Category Archives: Politics & Policy

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Does Wealth Inequality among Universities Pose a Threat to the American Economy? (Part 4)

Pros & Cons: How America Funds Higher Ed

In the first three parts of this series, we initially looked at a report from Moody’s regarding the growing separation by wealth between a small number of extraordinarily rich colleges and universities and the very large number of institutions that are heavily dependent on tuition to fund their annual budgets. Subsequently, we reviewed the history of wealth acquisition by the very rich campuses and noted that it was a relatively recent phenomenon. Then we examined the consequence of this imbalance in wealth in terms of the long-term viability of tuition-dependent colleges and universities.

Now, in Part 4, we will consider the relationship between historic patterns of public and private financial support for higher education, and the current very high level of frustration, on the part of parents, politicians and pundits, regarding the diminishing opportunities for young people to receive a college education that is both excellent and affordable.

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Does Wealth Inequality among Universities Pose a Threat to the American Economy? (Part 3)

It’s Not a Good Thing to Be Other Than a King

In Part 1 of this series, I examined a recent report from Moody’s that predicted growing economic separation between a handful of the wealthiest universities and the rest of higher education. Media coverage of the report did not examine the consequences to either higher education or the American economy, should Moody’s prediction prove true, nor did the coverage assess the accuracy of the analysis, something that I sought to address.

In Part 2, I noted that extreme wealth in a handful of famous universities was not true historically, but is, instead, a relatively recent phenomenon.

Now, in Part 3, we look at the other side of the story: What does it mean to higher education in general that wealth is so unevenly and inequitably distributed across the 4,000-plus colleges and universities in this country? And why isn’t there greater concern about this extreme inequity on the part of the American public?

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Does Wealth Inequality among Universities Pose a Threat to the American Economy? (Part 2)

The Growth of Institutional Wealth

In Part 1 of this series, “It’s Good to Be the King,” I addressed a recent report from Moody’s Investors Services that predicted a growing separation of a relative handful of super-rich universities from the rest of higher education. I also considered the media coverage generated by the Moody’s report, and expressed my bewilderment that the report’s conclusions did not generate deeper analysis and greater concern.

Perhaps the reason that there was not more media attention and review was because Moody’s summation of the institutional wealth of the richest universities did not surprise many people. There is evidently a broad understanding – and perhaps even acceptance – that some universities have amassed significant wealth, and that the universities with the most recognizable names, and/or the strongest reputations, are often the wealthiest universities.

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Does Wealth Inequality among Universities Pose a Threat to the American Economy? (Part 1)

It’s Good to Be the King

On April 16 of this year, Moody’s Investors Services published a report entitled “Wealth Concentration Will Widen for U.S. Universities.” This report was the subject of articles on the same day in such major media outlets as the Boston Globe, The Wall Street Journal and BloombergBusiness.

The underlying tone of the Moody’s report was fundamentally positive, as was true of the media reports referenced above. Given Moody’s previous grim reports regarding the perceived financial weakness of much of American higher education (see an earlier blog post in this series, Moody’s Blues, Feb. 14, 2013) a positive report on a few enormously wealthy AAA-rated institutions was presumably welcomed by many readers and investors.

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What Is the Purpose of Higher Education? (Part 2)

Higher Education Strikes Back (Weakly)

In Part 1 of this series, “Attack of the Politicians,” I pointed out just how pervasive has become the branding of higher education by politicians and media pundits as being primarily – even exclusively – a mechanism for job preparation. And this idea is apparently not a passing fad. The idea that the value of college is to provide the training young people need to “get a good job” is being treated as a truism among a number of probable candidates for the Republican nomination for president in the 2016 election. In Part 1, I quoted Gov. Scott Walker of Wisconsin as a specific example.

Because the proposition that the purpose of higher education is job preparation is likely to become even more prominent in the coming months, it is important that we consider the origins and merits of this idea.

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What Is the Purpose of Higher Education? (Part 1)

Attack of the Politicians

Recently, Gov. Scott Walker of Wisconsin, who some consider a potential contender for the Republican presidential nominee in 2016, has been in the news for comments he made when announcing his proposed state budget (The New York Times, Feb. 4 and Feb. 17, 2015; Inside Higher Ed, Feb. 5 and Feb. 16, 2015). In addition to calling for a $300 million, two-year cut in state appropriations to the University of Wisconsin system (a 13 percent reduction from its current appropriation), Gov. Walker also called for a change in the university’s mission statement, removing century-old language such as “search for truth,” and “improve the human condition,” and substituting instead “meet the state’s workforce needs.”

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Tuition-Free Community Colleges and the Law of Unintended Consequences

A detailed look at President Obama's plan

On Jan. 9, President Obama announced the America’s College Promise proposal, an initiative which, if adopted and funded, would make an estimated nine million students eligible for an average of $3,800 per year in tuition assistance at community colleges throughout the nation, for an estimated cost of $60 billion. (“Fact Sheet: White House Unveils America’s College Promise Proposal: Tuition-Free Community College for Responsible Students”)

Modeled after programs in Tennessee and Chicago, the proposal is closely linked to other initiatives of the Obama presidency, including increases in the maximum value of Pell Grants; the expansion of education tax credits; pay-as-you-earn loans (wherein loan payments are capped at 10 percent of income); and so forth, all designed to address the president’s call for increasing the percentage of the adult population with an associate’s or bachelor’s degree from today’s level of approximately 40 percent to 60 percent by 2020.

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A Democratic White House, a Republican Congress, and Higher Education: Now What?

Higher education on the national agenda

As President Obama begins the final two years of his second term, and as the next Congress takes office with both houses controlled by the Republicans, what might we expect to see coming out of Washington that will change the landscape for higher education?

College Rating Plan

In August 2013, the Obama White House announced a plan to create a rating system for colleges and universities. In the face of considerable opposition from many higher education organizations and individual campuses regarding the wisdom of any such plan, and the criteria to be used for rating campuses, the timeline for its release has been repeatedly extended.

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Higher Ed, Income Inequality & the American Economy (Part 4)

Misdirecting Blame: Unwitting or Deliberate?

In the first of three parts of this series, I discussed the general topic of what has been called a “jobless recovery,” following the Great Recession of 2008. In parts two and three, I examined at length the culprits that have been implicated as being the cause of our weak economic recovery: an outmoded and, to date, unresponsive system of higher education; and income and wealth inequality.

Analyzing the root causes of this unusually poor economic recovery is important not merely to ensure that blame is correctly assigned. The real importance lies in our efforts to remedy the problem: If we are focused on the wrong cause, not only will our solution fail to revive the economy, but also the potential for harm in repairing something that wasn’t broken could be enormous – and, in the long run, further negatively impact the nation.

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Higher Ed, Income Inequality & the American Economy (Part 3)

The role of income inequality in our ailing economy

In my last post, I considered the claim that more and better education is the answer to fixing our troubled economy. However, as I pointed out in the first post to this series (Sept. 8), there is a second explanation to the uneven nature of America’s economic recovery from the Great Recession: the game may be rigged to favor the very rich at the expense of everyone else. If this explanation has merit, then trying to repair the economy through more and better education will eventually prove to be not just futile but potentially very destructive to long-established institutions of higher learning.