2008 August 16 Saturday
US Congress Moves Toward Price Controls On Education

The United States government has poured large quantities of money into higher education. As a result prices have risen. Increases in demand often cause prices to rise. Now the morons in the US Congress are going to try to pressure colleges to ignore the extra market demand created by the government.

New legislation, expected to clear the House and Senate after press time on July 31, includes provisions designed to put pressure on colleges, universities, and states to rein in the escalating price of a college education.

The best potential for doing so, some experts say, lies in the searchable college data that the US Department of Education will post online to bring transparency to tuition rates and the "net price" students pay after receiving aid.

One set of lists would spotlight the 5 percent of institutions with the largest percentage tuition increase over the past three years – in categories such as public, private, four-year, and two-year. They would have to report to the Ed Department the reasons for the tuition hikes.

Why not address the costs of higher education by reducing the need for people to go to bricks and mortar 4 year colleges in the first place? The most obvious way to do that is to deliver more course content over the internet and to provide ways to do testing for most subjects over the internet. Recorded lectures and automated testing software could greatly reduce the labor needed to deliver courses. People all over the country or all over the world could watch the same lectures and take the same tests. The cost reductions due to economies of scale will be enormous.

The US Congress wants to force states to keep up college level spending even when recessions happen. Congress does not want cost reductions.

To push states to do their part, the law requires that their higher education funding each year be at least as much as their previous five-year average (excluding capital and research and development). Such "maintenance of effort" provisions are common in K-12, but this sets a new precedent in higher education, Mr. Hartle says.

As the federal government increases student aid, "states should not see that as an opportunity to take their own funding out at the bottom," says Rachel Racusen, spokeswoman for the House Education and Labor Committee. Last fall, Congress provided about $20 billion in federal aid for students over the next five years.

The government aid reduces the incentive to develop lower cost ways of delivering college courses. The US government impedes educational innovation. There's no need for thousands of people every year to deliver first year calculus lectures or lectures on differential and partial differential equations. There's no need for thousands of introductory physics courses or organic chemistry courses or accounting courses. Lectures on these and many other subjects could be delivered over the web for much lower cost.

A more automated electronic approach to education would not just lower costs. It would also provide much greater convenience since people could watch web prerecorded lectures at their own pace and at the times of their choosing.

Update: An article in the Christian Science Monitor focused on the drive of colleges to recruit more students from low income families (in part to get around legal obstacles to the use of racial preferences for blacks and Hispanics) describes efforts by Amherst College to boost enrollment of low-income students. The amazing thing: Amherst claims that it costs $80k to feed, house, and educate each student. This shows how far costs have gotten out of control at colleges.

Some parents wonder if their child might be paying more to subsidize low-income students, Parker says, but that's not the case, because funding for financial aid primarily comes from colleges' endowments. Many donors, in fact, dedicate their endowment gifts to financial aid. Even students who pay the full price of tuition, fees, and room and board – about $47,000 – aren't paying the full amount it costs for the college to house and educate each student, which adds up to nearly $80,000.

That number shows why automated education is the solution. More subsidies for colleges will just further bloat their already bloated cost structures.

Update: I've been arguing for years that automated delivery of standard tests across the internet could enable testing and teaching to be sold as separate services and that this could cut enormously cut the costs of education while making it more convenient and tailored to individual needs. Charles Murray has now written a book entitled Real Education: Four Simple Truths for Bringing America's Schools Back to Reality where Murray makes the case for certified examines to demonstrate subject mastery modeled after the CPA examination.

The model is the CPA exam that qualifies certified public accountants. The same test is used nationwide. It is thorough -- four sections, timed, totaling 14 hours. A passing score indicates authentic competence (the pass rate is below 50%). Actual scores are reported in addition to pass/fail, so that employers can assess where the applicant falls in the distribution of accounting competence. You may have learned accounting at an anonymous online university, but your CPA score gives you a way to show employers you're a stronger applicant than someone from an Ivy League school.

The merits of a CPA-like certification exam apply to any college major for which the BA is now used as a job qualification. To name just some of them: criminal justice, social work, public administration and the many separate majors under the headings of business, computer science and education. Such majors accounted for almost two-thirds of the bachelor's degrees conferred in 2005. For that matter, certification tests can be used for purely academic disciplines. Why not present graduate schools with certifications in microbiology or economics -- and who cares if the applicants passed the exam after studying in the local public library?

Certification tests need not undermine the incentives to get a traditional liberal-arts education. If professional and graduate schools want students who have acquired one, all they need do is require certification scores in the appropriate disciplines. Students facing such requirements are likely to get a much better liberal education than even our most elite schools require now.

Read the full article for more details. This approach would provide many advantages. For example, a smart adolescent kid in a rural town bored out of his mind in grade school and high school (I'm thinking of my childhood) could watch lectures on the internet and study and then take tests to start earning certificates of mastery of subjects years before graduating from high school. State governments could fund the recording of lectures at state colleges to make them freely downloadable (or charge a fee) so that someone could watch all the courses in a college without ever setting foot on a bricks and mortar campus.

People could pace their own education. If you wanted to learn at a very fast rate you could watch all the courses in a year of organic chemistry in a couple of weeks of very long hours of watching. Or you could watch every lecture produced by a big college history department in several months of long hours. Or you could spend a couple of months watching nursing lectures to help you decide whether you wanted to become a nurse.

Bricks and mortar colleges and universities will still survive as research centers and also for teaching advanced subjects that are constantly changing. But we currently employ easily an order of magnitude more people in higher education than would be needed if we embraced recorded lectures and certificate exams for most subjects.

Share |      By Randall Parker at 2008 August 16 10:27 PM  Education


Comments
Xenophon Hendrix said at August 17, 2008 12:27 AM:

This article by Charles Murray is relevant.

Wolf-Dog said at August 17, 2008 7:16 AM:

The new "price control" for college education will come when the internet and computers become just a little bit more advanced, which will be within less than a decade. In order to deliver the basic undergraduate curriculum on electronic media, in addition to recording the lectures of the best professors, we need to create a decent home study course pack that will include a strict way method for supervising the homework assignments, quizzes, midterms, final exams (and their grading). Besides lecturing and deciding the curriculum and homework assignments, the other important function of the college professor is to encourage (or threaten ) the students to do their homework and to take their work seriously.

The reason college tuition has increased so much during the last two decades is because of the fear that not getting a prestigious diploma will lead to poverty, or the belief that a prestigious diploma will lead to wealth. Also the salaries of the professors in most universities, not just top 20, have increased a lot more than inflation during the last two decades. Despite the declining median intellectual level, the competition to enter the top schools has become so much more intense during that last 20 years, that even below the top 20 universities, many colleges started to reject even A students who have high SAT scores.

But I agree that for most people, a more specialized training that is more job oriented, would be better than liberal arts training. For instance, a well organized computer science curriculum can be compressed into a 3 year program, like in UK, instead of a 4 year program that includes frankly unnecessary courses. And these computer science courses can now be on the internet, provided that we find a way of supervising the progress of the student, but thanks to the interactive nature of the internet, this is easy to do, so that at the end of each internet lecture, the student can be forced to take a 10 minute quiz at the end of the day, and every week a longer quiz of 1 hour can be done. I am sure there will be a biometric way of making sure that there was no cheating. Also, for the final exams and the midterm exams, every student would go to a test center in the town a village, where the test is computerized. At least for undergraduate education, this is enough, because even biochemical reactions can be simulated by means of computer graphics, eliminating the need for a laboratory at the undergraduate level.

Physics Coursework said at August 21, 2008 2:00 AM:

like this idea! Lets apply it to any defense contractor that prices a toilet seat higher than the national “toilet seat price index". Perhaps to political contributions that exceed the national “political bribe index". Why I see all kinds of potential money saving uses for this “tool".


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