Solving the “College Conundrum”

American Enterprise Institute (AEI) Scholar Andrew Kelly calls it “the college conundrum” (Forbes 1). College, he says, is “simultaneously more expensive, less valuable, and more important than ever before” (Forbes 1). But why is this the case? And, more importantly, what can we do to fix the problem? Here are some reasons our higher education system is currently at a point of critical ineffectiveness as well as some ideas on how to resolve the problems at hand.

Curricular Redundancy and the Academic Time Sink

The majority of four-year American institutions operate using a university-specific core curriculum composed of what they call “general education requirements.” This model is heavily supported by status-quo advocates like the American Council of Trustees and Alumni (ACTA), a privately funded nonprofit which conducts studies and makes recommendations on higher education.

ACTA suggests that all university students should be educated in, at minimum, the following seven areas: English composition, literature, foreign language, economics, college-level mathematics, and natural or physical science. Broad general education of this style is thought to accomplish two goals: 1. to create educated students by creating rounded students and 2. to give students the opportunity to explore a variety of fields before committing to a major program of study in typically their second or even third year. These are noble objectives in theory and function quite well at the primary and secondary school levels. However, when applied to higher education these goals can be detrimental to educational effectiveness.

General education requirements at the collegiate level promote curricular redundancy – the repeating of subjects already covered during primary and secondary school. They also promote low value survey-style education – trying to cover too much too quickly without allowing either academic literacy or professional competency in any field to be achieved. Perhaps most significantly, extensive arbitrary requirements like art appreciation and lab sciences often require up to two years to complete; this directs valuable time away from major-oriented coursework and reduces opportunities for students to become better equipped job candidates and contributors in their chosen fields.

To address the college conundrum as described by Mr. Kelly, university curriculum must be refocused on preparing students for their chosen fields rather than creating superficially equipped academics lacking concrete, marketable skills. General education requirements that are outside the scope of a student’s major and career path should be reduced or eliminated. This would allow students to spend more time in the major program of their choice and potentially even allow completion of an undergraduate program in three years, significantly cutting educational costs for each student and creating value.

These changes to the education model would also require something of the students themselves: that they arrive at college having already chosen a field. This may seem like a significant demand to make of the average eighteen-year-old high school graduate. However, it is not unreasonable. College is a significant investment in career preparation often totaling over $236,000 for four years. You wouldn’t spend $236,000 on a house without knowing what city you wanted it to be in. We should not permit students to incur this kind of financial risk without some level of certainty as to the type of returns they desire from their investment.

In much the same way undergraduates are often told to work or travel for a year or more before committing to graduate school, we should encourage high school students who are uncertain of their career path to take time away from academics before college. We might also promote the introduction of one- to two-year private, for-profit preparatory programs which would offer uncertain students continuing access to survey-style coursework of their choice in this interim.

Constraints on Market Forces and Skyrocketing Prices

A pretty simple point here, but one that needs to be made: if the average cost of attending a four-year public college is over $28,000 per year and the average cost of attending a four-year private college is over $59,000 (Forbes 3), do universities really expect students or their families to finance the cost of college out-of-pocket? The answer is no; they expect that at least a portion of every student’s tuition will be paid by government and private lenders.

Each student is legally permitted to accept (and can generally expect to be offered) loans and other tuition assistance up to the total sticker cost of attendance at their university. This significantly reduces incentives for universities to keep costs low. According to Forbes and the College Board, “tuition and fees have surged 146% from 1984-85 to 2014-15 at private nonprofit four-year colleges, and 225% over the same time period at public four-year institutions, even when accounting for inflation” (Forbes 2). This style of uncapped lending artificially raises what the market perceives as consumer willingness to pay to a level that is essentially limitless; it marks one of many significant distortions of market powers in higher education.

Higher education is also a market sector which, to a large extent, is shielded from competition through restrictions to entry for potential competitors. These competitors include online, trade-oriented, or other “entrepreneurial” alternatives to traditional university programs (The Federalist). Restrictions to entry by these players result from government regulations, low demand for alternative programs based on potentially adverse effects on employability, and, most importantly, accreditation.

Accreditation is conferred by private organizations (typically regional or national) and is meant to indicate whether or not a school provides adequate educational value to justify its tuition. Typically, only students of accredited institutions are eligible for federal financial aid, transferring of course credits, and other important academic benefits. Despite the obvious importance of accreditation, the criteria through which schools either succeed or fail to become accredited seem to be lacking in both transparency and consistency. This provides potential competitors to long-accredited traditional institutions with an unfair and often entirely arbitrary disadvantage.

Overall, the current education market and constraints imposed on market forces therein enable unrestricted tuition increases; they also nurture a predatory lending environment and increase government lending risk. To reduce these effects, caps on lending should be imposed, reducing artificial inflation of consumer (student) willingness to pay and exerting pressure on colleges to lower costs.

Additionally, Peter Wood, President of the National Association of Scholars suggests “the general-purpose undergraduate degree should face competition from alternative credentialing” (The Federalist). Barriers to competition should be reduced as should the idea that two- and four-year university programming is the only way to become equipped for the American job market.

Bad Investments

The value of college education to students and to society as a whole has been significantly reduced through bad investments on the part of the government, the students, and the schools themselves.

According to Jessica Thompson, research director for The Institute for College Access and Success, 2016 was a record year for defaulted federal student loans with about eight million borrowers defaulting on over $137 billion in education debt (Time). In other words, at least one in six proud owners of due student debt failed to make a single loan payment for nine months or more (Time). So who’s to blame for this blow to the national deficit?

Let’s start at the beginning: with the lender. The U.S. government provides federal student loans based on need as demonstrated by completion of the FAFSA (Free Application for Federal Student Aid). In allocating these funds, the government makes no consideration of an individual student’s choice of major, likeliness to succeed academically, or potential earning capacity in their chosen field post-college. This significant oversight seems to delegate federal student aid to the ranks of highly irresponsible and potentially predatory lending. It may be financially irresponsible for a student to invest $100,000 of borrowed funds in a career whose median salary will yield only $2,000 per year in expendable income after living expenses. However, that does not excuse government lenders from helping that student into the sinking ship to the predictable detriment of all involved.

To reduce these instances of bad investment by the U.S. government, federal loan allocation should include considerations of each student’s field-based future earning capacity and likeliness to succeed as indicated by past academic performance. Already, the government is already planning to identify vocational programs whose graduates consistently pay a high share of their earnings in loan payments or suffer from a high average default rate (Reuters). Vocational programs that demonstrate these inadequacies in two out of three surveyed years will not be permitted to offer their students federal financial aid (Reuters). This type of pre-lending evaluation should be applied to all higher education institutions and programs of study.

Higher education has also been severely devalued by bad investment on the part of the academic institutions themselves. More and more, the aesthetic and amenity-oriented competition between universities supersedes the dialogue on comparative educational quality. Institutions continually attempt to increase their prestige and ratings through investments in on-campus spas, fancy pools, rock climbing walls, state of the art athletic stadiums, and other entertainment initiatives. These construction projects are typically accompanied by a hike in student life fees and no significant increase in graduate employment statistics.

Although these instances of bad investment by universities stem from complex deficiencies in organizational culture and leadership, they are not impossible to remedy. At a regulatory extreme, government oversight of elective university construction spending above a certain value could be implemented to restrict misuse of federal aid dollars. Less severely, if students were to demonstrate the irrelevance of such spending to their decisions of which school to attend, they could initiate a powerful demand-side movement. A positive student/prospect reception of extravagant spending by universities will only reinforce that behavior to students’ eventual financial detriment.

Inclusivity v. Exclusivity: the Hunt for Hidden Value

In the past, the exclusivity of schools often dismantled value by excluding women and other minorities from the academic dialogue. Today however, the focus on inclusivity has become nearly as damaging. The expectation that a recent high school graduate will proceed on to a traditional two- or four-year university degree is pervasive. This is primarily because participation in the job market has come to essentially require an associate or bachelor’s degree. But is such a cultural norm valuable?

According to Mr. Wood of the National Association of Scholars, “only about a third of today’s college students belong in college in light of the ability to make much of the opportunity” (The Federalist). He further recommends that colleges and universities should have to repay part of the loans for students who drop out or default after graduating (The Federalist). This, he says, will make schools more “wary” of introducing students into the system who are “poor prospects” for their own academic success and, likely, who may degrade the academic experience of their classmates (The Federalist).

But what happens to those students who are disqualified from traditional university education in the wake of these heightened stakes? This is yet another argument for the introduction of competition into the higher education market. Students who are not well-equipped for a traditional university career should have options available to them such as trade school, apprenticeships, and so on. These programs need not be less prestigious than a traditional academic degree; they simply cater to a different though still valuable set of skills.

In order to more meaningfully accommodate a greater proportion of our college-age population, traditional universities must actually reduce their efforts to accommodate everyone. Universities should eliminate distorted applications of affirmative action as well as all other financially and reputationally motivated initiatives which encourage the admission of candidates who are objectively underqualified to make much of a traditional college career. This, along with market deregulation, refinement of the accreditation system, and reduction of the unfortunate negative stigma surrounding trade learning, will allow both forms of education to blossom.

 

Sources and Additional Reading:

blogs.reuters.com/reihan-salam/2014/03/17/how-to-fix-higher-education/

forbes.com/sites/akelly/2014/03/26/why-conservatives-should-crack-the-college-conundrum/#2c4ad2c67477

forbes.com/sites/laurashin/2015/08/26/how-the-college-pricing-and-student-loan-systems-hurt-students/#69f46f55547d

forbes.com/sites/troyonink/2015/01/31/college-could-cost-as-much-as-334000-total-in-four-years/#52245759c86a

thefederalist.com/2017/05/15/stop-complaining-start-fixing-americas-higher-education-crisis/

time.com/money/4701506/student-loan-defaults-record-2016/

 

 


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