Access to a high quality, affordable education has always been the lubricant of socio-economic mobility, as well as the driving force behind American exceptionalism. America is a place that is run by its people, and we want, dare I say, need, them to be educated. But like a frog in a slowly warming pot, a funny thing has happened over the past few decades, the cost of a college education has outpaced the growth in wages
by 8 times.
Let that sink in.
First things first, education is a product and products cost money. Maintaining the facilities, administration, professors, and keeping on the cutting edge of new research and equipment is a costly endeavor. In the centuries that we have been educating students in the United States, little has changed in the format and structure of higher education. Perhaps now is the time. The two main constraints are administrative headcount and student capacity. Maybe a hybrid model would be best here. For every class, perhaps a handful of the sessions could be deployed online (I am looking at you syllabus day) and then placing more importance on the in-person days for discussion with the class. This would help reduce the required administrative headcount, and increase the capacity of the university thus driving down the average cost of a degree. Oddly enough I learned this in my anthropology course freshman year - shout out professor Heckenberger... also sorry about that one argument, turns out you were right.
In an ideal world, higher education would be free and accessible to all Americans. And someday tuition may be covered, but the fact of the matter is that even when you eliminate the costs associated with tuition, there are still large costs associated with attendance.
Remember, there was a time when air travel was cost prohibitive for your average person? When the airlines found ways to make the tickets cheaper, they also made a lot of compromises on things like legroom (what's that?), and they began nickel and diming you on everything from being able to check your luggage to being able to enjoy the in-flight entertainment.
A similar scenario could be expected at universities if tuition became free. You'll still need to purchase textbooks, currently the only thing increasing in price faster than tuition, and you might be required to live on campus and pay for housing in order to enjoy free tuition privileges. That amazing campus life experience? You could expect to be nickel and dimed there too, paying extra for access to the gym, access to guidance counselors, increased cost of tickets to sports games and cultural events, etc. And don't get me started about the lazy rivers... college water parks would be a thing of the past... and I think we are all cool with that.
Aside from free tuition, there are a lot of things universities can do to help ensure that education is accessible to everyone. Vanderbilt university here in sunny Nashville, TN is one such university cutting its own path forward. Years ago, Vanderbilt endeavored to create an endowment that would be used to support need based scholarships for its students. How does this program work? Vanderbilt makes its admissions decisions on a need-agnostic basis. Once the acceptance list is finalized, family need is calculated and aid awards are granted. These are not loans, but rather grants that do not have to be paid back. Since its launch in 2008,
"Opportunity Vanderbilt" has reduced the loans of its undergraduate students by 70% and increased the diversity of their students to boot.
Now, not every institution can count on a loyal alumni base to fill the coffers of a massive endowment. In fact, second and third tier schools are in a tough financial situation - not only are they less likely to be able to offer grants to their students, they may go out of business. If this happens, unless they are absorbed by larger institutions, it will reduce that number of available college seats, which could drive prices up.
There are many things that can go right and some things that can go wrong with the future of higher education financing. While we wait for the future to shake out, it is important to focus on the things we can control, those being our friends: savings, investing, and planning.
Wesley Belden
Scholar Raise Founder and CEO
