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.
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?
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.
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.
Part 1 of this series, “Attack of the Politicians,” discussed the widespread notion that higher education’s purpose is, first and foremost, to prepare students for the workforce. Part 2, “Higher Education Strikes Back (Weakly),” focused on the idea that higher education actually serves a multitude of purposes, preparation for a career being perhaps the most important, but far from the only, purpose. Part 3, “A New Hope,” considered the findings of a Gallup-Purdue study that correlated particular experiences and opportunities students had as undergraduates with a subsequent rich and fulfilling life – and surely “a great job and a great life” is something that all prospective students (and their parents) desire.
In Part 1 of this series, “Attack of the Politicians,” I pointed out the growing consensus, particularly among some prominent Republican governors, that the primary purpose of higher education is to prepare students to obtain a well-paying job after graduation. In Part 2, “Higher Education Strikes Back (Weakly),” I noted the fragile balance struck by higher education faculty, regardless of whether their particular focus is in the liberal arts, in professional or applied fields, or in community college teaching, in support of the notion that higher education is a big tent, and there is room for several different purposes and outcomes for a college education. Different campuses have different missions; there is no single purpose that encompasses all of them.
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.
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.”
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.
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.