Why We Can’t Afford to Ignore Higher Education’s Financial Problems

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Sara Goldrick-Rab on the high cost of ignoring higher education's financial problems.

paying-the-priceHere are a few things we know that are wrong with post-high school education in the United States: It’s too expensive; access to quality schools is limited — especially if you’re a nontraditional student or have to pay for it on your own; and, our ideas about college reflect a bygone era. Sara Goldrick-Rab, a professor of higher education policy and sociology at Temple University, may be able to help with some of these challenges. She’s a nationally renowned expert on higher education, and was the lead author of  the Brookings Institution’s 2009 white paper “Transforming America’s Community Colleges,” which significantly influenced President Obama’s American Graduation Initiative. She is also wrote Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream. She joined the Knowledge@Wharton Show on Sirius XM channel 111 to talk about the broken U.S. college education system.

An edited version of the transcript of the conversation appears below.

Knowledge@Wharton: You followed the college careers of 3,000 students over six years. What did you learn?

Sara Goldrick-Rab:  A lot, particularly because we didn’t meet these people just one time. We followed them repeatedly over time, and we surveyed them and looked at their administrative records and we talked to them.

First, we learned how insanely broken the financial aid system is. A lot of folks talk about the FAFSA (Free Application for Federal Student Aid). The FAFSA’s a small American bureaucratic tragedy all its own … and it needs reform. But there are so many issues even after the FAFSA, including that students don’t know that they have to refile that darn form year after year. They don’t know that they have to take a certain number of classes and get a certain number of grades and perform in a certain way for them to be able to keep the money year after year.

And frankly, the other thing that they don’t know is that the money that’s delivered after the FAFSA is way short of what they will need to be in school. Even people whose families make virtually nothing are faced with having to borrow, and they’re still short. So they don’t make it.

Knowledge@Wharton: It’s staggering that it’s 2016, and we know young people need college educations as a way to build their careers, yet we have so many things impeding that. These issues have slipped through the cracks time and time and time again.

“We made a huge mistake. We told people to go to college…. But we failed to pay attention to the financing system.”

Goldrick-Rab: Look, we made a huge mistake. We told people to go to college. That was the right thing to do. We prioritized education. That was the right thing to do. But we failed to pay attention to the financing system. It’s as if we just thought that someday, everybody would go to college, and we magically wouldn’t have issues paying for it. Of course we have issues paying for it. And it’s from this lack of attention that we’ve gotten ourselves into this serious problem.

Knowledge@Wharton: I saw the interview you did with Trevor Noah, and you brought up something interesting: We’ve got kids that are going to community college right now who really don’t have a home right now. How does that happen?

Goldrick-Rab: It happens many different ways. One way is that you go to college and you think you’re going to get enough money not only to cover your tuition and fees, your books and supplies, but your housing costs. And the numbers literally don’t add up. So you say, “Well, I’m going to work even though I took the loans. I’m also going to work.” But you can’t get enough work.

Employers out there today are not exactly kind to undergraduates. They don’t pay well, and they don’t give them enough hours. The numbers just don’t add up.

Another way is that, frankly, people from very low-income families are going to college now at higher rates than before. It may have been that they experienced homelessness when they were a high school student, and they know the only way to prevent homelessness in the future is to go to college. It’s just that it keeps happening to them, and we don’t have any resources for them the way that we do when they’re in high school.

Knowledge@Wharton: What about on-campus housing, which some colleges and universities have. Could that be part of the solution in terms of setting something up to help people out when they’re in this type of situation?

Goldrick-Rab: Yes, we have to do much better. I think it will probably surprise your listeners though to know that only 13% of undergraduates today live on campus. So for the most part, the campus residency is not the story. Most people are commuting to school, and they live in their local areas. But if we stereotype them and say, “Well, they live with their families, so their families are paying their rent,” we’re flat out wrong. These days, families don’t have enough money to support other adults living in their houses, and they often charge them rent.

Knowledge@Wharton: What are some of your other concerns?

Goldrick-Rab: We’ve prioritized this idea that you should be able to choose any kind of college you want. What we haven’t done is very much to ensure that the colleges that you can choose — including using taxpayer-funded dollars — actually are good schools. We have a lot of schools out there that, frankly, are not giving people an education that’s worth anything in the labor market — or any other place. Yet they’re able to accept financial aid and student loans and all these sort of things, and pad their budgets with them, and pay their CEOs well. That needs to stop. That’s something where a consumer ought to be able to say, “If federal dollars are going to that place, I ought to be able to assume it’s a decent place.”

Knowledge@Wharton: You’re talking about for-profit schools?

Goldrick-Rab: Yes, the for-profit schools. And then, there are some private institutions that are not-for-profit as well that are not doing so well. We could raise some questions even about places like where we’re sitting here today — places with very big endowments that, frankly, are still charging a lot. I met a young man the other day who graduated from the Community College of Philadelphia. He’s got no income. He’s on disability. He went back to school at 35 years old. He got his associate degree. He was in the honors program. He was in journalism.

He did all this great stuff. He got into Penn. Penn sent him a bill for his first year of college, this guy who makes nothing and is on disability; he was offered a package of $42,000 a year. [Tuition plus room and board and books at Penn runs around $67,000 a year, making even that level of a scholarship offer potentially unaffordable]. Something is wrong here when you have an endowment like this. This is a great school. I went to this school. But I think the alumni of places like this ought to be standing up and saying, “We can do better than this.”

“Most people are commuting to school… But if we stereotype them and say, ‘Well, they live with their families, so their families are paying their rent,’ we’re flat out wrong.”

Knowledge@Wharton: We also need to really look at the types of things we’re teaching in some cases. Some of the degrees that kids are going for don’t match up with the real world.

Goldrick-Rab: Yes, I think this is actually one of the ways in which the new economics of college are changing what college even means. We used to have the freedom to pick what we wanted to major in. Sometimes, people majored in English, and it taught them how to write, it taught them good things, and they went on to do really well in business. That freedom is gone now because of these college prices. Now, we’re going to have 18-year-olds having to ask themselves, “What do I want to be for the rest of my life, so that I get a degree that I can pay off these loans with?”

That’s going to lead to a lot fewer people who know how to write and do those things, and I think down the road, we’re going to be very upset about it. I think the richness of the variety of majors that students have engaged in, in this country, has been part of why this country has done so well.

Knowledge@Wharton: The issue of college affordability has been getting discussed in the presidential race, with some candidates suggesting we should find a way to be able to provide free college education at some level, whether it be through community colleges or more broadly. Where do you stand on this issue?

Goldrick-Rab: I’ve been working very hard on this. I don’t think it’s a pipe dream. I do think it’s a lot more complicated to do it well than people are letting on. The most important thing, though, is that we have a very serious conversation about what we’re going to do finally. Enough talking about it. It’s time for action. And it’s very disturbing that in the recent debates, no mention of college affordability came up. It seems like it might have disappeared from the radar.

If the next president doesn’t take this head on, then we’re going to have a really serious problem. We’re not going to be able to save our way out of this. No amount of college savings is going to be able to help these families today cover the bills for little kids like those I have.

Knowledge@Wharton: Only a minority of people in this country who work 30 or 40 years of their life even have enough savings for themselves, let alone enough to try to help put their kid through college.

Goldrick-Rab: And very few universities provide any benefits for their employees. There’s been a huge change in universities. Most universities are using adjuncts and contingent labor. They’re not providing them with these benefits. When the question comes about educational quality, that’s the question.

If you’re going to send your kid to school and you’re going to pay for it, you want to have faculty there who are committed and able to spend time with your children, which means a move back to full-time faculty who have something to count on, so that you can have good teachers just like you have in K-12. In a good free-college model, we wouldn’t provide the money to make college free without stipulating that the college receiving that money would provide that kind of educational experience.

“There’s real food insecurity on our campuses, even while some schools are building sushi bars.”

Knowledge@Wharton: What surprised you in the data?

Goldrick-Rab: One of my graduate students came back and she was really upset. And I said, “What’s going on?” And she said, “Well, I asked the question we always ask,” which is a really straightforward, open-ended question: “How’s it going in college?” And the student looked at her and she said, “It’s not going well.” And she said, “What’s your biggest challenge?” She said, “Eating. I don’t have enough food to eat. When other students are eating in the classroom, it distracts me because I’m so hungry. I wish that I had enough to eat so I could focus on learning.” This was staggering to me.

I went, “Wait, that’s not a textbook issue. That’s not an iPod issue.” So we went out there. I mean, I have to admit being a little skeptical. Maybe she was one person. But I’ve now done about four studies of this question with my team, and this thing is happening. There’s real food insecurity on our campuses, even while some schools are building sushi bars.

Knowledge@Wharton: How do you correct that?

Goldrick-Rab: We certainly do have enough food in this country. It’s just how we distribute it and how we price it. Look, we’re sitting in the city of Philadelphia, where every single kid in the city, whether or not their income deserves it, gets a free or reduced price lunch at school. We make sure they have milk, we make sure that they get fed. We don’t do that when they get to college.

If they transition from one of our city’s high schools to the Community College of Philadelphia, they get cut off. And we’re surprised that they’re not learning?

Knowledge@Wharton: Why is there this failure to connect one with the other? Do we just assume that once you’ve graduated high school, you can handle yourself? You can run your own life?

Goldrick-Rab: Perhaps. But I also think it’s because the average person still imagines the average college student as being somebody walking up and down an ivy-covered Locust Walk, essentially. I think they tend to think of them as residential, four-year students with parents who are paying for things. That is not today’s undergraduate. They’re not even kids frankly. Their average age is between 25 and 30 years old when they start college. They’re mainly at community colleges and state universities. These real life things continue to happen to them. And I don’t think we need to say that’s giving away anything to help them. It’s making a good investment so they get an education, and they don’t need our support after they do.

Knowledge@Wharton: Obviously, we know that there are more and more people who are going out into the workforce first, or starting college, then going to get a job, and then going back later. It’s become more the norm.

Goldrick-Rab: It has, and I think it’s actually a great thing. This country gives second chances in a way that other countries don’t. And we have made more progress in that way. We don’t say to somebody, “Yeah, you’re 30 years old and it hasn’t happened for you, so your life is over.” We open our doors. That’s a great thing. But we have to actually resource it. This stuff doesn’t come free.

Knowledge@Wharton: Is it a concern for you that not only is this not really a topic that’s brought up by the presidential candidates, but that we have enough dysfunction in Washington, D.C., that this issue will likely … not really be pushed forward?

Goldrick-Rab: I’m less pessimistic than I used to be about this, because we have made a ton of progress in the last couple of years. We saw a remarkable thing happen in January 2015 when President Barack Obama got up there and put the words “free” and “college” together in a sentence. That’s never happened before.

Who thought that was going to happen? Not me — and I actually brought a plan to do that. We’re also talking about living expenses in a way that we never have. We’re talking about the fact that the rules for getting food stamps don’t align with the rules for being in college. We’re having a much more advanced conversation today than we were even two years ago.

It took 80 years to get free public high school. I think our pace of progress is actually pretty good. What’s important is that we not only focus on things we can get done tomorrow — that’s very short-term thinking. Some of us at least need to be engaged in the long-term battle.

I don’t know that you will get a free public university bachelor’s degree, or anything like that. But I think in the next 20 to 25 years at the most, we will see free public community college restored.

Knowledge@Wharton: There are countries that believe that free college education, as a component of their systems, is something that benefits their economy.

Goldrick-Rab: Most of those countries do things pretty differently than we do. One of those things is, they don’t let everybody go to college. They gate-keep a lot at the secondary level. Germany does this in spades. The tricky part here is that we want to send lots of people to college from all walks of life. We don’t want to have discrimination in who gets to go to college. And we want it to be really affordable. This is something we can do, but we have to give up something. I’m not actually saying money. I’m saying maybe, for example, just as in K-12 education, maybe we just pay for the public sector. That’s a discussion we’ve never had. Maybe we need to have it. Maybe we need to focus our resources on what we can afford to do, and stop prioritizing doing all the things while leaving everybody short.

Knowledge@Wharton: The problem is, though — and tell me if I’m wrong in this — that we’ve got so many public institutions across this country, that that’s a lot of money to be talking about.

Goldrick-Rab: If we take all the money we’re spending on the private institutions — you know, this is sacrilege, it gets people really angry, but I think we need to take a hard look and say, “Look, can we afford to keep doing this where we will finance any institution a student has ever wanted to go to? We’ll give them a voucher and they can take that voucher to that school,” even though the taxpayers are financing things that are not necessarily paying off. When this system began, we didn’t have all of those public institutions. We really needed those private institutions. It’s a completely different situation today.

“I’m less pessimistic than I used to be because we have made a ton of progress in the last couple of years.”

Knowledge@Wharton: The majority of institutions are providing quality education, and people are getting a good background heading into the real world.

Goldrick-Rab: Absolutely, and that’s especially true when those institutions get the resources they need to succeed. People can say, “I can’t get my classes at my local community college.” All right. But when you pass a bond referendum, and you stop underfunding the college, and you actually finance the college, people do get the classes they need. This is a pretty straightforward thing. If we’ve put the money that was supposed to be spent in the public sector into the public sector, we would have better completion rates.

Knowledge@Wharton: How much potential does online learning have to benefit this going forward?

Goldrick-Rab: I think of online learning as primarily benefiting the people who are pretty advanced already in their education. I would like to see it as an option for people to complete the last year of their bachelor’s degree, for example. Maybe more graduate education should be moved online. But people are quite vulnerable during that first couple of years of higher education, especially if they’ve been out of school for a while. They really do need that face-to-face instruction, or at the very least, a hybrid model that still emphasizes making a connection with your teacher. Teachers matter, and they matter a ton to students. So I would hate to see us fool ourselves into thinking that online is going to replace face-to-face instruction.

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