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January 14, 2009

The Campus And The Nanny State

By Richard Vedder

The most important documents governing our behavior and influencing our development as a civilization are mostly short - packing a lot of meaning into a few words. The Ten Commandments is 326 words, the Gettysburg Address is but 268. Even the extraordinarily complex and important law determining our form of federal government, the U.S. Constitution, is only 8,212 words - even with all the amendments added over two centuries. Yet brevity or transcendental meaning does not hold for laws regarding higher education. The original Higher Education Act of 1965 was probably roughly 20,000 words long - well over twice the length of the Constitution but far less significant. The newest reincarnation of that Act, the 2008 reenactment (several years late), is estimated by my colleague Jonathan Robe to be 175,859 words long---over 20 times as long as our foundational rules of government - and vastly less important. We are approaching "much ado about nothing," or maybe the less appealing opposite, "little ado costing us a lot." Moreover, the statistics above understate the complexity of federal higher education legislation. In 2008, in addition to reauthorizing the Higher Education Act, Congress also passed the Ensuring Continued Access to Student Loans Act, The College Cost Reduction and Access Act, and the New GI Bill law, to name just three additional laws. The formerly accepted notion that higher education is primarily an individual or a state and local government responsibility seems to be dying.

Before looking at the "trees" that constitute specifics in the current legislation, let us look at the "forest," the broader picture. Has the 1965 Higher Education Act as amended achieved its objectives? Is access to college greater because of its passage? Is the quality of higher education improved? Are taxpayers getting a lot of "bang" for their federal higher education "bucks"? I think a very strong case can be made that the answer to all of these questions is a resounding "no."

True, more persons are in college today than in 1965. But the rise in college attainment on average was greater in the 43 year period 1922 to 1965 than in the comparable length period 1965 to 2008, and some commentators (e.g., Claudia Goldin and Lawrence Katz in The Race Between Education and Technology) are lamenting the slowdown in the growth in the proportion of adults with degrees and America's falling behind other nations in this regard.

At the rather typical state university at which I teach, Ohio University, the annual in-state tuition in 1965, the year of the passage of the original legislation, was $450. That is about $2,300 to $3,100 in current dollars, depending on the price index used to correct for inflation. In the current year, the tuition fee is $8,907, at least three times as much. In 1965, it took 16 percent of the income of the typical Ohioan to attend Ohio University. Today, despite economic growth and rising incomes, it takes over 25 percent. With the possible exception of medical care, higher education is the only major spending item that has become more financially burdensome to the typical American family over the time since the original Higher Education Act was enacted.

Yet in 1965, when the higher education act was passed, federal aid to higher education was measured as a fraction of a billion dollars, perhaps slightly more depending on how some spending is categorized. The College Board tells us that federal student aid alone for the 2007-08 year was in excess of $98 billion, and that excludes billions of other form of federal assistance, not to mention huge sums for federally sponsored university research. A soaring in federal involvement in higher education has accompanied huge increases in student costs. Is the federal government the solution or the problem of rising university costs? At least as good a case can be made that it is the problem rather than the solution. The truth probably lies in between - federal involvement has pushed up higher education spending, and it is an unanswered empirical question whether on net the financial burden to students has risen or fallen on account of such spending, although there is no doubt that the burden on society as a whole has risen (total higher education spending has gone from roughly one to nearly three percent of total national output).

But that is not all. Neither the original legislation nor the most recent reenactment requires colleges to present any meaningful evidence that their students have actually learned something while in college (in marked contrast to K-12 legislation). It is a murky question whether college students today have learned more than their parents or grandparents did in the 1960s. Graduate Record Examination scores seem to be a bit lower on average. Adult literacy of college graduates is in sizable decline. The Civic Literacy Test given by the Intercollegiate Studies Institute to freshman and seniors at dozens of schools enhances my feeling that collegiate learning is low and probably not on the rise. To be sure, with changing technology and economic conditions, appropriately there have been changes in what students learn, but the scattered evidence strongly hints that the costs of college have risen relative to the intellectual knowledge, critical thinking, or moral virtues gained while pursuing a degree.

With this by way of background, Congress in 2008 finally got around to revising the Higher Education Act. The legislation abounds in complexity and thus is difficult to summarize concisely. In my judgment, however, Congress did virtually nothing to deal with the problem of declining college affordability - in fact it may have worsened the problem. It did almost nothing to improve or even measure academic standards. It ignored several key recommendations of the Spellings Commission on the Future of Higher Education. On the whole, the legislation was a disappointment, all the more so because it was a relatively non-partisan bill with differences between the political parties of trivial importance.

The legislation (and the aforementioned companion laws) sought to provide more money for student grants and loans. Pell Grants, for example, were expanded in magnitude and eligibility requirements were relaxed, in a few cases for the good (not penalizing students who work year round in order to graduate in three years, for example). An eighteen semester limit is put on Pell Grant eligibility, an absurdly high figure, although I suppose better than none at all. Why not eight or, at most, ten semesters of full-time equivalent attendance? Why should the Feds subsidize the lingering around college campuses by 23 and 24 year old students that is so common these days? Other grant and/or loan limits were expanded (in some cases initiated earlier in the student loan legislation). This (and other legislation like the new GI Bill) is a license for colleges to raise fees. The student default rate rules for colleges participating in the student loan programs were eased (just what our battered financial system needs - relaxing penalties for high loan defaults!)

Other provisions direct the Department of Education (DOE) to effect a dramatic shortening of the hated FAFSA form required to get federal financial aid (this appears to be happening anyhow), and try to shame schools who raise tuition a lot and reward ones that raise fees only modestly. The "Wall of Shame" approach (publishing the names of schools raising fees a lot on the DOE Web site) is a compromise between doing nothing and engaging in full-fledged price controls. College financial dealings with private student lending companies or their employees, a source of several recent scandals, are more severely circumscribed.

Not content on trying to influence college tuition fees, Section 112 of the law requires textbook publishers to tell professors about the prices of textbooks, their availability in alternative formats, etc. Colleges must tell students the ISBN for each book, for example. The same section "encourages institutions of higher education to inform students of ways to save money on course materials." In Section 116, there are potential penalties, albeit mild in nature, imposed on states that reduce funding on current operational expenses for public colleges. The notion that state legislatures might have a better idea how to allocate their resources than the Gang of 535 in Washington is apparently a distant thought to the majority supporting this legislation.

Yet none of this deals with the root causes of soaring college costs - rising third party payments (greatly aggravated by this legislation), the lack of big incentives for colleges to reduce costs, the lack of measures of outcomes that could lead to effective cost-benefit analysis of college performance, etc. It does nothing to end the unbelievable complexity of a double digit number of federal student financial assistance programs. It provides no incentives for schools to cut costs - using buildings year-round, reducing rising administrative costs, etc. It does nothing about the Academic Arms Race created by ambitious college presidents trying to "reach the next higher level" in the US News & World Report rankings that are positively related to reputation among fellow university presidents, spending, and selectivity (also known as reduction in student access).

Moreover, lobbying from colleges prevented some reforms sought by the Spellings Commission and others. A unified student record system sought by educational researchers and reformers was explicitly ruled out. Moreover, attempts by the Secretary of Education to force accrediting agencies to require tough outcomes-based standards were ruled out in Section 495 of the law. The accrediting agencies are largely academic cartels controlled by the universities themselves - the equivalent of letting the inmates control the asylum. No significant American university has ever lost accreditation for being, well, bad. Attempts by the DOE to impose standards for colleges by pressuring them to measure the "value added" by their institution using the accreditation agencies as the enforcer were outlawed by this legislation.

The Nanny State is in full bloom in this legislation, often using a carrot rather than a stick to achieve the politically fashionable objectives de jour. There are new programs for "Preparing Teachers for Digital Age Learners," "Teach to Reach" (whatever that means), and a new "Adjunct Teachers Corps." Colleges with high student loan default rates must create a "task force" to explore why this is so (hint: because the school admitted too many students who were both academically and financially unready for college). The DOE is to develop programs to encourage "sustainability practices" and make grants to develop programs to reduce illegal downloading and distribution of intellectual property. How about grants to promote the "sustainability" of Western Civilization by encouraging students to learn about our past, our institutions, our literary heritage?

Despite scores of pages detailing trivial federal grant programs, I am impressed (actually, depressed) on how little there is in the legislation about learning. Rep. Tom Petri (no doubt goaded by his wife Anne Neal) got a little bit into the law, I am told, on encouraging the study of history and civics. There is some mention of the need to encourage foreign language training, and some verbiage about improving teaching training (but no bold strictures that might actually work. Given the Nanny State orientation of the bill, why not make it a federal felony for school principals to hire a graduate of a college of education to teach young children, something that might actually improve student preparation for college?). The decline in adult literacy of college students is ignored. So is the fact that at least three independent surveys of student use of time (by UCLA, the National Survey of Student Engagement and the U.S. Bureau of Labor Statistics) show that the typical student is in class, studying, writing papers, or taking exams fewer than 1,000 hours a year, and more time is spent on entertainment than on work. Nothing is said about horrendous grade inflation and the abdication of standards by colleges. Lots of words are devoted to promoting college participation for blacks and Native Americans, but virtually nothing is said generally about improving learning for all.

What would an optimal federal higher education policy look like? I suspect legislation limiting higher education statutes to, say, twice the length of the U.S. Constitution (a 90 percent plus reduction from present) would be a good start. Cut federal financial aid programs to one. Get out of the student lending business. Give funds to students, not schools. Provide for a robust, meaningful and independent accreditation system in lieu of the current cartel and then largely get out of the way and let the 50 states use their own initiative to create "50 laboratories of democracy" as envisioned by Justice Brandeis. It may true that the Northwest Ordinance of 1787, the Morrill Act of 1862, and the GI Bill of 1944 were federal interventions that advanced higher education. But the Law of Diminishing Returns has long ago set in, and it is time for the Feds to help higher education by largely going away.

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Richard Vedder directs the Center for College Affordability and Productivity, is Distinguished Professor of Economics at Ohio University, and is an Adjunct Scholar at the American Enterprise Institute.



Comments (2)

Sonny Perque:

The penalty for laughing in a courtroom is six months in jail; if it were not for this penalty, the jury would never hear the evidence.

Grover Duey:

This is the other thing: we make the cost of raising kids higher than it has to be just because we feel they need all this stuff, like gadgets, certain schools, and activities that are nice but aren't really necessary.

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