31 July 2011

Reader Mail on In-State Tuition Reform

My column in-state tuition reform was reprinted today in the Dallas Morning News and prompted this response from a former CU parent which came in by email:
I was fortunate to see your article about in-state tuitions in my Sunday Dallas Morning News and wanted to tell you how pleased I was to see a professor actually trying to do something about the college costing paradigm. My daughter was graduated from your Journalism school in December of this past year and while we paid out of state rates--I feel that she/we received a reasonable value for our money; increased academic rigor, and more discussions of economic realities would have probably made her current job search slightly more palatable and productive. Your underlying assertions about needing to drive the University toward greater greatness for the good of all truly resonate, because at some level a rational parent looks at their child and says, "okay, now over the next 4 years I am going to plunk down $160k to get a diploma," is that worth as much as potentially staking the child to ownership of a small business? The answer really is: largely only if the diploma has some resultant training of the mind, some affiliation benefit, and some reputational worth. The balance can be found on the internet or for less cost elsewhere.

Too many college administrators appear to believe that the "wisdom" the professors bring to the classroom by their presence is either of such inestimable value or uniqueness that we should be honored to shower them with money. That isn't to say I begrudge any University what they charge, because for many students especially in the college age range, it is only by bringing the subjects to life that learning and inspiration occur and when they drive and inspire ground-breaking research, lifelong careers, and changed behaviour patterns the educators have effectively altered the course of history. Still the reality remains that students are going to be motivated by something, and 99% of what is taught is readily available through books and the internet so the schools really need to understand and focus on those aspects of the college investment that make one school more valuable than the next--and unless you want to compete on price, I would suggest that your essay is a good start for looking at what continues to make being a "Buff" worth the dollars people are now paying. And pushing this value equation could be the right catalyst for propelling your school to next level.

Regards,

Dave Lapka

8 comments:

  1. When I went to CU in 1966-1970, my in-state tuition went from $286 per semester the first two years, to a little over $300 a semester at the end. When I see what is charged these days ($160K over four years at CU, out-of-state?), I don't see how either the university or parents can justify it.

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  2. Roger,

    On your original thread, what I tried to write was that I don't think the average customer perceives value from the typical university for the school's efforts to achieve excellence in research. As I'm sure you know, far too much of the teaching load is borne by poorly paid grad assistants while full profs with tenure bring down large dollars for small teaching loads.

    The reality is that there is no relationship between being a good researcher and being a good teacher. The tuition bubble will eventually burst for all but the most highly touted schools when some universities start focusing on achieving excellence in teaching at a fraction of the current tuition levels.

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  3. -2-Stan

    Thanks, perhaps you are right, but looking at the applications/admissions statistics for the top research schools does not suggest that tuition rate's are in a bubble state. E.g., MIT and Stanford admitted less than 10% of applicants, see:

    http://thechoice.blogs.nytimes.com/2011/03/30/admit-stats-2011/

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  4. -3- Roger,

    Do the acceptance rates really signify any thing meaningful regarding the possible existence of a bubble?

    What about these charts, which show that tuition is going up faster than medical costs, and dwarfed even the real estate bubble.

    It's not quite the same thing, since tuition isn't an asset like a home, but it seems like something has to give at some point.

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  5. The top ten liberal arts colleges also have high tuitions and low acceptance rates. And no one is applying to them because of the research. Families pay for a ticket that has prestige attached to it. The vast majority don't give a damn about research by profs in the grad school. Especially if they are majoring in business or English or History.

    To change the subject with an example to try to make the point -- CPAs are very proud of all the documentation that they provide a small business every month (journal, general ledger, balance sheet, income statement, etc.). But 99% of their clients don't give a damn about any of it other than to check the bottom line to see if it is red or black. Regardless of what the CPA thinks he is selling, the customer is simply buying tax compliance with all the various local, state and federal govts.

    Colleges and universities obviously get enthused about things like research and the number of volumes in the library. Not the customers. They are buying a ticket punch that says "college graduate". The more cachet to the name, the more they are willing to pay.

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  6. Using acceptance rates as a measure for quality is fraught with imprecision, especially for undergraduates and involving the entire spectrum of undergraduate degrees.

    The reason top schools get the most applicants is due to the scarcity of enrollment and prestige of their name.

    The reasons all schools, top or otherwise, are seeing ridiculous increases in tuition costs are varied, but I firmly believe a huge factor is student loans.

    Student loans are like mortgages for homes; by spreading out the up front cash requirement, a dynamic is introduced where ever soaring tuition rates are made to appear less soaring.

    This is very similar to the residential mortgage market: the more people buy using mortgages, the faster home prices increase. The correlation can be seen in comparing overall mortgage credit levels with the growth in overall residential real estate prices. It is this dynamic which led the overall residential property value from 80% of GDP to the 125% of GDP today - with peak around 150% of GDP.

    The sad part is that sum of all student loans outstanding just recently have grown to be larger than the sum of all outstanding credit card debt.

    These two sums are still dwarfed by the residential mortgage debt, but we're still talking in the neighborhood of $800 million dollars.

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  7. -6-Khan

    Thanks ... I'd never suggest acceptance rates are a useful measure of quality, but they are a measure of demand.

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  8. "That isn't to say I begrudge any University what they charge, because for many students especially in the college age range, it is only by bringing the subjects to life that learning and inspiration occur and when they drive and inspire ground-breaking research, lifelong careers, and changed behaviour patterns the educators have effectively altered the course of history".

    This is typical educationalist baloney, Mostly education requires reasonably competent teachers and reasonably conscientious students, most of whom will get averageish diplomas.
    The ridiculous exagerations of the educational clique such as "striving for excellence" etc. have been the cause of the over expansion of the useful but limited role of education over the last fifty years or so.
    I spent my career as a state school maths teacher. I was quite successful and have no regrets, but I would warn against overvaluing education.

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