More Problems with “Simple” Solutions

President Obama has apparently now decided to try to punish universities and colleges, even state universities and colleges, who raise their tuition by “excessive” amounts.  This is, pardon my language, absolutely asinine.  It’s also addressing a very real problem with a simplistic approach that shows either no understanding of the problem or no intention to really address it, if not both.

To begin with, he doesn’t have the leverage to do this directly, but only through the threat of withholding direct federal funding, which doesn’t include federal loans and grants made directly to students, and which amounts to less than 3% of total federal funds going to students and institutions of higher education. The real reason for the increase in student tuition, particularly at state colleges and universities, is the significant decline in the funds provided by the state legislatures over the past several decades. In just the last year, state support to state universities and colleges dropped more than 7%.

Over the last 30 years, tuition for an undergraduate degree has increased roughly 600%, while the cost of living has increased 250%

Why and how did this happen?  It happened because, over the last twenty-five years, the number of students pursuing an undergraduate degree increased by almost 45% at a time when the percentage of state spending on higher education declined, resulting in a huge decrease in the percentage of tuition costs subsidized by state governments.  So, although total state funding of higher education did initially increase by some twenty percent [until about ten years ago], that increase was overwhelmed by a huge influx of additional students, and without additional state funding the only way the state colleges and universities could cope was by increasing tuition.

My wife’s own university is a good example.  The number of students enrolled has almost tripled in the last twenty years, while the faculty has increased by less than forty percent.  Faculty salaries have been frozen for at least six years out of the last eighteen, and yet tuition increases have averaged roughly 7% for the last three years, and an 11% increase is budgeted for next year.  On average, faculty pay has averaged increases of 3-4% per year over the last 20 years, and that includes rank and merit raises.  Over the same period, in real dollar terms, despite an outstanding record, and two promotions, in real dollar terms, my wife now makes only about 10% more as a tenured full professor with an incredible record of achievement than she did twenty years ago as a newly-hired untenured assistant professor.

These numbers are similar for virtually every public university in the country, as study after study shows.  The problem is not, despite popular beliefs, high-paid professors and wasteful spending, but simply a massive increase in students coupled with a lagging of state support – and President Obama’s threat to colleges and universities totally ignores the basic economics.

One of the more disturbing results of this funding crisis is that, on average, the salaries of tenured or tenure-track assistant, associate, and full professors at state colleges have dropped from being roughly comparable to those at private colleges and universities twenty years ago to being 20% lower than those at private schools today.  Add to that the fact that professors at public institutions generally teach larger classes [represented by the fact that the student-teacher ratio is almost 50% higher at public institutions], and the discrepancy becomes effectively larger.  What this also means is that, over time, a larger percentage of the best professors will migrate to private colleges and universities, and not only will students at state institutions have the problems of larger classes, capped enrollments in classes [because classrooms are only so large and in specialized classes, professors are limited in the number of students they can effectively educate], but also fewer of the very best professors, particularly in the years ahead, when senior tenured professors, who have remained in state institutions because they’ve established roots there, retire.

And the threat of withholding $3 billion in federal funds does nothing to address the problem.



6 thoughts on “More Problems with “Simple” Solutions”

  1. Brian says:

    Syndrome: “And when everyone’s super… [chuckles evilly]
    no one will be.”

    I think the fact that it was said by a cartoon character enhances the irony.

    Does everyone need a college degree? Should the public pay for it? Although I don’t agree with Nietzche, I have great sympathy for a meritocracy that rewards the reality of the bell curve without being excessive.

    It’s really hard to find great demand for college graduates if the degree is meaningless as signifier of talent AND hard work.

  2. Joe says:

    We should improve high-school standards, so that only those people who really want to go to university go. It is no fun teaching people who do not care about the subject matter, but only want a credential to get a job. And most jobs should not require university level education, or the debt burden that goes with it. Education inflation is creating a form of debt-bondage, where clever people end up stuck in jobs they hate but must stay in to pay off their debt. Wonder why there are so many leaches (bankers, patent lawyers, etc) destroying our economy? Debt from “education”.

  3. Hob says:

    The real thrust of the proposal is to actually limit funding and indirectly create easily accessible private sources of Uni loans for future students. The important point of it being private and not federal.

    Why? Its actually a trend running through most developed economies–the markets put pressure to not allow anybody without degrees to attain entry level positions regardless of skill so that a firm additional tax model is created. Non degree jobs are increasingly marketed as a lifestyle for immigrants, legal or otherwise, firmly enforcing/informing another ‘normal’ behavior for ‘locals’.

    ‘Normal lifestyle’ People have good jobs with good pay but they still have to pay the student loans–the overall effect of this highlights real time inflation control.

    At the end of the day no New cities are being built in America or anywhere else in the western world. People who get comfortable in the centers of economic direction rarely wish to have the centers questioned or shifted in relation to population changes during long peace periods.
    A questionable exercise given history.

    1. R. Hamilton says:

      In a society where offices and factories alike need not be in cities, what is the significance of “no New cities are being built”?

      1. Hob says:

        A city is in its most basic ideal, a lifestyle that encourages the behavior of the majority in any given

        The methods can vary but the inducement of an ideal lifestyle of art and pleasure used properly generates willing labor.

        The American dream is a good example–suburbs were a start to create and challenge bigger cities. Only later the implication that this would mean that actual cities would start getting eclipsed in importance stopped progress. Cities also happen to be power centers and the elite are quite comfortable and have no need to aspire as it were.

        This creates a divergence of goals–economies cannot increase if the physical nature of said economies doesn’t increase. The elite need to move but are comfortable. Either the economy will create aspirations which allow them to become realized or the economy will dictate that the elite be separated from the aspirations of the majority.

        Skyscrapers are great examples of cities evolving and pulling up villages into suburbs.

        What is the significance of “no New cities are being built”? Put simply, a city is the aspiration for the economy, if the elite cannot create beyond it, a forced gold standard is adopted as it were.

  4. R. Hamilton says:

    I’m not sure that I follow, let alone agree with, the idea of cities being some sort of essential expression of aspirations. Most people I know would aspire to, if not already have, some place suburban if not downright rural, depending on how much of the maintenance they enjoy doing (or can afford to pay someone else to do).

    Wealthy people can afford to make a comfortable life anywhere, and may do so in cities and enjoy the convenience of having all manner of institutions nearby.

    But less than wealthy people will of course prefer the suburbs to the combat zones that much of the non-wealthy parts of many cities have been perceived as becoming.

    35 years ago, I could walk from the mall in DC to an inexpensive but safe place to stay (military only) that I think no longer exists for that purpose – despite walking through some dubious areas, it wasn’t a real worry. Now, I wouldn’t attempt it. And Baltimore? I won’t even go in there without a GPS, so that I can be assured of getting out directly without being taken by a maze of one-way streets into areas I’d just as soon not even _drive_ through. Or take Philly, with all the reports of violent crime.

    (OTOH, I’ve gone to Pittsburgh twice, walked a mile from a good hotel to the opera hall, and back again fairly late, in black tie, without any more notice than the occasional smile. And Pittsburgh, perhaps in part because of the tradition of tolerance in PA as well as being north of the Mason-Dixon line, i.e. willingly part of the north, seemed MUCH less tense to me than any place in central Maryland.)

    Even with a friendly and mostly safe city, I might want to live conveniently nearby…but _in_ it? No way. If I had kids, I’d be worried about the schools (not that suburban or even near-rural ones are immune to all the problems). And if I lived far enough in the boonies, I could even get a telescope and see stars instead of the glow of city lights.

    As long as I can get high-bandwidth connectivity and either cable or satellite TV, and am no more than perhaps an hour’s drive from a city if there’s something I can _only_ get or do there, that’s as close as I need. Even if I could afford a very nice condo (or even a full size walled compound) in an excellent location, I don’t know that I’d want to live in a city – why breathe everyone else’s exhaust and exhalations?

    That’s my point – by now, neither information nor goods (unless you want to see and touch them before buying) require going into a city. Even a few venues are in areas that are if not truly suburban, at least not really city either – and more people can watch by pay-per-view on a big TV with a good sound system, or by remote to a movie theater, than could ever fit into any venue.

    The city is obsolete, or will be once enough people can afford to leave. Consider the history – crap in the streets, water that frequently wasn’t safe unless boiled, Jack the Ripper…and that’s just London!

    Good riddance, I say.

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