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All Posts for The President's Blog

Colleges: Grinches or Santas?

December 21st, 2012 by dfarish

In my previous post, I noted the diametrically opposed reactions of some colleges and universities to the public’s rising concerns regarding the cost of a college education, and the ballooning debt taken on by a growing number of students and their families.

The large majority of both public and private institutions are tweaking what I believe to be a broken model: they are seeking to increase financial aid while looking for ways of economizing, but, while well intentioned, these are at best temporary bandages on a severe wound. Moreover, these solutions are not sustainable, and, in their efforts to economize, these campuses risk being perceived as cutting the quality of their educational offerings.

Too Rich To Be Generous?

December 17th, 2012 by dfarish

In the last few months, a number of the wealthiest colleges and universities in the country have been reconsidering the level of their financial aid. Paradoxically, their intent is not to increase their financial aid, but to reduce it. How do we reconcile societal concerns regarding the rising costs of higher education (and the corresponding rise in student debt) with the decision by wealthy colleges to spend less on student aid? What is going on?

Let’s turn the clock back about 30 years. In the early 1980s, there were, by today’s standards, only a handful of wealthy colleges and universities. Top-tier universities such as Duke and Brown had endowments of less than $150 million. Even at Harvard, endowment drawdown and annual giving contributed only a minor portion of the annual operating budget. And yet, as a fraction of median family income, the cost of college then was significantly more affordable than it is today.

How to Get Off the Merry-Go-Round

December 3rd, 2012 by dfarish

A recent analysis showed that the median family income in America, adjusted for inflation, has fallen to levels not seen since 1995. The median inflation-adjusted tuition sticker price at America’s private colleges and universities, however, has grown by more than 50 percent since 1995. The consequence, even with increases in institutional aid, is that a substantially smaller fraction of the population is able to afford today’s prices than was true in 1994.

How have we arrived at this undesirable – and, I would suggest, unacceptable – outcome?

Well, there are several reasons. Higher education is an inherently costly enterprise, and there are few economies of scale: doubling class size, for example, would save money, but it would come at the expense of a personalized learning environment – the primary selling point of private higher education.