February 22, 2012
President Obama started a national discussion on the high price of college in his State of the Union address on Jan. 24. He declared that “Higher education can’t be a luxury — it is an economic imperative that every family in America should be able to afford.” In order to make this affordability a reality, the president proposed punishing public institutions for unnecessary tuition increases by revoking federal support.
Most of us agree that an affordable college education should be available to every student. However, the president’s approach to improving higher education appears to have political incentives behind it, while ignoring the current state of higher education funding.
First, we should put some thought into who should pay for college. Historically, state governments created public colleges and universities and helped fund them. Just a decade ago Colorado paid 68 percent of resident student’s tuition, according to a study by the National Center for Higher Education Management (NCHEMS) for the University of Colorado. Students now pay 66 percent of the cost, with the state share averaging 34 percent. This reversal means students pay a higher portion of the tuition in order to maintain quality. Some institutions experience budget cuts more than others: The University of Colorado at Colorado Springs (UCCS) pays 92 percent of its own costs. Obama should be proposing state governments return to higher levels of subsidization to help struggling college students, instead of offering more regulation at the federal level. While he did say “States also need to do their part, by making higher education a higher priority in their budgets,” Obama’s plans still call for federal intervention.
Second, we need to consider which schools we want to subsidize with federal money. While UCCS receives only 8 percent of its revenue from the state government, for-profit institutions receive a substantial percentage of their revenue from the government in the form of federal grants and loans. In a 2011 economic analysis, David Deming of the Harvard Graduate School of Education wrote in The For-Profit Postsecondary Sector that “federal student financial aid is the lifeblood of for-profit higher education.” His other findings attest to the lack of quality at for-profit colleges as evidenced by higher post-college debt and lower employment rates upon graduation. Public universities devote themselves to providing a quality education instead of turning a profit, making them a more sound investment of the government’s money.
Third, any new plan to change higher education needs to address how the quality of education will be affected. After the economic downturn of 2008, universities laid off considerable numbers of faculty and staff. Undergraduates at public universities now face higher tuition rates — as well as larger classes and less interaction with tenured professors. If public schools attempt new efficiency measures in the classroom they will have to consider their greatest expense: faculty. The professors may have to teach more classes, teach larger classes or be replaced by less expensive teaching alternatives. Each option negatively impacts the quality of the education and students’ experience. The federal government can threaten reduced aid if tuition prices increase, but they must acknowledge that this could backfire with the loss of top-notch professors and less student-faculty interaction. We need to encourage quality improvements instead of shortcuts.
These points should not detract from President Obama’s efforts to improve the affordability of higher education. However, they do point to a re-evaluation of the goals of higher education and the role that government plays. The primary goal should be quality education. Publicly supported universities and colleges provide this service better than the heavily subsidized for-profit sector. The way to achieve this goal is not through federal incentives, but through the rejuvenation of the state-support system that created the schools. State governments have the power to control tuition rates along with other regulations, but they are not providing the means to lower tuition rates. Any additional constraints imposed by the federal government can potentially take away the quality education that enables students to thrive in the workplace. We can solve this problem by supporting public universities instead of punishing them.
Laura Putnam is a senior at Colorado College. She wrote this op-ed piece as a class assignment for The Economics of Higher Education, taught by CC President Jill Tiefenthaler and her husband, economist Kevin Rask.