Peter Thiel’s 20 under 20 program has touched off a debate on whether getting a college degree is worth it. Thiel awarded 20 teenagers with $100,000 grants to start their own pathbreaking tech companies if and only if they drop out of college. A lot of higher-education boosters, David Leonhardt chief among them, argue that by just looking at the jobless rate for college grads, or at the college premium — the increased wages that college grads earn over their less-educated peers over their lifetimes — one can see that college pays for itself.
Absent from a lot of this debate is an evaluation of why college costs have risen five times faster than inflation in the past 30 years. Maybe college is worth it now, but what if fees continue their inevitable climb? Or if college is worth it now at the current price of tuition, wouldn’t the payoff be even better if we saw a decline in costs in real terms Adrian Wooldridge attempts to answer this question by looking at Oklahoma State University professor Vance Fried’s recent research:
Are universities inevitably expensive? Vance Fried, of Oklahoma State University, recently conducted a fascinating thought experiment, backed up by detailed calculations. Is it possible to provide a first-class undergraduate education for $6,700 a year rather than the $25,900 charged by public research universities or the $51,500 charged by their private peers? He concluded that it is.
Mr Fried shunned easy solutions. He insisted that students should live in residential colleges, just as they do at Harvard and Yale. He did not suggest getting rid of football stadiums (which usually pay for themselves) or scrimping on bed-and-board.
His cost-cutting strategies were as follows. First, separate the funding of teaching and research. Research is a public good, he reasoned, but there is no reason why undergraduates should pay for it. Second, increase the student-teacher ratio. Business and law schools achieve good results with big classes. Why not other colleges? Mr Fried thinks that universities will be able to mix some small classes with big ones even if they have fewer teachers. Third, eliminate or consolidate programmes that attract few students. Fourth, puncture administrative bloat. The cost of administration per student soared by 61% in real terms between 1993 and 2007. Private research universities spend $7,000 a year per student on “administrative support”: not only deans and department heads but also psychologists, counsellors, human-resources implementation managers and so on. That is more than the entire cost of educating a student under Mr Fried’s scheme
Wooldridge points out two other avenues for cost-containment: allowing Americans to obtain their bachelor’s degrees in just three years, and the proliferation of free online courseware:
Mr Fried fails to mention an obvious source of savings. Americans could complete their undergraduate degrees in three years (as is normal elsewhere), instead of four. In practice, most American students take even longer than four years, not least because so many work to pay their tuition. Surprisingly, America’s future chainsaw-wielding corporate titans take a leisurely two years to complete their MBAs; most Europeans need only one.
Shai Reshef, an educational entrepreneur-turned-philanthropist, is pioneering an even more radical idea. His University of the People offers free higher education (not counting the few hundred dollars it costs to process applications and mark exams), pitching itself to poor people in America and the rest of the world. The university does this by exploiting three resources: the goodwill of academic volunteers who want to help the poor, the availability of free “courseware” on the internet and the power of social networking. Some 2,000 academic volunteers have designed the courses and given the university some credibility. Tutors direct the students, who so far number 1,000 or so and hail from around the world, to the online courses. They also help to organise them into study groups, and then supervise from afar, dropping in on discussions and marking tests. Mr Reshef pays for incidental expenses with $2m of his own money and donations.