Clinton: ‘Higher Education Institutions Are Pricing Themselves Into America’s Decline’
Clinton: ‘Higher Education Institutions Are Pricing Themselves Into America’s Decline’
Editor’s note: The Wonk Room is reporting from the Clinton Global Initiative conference this week. This is our first post.
Photo courtesty of the Clinton Global Initiative
One of the main thrusts of this year’s CGI conference is discussing ways to build up human capital through public and private investments. This is particularly important here in America, as our educational attainment has stagnated, and we have lost the competitive academic edge that we used to hold over the rest of the world. Clinton touched on this, lamenting our falling academic standing:
In the last eight years, we went from first to tenth in terms of the percentage of 25-34 year olds holding a bachelor’s degree. That’s the most important unknown statistic out there…We are headed into long-term economic decline if we don’t do something about it.
He added that prohibitive tuition at college is contributing toward this problem, as “higher education institutions are pricing themselves into America’s decline.” Indeed, this is a real problem. As Michael Mandel at Economics Unbound pointed out, “college costs are up by 23 percent since 2000. But real pay for young college grads is down 11% over the same period.” Meanwhile, two-thirds of today’s college students borrow to pay for tuition, and their average debt load is $23,186.
“We’re soon going to have to change the delivery system in higher education,” Clinton said, noting that 17 states have authorized community college to offer four-year college courses and credits. The Senate passing the student loan reform package that the House approved last week would also be helpful (although that doesn’t get at the root cause of the problem, which is the price increase in the colleges themselves, which consistently grows faster than the rate of inflation).
We currently have a higher education system that is delivering less and less, but costing more and more. And if that trend continues, America can only continue to lose ground on the rest of the world.
7 Responses to “Clinton: ‘Higher Education Institutions Are Pricing Themselves Into America’s Decline’”
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The cost to the consumer may be increasing, but there is a long-term divestment from public education by state legislatures that helps explain why tuition is rising on the consumer side.
Big public universities are educating more students at the behest of their legislatures, with less public funding. Those students take on much more debt than in the past as a result. But the college age population has grown, so even though entering classes are larger and poorly funded, we have been educating a smaller percentage of that demographic (the children of the baby boomers, who were a mini-boom themselves).
If the US would forgive student loans, they could get some of those students back to graduate school to increase our economic competitiveness, which is produced by students with advanced skills, not just bachelor’s degrees. And if public schools would once again receive public funds, tuition could go down instead of up. De-funding public education is the reason costs are up; there is no trend of over-paying instructors, many of whom are increasingly badly paid temp workers, or of delivering education inefficiently in other ways.
Americans have to fund public education if they want competitiveness. That’s what other nations are doing, and that’s why their young people are more often holders of University degrees.
September 22nd, 2009 at 9:51 amThe University of California is facing a half a billion dollar deficit this year, due to years of cuts from the state, and bad decisions by the UC regents. The Cal State U. system is in worse state, one might say.
Cuts have been made to all programs, departments have been wiped out, whole departments have been given layoff notices, salaries for all employees have been hit by mandatory furloughs, student fees have been jacked up, services have been cut, experienced teachers have been given retirements, and so on….
Oddly enough, from 2006-2008, the number of people making over $200,000 in the UC system almost doubled, and salaries for these top earners rose 40% over the period….
So, the UC is siphoning funds for broader education to pay for the top1%….
September 22nd, 2009 at 2:20 pmI agree with kristina. There are at least two threads to this issue. First, at least in Texas, we have too many politicians who really don’t believe in public education, because they don’t like rich people having to help pay for the education of poor kids.
Second, as John Kenneth Galbraith pointed out decades ago, as manufacturing productivity rises (these days partly from outsourcing), the relative cost of “stuff” decreases and the relative cost of services increases – one reason the costs of medical care and education are outstripping the rate of inflation. To the extent these services are provided by government (as in public schools), taxes must go up to pay for them. That’s not an out-of-control bureaucracy so much as a dramatic change in the relative cost of “stuff” vs. someone’s time and expertise.
I teach high school math in an urban school district. According to my Social Security statement, with inflation I make less now than I did working two-thirds of a year as a 3rd shift computer operator in 1974 when I was in graduate school. So when you talk about forcing down the cost of education, we’re already there. It’s the other end of the equation that needs fixing.
September 22nd, 2009 at 3:12 pmJack said it in a nutshell, “So, the UC is siphoning funds for broader education to pay for the top1%….” But that dynamic is just reflective of what we are seeing relative to executive compensation in the U.S. and the decline of our standard of living. …and the cream just keeps rising to the top while the rest of us keep struggling.
September 22nd, 2009 at 3:12 pmStudents aren’t going to invest time / money in an advanced degree if they don’t see a job at the other end. Where’s the American infrastructure that will support Americans with advanced degrees? Companies are moving overseas and others are bringing in “cheap” labor with advanced degrees.
Of course, Mr Clinton’s trade policies contributed to today’s lack of infrastructure so it makes sense that he’d blame something else.
September 22nd, 2009 at 8:53 pmSpeaking from my own experience and frame… a professor who has spent my entire career in a state land-grant university(ies)… Kristina is right-on. I am especially reminded of the case a few years back where the then governor of South Carolina proposed “selling” the Land Grant to the university administration, and running it as a private university: That is, the State could no longer support it. I would also add, there has been a similar dis-investment from the federal level.
The “individualization” of society (i.e. we are not in this together, as though we are completely autonomous and independent rather than fellow travelers on this spaceship-Earth!), especially prominent in the last 3-decades or so, is the driver. No new taxes, lower taxes, etc. (reflecting this new framing) has had a devasting affect (yes, affect, as in emotions recognized here) on the public universities, in the sense that we have had to raise individual tuition (consistent with individual autonomy and independence, so everyone is happy, right?).
September 24th, 2009 at 7:52 amWow! These comments are shrewd, however I wonder what is thought of the following criticisms of CGI, also with my good suggestions:
1) Broad ‘urban’ initiatives begin with the concept that every city is identical, and thus always fail to establish a useful definition of a city, or a unitary urban purpose! My suggestion: each country, and each region have different cities.
2) Trying to help all women everywhere, means that all the citizens, of all countries, have identical philosophies of government and law, regarding families. My suggestion: advocating domestic safeguards on voting rights, would embody all ‘inalienable rights’, here.
3) That tax dollars should be allotted, before they have been collected, to advocate a uniform technology, would wrongly infer that any or every human need or occupational requirement is identical. My suggestion: more private industry regulations will serve to effectively channel needed resources.
4) To limit our philanthropy, by encouraging particular NGO’s and their global concerns, will divert money from domestic investments. My suggestion: advocate universal health care regulations, which will help us be healthier, and happier!
5) To the end that market forces work equally well, for teaching ideas, they would unreasonably standardize English semantics. My suggestion: public education financing is the efficient equalizer, to finance education by region, and for the span of academic fields of study!
September 27th, 2009 at 10:42 pm