Good National Coverage of the Causes of Student Debt

The think-tank Demos has done a report on the causes of soaring tuition costs and debt levels for students enrolled at public colleges and universities, and the report is getting some national attention. Here is an excerpt from an article on the CBS News site MoneyWatch:

“Thanks to rapidly rising tuition costs, America has a $1.2 trillion student debt problem.

“That’s caused a lot of finger pointing, with some blaming soaring administrative hiring and pay, or the rash of expensive building projects on campuses. But when it comes to public universities, the real culprit is a more insidious force: cuts in state support for higher education, according to a new report from the left-leaning think tank Demos.

“Declining state appropriations for higher ed is responsible for more than three-quarters of tuition hikes between 2001 and 2011, the analysis found. Increased spending on administration and building projects accounts for only about 12 percent of the tuition increases over that time. During the recession, when many states scrambled to cope with shrinking coffers, lawmakers slashed spending on public universities. But appropriations haven’t returned to prerecession figures despite an improving economy.

“’Normally, funding would have recovered to relatively high levels given where the economy is, but we haven’t seen that,’ Demos senior policy analyst Robert Hiltonsmith told CBS MoneyWatch. ‘I think that’s because we’re seeing a divergence in the way states are viewing their responsibilities to fund their public schools.’

“Take Wisconsin, where Gov. Scott Walker earlier this year proposed a plan that called for slashing $300 million, or 13 percent, in state funds for the University of Wisconsin system, which enrolls about 180,000 students. The state’s budget committee is now trying to reduce his proposal. His plan sparked a backlash in his state, given widespread support and pride in its public education system.

“Walker’s argument is that the cuts will make the public university system more efficient, while also protecting taxpayers. Underneath the rhetoric is often the idea that taxpayers shouldn’t pay for individuals’ education, Hiltonsmith noted.

“’Those arguments are a common thread among states that are slashing support for public universities, but Hiltonsmith called that a ‘wrongheaded and incorrect view of public education,’ given that it benefits American society as a whole to have a highly educated workforce.’”

The entire article is available at: http://www.cbsnews.com/news/the-culprit-behind-surging-tuition-at-public-universities/

I recently posted a series on the obvious interconnections between declining union membership and wealth inequality.

The “equations” here are just as obvious and straightforward. If one graphs the decline in state support for public higher education and the increase in tuition costs and student debt, the graph lines are very much the inverse of each other. The same is true if one graphs the decline in institutional allocations for instruction and the rapid and substantial increase in both administrative positions and administrative support staff.

So, although the decline in state subsidy is the obvious culprit in terms of the increase in direct costs to students, the administrative bloat, in the broadest sense, is eroding the quality of the education and the value of the degrees that students are going into debt to earn.

Our institutions may not be able to control the ideological agendas that our governors and state legislatures are pursuing, but they certainly can control—and are primarily responsible for—the rampant growth in administrative compensation and staffing.

So, although the 12% of the increase in costs cited by Demos may look somewhat inconsequential compared to the impact of the reductions in state support, any double-digit element is not inconsequential. And, again, the direct impact of administrative bloat on direct student costs is only one part of that issue.

 

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