Tag: center for college affordability and productivity

Is Cato Taking the Faculty Productivity Debate National?

From some of the coverage of the release of the new University of Texas report on the productivity of its faculty, you might get the sense that this Friday’s Cato/Center for College Affordability and Productivity conference will be the national coming out party for the faculty productivity debate.  As the The Daily Texan writes, echoing an earlier Texas Tribune article:

with elected officials like Florida Gov. Rick Scott praising Texas’ controversy as good for higher education reform and with the Cato Institute hosting a conference called “Squeezing the Tower: Are We Getting All We Can from Higher Education?” this Friday in Washington D.C., this is very much a national debate.

This is—and must be—a national debate, because huge amounts of taxpayer dollars from all levels are at stake, not to mention oodles of bucks from students and parents. But don’t expect the sides to be well settled. Speakers on Friday are likely to offer a variety of opinions on how to hold schools and their faculties accountable, and there will be no simple left/right breakdown. I telegraph a bit of what I’ll be saying in this new Education News interview.

Cato and CCAP certainly want to take this crucial discussion national, and I hope you’ll join us on Friday. Register here!

Tough Breaks for the Blame-Cheap-States Crowd

An explanation for explosive college prices that’s very popular with ivory-tower apologists is that state governments have been ruthlessly “defunding” higher ed for years, forcing schools to raise prices. Two new reports help to make clear – as I have argued many times in the past – that this simply doesn’t hold water.

The first report is the annual State Higher Education Executive Officers’ State Higher Education Finance Report.  While it shows that on a per-pupil basis state and local funding has declined over the last few years, total amounts have risen pretty steadily since 2000. Adjusted for inflation, total state and local support dipped from $81.3 billion in 2000 to $78.0 billion in 2005, ballooned to $87.1 billion in 2009, then dropped just a bit to $85.5 billion in 2010. Helping to put it all in perspective, SHEEO reports that in 1985 state and local funding totalled just $65.5 billion. In other words, the general trend line has gone steeply up. But don’t believe me? Take it right from the report:

Some observers have suggested that states are abandoning their historical commitment to public higher education. National data and more careful attention to variable state conditions strongly suggest that such a broad observation is not justified by the available data.

Of course, if total taxpayer funding is generally up but per-student funding is down, increases in enrollment must be significant. And indeed they are. Unfortunately, evidence suggests that that’s very likely not a good thing.

The other bad news for the blame-the-taxpayers crowd is a new report from the Center for College Affordability and Productivity that illustrates that external factors such as decreasing state subsidies are not the main culprit behind skyrocketing prices. Student aid is, because it allows colleges to increase their prices with impunity. Evidence of this includes college prices considerably outpacing overall inflation; hugely declining faculty productivity; tuition growing far beyond instructional costs; and ballooning financial aid that hasn’t been accompanied by decreasing net costs.

Unfortunately, much of this will likely either be dismissed out of hand or just ignored. But the evidence, when you examine it, is awfully compelling: Subsidies, not pennypinchers, are the big problem in higher ed.

Income-based Taxpayer Ripoff

Great stuff on Forbes.com today by the Center for College Affordability and Productivity’s Daniel Bennett. Bennett examines the income-based student-loan repayment provisions attached to the health-care reconciliation law, and itemizes how much of their monthly repayment bill borrowers in most federal loan programs will be able to skip out on, leaving taxpayers holding the bag.

Check out Bennett’s entire, handy chart in the article to see the savings for numerous levels of debt and income, and I’ll just highlight the savings for borrowers with $25,000 in debt – slightly more than the average for those graduates who have any debt.

Basically, any single person at that debt level making below a little more than $60,000 a year would see savings under IBR. A federal loan of $25,000, with a 6.8 percent interest rate, would normally carry a monthly repayment of $383. But a person earning $60,000 a year would only pay $365 under IBR, a $19 monthly savings. And, of course, the IBR savings to the borrower – and loss to the taxpayer – gets bigger as income goes down.

Oh, and that’s really only half the story: While anyone with a federal loan (excluding PLUS loans) is now eligible for IBR, if you go into saintly non-profit work – including assuming the incredible hardships of working for the government – your remaining loan balance will be forgiven after only ten years of on-time payments, versus twenty for any devil who dares produce things for which people voluntarily pay!