2014 Lycoming Winter Magazine - page 17

I
n August, President Obama proposed
rating colleges and universities based
on the costs to attend, the likelihood
students will graduate and the alumni’s
earnings. Such ratings and further plans
to tie ratings to the amount of federal aid
a school can receive are designed to reign
in the rising college costs.
Lycoming College would likely
stack up well under such a plan. While
like most private colleges, Lycoming’s
published tuition costs are high, but
the college’s institutional financial aid
programs are solid thanks to efforts
by retired President James Douthat
to grow the college’s endowment. In
addition, according to national rankings,
Lycoming’s graduation rates exceed
predicted levels given our student
profile, a sign that the faculty, staff and
curriculum work in concert with students
and their families to head off problems
and achieve academic success. While I
don’t have ready access to the College’s
graduates’ earnings data, anecdotally it
would seem that our students do well
post-graduation.
For Lycoming to shine under such
scrutiny, any adopted policy would need
to be based on a nuanced understanding
of the state of higher education in the
United States. In other words, the devil
is always in the details. For example,
the president’s stated goal is to make
college more affordable for middle class
Americans. Step one, he says, is to rate
colleges on their affordability. How much
does going to college cost? If you go onto
the website of nearly any college in the
country, you can find their tuition rates.
For 2013-14, Lycoming lists annual tuition
for full-time students as $33,056, Penn
State is $16,090, Harvard is $38,891 and
the University of Phoenix is $12,600.
On the surface then, one would think
that Obama’s proposal would funnel
resources to the relatively cheaper public
schools like Penn State or for-profit
schools like the University of Phoenix.
But the rack-rate tuition only tells part
of the story. At schools like Lycoming
more so than public or for-profit schools,
most students pay much less than the
published tuition out of their pocket or
with loans. In addition to any state or
federal aid they might receive, students
at private schools like Lycoming often
receive institutionally-funded merit or
need-based financial aid funded by the
endowment. Often the difference in costs
between attending a private institution
and a public institution can be all but
eliminated because private institutions are
more likely to provide larger institutional
financial aid than public institutions.
So the president’s proposal will need to
factor in tuition costs net of financial aid
provided by the institution.
Second, tuition is not the only cost
of attending a college or university. If
the policy only focuses on tuition, then
schools would have the incentive to
charge students higher rates for other
things to help keep tuition costs down.
Such costs can go well beyond room and
board. For example, Harvard currently
charges students $958 for a Health Service
Fee and $2,443 for a Student Service
Fee. Lycoming’s fees average around
$700. A successful policy would need to
incorporate such ancillary charges into cost
calculations.
Even a nuanced measure of costs is not
enough to achieve the president’s goals.
In the world of academia, one measure
of value is the school’s graduation rate.
If a college admits students and for any
of a number of reasons, many of those
students fail to graduate, then the value
of a cheaper school may be less than a
more expensive school where most of
its students successfully complete the
program and graduate. For-profit schools,
for example, are known to have abysmally
low graduation rates, with public schools
falling somewhere in the middle and
private schools, like Lycoming, whose
most recently available graduation rate is
71 percent, generally the highest. A plan
like Obama’s would need to decide how to
balance the value of inexpensive schools
with low graduation rates against that of
higher price alternatives with higher rates.
Similarly, the policy would need a
nuanced approach to graduates’ earning
potential after college. Some careers,
and the colleges that train their students
for those careers, lead to higher starting
salaries, but relatively flat earning potential
over the course of a lifetime. Other career
paths, often those associated with a
liberal arts education like that offered by
Lycoming, start with low salaries, but after
10 or 15 years, those graduates are earning
on average more than graduates from the
first group of careers and colleges.
Editor’s note:
Williamson is an assistant
professor and chair of the political science
department at Lycoming.
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