Skip to comments.Fighting Against the Fight against Rising Tuition Costs
Posted on 12/19/2013 9:08:16 AM PST by Kaslin
Remember when the federal government took over student loans? That power grab was part of the Democrats push to make college affordable. It didnt work because it was never really designed to work, just to make people think they were doing something to address the issue. But failure has never stopped our liberal/progressive friends from striving forward.
When it comes to soaring college costs, as President Reagan famously said, "Government is not the solution to our problem; government is the problem."
Since the government isnt going anywhere anytime soon, cost savings in higher education have to be found elsewhere. But with government being the intrusive, ever-growing obstacle it is, you cant expect it to sit by and do nothing as schools scramble to rein in costs.
I was talking with an education policy analyst friend of mine the other day about how much more expensive college has gotten ever since I graduated in 2000, and we bounced ideas around about how to control costs in ways that dont involve government. (Yes, thats what many of us inside this beltway bubble talk about over drinks. The rest of you are missing nothing!)
While government subsidizing education is a lion's share of the problem, one of the other issues we discussed is privatizing much of the administrative work. Just like in every public school district in the country, there is an enormous amount of overhead in the university system.
My friend told me about schools that were trying to control costs and the opening salvo of a move by progressives to stop even this modest effort.
About 1,600 schools across the United States have contracted with a company called Higher One to handle the disbursement of financial aid refunds to their students... Higher One saves these schools millions of dollars by disbursing these refunds at much lower costs than colleges can do it themselves. Needless to say, this helps slow the growth of tuition -- making school more affordable to low-income and non-traditional students.
Youd think this would be applauded by politicians and The Left. Youd be wrong.
See, Higher One commits the sin of making a profit.
Many students on financial aid receive funds to cover both tuition as well as books and living expenses. Instead of universities cutting students a check for expenses, they contract with a company like Higher One to handle the money. Higher One gives students choices about how they want to receive the remainder of their student aid for living expenses. Students can opt for either a check in the mail, direct deposit into a bank account or a Higher One debit card that can be used like any other debit card. Thats where liberal opponents have decided to target Higher One.
What Higher One does is what MasterCard and every other bank does charging fees for using their cards. Apparently, making money from students is against the rules.
That's why Higher One has attracted some attention on Capitol Hill. Congressman George Miller (D-CA) is very interested in the activities of Higher One. Why? Because in his opinion, Higher One's fees are too high.
Never mind the fact that if students only use Higher One ATMs and hit "credit" instead of "debit" every time they make a purchase (and don't bounce any checks) they probably will never pay a fee. In fact, according to Higher One, the typical student pays less than $5 a month in fees. These facts don't matter to Congressman Miller.
The reason for Millers sudden interest in this issue isnt altruistic, its something all too common in Washington. Miller has a staffer named Rich Williams who, before handling education issues for the congressman, used to work for the Public Interest Research Group, or PIRG, which has a long history of left-wing advocacy through studies they produce as a means to an end advancing the progressive agenda.
While at PIRG, Williams wrote a study about how the debit card fees charged by Higher One accounted for 80 percent of their profits. The PIRG story is wrong; the real number is less than 50 percent, but that's irrelevant. After all, is there an acceptable percentage that PIRG and Rich Williams would accept? Probably not and they shouldn't have the right to pick how much money any company can or cannot make.
But Williams' work at PIRG, flawed and pointless as it is, is now being cited by Congressman Miller in his salvos against Higher One and, by extension, against colleges that attempt to reign in ballooning administrative costs.
Garbage in, garbage out is one thing. But when you can see that garbage is being used as the basis for government action, that makes it something entirely different. Today, the Department of Education is looking at debit cards issued by companies like Higher One. If Miller and Williams are successful, schools may be forced to stop working with these companies to process student loan refunds. That means schools will need to spend millions of dollars a year on unnecessary staff, check printing and postage costs. And oh yeah, tuition costs will probably go up because of it. I guess that's ok with Congressman Miller and Rich Williams as long as no one dares make a profit.
I dont know if Williams has it in for Higher One for some personal reason or if it was just what he was assigned to do while at PIRG, but it doesnt matter. That the mentality he appears to possess is now working for the senior Democrat on the House Education and the Workforce Committee should be a concern for anyone who believes in the free market.
Williams is not unique. Capitol Hill, and government in general, is populated by people who come to serve not the public, but their own or some organizations agenda. They have every right to. Just as we have every right to know about them, especially when theyre finding new and creative ways of costing taxpayers more money.
What gets me is the redistributionism tuition aid system.
Those born from successful parents get punished with huge student debt taking decades to pay, while those whose parents are losers get college for free.
A law should be passed to forbid the IRS from sharing tax returns with anyone else, even if a waiver is signed.
I want to know how the public universities get off with increasing their tuition 300-500% in the past 12 years or so.
Yes, it is all about redistribution.
PIRG is Nader, right?
Well at least we can thank him for torpedo’ing Algore in 2000 LOL.
My own university has, over the past two decades decreased the size of our faculty by 0.4%, while the number of administrators and administrative support staff have increased by about 50%. Over the same time, faculty pay has lagged inflation while administrative pay packages have increased by 3% to 5% per annum above the CPI. This is not peculiar to my university, as Benjamin Ginsberg documents in his book The Fall of the Faculty: The rise of the all-administrative university and why it matters.
This is all part and parcel of the zeitgeist in what I have called "the Era of Bad Stewards": fiduciaries treating their posts as existing for their own enrichment, rather than to serve those whose interests they are, in theory, paid to uphold. (One waggish FReeper suggested I always typeset that as "the Era of Bad Stewards".) Be it university administrators who put the interests of administration and their own pay packages ahead of those of the faculty, corporate managers to similarly maltreat the shareholders whose interests they, in theory serve, or government bureaucrats who build fiefdoms to extend their own power and importance, without regard for any real public interest, the professional managerial class has become the enemy of accountability, liberty, and sound finance.
They call it tuition aid but what they are really doing is charging everyone a different rate.
Imagine if you were a homebuilder and set the house prices real high but gave home-buying ‘aid (only to those buying your houses) based on race, or sex, or political party.
See my post #6, below. The administrators at public universities are hucksters who manage to sell the “need” for more adminstration and “hiring the best” (in administration) to state legislatures and boards of regents.
channeling unlimited taxpayer subsidized borrowed money to universities who pay huge salaries to liberal admins and profs who donate to Democrats.
Because there’re market forces in “making happy students”, and diminished market forces in price...combined with an increase in unneccesary degree requirements.
I will predict sometime over the next decade....some state legislature in the US will put a law in effect to dump the vast number of administrative personnel at their state universities, and suddenly calculate tuition at fifty percent of the previous rate. They will suddenly attract thousands across the US and steal students from neighboring states.
Thanks for the insight. It seems to me that a market opportunity is there for enterprising educators to offer identical degrees that are all or mostly online. This is not a new concept, indeed, but this could be taken to the full degree, literally. For instance, a Physics 1 course could be recorded, perhaps with the aid of Communications and Art students, to make a excellent presentation with Q & A time, further discussions, etc. Physics 1 does not change.
The point is that it would only have to be made one time, yet could be broadcasted to paying students for years to come. No staff and overhead to pay for every section, every semester. I understand enough to know that I do not know enough about the inner workings of staff and faculty, granted, but this seems like a no-brainer.
Maybe you could weigh in.
I think the solutions will come from the market not from government, could be wrong, but see my reply #12.
What you suggest is actually the death of the university: replace faculty with canned lectures, replace teaching assistants with a few faculty to answer questions. The natural mechanism for producing new scientists, humanists and artists that the university has provided since the middle ages, of the older generation teaching the younger, is gone, replaced with efficient technological information transfer, rather than actual teaching. All that will be left will be rent-seeking administrators collecting fees for the lectures some faculty member gave years ago after signing an “intellectual property” agreement that made the institution the holder of the rights to his or her work, lectures included.
Considering that most science is still done at universities, especially the basic research on which applied research more readily funded by corporations depends, killing the university by abolishing the teaching role of the faculty does not sound like a good deal for civilization.
What I am talking about is automating the antiquated. Technology is upon us. Perhaps we should subsidize the manufacture of buggy whips and 8-track tapes. The university would not die, it would evolve. Research would continue, and why wouldn't it? Student activities, visiting speakers, sports could all continue. And there are plenty of classes that simply require the student to be present.
And the market would demand both the traditional university and this evolved university. And, I am sure that tenure will be around for a long time.
Now, here is another radical idea: A premise of the university system is a grade per semester. That is a variable per constant. Change the grade to a constant, an "A-", and make the semester the variable. With automated classes this can work. The existing honor students will zoom through the system. The current "C" students will take longer. But completion of the classes demands competency. The "reward" is time, not a fungible grade. Employers will be asking graduates "how long did it take you to graduate" rather than "what is your GPA".
They got away with it because the government apparently has made it impossible to test prospective employees so the degree has become the screening tool. Very few recent college graduates have anywhere close to what used to be a HIGH SCHOOL education, some don’t have what used to be an EIGHTH GRADE education. Not only are they paying ridiculously high tuition but they can’t spell ridiculous or tuition, they are settling for jobs that should be going to high school graduates or even eighth grade dropouts if we had a real education system.
In SC, as in many other states, we have an “educational lottery” which was supposedly going to pay for education but tuition costs have skyrocketed since the lottery began.
Someone is benefitting but not eduation.
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