On Monday, April 14, 2014, the Lumina Foundation convened a group of opinion leaders in Washington, D.C., to discuss college affordability, federal student loan policies and the role of states in supporting public colleges and universities (The Chronicle of Higher Education, “Paying for College: Experts Gather in Search of New Models,” April 15, 2014).

Unfortunately, the experts came up empty.

One commentator noted that “affordable” does not necessarily mean “cheap.” Another touted the merits of a net-price calculator designed to show the number of years after graduation at which “the benefits of college outweigh the cumulative costs.” A third suggested that greater numbers of women and minorities should choose more lucrative majors.

I hope the Lumina Foundation did not overly deplete its endowment to pay for these platitudes and in-the-box thinking.

An online commentator on the Chronicle article had it exactly right: “The real issue is the raw cost of a higher education, not ‘affordability’.”

In order to do something useful, let’s spend a little time reconciling two quite different reports: “How America Saves for College 2014,” (SallieMae); and “The Ongoing Inflation of the Higher Education Bubble,” Townhall.com, April 6, 2014.

The SallieMae report is full of interesting (but mostly depressing) statistics:

• Just 51 percent of families with children under the age of 18 are saving for college, down from 62 percent in 2009.
• On average, families are devoting a mere 10 percent of their savings for college.
• The average family savings for college is only $15,346.
• The primary reason for not saving is that families say they don’t have the money.
• Over 40 percent of parents have a plan for college – but not all planners have actually saved anything (and not all those with college savings have a plan).
• Parents with a plan expect to pay for 40 percent of college costs through their savings and income; parents without a plan expect to pay for just 23 percent through their savings and income.
• Parents with a plan expect about 26 percent of college costs will be covered by grants and scholarships; parents without a plan expect that grants and scholarships will cover about 36 percent of college costs.
• 73 percent of high-income families are saving for college, but only 34 percent of low-income families are doing so – and the average amount saved for college by low-income families is just $3,762.
• Savings goals are based more on what families say they can afford than on how much they think college will cost.
• Large numbers of parents report being “anxious,” “annoyed,” “overwhelmed,” and “frustrated” about saving for college, and these reactions are particularly strong among non-savers.
• High-income non-savers are four times more likely to say that their child is responsible for paying for college than are low-income non-savers.

The Townhall.com posting includes two fascinating graphs. The first graph shows average tuition and required fees for all four-year colleges and universities from 1969 through 2012. Tuition and fees averaged just $754 per year in 1969 and $13,608 in 2012. (When adjusted for inflation, the $754 figure would have been $4,619 in 2012 – a great deal less than the actual figure of $13,608.)

The second graph is devastating. It shows the ratio of average tuition and fees to median household income over the same 43-year time period. In the 14 years from 1969 through 1983, the proportion of the median household income needed to pay for tuition and fees rose slowly from 8.6 to 10.2 percent. It rose more than 4 percent (to 15.2 percent) in just four years, between 1990 and 1993, and reached 20 percent by 2004. By 2012, the proportion of the median household income needed to pay for tuition and required fees was 26.7 percent – three times as much as in 1969. (This last jump was attributable, in large part, to the fact that median household income did not increase between 2006 and 2010, whereas tuition and fees continued to grow.)

It would not require a crystal ball to predict that more and more families, faced with little income growth on the one hand, and the need to devote a backbreakingly large fraction of household income to pay for just tuition and fees (remember, room and board would be extra), might well decide to abandon completely the idea of saving for college. Even the families that have saved find, with an average savings of just over $15,000, they can pay for only one year of tuition and fees.

No wonder families feel “anxious, annoyed, overwhelmed and frustrated!”

No wonder student debt (to say nothing of parental debt) has shot up like a Roman candle!

So if fewer families are saving for college, and fewer families appear able to afford college, shouldn’t we see a drop in college attendance numbers? Glad you asked. Just two days ago, on April 26, The New York Times published an article with the telling title, “Fewer U.S. Graduates Opt for College After High School.” Last fall, only 65.9 percent of high school graduates from spring 2013 enrolled in college, continuing a four-year downward trend from the historic high of 70.1 percent in 2009. It is safe to assume that much of this decline is due to the belief by an increasing number of families that college is just not affordable.

The overall picture is even more dispiriting. Nationally, the number of high school graduates has been declining since 2011. Now we see that over the past four years the percentage of these high school graduates enrolling in college has also been in decline. No wonder so many colleges are falling well short of their enrollment targets! No wonder economists are expressing such concern about the negative impact on our economy that will result from a shortage of college-educated adults!

So if government won’t pay for very much of the cost of a college education, and if parents can’t pay for it, the problem is left squarely in the laps of the colleges and universities. There is no alternative: the primary task American colleges and universities face today is controlling their costs.

How should this task be addressed? College and university presidents must start by committing to limiting tuition and fee increases to no more than inflation – but that is only the first step. We must also develop other revenue streams to subsidize the costs of residential college education, if we want to see this well-honed, time-honored and truly excellent model of American higher education survive at more than a handful of very affluent campuses that cater largely to the wealthiest stratum of our society.

There is no avoiding it – college and university presidents must work assiduously to reduce both their sticker prices and their net prices. America’s continued success as the world’s leading economic engine depends on it. It may not be fair; it may not be right; but presidents of higher education institutions must accept this responsibility. No one else can, or will.

There is no shortage of commentary regarding the problems of higher education. Too often, however, the wrong people are in the conversation. It’s a waste of time to attempt to convince people of the righteousness of your position if the people to whom you are speaking already agree with you – and if your arguments aren’t precise, you can actually do your cause damage by providing the other side with free ammunition.

By way of example, Suzanne Mettler, a professor of government at Cornell University, has recently written a book with the provocative title of Degrees of Inequality: How the Politics of Higher Education Sabotaged the American Dream. Essays drawn from the book appeared in The Chronicle of Higher Education on March 7, The New York Times on March 1, and a news article on the book was in the Epoch Times on March 31.

In these essays, Dr. Mettler covers some familiar ground: state appropriations to higher education have fallen; the federal government has focused much more on providing loans than on increasing the value of Pell Grants; for-profit institutions suck up a disproportionate amount of federal aid dollars, but students in those institutions have low graduation rates, high indebtedness and a very high default rate on their loans; low-income families are far more impacted by all the above than are high-income families.

Dr. Mettler suggests three remedies: increase the size of Pell Grants, possibly by reconsidering tuition tax policies that currently favor higher-income families, but do little to help low-income families; put pressure on the states to increase their support of public institutions; and put the squeeze on for-profit institutions with poor performance records. In other words, pretty standard fare – and others have made the same recommendations, with no discernible result as of yet.

Unfortunately, she weakens her own case with some odd, and sometimes erroneous, statements. For example:

• In her Chronicle essay, Dr. Mettler states, “In fact, few students who attend elite private nonprofit colleges and flagship public universities – which advertise high sticker prices – pay full fare.” Well, first it’s strange that she should put “elite privates,” with sticker prices around $60,000, with “flagship publics,” priced at less than half that amount, in the same sentence. Second, at many of the elite privates, more than half the students (not “a few”) pay full price – including students at her own university, Cornell. Indeed, students from the very richest segment of society are the dominant bloc at the Ivy League schools – the elite of the elite.
• In the same essay, she suggests that the federal government should “penalize” private nonprofit colleges “that make limited efforts…to enroll and graduate high percentages of low-income students,” claiming that these schools “use funds from their endowments to offer merit aid to students with high test scores – a strategy that… tends to favor the well-off.” I wonder if Dr. Mettler is aware that the mean endowment at private schools is only about $20 million, and that by far the bulk of institutional aid at private colleges comes from discounting the sticker price, as opposed to endowment drawdown. Her suggestion that private schools are somehow conspiring to restrict access to low-income students is, in large measure, untrue – except of course for the very wealthy privates, including Cornell, which announced last year it was converting some of its institutional grants to loans (that of course have to be repaid). (For more on that topic, see my blog post from last year, Down the Up Staircase, March 2013.)
• In her Times essay, Dr. Mettler first praises public universities and colleges (“[they] still offer the best bargain around…”), and then condemns them for squeezing resources (“For poorer students, graduating becomes all the harder as class sizes grow, online courses proliferate and support services are cut”). Actually, many public universities are now more expensive for out-of-state students than are most private schools. (For example, the University of Virginia charges out-of-state students a staggering $39,844 in tuition and fees – yet it still manages to attract 25 percent of its undergraduates from out-of-state). And while all students (not just “poorer” students) would be affected by the changes that Dr. Mettler presumes public schools must make in the face of reduced resources, she offers no data to show that graduation rates for low-income students are either disproportionately falling at these schools, or even that they are falling at all.

So why am I being so mean and picky with Dr. Mettler’s essays? She makes many good points, she writes in a compelling way, she’s (mostly) on the side of the angels – what’s the problem?

Dr. Mettler is taking on a huge quest: how do we go about changing the direction of higher education in this country (and its concomitant effects on social inequity)? How do we somehow recapture the belief that has long existed in this country that education is the first (and increasingly necessary) step up the ladder to social mobility? She points out that prominent Americans from Franklin and Jefferson (who were instrumental in the founding of two universities) to Eisenhower and Nixon (who introduced landmark higher education laws) were staunch advocates of the virtues of higher education.

For the last 30 years, a different mindset has prevailed in Washington and in many of the states – and the political polarization that has accompanied this mindset is well entrenched and will be difficult to move. For that reason, arguments in favor of higher education must not only be persuasive, but also grounded on hard evidence. Our opponents will seize upon any missteps, and therefore we must be careful not to make any.

Finally, Dr. Mettler’s central thesis is that the consequences of actions and (especially) inaction over the past three decades is that higher education “…has gone from facilitating upward mobility to exacerbating social inequality.” That’s a rallying cry for liberals, but falls on deaf ears with conservatives. Change in higher education will come, I believe, from a series of pragmatic steps that address cost, debt and jobs in meaningful ways, and not from a moral or ethical appeal.

It is easy to preach to the choir – but they are not the ones who need convincing.