Holly Yettick is a doctoral student in the Educational Foundations, Policy and Practice program at the School of Education at the University of Colorado in Boulder.
Just as markets experience bubbles, so too do policy trends. Right now the tulip/tech stock/real estate bubble of wonkdom is the idea that, as a recent New York Magazine cover screamed, “college is a scam.”
The argument goes something like this: Sky high tuition has resulted in skyrocketing debt, all for a product that everyone thinks he or she needs even though many of us could and should do without. (For a more thorough and eloquent description of this argument, see this recent Education News Colorado blog post.)
To quote billionaire Peter Thiel and the New York Magazine article: “Not only is it [college] a scam, but the college presidents know it. That’s why they keep raising tuition.”
Really? College presidents are sitting in their offices conjuring plots to imprison hard-working Americans with Wall Street-style Ponzi schemes?
I’ll set aside for now questions related to the inherent value of a college education. Instead, piggybacking on a recent Ed News blog post, I would like to offer some context about college costs and debt.
Despite the copious national media attention devoted to getting into and paying for private colleges, three quarters of America’s 17.5 million undergraduates attend public four and two-year institutions. These institutions are not gleefully jacking up their rates a la Madoff in order to line their coffers. They have instead been weathering a double whammy: Public financial support for higher education has eroded in the past 25 years even as enrollment has increased by 55 percent, according to the most recent annual financial analysis of the Boulder-based State Higher Education Executive Officers (SHEEO). Per pupil appropriations to public colleges were lower in 2010 (in constant dollars) than in any year since 1980.
So who picks up the tab? The consumer. Students are not just paying higher tuition. They are paying for a higher portion of their own educations because we, collectively, as taxpayers, want them to. According to the SHEEO report:
- In 1985, government funding contributed 77 percent of the annual per pupil expenditures on public higher education.
- In 2010, the government contributed 60 percent of the annual per pupil expenditures on public higher education.
- Colorado has the third lowest public, per pupil postsecondary educational appropriation in the nation. We allocate $3,781 per pupil—about half what we spend on K-12. This is nothing new. We have been at the bottom of that barrel now for the past 25 years.
True, the cost of educating a student at a public college has increased in recent years. But nowhere in the SHEEO report could I find the “tenfold” increases that are bandied about by anti-college crusaders. Rather, in constant dollars, the annual per pupil expenditure of the public education experienced by the majority of Americans has increased 10 percent in the past 25 years to $10,775. Ten percent. We should definitely look into that. But I believe it is much more urgent to look into this:
- In 1985, tuition contributed 23 percent of the annual per pupil expenditures on public higher education.
- In 2010, that percentage had nearly doubled—to 40 percent or $4,321.
- In Colorado, tuition contributes 60 percent of the annual per pupil expenditures on public higher education. Only seven states were more dependent on tuition. For every $1,000 of personal income, we spend $4.21 on higher education. Only four other states spend less. The national average is $7.35.
As tuition has increased both overall and as a portion of the cost of higher education, students have become more likely to borrow money. For instance, according to the National Center for Education Statistics, the percentage of students borrowing money through the federal Stafford loan program increased from 25 percent in 1994 to 33 percent in 2004. The biggest increases occurred for Stafford loans that were federally guaranteed but not federally subsidized—i.e. loans to those whose incomes were too high to qualify for subsidized loans. During that time, the average total Stafford loan amount increased by 20 percent, from $3,900 to $4,900.
One would think that free-marketeers like Thiel would be pleased about the way in which higher education finance has developed in the past generation: The burden is shifting from the government to the individual consumer. Individual students are taking on more debt in large part because we, collectively, as taxpayers, have refused to foot the bill.
Whether you consider this to be a good thing or a bad thing will depend upon your beliefs about the role of government and education in society. But let’s be clear: Your family college fund is not looking smaller and less adequate every day because public college presidents are financing a lifestyle of Palm Beach mansions and Ferrari Spyders.
It is shrinking before your very eyes because that it how you, your neighbors and/or your elected officials want it to be.
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