This article originally appeared in Forbes.com on December 22, 2015.
“Choco ration’s going up!”
A character in George Orwell’s dystopian novel, 1984, announces this rumor. The book’s protagonist, Winston Smith, is not deceived, and for good reason. In his work as a clerk in the Records department of the Ministry of Truth, Smith is ordered to “edit” earlier news stories, replacing the actual past ration amount of 30 grams with 20 grams. Thus, when the “official” number is later reported on the news, chocolate rations—which, in actuality, were being cut from 30 grams to 25—are announced to be “going up” from 20 to 25 grams.
The deception leaves Smith demoralized, and higher education reformers might know the feeling. Over the past quarter-century, average college tuitions nationwide have spiked 440 percent, nearly four times the rate of general inflation. Student-loan debt stands at $1.2 trillion, which, for the first time in history, exceeds total national credit-card debt. For years, defenders of the failed higher education status quo have sought to defend tuition hyperinflation and rising loan debt as the inevitable consequence of “declines in state funding for higher education.” According to this narrative, state legislators are presented as The Grinches Who Stole Affordable College. Never mind the unprecedented growth in college administrative expenses, as well as the inflationary effect of federally subsidized student loans over the same period. Instead, we are told, the fault lies with our elected representatives.
We heard the latest iteration of this argument in Saturday night’s debate among the Democratic Party’s presidential hopefuls. In an effort to explain tuition hyperinflation, Bernie Sanders argued, “The cost of college education is escalating a lot faster than the cost of inflation. There are a lot of factors involved in that . . . and that is that we have some colleges and universities that are spending a huge amount of money on fancy dormitories and on giant football stadiums. Maybe we should focus on quality education with well-paid faculty members. . . . And I understand in many universities a heck of a lot of vice presidents . . . earn a big salary.”
In opposition, Hillary Clinton advanced the familiar refrain, arguing that the biggest cause of escalating college tuitions is that “states have been disinvesting in higher education. . . . So states over a period of decades have put their money elsewhere—into prisons, into highways, into things other than higher education.”
Following the debate, AP Fact Check sided with candidate Clinton. Why? AP Fact Check writes: “Demos, a left-leaning think tank, said in a May study that the decline in state funding accounted for 79 percent of tuition hikes between 2001 and 2011.”
Based on my review of the data available for roughly the same period (2000-2010) in Texas, I’m not persuaded by the study that AP Fact Check deems authoritative. Texas is the nation’s second most-populous state, and among higher-education analysts, it is praised for having implemented “the most sophisticated and publicly available higher-education data set in the country.” In 2004, the governor of Texas signed an Executive Order announcing that “the public has the right to demand complete accountability for its investment in institutions of education.”
When we examine the Texas data for 2000-2010, we find the following. Looking at tuition and state funding on an inflation-adjusted, per-fulltime-pupil basis, the state legislature is found to have decreased funding by 15.9 percent, which might appear to support the Demos study. However, during the same period, Texas public university tuitions and fees collected (not merely the “list” prices, which are often discounted) roseby 76 percent.
Now, how can a 15.9 percent decrease in funding yield a 76 percent increase in university tuitions and fees? It seems to this writer that it cannot. Instead, the more nuanced truth regarding the relationship between funding and tuition is that there have been mild decreases in legislative funding that have been met by comparatively wild increases in university prices and spending.
For argument’s sake, it is possible that Texas is the lone outlier among the fifty states examined by the study deemed dispositive by AP Fact Check. Again, I’m doubtful because, for this to be the case, we would have to do the following:
(1) We would have to deny the validity of the recent Federal Reserve Bank studydemonstrating that the federal program of subsidized student loans is the single greatest cause of tuition hyperinflation. The study finds that for every dollar increase in Pell Grants, colleges raise tuition an average of 55 cents. For every dollar increase in federally subsidized student loans, colleges raise tuition an average of 65 cents.
(2) We would have to deny the validity of the Organization for Economic Cooperation and Development (OECD) data that show overall American expenditures on higher education to be the highest of all OECD nations, and twice the international average.
(3) We would have to affirm that the documented increases in college administrative staffs and expenses have come at no cost to the schools hiring them and thus at no cost to students in increased tuitions and fees. According to Benjamin Ginsberg’s 2011 study,The Fall of the Faculty: The All-Administrative University and Why It Matters, 40 years ago, U.S. colleges employed more faculty than administrators. But today, teachers make up less than half of college employees. “Forty years ago . . . the efforts of 446,830 professors were supported by 268,952 administrators and staffers. Over the past four decades, though, as the number of full-time professors increased slightly more than 50 percent . . . the number of administrators and administrative staffers employed by those schools increased by an astonishing 85 percent and 240 percent, respectively.”
Ginsberg also finds that, adjusting for inflation, from 1947 to 1995, “overall university spending increased 148 percent. Administrative spending, though, increased by a whopping 235 percent. Instructional spending, by contrast, increased only 128 percent, 20 points less than the overall rate of spending increase.”
Finally, Ginsberg reports that, from 1998 to 2003, deans and vice presidents saw their salaries increase as much as 50 percent. “By 2007, the median salary paid to a president of a doctoral degree-granting institution was $325,000. Eighty-one presidents earned more than $500,000 and twelve earned over $1 million.”
To believe the Demos study, we must believe that the massive growth in administrative budgets and senior administrators’ salaries has come at no additional expense to the students and legislatures who pay the bills. I am hard-pressed to believe this.
In this light, what does it really mean when some criticize state legislators for alleged higher-education “disinvestment”? The legislators are, after all, elected by the people, and it is the people, living under the economic malaise known as the “New Normal,” who have been forced over roughly the last decade to learn to do more with less. Is it unreasonable, then, that the people might expect our universities to make the same sacrifices that individuals, families, and private businesses have been making? Yet, for making this request, the people—the victims of tuition hyperinflation and crushing student-loan debt—are blamed for being insufficiently generous to higher education institutions.
At the very least, the above reflections might lead us to recognize, as Orwell writes elsewhere, that “we have now sunk to a depth at which the restatement of the obvious is the first duty of intelligent men.” So apprised, we might remember to take a more careful look when the defenders of the higher education status quo announce their next choco rations report.