Spin-off: is college an "industry"?

[Catherine]

I saw this term used in another thread, by way of pointing out that institutions of higher education are managed like businesses, I guess?

 

But I think the bigger question is if universities are worth what they charge. And if they aren't, how can they continue to charge as much as they do?

 

For anecdotal evidence, I'll just say that my opinion is heavily influenced by my upbringing, and my husband's, in which few in our extended families went to school after high school, and none of them is in a position of real financial security right now. The ways in which they are struggling range from job\business loss or decline in this economy, to retiring early because of illness and finding it extremely difficult to live on social security, to needing to find a less physically demanding line of work as they age, and being unable to do so. Oh, and loss of much of a retirement fund through stock market downturn.

 

So my perception is that my education, my degrees, have saved me these difficulties. And I am definitely strongly biased toward encouraging my offspring to get a college degree. And I also think that colleges are charging what the market will bear. We may not like it, or find it impossible to pay for, but I do think market forces are at work in the dramatic rise in college costs. But I honestly do believe that schools couldn't charge as much as they do unless they were flooded with students whose parents are willing to pay for it.

[Sebastian (a lady)]

I saw this term used in another thread, by way of pointing out that institutions of higher education are managed like businesses, I guess?

 

But I think the bigger question is if universities are worth what they charge. And if they aren't, how can they continue to charge as much as they do?

 

For anecdotal evidence, I'll just say that my opinion is heavily influenced by my upbringing, and my husband's, in which few in our extended families went to school after high school, and none of them is in a position of real financial security right now. The ways in which they are struggling range from job\business loss or decline in this economy, to retiring early because of illness and finding it extremely difficult to live on social security, to needing to find a less physically demanding line of work as they age, and being unable to do so. Oh, and loss of much of a retirement fund through stock market downturn.

 

So my perception is that my education, my degrees, have saved me these difficulties. And I am definitely strongly biased toward encouraging my offspring to get a college degree. And I also think that colleges are charging what the market will bear. We may not like it, or find it impossible to pay for, but I do think market forces are at work in the dramatic rise in college costs. But I honestly do believe that schools couldn't charge as much as they do unless they were flooded with students whose parents are willing to pay for it.

 

I am definitely biased in favor of my kids going to college. Even if they were going to own their own business, I think that having a degree would give them several advantages.

 

But I also think that there is an industy to higher education. It may not earn profits that are shared with stockholders, but it does take tuition, endowments, and grants and turn them into salaries and facilities. I think there are some people within the campus system who maybe should be paid more. But I also think there are some people making very good livings, especially compared to what their credentials might earn outside academe. (As a card carrying English major, I especially wonder about the salaries of English lit professors. I'm also skeptical about many XX Studies programs.)

 

On why they can charge the prices they do. I think it partly that it is very difficult as a parent to tell your child not to go to college. There are many indications that a college degree has become the new high school diploma for demonstrating work ethic, competence and employability. So since prices are set based on supply and demand, there doesn't seem to be a shortage of demand.

 

This is helped along by the various government programs that move the cost of tuition either onto someone else or into the vague realm of "taxes".

 

I can think that owning a house or a car is a good thing, something I desire, and still think that there is an industry devoted to marketing and selling cars. In the same way, I think that there is an industry that is deeply involved with the marketing of college. (For example, Crazy U points out that one of the US national daily papers would be a financial loss were it not for the publishing side of the company that does SAT and AP prep books. In other words, the publications being sold to prep high schoolers underwrites the paper. Alas, I can't cite which guides or which paper and it was a library book, so I can't go check.)

[creekland]

Most things are run like businesses - and I don't find that to be terribly wrong. One wants money in to at least = money out in order to survive and one wants to pay their top employees well to theoretically get the best.

 

Sure, in life, not all works as well in reality as it does in theory, but that happens everywhere - not just colleges.

 

Sure in life there are those who are greedy and don't care who they are ripping off to get more, but that happens everywhere in every system - not just in capitalism or business.

 

Fortunately, in life I still believe there are more good folks out there than bad. Even if it's not true, I want to believe it. It keeps me sane. I KNOW more good than bad IRL.

 

For colleges I think one needs to pick carefully to find a good match for academics and affordability. There are many I wouldn't pay a dime for nor accept if they were free. I also won't support some other businesses I disagree with or who offer goods/services I don't want.

 

I'm very biased pro college education, but I never consider the worth of someone based upon whether they have one or not. It just fits our family well with our love of education and loving to learn. My boys could win the lottery to where they'd never need money from a job and I'd still want them to get their college degree. They could decide they love working at a fast food joint (doubtful though) and I'd still want them to get their college degree.

 

Today we had "decision day" at our school and all sorts of decisions (jobs, military, cc, state, private) were celebrated. They also had taped interviews from several folks who work in our school. One was from a custodian. I felt sad when he wished the future college students well telling them to hang in there and work hard - he'd always wished he'd "gotten that piece of paper" himself and he'd do things differently if he'd had it to do over again. Any of my guys might choose to be a custodian and I'll be proud of them, but I don't want them having regrets about a degree. It need not come from an expensive school.

[Jane in NC]

 

So my perception is that my education, my degrees, have saved me these difficulties. And I am definitely strongly biased toward encouraging my offspring to get a college degree. And I also think that colleges are charging what the market will bear. We may not like it, or find it impossible to pay for, but I do think market forces are at work in the dramatic rise in college costs. But I honestly do believe that schools couldn't charge as much as they do unless they were flooded with students whose parents are willing to pay for it.

 

Yup. And at the risk of offending those who believe that government has no place in funding things like college via Pell grants or subsidized Stafford loans, let me state that I personally have benefited significantly from government programs. We now pay a healthy amount of income tax back into the system--I am not complaining. We also make annual contributions to the two private colleges that my husband and I attended. They invested in us and we give back so that they can invest in current and future students.

 

Most things are run like businesses - and I don't find that to be terribly wrong. One wants money in to at least = money out in order to survive and one wants to pay their top employees well to theoretically get the best.

 

Sure, in life, not all works as well in reality as it does in theory, but that happens everywhere - not just colleges.

 

Sure in life there are those who are greedy and don't care who they are ripping off to get more, but that happens everywhere in every system - not just in capitalism or business.

 

 

Actually, I don't think colleges should be run in terms of a business model. The point of a business is to bring economic benefit to shareholders. There is a clear distinction between what I see as the traditional college and the for-profit institutions which seem to be growing via leaps and bounds.

 

Many of the problems we hear with student loan debt affect those attending for-profit colleges. The shareholders are blissfully happy but the students risk becoming indentured servants.

[creekland]

Actually, I don't think colleges should be run in terms of a business model. The point of a business is to bring economic benefit to shareholders. There is a clear distinction between what I see as the traditional college and the for-profit institutions which seem to be growing via leaps and bounds.

 

Many of the problems we hear with student loan debt affect those attending for-profit colleges. The shareholders are blissfully happy but the students risk becoming indentured servants.

 

I'll agree that I don't think they should be run as a for-profit business, but I also don't think they should be run with the inefficiencies of many gov't agencies either. I think some less profitable areas should be propped up by more profitable areas within the college. I'm also ok with college fundraising from alumni or local businesses or research or wherever (including gov't aid).

 

I'm totally against the for-profit places and would never have any of my guys attend one, but that doesn't mean I throw the whole business model out. I just use an ethical business model. ;)

 

Edited to add: I don't want college to BE businesses (no shareholders), just put some practical business practices into place to run more efficiently.

Edited May 11, 2012 by creekland

[Jane in NC]

I'll agree that I don't think they should be run as a for-profit business, but I also don't think they should be run with the inefficiencies of many gov't agencies either. I think some less profitable areas should be propped up by more profitable areas within the college. I'm also ok with college fundraising from alumni or local businesses or research or wherever (including gov't aid).

 

I'm totally against the for-profit places and would never have any of my guys attend one, but that doesn't mean I throw the whole business model out. I just use an ethical business model. ;)

 

Edited to add: I don't want college to BE businesses (no shareholders), just put some practical business practices into place to run more efficiently.

 

I take a long view on investment. Science today is only beginning to find uses for some of the mathematics of the early 20th century. Sometimes it takes a while for the value of something to be seen--which is why I believe that colleges (and the government) need to invest in knowledge. A lot of math and science is so esoteric to people outside of the disciplines. Yet we would not have the highly technical world we live in today without the math and science that made it possible.

 

What is profitable on a college campus? Football? Is the philosophy department profitable? I suspect that no one thought much about the Farsi and Arabic departments a couple of decades ago but today those languages are of value to the state department. But not necessarily profitable, you know?

 

It is really hard for me to place a dollar figure on knowledge. Knowledge is what I see as the point of these post-secondary institutions. I guess that I could let go of the sports programs! ;)

[Bluegoat]

THe president of one of our local universities said in an interview that it was better to have a businessman run the university than an academic "because you don't want the inmates running the institution".:001_huh:

 

Pretty much any institution needs to run in a way that it can actually pay its bills, but I think what I'd call a business model is really bad for universities, though it seems the dominant way to run them these days. But it seems to result in the administration forgetting what the actual core purpose of the university is because they get caught up in all the things that bring in money - be it securing science grants or opening departments in faddish areas of study or doing whatever they think will attract more students.

 

I think it is a bit like running a library as a business and so cutting the book budget to so there can be a coffee shop in the lobby or to build a performance space to attract shows.

 

I am not sure I necessarily feel like a university degree offers more security than other career options. overall we haven't been affected a lot by the recession here, but we have some. My relatives in trades or medicine have all done well. My husband, with a BSc has kept his job in the civil service, but a lot of people have been cut or are being moved to other areas. The worst off in my family is a relative with a PhD in biochemistry who is involved in business - he tends to pick up jobs like CEO of some new genetics company and that sort of thing. But no one is financing that stuff right now, and even on the public end funding for research is drying up. So he is working for free for a project that he hopes will take off, but I don't think he is in a stable position at all.

[Catherine]

THe president of one of our local universities said in an interview that it was better to have a businessman run the university than an academic "because you don't want the inmates running the institution".:001_huh:

 

LOL. Not sure I agree with that one. I know that since the "bean-counters" took over here at my university hospital, $$ is flowing in and we hear a LOT more about protecting our "brand." They have been mostly silent on the topic of caring for the sick.:tongue_smilie:

 

I agree with Jane that and creekland that education is an investment with a value ot its own. And I also agree that in some cases such an investment is worth pursing even if debt is needed (within reason) to accomplish it. Sure we hear about egregious cases of students with degrees that are not helping them to find work and huge debt, but honestly, I don't know anyone who has done anything like that at all. All of my personal contacts (and I'm including some of y'all :001_smile:) have been sensible about educational debt. As long as the student has a basic plan in place, education is a good investment IMO, in addition to boadening one's perspective and hopefully bringing the student into contact with people who have different perspectives than his own.

[Jane in NC]

I know that since the "bean-counters" took over here at my university hospital, $$ is flowing in and we hear a LOT more about protecting our "brand." They have been mostly silent on the topic of caring for the sick.:tongue_smilie:

 

 

A bit off topic, but what is it with everything in life being reduced to a "brand"? Brands, to me, were once associated with products like peanut butter. Today it seems that people and institutions market themselves in a similar fashion with much being lost. Instead of a larger scope, importance is placed on immediate recognition of a name. Sigh.

 

Sure we hear about egregious cases of students with degrees that are not helping them to find work and huge debt, but honestly, I don't know anyone who has done anything like that at all. All of my personal contacts (and I'm including some of y'all ) have been sensible about educational debt. As long as the student has a basic plan in place, education is a good investment IMO, in addition to boadening one's perspective and hopefully bringing the student into contact with people who have different perspectives than his own.

 

We just returned from picking up our son at his college. This gave us the opportunity to meet some students as well as parents from around the country. (Side note: I cannot believe that my son has just finished his sophomore year! It seems that we were sweating over applications just yesterday!) Most of the students with whom I spoke have summer jobs--one girl has three! My son will be off to an archaeological dig in Britain later in the summer so his opportunity for employment is limited but friends and family have a few tasks for him. I guess I just want to point out that while these students are privileged to attend college, most are not living lives of complete idleness as is sometimes suggested.

[Sebastian (a lady)]

I'll agree that I don't think they should be run as a for-profit business, but I also don't think they should be run with the inefficiencies of many gov't agencies either. I think some less profitable areas should be propped up by more profitable areas within the college. I'm also ok with college fundraising from alumni or local businesses or research or wherever (including gov't aid).

 

I'm totally against the for-profit places and would never have any of my guys attend one, but that doesn't mean I throw the whole business model out. I just use an ethical business model. ;)

 

Edited to add: I don't want college to BE businesses (no shareholders), just put some practical business practices into place to run more efficiently.

 

I have an issue with the current for profit examples, because they seem to have as a model taking the max in tuition payments without providing a quality education in return. But that doesn't mean that there couldn't be a good for profit model.

 

But I also have an issue with the "not for profit" schools, in that I think they have a tendency to consider the influx of money to be an infinite pool to be tapped. And they often demonstrate the worst tendency of government entities to considering public money as theirs by right (not to mention the issue of poor customer service). And it certainly doesn't mean that there couldn't be a good public model. (Though I'm really skeptical about public universities and college for everyone as a sustainable model. I think we'd be far better off to return to the rigor of lower grades. And if the argument is that it's not possible to bring all high school students up to higher levels of performance, what do we think is going to happen to them at college?)

 

I don't hate companies, just because they are companies. I cheerfully buy clothes, food, cars, etc. But I also read the fine print about shipping, condition, warranties, ingredients, etc.

 

The quality and cost of colleges varies widely. It is definitely worthy of study and comparison shopping. Caveat emptor.