United Press International, August 25, 2004, Wednesday

Copyright 2004 U.P.I.
United Press International

August 25, 2004 Wednesday

HEADLINE: Is college tuition money well spent?

BYLINE: By NATHALIE LAGERFELD

DATELINE: WASHINGTON, Aug. 25 (UPI)

BODY:
Students who return to the University of Virginia this fall will pay 10.7 percent more than last year to attend classes on its tree-shaded colonial campus, according to the National Association of State Universities and Land-Grant Colleges. But faculty and administration nationwide are split over whether tuition hikes that have outstripped inflation for decades are an operational necessity or a result of waste.
"Universities are largely not-for-profit institutions. Therefore there are few incentives to cut costs -- there are very few forces at work to offer instruction at lower prices than before, cut administrative overhead or bureaucracy," said Richard Vedder, professor of economics at Ohio University and author of "Going Broke By Degree: Why College Costs Too Much."
In fact, high tuitions can actually make a college "brand" more attractive to prospective students, according to James Twitchell, a professor of English and advertising at the University of Florida and author of the forthcoming "Branded Nation: The Marketing of Megachurch, College Inc., and Museumworld."
"It's like a Prada handbag -- the more that is charged and the greater the perceived scarcity, the more valuable the commodity," Twitchell told United Press International. "It's become in a way a kind of consumerist mentality ... so it makes absolutely no difference what they charge."
But colleges pin higher fees on factors out of their control: increased healthcare costs, federal regulations such as Title IX that require extra staff and bloat expenses, advances in information technology that necessitate expensive updates, and decreased state appropriations.
Public colleges posted an average 14.1-percent tuition increase in 2003 over the previous year, the highest rate of increase for such institutions in at least 30 years, according to the College Board.
These increases are a product of state funding cuts and may be reversed in a sunnier economic climate, said Terry Hartle, senior vice president for government and public affairs at the American Council on Education, a lobbying group that represents colleges.
During the economic boom of the 1990s, "We saw many states like California cut tuition for seven years in a row," he said.
According to the National Association of Independent Colleges and Universities, private-college tuition for the 2004-2005 school year increased at a more modest 6 percent over last year, which is close to the 10-year average of 5.5 percent a year.
According to Ronald Ehrenberg, a professor of economics at Cornell University and author of "Tuition Rising: Why College Costs So Much," competition driven by rankings like those in U.S. News and World Report are a reason for high spending.
"One of the variables that go into the rankings is how much they spend per student, which is an incentive not to cut costs," Ehrenberg said.
"Very often we're spending on what are called competitive amenities -- on such things as climbing rocks or a huge Jacuzzi," Twitchell said, calling competition for rankings "fierce and mindless."
But Ehrenberg said that colleges have no choice but to cater to students' desires.
"If there was a demand by students for a more vanilla type of environment with the resources focused solely on what you call pure education, then there would be some competitors who would try to adopt that," he said.
Ehrenberg also said that pressure on college presidents to keep alumni donations flowing and faculty cooperative is a disincentive against budget cuts for many programs, both athletic and academic.
A bill introduced in the U.S. House of Representatives last year would have withheld federal aid from colleges that raised tuition at more than double the rate of inflation for three years. Although the bill was eventually dropped, it reflected widespread concern that rising costs might keep low-income students out of college.
Financial aid will probably not make up the difference. Hartle said that the maximum grant given to an individual under the Pell Grant (the most important form of federal financial aid) has not increased enough to keep up with inflation, even as overall funding for the grant has increased.
"Is financial aid enough the way we're currently doing it? Probably not," he said.
Colleges have found some ways to cut costs. An NASULGC statement included a laundry list of cost-saving measures enacted by its members. The University of Virginia, for example, saved almost $2.9 million by burning coal instead of natural gas in its main heating plant.
But opinion is still divided on how to tackle the problem.
Ehrenberg suggests more need-based financial aid to ensure accessibility and more state funding instead of cost cutting.
"If people felt that public higher education was high quality, there would be less of a mad rush to private institutions," he said. Larger budgets for public institutions would decrease competition (and lower prices) across the board.
According to Hartle, the only way to cut costs significantly is to let go of faculty. Personnel costs form the greatest proportion of college expenditures, and "the largest number of college personnel are involved in teaching," he said.
"We're seeing more adjunct professors, experiments with alternatives to tenure," Hartle said.
But Vedder disagrees. "There is a rare university where you can't eliminate 20 to 30 percent of the non-instructional staff and the quality of instruction won't be affected," Vedder told UPI.
It seems unlikely that a plan of action will be agreed on soon.
"I think we have some people who want to find a simple explanation to a very complicated problem," Hartle said. "But colleges and universities are very complicated institutions."