Technology Alone Can’t Curb College Cost Inflation
Steven Pearlstein writes up a promising application called Aplia that helps teach introductory economics to college students. I can’t judge independently whether or not Pearlstein is right about the program’s merits, but I can say that he’s too optimistic about this: “For me, however, what’s really exciting about Aplia is that it finally holds out the possibility of bringing to higher education the same productivity revolution that has lowered costs and improved quality in almost every other industry over the past two decades.”
I used to think this way. I used to think that cost inflation in higher education was driven by a lack of productivity improvements. Therefore, I thought, when people invented productivity-enhancing technologies that made undergraduate education cheaper, we’d be on the road to curbing cost inflation. Then I read this eye-opening article by Kevin Carey in The Washington Monthly. Kevin points out that we actually have seen a bunch of things like Aplia that are making aspects of undergrad education more efficient. They’re just not making it any cheaper for students and their parents:
For the most part, colleges would just rather spend it elsewhere. The nonprofit Delta Project on Postsecondary Education Costs recently found that tuition and fee revenue per student at public research universities increased by 34 percent, in inflation-adjusted dollars, from 2000 to 2005. At the same time, spending per student on instruction and academic support declined. This is nothing new—overcharging for introductory courses is standard operating procedure in higher education, and has been for a long time. Colleges routinely use the excess revenues generated by huge, inexpensive lecture hall classes to support other, money-losing activities. Freshmen have always been cash cows—technology just made them more so.
You should read the whole article. But suffice it to say that the larger issue is that colleges and universities don’t face incentives to deliver cost effective undergraduate education. They face incentives to use undergraduate education as a profit center with which to finance other status-seeking endeavors like sports and research and higher salaries for administrators. If you want productivity enhancements to bring tuition down, you need to change those incentives.
42 Responses to “Technology Alone Can’t Curb College Cost Inflation”
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May 8th, 2009 at 2:41 pm
College (particlularly elite college) is a prestige good. It will always be as expensive as it needs to be, in order to maintain it’s exclusivity, and colleges will just find a way to spend the excess money.
Private schools like the University of Phoenix have already gone a long way toward rationalizing the actual process of instruction. I dare say the average graduate there gets a better quality education than they would at Harvard. Doesn’t matter. A degree from U of P and 2 bucks will get you a cup of coffee, while a degree from Harvard lets you get paid to blog all day about things you don’t know anything about. And it will never, ever, ever, change.
May 8th, 2009 at 2:46 pm
I haven’t read the Carey piece, but a few years ago it had become conventional wisdom that colleges were engaged in an arms race to pamper students and attract the best and brightest. Fabulous gyms, nice dorms, high-quality cafeteria food, etc. Basically a bunch of stuff largely irrelevant to the educational mission of the school, except that there is a zero-sum fight over high-quality students, who of course factor hugely into the quality of education at any school (both because it takes two to tango and because peers are important in the educational process – and presumably because good students make it easier to attract good faculty).
So you have college students at places like Middlebury (but also large state schools) living much better than previous generations of college students, and probably better than they will once they graduate. It’s probably a big waste, especially when you consider the vast resources commanded by these elite schools.
However, one aspect of this is that the very best schools in the US have excellent financial aid (it’s part of the arms race). Once you get below that elite tier, though, it gets worse and worse.
May 8th, 2009 at 2:47 pm
[...] More College Cost Inflation By Matthew Yglesias: [...]
May 8th, 2009 at 2:55 pm
If you want productivity enhancements to bring tuition down, you need to change those incentives.
Good fricking luck with that. Short of nationalizing the university system, they are going to keep charging what the market will pay for their diplomas and taking the profits in the form of goldplating.
May 8th, 2009 at 2:57 pm
At least at the elite level (and the most expensive schools) I’m not sure that’s a bad thing. Rich kids subsidize their poorer peers through financial aid, and also provide public goods by supporting research in socially beneficial fields. It’s basically a progressive tax.
May 8th, 2009 at 3:05 pm
I would point out that changing the incentive structure could result in lower returns even without deciding to replace classtime with computerized applications. (Do people actually like the idea of the de facto method of interfacing with the universe being through the virtual reality of a screen? It’s not that different from the virtual reality of language which is the basis of language, but it may leave less room for the important sense of place and related issues.) Now of course I have no idea how to change these incentives. Let’s all whine about money-losing athletics, vanity building projects, and expenditures on the standard of living for students!
(And I would point out to jimbo that were cost, as opposed to the admissions process, to be the key to the exclusivity to some colleges, then colleges wouldn’t spend so much on financial aid and would more overtly auction off their slots for students. The point of the prestige is “This degree means you’re supposedly smart,” not “This degree means you’re supposedly rich.” But of course in real life it’s more complicated than this.)
May 8th, 2009 at 3:08 pm
Education is in large part a positional good, so is not subject to productivity improvements to the same degree.
May 8th, 2009 at 3:08 pm
To the extent that the purpose of college is signaling (”look, I went to a good college, I must be smart, hire me”), then productivity enhancements that improve education quality won’t reduce the cost of college.
But spending govt. money to make more high-quality colleges or increase the # of students at high-quality colleges would decrease costs, because it would make the signaling mechanism less efficient.
May 8th, 2009 at 3:10 pm
I was surprised to read such ill-informed blather. Undergraduate education never, ever subsidizes the rest of the university–and, of course, at most institutions there *is* nothing besides undergraduate education. And let’s not forget that this college-cost-inflation discussion is only relevant to the top-prestige tier of institutions; for the rest of them, largely public, any tuition increases beyond inflation have been because of decreased state support. That’s the principal cause of beyond-CPI inflation at flagship publics as well, by the way. So basically you’re down to a relative handful of elite private universities’ practices that are driving the whole discussion, which is ridiculous.
May 8th, 2009 at 3:13 pm
Undergraduate education never, ever subsidizes the rest of the university
OK, A) where are you getting this “fact”, and B) are you counting alum contributions by former undergraduates?
May 8th, 2009 at 3:13 pm
My second parenthetical point in my most recent post is not to suggest that colleges aren’t interested in making money. It’s that they are interested in making money because it’s good to have, not only to share some strained prestige through economic exclusivity with their students (and I am not particularly interested in drawing a line from 19th century higher-education to the 21st. A lot has changed in the outlook of people involved and there may have been more nuance to the view of the 19th c. than may be thought at first). But it’s definitely naive to assume that anyone can easily afford a college education just because of the existence of financial aid.
May 8th, 2009 at 3:22 pm
And of course my first point in my first comment was not wrong but insufficient. The colleges will continue to charge what they want (in order to get money), and then use it on whatever they feel. Many students will continue to pay what the colleges will ask them to pay in order to receive the credential associated with the admissions process, the ability to do well in a college curriculum, and the educational value added by a college education. THis is different from a colleges making its costs high in order to maintain “it’s” exclusivity. It is a reflection of that exclusivity in the first place.
The first point was correct in that I follow it up with a discussion of how difficult it would be to change the incentives structure and to get colleges to trim away more and more of what is not necessary until a handful of competitive colleges (politically correct caveats about the perception of the college not automatically applying to the college and to the reality of the college not automatically applying to all of its students all around) may lower costs enough that others start to lower their costs. But yeah, complicated.
Blog comments.
May 8th, 2009 at 3:27 pm
Improved efficiency should make it possible to convey more educational content to students in less time than it has in years past. Yet a bachelors degree still takes 4 years. I think its time to trim that back to three years – and slash the cost of college by 25% right there.
May 8th, 2009 at 3:29 pm
I’m sure many liberal arts students could educate themselves just reading books at the library, and watching lectures online. Nevertheless, I don’t think there are many technology enhancements that will make their learning faster, even if the Internet has made research easier and more efficient.
For science and engineering students, though, there is little substiture for spending hours in the lab. At better schools, the money goes for providing facilities and equipment to students for learning that otherwise would be completely out of reach.
I went to an expensive private school, and one thing that you get for the money is a high faculty to student ratio. When there are fewer than 20 students in a class, you can’t avoid engaging the professor and there are few who will risk showing up to class unprepared. I know that there are many large public universities that don’t work that way, where they pack as many students as they can into a lecture hall, but there is a substantial difference in the quality of education between the two approaches as a result.
I am a technologist, and I can see how technology can make poor mass education more efficient, but I don’t see it delivering quality.
May 8th, 2009 at 3:41 pm
There’s several things at Aplia (http://www.aplia.com/ ) including philosophy (I know, it’s just logic, but once you know logic, the rest of philosophy is mere detail, right?) The economics offerings include AP Economics which suggests the target is more than just undergraduates at colleges. so I need to figure out if this would be useful in the near future for my 14 year old.
There’s even a meter for Aplia output: total answers produced! If that’s not engineering educational efficiency, I don’t know what is.
May 8th, 2009 at 3:42 pm
I do want to point out that intercollegiate sports are by no means loss leaders. Whenever the USC Trojans football team score a win, huge dollops of alumni donations come in. It’s actually quite profitable for USC to invest a lot of money in the Trojans sport franchise.
Same, to a lesser extent, with Harvard, Yale, and Princeton. There, the factors influencing donations tend to be nostalgia, but it is worthwhile to point out that among elite college, the wealthiest, and the ones with the most enthusiastic donors, tend also to be the most athletically successful; i.e., Dartmouth as a mostly undergraduate institution, Princeton, with the highest endowment per-head and its Bulldogs, Williams, which is the wealthiest, as well as (by consensus) the most athletic of the Little Ivies, Middlebury, which is the 3rd wealthiest Little Ivy and is also famous for athleticism.
Athletic success has a very much verifiable correlation with financial well-being, for elite colleges. In no way are sports financial sinkholes; precisely the opposite.
May 8th, 2009 at 3:43 pm
And no need to mention Stanford, its athletics, and the only athletic scholarship program (at least explicitly) among elite schools.
May 8th, 2009 at 3:45 pm
Waah, I made typos in my comments. Therefore everything I wrote was wrong! (THis is me being a pardoy of my unpleasant self.)
May 8th, 2009 at 3:45 pm
Duke, its famed presences on Wall Street, its lacrosse team (which has a large cross-over with the Wall Street crowd), and its basketball players.
May 8th, 2009 at 3:46 pm
The statement was that freshmen students, because of their large lecture hall classes, supplement the rest of the students. I spent the equivalent of a full year in lecture halls with about 500 other students as an undergrad. That’s 500 student-years of tuition, for a quarter year of a professor’s salary and 8 months rent on a lecture hall. That comes to about $100,000 cost for $4 million in tuition.
May 8th, 2009 at 3:46 pm
This is the first semester I have used Aplia. I think it is a good program, but it is not clear that it will reduce costs very much. I sometimes teach very large classes, and that is when I would use a program like Aplia. Before it came along, however, I used undergraduate teaching assistants to go over problems with the students. This was mainly done (by the TAs) for course credit and a very small stipend. Thus, while there may be an improvement in learning outcomes (at least I hope so), the dollar savings is not very large in the scheme of things.
May 8th, 2009 at 3:58 pm
It’s not about productivity.
Higher education has become a sorting mechanism — to separate “us” from “them.” The “best” colleges — or, more precisely, the ones whose students score highest on tests — have erected two barriers to keep “them” out: academic and financial.
Pearlstein is pissing in the wind, albeit with good intentions. He doesn’t understand that “we” will never settle for an Aplia-driven education for “our” kids.
Productive or not, that’s for “them.”
May 8th, 2009 at 4:05 pm
Let’s see…a culture that says everyone has to go to college. so there’s a near limitless customer base. Customers with easy government backed credit so price is no object.
So a surplus of customers who are all flush with student loans (that will crush them later). There is zero incentive for colleges to keep tuition low. Plenty of people will pay for it whatever it costs.
Take away the customers or take away their financing, and only then will tuition prices be realistic.
Does it remind you of anything? Maybe a bubble of some kind?
May 8th, 2009 at 4:06 pm
This program looks like it could have been developed as open courseware by one coder and one economist.
Instead, Romer gets $10 million in VC money and charge universities proportionately. I’m sure they have a portfolio of bogus computer instruction patents too, because that’s how VCs work.
Rentseekers. They’d patent “Lemonade Stand” and sell it to undergraduates if it made them money.
May 8th, 2009 at 4:07 pm
One of the largest sources of revenue at a large research university- rivaling tuition- is the overhead charged on research grants. A grant obtained from the National Science Foundation, for example, to an individual professor might be in the range of 200-400k over three years. Of that total, the university will take 50-60% (depending a bit on the school) as overhead cost. At a research university each professor in each science/engineering department will most likely have one or more grants active at any given time.
May 8th, 2009 at 4:08 pm
Or you could bring up your favorite search engine and look up “online colleges” which I did. Students everywhere, from High School through college are taking some or all of their classes using the new technology with limited one on one, or seminar teacher meetings. They just don’t go to the colleges that “sell” fake prestige.
May 8th, 2009 at 4:09 pm
Research is merely a status-seeking endeavor?
May 8th, 2009 at 4:43 pm
Overhead costs for researchers at non-university laboratories run about $250k-$500k per man year. That’s costs on top of salary and non-capital equipment. If your numbers are correct, then universities are subsidizing research, not making money off of it.
May 8th, 2009 at 4:46 pm
In our case (I work for a State university in Arizona, in a professional college.Think Law or Medicine)
Our tuition has gone up steadily, well outpacing inflation.
Of course, in that same time frame our state support has gone DOWN 35% (adjusting for inflation) while our enrollment has increased by 100%, meaning our state dollars per student has plummeted. All the while we’ve struggled to maintain a high ranking among our peer colleges, which means expensive faculty.
And never mind that the kind of reaearch we do has moved from needing test tubes and $10K instruments to culture plates $100k instruments.
And guess what? Our lege is now aiming cut higher ed AGAIN. Arizona State os making employees, faculty and staff take 22 days furlough this year, which means, practically speaking there are going to be a hell of a lot of people working for $0 for those 22 days, because furlough time cannot affect the University mission.
Finally, people are not widgets, and education is not a business.
Business models made for cranking out and selling transistor radios more efficiently do not apply to teaching humans, any more than increased automation would elevate the output of Hollywood.
May 8th, 2009 at 5:48 pm
I love The Teaching Company.
They claim they are college level courses but they really aren’t.
Having said that, they do have some of the best lecturers in the world prepare and lecture.
We could save a ton of money if we had all lectures given my actors reading a script and recorded.
That would allow the live teachers to use their time far more productively and reduce costs while improving quality.
May 8th, 2009 at 7:07 pm
We used aplia one year for an intro econ class that I TAed for. It was alright, but we ended up dropping it. It mostly came down to the fact that it was too hard to teach graphs, which is all intro econ really is. That said, not needing to grade homework was awesome.
May 8th, 2009 at 8:01 pm
The reason for conservatives’ existence is to appropriate productivity gains for the rich. Productivity improvements will never be passed on to the middle and lower classes so long as conservatives have anything to say about it.
Tuition prices will never be relieved on the supply side while conservatives oppose building enough state universities to meet demand.
Tuition will never be relieved on the demand side either, so long as conservatives oppose universal health insurance, practical mass transit, sensible urban planning, unionization, living wages and every other liberal policies that would enable young adults to afford their own apartments without a college education.
May 8th, 2009 at 8:39 pm
This is certainly true for my land-grant, the University of Missouri. State funding has been steadily cut for years, sometimes steeply. For example, the manager of KOMU TV forbade the wearing of flag pins on air in 2001, saying that they were there to report the news, not to editorialize. For this treasonous behaviour, a special amendment was introduced specifically to cut funding for the Journalism department by the Missouri legislature.
Automated math teaching doesn’t work, btw. I don’t have the relevant cite handy, but this seems to be the case, broadly speakeing. Anecdotally, we’ve tried several packages, none of them that seem to produce detectable results. Currently we’re using Coursecompass software for lower division math classes. About the only thing it’s good for is freeing up the TA’s from grading homework.
May 8th, 2009 at 8:46 pm
[...] looks at intro econ classes and the program Aplia used to give tests online. Matt Yglesias gives a pretty good rundown of why Pearlstein’s argument that programs like Aplia will cut college costs. I wrote about [...]
May 9th, 2009 at 1:23 am
Carey’s article contains some very weird and stupid stuff. The paragraph Yglesias quotes is followed immediately by this:
“Where did all the money generated by cost savings and price hikes go? In some states, back to the public treasury.”
So the states slash the amount of money they give to public universities and this is supposed to say something about the incentives the universities face, that “colleges would rather spend money elsewhere”? I guarantee you the universities would prefer not to have their appropriations slashed.
May 9th, 2009 at 1:27 am
Also, the Aplia demo for logic is almost entirely Venn diagrams. Fuck that Aristotelian shit; for the big logic class that I’m going to have to teach because of massive budget cuts, I’ll be looking at some of the other computer-assisted logic texts.
May 9th, 2009 at 6:44 am
No one’s reading this, but this paragraph from Pearlstein is cute:
By relieving instructors of the considerable burden of reviewing homework assignments, the technology makes it possible for universities to require professors to teach more students, either by increasing class sizes or the number of classes they teach. More important, it frees instructors to spend more time preparing for class, working with individual students and even doing their own research.
1) Universities are ramping up class sizes anyway.
2) Carey thinks “doing their own research” is an indulgence and a waste of productivity gains. Seriously. He writes “All of these things—research and scholarship, Division I sports programs, new buildings, high SATs—have one element in common: they’re components of status. And colleges are, at their core, status-seeking institutions.” Later he complains about universities’ “lust for status based on exclusivity and scholarly renown.”
May 9th, 2009 at 10:53 am
I’m still reading. I get the sense from a lot of these people – people like Carey, that is – that teaching isn’t a skill that’s hard to come by(at least, for some of us
I can remember when I first started formally teaching, and having kids ask me ‘How did you know how to do that?’. Trust me, floundering a bit, and then saying something to the effect that it is ‘obvious’ is not good teaching. Nor is grading as cut and dried as it is often made out to be.
In my experience, teaching is not primarily about imparting information. The core skills, it seems to me, revolve around figuring out whether the student gets it, or whether the student got it, but got it wrong, and what they have got wrong.[1] You can be the Top Guy in your field, and be abysmal at teaching, as I’m sure most of us have found out the hard way. ‘Technological innovations’ like Aplia or MathLab are nice bits of window dressing, and are useful in the lower divisions where there might be 200 students in a lecture hall. But they don’t increase productivity in any meaningful way.
[1]I teach mathematics; I can’t speak to some other field like History or English, which presumably come with their own set of teaching woes.
May 9th, 2009 at 12:37 pm
Yeah, fuck that money-losing research boondoggle.
May 9th, 2009 at 2:37 pm
You’re STILL wrong.
The central error that you, Carey and Pearlstein all make is that understanding is something to be delivered to the students. It is not. It is something that has to be constructed individually in each student mind. So when you ask for productivity improvements, you are essentially asking for something that will make student brains run faster and/or more efficiently.
Education is essentially a handicraft industry. Each student presents his/her own individual issues that must be individually addressed. This means that it suffers from the same impediments to productivity improvement as the making of sculpture or handmade furniture. Yes, you can buy mass produced furniture. You can also go to DeVry instead of Cal Tech. So what?
Neither you nor anyone else has any credibility writing on this issue until you have at a bare minimum read How People Learn. And since this is available for free on the National Academies web page, you’ve really got no excuse.
May 9th, 2009 at 4:09 pm
In English–low down, not the grad research level above the clouds–the burden is reading essays, tons of them. I don’t think that the technology has appeared that reads student writing (frequently exceptionally bad)in the nuanced way that an experienced teacher of the subject is able to do.
No one in the above comments mentions Distance Learning (DL), which many colleges & universities love because it is relatively cheap to install and also saves money by eliminating student physical presence. I taught an online sophomore course (World Literature survey) for five years, every fall and spring semester. The typical washout rate was 50%; students were alone, by themselves, there was no communal class experience. The online students never numbered more than 25. But they often failed to do the work, just disappeared. If they had come to class without the assignments, they couldn’t escape so easily: they would be known faces, not just online names. With DL, it might work well with subjects that are entirely factual–which eliminates most of the humanities.
How about a study (Harvard Graduate School of Education?) on how well/effectively students actually learn in DL, as opposed to financial considerations for the institutions?
May 12th, 2009 at 9:09 pm
I see that you’re ignoring the elephant in the room, which is the fact that government policy drives the costs of higher education upwards, primarily by subsidizing student loans. This removes the market pressure on schools to keep a lid on their costs, and it sharply reduces the student’s incentive to get the best bang for the buck.
The cost of higher education in relation to income was quite steady until the GI bill, which started the upward trend, and then the federal student loan program sent it into overdrive.