Sunday, January 22, 2012

When cost, quality, and access are in conflict

People who worry about the cost of higher education often argue that high cost reduces access to higher education.  That is undoubtedly true.

But it is also true that low cost limits access.  Here is how: When a good school offers a very low tuition, demand for enrollment in that school increases.  In this case, schools could do one of two things: increase enrollment or become more selective. Because schools have a limited ability to increase capacity (both because of physical plant and because low cost is almost always a result of finite subsidies from outside sources), they almost always become more selective.  And by becoming more selective, students who need access to higher education are often unable to enroll in those top-quality low-cost schools.

US News and World Reports' recent list of the 10 Least Expensive Private Colleges makes this point in spades. The top four schools in this list (which is an idiosyncratic list--it is missing Cooper Union, for example) are good schools and inexpensive.  But they are hardly accessible.

Berea College is inexpensive because its endowment--almost 800 million dollars--subsidizes a huge portion of its budget.  The BYUs that follow--Idaho, Hawaii, and Provo--get subsidies from another source.  When I was a faculty member at BYU Provo about a decade ago, the rumor was that 80% of the budget came from LDS Church funds--mostly the tithing dollars of members. I don't know if that number is correct, but it is certainly the case that BYU is inexpensive because the church pays most of the costs of attending there.

These schools limit access in two ways. First on  mission.  Berea is dedicated to serving low-income students from Appalacia, the BYUs to serving Mormons. Second, on academic preparation.  Here BYU Provo is the strongest example.  Its entering freshman class routinely has an average HS GPA of 3.75 and an ACT composite score of 28.

(BYU-Idaho has worked hard to increase capacity to be able to serve Mormons who cannot get into BYU-Provo.  It has adopted a year-round calendar, and has recently begun aggressively moving into online education. (Take a look at The Innovative University for the full glowing story. Here are my views on the book.)  In doing so it hopes to draw on volunteer faculty--retired Mormons with PhDs who will teach online for almost nothing.  Hardly a business model for the nation.)

The stories of these schools share a simple message--reducing cost doesn't necessarily help with access at all. It may, in fact, make it harder for good students to go to good schools.

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