The Friday edition of Inside Higher Education had two stories that really should be read side by side. Each makes more sense when read in light of the other.
The first concerned current high school students who applied to college in unusually low numbers. I was struck by this paragraph:
“Carnevale said applications for the top 200 colleges in the United States have actually increased; the drop in enrollment mainly affects two-year colleges and non-selective four-year colleges, where low-income and minority students are concentrated.
The implications of this still fly largely under the political radar.
Top 200 colleges tend to be much more expensive than community colleges and regional public colleges. But their number of requests is increasing. This first suggests that talk of the “tuition spiral” pushing students away is wrong. If schools that charge $60,000 a year have an increase in applications while schools that charge a 10th of that see applications drop, then the simple narrative of “pricing students” doesn’t quite work.
Yes, there are some caveats. For example, schools with high listed prices are sometimes able to reduce them, so low-income students don’t pay the full amount. Which brings me to the second story.
This story glosses over a recent article by Zhifeng Cai and Jonathan Heathcote on the impact of wealth disparity on tuition fees. As rendered in the Inside Higher Education piece, the conclusion is that increasing financial aid for low-income but high-ability students increases institutional costs. These costs, in turn, are passed on to those who can pay through higher prices. The highest prices are paid by those who can, thus subsidizing those who cannot.
(It is worth defining “low income” in this context. For example, according to Yale’s website, the total cost of attending an undergraduate student at Yale this year is $81,575. That’s higher than the median annual household income in the United States. For present purposes, “low income” means anyone who couldn’t afford to spend $81,000 cash on a barrel per year for four years, which is most people.)
Both stories seem correct, as far as they go, but they’re best understood as symptoms of something much bigger.
The second story explains, correctly, that discounts are an institutional cost. But that doesn’t explain why applications to elite schools are up, or why applications to more affordable schools are down.
The effects of income and wealth polarization go beyond a particular institution. Colleges and candidates live in a political economy. This political economy forms the basic conditions under which they make decisions. Among other things, it informs the decisions prospective students make. The rewards that come back to the top are greater than they were before, while the potential downside of an expensive but not elite degree is worse than it was before. On the community college side, we compete with entry-level jobs, which has been the hottest market for years. In other words, for our students, the opportunity cost of a college education has increased.
The sudden boom in entry-level jobs seems unlikely to me to be the new normal; over time, I expect some students who have chosen to postpone college to find their way home.
In the longer term, however, an economy with extreme rewards at the top and a slippery slope in the middle is likely to remake higher education in its own image. It has already started.
That political economy continues to develop in this way is, at least in part, a social choice. Higher education has a role to play, but its various sectors must also recognize that the economy of the 1960s, or even the 1990s, is not coming back. Adaptation requires recognition. And good politics requires recognizing when a simple story isn’t as simple as it looks.
Anyway, thanks to Inside Higher Education for putting these two articles in the edition of the same day. Sometimes happy accidents illuminate.