Cost of College – Wrapping Up

As I mentioned recently, the time has come to start wrapping up a discussion of why college costs so darn much that began on this blog earlier in the year.

That analysis actually started when a good friend who was familiar with my One Year BA project mentioned that, while she found that endeavor intriguing, wondered what the whole thing meant for her as a parent with a child young enough and smart enough to inspire terror of six-figure colleges bills to come.

Her comment got me thinking about why MOOCs were so jubilantly (if somewhat irrationally) hailed as the beginning of the end of college as we know it when they exploded onto the scene just a few years ago.

Some of this zeal was just the understandable reaction of those who saw great college courses once locked inside ivy bunkers being made available to anyone for nothing. But I suspected that the ever-increasing cost of getting a degree also motivated people to celebrate any possible alternative, even ones that (like MOOCs) were still on the vine, un-ripened.

That last hypothesis took as a given that college costs are both high (which they obviously are) and destined to go over higher (which they might). But that just opened (not begged) another question, namely: why does college cost so much and must it always be so?

Like most questions worth asking, this one took a long time to sort out with months of reading, writing and analysis opening up two new questions for every one answered. But I do firmly believe that this synthesis of the two major competing theories regarding college cost: Cost Disease vs. The Bennett Hypothesis, provides enough of a framework to answer some pragmatic questions about what we can expect in the future.

The Cost Disease hypothesis says that college – a high-touch service vs. a scalable manufacturing business – is just one of those industries (like dentistry and legal work) destined to outpace inflation due to (1) its reliance on a highly skilled work force; and (2) the fact that technology investment does not translate to increased efficiency. If you embrace this hypothesis, the increasing cost of college is simply an outcome of a growing, technology-driven economy meaning the only way to bring those costs down is for the economy to go back into a 70s style recession for a decade or more.

For those who don’t believe the Cost Disease hypothesis (or see the cure – a long-running recession or depression – as worse than the illness), the Bennett Hypothesis offers both another viewpoint and set of action items. For, according to this theory, college costs are rising because of the sheer amount of money being poured into the system through government grants and easily available loans. And, as well intentioned as it may be to make college financially possible for anyone who wants to go, “greedy” colleges will always raise their rates to vacuum up as many dollars as are available.  Which means solutions are available (even if painful) such as tightening the money supply or punishing schools for reckless price raising, borrowing and spending.

A synthesis of these two competing theories might help resolve seeming contradictions between them. Unfortunately, such a synthesis does not provide a simple means to figure out what (if anything) can be done to drive down those costs.

Looking at colleges themselves to reduce their own price tags (and spending) strikes me as a long shot. Yes, government, media or Internet-based shaming rituals might cause them to question huge increases year after year (and some schools have announced tuition freezes and even price reductions now and then). But hoping an industry that has gotten used to customers willing to pay premium prices will move to a cheaper pricing model seems like a long shot.

But changing the nature of the product colleges are selling or creating alternatives for niche groups of customers does not seem far-fetched at all. In fact, these are phenomena we are already seeing play out in front of us.

As this series wraps up over the next few Mondays, I’ll spell out what those changes and alternatives might look like. And from that discussion, we might spot a few places where MOOCs can play a role in bringing the cost of higher education back down to earth.