Future of Higher Education Financing
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The document discusses potential futures for higher education financing in the United States. It outlines current drivers of inequality like growing wealth concentration at the top and a hollowing out of the middle class. Two potential futures are extrapolated: one where inequality continues to grow and the middle class is priced out of traditional higher education, and another where inequality is mitigated. National actions like increased public funding and campus actions around affordability and adjunct issues are proposed to shape a more equitable future.
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Future of Higher Education Financing
- 1. Towards the future of higherTowards the future of higher education financingeducation financing NERCOMPNERCOMP -- December 2016December 2016
- 2. Plan of the sessionPlan of the session 1.1.How we pay for higherHow we pay for higher educationeducation 2.2.Current driversCurrent drivers 3.3.FuturesFutures
- 3. Introductory hedgesIntroductory hedges • My perspective: future of educationMy perspective: future of education • Caveat1: some of the data isCaveat1: some of the data is controversial or provisionalcontroversial or provisional • Caveat2: serious complexityCaveat2: serious complexity • Caveat3: narrow scope of United StatesCaveat3: narrow scope of United States
- 4. (Rejected titles for this talk)(Rejected titles for this talk) "When 'middle class' is as historical a term"When 'middle class' is as historical a term as ‘the Warsaw Pact’”as ‘the Warsaw Pact’” "Neofeudalism, and why you are making it"Neofeudalism, and why you are making it happen”happen” "Downton Abbey, and you're not the lords,"Downton Abbey, and you're not the lords, but some of your students are and will be”but some of your students are and will be”
- 5. 1.1.How we pay forHow we pay for higher educationhigher education
- 6. HigherHigher education:education: costs soaringcosts soaring • NB: health careNB: health care costs contribute tocosts contribute to college costscollege costs
- 7. 1.1. How we pay for higher educationHow we pay for higher education • Public/private/for-profit segmentationPublic/private/for-profit segmentation (weakening)(weakening) • State support (budget)State support (budget) • Federal support (loans)Federal support (loans) • Other aidOther aid • Tuition (THE BIGGIE)Tuition (THE BIGGIE)
- 8. EndowmentsEndowments ““Amherst College endowment,Amherst College endowment, valued at $2.19 billion as of Junevalued at $2.19 billion as of June 30, 2015”30, 2015” https://www.amherst.edu/offices/ohttps://www.amherst.edu/offices/o ffice_of_the_chief_financial_officer/ffice_of_the_chief_financial_officer/ investmentsinvestments
- 9. EndowmentsEndowments ““The value of the Investment PoolThe value of the Investment Pool as of June 30, 2016 is $2.3 billion;as of June 30, 2016 is $2.3 billion; this amounts to over $1 million perthis amounts to over $1 million per student at the current enrollment.”student at the current enrollment.” http://investment.williams.edu/fileshttp://investment.williams.edu/files /2016_Investment_Report.pdf/2016_Investment_Report.pdf
- 10. Tuition -> financializationTuition -> financialization ““The value of the Investment PoolThe value of the Investment Pool as of June 30, 2016 is $2.3 billion;as of June 30, 2016 is $2.3 billion; this amounts to over $1 million perthis amounts to over $1 million per student at the current enrollment.”student at the current enrollment.”
- 11. About state supportAbout state support
- 12. What we pay for in higherWhat we pay for in higher educationeducation • Personnel costs leadPersonnel costs lead • Some research costsSome research costs • ““Administrative” costsAdministrative” costs • Increasing student supportIncreasing student support • Some campus infrastructureSome campus infrastructure
- 13. Why we pay this wayWhy we pay this way • Baumol’s disease (productivityBaumol’s disease (productivity not increasing)not increasing) • Ethos of careEthos of care • Amenities arms raceAmenities arms race
- 14. Campus actionsCampus actions Adjunctification risingAdjunctification rising
- 15. Campus actionsCampus actions InequalityInequality withinwithin professoriatprofessoriat e sharplye sharply increasesincreases
- 17. 2. Current drivers2. Current drivers
- 19. The topThe top takes offtakes off
- 20. Long-term trend:Long-term trend: hollowing out thehollowing out the middle classmiddle class
- 21. Inflection of racismInflection of racism
- 22. Changes in job typesChanges in job types
- 23. Causes: no consensusCauses: no consensus GlobalizationGlobalization De-industrialization, rise of serviceDe-industrialization, rise of service (related) De-unionization(related) De-unionization ““Supermanagers” (Piketty)Supermanagers” (Piketty) Winner-take-all economy (Frank + Cook)Winner-take-all economy (Frank + Cook) Financialization (Arrighi)Financialization (Arrighi) Market-focused, or neoliberal ideologyMarket-focused, or neoliberal ideology
- 24. Causes: widespread automation?Causes: widespread automation?
- 25. Can education keep up?Can education keep up? Goldin and Katz,Goldin and Katz, The Race BetweenThe Race Between Technology and EducationTechnology and Education (2010):(2010): ““[I]f the supply of skills does not[I]f the supply of skills does not increase at the same pace as theincrease at the same pace as the needs of technology, thenneeds of technology, then groups whose training is notgroups whose training is not sufficiently advanced will earnsufficiently advanced will earn less and be relegated toless and be relegated to devalued lines of work, anddevalued lines of work, and inequality with respect to laborinequality with respect to labor will increase.” (305)will increase.” (305)
- 27. DemographicsDemographics Youth population shrinkage,Youth population shrinkage, esp. NE + midwestesp. NE + midwest Increasing nonwhiteIncreasing nonwhite populationpopulation Ballooning senior population…Ballooning senior population…
- 28. 2828
- 29. 2929
- 31. Demographic possibilitiesDemographic possibilities Increased state and federalIncreased state and federal funding to Medicaid, Medicare,funding to Medicaid, Medicare, pensions, etc.pensions, etc. Smaller labor pool w/wageSmaller labor pool w/wage stagnation = falling tax revenuestagnation = falling tax revenue
- 32. Political possibilitiesPolitical possibilities Pressure onPressure on highhigh endowmentsendowments Hostility toHostility to academia?academia?
- 33. Political possibilitiesPolitical possibilities StudentStudent unrest,unrest, uprisingsuprisings State/fedeState/fede ralral reactionreaction
- 35. Piketty, take 1: get used to itPiketty, take 1: get used to it Great Compression was an anomalyGreat Compression was an anomaly ““Once constituted, capital reproduces itself fasterOnce constituted, capital reproduces itself faster than output increases. The past devours thethan output increases. The past devours the future.” (571)future.” (571) r>gr>g
- 36. Extrapolate into medium termExtrapolate into medium term Faculty 80% adjunctFaculty 80% adjunct (“neofeudal” campus)(“neofeudal” campus) Focus on rich studentsFocus on rich students Student debt > mortgagesStudent debt > mortgages
- 37. Extrapolate into medium termExtrapolate into medium term F2F for the 1%F2F for the 1% Distance learning forDistance learning for middle classmiddle class MOOCs for everyone elseMOOCs for everyone else
- 38. Extrapolate into medium termExtrapolate into medium term Elite schools offer liberal artsElite schools offer liberal arts educationeducation Lack of visible tech = mark ofLack of visible tech = mark of statusstatus BA= mark of service qualityBA= mark of service quality Leading majors: finance, humanLeading majors: finance, human resources, poli sci, CS, engineresources, poli sci, CS, engine
- 39. Follow 1% displays closelyFollow 1% displays closely Contributed to sharingContributed to sharing economy by age 10economy by age 10 ““Middle class” is asMiddle class” is as historical as the Warsaw Pacthistorical as the Warsaw Pact
- 40. Extrapolate into medium termExtrapolate into medium term Some mitigation by publicSome mitigation by public servicesservices Potential unrest stirred and/orPotential unrest stirred and/or sapped by mediasapped by media Populism and oligarchyPopulism and oligarchy
- 41. Take 2: PikettyTake 2: Piketty et alet al turn out to beturn out to be wrongwrong • Class mobility becomes more dynamicClass mobility becomes more dynamic • Globalization’s pressure on wages slowsGlobalization’s pressure on wages slows downdown • We decide family dynamics are moreWe decide family dynamics are more importantimportant • Upper 1% commit to massiveUpper 1% commit to massive philanthropy increasephilanthropy increase
- 42. What is to be done?What is to be done? National actionNational action • Increased government support forIncreased government support for public institutionspublic institutions • “ “ “ “ ““ “ “ “ “ LACs (i.e., COPLAC)LACs (i.e., COPLAC) • Change K-12 fundingChange K-12 funding • return to busingreturn to busing
- 43. What is to be done?What is to be done? On campusOn campus • Partner with K-12Partner with K-12 • Increase aid based on economicsIncrease aid based on economics • Organize on adjunctsOrganize on adjuncts • Nurture public intellectualsNurture public intellectuals • Research and teach the problemResearch and teach the problem
- 44. 3. Peak higher education3. Peak higher education AcademiaAcademia experiencesexperiences a seriousa serious correctioncorrection
- 45. 3. Peak higher education3. Peak higher education Brian Mitchell, former president of Bucknell UniversityBrian Mitchell, former president of Bucknell University and Washington & Jefferson Collegeand Washington & Jefferson College https://academeblog.org/2016/07/27/higher-education-https://academeblog.org/2016/07/27/higher-education- must-look-inward-to- improve-financial-viability/must-look-inward-to- improve-financial-viability/
- 46. Enrollment decline?Enrollment decline? Spending less per familySpending less per family
- 48. Grad programs checkedGrad programs checked
- 49. How does this impact campuses?How does this impact campuses? Fewer, less crowded campusesFewer, less crowded campuses Very international studentVery international student bodybody Low-cost programs ($10K BA)Low-cost programs ($10K BA)
- 50. How does this impact campuses?How does this impact campuses? Increased remedialIncreased remedial programsprograms College generally seen asCollege generally seen as job trainingjob training
- 51. A handful of readingsA handful of readings Archibald and Feldman,Archibald and Feldman, Why Does College Cost So MuchWhy Does College Cost So Much?? (Oxford)(Oxford) Cappelli,Cappelli, Will College Pay OffWill College Pay Off? (Public Affairs)? (Public Affairs) Christensen et al,Christensen et al, Disrupting ClassDisrupting Class (McGraw-Hill)(McGraw-Hill) DeMillo,DeMillo, Abelard To AppleAbelard To Apple (MIT)(MIT) ____,____, Revolution in Higher EducationRevolution in Higher Education (MIT)(MIT) Massy,Massy, Reengineering the UniversityReengineering the University (Johns Hopkins)(Johns Hopkins) McGee,McGee, BreakpointBreakpoint (JHUP)(JHUP)
- 52. A handful of readingsA handful of readings NACUBO.NACUBO. Newfield,Newfield, Unmaking the Public UniversityUnmaking the Public University (JHUP)(JHUP) ____,____, The Great MistakeThe Great Mistake (JHUP)(JHUP) Piketty,Piketty, Capital in the 21st CenturyCapital in the 21st Century (Harvard)(Harvard) Stevens and Kirst, eds.,Stevens and Kirst, eds., Remaking College: The ChangingRemaking College: The Changing Ecology of Higher EducationEcology of Higher Education (Stanford)(Stanford) Wildawsky et al, eds.,Wildawsky et al, eds., Reinventing Higher EducationReinventing Higher Education (Harvard(Harvard Education)Education)