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A 'necessary' of modern life? A very expensive college education - Cover Story

Commonweal - March 28, 1997

In 1844, Middlebury College in Vermont sued one Lyman Chandler for nonpayment of tuition. The college lost. The final verdict was rendered by the Vermont Supreme Court. Mr. Justice Royce summed up: "A collegiate education is not ranked among the necessaries for which an infant can render himself liable for contract." The statement inhabits the realm of common law. Chandler was an "infant" - he was fifteen when he originally enrolled, and thus below the age of majority. Under common law, minors could validly contract for "necessaries": food, lodging, clothing. Was higher education a "necessary"? The court noted that a "common school" education was a necessary since it was "essential to the intelligent discharge of civil, political, and religious duties," but college studies, "though they tend greatly to elevate and adorn personal character, are a source of much private enjoyment, and may justly be expected to prove of public utility..., are far from being necessary in the legal sense." As the court observed: "The mass of our citizens pass through life without [collegiate education]."

Tuition at Middlebury in 1844 was $20 per quarter (plus $7 for room, sweeping $4, library $2, board in town $50). Chandler couldn't afford it. In 1996-97, Middlebury's comprehensive fee - which includes room, board, and fees - exceeds $28,000 (sweeping thrown in). Could Chandler - can anyone! - afford it? (Middlebury must think so, since it has announced plans to expand the size of its student body.)

I mention this mini-bit of history to give perspective on the issue of the high price of higher education. Reflection all the way back to Middlebury. v. Chandler indicates the absolutely radical change in the place and price of higher education. Using the wholesale price index as at least a rough measure, costs have risen by a factor of about ten since the 1840s. That should peg current costs at Middlebury at $2490. But a Middlebury education is now over one hundred times more expensive than when Chandler could not afford tuition. Neither could most citizens in the nineteenth century, and most would have agreed with the Vermont justices that it was not a "necessary."

It is sobering to consider that higher education has always been unaffordable. I call Lyman Chandler as a witness, and the "mass of our citizens" who could not afford college up to the end of World War II. (Before World War II less than 5 percent of the U.S. population had college degrees; today 50 percent of the college-age population receives "postsecondary" instruction.) What changed everything was the G.I. Bill. For the first time in American history, lots of people could afford higher education. Once properly imbued with the college spirit, the G.I.-Bill generation and after were determined that their children should have the same advantage.

If college became somewhat more affordable through government largess (G.I. Bill, vast expansion of public higher education), social perception also changed: college education came to be seen as a "necessary" for economic and social reasons. Sociologist David Riesman claimed that a college degree - any college - is the American passport to the middle class. If higher education is perceived as establishing a life position, not a personal adornment, one can even change the philosophy of funding. Like housing, education is a life necessity to be subsidized (in public housing/public education or government grants and/or long-term loans).

Despite the fact that higher education has a long history of unaffordability - recently tempered by government subsidy - I think that the current situation is different and drastic. When discussing the extraordinarily high cost of higher education today, it is not cost alone that is an issue; it is the cost plus the social demand. When no one wanted to go - or even dreamed of affording tuition - the "high cost" was, in a sense, a nonissue. In the meanwhile, colleges and universities have become somewhere near one hundred times more complex and sophisticated. Middlebury circa 1844 had 1,500 books in the library, no scientific equipment, no gymnasium, and five ministerial faculty. Contemporary colleges have extensive libraries - often in the millions of volumes - cyclotrons, computers, football stadia, and cadres of highly trained specialist faculty. No wonder they are more expensive.

Why the current stir about unaffordable higher education? Some of it is illusion: the really high price spread is limited to about one hundred or so of the three thousand American colleges and universities. Harvard (or Middlebury) is not all of higher education, so it is merely titillating to think college must cost $28,000 per year and up. Most folks go to public universities - many of great distinction - where the tuition price is more likely to be $2,800 and down. Nor is private higher education all at the Harvard price: many smaller collegiate institutions, including many Catholic colleges, are priced at one-half to two-thirds the expensive Ivies. Then, community colleges are substantially free.

Except that there is no free lunch or learning. Anguish about "the high cost" of higher education needs to distinguish with pellucid clarity cost and price. The cost of delivering the product - instruction plus library plus sweeping - is more or less the same at public and private institutions of the same scope and caliber. It is the tuition price that differs and startles the consumer. But if parents protest tuition at pricey private schools, taxpayers protest the cost of public education. Recent drastic cuts in public university budgets suggest that taxpayers are as reluctant to pay for public higher education as individuals are for high-tuition private colleges.

If the current price structure of higher education annoys tuition payers and taxpayers, what are possible scenarios for the future?

* Private colleges will be utterly priced out of the market. That's unlikely for the really high-priced institutions. Princeton is nowhere near setting a "market clearing price" (the price that is so high that it exhausts the number of potential buyers). This is a sempiternal truth for institutions of high prestige. Someone will pay (almost) anything for Ivy-ish credentials. The pressure in the private realm is on second-tier, often moderately priced institutions of lesser "prestige." Their competition is the public institution in the next county which is currently a real bargain. However....

* Public universities will boost tuition. A harried public university president told me that his budget had been cut so drastically that he no longer considered his institution a state university, even a state-supported university - "state-located" was the best he could suggest. Given the closing down of the state treasury, public institutions have already and will continue to increase tuition sharply. Out-of-state tuition for some of the flagship state universities is already at $10,000 - at a level with the modest-priced privates.

* Private and public higher education will become financially similar. United States private universities already are heavily dependent on government funding. A major research university may receive - through research funding, government grants-in-aid to students, and federal loan programs - more than half its aggregate income from direct or indirect government sources. Public universities, on the other hand, often receive only modest funding from their home state. The University of Vermont gets about 16 percent of its budget from the state; only 25 percent of UCLA's budget is state-funded. If the state does not/will not fund, high-tuition public education is the likely result.

I am reasonably confident that these predictions will prove accurate. Students at public institutions will pay more in tuition, because taxpayers will pay less. (President Bill Clinton's tax break for college education is a Band-Aid at best - and since he is also advocating higher education for everyone, I cannot imagine that either the federal or state tax resources can keep pace with that possibility.) Some equalizing between public and private price will benefit the privates, assisting them in dealing with falling applications and high financial-aid costs. Unfortunately for taxpayers and tuition-payers alike, these sorts of changes do not alter the aggregate economics. Nothing so far said lowers the total cost of delivering higher education. If taxpayers and individuals combined are not willing or able to pay for all this academic elegance, inexorable economic pressure will lower the aggregate cost. Can that be done?

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