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Sunshine State News: Lectures from the President on Fiscal Prudence

Tuesday, August 27, 2013

By now we have all heard about the president’s tour of colleges to tout his plans for making higher education more affordable. Being lectured by the head of a government in perennial deficit is interesting.

According to the White House numbers and press release, the average tuition has grown by 250 percent over the past 30 years. The Bureau of Labor Statistics’ inflation calculator for the same 30 years shows it takes $234.53 to purchase what it took only $100 to do in 1983. Not much being said about that!

Excuse me for interjecting some harsh facts — facts that serve to describe the bigger issues of an economy that challenges our higher education system every day — as our institutions seek to keep doors open for access to every strata of our American student population. The federal deficit in 1983 was $207.8 billion. Now it is estimated to be $977.9 billion for this year, a 480 percent increase. The national debt was $1.37 trillion in 1983. Now it is $16.78 trillion, more than a 1200 percent increase. Not much being said about that, either!

Higher education, the world’s best collection of institutions and options, is riddled with increased regulations, expectations, cost drivers and demands to modernize and acquire high-cost IT and communications and other assets that did not exist 30 years ago. When you squeeze down the cost of a good or service, while the provider constantly has to deal with the inflationary reality of rising costs, there is one main casualty – quality.

But you will not hear much discussion about learning quality from D.C. You will not see inquiries into how teaching and learning best occurs. Is there an effect from having classes of 250 or 500 students in organic chemistry? Are students best served by going semester after semester without any interaction with professors who have spent careers acquiring knowledge so it can be shared?

President Barack Obama speaks as if there is a uniformity of higher education delivery and higher education funding across our country, but that is not the case. He speaks of average costs and average increases, but his idealistic view ignores the reality that every state is unique and every higher education sector is unique, as well.

There are high public subsidy states with low public tuitions, high public tuition states with low public subsidies. Some private and public colleges have demographics that reflect their state or region and some do not. In short, there are myriad options for the discerning consumer. The higher education market has bloomed, providing the true option of choice for students to seek out the best fit for them in meeting their higher education needs.

Unfortunately, in the harsh reality of our economy, what has not kept pace with inflation are wages and salaries, both of which took a severe blow in this extended downturn. In the same 30 years used by the White House to do tuition comparisons, the average family income has roughly doubled. During this same time frame the cost of a loaf of bread has tripled, as has the cost of gasoline, a new car has quadrupled, and the cost of a home has more than tripled.

Students and families borrow for college, and make no mistake, the rising amount of borrowing is the catalyst for all of this discussion. The Obama administration knows that the ticket for young people for a brighter and more prosperous future depends on access to education. But to blame institutions without any detailed study as to why costs have risen is ludicrous.

A more useful activity might be to take a look at the costs of insurance, legal services, utilities, salaries, health care, regulatory mandates, IT equipment, housing, basic supplies, etc., at each institution and compare them to what had to be paid 30 years ago. Bottom line: It isn’t higher education that is driving increased costs; it is the rising costs that are driving higher education.

I think the American public is getting to be pretty adept at separating the wheat from the chaff when our presidents speak. We recognize rhetoric and we know the difference between grandstanding and thorough analysis with meaningful solutions. This brings to mind an old adage: You can sometimes fool the fans but you cannot fool the players. In the case of higher education and the value it has to the American public, I think there are more players who understand that quality and access matter, and that higher education is truly open to all, offering the ladder to success. We need an honest dialogue about costs, but it must include a true focus on quality as well.

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