Ohio University economics professor Richard Vedder has been studying our badly distorted higher-education system for many years. He recently spoke at an event hosted by the Martin Center. Today’s article is a shortened version of his talk.
First, there’s the cost issue. While prices of other services have been falling, the cost of going to college has been rising much faster than the rate of inflation. Vedder points out that when he was an undergraduate in the early 1960s, a year at Northwestern cost just $795. That’s equal to about $7,000 in today’s dollars — but Northwestern now charges students over $56,000 per year. Why the huge increase? Vedder argues that it’s overwhelmingly due to the federal student aid program, one of the worst legacies of LBJ’s “Great Society.”
Student aid dollars have done much more to enable colleges to expand their staffs and budgets than to help students afford to attend, Vedder says.
The ballooning “diversity and inclusion” offices are a good example of the waste brought about by federal generosity. Vedder says:
We have armies of administrators doing tasks that did not even exist 50 years ago. The University of Michigan, for example, at last report had 93 diversity and inclusion administrators, of whom more than two dozen made over $100,000 annually. I ask: If that school fired all of them, saving probably $10 to $15 million annually, would Michigan revert to massive racial and gender discrimination? I doubt it.
Costs are way up, but learning is not. Many students coast through college with scant gains in useful knowledge. What can be done?
Vedder favors changes that would make colleges have some “skin in the game” when they take government money and purport to educate students. Incentives would change greatly if colleges had to worry about repaying at least some of the student aid if the student later defaults.
Another change he likes is the movement we’re seeing at a few schools towards financing through income-share agreements, whereby investors put up the money for a promising student. That also improves the incentives.
And as a parting shot, Vedder suggests that we undo one of our great educational blunders by abolishing the federal Department of Education.
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