National Public Radio (NPR) July 13, 2004 Tuesday

National Public Radio (NPR) July 13, 2004 Tuesday

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National Public Radio (NPR)
SHOW: Talk of the Nation (3:00 PM ET) - NPR
July 13, 2004 Tuesday
HEADLINE: Rising cost of college tuition
ANCHORS: LYNN NEARY
BODY:
LYNN NEARY, host:

This is TALK OF THE NATION. I'm Lynn Neary in Washington, sitting in for Neal Conan.

As high school kids and their parents begin thinking about college, they have to consider a number of factors: Is it the right fit academically? Is it the right size, in the right location and, perhaps most importantly, does it have the right price tag? For more and more families, tuition is a deciding factor in where the kids will go to college, because the cost of a college education keeps increasing astronomically. A recent report from The College Board shows that during the last school year, the average tuition and fees at four-year public colleges rose 14 percent to nearly $4,700 on average. At four-year private colleges, where costs are already higher, the prices rose 6 percent to an average of nearly $20,000. A lot of educators, government officials, parents and students are asking why tuition costs keep spiraling upward and if anything can be done to curb the trend.

[Shortened to focus on Prof. Eherenberg]

Joining us now is Ronald Ehrenberg, professor of economics and director of the Higher Education Research Institute at Cornell University. He's he author of "Tuition Rising: Why College Costs So Much." Professor Ehrenberg joins us from studios on the Cornell campus in Ithaca, New York.
Welcome to the program.

Professor RONALD EHRENBERG (Cornell University): Thank you, Lynn.

Prof. EHRENBERG: I think you've been listening to our conversation with Professor Vedder. First of all, what's your take on some of what you've heard?

Prof. EHRENBERG: Well, I think one unfortunate thing in Professor Vedder's presentation is that he doesn't distinguish between what's going on in private higher education and in public higher education. Public higher education in the United States has been hemorrhaging. The share of state budgets going to public higher education has declined over the last 30 years. State expenditures per full-time or equivalent student have risen at rates barely higher than the rate of inflation. And the increases have not been sufficient to account for increases in things such as faculty salaries. And faculty salaries in public higher education have fallen relative to faculty salaries in private higher education. If you went back to 1980, the average faculty member at a public university earned about 90 percent of what the average faculty member at a private university earns. Today, the number is down near 77 percent. So the publics are having a great deal of difficulty attracting and retaining high-quality faculty.

These very, very difficult--you say, 'Well, expenditures have gone up at the rate of inflation. Why isn't that enough?' There've been tremendous costs that the publics and the privates have had to take on. Part of the reason for the costs comes from government itself. And here I agree with his analysis that there is room for less government regulation of the universities. But much of the increased administrative costs at my university is due to all of the money that we spend on environmental issues, on health and safety issues, on equal employment opportunity, on federal contract compliance, on auditing and reporting requirements. These universities have to come up with the money to completely wire their campus and capital construction costs, and the public universities don't have the access to as many private donors as the private universities have. And then over the last 20 years, the public universities have gotten involved in development and fund-raising, and you have to spend money and hire people in order to raise money.

NEARY: What about...

Prof. EHRENBERG: So, yes...

NEARY: What about this whole question of productivity that Professor Vedder raised?

Prof. EHRENBERG: Well, the productivity issue is very interesting because we seem to be using a measure of the number of students that you can turn out per faculty member as a measure of productivity and we're not talking at all about the quality of product. You asked Professor Vedder what his teaching load is; I currently am teaching one course per semester because of some external funding I have. But in the one course that I'm teaching, I have 75 students and they all write group research papers and they meet with me regularly in my office. I have a number of other students doing research with me as part of the Cornell Higher Education Research Institute. And because of these experiences, many of these students are going on to PhD study. So I think one important thing that gets lost in the debate over productivity is the college experience for students, and what they expect today is very, very different than what it was 20 or 30 years ago.

NEARY: And what about the idea of cutting non-educational programs, athletics, for example?

Prof. EHRENBERG: Well, I'm not going to be a defender of large athletic programs. And I'm at the university which is in one of the few conferences that have no athletic scholarships. But what students expect at a university and what universities have to do to attract students has gone up. And many public universities are finding that they need, or they believe they need, large athletic programs to make their campuses more attractive to students, and also to build the type of alumni loyalty, which many of the privates already have, that leads to increased private support in the future.

NEARY: Professor Vedder, there's something I wanted to talk to you about a little bit further, and then ask you, Professor Ehrenberg, to respond to it. And that is your argument eventually sort of goes to privatizing colleges and universities, state colleges and universities. I wonder if you could just explain a little bit more about that idea.

Prof. VEDDER: Well, I'm not sure--I don't think it's even politically feasible to truly, fully privatize American universities at any time in the immediate future, and I'm not sure that I'm advocating it. But I raise the question in my book 'Why do we have public support of the universities when universities are an investment for the individual attending school and in most cases--not all cases, but in most cases brings about a very significant increase in their income from what they otherwise would receive?' College graduates earn close to, say, just rough it out, double what high school graduates do on average, and so it's a pretty good investment going to college. That's one reason why the demand for a higher education has gone up so much.

Well, we've always assumed that there were a lot of external benefits to universities. Professor Ehrenberg, in his book, makes the point that universities promote economic development. Well, my own research shows--and I started out believing this myself. But when I start looking at the relationships between what we spend using public-sector funds anyway on universities and what we get in terms of growth in income per person or what have you, we don't get those strong, positive relationships and we don't see that states that spend lots more money on public universities get significantly higher rates of educational participation, another goal that higher education--public support of higher education has.

So I ask the question maybe it's time to disengage somewhat from supporting universities. And, indeed, that is what is happening, as Professor Ehrenberg indicates, at the state and local governmental level. They are reducing support relative certainly to their total budgets and, in some cases, relative to the number of students they have. So we're moving away from that. And I'm suggesting, 'Well, maybe what we ought to be doing is giving more of the money directly to students'--which we already do, to some extent, and particularly to the lower-income students--'and largely disengage from education and, ultimately, have state universities move closer to private status.' Of course, they don't have the endowments and so forth that the Cornells of the world have, and so there are some problems with this. But at least I think it's an idea that is worth giving serious thought to.

NEARY: Professor Ehrenberg.

Prof. EHRENBERG: Well, the growth of public higher education in the United States--which started actually at the turn of the 20th century--was a great democratization-type move, which took higher education which had historically been the venue just of the elites and opened it up the rest of society. And my concern is that over the last 30 years, we have not narrowed educational differentials by socioeconomic class. And the public higher education institutions have a unique responsibility to serve all members of our society, which the privates, although they should be doing that, do not always do.

And the other point I would make is that we have shifted over the last 10 or 15 years from thinking about higher education as a public good to thinking about higher education only in terms of the economic return to the people undertaking it. And if you accept the latter view--which is the view that Professor Vedder is putting forth--then certainly the standard economic argument is, 'Well, just break down capital constraints and provide subsidies to individuals and that's all you need to know.' But I would sort of point out that the public higher education and the whole land-grant university system was developed with the notion that public higher education institutions have a unique responsibility to the rest of society in that they prove to serve a social purpose.

NEARY: All right. I want to get a call in here now. Deb in Greensboro, North Carolina. Hi, Deb. Go ahead.

DEB (Caller): Hi. I'm calling as a former adjunct part-time instructor at three colleges--one private, one public and one community college, and I just wanted to comment that if you're talking the money away from the schools--the government money--what ends up happening is you have a whole bunch of people like me with no insurance, no benefits. We work out of our car or--I had a bike. I couldn't even afford a car. And the students suffer. They don't get the education they want. I ran into--I ended up going into the high school because I wanted to be able to have vacation, and if I got sick I wanted to be able to see a doctor. When I ran into one of my former college students, he said, 'Oh, yeah, we have a new athletic field, we have a new gym and I can't get the classes I need.' And that's not--he honestly said that to me because I asked him what was going on. I'm not kind of saying it to push--I mean, I am saying it to push my point, but the fact of the matter is he said it; I didn't ask him.

NEARY: All right, Deb. I wanted to read an e-mail just to support what you said. Somebody wrote in something very similar and I'd like to hear our guests reply. 'I work at a college and I see what they are spending money on. Most of it is, A, to enable new learning technologies, and, B, do what students, parents and alumni want, like athletics and student life. But in the library, which is the academic heart of most colleges, costs of journals, databases and basic data--that is, all information--have double-digit inflation every year. Over time, this is one reason college costs go up.' So I'd like to hear you comment on that first, Professor Vedder. And thanks for your call, Deb.

DEB: OK. I'll take it off.

Prof. VEDDER: Those are both interesting comments, and I don't disagree with either one. Indeed, the comment from Deb about her situation working at three different colleges points out another interesting thing. In the attempt to cut costs, a lot of universities are increasing the amount of non-tenure-track, sort of adjunct faculty that are paid relatively modest amounts, have relatively little job security and so forth. Other--my sense, and this is partly just my intuitive sense more than based on factual information, is that there's a sort of an academic underclass of faculty that move from university to university. At the same time we are at the other end of the spectrum finding ourselves paying very large amounts for sort of superstar faculty, particularly at the better private universities.

NEARY: And we actually have not discussed your take on tenure, either, which is one of your cost-cutting proposals.

Prof. VEDDER: Yeah, yeah. Well, I'm not necessarily in favor of abolishing tenure, but I do think it does impose some costs on society. So anyway, you've got a huge disparity. I suspect a growing disparity and I don't know if Professor Ehrenberg agrees and knows more about this--between the haves and the have-nots within the academic community.

NEARY: That's interesting. Let's take another call now from John, and he's calling from Idaho. Hi, John.

JOHN (Caller): Hello.

NEARY: Hi. Go ahead.

JOHN: I go to the Albertson College of Idaho in Caldwell, Idaho, and recently we actually lowered our tuition to about 13 grand a year, which cut our tuition in about half.

NEARY: How'd you do it?

JOHN: Well, what happened was that we had increased our sticker price just a few years earlier because of the perception of prestige, to make it look like we were more prestigious because everyone was asking us, 'Why is your college so cheap? Why is it so cheap to go there?' so you must not be as good as these other schools. And what--but then what we did is we increased our price and people said, 'Oh, you are as good as those other schools,' now is the perception, but we can't afford to go there anymore. So we just recently decreased it back down to the actual price. When we had the price up higher, only about three people actually ever paid the full price.

NEARY: What do you mean by that?

JOHN: I mean that the actual sticker price that the college was saying--there was a press release they released after they switched the price back down and they switched it for those students, too, but at the time when our cost was about twice as much, only three students at the school were actually paying that price. Everyone else was actually paying very equivalent to what we've now lowered it to. But the problem was there was perception from students who would say, 'Well, I can't go to your school because it's too expensive,' but it really wasn't.

NEARY: All right. That's an interesting comment, John. Thanks so much for your call.

And I want to remind everyone that you are listening to TALK OF THE NATION from NPR News.

Professor Ehrenberg, what's your reaction to that?

Prof. EHRENBERG: Well, can I return first to the previous caller who talked about the growth of part-time faculty?

NEARY: Sure.

Prof. EHRENBERG: I think that Professor Vedder's point there was exactly correct, and the growth of part-time faculty and non-tenure-track faculty, which is being done in an attempt to hold costs down, my own research has shown that this leads to adverse outcomes for undergraduate students, and it reduces graduation rates exactly for some of the reasons that the caller mentioned. The other thing, of course, that is happening is that because of the poor treatment of adjunct faculty, there now is a growing movement in this country for unionization and collective bargaining for adjuncts, and as that occurs, the cost advantage from using them will go down and universities will have to figure out other ways to hold their costs down.

NEARY: All right. And to the point of the last caller, and either one of you can respond to this--perhaps Professor Vedder. I mean, it's a curious call in the sense that they just simply raised the tuition to be competitive and then dropped it back down again. I don't know how common that is, but it seems to--it raises the question of, first of all, how much competition plays into this whole question of rising tuition costs.

Prof. EHRENBERG: Well, if I could just answer that because...

NEARY: Go ahead, Professor Ehrenberg.

Prof. EHRENBERG: ...I've been doing research on this. Colleges and universities fool around with what they call enrollment management or pricing consultants, and some institutions have found that when they reduce their price--their posted price to students--they can succeed in increasing revenue as opposed to using the strategy of setting a high posted price but give large tuition discounts to many students. And that's what the caller described that happened at his institution.

NEARY: OK. Let's see if we can get one more call in here. Craig in Greensboro, North Carolina. Go ahead, Craig.

CRAIG (Caller): Hi. Love the show. Yeah, I saw a report maybe a year ago talking about that some colleges were trying to cut costs by limiting contact time with students, whether it was shortening the school year or shortening the number of days or hours that the kids met with professors per class. I'm wondering what the panel thinks about that, and I'll take my message off the air.

NEARY: All right. Thanks so much, Craig. Professor Vedder, is that getting to some of what you're suggesting or not?

Prof. VEDDER: Well, I haven't heard much talk about that. There is, of course, a great growth in online instruction, both through the formal processes through traditional universities and also through these for-profit providers which are growing exponentially as we speak. So there is a view that the costs of higher education are largely labor costs, and if we can lower those costs we can do better. But I--as a professor myself, and I've read what Professor Ehrenberg has said, and I think we probably largely would agree, there's a lot of students whose lives have been impacted by the personal contact that they have with individual faculty. And one raises some issues relating to quality if one starts dramatically cutting the class contact with faculty in an attempt to cut costs. There is a dilemma there. I'm not saying that some of it can't be done, but it's certainly not a totally costless thing in terms of qualitative issues as well.

NEARY: Well, all this is great food for thought, and I thank both of you for joining us today for this discussion. Richard Vedder is professor of economics at Ohio University in Athens, Ohio. Ronald Ehrenberg, professor of economics and director of the Higher Education Research Institute at Cornell University in Ithaca.

When we come back from a short break, we take up one of the most serious political issues of the campaign: hair.

I'm Lynn Neary. It's TALK OF THE NATION from NPR News.