Oh, Where’d I Put Those Facts?
A few days ago the New York Times offered the following explanation for why public college and university students graduate with less debt than people attending for-profit schools:
[F]or-profit schools sometimes encourage students to borrow privately from the school, rather than from federal programs, which often have lower rates and loan forbearance for those who fall ill or become jobless.
Of course! Evil “subprime” education has teamed up with evil subprime lending to form the Dastardly Legion of Subprime Higher Ed!
Or maybe not. It could also be that the Old Grey Lady is losing her memory a bit and forgot about the, oh, $75 billion or so that public colleges get directly from state and local taxpayers to keep their prices down.
Darn those meddling facts.
Some ‘Unsung Heroes’ These Colleges Are
Heating and cooling equipment installed upside down. A ramp for the disabled too steep for wheelchairs. A leaning tower of time. A $3.4 million renovation for a theater slated for demolition. Payouts to everyone from airborne videographers to feng shui experts.
Welcome to community college!
These and a litany of other failures and abuses are chronicled in a new Los Angeles Times article on the disaster that has been the Los Angeles Community College District’s decade-long, $5.7 billion building orgy. It’s a tale made especially sickening by California college officials’ repeated wailing that state budget cuts are forcing them to dig “deep into bone.” It’s also galling in the face of Washington politicians’ continued berating of for-profit schools and blind-eye-turning toward excess throughout higher ed. And topping it all off, President Obama recently proclaimed community colleges the “unsung heroes” of American education.
They’ve certainly earned the “unsung” part.
Hurrah for ‘Draconian’ Education Cuts!
Over at the Daily Kos they’re getting ready to demonize. Some congressional Republicans opposed language in the continuing budget resolution passed yesterday that would fill a shortfall in Pell Grant funding and keep individual grants at their current sizes. By not filling the shortfall, individual grants would get smaller, something that Kos contributor Jed Lewison characterizes as “draconian.” He also suggests that Republican concerns foreshadow mean things to come in next year’s Congress.
Oh please, let this be true!
For far too long, almost anything related to education has seen pretty regular, sizeable funding increases due largely to the simplistic — and easily demagogued – notion that spending more money on education must be good. Anyone opposing such increases has generally been attacked as a fool or heartless idealogue. But here’s the thing: All this spending has produced little if any discernable good! In higher ed, it has mainly encouraged more and more people to pursue degrees that they either don’t need, can’t handle, or that don’t signify much learning, all while enabling colleges to raise their prices to capture the aid increases! In other words, all the magical thinking about education spending notwithstanding, the evidence strongly suggests that more spending ultimately does little educational good while bleeding taxpayers dry and expanding our utterly unsustainable debt.
So let’s get those “draconian” cuts going, and maybe even have an honest discussion of what really happens when government spends on “education.”
Harkin: Education Too Important Not to Mortgage Our Future
Yesterday, I wrote about a bill introduced by Sen. Tom Harkin (D-IA) that would allocate $23 billion to protect public schooling employment against the end of “stimulus” funding. I wrote that it appeared the stimulus would essentially set a new floor for education spending — as many had feared it would – not just be a one-time deal. It also seemed an utterly irresponsible expenditure given the nation’s almost unimaginable debt.
At a hearing on the measure yesterday, Harkin addressed the debt concern. Of course, he did it in the same way federal politicians have for years dealt with their spending the nation into oblivion. According to Inside Higher Ed, Harkin said the debt is a legitimate concern, but this particular issue is just too important to worry about it:
“We’re going to borrow from our kids and our grandkids to pay for this now? That shouldn’t be — we’re borrowing too much from our kids and grandkids,” Harkin said, channeling criticism he said he anticipated hearing. Harkin said he agreed with the overarching concern. But the fact that this money is targeted for education makes it different, he suggested. “How can you argue on the one hand that it’s okay for kids to borrow to go to college, but it’s not all right to borrow to make sure there’s a college for them to go to? That there are teachers in our high schools and grade schools to prepare these kids for the future? It seems to me if there’s one legitimate area where we can borrow from the future, it’s in education.”
Um, Senator, even if you think education is more important than utterly unsustainable debt, would you at least take a small moment to see if yet more spending and hiring would do any educational good? You know, if we’d get a positive return on our investment?
Oh wait — if you did that, you’d not only see that it is absurd to suggest that failing to furnish $23 billion would lead to the widespread demise of colleges and teachers (in 2008 we spent almost $1.1 trillion on education), you’d also see that decades of spending increases haven’t produced any meaningful improvements. K-12 test scores have been flat, literacy levels among college graduates dropping, and our international standing poor.
So Senator, feel free to think that a good education is more important than controlling profligate government spending. But don’t try to tell us that spending more will actually provide that good education. That just isn’t true.
Our Little Scholars
As I mentioned a few days ago, today is the “Day of Action” in California — and, it turns out, elsewhere – when college students and just general protectors of public schooling are supposed to take to the streets and demand that taxpayers fork over not one less red cent to students and schools.
Ironically, the mindless, property-destroying, absurd goings-on that have surrounded past such demonstrations in Cali — and are already in evidence today – brilliantly illustrate one major reason we need to cut higher education subsidies, not increase them. Clearly, too many college students have both far too much time on their hands, and far too little self control, to justify spending hard-earned taxpayer dough on their “education.”
But at least the ostensible motivation behind recreational rioting in California has been slightly related to a principle — namely, the principle that taxpayers owe students stuff. That’s actually a better excuse for taking to the streets than what set off last night’s student riots in College Park, Maryland: a victory in a basketball game. (To be fair, University of Maryland students also riot after losses – they’re no fair weather fans!)
And to think — one of the reasons we’re supposed to support massive subsidies for students is that it serves the common good. Go figure.
Test Cheating by National Education Standards Agency
When you erase a test score and write in a new one for your own benefit, that’s cheating, right? So what is it when you do this several thousand times?
Ofqual, the British education standards regulator, “secretly downgraded the GCSE [General Certificate of Secondary Education test] results of thousands of pupils to avoid public fury over dumbed-down tests,” reports the Daily Mail. “Fearing a row over inflated results, Ofqual’s chief executive ordered all exam boards to cut the number of pupils getting top scores just two days before marks were finalized.”
The argument for national education standards is based on a host of unexamined and incorrect assumptions. One is the belief that the authorities overseeing such standards (and associated testing) will have truth and transparency as their only motivations. As the above example illustrates, that’s rubbish. Bureaucrats and politicians are as self-interested as the rest of humanity, and they do, in practice, consult their own interests in the execution of their duties.
The way to deal with this reality is not to ignore it — as national standards advocates and other statists are wont to do — but rather to adopt systems for structuring human action that take it into consideration. In the context of education standards, that means leaving the standards-setting process to the competitive marketplace: make it easy for all families to choose whatever schools they deem best, allow schools to administer whatever curriculum and whatever tests they want, and allow higher ed and employers to weigh the value of the various standards and certifications that arise. Lousy standards that don’t reflect real achievement won’t be valued, good ones that do will be.
National standards advocates are right that children should be encouraged to do their best and that every child’s diploma should really mean something. But that doesn’t mean that every diploma has to mean the same thing. A competitive marketplace for education standards and testing would ensure both quality and relevance, while also allowing for the fact that very different students heading toward very different futures may want to strive to excel in different areas.
For a detailed account of the evidence on national standards and its alternatives, see Neal McCluskey’s excellent recent policy analysis on the subject, linked here.
Obama Ringing the Pell
As part of his ill-considered credentialing-to-compete initiative, President Obama wants to greatly increase both the size and availablity of Pell Grants. Under his proposed FY 2011 budget, the total pot of Pell aid would rise from $28.2 billion in 2009 to $34.8 billion in 2011; the maximum award would go from $5,350 to $5,710; and the number of students served would rise by around 1 million.
A critical question, of course, is whether increasing Pell will ultimately make college more affordable or self-defeatingly fuel further tuition inflation. The New York Times took that up in yesterday’s Room for Debate blog.
Economist Richard Vedder has long educated people about the inflationary effect of student aid, and does so again with great clarity. It’s higher-ed analyst Art Hauptman, however, whom I think best captures what likely occurs when Pell is combined with all the cheap loans and other aid furnished by Washington, states, and schools themselves:
Read the rest of this post »
College Students to Taxpayers: ‘Rent Now, Oppressors!’
Inside Higher Ed reports today on growing college student acitivism. And what are the young scholars suddenly so active about? Not unjust wars, racism, or anything else so high-minded. No, today the “no justice, no peace!” chants are all about the injustice of students being asked to pay for more of their hugely taxpayer-subsidized educations.
There’s a word for this kind of activism, and it’s not “idealism” or anything else so complimentary. It’s “rent seeking.” Or, if you want to put it more bluntly, “freeloading.”
Degree Disaster Behind The Great Wall
Based on my regular reading on education, but not China specifically, I know that the world’s most populous nation has had a lot of trouble finding jobs for its throngs of recent college graduates. I wrote a bit about that yesterday, pointing out that the important higher education lesson from China is that pumping out more college grads is meaningless if they don’t have skills that are in demand. Well, thanks to a very helpful Cato@Liberty reader who actually lives in China (and wishes to remain anonymous) I now have a much better idea just how important that lesson is. He directed me to this Asia Times article that includes, among many fascinating tidbits, this startling revelation:
An explosive report released by the Chinese Academy of Social Sciences (CASS) in September said earnings of graduates were now at par and even lower than those of migrant laborers [italics added].
Wow! If this report is accurate, until now I have had no idea how truly ridiculous Washington’s obsession with pumping out more degrees to keep up with the Chinese has been — and I’ve been pretty sure it’s ridiculous! Much more troubling, if I’ve had little clue about the true extent of the absurdity, imagine how far from grasping it our government-loving federal politicians have been! Of course, as I wrote yesterday, even if they did know it, they probably wouldn’t let on.
History Fun Fact: Ayn Rand Liked Ed Tax Credits
Many thanks to Lisa Snell at Reason for bringing this interesting historical fun fact from 1973 to light: Ayn Rand was a fan of education tax credits:
In the face of such evidence, one would expect the government’s performance in the field of education to be questioned, at the least, [but] the growing failures of the educational establishment are followed by the appropriation of larger and larger sums. There is, however, a practical alternative: tax credits for education.
The essentials of the idea (in my version) are as follows: an individual citizen would be given tax credits for the money he spends on education, whether his own education, his children’s, or any person’s he wants to put through a bona fide school of his own choice (including primary, secondary, and higher education).
Rand’s support for credits is interesting for a number of reasons, not least the fact that she explicitly endorses credits, not vouchers. I’ve had numerous and largely fruitless arguments over which policy is most “free-market” or least distorting. To me it is obvious that credits are the most “free-market” education reform. Now I can skip the arguments and yell, “Ayn Rand!”
Rand’s essay also highlights the fact that education tax credits were, throughout the 1970s and 1980s, the most prominent private school policy on the scene. Federal tax credits were a live issue under Nixon and Carter. Ronald Reagan and the Republican Party gave strong and explicit support for education tax credits throughout the 1980’s – with tax credits, but not vouchers, mentioned specifically in the Republican Party platforms of 1980, 1984, and 1988.
The largely forgotten history of education tax credits . . . interesting . . .
Nothing Good about The Higher Ed Pricing Game
On Tuesday I noted that the College Board had released its annual reports on college prices and student aid. At the time I wrote the post I hadn’t yet been able to download the reports, but was planning to provide a rundown of their major findings once I’d read them. I’ve now done the latter, but it turns out that Ben Miller over at the Quick and the ED has already posted a pretty good summary of the most important findings. Go there if you want the highlights. Don’t go there, though, if you want to know what the highlights mean, at least for anyone other than students. For that, you’ll have to read on here….
The big news is that net college prices — what students pay after aid– have actually decreased over the last 15 years. While sticker prices were rising much faster than incomes and inflation, what students were actually paying dropped. The implication of this is so obvious that Mr. Magoo couldn’t mistake it: Student aid, much of which comes through taxpayers, enables schools to charge ever-higher prices with near impunity.
Back to the Quick and the ED. To some degree, Miller sees declining net price as a triumph for federal aid, making college more affordable even as prices explode:
This story should be encouraging for legislators that fought hard to win Pell Grant increases over the last few years. The steepest decreases in net price occur beginning in the 2007-2008 academic year, the same time Congress began passing legislation that boosted the maximum Pell Grant award several times. This at least suggests that the money spent on the program did play some role in lessening the financial burden for students and was not completely eaten up by sticker price increases.
On the flip side, Miller at least acknowledges that:
The net price figure also lessens the pressure on schools to actually take proactive steps to lower their costs. If the price you list isn’t actually what you charge, then why should anyone care what the listed price is and how high it gets? Net price thus serves as a kind of smokescreen that gets colleges at least partially off fo[r] charging an arm and a leg.
So what’s wrong with this analysis?
Most important is that Miller softpedals the aid effect, suggesting that the main negative consequence of ever-increasing assistance is that it bleeds off a bit of the pressure for schools to lower costs. But it likely has a much more destructive effect than that, not just curbing efficiency pressures, but enabling schools to constantly charge and spend more. It’s a likelihood that student-aid defenders try to dispel by citing studies that cover very short periods of time, or that simply pronounce that we don’t know that it happens. That it probably happens, however, has been borne out empirically, and it’s readily ackowledged by prominent higher educators including former Harvard president Derek Bok, former Stanford vice president William F. Massy, and former University of Iowa president Howard Bowen. Indeed, the latter’s “law” couldn’t be more blunt: “Universities will raise all the money they can and spend all the money they raise.”
Miller’s other major failing is that he completely ignores that all this aid has to come from somwhere, and that “somewhere” is largely taxpayers. (OK, first it’s China.) Just to give you a sense of the impact on taxpayers, College Board data show that between the 1998-99 and 2008-09 academic years, total federal aid — including grant money recipients don’t have to pay back, and loans they (sometimes) do — rose from $61.1 billion to $116.8 billion. Add state aid to that, and the total goes from $66.6 billion to $126.2 billion.
And what are some of the major downsides of these forced third-party payments? Miller mentions a few pricing difficulties for students, but makes no mention of the potentially huge negative consequences for the nation: Encouraging lots of people to attend college who simply aren’t prepared for it; cranking out many more degrees than the job market demands; and potentially slowing economic growth by taking funds from productive uses and giving it to efficiency-averse colleges and students.
The big finding in the latest College Board data, which the Quick and the ED nails, is that net college prices have been going down. The important story, however, is that this is bad news for the country. Unfortunately, the Quick and the Ed misses that almost completely.
Lies Our Professors Tell Us
On Sunday, the Washington Post ran an op-ed by the chancellor and vice chancellor of the University of California, Berkeley, in which the writers proposed that the federal government start pumping money into a select few public universities. Why? On the constantly repeated but never substantiated assertion that state and local governments have been cutting those schools off.
As I point out in the following, unpublished letter to the editor, that is what we in the business call “a lie:”
It’s unfortunate that officials of a taxpayer-funded university felt the need to deceive in order to get more taxpayer dough, but that’s what UC Berkeley’s Robert Birgeneau and Frank Yeary did. Writing about the supposedly dire financial straits of public higher education (“Rescuing Our Public Universities,” September 27), Birgeneau and Yeary lamented decades of “material and progressive disinvestment by states in higher education.” But there’s been no such disinvestment, at least over the last quarter-century. According to inflation-adjusted data from the State Higher Education Executive Officers, in 1983 state and local expenditures per public-college pupil totaled $6,478. In 2008 they hit $7,059. At the same time, public-college enrollment ballooned from under 8 million students to over 10 million. That translates into anything but a “disinvestment” in the public ivory tower, no matter what its penthouse residents may say.
Since letters to the editor typically have to be pretty short I left out readily available data for California, data which would, of course, be most relevant to the destitute scholars of Berkeley. Since I have more space here, let’s take a look: In 1983, again using inflation-adjusted SHEEO numbers, state and local governments in the Golden State provided $5,963 per full-time-equivalent student. In 2008, they furnished $7,177, a 20 percent increase. And this while enrollment grew from about 1.2 million students to 1.7 million! Of course, spending didn’t go up in a straight line — it went up and down with the business cycle — but in no way was there anything you could call appreciable ”disinvestment.”
Unfortunately, higher education is awash in lies like these. Therefore, our debunking will not stop here! On Tuesday, October 6, at a Cato Institute/Pope Center for Higher Education Policy debate, we’ll deal with another of the ivory tower’s great truth-defying proclamations: that colleges and universities raise their prices at astronomical rates not because abundant, largely taxpayer-funded student aid makes doing so easy, but because they have to!
It’s a doozy of a declaration that should set off a doozy of a debate! To register to attend what should be a terrific event, or just to watch online, follow this link.
I hope to see you there, and remember: Don’t believe everything your professors tell you, especially when it impacts their wallets!
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