Wednesday, March 14, 2012


Express Lanes Redux

Santa Monica College in California is proposing setting up new, premium sections of popular courses at higher cost for students who are shut out of subsidized sections.  The cost difference is dramatic: rather than the $36 per credit they’d pay in subsidized classes, students would have to pay about $200 per credit.  The idea is to allow the college to run the extra sections on a break-even basis.

This has been tried before.  The IHE piece doesn’t mention it, but a couple of years ago Bristol Community College in Massachusetts tried something similar with its Nursing program.  Student demand far exceeded available seats in the program, so the college briefly contracted with a for-profit provider, the Princeton Review, to offer extra sections at a tuition premium.  The Princeton Review would set up the extra sections, the curriculum would be the same, and students who were shut out of the low-cost sections would have the option of either waiting their turn for the cheap seats or paying extra for immediate availability.  It’s the academic equivalent of a next-day shipping option.

In both cases, it’s easy to raise objections from equity, fairness, incentives, and in the earlier case, motivation.  It’s also not entirely clear whether California law will allow Santa Monica to pull it off. But in both cases the objections miss the underlying dilemma.  

Public colleges, especially at the two-year level, offer services at far below cost.  That’s by design; the idea is to encourage people to go to college.  Some of the gap is filled by proceeds from for-profit community and corporate education programs, and a little from bookstore revenues, but most of it comes from state and/or local subsidies.  The theory behind the subsidies is that the entire population benefits from having an educated workforce and citizenry, so it’s fair to have the entire population kick in some money.  Even if nobody in my family attends the local community college, we all benefit from having police, nurses, and various local employees -- that is, taxpayers -- who did.  

But when the subsidies don’t track enrollments -- which they absolutely have not for many years now -- growth is a problem for a college.  In the Massachusetts case, student fees didn’t come close to paying for the cost of more Nursing seats.  In the California case, incredibly enough, the low tuition that students pay goes entirely to the state; the college keeps none of it.  In that system, new enrollments are pure cost.

For-profit colleges are the polar opposite.  For them, new enrollments more than pay for themselves.  For them, growth isn’t a problem; it’s a goal.  

As long as the incentives line up this way, I expect to see variations on the “express shipping” option continue to arise.  They already exist at the macro level; students from wealthy families can buy their way into undistinguished private colleges, whether for-profit or nonprofit, where they can take whatever they want.  Public colleges are supposed to be the alternative to that, but the funding constraints on them are making that harder to sustain.  

Of course, as public colleges start to behave more like their tuition-driven private competitors, they start to lose their reason to exist.  That’s fine if you’re Grover Norquist, but for normal Americans, that’s catastrophic.  The masses will never be able to afford the express option in large numbers.  As bad as the student loan numbers are now, just imagine how much worse they’d be if every community college followed Santa Monica’s example and quintupled tuition.  

Bristol and Santa Monica are open to all sorts of critique, but I’m glad that they’re at least showing us the logical consequences of continuing down the path we’ve been on for the last few decades.  Let’s put “quintupled tuition” on the ballot and see what happens.

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