Why Does College Cost So Much?

Fenster writes:

Thomas Sowell tweets:

And so I wonder what free college will mean on the cost side?

And I mean the cost side, not the price side.

If it is free the price to “consumers” will be zero.  But the cost?  Who will make decisions about costs once the good is socialized?

This is not to suggest free public higher education is not possible.  But is it desirable, and have the advocates thought it through?

For one the inevitable nexus between subsidy and cost means that the adoption of the free model in private, non-profit higher education would be extraordinary difficult in terms of management, governance and mission.  Thankfully no one seems yet to want to let students at Harvard, Pomona or Bay Path off the hook for tuition.

But adopting free tuition at public colleges won’t be a cakewalk either.

At present public institutions of higher education are tethered only loosely to the state governments of which they are nominally a part.  Once government becomes the full guarantor ought it not play a much for forceful and direct role in setting costs–and therefore, in turn, setting limits on programs, growth, resources and the like?

Are people ready for serious public higher education, as in “run and managed by the state?”  Or will public higher education remain largely independent in terms of decisions, with the result that government just shells out whatever it asks for?

And what happens when it is not the state governments that guarantee free tuition for their public colleges but rather the federal government?  Other than one-offs like service academies the feds don’t run their own public colleges.  Will that have to change?

Kudos to Sowell.

But you didn’t think you’d get through this without a caveat did you?

While Sowell is to be lauded for using an economic lens to critique the system his pro-capitalist economic thinking seems to have led to some misunderstandings.  Higher education does have a business model, but it is not sufficient to say that a free market lens does a good job explaining how things work.   It is an odd enough business model that you have to go elsewhere, probably to behavioral concepts, to get it right.

In his tweet Sowell notes, correctly, that government aid can be a contributing factor to cost increases.  But in the article he passes along, from 2008, he goes further.  For instance:

There was a time, back in the early 1960s, when my academic career began, when many — if not most — colleges had their faculty teaching 12 semester hours and a few had teaching loads of 15 semester hours. . .

But that was then and this is now. Today, a teaching load of more than 6 semester hours is considered sweatshop labor on many campuses. . .

Why was it considered necessary to cut the teaching load in half? Mainly because professors were expected to do more research.

True, that.  But he goes on:

Why was more research considered necessary? Because research brings in more money from the government, from foundations and from other sources.

On many campuses, a beginning faculty member cannot expect to be promoted to a tenure position unless he or she brings research money into the campus coffers.

That’s a worthy, but insufficient, explanation. It seems to betray his default reliance on a capitalist economic model.  Yet is that a good enough guide for how the place really works?

Yes research dollars are important.  But sponsored research supported by the big federal funding agencies actually create costs in excess of the grant amounts provided–this even after taking the very high negotiated overhead allowances into account.  Sponsored research in the sciences tends to create net deficits.  Why would colleges be so intent on pushing sponsored research in the sciences as a money-maker when it is a money loser on its face?  This comes on top of the reduction in teaching load to make the research possible.  The highly-paid star research scholar in life sciences may well contribute little to nothing to the teaching mission.

And then consider that while higher education has everywhere dropped teaching requirements in favor of research only a small amount of research, typically in the hard sciences, is able to secure significant research funding.  Most research in areas like the humanities and the social sciences is not supported externally.  In effect such research is supported internally–i.e., as a result of the institution easing up on teaching to allow for the research to be conducted by a professor who is normally compensated via salary.

The level of external research funding outside the elite privates and large publics is quite small, yet virtually all of the professoriate at non-elites are on the research treadmill from the get-go.

So if a humanities professor at Clark is paid $100,000 and is expected on in a rough way to devote half his effort to teaching and half to research it is the institution that is paying the $50,000 going to research (hint: for the most part that means parents).  That’s a better way to understand cost increases than the argument that colleges push research in order to profit.

Sowell’s market-obsessed economic thinking needs a dose of political economy.  Research has pushed aside teaching for reasons other than institutional greed.  There are a host of factors in play that go beyond filthy lucre for the college bottom line. Featherbedding.  Status.  “Climbing the Carnegie ladder”.  The perpetuation of the research focus in the process of producing, hiring and incentivizing new scholars.

The bottom line: less teaching, some great scientific research, higher costs–and lotsa papers no one reads that mostly function as internal promotion and status signals.



About Fenster

Gainfully employed for thirty years, including as one of those high paid college administrators faculty complain about. Earned Ph.D. late in life and converted to the faculty side. Those damn administrators are ruining everything.
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1 Response to Why Does College Cost So Much?

  1. Pingback: Debt, and the Student Loan Problem – Facebook Commentary

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