an email exchange he mentioned the RTD had omitted any reference to his book. (Save me $25 and loan it to me when you’re finished.) I see your point, and his. I may lean closer to his, and think that if the total cost of attendance were substantially lower, the mix of students would be very different. As you’ve said, in the current price environment the schools need to “bend over backwards” to achieve the weak diversity they show. And he also outlines the pressure the schools feel to live up to those rankings, which also plays a role in the heavy reliance on high entrance standards.

  3. LarrytheG Avatar

    re: ” meritocratic traits that are correlated but not synonymous with socioeconomic status.”

    this sorta sounds like the folks who are well off – are that way because of their “traits” (as opposed to family wealth or education, Dad went to college – so son/daughter go,etc?

    At any rate, this is not rocket science and it’s useless to blame ALL colleges and ALL boards for something that is systemic as if they are all acting in concert to achieve that same goal of high cost education.

    Colleges sell a product. The more their course offerings (no matter how lightly attended), the more amenities, the more programs, sports, etc the stronger their appeal to prospective students so they charge as much as they can then expand/boost their programs, etc seek to fill as many seats as they can with more “help” from easily-available loans.

    It’s sorta like expecting Chevy and Ford to sell basic pickups for the bare minimum profit rather than outfit them with all manner of amenities to attract as many customers as they can and – as WSJ reports – they AVERAGE 5K in profit per truck – 10 times what they make on a car.

    Colleges do the same thing – the more students, the more money, the more programs/amenities – no problem got easy loans, etc, etc.

    Almost no college is going to offer a stripped down curriculum for cheap – even though that option is always available – there is a “competition” of sorts – a few could do that but – it’s actually the standard for Community Colleges but many parents/kids do not feel that they are “real” full-service colleges – limited programs and curriculas, no 4 year degree, no sports, no Spanish clubs, etc.

    Despite what critics say, colleges are offering what the customers want – for way more than it should cost – just like those pickups – but that’s what people want and everyone gets a chicken dinner (loan).

    1. djrippert Avatar

      “At any rate, this is not rocket science and it’s useless to blame ALL colleges and ALL boards for something that is systemic as if they are all acting in concert to achieve that same goal of high cost education.”

      But, of course, you would blame ALL pharma companies for the systemically high cost of drugs?

      1. LarrytheG Avatar

        Well actually no – Big Pharma, like most companies, try to provide the product that people want and charge the most they can from it just like Ford and Chevy do with their pickups. Do you want the Govt telling Ford/Chevy what they should charge for their pickups? If you REALLY want the govt telling big pharma or higher ed what to charge – isn’t that that terrible “socialism” that we all say we abhor?

        1. djrippert Avatar

          The Star Wars Cantina Scene which is the Democratic Primary has plenty of time to scapegoat “price fixing” by big pharma. The answer? Get the government into the business of making drugs!


  4. Excellent, provocative book and post. You quote Dr. Koch’s comment, “[These Board members] think they’re supposed to be advocates for the institution rather than representing the public and taxpayers and students.” That is a nuanced problem. When the State has the dominant role in funding the solution, the GA becomes the obstacle if not the enemy and the Board becomes swept up in a focused lobbying effort to maintain higher ed’s place in the queue. But today we increasingly look at Virginia’s public higher ed as a sprawling business Enterprise and look to alumni and corporate sponsors and government grants and student loans and ancillary University business profits for funding — and it’s much harder for the Board members to keep a single priority, a clear goal, in mind. For all the chaos involved, that episode with Dragas and Sullivan in 2012 was a chance to put the UVa Board’s proper role in perspective. Procedure aside, those were questions about the future that any thoughtful, independent Board member should have been asking.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      “For all the chaos involved, that episode with Dragas and Sullivan in 2012 was a chance to put the UVa Board’s proper role in perspective.”

      Quite the opposite, this chaotic event did enormous damage to the proper relationship between university boards and presidents at UVA and elsewhere, and both players to that debacle were equally to blame for their behavior. But the real problem, the rise of illicit and overweening presidential power, and the concurrent decline of Board power and responsibility had been ongoing for generations.

  5. LarrytheG Avatar

    Well, they ARE advocates for the institution AND the students on what the students want and want increases the appeal of the College to prospective students.

    If you actually want a board whose primary goal is to keep the cost of tuition low then I would posit that the current model is not designed to do that and you’d have to have a board that is NOT appointed as “plum” jobs and NOT taking goodies from the College, etc… you’d need more of a stand-off board, an adversarial board that can and does nix programs and amenities that ADD to costs. You’d need something like the board that decides how much Medicaid will reimburse for a procedure or pay for it at all… The model we have right now is not that kind of model and the proof of it is that for the most part, there are no cost containments for colleges. They are driven to provide things they think that students/parents want – no matter how cost-effective they are or not – as long as the “customers” pay for them.

    The ongoing blame mantra on these boards , that NONE of them are doing the right thing – at some point one has to wonder if blaming them all (as opposed to ONLY the “bad” ones – ALL of them are “bad” – that’s systemic and an issue with their design and intended operation. All colleges will co-opt such boards if they can and no college really wants an independent authority deciding prices and costs. Right?

  6. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Sounds like an excellent book. Certainly it’s an excellent editorial in Richmond Times Dispatch.

    As suggested by Steve, this quote caught my attention;

    “A 2017 New York Times piece disclosed that already in 2013 only 12.1% of undergraduate students at the College of William & Mary came from the bottom 60% of the family income distribution. At James Madison University, the comparable number was only 12.6% and at both the University of Virginia and Virginia Tech, only 15%. Christopher Newport University, the University of Mary Washington and Virginia Military Institute all fell below 20%.

    What this means is that relatively few of the sons and daughters of “common folk” are entering Virginia’s highly regarded four-year institutions. They and their families might pay taxes that support these institutions, but they’re not likely to attend them. Even if admitted, they probably can’t afford to attend. … Four-year public higher education increasingly is becoming the province of the well-to-do. … Dare we label this for what it has turned out to be — a sophisticated form of segregation — not based on race, but instead based upon one’s ability to pay?” End Quote.

    So much for higher education’s claim of diversity. The claim is bogus as is so much else in American higher education today.

    But is the last sentence of the quote really totally true? I think not, given all the means and standards of cultural discrimination today. As I mentioned here on this blog site in early June, what I saw this year when attending graduation ceremonies in Virginia, was a shocking lack of graduating white males. From what I saw this past year on some Virginia campuses is that racism was alive and well in some places and America, including Virginia. Racism there has just shifted its targets, as if the human species always needs an “other” to discriminate against, all grown our of our fierce tribal instinct.

    Indeed, as I surveyed that large crowd of graduating university students, I was reminded of Teresa Sullivan’s last UVA graduation video wherein it appeared that there were no graduating white males that year at all at UVA. It is remarkable, how blind many of us are at our own version and style of racism today. It is why we’re foolishly surprised, and just can’t understand, why Trump won.

  7. LarrytheG Avatar

    I tend to think whether it comes to housing, food, medical care, etc, that those with the economic means will do “better” and that includes education.

    What “we” – the USA “promises” is EQUAL _opportunity_.

    So that does NOT mean that everyone gets the same thing and it should not. What it means is that we strive to provide a baseline of education upon which one presumably has opportunity sufficient to make their own way if they add in some of their own sweat equity – and perhaps debt.

    What it does NOT mean is that one should go deep into debt to “get” what others of better economic means are getting.

    yeah – I know – that’s a real bummer but we are not a socialist country and I hope, never will be.

    So I’m not sure what our obsession is with having low income folks attend Ivy League schools; We should by all means provide education opportunity sufficient for folks to make their own economic way in the 21st century – but we owe no one a top-flight Ivy league education and encouraging that as a goal when the consequence is debt up to your eyeballs for much of your life is a terrible mistake that actually harms those who are victimized by it.

    Don’t read the above as agreement that we should discourage low-income folks from aspiring for the highest goals – there does need to be a path for those who are willing to work for it but what we are doing now is a perversion of the original purpose of “equal opportunity”.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      I basically agree with Larry’s statement. My point here is that we should not allow universities to construct and execute admissions processes and biases that favor one group of people over another group of people, or one person over another another, on the basis of the color of their skin or ethnicity, their wealth or their parents wealth, their athletic ability, or fact their parents attended that university, or any other purely subjective or false standard, not relevant to the students demonstrated academic ability, achievement and/or work ethic in school.

      And, at the same time, we should require all universities to give ALL people of limited financial means who would otherwise qualify for a particular university on the basis of proven academic merit alone, the reasonable opportunity to attend that university if that university receives federal and/or state funds, including scholarships out of that universities endowment funds, and Purdue type programs. This would include taxing those endowment funds to force that result, if that proves necessary. It would also require the establishment of rigorous requirements of proving ongoing student achievement in college semester by semester to earn the right for any such student to stay in college. This achievement standard should apply to all students, no matter their wealth and means. This will insure learning by students and actual teaching by all professors in these schools, unlike what happens today in most colleges. This will also open up spaces in schools for others denied those space occupied by otherwise qualified students who are unwilling to take advantage of a higher education, yet refuse to relinquish their seat to another kid who deserves the opportunity to learn that the lazy or irresponsible student is squandering, while the school just happily collects his money.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        The above policies force university boards, presidents, and faculty to truly look after the interests of their students first as their fiduciary obligations demand, instead of having those boards, presidents, administrators and faculties looking after their our private personal and corporate interests first and foremost as is obviously what is going on today, to the great detriment and disadvantage of students everywhere today.

        Today, these injustices against giving all students of equal academic achievement start at a plainly corrupt admissions process and the concurrent tuition and fee fixing schemes that benefit primarily those who run the institutions, and encourage all those other pernicious practices that harm students throughout their enrollment in these universities.

  8. LarrytheG Avatar

    If we want to stipulate that all admissions are based purely on merit – no exceptions for Alumni or Sports – I’d agree.

    That’s how you tell someone who is not academically qualified no matter their color or economic status ……….. and everyone has to qualify on merit – no exceptions. We’d still have to address the income disparities which enable some kids to get uber tutoring while others cannot afford it.

    The discrimination we have is actually engendered by alumni offspring and sports scholarships which basically are saying that there are OTHER ways to get admitted BESIDES academic merit. Once you cross that bridge for one thing – others come along and it seems that many are for folks who are NOT disadvantaged economically or Alumni-wise or sports-wise, so we then add income and skin color.

    I think this also affects the cost of college – when you offer various ways to attend – beyond academic merit – you increase demand and if you can charge more -you can add more academic courses and other even more amenties – that also increase demand that combined with “easy-financing” is a lot like an auto dealer ecouraging customer to go for the “well-equipped” car because it only adds “pennies” to the monthly payment!

    This approach is pretty universal with many larger colleges who are simply killing the smaller private colleges who cannot offer all the programs, sports and amenities.

    Institutionally and politically – we are not going to _stop_ this. What we have to do if offer alternatives that are “better” for people to choose. The Colleges nor their governing boards are not going to change – so change must go around them.

  9. […] Koch, “The Impoverishment of the American College Student.” Steve Haner has written a broad overview of the book, but the volume contains such a wealth of research, much of which applies to Virginia […]

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