How much would it cost to fix American higher education? Think big. In 2015, colleges and universities spent about $532 billion to teach 20.5 million students enrolled in two-year and four-year colleges.
That $532 billion figure is the lowest estimate in circulation. The National Center for Education Statistics gives the figure as $605 billion for 2013-14. But let’s stick with the humble $532 billion.
So how much would it cost to fix our $532 billion worth of colleges and universities? The answer depends, of course, on what you think is wrong with them and which of the possible repairs you favor. But let’s not get overly complicated.
Here’s What’s Wrong with Higher Education
American higher education is subject to five broad categories of complaint.
The progressive left criticizes it for reinforcing oppression based on race, class, and sex. American higher education favors the rich and abets unjust capitalism.
Pro-market and libertarian observers criticize its dependence on public funding; guild-like stifling of innovation; and hostility to capitalism. American higher education privileges itself.
Liberals, moderates, and conservatives criticize it for putting identity politics at the center of curriculum and student life. It fosters inter-group hostility, a grievance culture, psychological fragility, incivility, and contempt for free expression. American higher education is illiberal.
Those who support the classical liberal arts criticize it for trivializing higher education, turning the curriculum into a shopping cart, neglecting the formation of mind and character in favor of political advocacy, and estranging students from their civilization by elevating the false ideal of multiculturalism. American higher education is culturally corrosive.
A wide variety of people criticize its high price, frivolous expenditures, and increasingly uncertain rewards for graduates. The gigantic growth in the number of campus administrative positions relative to the faculty comes under this heading too. American higher education is too expensive.
It would be easy to add more items or expand any of these into a whole book. Many have done just that. But my goal here is to cut a path through the forest, not to linger over the variety of trees.
When I speak of fixing higher education, I discard the first category, the criticisms of the university as a font of capitalist oppression. It simply has no basis in reality. Each of the other four categories is cogent, and any real repair would have to address all of them. Moreover, they are deeply connected.
I won’t linger over their interconnections either, but it is important to keep in mind that the guild-like or oligarchic aspects of higher education undergird its illiberalism, incoherence, and excessive expense; and its culturally corrosive quality licenses its voracious appetite for public funding, suppression of intellectual freedom, and frivolity.
Four Proposed Repairs to Higher Education
Corresponding to the four legitimate categories of complaint are four broad categories of possible repair:
Fix the financial model. Reduce and restructure federal and state support for colleges and universities. Eliminate the regulations that favor the guild and prop up oligarchy. Unleash the marketplace, including for-profit, online, and other entrepreneurial alternatives to the dominant model of two and four-year colleges. Steer Americans away from the idea that a college degree is necessary for a prosperous career. Find new and better ways to credential people as competent in specific endeavors. The general-purpose undergraduate degree should face competition from alternative credentialing.
Dismantle the infrastructure of campus illiberalism. Eliminate grievance deans and programs; rescind all government programs that subsidize identity politics; insist that colleges and universities punish those who disrupt events or otherwise undermine free expression. Some call for eliminating tenure because it has become a bulwark for the faculty members most intent on redirecting higher education into political activism.
Restore a meaningful core curriculum. This repair has three varieties: create an optional core curriculum at existing colleges, leaving everything else alone; create a mandatory core curriculum for all the students at a college; create new colleges that start out with their own core curricula. Reversing the cultural corrosion of American higher education will take more than reviving core curricula, but by common consent, that is the first step.
Restructure federal student loans. This is, of course, part of fixing the financial model, but it is crucial if the goal is to reduce the ballooning costs of higher education. Colleges and universities are expensive for several reasons, including their very high labor costs and tendency to compete with one another by increasing their amenities (e.g., rock-climbing walls), but the underlying cost-driver is their ability to rely on federal student loans to subsidize their ever-expanding budgets.
Total individual student borrowing of federal loans should be capped and time-limited. The jumble of federal student loan and grant programs should be reduced to just two: loans and grants. Colleges and universities should have to repay a portion of the loans for students who drop out or default after they graduate. This last step will make them much more wary of admitting students who are poor prospects for academic success.
To these four, perhaps I should add a fifth, more general repair: Fix college governance. Our variously named boards of trustees, regents, governors, overseers, etc., are conspicuous as having most of the legal powers necessary to enact the necessary reforms but seldom the collective will or competence to do anything meaningful.
For the most part, the boards are dominated by college presidents and chancellors. In principle the boards have the real authority, but in practice they have abdicated it. College presidents and chancellors are likewise typically beholden to the campus interest groups that had a say in their appointments. The governance structures in American higher education go back to Supreme Court decisions of the early nineteenth century.
Repairing governance structures will be difficult, but without this most other repairs will also fail because they will be successfully opposed from within the institutions. The basic repair needed is to create a high wall between the college president and the trustees that permits the trustees to demand information from the president, but keeps the president from artfully controlling the trustees.
I’ve made more detailed recommendations in my proposals for “Freedom to Learn Amendments” in the Higher Education Act, and my organization, the National Association of Scholars, has offered numerous other specific reforms ranging from getting colleges and universities out of carrying water for the “sustainability” movement to cutting the federal incentives for “service learning.” NAS in turn is only one of a dozen or so groups that has been advocating reforms. We aren’t short on proposals for making things better.
This simplified list of five kinds of repairs, however, can help frame an answer to how much it would cost to fix our $532 billion system of higher education.
Now For Some Parameters
Framed in this fashion, the most striking thing about fixing American higher education is that the direct costs look surprisingly small. The major obstacles are political, not financial. That’s not to say those obstacles are small. Politics is more than enough to sink most reforms, no matter the public good or economic benefits. Politics aside, overcoming the ferocious opposition of entrenched special interests would likewise pose a major challenge.
But the task in this essay is to conjure the costs of fixing American higher education, not the other difficulties. Let me set some parameters. We currently have 13.3 million students attending 3,039 four-year degree-granting undergraduate institutions. A substantial subset lacks the necessary preparation or basic ability to succeed in college. Another substantial subset have the preparation and ability but lack the interest and commitment to do much with the opportunity.
We can gauge the size of the first subset by the number of students who reach college in need of remediation. About three-quarters of first-year students who are required to take at least one remedial course drop out of college. We can gauge the size of the second subset by the results of the Collegiate Learning Assessment (CLA), which measures how much a college student gains in liberal arts skills over four years.
The remediation rate is roughly 25 percent. The national results of the CLA for 2013-2014, showed that 40 percent of seniors scored at a “basic” level or “below basic.” The “below basic” group—“unable to demonstrate even basic mastery of CLA+ skills”—amounted to 14 percent of the college seniors in the national sample.
Let’s not pretend to a refined degree of accuracy with these numbers. Rather, I estimate that only about a third of today’s college students belong in college in light of the ability to make much of the opportunity. Let’s err even more generously on the side of holding the door open for millions of others who might rise to the occasion if the occasion were better than it is. In that light, I propose we aim for a total enrollment in four-year degree-granting undergraduate institutions of half the current number. That would be 6.65 million students.
We don’t necessarily need 3,039 four-year colleges to teach 6.65 million students. Our proposed financial model will let competition thrive. We may well see new colleges as well as closings of existing institutions, as non-college options become more appealing to some students. In any case, we will not set a target for how many colleges there should be. The marketplace will determine that.
Consider an analogy with bookstores. Online bookselling, dominated by Amazon.com, precipitated the closing of many local brick-and-mortar bookstores along with entire national chains. But we are now in the midst of a boom in new storefront bookstores, whose proprietors have carved out a market niche that Amazon.com does not reach.
We can expect that higher education will experience something similar. It happened once before. In the pre-Civil War United States some 516 small colleges were founded. Post-Civil War, with the creation of land-grant colleges and universities, only 104 of these survived.
Next for Some Estimates
My goal is to put some realistic numbers for the costs of fixing higher education. Some of the fixes I’ve outlined would save rather than cost money, but that comes without reckoning on the costs of overcoming the opposition to reform and the transition costs of dismantling the programs th now in place. Here are my estimates.
Fix the financial model. Those who favor this step aim at drastically reducing federal and state expenditures on higher education. Those expenditures currently account for about half the revenue of colleges and universities. At public colleges and universities, 42 percent of total revenue comes from government grants, contracts, and appropriations, and 20 percent comes from tuition—much of which derives from federally guaranteed student loans. At private non-profit universities, 25 percent of total revenue comes from government grants, contracts, and appropriates, and 30 percent from tuition, again much derived from federally guaranteed student loans.
Absent this $260 billion subsidy, American higher education as we know it today would implode, along with much of the nation’s basic scientific research and other things we take for granted. I know some people who say, “Good. Let it implode,” but that would not fix the financial model. We do not bulldoze a house in order to repair the wiring.
What’s needed is a plan to reduce public expenditures in an orderly way to get them to a level that doesn’t feed the guild, stifle innovation, and feed a system of inveterate hostility to American values. I venture that the goal should be to cut public support by 50 percent in real dollars over five years. The five years would allow students currently enrolled in the system to adjust to the reductions. It would give start-ups a chance to organize themselves independently of the current system. The net cost of this reform is less than zero for the public purse.
Dismantle the infrastructure of campus illiberalism. Again, the actual expense of doing this is negligible. By eliminating programs and positions, it would pay for itself, even with the costs of litigation thrown in as grievance professionals proliferate lawsuits on their way out.
Restore a meaningful core curriculum. This one costs real money because it requires educating and hiring a new generation of college professors who have studied the traditional liberal arts and know how to teach them. A significant percentage of existing faculty would be redundant and have to be pensioned off or tolerated as a non-performing asset.
I think it is safe to assume that few if any existing colleges and universities that do not already have real, i.e. mandatory, core curriculum would be willing to add it. Such an addition would come at the expense of curtailing or replacing their current commitments to multiculturalism, distribution requirements (often deceptively marketed as “core requirements”), and undergraduate vocational instruction in areas such as business and “communication.”
Multiculturalism in the curriculum gives full scope to identity politics and victim group advocacy and plays a key role in minority faculty recruitment. Distribution requirements have created a system where all academic departments are equally licensed to compete for novice students. And vocational instruction now overwhelmingly dominates all other college majors. Business majors alone, for example, accounted for more than 19 percent of college graduates as of 2014; graduates who majored in the humanities—all fields combined—accounted for only 6.1 percent of college graduates as of 2014, which according to the American Academy of Arts & Sciences is the lowest percentage recorded back to the beginning of records in 1948.
It’s evident that restoring a meaningful mandatory core curriculum is not in either the ideological or the financial interests of contemporary colleges or universities currently offering non-core models. They might change their minds in response to a change in federal incentives and market conditions, but the prospect of alumni, donors, foundations, or advocacy groups prompting a move towards genuine core curricula is remote.
But that leaves open the possibility of creating more voluntary programs on “core texts.” Enough colleges have created these in the last quarter-century to warrant the existence of the Association for Core Texts and Courses, which has 67 institutional members, only a few of which mandate core curricula. The optional program approach is plainly in reach for many colleges and universities, and is something alumni, donors, and foundations can encourage. Because it typically involves a minor re-deployment of current faculty and modest administrative costs, it does not represent a significant expense at most institutions.
Restoring a meaningful core curriculum by creating brand new colleges may be the best way to ensure the quality of such programs, but it is also by far the most expensive. I helped one start-up residential college get off the ground and have watched it succeed; but I also advised an online start-up college that had to close under the weight of hostile regulation. From both experiences, I estimate that it takes a minimum of about $50 million in capital to plant a college and get it to the point where it might succeed. A college with seed capital of $100 million would have much better odds.
How many such new colleges do we need? That depends on how much digital learning we are willing to substitute for the traditional classroom. I propose that philanthropists set aside $1 billion for creating ten new bricks-and-mortar colleges, and another $500 million for hybrid on-line/residential start-ups. That $1.5 billion might well create a critical mass of institutions dedicated to genuine high-quality liberal education in the United States.
Adding new colleges, whether residential, online, or hybrid, however, is only one part of restoring a meaningful core curriculum.
Restructure federal student loans. This proposal in a variety of forms is already part of the political discussion. It branches off in many directions, with the Bernie Sanders and Elizabeth Warren wing of the Democratic Party eager to make college education “free” to students, and New York Gov. Andrew Cuomo providing the state university demonstration model of that idea right now.
A completely different branch of the debate—one favored by Sen. Lamar Alexander—calls for requiring colleges and universities to bear part of the responsibility of paying student loans back if the borrower defaults. This is called “skin in the game.” It would not directly reduce the mammoth portfolio of federal student loans but would give colleges and universities an incentive to think more carefully about whom to enroll. Students who are likely to drop out or perform poorly in their academic programs are bad credit risks, and colleges would presumably admit fewer of them.
Better still, we should cap the total federal loan borrowing of every student. Reduce the bounty on students’ heads, and colleges and universities will hunt fewer of them. These are, again, money-saving proposals, not a source of new costs.
Fix college governance. Encouraging college trustees to do their jobs in a meaningful way may sound easy, but history shows it is not. Maverick trustees who seek independently to examine financials or other details of institutional governance usually find themselves ostracized and isolated. College presidents typically control their boards, and trustees know their place. Most are very happy with an annual gala dinner and tickets on the 50-yard line to the homecoming game. Perhaps this problem becomes fixable in the face of financial exigency. In that light, fixing the financial model and restructuring student loans may create the opportunity in their wake to fix the governance system.
The Costs of Reformers
It might be well to add something about the costs of the reformers: the organizations that advocate for ideas such as those I’ve summarized here. We are not all singing from the same musical score, but we are a brethren of sorts. By my calculation we cost collectively about $70 million per year as follows:
Institute for Humane Studies: $17.7 million
Leadership Institute: $14.9 million
Intercollegiate Studies Institute: $9.08 million
The Jack Miller Center: $7.93 million
David Horowitz Freedom Center: $7.5 million
Foundation for Individual Rights in Education (FIRE): $6.3 million
American Council of Trustees and Alumni: $3.99 million
National Association of Scholars: $1.3 million
William F. Buckley Jr. Program at Yale: $700,000
James G. Martin Center for Academic Renewal: $638,000
Alexander Hamilton Institute for the Study of West. Civ.: $452,000
Total: $70.48 million
I have no desire to understate the sum, and if I have left out any organizations that fall within the scope of my subject, it is inadvertent.
Reform-minded organizations are, of course, only one face of the reform movement. If we add the numerous other small programs that row in the same direction, the total might reach $80 million. A more expansive definition of “reform-minded” could conceivably push the total to $100 million. I’ve also left out progressive reform groups that generally push in the opposite direction. These include organizations such as Education Reform Now, whose data on remediation I used above.
I’ve left out the various think-tanks such as New America, Heritage, and the American Enterprise Institute that have dedicated departments for higher education issues; and finally, I’ve left out the 50 or so “centers” on various campuses that strive to represent traditional humanistic thought in an otherwise hostile environment.
The king of these is Robert George’s James Madison Program at Princeton. The Jack Miller Center’s list of sponsored campus programs comes close to being comprehensive. If we added in the budgets for the relevant pieces of all these—relevant in the sense of aimed at broader reform of American higher education and not just high-quality programming at a particular institution—the entire reform movement might stretch to a $150 million enterprise.
Which is to say, at the outside limits of estimation, America spends about almost three one-hundredths of 1 percent (0.0282 percent) on reform of higher education of what it spends on higher education itself.
The differences among these groups are important, but that’s for another time. Rather, to answer the question, “How much would it cost to fix American higher education?” the cost of supporting the reform movement itself needs to be reckoned.
Now For the Big Answer
How much would it cost to fix American higher education? Adding up the estimates for the five reform areas comes to something between $1.5 billion and $2 billion. That’s a miniscule expense compared to the annual carrying costs of American higher education, but it is far more than Americans currently devote to the cause. Even if we were to factor in alumni and other donations to the handful of colleges and universities that exemplify traditional academic standards, the sum would not reach the billion-dollar mark.
This essay is more a matter of sitting on a promontory and surveying the landscape than a call to action. Of course, all of us working on higher education reform would welcome more financial resources, and most of us aren’t shy about asking potential supporters for help. But right now I’m not asking. I’m simply taking in the big picture. That picture shows that the greatest difficulties in fixing higher education are clearly not in the costs.
The greatest difficulties are in our dispirited acceptance of colleges and universities for what they are: self-serving, illiberal, culturally corrosive, luxuriously expensive mediocrities that pretend to an “excellence” they do not have. Complaining about this helps only to the degree that it is a way of finding others who recognize the aptness of the complaint. Complaints are signal lanterns in the dark night. But the real work is to present compelling ideas for how to fix things—and then actually fixing them.