TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, January 29, 2019

This Is Higher Education’s Golden Age

Two CheersChronicle of Higher Education:  Is This Higher Education’s Golden Age?, by Steven Brint (UC-Riverside; author, Two Cheers for Higher Education: Why American Universities Are Stronger than Ever — and How to Meet the Challenges They Face (Princeton University Press 2019):

American universities appear to be in deep trouble. Consider a few recent headlines: in The Atlantic: “The Pillaging of America’s State Universities” and “The Broken Promise of Higher Education”; in The New York Review of Books: “Our Universities: The Outrageous Reality” and “The Hi-Tech Mess of Higher Education.” The Chronicle, too, has contributed to the pervasive negativity: “An Era of Neglect,” “Higher Education Is Drowning in BS,” “The Slow Death of the University.”

Scholars have joined the joyless chorus. For many of them, American universities have transformed themselves into market-oriented enterprises, barely different from corporations: They charge exorbitant fees, effectively excluding students from the bottom half of the socioeconomic hierarchy; they shortchange students’ educational experiences by obsessing over the bottom line; they have created a caste system with low-paid adjuncts doing most of the teaching. In the scramble for dollars, these critics assert, universities have forsaken their social and cultural responsibilities.

The truly puzzling feature of this narrative is how little relation it bears to reality. Far from supporting this gloomy perspective, the statistical evidence suggests that American universities have never been stronger or more prominent in public life than they are now. At major research universities, from 1980 to 2010, research expenditures grew by more than 10 times in inflation-adjusted dollars, while high-quality publications cataloged in the Web of Science grew by nearly three times. Few, if any, sectors were as important to the emerging knowledge economy as universities, and the federal government supported their development with high, if never fully sufficient, funding. Federal R&D funding, estimated at more than $30 billion in 2017, is largely responsible for the explosive growth of research during this period. The federal financial-aid system provided essential fuel for higher education’s expansion, doling out about $65 billion in Pell Grants, work-study funds, and tax benefits in 2015 — not counting the hundreds of billions of dollars in loans that are also available through federal lending. Both support systems have trended sharply upward in inflation-adjusted dollars since the 1980s, including during recessionary periods.

Higher education’s critics may assume that as tuition has increased, demand for college degrees would plummet. The opposite has been true. The growth in undergraduate enrollments has been steady during periods of recession and prosperity alike. The 20 million students who now attend higher-education institutions represent a college-going group nearly 100 times larger than in 1900 and nearly 10 times larger than in 1950, far outpacing population growth. Graduate degrees also became more common. By 2015 more than 25 million Americans held advanced degrees (master’s and above), a cohort larger than the combined population of the five largest American cities. As much as students may resent higher tuition, they continue to think of college as a good investment — and they are right. In 2015, economists at Georgetown University estimated that the average college graduate earned $1 million more than the average high-school graduate over the course of a working life.

Even during the depths of the Great Recession, the idea of a “crisis of the public university” was badly exaggerated (a 2011 Chronicle essay by that title proclaimed that “public higher education is dying”). While a few professors and the press dwelled on the recession as a period in which the sky was falling, the mean salaries for assistant, associate, and full professors actually increased a little between the 2007-8 and 2012-13 academic years, as did average staff size and the asset value of endowments. Yes, some campuses suffered from tight budgets, but a look at the system as a whole makes clear that parents and students were willing to pay higher tuition to compensate for declining state support, and that universities were, by and large, successful in controlling costs and diversifying their revenue bases.

As I have pored over the evidence, I have come to a conclusion very different than the one suggested by pessimistic professors and an alarmist press: Beyond the din of the latest protests about sexual violence on campus or controversial speakers causing an uproar, some remarkably positive trends have left American universities bigger, stronger, and in a more influential position than ever before.

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Comments

"The federal financial-aid system provided essential fuel for higher education’s expansion, doling out about $65 billion in Pell Grants, work-study funds, and tax benefits in 2015 — not counting the hundreds of billions of dollars in loans that are also available through federal lending. Both support systems have trended sharply upward in inflation-adjusted dollars since the 1980s, including during recessionary periods."

Great for the universities and their stakeholders (faculty and admin). Not so great for the generation of students graduating (or not) with crippling debt who are forced to delay major life events like home ownership and parenthood while they struggle to repay the loans associated with the bloated cost structure of higher education in this country.

The lack of self-awareness, how utterly oblivious this author is to the struggles of the students, is truly amazing.

Posted by: Todd | Jan 29, 2019 4:58:25 PM

Maybe like 2005 was the golden age of houses...

An annuity calculator tells me a Georgetown graduate might need *well over* $1 million in incremental earnings to really break even on ~ $71,000 x 4 = $280,000 in college costs, considering a reasonable rate of return, the income coming over decades, and the expenses generally not being deductible.

A Georgetown education might do better than average - but so could a high school grad who could go to college but chooses another path.

Posted by: Anand Desai | Jan 29, 2019 5:17:20 PM

Nothing beats an apologist

Posted by: Mike Livingston | Jan 30, 2019 2:18:51 AM