During his State of the Union address, President Obama asserted that colleges and universities must emphasize “affordability and value.” He called for these concepts to be the standards against which institutions of higher learning are measured. One of the problems is that much of the discussion that goes on about college these days uses the terms interchangeably. While it is clear what affordability means in terms of college: can you afford to attend X university or do you need to consider Y community college; and what type of aid do you need and are you eligible for? These are today’s basic affordability questions.
“Value”, on the other hand, is a little more amorphous — especially when it arises in discussions about liberal arts and other, less career directed types of education. If you look at college guide books, or even suggestions from major news media outlets such as the New York Times, calculating the value of an education is a simple equation: future, post-graduation earnings less the cost of attending college. Elementary, right?
Simplistic, yes. But not so simple. You could certainly make a valid argument that a non career-oriented education — say an English Writing degree, like the one yours truly has in a drawer somewhere — has its own intrinsic value, as well as value to society as a whole. You could also run it through the wringer of a straight cost-benefit analysis, and it may come up wanting; but even such an economic argument fails to capture all the economic nuances involved in financing a college degree. A simple cost-benefit analysis does not look at how much the value of a certain degree or educational program is affected by demand for that particular degree. The demand for a particular type of degree is affected significantly by the factors that contribute to the costs of getting the degree.
An American Association of Colleges and Universities (AAC&U) panel discussion held in January looked, specifically, at “The Economic Future of Liberal Arts Colleges.” According to a summary of the event written by Alison Byerly on the AAC&U’s blog, the discussion’s presenters concluded that “less expensive colleges offer more ‘bang for the buck’ than do higher-priced institutions.” Byerly also notes that two other recently-issued reports also add dimension to a discussion of the value we derive from a college education.
In January, the entire higher education sector was given a “negative outlook” by Moody’s. The lack of enthusiasm for higher education in the financial world is due largely, according to the rating company, “weakened pricing power and enrollment pressure.” The final report that Byerly mentions is a University of Michigan economics study, which the National Bureau of Economic Research published, that found investment in what the authors termed “consumption amenities” — posh dorms and state of the art fitness facilities, for example — actually increased the value of, as well as demand for, less selective colleges.
If you compare these studies with, for example, Princeton Review’s list of “Best Value Colleges” — some of which we discussed here — it’s clear that not everyone’s concept of value meshes when it comes to college. Thus, in light of President Obama’s directive to hold colleges accountable for affordability and value, it is unclear what higher learning institutions, and those that assess their worth, are exactly supposed to do. In these turbulent times for higher education, it’s really a positive to hear the president taking such steps toward raising the significance of education as an issue. However, without some more concrete ideas of what actually constitutes “value” when it comes to higher education, such ideals may just get lost in the rhetoric like so many other good ideas.
In the second part of this post, we’ll take a look at how some experts have broken down the notion of value when it comes to higher education.