The national dialogue on college costs is now focusing on questions like “Is college worth it,” “Why is college so expensive” and “How can costs be lowered.” But perhaps the fundamental question we should be asking instead is, is higher education a public “right,” like high school? Over the past several years, the United States has backed away from free public higher education. As our nation needs a highly educated workforce to compete in the global economy, a strong case can be made for publicly funded K-14 education. At the end of the 19th century, our workforce needed at least a high school education and a high school diploma became a right. Our workforce needs more than a high school education today but more education is still a consumer choice, rather than a right. It would be interesting to study the effect that the advent of compulsory public high school education had on the price of private elementary and secondary school costs at the end of the 19th century to see if a comparison could be drawn to higher education today. How would free public education through the 14th year affect the price of private colleges? We know that backing away from free tuition in California and other states has been one of the drivers in the recent cost increases of higher education. Would free public education through the fourteenth year put pressure on four-year schools to reduce price? It’s a question we don’t have an answer for yet.

But another question we need to examine is why college costs are so much in the spotlight today. It’s because, as a nation, we fund higher education using debt and more and more alumni can’t handle student loan repayment. This in turn leads people to question the cost and value of their higher education purchase. The down economy and wretched job market are partly to blame. Ironically, though, a large portion of the problem is that we use debt to provide access to college, but then fail to give student loan borrowers the information they need to effectively manage the debt. Many borrowers simply don’t understand their rights to make the repayment more manageable. If more borrowers understood how to repay their loans without busting their budgets, student loan horror stories wouldn’t be making headlines or forcing their way into the social consciousness – and therefore neither would college costs.

The surge in college tuition is of critical concern not just to students and families but to the country at large. “Economic opportunity and the prospect of upward mobility have formed the bedrock upon which the American story has been anchored,” a recent study by the Pew Charitable Trusts pointed out. But “the last thirty years has seen a considerable drop-off in median household income growth compared to earlier generations. And, by some measurements, we are actually a less mobile society than many other nations.” What has caused this loss of mobility? According to economist Adolfo Laurenti, "The interaction between education and the jobs being created in the 21st century economy is a major driver behind what we see in unemployment, income and social mobility,"

For colleges and universities like the private HBCUs that belong to UNCF, part of whose core mission is to serve students from low- and moderate-income families, controlling the cost of college is not a matter solely of social justice, but of mission-fulfillment and institutional survival. Raising tuition beyond what our students can afford would renege on HBCUs historical commitment to their students. Excessive tuition increases would also force many low-income students out of school—or into debt that would burden them into their thirties and even forties.

These mission- and market-driven realities are reflected in HBCUs’ tuition levels. Affordability of UNCF Member Institutions, a study performed by UNCF’s Frederick D. Patterson Research Institute, demonstrated that these colleges and universities have average student costs approximately 30% lower than those at comparable institutions.

How have HBCUs managed to control the cost of going to college? Part of the answer lies in sharing services to achieve economies of scale. Our member institutions have average enrollments of slightly less than 1,400. That’s good: the small-college experience is a key factor in their appeal to their students. But students’ escalating college expectations--job-focused majors, a powerful technology infrastructure and state-of-the-art fitness facilities, for example—are hard to meet on such a small tuition base.

UNCF was founded in 1944 by a consortium of private HBCUs to share the costs of fundraising and appeal to national donors. Similarly, the Atlanta University Center, a consortium of four Atlanta HBCUs founded even before UNCF, share a campus in downtown Atlanta, a library, a dual-degree engineering program and a career planning and placement service.

The continuing increase in the cost of providing a college education, combined with stagnating or even decreasing family income levels, continues to drive the move to sharing services at UNCF member institutions. Five years ago, soon after I came to UNCF, we created our Institute for Capacity Building (ICB), to share the cost of institutional improvement in such areas as technology, finance, enrollment management, fund-raising, and facilities preservation and improvement.

The potential for cost-sharing is, of course, not limited to HBCUs. The current issue of Educause Review, for instance, reports on a cost-sharing arrangement between the University of Akron (UA) and Lorain County Community College.

For everything that colleges, including our members, have done to control costs and tuition, however, we have not nearly exhausted the potential for controlling costs and tuition through cost sharing. Information Technology, procurement services, online e-learning platforms recruitment and marketing offer particularly fertile areas for cooperation and cost-controlling.

Every college is proud of its unique history and mission. Our experience suggests that those can be preserved while increasing efficiency, and passing the savings on to students by keeping tuitions affordable. HBCUs have controlled tuition because their missions and economic realities obliged them to. The increasing disparity between college cost and family incomes suggests that other schools could learn from HBCUs’ experience.

Fear Not The Electron

By: Bob Schaffer

There are hundreds of things governments can do to reduce costs on college campuses, but when it comes to driving tuition costs down to their natural levels, nothing works better than the marketplace.

Sure, states could consider shielding students from the ridiculous “fees” that get tacked onto base tuition, for example. These fees can add up to $2,000 a year in costs for things few students need – like funding student clubs, campus-based political societies and redundant insurance policies.

Personnel costs on many campuses are excessive. University employees tend to enjoy retirement, healthcare and employee benefits that are far more generous than for comparable jobs in the private sector. Their take-home pay is envious, too.

The politics of the modern college campus considering faculty senates, politically appointed governing boards and student governments that meet in rooms better furnished than some state legislatures (funded by student fees) make it unlikely the plight of low-income students will be seriously considered by those in charge of academia.

In any other industry, when prices rise, upstart competitors rush in. They typically gain market footholds through all the typical efficiencies. Yes, some fail. Successful innovators deploy technology, they work harder, they improve economies of scale, they offer targeted services, etc. They accelerate the rate of overall market improvement and efficiency. Consumers start to win.

Why is higher education immune from such consumer-driven marketplace considerations? The answer is found in the disturbing alliance that exists to bind colleges, accreditation agencies and governments.

Once one understands how effectively and comprehensively this cartel works to limit the number of providers in the industry – thus guaranteeing prices drift only upward – the problem becomes pretty clear. It’s not rocket science.

Leaders of America’s universities actually prefer more money flows through their treasuries, not less. Raising money is the main part of their job descriptions. When was the last time you’ve ever heard of a college president getting promoted or praised for slashing costs, lowering tuition and reducing income? Never. They are celebrated for raising money – from anyone – from donors, the government or tuition-paying dupes.

By relying on their friends in Congress and in state legislatures, this alliance succeeds consistently in slapping down so-called career colleges that provide cheaper, skill-specific, post-secondary job training. They routinely succeed in crushing small private colleges that get too big for their britches. They’ve become experts in preventing new colleges from popping up. They absolutely loath competition from the Internet.

Here’s how you’ll know when the White House and Secretary Duncan are truly getting serious about reducing college costs for middle-class Americans:

1) They’ll break open regional accreditation associations (the glue of the higher-ed cartel) to ease their mercantile practice of boxing out new entrants to the education marketplace. Few, possibly as little as five or six, solely Internet-based institutions have attained regional accreditation. Meanwhile, the Internet has transformed American commerce, communication and leisure. Traditional higher-ed still operates in the slow and inefficient era of paper, candlelight and quill pens.

2) They’ll initiate efforts to neuter university-faculty cabals that have a vested interest in blocking the establishment of parallel Internet colleges. The University of California wants to lower costs with web-degree programs, but the faculty says “No!” The same thing occurred at Northern Illinois University and elsewhere throughout the country.

3) They’ll drop their preoccupation with “seat time” and instead come to value results. The Obama Administration has recently promulgated a regulation defining a credit hour in terms of serial time engaged in coursework. This is instead of considering what students learn, called “outcomes.” The efficiencies of new technologies are valued in terms of the outcomes they produce, not in “inputs.” As a consequence, students at online institutions are now being timed for how many minutes and hours they have logged into their courses.

4) They’ll overcome their fear of technology where the delivery of college curriculum is concerned. The Obama Administration is now saying that if an online student misses an assignment, that student must be dropped from Title IV loan and grant programs. Is there a corollary response to students who attend old-fashioned campuses? No.

It’s no wonder traditional colleges feel entitled to operate in the same costly way they’ve operated since Greek citizens hired the Sophists. American colleges should at least be prodded into the age of Franklin, Edison and Farnsworth; if not that of Jobs, Gates and Gore (inventor of the Internet).

Among the many compelling reasons for streamlining costs and reducing tuition in higher education, perhaps the most obvious is that it is fundamental to our economic future. Recent estimates show that by 2018 more than 60% of American jobs will require some form of postsecondary education. Today, only about 40% of American adults have an associate or bachelor’s degree.

A great deal of the national dialogue over the last couple of years has been focused on ensuring that 60% of Americans have a high-quality degree or credential in the next decade or so—a huge increase from the current level of around 40%. The 60% level matches the workforce projections, and also happens to be what the best-performing nations in the world already are achieving. Lumina Foundation has directed all of its efforts toward achieving this goal, and many leaders—from President Obama, to a growing number of governors in both parties, to business and higher education leaders—are strongly in favor of this push for much higher educational attainment.

Much, if not most, of this increase will need to come from low-income, first-generation, minority, and adult populations. Unfortunately, we don’t have the resources to scale up our current system to the size it needs to be to produce the numbers of graduates our economy needs, while maintaining or improving the quality of its graduates.

The best way to increase the numbers of highly qualified college graduates to the levels we need is for higher education to become more productive. To raise college attainment dramatically, productivity improvement will require a substantial increase in the number of high-quality degrees and certificates produced, at lower costs per degree awarded, while improving access and equity for the least well-served populations. I won’t go into the details of how to do that here, but the good news is that there is a lot of terrific work being done at the state and institutional level. You can read about some of the progress being achieved here.

The question is, do these state and institutional strategies to lower costs and improve completion and quality have implications for Federal policy? I believe the answer is an emphatic yes.

One area where Federal policy comes to bear is in financial aid, which continues to be the bedrock of support for low-income populations. The fiscal climate means that innovation and creativity will be required to enhance the capacity of the current system to serve the increasing numbers of college graduates our nation needs. One of the most important elements of a reframed student aid system will be to ensure that all Federal programs are designed to support student success – as measured by well-designed indicators such as on-time progression, course and program completion, and graduation. This does not mean that access should be any less important in designing a new aid system – quite the contrary. We need to continue to increase access for the nation’s fastest growing populations in order to meet our employment and competitiveness goals as a nation. Yet we must have the courage to re-examine the entire system of grants, loans, tax credits, and work study to make sure it all works as effectively and efficiently as possible to support the success of low-income students that desperately need it.

Another topic we have to deal with is the unglamorous but essential topic of data. It’s inexcusable that we don’t have comparable data at the national level on student progression toward degrees, college graduation and ultimately job placement. In the absence of reliable Federal data, states are developing their own systems to provide these and other critical data. But it is hard for states to solve this problem alone. At the very least, the Federal government should help to assure that state and institutional data are comparable and can be easily shared to help everyone improve the performance of higher education.

Perhaps the most urgent Federal concern is quality assurance. We are on the cusp of a fundamental change in higher education – the shift away from a system based on time, to one based on learning. In a knowledge-based economy, degrees and other credentials must represent real skills and knowledge, not the amount of time a student has spent sitting in a classroom. We need to recognize the prior learning of displaced workers, returning veterans, and millions of others who want and need to improve their knowledge and skills to advance their career or improve their life. We need transparent credentials based on learning that allow us to seamlessly connect the workforce development system and higher education. Lumina is working with states, institutions, and others to develop the tools that will allow these new approaches to emerge – tools like the Degree Qualifications Profile, which defines common reference points for degrees across disciplines and institutions. These approaches will have significant implications for the way quality assurance is addressed by the Federal government.