The high cost of not investing in U.S. colleges

As states pull back support for higher education, the costs of college are being shifted to U.S. families.

Americans are right to be worried about the ever-rising cost of college and student debt. The U.S. Department of Education's recently-released College Scorecard is an attempt to quell this anxiety by providing accessible data on the costs and outcomes for colleges across the nation. The idea is to help students better understand what they're getting into. Certainly, efforts to improve transparency and empower students are laudable. Unfortunately, they do not address the heart of the problem.

The costs of college are disquieting for middle-class America not because they are hard to decipher. Rather, it has become all too clear to most Americans that post-secondary education is expensive. As recently as the 1990s, however, students and their families paid little attention to this fact because they were asked to pay a small share of these costs. Now, as states across the country pull back on their support for higher education, the costs of college are being shifted to American families. Naturally, this ignites occasional crises, like the one unfolding at the University of Wisconsin. Faced with ever-declining state support, Wisconsin's chancellor is now pushing to admit more out-of-state students, who will pay even higher tuition.

Yet American families' angst about the cost of higher education is not driven by dust-ups like what's happening at elite public universities like Wisconsin or by the knee-buckling tuition at places like Princeton or Vassar. American families' sense of the cost of higher education is being driven by their children's experiences at community colleges, or in the California State system and at places like North Texas and Maryland's Towson University.

Quietly, a relentless retrenchment of state support for higher education has hamstrung the open admission and less-selective public colleges and universities that educate the vast majority of students. At the least-selective, four-year public colleges, the real per-student revenue from state appropriations has fallen from about $8,500 to $6,000 since 1988. And these are only averages; there are cases where the decline in state support is much steeper. The situation is even worse at community colleges. And the forecast is not good either. As state revenues have recovered after the 2008 financial crisis, state support has continued to fall in 47 of 50 states, including Maryland, where spending dropped 6.8 percent per student in that time frame.

To make up for lost revenue, these colleges are forced to raise tuition and/or cut services. In my recent work with Steven Hemelt at the University of North Carolina, we found that large declines in state support at community colleges and the least selective public four-year colleges led to higher tuition charged to students along with cut-backs in spending on instruction, student support, academic services and maintenance.

This has not been true at the more selective public universities like Wisconsin, where increases in tuition revenue have forestalled these cuts. For highly-selective and renowned public universities, the demand for seats from students of means is bottomless. Tellingly, at the University of California Berkeley, the New Yorker reported in 2010 that a faculty liaison to the regents claimed that legislators had essentially told them "'The student is your A.T.M. They're how you should balance the budget.'"

Unless we want students to pay a larger and larger share of their education and many to get less for it, we cannot circumvent the need to increase the level of public subsidy for higher education. And we need to go beyond means-tested strategies like Pell Grants to achieve this end. Public higher education has historically been a springboard of opportunity to the children of the middle class. Indeed, the foundation of the American Century was laid by a massive investment in secondary education. Nearly three quarters of children born at the dawn of the 20th Century didn't start high school. By mid-century, more than three quarters finished high school.

In this century, it is starting and finishing college that is the sine qua non for the welfare of young Americans and integral for the nation's economic growth. While recent developments help clarify the costs of investing in college for prospective students, it is not at all clear if we as a nation understand the costs of not investing in public colleges and universities.

Dave Marcotte is director of the Washington Institute for Public Affairs Research at American University. His email is marcotte@american.edu; Twitter: @dave_marcotte.

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