Higher Education Is the New Big Business

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Higher education is seen as the safest path to the middle class in America. Obtaining your bachelor’s, graduate, or professional degree is seen as a net benefit to society. College graduates are reported to earn higher salaries than those with just a high school degree. They also have higher levels of job satisfaction, lower unemployment rates, and their children are more likely to enroll and complete college as well.

However, public universities tend to operate in a way that benefits their bottom line more than the students they educate. Tuition at public universities continues to increase without an end in sight. Some have argued that easy access to student loans (federal and private) has driven up the cost of college. Others argue that public universities have prioritized the wrong ends when trying to improve their campuses, such as building expensive student housing or a new athletic center.

Christopher Newfield, author of The Great Mistake: How We Wrecked Public Universities and How We Can Fix Them, agrees with the latter line of thought. In his chat with Mikhail Zinshteyn, a writer for The Atlantic, an excerpt from their discussion focuses on the misguided aims of public universities.

Newfield talks at length about the primary motivation of these institutions, which was to improve their prestige, “…because they were adding prestigious activities. And after U.S. News came in with [college] rankings in the late 1980s, it just really took off.” He goes on to elaborate on what motivated public colleges to act in such a manner, asserting “…but I think some of it is just that it was more important to have a kind of a national profile than it was to do really good regional service…then later, in the 1990s and 2000s, when you're starting to compete for blue chip out-of-state students, the arms race in facilities accelerates, and just re-accelerates after 2008.”

Newfield was prescient in his observations of public universities operating more like businesses. In The New York Times, Laura Poppano describes how the University of Alabama in Tuscaloosa has become a “national player” in its quest to raise its national profile to the level of other prominent flagship state schools. Poppano quotes Kevin W. Whitaker, Alabama’s interim provost saying, “Berkeley, the University of Michigan and University of Virginia are the schools ‘we [University of Alabama in Tuscaloosa] compare ourselves against.’”

The cost of this competition is high too – Poppano notes, “Instead of layoffs and cuts, some public universities facing budget challenges are following this blueprint for survival: higher charges to students, and more of them. Nowadays, the real money comes from tuition and fees.” In Alabama’s case, she highlights that “tuition and fees have about doubled in the last decade, to $10,470 for residents and to $26,950 for nonresidents.”

In an ironic twist that brings this story to its conclusion, Dr. Whitaker honestly quips, “I hate very much to use this analogy, but it’s like running a business.”

Public Universities Have Deviated From Their True Mission

I would like to believe that the missions of not only public universities, but also private colleges as well are encapsulated in the introduction of this open letter to President-elect Trump regarding undocumented students:

“The core mission of higher education is the advancement of knowledge, people, and society. As educational leaders, we are committed to upholding free inquiry and education in our colleges and universities, and to providing the opportunity for all our students to pursue their learning and life goals.”

It’s incredible how contrasting this statement is from Alabama interim provost Dr. Whitaker’s remark. Higher education has become the new big business in a stunningly anti-competitive landscape. The fact that federal student loans are easily accessible by prospective students allows universities to be sluggish in improving their core educational offerings. Universities aren’t compelled to lower costs because the capital to fund one’s education is virtually guaranteed by the government and is not dischargeable in bankruptcy.

The unfortunate result is that lower-income students are being priced out of the public educational institutions that were designed for them to obtain their education at an affordable cost. The only way they can fund their education is to take on significant amounts of student loan debt.

Hopefully, public universities will realize the error of their ways before it’s too late and return to offering an affordable education for all.

#StudentVoices

#EdInsights

Frederick Daso is a senior at the Massachusetts Institute of Technology. He is interested in learning more about or exploring opportunities in engineering, technology, management consulting, and/or journalism. Feel free to e-mail me at [email protected].