Thursday, February 5, 2015

Higher Higher Education Costs

In the State of the Union address last month, one of the little candy toss-outs was free tuition at community colleges. We’ll tackle that in a minute. But in the follow-up interviews the president did with YouTube stars (go ahead and debate the appropriateness of that among yourselves), he was trying to explain how valuable politicians are. He said this:
Well, basically, politics is just -- how do we organize ourselves as a society? How do we make decisions about how we're going to live together? So, young people care about how college is paid for. Well, the truth of the matter is, the reason we even have colleges is that at some point there were politicians who said, ‘You know what? We should start colleges.’
Dating back to Abraham Lincoln, who started something called the land-grant colleges. He understood that government should invest in people being able to get an education and the tools to succeed. You guys are going to be the ones who are using these colleges and universities, and if they are not getting enough funding from government, and your tuition goes up, and you've got more debt, you're the ones affected. So you'd better have a voice and know what's going on about who's making decisions about that.
Politicians thought up colleges? As far back as Abraham Lincoln? What an invention!
Except that, I thought I remembered from an Iberian Culture class (back at the private university I attended) that the first university was created in Spain, in Salamanca. I didn’t remember a date, so I did a quick Wikipedia search. Salamanca dates to 1218, founded by the Catholic Church. It was among dozens of medieval universities in Europe (and not the first, although nearly so). Cambridge, in England, predates it by nine years.
Old Library, University of Salamanca
founded 1218, photo from Wikipedia
Other parts of the world lay claim to even earlier universities: Plato’s Academy, Athens, 387 BC; Najing University, China, 258 BC; Al-Azhar University, Cairo, Egypt, 988 AD. Although the European ones might be the first degree-granting ones.
Meanwhile, I came across an article in my alumni magazine about some of those early universities and what they taught—the liberal arts: grammar, rhetoric, logic, arithmetic, geometry, music, and astronomy. This is from “The Crossroads of Learning,” by John R. Rosenberg, dean of BYU College of Humanities, in BYU Magazine Winter 2015:
What we call the Renaissance, what we celebrate as the beginning of modernity, was actually a rerun, a 15th- and 16th-century sequel of a remarkable unfolding during the 12th and 13th centuries. In the luminescence of what we incorrectly call “the dark ages” sprouted one of mankind’s great creations, one that has endured 800 years and, gospel-like, has spread to every nation: the university.
Pretty much without exception, these universities were not government inventions, but church or otherwise private creations. And the concept of higher education greatly precedes the creation of the United States. We could even say that it was the higher education level of the founding fathers that made it possible for our Constitution to be created.
Abraham Lincoln, himself, studied law. The system was different then, but he still went through some sort of private higher education in order to enter his profession, well prior to becoming president and working out the Morrill Act in 1862 to create the land-grant system—which is what president Obama referred to. That was where states received (at the benevolence of the federal government) grants of federal land within their boundaries that were to be used for the building of colleges.
Colleges didn’t suddenly come onto the scene at that point. Colleges were all private before that. Colleges remained mainly private. A substantial portion—including all but one of the Ivy League schools—have always been private. States have used land grants to create colleges. More often state governments have acquired existing private colleges, turning them into state institutions.
Are there any federal government schools? You could give that designation to the military schools: West Point, Navy, Air Force. They have had special missions, and were funded by Congress. But all other government higher education is at the state and local level.
So that’s the history—somewhat different from Obama’s claim that higher education exists because of some politicians sitting around, going, “You know what? We should start colleges.”
The next thing to look at is whether higher education (with the possible exception of military academies) is within the proper role of government. What is that list again? Oh yeah, it’s in the Preamble of the Constitution:
We the people of the United States, in order to form a more perfect union,
·         establish justice,
·         insure domestic tranquility,
·         provide for the common defense,
·         promote the general welfare [i.e., good for all citizens at once]
·         and secure the blessings of liberty to ourselves and our posterity,
do ordain and establish this Constitution for the United States of America.
Does it say “give free higher education to all citizens"? No, it does not. Can you screw that idea into one of those provided? Nope. It’s good for the general welfare if we have an educated populace, but education is a product you can purchase, individually, according to your own desires and needs, and according to your preferences. Getting government involved in making that a blanket bestowal stretches the list beyond the point of elasticity.
And what do we know—conceptually, even before the data proves it—about government getting involved in something beyond its role? It will cost more. It will be poorer quality. It will essentially do exactly the opposite of the stated goal.
There’s a quote by P. J. O’Rourke, on free health care: “If you think health care is expensive now, wait until you see what it costs when it's free.” Ouch! We can restate that for college education: “If you think higher education is expensive now, wait until you see what it costs when it’s free.”
Let me give you some perspective. I was raised in a family where I was told people like us (comfortable lower middle class) don’t go to college; that’s for rich people. But I was around a lot of smart kids who told me otherwise. There were things such as scholarships. For a while I had the mistaken idea that a scholarship was only for the top single person in a school, and I was among a lot of smart kids in a very large school. (The top 10% of the highly rated school would have been about 65 kids.) But they encouraged me anyway. And it turns out that most hard-working bright students can get some sort of scholarship. I was one of those. I also worked summer jobs, and sometimes two summer jobs plus a Christmas break job. One of my jobs was as a waitress in a luncheon restaurant in a department store—paid about $1.10 an hour plus tips, which were customarily about 10% then. Yet it was enough. I got through college without debt, and without family help beyond the occasional phone bill and a few things from the pantry.
It’s still possible to get a scholarship, but it helps if you’re somehow “underprivileged” in ways that supposedly I was not. It is much more likely that you can get student loans. Government stepped in and made that possible. Mr. Spherical Model (and therefore, me, by marriage) had student loans—at the low-cost government rate of 9% thanks to Pres. Carter making that rate seem low—of under $20 by the end of graduate school, which took a decade to pay off.
Skip ahead a few decades, and tuition rates have skyrocketed—consistently outpacing the rate of inflation, and, more obviously, the rate of household income. Why? Many reasons, interrelated, probably. But be certain that it has coincided with government’s attempt to make college more affordable for more students.
Making college affordable for more means greater demand. When demand is greater, prices go up. That is a basic economic reality. Although sometimes quality goes down to spread the service to greater numbers. Sometimes costs go up and service goes down (like with government health care).
I don’t know if this “free community college” plan will result in more community college students. But if it does, the cost of educating them will go up, and probably the quality of community college will go down. Count on it.
I also don’t know what an edict from the emperor-in-his-own-mind means. Community colleges, when not private, are paid for by local taxes—usually not even state taxes, but at the city and county level. So what the president has just done has offered to place (pending Congressional legislation, if lawful) an enormous burden on communities that are already stretched to meet the education needs of their communities at relatively low tuition rates compared to larger four-year universities. Somehow the already deficit federal budget will “grant” tax money filtered through federal treasuries to local community colleges to help them make up the difference between low tuition and zero tuition—coming from the same people and businesses already being taxed.
It hasn’t worked with any other government project beyond the proper role of government. It won’t work in higher education. Take a look at “free universal high school” where inner cities are lucky to have only a third fail to graduate. (Suburbs graduate at rates about 20% higher; rates across the rural-urban spectrum are related to family strength.) The same problems that lead a huge portion of the public to choose poverty over free high school education will lead to an additional portion failing out of free community college. And the cost for the rest of us will be far more than without government intervention.
But if the president is trying to “buy” voters from among lesser educated non-thinkers who haven’t learned this reality yet, he’s gone to the right source.

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