Feldman discusses 'The Road Ahead for Higher Education'
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The narrative of crisis that has infiltrated public discussion of higher education goes on ad nauseam, suggests W&M Professor of Economics David Feldman.
“Everything is about the demise, and half the schools will go bankrupt, and student debt is bigger than credit card debt,” he said. “It’s all about the end of the world.”
It is far from the end of the world, Feldman believes. In part to address the negative narrative, he, along with colleague Robert Archibald, also a W&M economist, wrote The Road Ahead for America’s Colleges and Universities. The book is intended to counter those insisting that “the higher-education industry is going to blow away like dust in the next 30 years,” Feldman said.
The book admits the significant challenges facing the industry. It addresses many in a data-driven way that ties them to broad economic forces reshaping the United States. As it concludes, it raises its own cautionary admonishment, namely that pursuit of a university education is relinquishing its ability to serve as a pathway of social mobility.
“If the cost of producing a year of college is rising, but a rising tide is not lifting all boats, if there are people who are significantly falling behind, which is the case during the past 40 years in the United States, then people are coming into college with less and less capacity to pay the cost of high-touch, personalized education, which is the gold standard,” Feldman explained.
He fears that such education increasingly will be reserved “for students of wealth and privilege” or what he designates the “cognitive elite,” he said.
As with many of the problems addressed, the book offers means of response. Feldman cites the “fallacy of the list price” posted by institutions as resulting in what he terms “undermatching,” a situation in which academically qualified students from lower socio-economic brackets do not apply to higher-tier universities because they believe the cost is out-of-reach. This occurs despite the fact that the “net price,” the amount the students would actually pay after Pell Grant, other monies and institutional need-based discounts are calculated, would prove significantly less.
“If we can induce them to apply, we would do a lot for increasing the social-mobility function of higher-education,” Feldman said.
In the book, the authors suggest that the rising cost of a higher education is a factor of "cost disease," the situation in which the cost of providing services has risen faster than the cost of providing goods. Although they acknowledge that online learning alternatives have a place, data shows that the traditional university-age student does not fare well in such programs, they said. The sometimes maligned "college bundle," which includes services such as rooms and meals, as well as health and recreation facilities, is time-tested and effective in "magnifying the peer effect" that accounts for a high percentage of a young person's learning.
"We do not see the industry being disrupted, to use a common buzzword, by online education, or by the for-profit education colleges and universities, but we do see the non-profit side facing serious problems over the next generation," Feldman said. "Different kinds of schools in our system will face those problems in their own ways. Some sides of our industry will face far deeper problems than others."
Elite public and private universities that can raise adequate funds and can draw students from a wide geographic base are poised to thrive. Less-competitive schools need to assess their own demographic challenges, according to Feldman. "For the next 10 years, or so, the numbers of high-school graduates is projected to be stable," he explained. "The problem is that it masks regional differences. The Northeast and the Midwest are in trouble in the sense that the demographic forecast is down."
Schools are not in competition generally with the other 4,000 schools in the country, Feldman explained. They are in competition with a group of five-to-20 other regional schools. In such cases, universities that can distinguish themselves within their group, whether by offering courses in a STEM or health-care field, or by sponsoring selective internships, can stand out. Schools also can find ways to cut costs. Some are sharing libraries, Feldman said. Others are exploring ways to offer components of a physics education without maintaining fully-resourced physics labs. "They are finding that they can share the toys," he said.
Some schools simply will close, Feldman said. Their prospective students will be available to other institutions.
{{youtube:medium|r0q3LWiLYuM,Va. Senator Timothy Kaine reads from David Feldman's letter during a hearing to reauthorize the Higher Education Act.}}
