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    Raising college tuition in the interests of fairness and access

    There was a story in today's NYT about a number of colleges that are lowering tuition, sometimes drastically. The argument is that they can do this without loss of revenue, since so few pay full tuition anyway. Thus, they are lowering tuition and cutting financial aid and making a splash vis a vis the current concern over high tuition. 

    The article makes a number of useful points: that colleges have done a terrible job at advertising how few people actually pay the official tuition amounts that sound so scary, or that there is a significant phenomenon of high tuition causing a perception of quality.  But one obvious point goes utterly unmentioned in the NYT coverage: that cutting both tuition and aid hurts the most economically vulnerable and benefits the less vulnerable.  (The NYT mentions that the college it most focuses on will retain mert-based scholarships, but fails to discuss the effects of cutting need-based.)

    All of which leads me to float a suggestion for discussion – one that I once raised with our university president at a party, predictably being responded to with a chuckle and a raised eyebrow: let's raise tuition.  A lot.  


    I suggest that elite schools like Georgetown should double tuition.  I predict that the very wealthy – eager as they are to have their children attend college in Washington and rub shoulders with the world's power brokers – will not balk at $80,000, or $100,000, or even $200,000.  (It's an experiment in market economics. If they won't pay, then we lower to the maximal level they will.) And then every cent of the extra income generated by charging more of, to pick an example of a student I once taught, the Emir of Kuwait goes to need-based financial aid.  The cost for poor kids would go down, and the charge to the rich would simply more accurately reflect what it really costs to attend a first-rate research university that also devotes itself to hands-on liberal arts teaching.  That strikes me as the right way to lower the cost of college education.  

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    12 responses to “Raising college tuition in the interests of fairness and access”

    1. Curtis Avatar
      Curtis

      Interesting idea. Supply and demand curves would get a bit more complicated than implied — quantity demanded wouldn’t change, it’s how badly someone wants it that might (unless considered a Veblen good, I don’t see how raising tuition would change even that).
      I agree wholeheartedly with your underlying value, though, which could be called either the difference principle (to Rawlsians) or the option for the poor (to Christians).

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    2. Patrick S. O'Donnell Avatar
      Patrick S. O’Donnell

      Provocative idea. Another way to lower the cost of college education is to encourage students to first attend community college and then transfer (with junior standing) to a four-year university. That’s how I made the cost of my education, and that of our two (now adult) children relatively affordable (in my case, I was still in debt, largely because I attended graduate school, which took many years to pay off). When one graduates from a four-year institution, it does not say on the diploma: two years spent at community college. When I transferred to university, several professors informed me that their more mature and brighter students often were transfer students. This proposal has to some extent caught on in California (it assumes that a state’s community colleges meet a requisite standard of quality).

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    3. Gordon Avatar
      Gordon

      It’s probably worth pointing out that public universities do this too – so here in North Carolina, for example, it costs out-of-state residents a lot more to attend than in-state. Nonresident students are willing to pay the higher price to go to an institution with Chapel Hill’s reputation (presumably, states with less prestigious flagship schools won’t have this option, at least not as readily). International students (especially from places like China and the Gulf States) often also come with the ability to pay. The state caps out-of-state enrollment as a percentage of total student enrollment in order to keep slots available in-state, and it’s very hard to get into the school if you’re out-of-state.
      I do worry that states may come to view this as a general funding template – the temptation is to avoid the need to adequately fund the system by increasing the percentage of non-resident students, which of course hurts resident students who get nothing for having paid their taxes. There’s already a troubling manifestation of that here, as the state has approved allowing a couple of financially-troubled, low-enrollment campuses in the system (I believe they are HBC’s, as well: nothing is simple!) to increase their percentage of nonresident students. The concern is thus that if (when?) these schools fail to draw significant numbers of nonresident students, that will then be used as an excuse to shutter them or collapse them into other institutions. So the failure to “compete” in a neoliberal educational marketplace causes local (minority) populations to lose access to a significant community institution, one with all kinds of positive externalities that don’t get figured into the calculations.

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    4. Alex Guerrero Avatar
      Alex Guerrero

      Another concern is that one may create a very strange and possibly very bad educational environment if there really are two distinct tiers of students–those who pay tuition and those whose tuition is covered by those who pay tuition. Of course, this environment is already present at most private schools (where shockingly high %s of students are able to pay the full sticker price), but your proposal would dramatically intensify that element.
      See here for one way in which this has played out at the elite prep school level: http://m.theatlantic.com/education/archive/2013/12/when-minority-students-attend-elite-private-schools/282416/

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    5. Mark Lance Avatar
      Mark Lance

      Curtis: Who knows how it will shake out in terms of demand at different schools. I suppose I’d go in stages, and see what the market will bear.
      Patrick: That’s a whole other, and interesting conversation. I’m very sympathetic to the idea – as a general policy not just for individuals. But moving to a system where most go to CC first, and then regular college esssentially becomes the second 2 years would have lots of effects.
      Gordon: Yes, the massive differential cost in and out of state – typically about double – shows that there is no reason in principle not to try this. Now I suspect that no admin ever will take it up, and that public schools are the least likely of the unlikely, but if one can charge such different costs, one can base that on ability to pay.
      Alex: I really don’t see the worry. There is already a 100% differential. Close to 20% of the students at Georgetown are paying nothing and some are paying full tuition. I see no way that this stigmatizes folks. What does is the fact that the former group generally have to work full time to pay for their living expenses and sometimes, in teh case of one of my studenets, to support their family back home, while the latter engage in conspicuous consumption. But that will be made no worse if tuition goes up. There are always class issues to deal with, but I don’t think the answer is for college to be priced in such a way that the poor can’t go there.

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    6. Michael Cholbi Avatar
      Michael Cholbi

      Not to be all infomercially here, but suppose there was a way to cut student costs 50%?!
      There is. The number one way to reduce tuition is to figure out how to get students to only pay four years’ worth of it: I’ve not seen the latest numbers, but only about 40% graduate in four years and less than 2/3 of students graduate in SIX years. Here are some more numbers along these lines :
      http://nces.ed.gov/fastfacts/display.asp?id=40
      http://bit.ly/JggCzt
      That means most students have double the indebtedness they’d have if they graduated in four years or less, lost income due to delayed entry into the job market, etc.
      Graduation rates are (unsurprisingly) highest at the most selective institutions. I wonder to what extent that’s due to selectivity as opposed to something about the educational models at elite schools. Another factor: too many students trying to be full-time students and full-time wage earners simultaneously.

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    7. Skef Avatar
      Skef

      The raising-tuition-solution would have at least two significant problems. The first is that not all parents of means want to fund their child’s education, and even fewer would want to if the prices went up significantly. So children of those parents would be put in the perverse situation of having to take out extremely large loans to go to college.
      The second problem is that not all parents are interested in supplying their financial information to colleges. Any child of such a parent is generally assumed to be in the best financial position (because otherwise, wealthy parents would have an incentive not to report). So those children would also be put in a very bad position.
      Both of these problems might be addressed by somehow beefing up the poor legal situation of children with uncooperative/uninterested parents. But that would be tricky — how you could prevent parents from funding their kids under the table or after the fact?

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    8. Anonymous Avatar
      Anonymous

      I am far from an expert in tuition, budgets, or aid, but I think this suggestion would not play out at all successfully. I think Skef makes some good points. Also, many middle and upper-middle class families don’t qualify for extensive need-based financial aid even at the current exorbitant prices, and so have to take out significant amounts of loans. Even if the financial aid is more extensive, from personal experience it seems that the burden of increased tuition really falls on the middle class, not the super-wealthy. Hence the student-loan crisis that we’re currently going through right now.
      In my own case, I come from a middle class family, both my parents work (making just over six-figures), and both me and my brother went to college. I went to a university that cost about 180,000 over four years, as did my brother, and both of our universities gave only need based aid. I only qualified for tuition remission in my senior year, and then only a small fraction of my tuition costs were paid for. Other than that, myself and my family took out a lot of loans. Our schools prided themselves on providing aid when necessary, but myself and my brother just did not make the cut. I am not sure how quadrupling these costs would help people in the middle class in the future.
      Finally, you say “the charge to the rich would simply more accurately reflect what it really costs to attend a first-rate research university that also devotes itself to hands-on liberal arts teaching”. A real education is certainly priceless, and if you want to take advantage of that fact by giving it a near-million dollar price tag, I guess you can. But it also strikes me that we should be focusing on changing the model so that people don’t need to rely on financial aid and especially on student loans – and this primarily is a matter of lowering tuition as much as possible. I’m sure you know that you can get a good education for a reasonable price in places like Germany or Sweden, no matter what your income is.

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    9. Mark Lance Avatar
      Mark Lance

      Skef, i agree that a few kids of unsupportive wealthy parents are hurt by the curent siuation, and that my proposal would not change that. I would be happy to see ways around that, but insist that we keep in mind the fact that so many more children of less wealthy parents are priced out of college.
      Anonymous. Yours is a problem that currently exists, and that would clearly get better if more money was available for aid. Once we have extra income, all going to aid, the cost to those middle class folks you are concerned with will go down. So my proposal makes things better for the folks you are concerned with. Would a very low tuition for all system be better? Of course. But it isnt on the table. This is possible only with massive state funding. I have many times here opined that the cuts to state fundingfor education in the US -funding that was never at european levels – is a crime. The present proposal is a suggestion for how to limit the harm that not having socialized education causes. It is also primarily aimed at prestigious private universities where I think it is most plausible.

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    10. Anonymous Avatar
      Anonymous

      In that case: Nationalize the privates. Let them keep their endowments. Slash tuition across the board.

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    11. Mark Lance Avatar
      Mark Lance

      I promise that will be the first thing on my agenda, day after the anti-capitalist revolution.

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    12. Anonymous Avatar
      Anonymous

      The other capitalist countries did it (perhaps not “nationalize”, but pretty close, and certainly regulated tuition fees, pretty much eliminating them in all other countries in, e.g., the 70s), and their economies arguably gained capitalist competitive advantage from it. The US is the outlier, as with health care insurance.

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