James V. Koch’s indictment of the U.S. higher education system can be summarized as follows: The cost of attending four-year public universities has soared in recent decades, creating an affordability crisis. Lower- and middle-income students and their families have coped by piling up massive student loans to the point where indebtedness has become a major social and economic problem. Higher-ed institutions, especially those with brand names and pricing power, have extracted wealth from its students to fund institutional priorities of bolstering prestige and influence.
The underlying problem, Koch suggests in his recently published book, “The Impoverishment of the American College Student,” can be traced to an asymmetry in political and market power.
Undergraduate students come and go. They and their families usually focus intently on college costs for a period of one to six years. After this, their attention dissipates. There is no permanent constituency of interested parties or victims. … Hence it is difficult to organize student or parent pressure groups that might address tuition and fee issues…
By contrast, the institutional interests of colleges, universities, and their bureaucracies endure. Boards of Visitors, set up to provide oversight of ambitious administrators, are routinely captured and dominated by university presidents. Board members adopt the goals and priorities of the administration rather than those of largely invisible students and families.
“Many members of the boards of these institution have been co-opted by those institutions and their presidents,” writes Koch. “Too often, they act as if their primary duty is to find ways for their institutions, its administrators, and its faculty to prosper as opposed to representing citizens, taxpayers, students, and families.”
As former president of the University of Montana and then Old Dominion University, and as a consultant to dozens of institutions, Koch should know.
I’ve observed dozens of skillful college presidents fill the ears of board members with enticing, institution-centered narratives; watched them cleverly present their boards with leading questions and topics that demonstrated the “need” for their initiatives; observed them showing board members their institution’s points of pride; … saw them feed and entertain board members sumptuously; listened to board members being flattered concerning the value of their services; and, finally, watched skilled, charismatic presidents send their board members home happy with the thought their “their” institution was on the right track. …
Board members … are deluged with mountains of information, nearly always positive. Seldom are data concerning affordability and access part of their data smorgasbord. … In fewer than 20 percent of cases have I ever witnessed a meaningful board discussion (public or private) that either explored the basic purpose of the institution or elucidated the public responsibilities of governing board members. Questions of affordability and access seldom arise.
So, what is to be done?
Koch does not believe that micro-management by state government is a viable solution. Rather, he says, the higher-ed system needs more transparency, different incentives, and governance reform.
The first step is to enhance transparency. Abundant information about individual colleges and universities is available online, but it is fragmented and scattered. “We need to find ways to make students and their families more informed about college choices.” Koch would like to see colleges publish sticker prices and net prices (accounting for financial aid) across income levels. He’d like to see student persistence rates, graduation rates, employment rates, and alumni incomes broken down by college majors. More radically, he argues for posting complete line-item budgets online, making presidential papers public after a year, and opening up the deliberations of college foundations.
While transparency is desirable, Koch acknowledges, it is not sufficient in itself to drive change. Accurate consumer information can help discipline the higher-ed marketplace but it does not eliminate the causes of cost-inflating behaviors.
A second approach is to place prices on previously “free” resources. “A portion of the solution to the collegiate cost conundrum … is to have institutions begin to price heretofore free resources such as space, utilities, and computer support.” The “space” problem is a classic example. “Departments and programs seldom pay for their use of space and therefore often attempt to control as much space as they can and demand incremental space whenever possible.”
Third, the activities of foundations should be opened up to public scrutiny.
Fourth, states should promote stronger state oversight boards to restrain curricular and programmatic bloat. Koch describes the State Council of Higher Education for Virginia, SCHEV, as a relatively weak board. “One can argue … that Virginia institutions have utilized their freedom to add expensive programs and complexity beyond what has been appropriate, and this is a reason why tuition and fees in that state not only are high but have increased more rapidly than the national average since the turn of the century.” However, he acknowledges that Virginia’s system allows more scope for innovation and differentiation between institutions. “Once must balance the costs of operating strong or weak statewide boards against their benefits.”
Fifth, states should reform governance.
To reverse the affordability crisis in public higher education, we [should] require governors to appoint board members who first of all have been educated to understand what has been going on in higher education, and second who view their major responsibility as being to citizens, taxpayers, and students rather than to a specific institution and its charismatic president. … Board members need an evidentiary look at trends such as administrative proliferation, the financial tradeoff between instruction and research, and the expansion of amenities.
As much as they need more information, board members need courage, Koch says. “They must be willing to ask probing questions at opportune times and look beyond institutional narratives and the rhetoric of administrators and faculty.”
Failure to reform higher ed, he warns, will make colleges and universities more unaffordable and less accessible, perpetuate economic and social stratification, and contribute to social discord.
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