For several years now, Americans have been questioning the value of higher education. Is a college degree worth the thousands of dollars it costs? Does the bachelors’ degree lead to a good paying job? Higher education faces many challenges in the nation. Unfortunately, one major challenge is the escalating cost of a college education. And as Americans question its value, the college degree has begun to lose its prominence in the minds of many Americans. The evidence to support this is the decline in enrollments in colleges and universities throughout the country. The problem has been further fueled by the high unemployment rates and the need by Americans for employment and the promise of a steady income.
The National Center for Education Statistics reported that there was a 2% drop in the enrollment of undergraduates in colleges and universities across the country from 2010 to 2012. Additionally, the U.S. Census Bureau reported a decline in college enrollments in the fall of 2012 by half a million students compared to the previous year. According to Census Bureau data the biggest drop was among older students, those 25 and older, and among white students who saw a decline from 67% to 58%. Surprisingly, Hispanic and African American students did not follow the trend, but rather their enrollments increased during the same period, from 11% to 17% for Hispanics and from 14% to 15% for African Americans. More recently, the Chronicle of Higher Education related that college enrollments this past spring semester decreased by 0.8% for the third year in a row. This is compared to a 2.3% decline over the previous one year period. The biggest drop, 4.9%, occurred among four-year for-profit colleges compared to 9.7% decline last year, and at two-year public colleges, which fell by 2.7%. Thirty-seven states saw enrollment declines, while 13 states reported increases.
One logical assumption is that the drop in college enrollments was precipitated by the number of high school graduates not going on to college. The U.S. Department of Labor reported that indeed fewer high school graduates were going on to college last year: 65.9% in 2013 versus 66.2% in 2012. The drop; however, was only 3 tenths of one percent. While this is minimal, it does not account for the larger drop in college enrollments.
Today, the public and politicians expect colleges and universities to provide an education that leads immediately to a good paying job. College administrators can no longer expect students and parents to incur debt to fund an education that in many instances leads to uncertain career opportunities. Higher education has been steadily pricing itself out of the market in the minds of Americans. Data from the National Center of Education Statistics indicate that the cost of college (tuition, fees, and room and board) rose 40% at public institutions of higher education and rose 28% at private non-profit institutions during a ten-year period, 2002 to 2012. According to an August 15, 2012 Bloomberg article, “college tuition and fees have surged 1,120%… since 1978, four times faster than the increase in the consumer price index.”
Nationwide, colleges and universities have gotten so expensive creating a perception that the pursuit of higher learning is no longer as valuable as in past years. U.S. News and World Report, in a recent article, suggested that while tuition prices at public four-year colleges are growing more slowly than they have in more than 30 year, the fact remains that tuition has dramatically outpaced other consumer goods. For example, from 2003 to 2013 college tuition grew nearly 80% while Medicare grew 43.1%, Food and Beverages 31.2%, Housing 22.8%, Men’s Apparel, 6.9% and Women’s Apparel 5.6%, as compared to an increase in the Consumer Price Index of 26.7% during the same ten-year period.
The dramatic increase in college costs has been due in large part to the recession and a weak economy, both at the state and national levels; dramatic cuts in state funds to public higher education institutions; and drops in enrollments, due to the scrutiny of the value of higher education. Inside Higher Ed recently reported that there has been a 7.6% drop in state appropriations for colleges in 2012, the largest decline in a half a century. Forty-one of the fifty states cut their spending for higher education from as little of 1% in Indiana to as much as 41% in New Hampshire. In the last five years spending by states nationwide is down 28%. All but two states, North Dakota and Wyoming, cut funding for their institutions of higher education. Thirty-six states cut higher education funding by more than 20%, eleven states have cut funding by more than one-third, and two states, Arizona and New Hampshire, have cut their higher education spending in half. At the federal level, budget cuts have impacted research programs, student support and financial aid programs and many other programs that support students who attend our institutions of higher education.
In response to these budget cuts, colleges and universities have raised tuition to make up the difference. Over the last 25 years, the share of public university revenues coming from tuition and fees has climbed steadily to 47% this year, from 23% in 1987, according to a March 6, 2013 article in the New York Times. Moreover, college administrators, due mostly in response to pressure coming from legislators and governors, have begun to freeze tuition and fees, a move that unfortunately is not sustainable, given that the other costs of doing business will not freeze. As colleges raise tuition costs, the anticipated effect is a potential drop in enrollments. To ameliorate this effect, colleges have discounted tuition by providing scholarships and other forms of student financial aid, a practice that private, high-priced institutions have followed for many years. But rather than adjusting to a new model of doing business when the economy starts to recover, the reliance on tuition revenue has created a "new normal" for higher education funding that is simply not sustainable.
Many Americans have begun to believe that a bachelor’s degree is now the financial equivalent to a high school diploma of ten years ago. However, the most important message that must be disseminated is that with a college degree, graduates are more likely to obtain higher quality and more well-paying jobs. According to College Board, college graduates with bachelor’s degrees have a 61% higher earnings potential than high school graduates.
Historically, higher education was originally created in Greece in the sixth century BC to impart knowledge to the elite and the clergy. It later expanded to medicine, philosophy, mathematics and the study of the nature of humanity and the universe. Through the centuries, higher education has maintained the imparting and expanding of knowledge as one of its primary functions, but what has changed is the characteristics of the students. Today, higher education prepares individuals to think critically, analyze, and draw conclusions to solve problems in an ever increasing global society. Liberal arts degrees, for example, teach these skills, yet a bachelor’s degree in liberal arts does not lead immediately to a high paying job. Therein lies the dilemma for higher education. Does higher education continue to educate students with a centuries old model or does higher education change to meet the needs for our society?
The dilemma institutions face, as they continue to raise tuition and fees at record levels, is that attendance will become out of reach for an increasing number of students, especially minority, first-generation, low-income students, which will diminish dramatically their chances of completing a degree. Horace Mann, the great education reformer of the 19th century, once said, “Education … is the great equalizer…” I am a perfect example of this phenomenon.
One of the primary assumptions in our society is that a higher education degree leads to a good paying job. However, not all college degrees lead to an immediate career and a good paying job, yet increasingly the public and more specifically politicians are expecting colleges to produce larger numbers of job-ready graduates. The challenge facing higher education is to move away from the ancient model of educating for enlightenment and changing the paradigm to meet the needs our society in the 21st Century. College and University presidents, particularly in the public sector, must get together and re-invent the university for the 21st Century. If not, students will vote with their feet as they are starting to do now.
