25 Ways to Reduce the Cost of College - ERIC

25 Ways to Reduce the Cost of College

Center for College Affordability and Productivity

A Policy Paper from the Center for College Affordability and Productivity

September 2010

About the Authors

This study is the result of a collaborative effort among the staff of the Center for College Affordability and Productivity. Authors include:

Richard Vedder, Andrew Gillen, Daniel Bennett, Matthew Denhart, Jonathan Robe, Todd Holbrook, Peter Neiger, James Coleman, Jordan Templeton, Jonathan Leirer, Luke Myers, Ryan Brady, and Michael Malesick.

Acknowledgements

The Center for College Affordability and Productivity would like to thank Lumina Foundation for its generous support of this research.

Lumina Foundation for Education is an Indianapolis-based private foundation dedicated to expanding access to and success in education beyond high school. Through grants for research, innovation, communication and evaluations, as well as policy education and leadership development, Lumina Foundation addresses issues that affect access and educational attainment among all students, particularly underserved student groups, including adult learners. The Foundation bases its mission on the belief that postsecondary education remains one of the most beneficial investments that individuals can make in themselves and that society can make in its people. For more details on the Foundation, visit its Web site at .

The views expressed in this publication are those of the authors and do not necessarily represent those of Lumina Foundation for Education, its officers, or employees.

Center for College Affordability and Productivity

The Center for College Affordability and Productivity (CCAP) is an independent, nonprofit research center based in Washington, DC that is dedicated to researching public policy and economic issues relating to postsecondary education. CCAP aims to facilitate a broader dialogue that challenges conventional thinking about costs, efficiency and innovation in postsecondary education in the United States.

1150 17th Street NW #910 Washington, DC 22036

Tel: (202) 375-7831 Fax: (202) 375-7821 collegeaffordability.

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Table of Contents

Section One: Use Lower Cost Alternatives ............................................................. 1

#1: Encourage More Students to Attend Community College................................................................ 1 #2: Promote Dual Enrollment Programs.................................................................................................. 7 #3: Reform Academic Employment Policies.......................................................................................... 11 #4: Offer three year Bachelor's Degrees ............................................................................................... 26 #5: Outsource More Services ................................................................................................................. 31

Section Two: Use Fewer Resources...................................................................... 43

#6: Reduce Administrative Staff ............................................................................................................ 43 #7: Cut Unnecessary Programs .............................................................................................................. 57 #8: End the "Athletics Arms Race" ........................................................................................................ 66 #9: Overhaul the FAFSA ......................................................................................................................... 77 #10: Eliminate Excessive Academic Research ....................................................................................... 86 #11: Streamline Redundant Programs at the State Level ..................................................................... 93 #12: Promote collaborative purchasing .............................................................................................. 105

Section Three: Efficiently Use Resources ........................................................... 109

#13: Improve Facility Utilization .......................................................................................................... 109 #14: Increase Teaching Loads .............................................................................................................. 116 #15: Encourage Timely Degree Completion ........................................................................................ 125

Section Four: Exploit Technology to Reduce Costs ............................................. 131

#16: Move More Classes Online .......................................................................................................... 131 #17: Reduce the Cost of Textbooks ..................................................................................................... 141 #18: Digitize Academic Libraries .......................................................................................................... 150 #19: Outsource Email Services ............................................................................................................. 157 #20: Utilize Course Management Tools............................................................................................... 161

Section Five: Improve Competition .................................................................... 171

#21: Ease the Transfer Process among Public Institutions ................................................................. 171 #22: Reform Financial Aid .................................................................................................................... 182 #23: Reform Accreditation to Reduce Barriers to Entry ..................................................................... 194

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#24: Subsidize Students, not Schools .................................................................................................. 206 #25: Promote Competition Based on Value, Not Reputation............................................................. 220

Figures

Figure 1.1: Public Institution Enrollment Trends: Two-year vs. Four-year...............................................2 Figure 1.2: Public Institution Tuition and Fee Trends: Two-year and Four-year......................................3 Figure 3.1: Percent of Full-Time Faculty Not Tenured & Not on Tenure-Track......................................12 Figure 3.2: Percent of New Hire Full-Time Faculty w/o Tenure & Not on Tenure-Track........................13 Figure 3.3: Ratio of Part-Time to Full-Time Faculty.................................................................................14 Figure 6.1: Job Growth by Position & Status: 1987 to 2007....................................................................45 Figure 6.2: Employee Projection at 4-Year Public & 4-Year Private Not-for-Profit Colleges .................46 Figure 6.3: FTE Administrative Employees Per 100 FTE Students...........................................................47 Figure 8.1: Real Growth in Generated Revenue vs. Expenses (medians): 2004-2006............................67 Figure 8.2: Real Growth in Median Allocated Revenue: 2004-2006.......................................................67 Figure 8.3: Median Athletic Expenses by Category of Expenditure, FBS Institutions, 2006...................69 Figure 10.1: Research Spending at Colleges and Universities.................................................................88 Figure 11.1: Operating Expenses Percent Breakdown by Category, Public 4-Year College and Universities, 2008.....................................................................................................................................95 Figure 15.1: Time Between Post-Secondary Entry and Degree Completion.........................................125 Figure 19.1: Estimated User Cost Per Month by Expense Category......................................................158 Figure 24.1 Revenue Sources of Public Colleges: 2005-06 (in Billions of Dollars)................................207

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Tables

Table 3.1: Average Faculty Compensation at Select Engineering Schools (2007)..................................23 Table 5.1: Percentage of Colleges Using Privatized Services, 2001........................................................39 Table 6.1: Total & FTE Staff in Degree-Granting Institutions, by Occupation; All Institutions..............44 Table 6.2: Percentage Change in Staffing at Degree-Granting Institutions, by Occupation; All Institutions...............................................................................................................................................44 Table 6.3: E&R Spending by Sector and Educational Category (in 2006 Dollars)...................................49 Table 6.4: Earnings Level of Administrative Staff, by Institutional Type (#Schools), Fall 2007.............49 Table 6.5: Typical Administrative Worker Salary by Functional Category and Type of Institution, 2008-09.....................................................................................................................................................51 Table 6.6: Estimated Savings from a 5% Reduction in Administrative Staff..........................................52 Table 10.1 Time Actually Spent On Research Versus Time Preferred On Research...............................87 Table 11.1: Average Total Instructional Expenses by Sub-category, Public 4-Year Colleges and Universities, 2008.....................................................................................................................................95 Table 14.1 Mean Course Loads By Year.................................................................................................117 Table 17.1: Percent of Courses Using Electronic Books in 2008, by Institution Type...........................145 Table 18.1: Academic Library Expenditures by Function, 1996 & 2006 (Constant 2006 Dollars)........151 Table 20.1: Percent of Institutions with Single Product Standard LMS, 2008......................................163 Table 20.2: Percent of Courses Using LMS, by Institution Type............................................................163 Table 21.1: States with State-Wide Transfer and Articulation Policies (2005).............................175-176 Table 21.2: Retention and Graduation Rates for North Carolina Transfer Students...........................177

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25 Ways to Reduce the Cost of College

Section One: Use Lower Cost Alternatives

#1: Encourage More Students to Attend Community College

Community college enrollments have grown considerably over the last half-century, reflecting a general increase in demand for postsecondary degrees seen in this period. However, little attention is given to the fact that community colleges have quietly gained not only in enrollments, but in public institution market share as well. Community colleges held a 34 percent market share among public institutions in 1970, steadily escalating to 46 percent in 2007. The rising costs and debt loads associated with four-year institutions have subsequently decreased the opportunity cost of attending community college. That is, achieving higher wages by attending a four-year school is growing less profitable as a student is required to pay more out-of-pocket, take on more debt, and forgo years of employment. The benefits community colleges offer to the student are numerous and range from cost savings to scheduling flexibility, while public benefits include fewer tax dollars spent per student and positive externalities for local economies.1 Community colleges provide an alternative to those who wish to continue their education at a lower cost, with fewer entry requirements, and often with a higher level of convenience, while reducing the mounting costs to the taxpayer.

Community College Trends

Community Colleges got their first big boost in 1947 when the Truman Commission aimed to increase educational opportunities after high school by establishing a network of public community colleges around the country with little or no direct cost to the student. Additionally, military education assistance, such as G.I. Bills, work to promote higher education attainment among veterans who often opt for community colleges over traditional four-year schools. In the years since, their scale and scope has expanded. Dual enrollment options (where students take a class that counts for both high school and college credit) are becoming increasingly popular, with a large proportion of these students enrolling through two-year colleges and universities. Economic downturns are also believed to attract many students to community colleges, acting as a more affordable route to higher education at a time when money is tight and jobs are scarce. In 2007, 6.3 million students enrolled in community colleges in the United States, representing 34 percent of all undergraduates, and 46 percent of all undergraduates at public institutions.2 Community college enrollments have shown a steady average increase of 5.2 percent annually since 1963, compared with 2.6 percent at public four-year institutions.3

1 Economic Impact: Houston Community College Regional Economic Growth and Investment Analysis (Houston Community College). 2 United States, National Center for Education Statistics, Digest of Education Statistics (Washington: NCES, 2007). 3 Ibid.

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Enrollment (In Millions)

Center for College Affordability and Productivity

Figure 1.1: Public Institution Enrollment Trends: Two-year vs. Four-year

8 7 6 5 4 3 2 1 0

1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

Four-year

SOURCE: DIGEST OF EDUCATION STATISTICS, TABLE 190

Two-year

Benefits of Community Colleges

Community college proponents cite a multitude of advantages in favor of two-year education, with a focus on five main points. First, community colleges provide postsecondary education at a fraction of the cost of their four-year counterparts. Students at public two-year institutions save, on average, $4,183 in tuition over public four-year institutions, and $22,741 when compared to private four-year schools.4 These numbers are particularly significant when extrapolated to four or more years of postsecondary education. This tuition differential has resulted in a substantial difference in debt accumulation between two-year and four-year students. A Department of Education survey showed that during the 2003-2004 academic year 64.5 percent of students graduating from four-year institutions took out student loans, and they borrowed an average of $18,417. Conversely, only 29 percent of students attending public two-year institutions took out loans averaging only $8,805 in debt.5

4 2008 Annual Survey of Colleges (The College Board, 2008). Figures obtained by subtracting average published tuition and fees for public two-year schools ($2,402), from that of public four-year ($6,585) and private four-year ($25,143) schools. These relative annual savings amount to $4,183 between public two-year and public four-year schools, and $22,741 between public two-year and private four-year schools. 5 Mark Kantrowitz, "Growth in Cumulative Education Debt at College Graduation," Student Aid Policy Analysis 30 July 2009.

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