Category Archives: Higher Education

Administration in China’s Higher Ed System: A Problem of Kind, Not Degree

Where there is a problem in an American university, a university administrator will be hired to address it. It does not matter if the problem has a solution: as Stanford sociologist John Meyer cynically explained in a lecture this week in Beijing, as formal organizations such as universities expand beyond their core mission, the answer is to hire a professional to accommodate each additional new function, no matter how difficult or unnecessary it may seem. “You have to hire a professional,” he said. “That’s how you prove that someone is doing something when they should be doing nothing.”

While the American higher education system has been dominated by growth in the number of administrators, the crux of China’s higher education shift in the last decade-plus has been an unprecedented expansion in the number of students. The Chinese higher education system counted 36.5 million students in 2852 postsecondary institutions in 2015. From 2003 to 2013, total enrollments increased more than 200 percent, more than 10 times the growth in the United States over the same period

The 2016 budget expenditures for the 73 national universities in China. Even if you don't read Chinese, you can figure out that the numbers drop off pretty quickly.

The 2016 budget expenditures for the 73 national universities in China. Even if you don’t read Chinese, you can figure out that the numbers drop off pretty quickly.

Since the Chinese government began the latest round of higher education expansion in 1999, at the tail end of the Asian Financial Crisis, it has excelled at enrolling students but struggled to actually educate them. Most students will enter middle- and lower-tier schools, but funding and attention remain concentrated on the most elite schools — even compared to merely elite institutions. Tsinghua University, one of China’s top two schools, is slated to spend 18.2 billion yuan in 2016; more than double every other school in the nation except Peking University, Zhejiang University, and Shanghai Jiaotong University. (see chart, right)

Many scholars and commentators criticize the university’s administrative system for holding back the development of China’s higher education. But although the inequality between schools is reminiscent of problems in the United States, the administrative issue that plagues China’s higher education system is a difference of kind, not of degree. As I explain in my new piece in this month’s Washington Monthly, China’s problem of over-administration is a question of concentrated political power, not of administrative bloat.

Administrative expansion, combined with decreasing state funding, more price discrimination, and the Chivas Regal effect that equates higher price with higher quality, has spurred massive tuition increases in American higher education. It is extraordinarily expensive to go to college in the United States: the annual cost of attending an elite private college, or a public college for out-of-state students, is far higher than the median household income in the country.

None of this can apply in China because the state controls all of these levers. Tuition levels are set by the state and have not increased in a decade. Most schools rely almost entirely on government funding for their revenue; few universities except for the most elite schools can draw a significant amount of money from other sources, such as donations or external grants. Continue reading

In Defense of Free Public Higher Education

I’m late to the party. Last week, Matt Bruenig offered 3 counterintuitive theses about the price of higher education and whether public college should be free. Bruenig’s major concern is that the price of higher education is really a rich person’s issue because most people who attend college and who are feeling the brunt of the price hikes are at least moderately wealthy, if not very wealthy. His follow-up is that progressives who argue for free public higher education are, to put it kindly, missing the boat.

A spirited back-and-forth ensued, a number of critiques were put forth, and Bruenig responded to some of those. Meanwhile, I made a really nice dish of roasted Brussels sprouts and learned how to brew beer.

Luckily, I’ve always liked to be fashionably late. Now I will make my entrance to the party. Nobody get too excited, please.

As an outspoken progressive, I agree with Bruenig on most issues. (Disclaimer: we have met a few times in “real” life and are in a philosophy discussion group together). However, we tend do disagree on some of the specifics about higher ed. Allow me to put my own few cents into the ring where I think I can add value to the discussion that has already occurred.

Matt writes, “So my main point, if it can be drilled down, is that poor people are under-represented in four-year public colleges and will continue to be under-represented in four-year public colleges even if you increase subsidies. I am therefore moved to rail against those who think that such a move would actually make these colleges more universally accessible. They weren’t universally acceptable in the past when they [were] more affordable, and I don’t see that being the case in the future. The fact remains that removing the “pay toll” does not remove the “credential toll,” and we know that the credential toll disproportionately screens out poor people and people of color.”

This is a great summary, and offers a good starting board for discussing some of these issues.

Poor Vs. Working Class Vs. Middle Class Vs. Rich Vs. Uber-Rich Vs. Uber-Uber-Rich Vs…

Students at big or elite 4-year colleges, both public and private, are skewed toward the wealthy. This is true. (Private schools are more skewed, and elite private schools are even more skewed, but some publics are not as far behind as one might think). Poor students are particularly under-represented. This is also true.

But the distributional question is not quite that simple. Bruenig writes, “Recent grumblings about tuition [are] driven by the concerns of the richest half.” This is a very strange way of dividing different categories of people. In my frame, the richest half is not a grouping that makes any sense whatsoever. It includes everyone above $50,000 of income. A family with $50,000 of income facing a $15,000-$20,000 tuition bill cannot be grouped with a family making $200,000-$500,000. To talk about this issue, we need to talk about the middle class.

The term “middle class” has been bludgeoned so hard by every politician in existence that it has all but lost its meaning much of the time. Ignoring the meaninglessness of the term for one moment, if we use a very generous but standard definition of the middle class – the 20th to 80th percentiles of income – we see that about 60% of dependent public 4-year students fit this definition. (Dependent students are those that have to visit their parents during the holidays and pretend that they are enjoying school, while independent students are those who often are either married, have children themselves, or are older than the 18-22 cohort and may or may not have to visit their parents during the holidays). Including independent students in this analysis is difficult, but it is likely that it would make this number significantly higher. This is not to say that the distribution is totally fine; the poor are under-represented and even the distribution of those in the 20th to 80th percentiles tilts toward the higher earners. But it does mean that we are not simply looking at a rich vs. poor issue as Bruenig describes.

Therefore, there is absolutely no way we can consider this simply a “rich” person’s issue; it is much more a middle class issue (and increasingly so as the price hikes edge down to all but the poorest students). Looking at Matt’s original charts on price increases, it is clear that there has been a huge price jump for lower-middle class students on par with that of the rich.

This is not just semantics. The middle class serves an important function both socially and politically, and free public higher education with the correct progressive funding mechanism and the right accountability standards is one possible reform to make college a better program first and foremost for the middle class.

While writing this piece, or perhaps when I was making the Brussels sprouts, I had one of those fundamental epiphanies that we dream about but rarely ever have. In this case, my realization was about how we bifurcate people into categories. Bruenig, I think, separates the world into the poor and everyone else. There are policies that help the poor, and there are policies that help everyone else. We ought to focus on the policies that help the poor. Sometimes, but rarely, there might be overlap.

I separate the world a little differently. I separate the world into the very rich and everyone else. There are policies that help the poor, and there are policies that help everyone else. We ought to focus on the policies that help everyone else. Public college predominantly serves a significant portion of the “everyone else,” particularly non-elite public college, even if the poor are under-represented. And this under-representation is in part due to the cost and incentive structures that are in place, which could be alleviated by policies like free public higher education.

Because I have limited sympathy for the truly rich, I am aggressively against policies that subsidize wealthy private universities. I view public higher education differently, however, even if the difference in socioeconomic distribution at the upper-middle end is not quite as stark as one might expect.

Questions of Socio-economic Distribution in College Are A Big Giant Circle, and Other Endogenous Reasons for The Wealth Skew

Under the current structure of higher education, Bruenig is probably correct when he writes that poor will be under-represented in higher ed if you increase subsidies. But this statement does not necessarily hold true if the underlying fundamental payment structures are disrupted.

Bruenig implies that there is some “natural” (or unnatural but fixed) rate of college attendance. College will always be a rich kids’ game. There is indeed a credentials issue that won’t go away unless we get rid of poverty and improve the K-12 situation for millions of students. (I agree that we should get rid of poverty and improve the K-12 situation for millions of students – sign me up!) But I think that is only part of the issue. The other part of the issue is still a significant pay issue related to the way the higher education system operates. As long as this is true, the way our higher education system is designed endogenously affects the distribution of students, rather than simply being a function of a bunch of exogenous “other” factors.

For example: One of the more interesting reasons that poor students have been mostly shielded from the rapid rise of 4-year college prices is because there are so few of them at 4-year schools. The system works if there’s a small share of these students, but the system cannot work if there’s a much larger share.

What is happening at many selective universities, including public ones, is a continual move away from access and toward inequality. It is impossible to tell at what point access becomes a function of inequality and at what point inequality becomes a function of access. This is evident at public flagships like the University of Virginia, which cut back on its financial aid program for its (already very small) share of low-income students. It is even more evident at the 35% of all 4-year schools – including 51% of 4-year doctorate-granting public schools – that reported increased recruiting efforts toward students who could pay full tuition. It is even even more evident with the prevalence of “gapping” or “admit-deny” practices, in which insufficient financial aid is knowingly offered so that a student can be nominally admitted but practically denied.

At the same time, whether students actually can afford a final net price is clearly not the be all and end all of price barriers. If students believe that college is too expensive, it will limit access. Most data suggests that people believe that the price of college is a barrier; therefore it is a barrier.

One of the most promising arguments in favor of free or cheap public higher education is that it would allow the entire higher education system to jump out of its vicious circle of baked-in inequality. As it currently stands, we might be able to keep the price low for a few poor students here and there – but only so long as few poor students have access.

Other factors suggest endogeneity in the college socioeconomic distribution. (My Microsoft Word does not think endogeneity is a word, but I will use it anyways.) Over time, the class breakdown is not fixed. In the 1960s, college attendance skyrocketed among previous groups of low-income and minority students that did not previously even think of attending college. This was spurred on by the notion that college could be affordable under the Higher Education Act. Their numbers still paled in comparison to white, upper class students, but they grew rapidly. Since then, attendance has slowly moving closer to balance at 4-year public schools. There are many factors holding back this process, but even so it has trudged forward. Bruenig uses data for about 15 years ago; I would be curious to see what the breakdown of socioeconomic and racial distribution is today.

Next, the complexity of the financial aid system serves as a way of keeping the poor at the gates. If students do not have the time, effort, or knowledge to fill out an application, they also don’t have the time, effort, or know-how to fill out financial aid paperwork. If the problem is barriers to entry, as Matt insinuates, the roundabout and often perverse financial aid system that apparently helps the poor also works against them. A free or low-cost system would eliminate the need for this complexity and eliminate one of the biggest barriers to higher education:

As shown in work by Susan Dynarski and Judy Scott-Clayton, the FAFSA is four times longer than the simplest tax return (i.e., IRS Form 1040EZ), and longer than IRS Form 1040. Not surprisingly, students and their families are often confused and even deterred by the form.

Of course, as with any discussion of higher education, we need to remind ourselves that “higher education” varies widely across the board and even within categories of institutions. Most four-year universities — even schools that have doctorate programs — are not selective institutions. Take Long Island University, for example — they offered an “Express Decision Week” in which admissions officers took students’ information and gave them an admissions decision on the spot. It’s a walk-in admissions process, like at a barbershop. While LIU is private, the same types of problems exist at plenty of mid-tier public schools. If the demand is there (and the colleges can be held accountable for providing a good education, which is another issue), it is clear that the current system of higher education itself stands as a barrier.

As is, if we accept the logic as long as college is treated as a good for the rich that allows a couple of poor students to come along for the ride, of course it will always be skewed upward.

Free public higher education puts everyone on the same footing and encourages a shared base of understanding. It minimizes the possibility of gaming the system by locking people out or allowing those in charge to extract excessive rents. There is more to this debate, but making it free with the necessary caveats certainly addresses some of the major problems of higher education qua higher education.

And now that I’ve arrived to the party, I’ve probably just made it way less fun. This is very much like real life.

Recent Forbes Posts, Consolidated Into One Easy-To-Click Post

To highlight some of the recent work I’ve done over at Forbes, I could do three individual posts. Or I could just put three links in one post.

Here are three links. I am a paragon of efficiency.

The “Typical” College Student Is Not A Typical College Student (And Other Fun College Demographics Data)

-I use the word “fun” loosely, but not in this case. The pie charts in this piece are fun.

Why Don’t Americans Have Enough Skills? The Answer Is Inequality

-On the plus side, it turns out that our broken higher education system is not primarily at fault for many of our societal injustices. On the not-so-plus side, our societal injustices run way deeper than we thought. Somewhere in the middle, I start yet another post with a question word.

When Students Are Rejected For Being Poor: The George Washington University And The Roots Of A Troubled System

-One of my biggest pet peeves is when schools put an unnecessary and awkward “the” at the beginning of their name (The George Washington University, The Johns Hopkins University). One of my other biggest pet peeves is when people think that higher education is a meritocracy when it is nothing of the sort (The George Washington University, The Johns Hopkins University, every elite school ever).

Why Price Controls Are The Best Way to Keep College Affordable

This post originally appeared in Forbes. You can read it there. It is a follow up to the last post. Ideally, you will read them together.

Every time a person uses the phrase “price controls,” I’m fairly certain the fire alarm goes off at the Cato Institute and the soundtrack to “Requiem for a Dream” starts playing in the lobby. A bunch of policy interns saddle up horses and ride through Washington holding lanterns to alert all of the members of Congress and the news media that someone has proposed the idea.

Yet the best plans for actual higher education reform are centered on exactly that: a system of regulations to control prices. Last week, President Obama proposed to tie federal financial aid to colleges’ performance based on a new college ratings system that takes into account the number of low-income students in attendance, tuition prices, and even outcomes like graduation rates and future earnings of students. Yet the President stopped short of more overt price controls, instead preferring to use the college ratings system only to provide incentives to schools that perform well.

The response from many policymakers and college officials has been to cry foul at the government going too far to intervene in the economy. The President’s plan, however, doesn’t go far enough: if we want to tackle the skyrocketing cost of higher education, price controls are the best option we have for keeping college affordable. [Cue fire alarms at Cato].

This idea might sound radical, but it’s not new at all. Rather, it looks eerily similar to a 2003 proposal by Republican House Members – including John Boehner – that called for a “College Affordability Index” and threatened to eliminate federal subsidies for schools that failed to improve their status. It can’t be that radical of an idea if House Republicans were the ones that were pushing the idea a decade ago. Nor are these types of regulations a new idea in the economy at large: prices for public utilities like electricity and water are set by the public sector, as are the fee schedules for Medicare.

Neither President Obama nor John Boehner will ever use the phrases “price controls” or “price regulation.” The phrases elicit a rather unpleasant visceral reaction, akin to the smell of a well-aged stilton. But they are crucial. Tying federal subsidies to something and using public leverage to stop the upward pressure on prices would finally get at the root causes of price increases in higher education. Continue reading

Why We Need The Government To Play An Active Role in Higher Ed

This post first appeared at Forbes, where I am now a contributor. You can read it there. Or here.

These days, everyone knows that college is expensive. And everyone has their own idea of how to fix it. When it comes to higher education finance, we’ve become a nation of backseat drivers.

Allow me to drive in the backseat here. College is expensive, and the government’s attempts to help make college more affordable for students has likely driven up prices even more. But there is a solution: Rather than remove itself from higher education, as many libertarian economists have suggested, we actually need — and want — the government to play a larger and more prominent role.

Higher education prices have risen far faster than other prices in the economy: across all institutions, undergraduate tuition, fees, and living expenses more than doubled in inflation-adjusted dollars. At private nonprofit four year schools, tuition and fees have nearly tripled compared to 40 years ago, while at four year public schools costs have almost quadrupled over the same time frame. Public two-year schools, which experienced a huge drop-off in state funding in the wake of the recession (and where most of the higher education in this country takes place), have seen tuition and fees grow nearly 50% in the last decade. Bloomberg estimates that the price of college has increased twice as much as that of medical care since 1978. In short, college has become more expensive – and the price continues to increase.

The reasons for the unstoppable growth in price are many. These include increasing demand for college among students, systemic incentives that encourage colleges to spend money and raise tuition, declining state subsidies in the last few years, increases in “merit aid”financialization, and the college costs arms race that encourages schools to try to use resources in socially unproductive ways. Continue reading

University of Virginia: Proving Me Right Since 1819

You can read this post at the New America Foundation’s Higher Ed Watch blog. Or you can read it here. It’s the same. If you click both it will make me feel like more people are reading it, though.

The University of Virginia is no stranger to controversy. Just over a year ago, in June 2012, the school’s governing body, the Board of Visitors, voted to oust the president after less than two years at the helm.

The dethroned President Teresa Sullivan was popular among faculty and students; the ousters on the Board of Visitors, led by Virginia real estate mogul Helen Dragas, were less thrilled with her performance. Sullivan fell out of favor with the board, the Washington Post noted, “because of her perceived reluctance to approach the school with the bottom-line mentality of a corporate chief executive.” After students, faculty, and administrators turned out to defend Sullivan and criticize Dragas, the board reinstated Sullivan.

Flash forward to 2013. In April, Sullivan was at the forefront of the charge to increase the university’s tuition by 3.8 percent and 4.8 percent for in-state and out-of-state students respectively. Last week, Sullivan was one of the chief supporters of a plan to cut back on the AccessUVa program, the school’s financial aid commitment to low- and moderate-income students that began in 2004. Whereas previously the school covered all costs for students from families making up to twice the federal poverty line (about $47,000 per year for a family of four), the school will now only cover part of the cost, with the student needing to borrow the remaining amount.

The proposal to raise tuition eventually passed the Board of Visitors in a 14-2 vote, as did the proposal to scale back financial aid. The main dissenter in both cases? Helen Dragas. Continue reading

What We Talk About When We Talk About Oregon’s Debt-Free Tuition Plan

There has been much to-do about the bill passed in Oregon to form a committee to look at the possibility of passing a future bill for student debt-free college tuition. If you remove the whole middle part of that last sentence and just kind of ignore it, the hubbub makes sense — with student debt causing both personal hardships and macroeconomic ripple effects, the option to offer public higher education and guarantee no debt could be a game-changer.

Some people on the left like this plan. Some people to their left hate it. Some people to the left of the people who are already on the left love it. And most people don’t care one way or another because they have jobs and families and still can’t get over the fact that Kim Kardashian and Kanye West managed to ruin their baby’s life at literally the very first possible moment by naming their kid a direction. A direction!

Now I want to weigh in even if it adds little to no value to the world, which is why Al Gore invented blogging in the first place.

Putting aside the policy nitty-gritty, what is at stake here is whether we think public higher education should be a universal program or an individual luxury good. Most progressives and advocates of increased college access favor the former — rather than pushing tuition onto individual students or groups of students, they prefer public subsidies to fund the majority of public higher ed.

The liberal blogger Matt Bruenig (with whom I have discussed this), however, lays out the case for a different strategy. In his view, only users of college should pay because the non-users are predominantly poor. The benefits of the Oregon plan, then, are that it narrows the group of people paying for college from society at large (in the form of tax revenues) to only users of college — but does not put the onus on any specific individual. Unlike simply increasing tuition for each student, a plan like the Oregon plan puts the cost on the entire group of students that have used the college’s services under the payment plan (any underpayments are covered by the buffer fund paid into by former students). Thus, students under the Oregon plan share the same risk pooling of wider tax-funded programs.

It is not ‘Pay It Yourself’ as much as it is ‘Pay It If You Also Attended College.’ The second acronym is less catchy, but they can hire a team to work on that.

Continue reading