The Problem With College is College

College....delivering an obsolete education since 1950!

Both Hillary and Sanders have the whole college thing wrong - and backwards.  Their proposals not only won't fix college, it will make things worse.

Sanders proposes making college free for everyone.   Hillary proposes making it "affordable" for the poor by offering work-study programs (which really are the best education - why limit those to the poor?  She clearly doesn't understand work-study programs!).   Both are proposing increasing the government subsidies to colleges.

Sadly, not only will this not work, it will make things worse.   As you may have noted, the cost of college has outstripped inflation for a couple of decades now.   Costs have gone up at twice the rate of inflation - if not more - while the quality of a college education has gone down.   Throwing more money at the problem won't fix it.

In fact, easy money is the problem.   That and the antiquated and incorrect idea that a "college education" is always going to make you wealthier, no matter what the cost.

Colleges have raised tuition steeply because they can.  They know students can get loans, and in fact, the "financial aid" department will be very active in helping you get grants and loans.   It is like the billing department at the hospital - they know how to bill Medicare, and come after you for the difference.

The increase in the amount of student loans and the availability of private student loans has meant that colleges and universities haven't had to keep an eye on the bottom line, but rather simply raise prices.   And for a student loan financed over 10-30 years, a $10,000 increase in tuition amounts to only a couple hundred dollars a month in loan payments, if that.

The question no one is asking is why college has gotten so expensive for no apparent reason at all.   Colleges are hiring "adjunct faculty" at cut-rate prices and denying tenure as much as possible.  The quality of an education is suffering at the same time.   Where is all the money going?

Like anything else, it is hard to pinpoint one single area of "waste" that is causing the cost of college to explode.   Salaries for administrators are no doubt at all-time highs.  Bloated staffs and management add to the cost.   Cost of maintaining the huge and antiquated infrastructure on campus has no doubt crept up.  Salaries and benefits for union workers on campus no doubt add to the toll.   Retirement benefits for professors are also part of the picture.  Even the cost of scholarships to attract smart students adds to the bottom line.

As I noted in earlier postings, colleges are like General Motors back in the 1990's.   GM was stuck with a high-cost infrastructure, high overhead, huge pension liabilities, intransigent unions, and a product that was pretty crappy and no one wanted.   Cheap gas kept the game going for a while, as people would buy the empty steel boxes that are SUVs and Pickup Trucks.   But when the economy blipped for a moment, it all came unraveled.

Similarly, Colleges have a huge bloated overhead and an increasingly crappy product - as graduates are finding out.   Costs are passed on to students (and the government) in the form of loans and grants.   The difference is, of course, there is no Toyota or Honda making a better product at a lower cost to keep their feet to the fire.   Colleges have no competition other than other Colleges, who largely have the same cost structures.

Or do they?   Increasingly, students - the smart ones - are finding out that they do have choices and alternatives.   They can go to a two-year school and transfer to a "name" school and get the same diploma as the person paying for all four years.   They can go to a State school and get in-State tuition instead of going to a private institution and paying a lot extra.   They can cut expenses in school and borrow less by living more frugally, instead of having a new car, a nice apartment, and fancy clothes (and yes, a lot of students live that way, which is why colleges are ringed with retail stores).

On National People's Radio this morning, another sob story about "how hard we have it"(tm) and "how Awful America is"(tm) with regard to college this time.   We are told in breathless tones that students are graduating with more debt that ever, on average, but they fail to mention what that average amount is.

That's because the average amount is $35,000 and that includes loans the parents took out.  It doesn't seem so scary when you put it that way.  (The print edition of the story does mention this, however).

So, to illustrate the point, NPR picks a "typical" student who got a Master's degree in Computer Engineering at Cornell and rang up a staggering $190,000 in student loan debt.  They whine about paying $2000 a month in student loan payments and that "paying for a new tire" on their car "cleaned out their checking account".   Must be a Maserati.

NPR picks someone with a student loan debt over five times the national average as a poster-boy.  They pick someone who went to a private Ivy-League school which has some of the highest tuition rates in the country.   They picked someone who chose to get a Master's degree in a field where they are hiring people with Bachelor's degrees for the same amount of money.   When it comes to programming, you will learn more by doing in the field than by studying in college. 

And the message is clear:  What needs to be fixed is not the college that charges so much for an education, but the system that pays for this education.   We need, as a country, to just throw money at colleges and hope they spend it wisely, because as their track record shows, they are quite capable of controlling costs and not letting them spiral out of control for no reason whatsoever.

And yes, the sarcasm light is on.

Of course, all these policy choice issues and whatnot neglect one important thing:  Personal choice.   Many, if not most, of the sob stories on NPR represent outliers and not the average.   The story today is a case in point - they picked (how did they pick, anyway?) a student who made a lot of poor choices, in terms of borrowing money, choice of school, and whether or not to get a graduate degree (in a field that really doesn't value graduate degrees)*.   And we are supposed to feel sorry for him or believe that his experience is somehow a norm.   It isn't.

The problem with College isn't that there aren't enough student loans or grants but that there are too many.   The problem with College is College.  It delivers an inferior product at an inflated price, and the consumers don't perceive that there is a lower-cost alternative product to be had as a substitute.

We need to understand why Colleges are raising prices so rapidly and fix that problem.  And no, closing the chemistry department isn't the answer.

 

* Graduate degrees in Engineering or technology related fields are an interesting choice.  If you want to get a job as an Engineer, a B.S. in Engineering is required.   Beyond that, experience trumps education.  A Masters Degree in Engineering makes you something of an odd duck.  Are you an academic or an Engineer?   And does the Masters Degree mean you will demand more money?   And if so, does that degree make you more valuable than someone with three years' experience in the field?   Maybe things have changed in recent years, but back in the day, someone with a graduate degree in Engineering was a rare bird - and usually a pretty useless theoretician, in the field.

UPDATE:  Read this article about "luxury" college apartments.   Many people graduate from college with a lot of debt, but in many cases, it is not necessary debt.