“Universities share one characteristic with compulsive gamblers and exiled royalty: there is never enough money to satisfy their desires.” — Derek Bok, former president of Harvard University
Yesterday I went to the Cato Institute, a think tank here in Washington, D.C. that promotes civil liberties and free markets. They had an event called Taking Control of Spiraling College Costs, where a panel of experts gave their various reasons for why they think that college is so expensive and what might be good ways to counteract that trend.
This particular event was co-sponsored by the Pope Center for Higher Education Policy, and two of the panel speakers were affiliated with them. One, economist Robert E. Martin, is the author of a recent policy paper called The Revenue-to-Cost Spiral in Higher Education. In it, he outlines a number of suggestions as to why higher education is different from other industries, and how those differences translate into costs that increase so much more quickly than other things in the economy.
Cato also had some relevant policy papers. One, Making College More Expensive by Gary Wolfram, is subtitled, "The Unintended Consequences of Federal Tuition Aid", and explains why Pell grants and federal student loans may put college within reach of more people in the short term, but inevitably makes it more expensive for everyone in the long term. This point was echoed by most of the panel members as a big problem, but they seemed to understand also that changing the way this is done would be politically infeasible even if Congress and the Obama administration were interested in scaling this back, which given their recent expansion of direct student lending, is clearly not the case.
There was another view on this present, however. Kevin Carey, Policy Director at a different think tank called Education Sector, argued that radically decreasing federal aid to students was not the most effective way to control costs. He suggested that colleges and universities needed to be required to be more transparent in how they spend their money. The panel did all seem to agree that many colleges and universities spend an inordinate amount of money in non-academic ways, such as athletics, and recreational facilities like the University of Missouri's resort-like Tiger Grotto. But other than Mr. Carey, no one on the panel thought that transparency would be much of a deterrent to needless spending when there was so much money coming into the system.
All in all it was an interesting event with good points made by all panelists. I'm not sure whether any of the solutions presented were likely to be considered by policy makers, though. I'll stand by my earlier belief that college costs will be reduced indirectly, by the continued rise of alternative approaches like low cost DETC-accredited schools, initiatives like Straighter Line, and so forth.
Next up, I finally get around to wishing Gandhi a happy birthday.