Ways to Cut the Cost of College
U.S. President Barack Obama announced a new push last month to curb the rising cost of college. Thankfully, state governments, which helped cause the problem, are experimenting with ways to fix it. The federal government can help.
Obama is right to highlight the expense of going to college. Tuition, room and board at public universities went up 46 percent in real terms in the decade to 2010. Yet only a fraction of that increase reflects rising costs. The main thing is that state funding per student has fallen by about a third, leaving students to pay more. The share of college revenue that comes from students rose from less than 30 percent in 2000 to almost half last year.
One of the pressures on state spending per student is enrollment: Between 2000 and 2010, the number of undergraduates at public institutions rose 30 percent -- three times faster than the population as a whole. The share of state spending going to higher education slipped during this period, and the recession put further pressure on state budgets.
Easing the financial burden on students won’t be easy, but there’s plenty of scope for economies if students and universities are willing to be flexible -- and if states and the federal government give them better reasons to be. The watchwords are experiments and incentives.
-- Kentucky makes its universities and colleges put new capital projects to a student vote to approve any associated fees. If students vote yes, the extra costs aren’t capped by the state’s tuition ceiling.
-- Indiana is fighting “credit creep” by capping the credit hours universities can require for graduation. The idea is to help more students graduate on time.
-- Tennessee rewards students who graduate more quickly. To that end, it recently changed its scholarship rules, allowing scholarships to pay for summer courses. (Currently only a pitiful 43 percent of students graduate within six years.)
-- Connecticut limits remedial courses to one a semester, and is letting more students do remedial work concurrently with regular courses. Again the hope is to get students to graduate faster. Kansas will stop paying for remedial classes at state universities altogether, starting in 2015.
-- The University System of Maryland’s Effectiveness and Efficiency Initiative increased out-of-classroom credits, changed entry-level courses to improve completion rates, increased the faculty’s workload and cut the average time to graduation. The initiative has saved $356 million, 2 percent of total spending, since it began in 2003.
The federal government also has a part to play. The Obama administration has asked Congress for $1 billion to fund a Race to the Top program for higher education. The idea, based on a program for school reform that was part of the 2009 stimulus package, is to make states compete for more money by improving their higher education programs -- including making college more affordable. The Senate appropriations bill included only $250 million for the effort; the House isn’t willing to fund even that. It’s a false economy. The program is an opportunity to save money.
Other measures also deserve more support than they’re getting. Students could shop among colleges more intelligently if they could compare prices more easily. Last year, Democratic Senator Al Franken of Minnesota introduced a bill to make universities present their financial-aid offers in a simple, standard format. Obvious? Apparently not. The National Association of Student Financial Aid Administrators said schools should be able to cast their offers in the way that best suits them. The measure was defeated.
Obama is right to make the cost of college a priority. He ought to support the experiments already under way in the states, and keep urging Congress to lend a hand.
To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at email@example.com.