The State of the Union on college costs

So let me put colleges and universities on notice: If you can’t stop tuition from going up, the funding you get from taxpayers will go down. Higher education can’t be a luxury. It is an economic imperative that every family in America should be able to afford.

Barak Obama, State of Union 2012

Does this speech signal that the time has finally arrived when the government - which pays a good part of the bill - will step in to limit the rapid and seemingly never ending growth of tuition? In normal times, the answer would likely be "yes" given that politicians from both sides of the aisle have been introducing bills that would cap tuition in one way or another for almost a decade.  Thus, we might expect to see a quick moving bipartisan effort.

These, of course, are not times when bipartisan efforts go very far, so Obama's statements will probably push Republicans into fierce opposition to the idea. The response of Representative Virginia Foxx, the North Carolina Republican who is chairwoman of the House Higher Education subcommittee, is probably a pretty good representation of what we will now hear from the Republican side:

The president is saying that people can’t afford to go to college anymore, and that just simply is not true. Tuition is too high at most schools, but it isn’t the job of the federal government to punish those schools. It’s very arbitrary, and the president sounds like a dictator.

So this probably won't be the tipping point for this issue. But before the higher education community breathes a sigh of relief, its members should note that a President of the United States views the issue as important enough, with enough broad voter appeal, to put it into a State of the Union address, and he is continuing to speak about it at public events. It would be surprising if we didn't hear a lot more over the next two years about the relationship between tuition increases and taxpayer support. And, despite the negative initial overall response of Representative Foxx, it should be noted that she agreed that tuition is too high at most schools - hardly the position that makes a strong ally in this matter. 

The reported responses from the academic community to Obama's speech, sadly, fall pretty much as one would anticipate -The current system is close to perfect, and any constraints (fiscal or administrative) will lead to declines in educational outcomes. This is indeed the likely outcome if educational institutions try to handle the constraints without changing their basic approach.  

However this speech makes it increasingly clear that the reality must be faced - it is simply not possible for higher education costs to increase at 3% above inflation forever, and the end of the period of rapid increases is getting closer. Educational leaders that refuse to come to grips with this reality are ensuring that the negative outcomes they describe will indeed occur.

It is highly likely that the changes that will be required will involve things that most people in traditional higher education find undesirable because they break with comfortable traditional standards of "how things should be done". But the economic realities of the United States (and most of the rest of the world) are such that "undesirable" actions have been, are, and will be required of almost every segment in order to transition to new, viable configurations. Does higher education have the leadership to rise to the challenge of this kind of tranformative change, or will it simply sink into mediocrity while defending the status quo?

Comments

[tdaxp]

Obama's words clearly single he plans to do nothing, as in recent years the hike in tuition costs have been driven by a decrease in state funding.

So his words, with that unstated fact stated, become:

"If you can’t stop tuition from going up because the funding you get from the taxpays is going down, the funding you get from taxpayers will go down."

Lloyd comments: There is no doubt that recent tuition hikes in the public sector have been driven by decreasing state funding. However, the underlying issue for many years has been that the cost of providing the education has increased much faster than inflation. There was little reason for colleges to control costs when there was lots of money around, coming from both states and the federal government. Obama is just saying that colleges have to get serious about controlling costs if they want to continue getting educational aid from the federal government, which seems to me to be perfectly reasonable in a time of constrained resources. Whether his proposal appropriately takes into account the pressures on tuition caused by decreasing state support is debatable.