Correct College Pricing?

Ah, Jeffrey Dorfman. In my earlier article, Respectfully Disagree about Big Time College Sports I disagreed with Dr. Dorfman and his view of how much college football players are compensated. In a recent article about how much college costs, I largely agree with Dr. Dorfman views but respectfully disagree with a few of his details.

Before I start, I want to reiterate one of my biggest complaints about higher education writers; they all seem to focus on an ideal college experience that largely consists of the Ivy League, Baby Ivies, Ivy equivalents, or expensive liberal arts colleges. Everyone seems to do it; writers for The Atlantic, Forbes, The New York Times, and Inside Higher Ed., and The Chronicle are often biased by their own educational experiences when discussing all of higher education.

Back to the article. Dr. Dorfman’s article covers a lot of ground when it comes to how much college costs and he starts off with the beta topic of higher education, acceptance rates (alpha is cost). I have already written about acceptance rates and they tell you nothing about what type of learning occurs at an institution. Dr. Dorfman relates acceptance rates to supply and demand and that tuition at those schools are fairly priced and could even be higher. I agree!

If Williams wanted to charge $93k a year, Claremont McKenna $90k a year, Harvard $84k a year, and Princeton $80k a year for undergraduates (double current tuition), go for it! the reality is that the students who want to go to these schools will pay for it, aid will cover it, or they will figure out a way to come up with the money. I think it is a good idea because places like this will truly become the haute couture of higher education, they can continue to act like only the best and brightest attend, and their exclusivity will be solidified.

I also agree with Dr. Dorfman that supply and demand needs to be better applied to higher education; all institutions in higher education need to be grounded in solid business practices while following economic principles that the private sector follows. Colleges and universities cannot constantly grow and the growth that many experienced during the 80s and late 90s is gone. Programs and departments need to follow supply and demand (for the most part) and need to have funding not only for the short-term but also long-term.

Next Dr. Dorfman goes after federal loans as a contributor to to skewed college pricing. I agree that aspects of financial aid and federal loans have had a major unintended consequence when it comes to higher education (besides fraud). As Dr. Dorfman stated, “either way, more federal aid ends up bringing colleges more money rather than yielding savings for students and their families.”

In my view, the federal aid problem is health care light. When my wife and I had our son we had no idea how much it would cost because our hospital could not tell us; they had to submit the bill and then insurance would pay part of it with us left to cover the rest. This is bunk. You cannot shop around because no one can give you a straight answer. Higher education is similar to health care but not nearly as bad but that does not mean that it is good. Serious reform needs to occur because college pricing is bunk.

Finally my favorite quotes from Dr. Dorfman’s article.

“Students who expect to pursue careers that are not high paying would likely be better served by attending lower-priced public colleges. Students who would need to incur large student loans to attend a private college should carefully consider public education options.”

I agree; solid advice.

“Critics, just like students, need to remember that the public option is out there.”

This is my favorite quote from Dr. Dorfman’s article. To me this implies his circle of peers all went to the Ivy League or Ivy equivalents. For the majority of students out there, and I mean the vast majority of the millions of students out there, “the public option” is the only option. By having a statement like this shows a disconnect with the typical American family that wants their children to go to college but not have $50k in debt afterwards.

American families struggle to pay/help their kids with college because:

1. Median household income is $53.3k;

2. They still have to save for retirement;

3. They have to pay down other debts (own college loans, mortgage, et cetera.);

4. Multiple children.

All families want to help their children within reason but a median household income can only go so far. ‘Critics’ and writers who write about higher education are the ones that need to remember the public option.

“As long as affordable options are out there, why should we be concerned if there are also expensive choices? Nobody thinks that cars are unaffordable because Mercedes has a model that costs $100,000. College is not unaffordable because Harvard, Stanford, and other top schools are expensive. Students have plenty of other college options. Just as not everybody can buy a Mercedes, students should choose a college that they both love and can afford.”

I agree; who cares about Harvard, Stanford, and the like. Let the rich and the super motivated go to those schools and become titans of their fiefdoms while the majority of students go to those other schools, including community colleges that higher education writers seem to brush over constantly.