TOM WARD - Finally, higher ed cost bubble collapsing
TOM WARD - Finally, higher ed cost bubble collapsing
There's good news to report! The growth in the ridiculous amounts of money families are forced to sacrifice to send their children to college - especially private colleges - is finally starting to abate. The "bubble" over college costs is deflating.
For the past two decades, the government loaned or gave more and more federal aid to more and more kids. Colleges on this "welfare" simply ramped up their tuitions - and bloated their staffing - to meet the money that was being pushed at them. Campus dorms became comfortable hotels; old gyms became fitness clubs, and cafeterias became cherry wood-and-stainless steel dining centers, some open 24-7.
Happily, the end of this madness is near, though it will be a slow process unwinding the excess, with huge debts still to be paid on some of the higher ed Taj Mahals across our land. So what happened?
Most importantly and obviously, college is losing its value proposition. Wrote Richard Vedder and Christopher Denhart in the Jan. 8 Wall Street Journal, "a college degree's declining value is even more pronounced for younger Americans. According to data collected by the College Board, for those in the 25-34 age range the differential between college graduate and high school graduate earnings fell 11 percent for men, to $18,303 from $20,623. The decline for women was an extraordinary 19.7 percent, to $14,868 from $18,525.
Meanwhile, the cost of college has increased 16.5 percent in 2012 dollars since 2006, according to the Bureau of Labor Statistics' higher education tuition-fee index."
The big driver of disappointment, of course, has been the failure of higher ed to assure jobs for students. It may not be colleges' fault, but what does it matter? If mom and dad shell out $150,000 or more to send a child to college, and there are no jobs, you have very unhappy customers. With few jobs in the past five years, some students went on to graduate school in the hopes that the economy would improve. It didn't, and now many young adults are hopelessly in debt with few prospects for good employment. (And let's not talk about Law schools. The disaster there is unprecedented).
Write Vedder and Denhart, "the 2013 Center for College Affordability and Productivity report, found explosive growth in the number of college graduates taking relatively unskilled jobs. In 1970, less than 1 percent of taxi drivers had college degrees. Four decades later, more than 15 percent do."
So now, state budgets are squeezed and the lie that "every kid needs to go to college to get a good job" has been exposed. Cuts are finally being made, with state institutions leading the way. Consider these additional facts illustrating campus waste from Douglas Belkin of the Wall Street Journal Dec. 30:
* "The State University of New York system shaved $48 million in the past two years by cutting unused software licenses and consolidating senior administrators.
* The University of Kansas revamped its back-office operations to save about $5 million in 2013. One example of the fresh efficiency: A new way of deploying maintenance workers shaved an hour of drive time from their shifts each day. Also, they centralized some of its 800 computer servers to keep fewer rooms chilled to 64 degrees. Energy savings: about $1 million a year.
* Finally, the University of California-Berkeley, cut $70 million since 2011 by centralizing purchasing and laying off a layer of middle managers, among other things."
As a private-sector conservative business owner trying to manage resources carefully, it's hard not to have a good laugh at the expense of U-Cal Berkeley, the bastion of left-wing progressivism in America. Think of that: they cut $70 MILLION in middle managers in two years, and lived to talk about it. "Educators" and "administrators" in institutions of liberal thought wasting $70 million on pointless personnel? Say it ain't so! Lucky thing they have "speech codes" to stop the business students from insulting them and hurting their feelings. Can there be any doubt the 1960s-era marijuana cloud that covered the campus of hippies (now professors) hasn't dissipated much?
Of course, professors fired back! Reports the Journal, "Fawwaz Ulaby, an engineering professor at the University of Michigan in Ann Arbor, called out administrators for hiring consultants whom he called 'ignorant and out of their element.'"
Michigan's "blueprint to consolidate support staff from around the university into a single facility, pitched by consultant Accenture, 'is based on standardized operations as one would find in a state agency' or a big manufacturer," Mr. Ulaby wrote in an email. 'Those types of operations are a world apart from what happens in a university." More than 1,100 faculty members signed a letter this month he wrote in protest.
"Ryan Oakes, who directs Accenture's education business, declined to comment on the Michigan proposal but said the inefficiencies at universities are 'an order of magnitude' beyond those found in corporate America."
Now that's funny! Oakes is too polite to say "the people who run universities don't know jack about running a business."
And so parents - and students - have paid, and paid, and paid. No one from Berkeley is going to write a letter of apology to the kid drowning in debt that $5,000 of his loan is being forgiven because "we were really, really stupid." No, that letter won't come.
Finally, fiscal reality is reaching the campuses. Reports the Journal: "In-state tuition at public four year schools rose at their slowest rate in nearly 40 years. Published tuition and fees rose 2.9 percent for in-state students at four-year public schools, the smallest one-year increase since 1975-76. At private schools, tuition and fees rose 3.8 percent, a bit slower than in recent years, according to the College Board, a nonprofit group that tracks university costs."
Then there is the "creative destruction" of the internet, coming soon to a parent's computer near you. Write Vedder and Denhart, "New tests are being devised to assure employers that individual students are vocationally prepared, helping recruiters discern which institutions deliver superior academic training. The cleansing would be good for a higher education system still tied to its medieval origins - and for the students it's robbing."
Amen to that!
Ward is publisher of The Valley Breeze newspapers.