<p>"Californians will get the first chance to comment on President Obama's proposals to make college more affordable during a public forum this week at Cal State Dominguez Hills, officials said.</p>
<p>The ratings score card would be developed for the 2015 school year using such measures as the percentage of low-income students receiving federal Pell grants, average tuition and student debt, graduation and transfer rates, and graduate incomes." ...</p>
<p>Hoping these forums will spread to other states.</p>
<p>Suppose the government does award more financial aid to students at schools with higher alumni incomes, less debt at graduation, and higher graduation rates. Which colleges will benefit? Colleges with those characteristics tend to be the richest schools and the ones that already have the best need-based financial aid. </p>
<p>How will the government incentivize education that results in higher alumni incomes without dis-incentivizing careers (like teaching) that have low incomes, but serve important public policy objectives?</p>
<p>Instead of creating a new system, why not simply increase the funding levels of existing systems (such as Pell grants or other forms of federal student aid)?</p>
<p>Which in turn is how we got college education to be this expensive in the first place. Federal aid in the form of grants and loans has increased tremendously in the last three decades and merely allowed schools to charge higher and higher prices.</p>
<p>Pell + direct loans are about $11,000 per year, right? That does not seem to account for that huge a portion of the $60,000 list price at the most expensive schools.</p>
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<p>It would only really work if such measures were compared against expectations based on incoming student characteristics (academic preparation and financial means). Obviously, a school whose frosh class was mainly wealthy students with top end high school academic credentials should be expected to have very high graduation rates compared to a school whose frosh class was mainly students from low income families with high school academic credentials that indicate likely college readiness, but nowhere near as assured as top end high school academic credentials.</p>
<p>No, there’s also demand driven inflation, where relatively wealthy people are chasing a scarce product. But it wasn’t all that long ago that $11K a year could pay for all those schools that now cost $60K a year, or a good chunk of the annual cost. And public institutions were WAY cheaper than they are now. We have now migrated to a system where different people are charged different prices for the same product. It truly has become “from each according to his ability (to pay), to each, according to his (inability to pay)”. So, not only do some get to pay more for the product because they have a higher income, they also get to pay higher taxes to subsidize those who have lower incomes. There’s something morally bankrupt about that, especially from institutions that claim to be “non-profit”. (This is not just about higher education, all non-profits and even governments seem to be building empires these days for the benefit of the employees.)</p>
<p>I think we all know where the problem lies - it’s that higher education in general has become bloated with people who generate no revenue, they just add to the empire. It’s much more personally profitable to become an administrator than it is a professor, and I dare say it’s much easier to become an administrator as well, as long as one is a political animal. The number of administrators added in the past 20 years has outpaced the number of tenured faculty at leading research universities by over 8:1. The number of adminstrators is 50% higher than it was 10 years ago, the number of professors has barely changed. </p>
<p>In the words of P.J. O’Rourke, “What the f do they do all day and why does it cost so much gd money?”</p>
<p>In 1987, Stanford tuition was $11,208. Let’s say that room, board, and misc expenses were around $6,000 then, for a total of about $17,208. Adjusting for CPI inflation, that is $35,469 equivalent in today’s dollars.</p>
<p>In 1987, the maximum Pell grant award was $2,100, equivalent to $4,328 in today’s dollars. Stafford loan limits were $2,625 then, equivalent to $5,411 in today’s dollars. So the total then was $4,725, equivalent to $9,739 in today’s dollars. So those government grants and loans covered about 27% of the Stanford cost then, versus about 18% of the cost now.</p>
<p>Yes, but when you get right down to it, most Pell grants are used at public institutions - state schools and community colleges. I’m really not sure which came first, public schools raising their rates and private schools feeling they shouldn’t cost the same, the so-called luxury effect, or did private schools raise their rates and public schools felt like they could too. Or it might be mutual, combined with a state government drop in funding for higher education. </p>
<p>And like I said, we’ve also observed a tremendous shift in the non-profit world at the same time as well, where non-profits went from being focused on basically being charities with the public welfare as the primary focus to pseudo-businesses, where there may not be owners who profit, but employees who do. From higher ed to hospitals, mega-churches to government, they’ve all gone from public service to private gain. Throwing more money at the non-profit world only seems to create a feeding frenzy, where the primary goal is to suck up as much money as possible, so the administrators who run them can skim even more into their own pockets.</p>
<p>Regarding public schools raising their costs, a look at historic tuition levels in California shows that they tended to remain flat or increase slightly during good economic times, but increased greatly during economic downturns, when the tax revenues to the state government went down and the state government cut the universities’ budgets.</p>
<p>Yet, somehow, the UC system manages to spend $100,000 per student. You read correctly, and that’s not a typo. A $24 billion dollar budget and 240,000 students. That is just insane.</p>
<p>That amount does include a lot of stuff like medical center* income and spending, research income and spending, etc… How much of that is directly related to student education is not necessarily easy to figure out from the high level budget overview categories.</p>
<p>True, but calculate it the other way. 240,000 students will take approximately 2 million courses a year, slightly more than an average of 4 per semester. If each professor teach 2 courses per semester and two semesters per year, with an average of 20 students per class, that’s 25,000 professors. and if we generously gave them a pay and benefits package that averaged $150K per professor, and you’re at $3.75 billion. Let’s triple that to cover facilities and administrative overhead, which is really pretty inefficient in the private sector, and we’re still not even to $12 billion, less than half the budget. Whack off the quarter of the budget that goes for the medical centers, and we’ve got a mysterious $6 billion dollar inefficiency.</p>
<p>Maybe they could call it the Affordable College Act (ACA) and develop a one-stop shopping website where students could easily shop for much lower tuition rates than they’re currently paying…oh wait :(</p>
<p>There is an old saying when it comes to performance of a group: “it is not what you expect, it is what you inspect”</p>
<p>If they start to measure graduate income and the colleges take these measures seriously, doesn’t that create an incentive to move away from offering less of the less profitable majors and doesn’t it create disincentives to take a risk on applicants who may seem to have potential but have not demonstrated it yet?</p>
<p>“Maybe they could call it the Affordable College Act (ACA) and develop a one-stop shopping website where students could easily shop for much lower tuition rates than they’re currently paying…oh wait”</p>
<p>Priceless, Wolverine86!</p>
<p>I don’t trust government to rank colleges and I see no value in wasting tax dollars on the exercise. There will be blatant favoritism and irrelevant criteria used in the rankings. The government does not belong in the college ranking business. But government seems to thing it belongs in lots more places than I think it belongs.</p>