(The Lafayette Journal and Courier
(August 9, 2015) reported that Purdue University would seek a partner firm to
establish “income share agreements,” allowing students to borrow from an
investment pool for tuition in exchange for committing to pay a portion of
annual earnings after graduation. Alternatively, presidential candidates Bernie
Sanders and Hillary Clinton are proposing government programs to make college
tuition at public universities free.
These latter proposals are similar
to programs that helped stimulate American economic growth
during the last half of the twentieth century. Rising college costs, expanding
university administrations, reducing the range of educational priorities from
well-rounded educations to narrow job-linked curricula, and using simplistic
metrics to measure institutional success, are all part of a new “crisis” in
higher education, My essay below recently addressed the “income share”
proposal, the reasons for skyrocketing college indebtedness, and the ways in
which the debt problem is being used to privatize higher education. HT).
Harry Targ :
The cost-cutting approach to higher education
WEST LAFAYETTE, Indiana — Purdue
University President Mitch Daniels testified March 17, 2015, before a
subcommittee of the House of Representatives Committee on Education and
Workforce on what he calls higher education reform. He also spoke during that
week to the American Council on Education and the Brookings Institute.
A centerpiece of his recommendations
was “income share agreements” whereby students partner with investors,
particularly alumni, who would provide funds for their education in exchange
“for a small share of the student’s future income.”
Daniels was touting this idea in
addition to new cost-saving policies at Purdue University, such as offering
three-year degree programs, using different metrics rather than course hours to
measure student preparation, and tuition freezes. He has also urged a reduction
in costly federal regulations.
Although some of Daniels’ proposals
and programs at his home university have merit, the conversation he and other
administrators around the country are having about rising tuition and the
accumulation of years of debt ignore the major reason why costs and tuition are
rising. In addition to the cost of higher education attributable to increased
faculty salaries, layers of new administrators, and the creation of new luxury
amenities to attract students (housing, food, and recreational facilities),
tuition has risen because state government financing of higher education has
not kept pace with expenditures.
‘Funding
cuts have led to both steep tuition increases and spending cuts that may
diminish the quality of education.’
The Center for Budget and Policy
Priorities issued a report on May 1, 2014 (“States Are Still Funding Higher
Education Below Pre-Recession Levels”), which provides data to show that higher
education funding remains below 2007-2008 pre-recession levels in 48 of 50
states. This means, according to CBPP, that “the large funding cuts have led to
both steep tuition increases and spending cuts that may diminish the quality of
education available to students at a time when a highly educated workforce is
more crucial than ever to the nation’s economic future.”
CBPP reports that since 2007-2008
state spending on higher education is down 23 percent, or $2,026 per student.
Tuition increases have been substantial in public colleges and universities
from fiscal year 2008 to 2014, ranging from $253 in Montana to $4,493 in
Arizona. In Indiana tuition increased by $1,191 during this period.
CBPP notes that in 1988 colleges and
universities received 3.2 times more of their revenue from state and local
governments than from students. That ratio declined to about 1.1 times more
from government supports than tuition in 2013. Put another way the report
states:
Nearly every state has shifted costs
to students over the last 25 years — with the most drastic shift occurring
since the onset of the recession… Today, tuition revenue now outweighs
government funding for higher education in 23 states…
Not surprisingly, Daniels’ idea that
students find a rich supporter in exchange for future student earnings came
from proposals made by free market advocate Milton Friedman in the 1980s.
Friedman, the University of Chicago economist, was the most significant
descendent of so-called “free market” economists who believe as did President
Reagan that “government was not the solution; government was the problem.”
The
privatization of all education is on the agenda of wealthy conservatives such
as the Koch brothers.
From the vantage point of 2015, the
privatization of all education, including higher education, is on the agenda of
wealthy conservatives such as the Koch brothers and the powerful state
legislative lobbying organization, the American Legislative Exchange Council
(ALEC). ALEC funds state politicians who support the elimination of public
institutions, such as education.
Naomi Klein, author of The Shock
Doctrine: The Rise of Disaster Capitalism, argued that during periods of
economic or political crisis, changes have been introduced to weaken government
and the maintenance of public services. The CBPP data suggests that the deep
recession of 2008-2011 was an occasion for ALEC and the politicians and
educators they support to reduce resources available for higher education.
Despite the long history of
government support for higher education, public schools from kindergarten
through high school, libraries, roads, and police and fire-fighting services,
the recession offered the occasion for influential and wealthy elites to
pressure for policies that reduced state financial support for public services
and a shift toward their privatization. In addition universities became even
more dependent on big corporations, banks, and the military. Finally, tuition
increased and students had to pay a higher share of the cost of their
education.
Throughout
much of U.S. history public education has been seen as a public good.
Throughout much of U.S. history
public education, including higher education, has been seen as a public good.
The land grant system of public higher education was instituted in 1862. From
then until the recent recession, public colleges and universities educated
large percentages of the young and generated much of the scientific and
technical knowledge that stimulated the U.S. economy, based on substantial
public support and low student tuition.
After World War II, returning
veterans became eligible for free higher education under the GI Bill. The
program led to the training and credentialing of a whole generation of young
people who went on to become educators and researchers, and also consumers of
products manufactured after the war. The so-called economic “golden age,” from
1945 until the 1970s, was driven by research and development initiated by GI
Bill recipients. These college graduates became members of the largest middle
class in American history.
As Bob Samuels, author of Why
Public Higher Education Should Be Free, put it:
“I actually believe that we should
and could make all public higher education completely free. We’re currently
spending around $185 billion on higher education annually—which includes
spending on for-profit schools, which have very low graduation rates and high
debt rates, as well as on merit aid for wealthy students. Given current
enrollment, I estimate that it would cost about $155 billion to fund public
colleges and four-year institutions completely. My argument is instead of
funding the individuals, we should just fund the institutions directly” (quoted
in Rebecca Burns, “Why Can’t College Be Free?” In These Times, June 13, 2014).
However, advocates of “higher
education reform,” at least those collaborating with economic and political
elites who advocate policies depriving government of financial resources, sometimes
called “starving the beast,” envision a day when all public institutions are
privatized.
There is much evidence that the
privatization of education will increase gaps between rich and poor and may
leave the latter with inferior educations. The Daniels plan will rely on
wealthy benefactors to support students while tuition costs continue to rise
and those who still seek a college education will continue to accumulate a
lifetime of debt.
Without a return to affordable
publicly supported higher education, large proportions of young, intellectually
curious, and talented students may be deterred from pursuing higher education
which will have negative consequences for the entire society.
