¶ … Access and Equity of Higher Education by the Population Policy Analysis Memo Draft Format guidelines

Equity in higher education is a serious concern as the cost of tuition continues to increase. The cost of college tuition has increased by over 150% in the last three decades. Current financial pressure on students leads them to using student loans as a method to pay for college tuition or other strategies such as opting for two-year degrees. Higher education institutions are also facing the same economic pressure and feel forced to increase tuition fees leading to a vicious cycle of tuition fee increase. Looking at the expenditure of higher education institutions, the largest increase in expenditure over the same 30-year period has been in labor costs. The administrative costs per student enrolled has increased considerably (Ladd & Fiske, 2012). The current situation in higher education means the tuition fees are unsustainable and there need for cost-cutting strategies to be implemented.

Eight alternatives are proposed. The eight strategies are evaluated using a decision-matrix and the best solution is offering the traditional degrees at about half the cost by reducing the cost of capital and labor per student. By requiring faculty to teach more classes per semester, replacing faculty teaching trivial courses with teaching assistants, using buildings more effectively such as during the summer time, and having faculty members share administrators will reduce administrative expenses considerably. This will allow colleges to offer courses at an extremely low and affordable cost and increase equity of higher education considerably.

Background

Since the great recession, the issue of escalating costs of higher education has been of extreme importance to the economy. The net price that students pay for fees has been increasingly steadily and most families and individuals are indeed out of this range and forced to explore other options to finance their college education. An analysis conducted by Leach (2013) shows that tuitions fees have increased by more than 150% in the 20 years between 1988 and 2008 with the prices having increased by 30% from the period of 2008 to now. The middle class salaries have also not changed considerably in the same period. Calculations after adjusting for inflation show that the median middle class income of 2008 is $400 less than the median income of the year 1988, which was $33,400. Financial aid has also presented several challenges since though available, many students end up bearing huge costs when they leave their college and become part of the 24% unemployed graduates in the country. Even where employment is available, they often end up with low paying jobs that are unsustainable and they are unable to get out of debt. This is supported by data from Lewis (1990) that suggests that 50% of all college graduates will still be repaying their student loans after 20 years, which is the average student loan repayment period. This means that most of these college graduates will not be able to buy their home, save for their retirement, or even fund college education for their children.

Faced with these challenges, students have to find other options for college education. One is the two-year degree program that is much cheaper than the four-year option. The Department of Education reports that the number of students enrolling in two-year colleges has risen by 100% over the last ten years with about 50% of these being those who have dropped out of four-year programs. These two-year programs have been found to be insufficient to equip graduate with skills they need for future jobs. It is important for alternatives to be explored to enable more individuals attain proper college education to increase their competitiveness in the national and global economy.

Policy problem to be tackled

University fees have increased faster than the economy's inflation rate over the same period. In the last 30 years, college and university fees have quintupled, much higher compared to the inflation rate. Choudhury and Mahajan (2004) define this as an insatiable appetite for money for colleges that is akin to the situation of compulsive gamblers. Cost-cutting strategies need to be implemented for more of the middle-class to be able to attain a college degree and to increase their competitiveness in job opportunities.

One strategy suggested by Mr....

He also suggested other strategies such as consolidating or programmes that only attract a handful of students, or consider eliminating them altogether, to find ways to reduce administrative costs of universities and colleges, and to mix small classes with larger ones even where the college has few teachers (Schumpeter, 2011 ). Gilbert and Heller (2013) supports this and states that the cost of administrative support per student stands at $7,000 per year and has increased by over 60% in the last three decades. They suggest that these have the largest impact on the cost of education per student and there is need for them to be cut considerably to reduce the cost of education.
Cost-cutting is important for all universities though costs can be slashed by higher margins in certain institutions than others. These costs can be cut without sacrificing the value students achieve from their education and without creating inefficiencies in the education system. By reducing the cost of tuition, the industries that look to hire graduates will be able to access more talent.

Claims of harm

A recent survey run by the American Council on Education showed that close to 90% of college alumni reported that their experience in college was worth the cost and 85% felt that college education had at least adequately prepared them for their jobs. This bring the argument for the return on investment in terms of college graduates being appreciative of the costs of college education. This is the argument that is often presented by University Councils supporting their unwillingness to reduce the college fees. While it is accepted that higher education, is a key to success in the world through national competitiveness and being equipped with the necessary skills, the economy does not benefit if college education is out of reach for the majority population.

Similarly, the case for increased investment by colleges and universities in research, which is for the public good is laudable (Witmer, 1970). However, there is need to extend the reach for colleges and universities to increase the number of graduates in the country thus increase national competitiveness. Funds spent on nonacademic activities, such as counseling, are often important since it has been shown to improve graduation rates and support the well-being of students while at the college (Zollinger, 1984). These should, however, not be viewed as administrative bloat. However, investment in these activities can be done in a cost-effective way that eliminates the huge budget allocations and there is need to balance the budgetary allocations with the total revenue collections for the universities. Particularly, when considering the decreasing investment of states in higher education by about 13% across board, more students are unable to get into college because this increase impacts negatively on tuition fees (Lin & Vogt, 1996).

The income of college graduates is also significantly higher than that of high school graduates. High school graduates earn an average salary of $23,000 compared to the U.S. average of $41,000 above which most college graduates lie. Additionally, statistics presented by the Department of Justice shows that close to 70% of all inmates are high school dropouts. This places strong emphasis on the role of college education in ensuring a good job and reducing the rate of crime in the country. Higher education has been judged by many to be a great equalizer in the country. This is largely because even with a two-year degree, the person earns at least the country's average salary meaning many people are able to pull themselves out of poverty. However, this also means that many students who view the two-year degree as a cheaper option still do not get the same salary and benefits as those who go through the full four-year program. Furthermore, statistics show that less than 20% of the U.S. population has a college degree. These statistics are worrying considering even more people are unable to access college education, which may make this statistic go even lower.

In terms of university costs, it is accepted that universities and colleges are not immune to the effects of inflation. The cost of fuel, water, electricity, facility construction, etc. are increasing and universities need to cushion themselves from these costs by several measures. Looking deeper into these costs, the most significant increase in university costs over the last 30 years has been in labor costs. Administrative costs have increased by over 60% while instruction expenses have risen by 40%. The Goldwater Institute findings show that universities have expanded their administrative bloat considerably, the number of administrators employed per hundred students also rose by 40%, and the spending per student on administration rose by 66%.

Policy alternatives available

President Barrack Obama in a…