Keeping the Higher Ed Bubble Inflated


UPDATE: I am advised that this was the closest vote in 20 years on a tuition increase: 5-4.  I don’t have the names of those who had the courage to vote No, but kudos to them for doing so.  Even though Regents are elected, it’s relatively easy for them to roll over to an appointed administration on tuition votes, especially given the (at least perceived) centrality of higher education to opportunity for advancement.

The CU Regents have approved a 9.3% tuition increase for in-state students, and a 3% increase for out-of-state students.  No doubt it’ll take special scientific instruments to measure the time that elapsed between this announcement and certain legislators’ bemoaning the fact that we “don’t fund higher ed.”  But higher ed, even here in Colorado, has done a pretty terrible job of accounting exactly what it is we’re supposed to be funding.

The core mission of the university is the education of students, culminating in a degree that is supposed to represent the mastery of the material.  It is almost impossible to get a straight answer as to what that actually costs.  Go to the CU website, and you’ll be provided with a wealth of information about their sources of funding.  Detailed information about spending is almost impossible to find.

Part of the problem, of course, is that the university is like a huge conglomerate corporation.  It’s got multiple missions, and multiple sources of income, and it doesn’t really make any sense to directly match tuition, room, and board to the cost of educating undergraduates.  Also, the price of an item doesn’t really have to be closely related to the cost of providing it.  If you can persuade people that a CU degree will be worth $100,000 to them (compared to not having a degree at all), then they’ll pay that, even if the margins turn out to be substantial.

So there are a number of factors feeding into the higher-ed bubble.  Schools that would rather brand themselves than teach.  A pedagogical model that hasn’t developed since colleges were created, that’s also spawning some innovation:

 

And now you see why traditional colleges find for-profit schools so threatening, and why their friends in the administration have worked to hard to regulate them into, ah, competitive balance. And why their initial reaction was to ridicule the $10,000 bachelors, which looks like an attainable goal as well.  Because when compared, side-by-side, with institutions who do match the price and the cost of an undergraduate education, and who often have students living at home rather than frat houses, the traditional university rather suffers by that comparison.

(As a side-note, it now looks as though some of those greedy, corrupt, Wall Street speculators short-sellers got some information about which for-profit institutions were going to get hammered.  Good luck, CREW, with that subpoena.  If they follow the Justice Department model, you’ll get a pad of blank trading slips.  And given the Administration’s history with troublesome IGs, I’d be careful there, Ms. Tighe.)

Khan notes something important: credentialing is different from mastery of the material.  The Ivy Leagues will always command attention and status.  But most people aren’t going there, anyway.

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