‘What is going on with college tuition?

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~ The national spotlight has not abandoned health care, but it has definitely broadened to catch higher education in its glare.

The May 30, 1997, issue of The Chronicle of Higher Education has a special report on tuition. Higher education costs are on the lips and agendas of national and state legislators. In the March 10, 1997, issue of Forbes, Peter Drucker says that “big university campuses will be relics”, that the entire education system is “rapidly becoming untenable.” We even made the cover of Time magazine on March 17, 1997: “How Colleges Are Gouging ‘U.'”

Some headlines would have the public believe that higher education is 1. greedy, 2. fiscally out of control and 3. totally callous to students and parents trying to afford college. While no industry is exempt from the foibles of human nature, I do not think that higher education is on the leading edge of any of these sins. I believe the causes of our present situation are based solidly in simple economics:

~ Our product and our market have changed.

~ Our revenue sources have shifted.

~ Our cost pattern has been altered significantly.

The product of higher education had been an ambiguous mix, and depends substantially on the consumer. Society expects some level of exposure to an ill-defined body of knowledge incorporating human history, culture and scientific discovery, contributing to an enlightened and responsible citizenry. Business demands graduates with workplace skills not only in the technical realm, but also in interpersonal and ethical behavior. Parents of 18-year-olds want their children to “grow up” – but not too much or too soon, and preferably within comfortable parameters. Alumni want a sense of pride and self-worth – and a major bowl game is nice.

Students come in all shapes, sizes, ages, ambitions and want things such as a good-paying job, a social life, freedom, to become more cultured, additional skills, general knowledge, accessible parking and fast-food franchises in the student union. As the percentage of high school graduates entering college has grown steadily and as employers increasingly use level of education as a threshold qualifier, the product/market mix has changed. Once an opportunity for the financially or intellectually gifted, a college education is now the next logical step for nearly half of all high school graduates.

Funding patterns have changed and will continue to change as the federal and state governments are pressed to address more basic welfare issues. Federal aid to students has shifted significantly from outright grants to “self-help” mechanisms – loans and workstudy jobs. States have tried various combinations of controlling tuition levels, adjusting funding and scholarship levels, and establishing budget guidelines and formulas. One of the results in California has been a lengthening of the time it takes students in public universities to complete degree requirements. Many are unable to register for needed classes due to enrollment limits. The endowments generated by the “Builder” generation have been spread more thinly over the increasing numbers of students to be educated. It remains to be seem whether the “Boomer” generation will be as generous.

The “market basket” of goods and services required by institutions of higher learning is not identical to that required by the average consumer. It should be no surprise that higher education costs have risen more rapidly than the Consumer Price Index. Higher education, as it exists today, is labor-intensive, capital-intensive, discount-intensive, compliance-ridden and consumer driven! Each of these could be an article in itself. In a nutshell, colleges are spending more:

1. To compete for quality faculty and administrators.

2. To add hands-on appropriate technology experience for its graduates in multiple disciplines (without any real labor savings).

3. To compete successfully for students with desired characteristics while making higher education affordable for half our society.

4. To comply with burgeoning regulations affecting personnel, students, facilities, material and services in a growingly litigious society.

5. To meet the rising expectations of traditional and nontraditional students for options in services, programs and infrastructure.

A sign of the times comes from a colleague in Texas. He says that the Texas state legislature is now dealing with four issues related to higher education: post-tenure review of faculty performance, use of student fees for athletic programs, faculty workloads and control of post-termination benefits (“golden parachutes”).

rIt is a frightening reminder of that old cartoon caption: “I’m from the government, and I’m here to help you.” Understand, I believe we have to make some changes. My hope is that the end result will be a better system of education for our students and our society.

Patricia Gustavson is vice-president for finance and administration at John Brown University.