Wednesday, 29 August 2012


The cost of higher education has been rising steadily in the past four decades, essentially doubling in real terms from 1970 to 2010, and it is expected to skyrocket by 2030. This will not be limited to the US, but it is expected to be a global phenomenon. Moreover, the high cost of college education will coincide with a massive surplus of college graduates and very difficult economic conditions, unless the current neo-liberal model of development is replaced with a mixed economy that produces new wealth and is not parasitic as is finance capitalism resting on the state for constant support and periodic bailouts.If higher education is a mirror of society as well as the source for change and progress, is it time to consider new models that will best serve society and not just a very narrow segment linked to the corporate structure?  

1. Where is the cost of education headed and what are the causes of high cost?

In just 18 years from now, the average cost for an elite private university could be as much as $130,428 a year, while the cost for a state university could be as much as $57,609, assuming an average annual rise of 7% during the period in question. The situation isn't much better if you go the public route. The price tag includes room and board, but no beer and books that are essential to survive four years of higher education. Of course, one could assume an annual rise in costs of 5%, which would drop the cost from $130K, to $92K for private school, and from $57K to $41K for state college; still a significant amount for a family that wants to educate more than one child.

As a former university professor, I always heard the college administration argue that the costs of higher education follow the costs of medical care in the US, and that the rest of the world then emulates the American 'business' model of education and health, at least in some respect. This prospect should concern citizens, largely because it means that a fair percentage of the population will be excluded from having access to higher education owing to cost, just as is the case in health care and likely to continue.

College costs have been rising well above the inflation rate in the last six decades, but the big rise linked to the 'business model' of higher education is the result of the Reagan-Thatcher neo-liberal era whose legacy the Western World and other countries continue to emulate to this day; in short, it is the result of slashing funding from the welfare state and the concept of providing access to education to all, so that higher education, especially quality schools, is increasingly limited to those who are rich, with only token minorities and poor to prove they are not elitists!

Who is to blame for the high cost of college? Taxpayers that want low taxes; college administrators that have created massive expensive and corrupt bureaucracies; parents that do not save enough for college; politicians that allocate smaller funds to colleges; societal values that do not appreciate higher education;  college professors who are under-worked and overpaid; banks that make moeny off student loans; all of the above and other?

2. Where is the money going? 

In 2010 in the US, college students owed more than one trillion dollars for loans, or about one-third more than credit card debt for the entire nation. Who benefits from this massive business of college loans and where is the money going?

One could argue that large schools with top research labs and highly paid scholars justifiably cost more. This argument would be valid only if the cost in non-research four-year and community colleges would not rise as rapidly as in the top schools. So where is the money going? One answer is that administrators whose compensation was not much than a highly paid full professor in 1970, receive pay packages with all the perks comparable to a CEO of a small corporation. The idea that there are college administrators making more money than many US and most European corporate executives should be alarming to the public.

That college administrators receive high compensation is comparable to administrators in charity organizations receiving the bulk of the funds received to run the organization.  Even more alarming, the only accountability of administrators is to politicians and business leaders, regardless of effectiveness of the campus. As long as funds pour into the campus, that translates into good administration, without actually looking at the quality of education students receive. Mechanism of accountability resting with political parties and business leaders means that higher education cannot possibly be merit based as it is advertised to the public. This holds true as much for Harvard University that has a history of admitting the children of the rich and famous and produces some of the most tyrannical rulers and ruthless business executive on earth, as it does for the local community college where a powerful political machine and business bosses decide on the role of the college.

Colleges and universities have become highly bureaucratized and administration salaries bloated, while part-time faculty have skyrocketed. Today's college administrators are not rooted in scholarship not do they have any commitment to creativity and scholarship that actually impede their role as a 'business-like' executive. Instead, they are “business managers,” who see themselves in an antagonistic relationship with the faculty, the enemy of the administration, and they see students as 'paying customers', while business contributors are the real 'asset' of the campus and not the faculty and students.One reason for all of this is that the political and business elites want a business model higher education. Given that the share of the state's contribution to colleges and universities has been declining steadily since 1960, and especially after the Reagan-Thatcher era, it was inevitable that colleges and universities would turn to the private sector for money and in return the private sector would demand higher education be shaped to fit the precise needs of business.

3. Does higher cost of college mean high quality of education?

University and college administrators who command very high salaries and numerous perks insist that the cost of higher education is justified by the 'value', which to them means 'cash-value returned' over a lifetime based on averages. Even if that is true today, which it is not, if we break down the college graduates and not lump them together and average them out, will the same hold true in 2030 and beyond? If total college debt in 2010 was $1 trillion, how much will it be in 2030, and how many years of their lives will graduates have to devote to pay it off, and in what career fields?

We may be transitioning from mass consumer-mass producer education to elites education, and we could very well come full circle in another generation; that is to say, return to the days of when universities were created in Europe and the well-to-do middle class sent off its sons to secure an education so they could secure a respectable career and status in society. Of course, modern technology makes it possible to become self-educated without ever attending college, but that too implies a life of leisure associated with some wealth. Even so, as admirable as self-education may be, it is not a ticket to securing a career for which college degrees are essential.

Does the fact that students are trained to be good test takers make them well-rounded in a solid university education that includes subjects as diverse as arts appreciation and biochemistry, or are they so focused on doing well in their 'major' while they are fairly and deliberately oblivious to all other subjects that would contribute to their self-discovery and creativity. 

4.  How does higher education benefit students and society?

Are colleges and universities adding value to the quality of education to the students and to society because tuition is rising, or are the beneficiaries administrators with high-paying salaries? Articles and books dealing with the high cost of higher education is the abuse and corruption in college administration and the bureaucratized structure of colleges and universities. Another criticism is that along with tuition inflation, there has been grade inflation from the top universities to the community college. Without a corresponding value added to the student's education, neither the student nor society can possibly benefit from higher education that promotes itself as holding the Enlightenment ideals of meritocracy, but in reality not practicing what it preaches. The result is an undereducated college graduate who must receive more training either by pursuing a graduate degree or training in the field.

An even larger question is what will society do with all of the college educated people, given that the structure of the economy is not evolving to absorb applicants at the rate they are graduating. Whereas fifty years ago it was possible for a high school graduate to experience upward social mobility and move from a working class to a middle class background, that is not possible in the early 21st century and it will become even more difficult two decades from now. On the contrary, increasingly college graduates, even some with advanced degrees, find it difficult to secure employment in their chosen profession. The US Department of Labor notes that the average college graduate will change several careers in a lifetime; not necessarily a bad thing, assuming this is because the move is up and not down or parallel out of necessity.

While it is still true that the average college graduate will earn higher income than the average high school graduate, it is also true that in the past half century, especially in the past twenty years, the bulk of income gains have gone to an elite of college graduates, invariably with advanced degrees, especially in business.
This is fine, except that in the past twenty years wealth has been accumulated mostly through parasitic financial services - stock, bond, currency, bulk mortgage sales, and other financial product trades - rather than creating new wealth that would be able to create new jobs and new wealth for the next generation. College degrees have helped to create mostly a generation of people who are struggling to stay in the middle class and a few who are part of the top 10% making money mostly through parasitic enterprises. The question is what is the value of these people to society, and what does this say about their own values?

5.College education and the 'Brain Drain'.
The brain drain is continuing and becoming even more pronounced with each contracting economic cycle.It costs enormous public wealth for India and Pakistan to train its doctors and engineers, but a large number leave their countries for wealthy nations, including US and Europe where they are well compensated. The same hold true for Russia and Eastern and Southern Europe that has seen its educated population leave for US, Canada, Australia, Germany and other wealthy nations. Each time there is a global economic contraction, as has been the case from 2008 until the present, a new wave of educated people, some of the most talented that could be helping their struggling nations, head for the wealthy countries. In short, college education that represents a major drain on society, especially in poor nations like India and Pakistan, to some degree benefits the wealthy nations that are mostly but not exclusively responsible for creating the structural conditions for economic contraction.

At the same time that the brain drain takes place, the poorer countries are slowly moving toward the American business (neo-liberal) privatization model of higher education. This model not only means excluding those at the bottom of the socioeconomic ladder from having access to higher education, it means that a segment of the prospective graduates will leave for the wealthy nations, thus perpetuating the vicious circle of the brain drain that is as old as imperialism.   

6. Conclusions and prospects

Higher education emerged in the Renaissance as a result of society's changing needs during a period of transition from a feudal/manorial structure to a mercantile urban-based structure that depended on long distance trade as well as commercial agriculture, animal husbandry, fisheries and mining. Society needed more doctors amid the plague and other epidemics, more lawyers to deal with an increasingly urban money-market economy, more chemists and mathematicians, more educated people to shape a new world. Although the irony of all this is that witch hunts ran parallel to the rise of higher education, progress in science led to progress in every sector from technology to military and political institutions and government bureaucracies that needed educated people for greater efficiency.

Ideally, higher education ought to serve the goal of self-discovery, creativity, and social responsibility and advancement. However, there is nothing wrong with higher education as a vehicle for a personal career, especially if that entails upward social mobility, even if the ideals are absent. What if today's higher education does not translate to any of these goals, and it is simply a business like any other collecting prospective students and treating them as 'paying customers'; and after they are no longer paying customers they are on their own holding debt and trying to compete with others in a saturated market of surplus graduates for jobs?

Higher education is in fact a mirror of society, a mirror of what it is today and where it is headed. Political and business elites should be very concerned with what they see in that mirror, sacrificing higher education for short-term profits, and sociopolitical conformity. If the solution is to come from any side, it cannot come from those responsible for the crisis in higher education as a business model, namely, from the politician and business elites, and least of all from college and university administrators who are more corrupt and ruthless than their political and business patrons. The solution can only come from the grassroots, from society itself that higher education is supposed to serve instead of exploiting it. 

1 comment:

Anonymous said...

"Today's college administrators are not rooted in
scholarship . . . ."

With that said, neither are instructors at any level of education and this is in part due to the loss of elected school officials vs the appointed at the local level as well as the implementation of No Child Left Behind--nationalizing education.

The grassroots voice spoke against the Hegelian dialectic being implemented into education especially in the United States at its inception. Opposition cited a plethora of cognitive dissonance being implemented using federal funds.

And then, evidence that it was being implemented at the university level as a model appeared. How's it working? You have clearly said. And, how does it benefit anyone?

SCHOOL TO WORK: GOALS 2000. Gotta get those regional taxes paid because of corruption that prevails in the provinces.

It benefits the WTO.