President Obama’s recent visit to Scranton, Pa., and other cities in the northeastern United States highlighted a concern of many Americans: the price of a college education. He outlined a national plan to keep college prices reasonable but said little about why the cost of college has risen at a rate that surpasses the Consumer Price Index (CPI).
During his multi-city tour, the president referenced the percentage increase in public college education and also criticized Pennsylvania Gov. Tom Corbett for reducing support for colleges and universities. In so doing, he did not mention the Great Recession that resulted in reduced tax revenue and cuts to higher education.
In 2009 and 2010, federal stimulus funds were used by former Gov. Ed Rendell to bolster reduced funds flowing to colleges and universities in the Keystone State. When the stimulus funds ended, the new governor was faced with significantly less financial support for higher education.
To understand this dilemma, it is important to understand what drives the cost of a college education, including tuition increases above the CPI. Education is a labor-intensive industry, and labor costs tend to rise faster than other costs. With more than 70 percent of most college budgets earmarked for salary and benefits, a significant increase in health care costs alone can put tuition hikes beyond the CPI in any one year.
Colleges also do not buy goods and services in the same marketplace as consumers. The cost of scientific equipment, sophisticated computer systems and facilities maintenance, for example, are subject to price increases that all far exceed general increases in the market-basket of goods and services that comprise the CPI.
One culprit for tuition increases – and one the Obama administration must share some of the blame for – is the tremendous increase in regulations that are designed to enforce compliance with rigorous, and sometimes arbitrary, standards. The Association of Governing Boards, a Washington, D.C.-based group that identifies trends in college governance, identified a number of new rulings. The additional regulations created additional work for colleges, thereby necessitating increased expenses on the part of colleges and universities.
The U.S. Department of Education and the Justice Department have increased regulation enforcement, including the determination of how many handicapped accessible dorm rooms are available on college campuses. While no one disagrees with the intent of the regulations, the costs become significant and sometimes unnecessary. During most of my presidency at Misericordia University, the campus had 27 rooms in residence halls for the disabled. Oftentimes, less than half those rooms were occupied by handicapped students. Despite the excess availability of these specially retrofitted rooms, the university was forced to incur significant additional costs of adding another handicapped accessible room to a home close to campus that was being converted to a residence hall.
Other regulations, including extensive reports on campus crime, gainful employment and many other statistical and written reports are required annually. Together, they take thousands of hours to produce. The reports also have to be submitted in different formats to state agencies. In addition, regional accrediting agencies that accredit entire institutions and various national accrediting associations which review specific academic departments require arduous reports that are time consuming and expensive to produce. In addition, institutions of higher education are responsible for all of the costs associated with the visiting accrediting teams which often require five or more people.
To his credit, Gov. Corbett quickly recognized the cost of college was a deep concern for many Pennsylvanians, so he organized the Commission on Post-Secondary Education. Most of the suggestions made by President Obama appeared in the state commission’s report long before the president’s recent media tour. The 31-member commission also recommended that the commonwealth review its many regulations and try to eliminate or consolidate those that are redundant with the federal government.
The commission, upon which I served, included presidents and other decision makers from major state-owned and -related universities, private institutions, community colleges and for-profit colleges, as well as business and government leaders. Like President Obama, the commission stressed life-long learning. We recognized that not all high school graduates should attend college immediately. Those who don’t should receive encouragement to obtain an advanced degree later in life.
Commissioners realized the cost of a public college education is heavily subsidized by taxpayers and that even private colleges receive some support from the government through the financial aid their students receive and in a few other ways. Colleges that keep tuition increases relatively low should be recognized and rewarded for doing so, the commission recommended. Furthermore, the commission emphasized state support of colleges and universities should be allocated based upon important criteria, such as on-time graduation rates, student satisfaction and the employability of graduates or their success in entering graduate or professional programs.
With these thoughtful and Pennsylvania-grown recommendations already on the table, it isn’t difficult to see why so many in Harrisburg and Washington have trouble with the president’s plan. It is especially true when the president’s proposed program also includes arbitrary and expensive regulations that have, in the past, only served to increase college costs for the nation’s 21.8 million college students and 4,495 colleges and universities.
It would be much sounder if the impetus for increasing higher-education effectiveness and efficiency resided within the states and not in Washington.
Michael A. MacDowell served on Gov. Tom Corbett’s Commission on Post-Secondary Education while serving as president of Misericordia University in Dallas, Pa., before his retirement in June 2013. He is also a former economics professor and managing director of the Calvin K. Kazanjian Economics Foundation. He is a resident of Harveys Lake.