Tuesday, April 2, 2013

Blog CLXIII (143): Tuition and the Future of History

One of the impressions I have picked up over three years of writing this blog, is that most historians do not like economics.  Problem is it is a legitimate academic discipline and current economic issues suggest that earning a Ph.D. in history is going to become a lot more difficult.  

Over the last few weeks there has been some modest interest in policy circles about tuition increases at public colleges.  Last year average costs went up 8.3 percent, which according to The Wall Street Journal, is the highest single year on record.  Why?  The answer is fairly simple: state governments have been cutting appropriates to higher education, and the schools responded with tuition increases to make good the loses. 

These cuts have been so severe that supply and demand dynamics have not compensated.  Consider the case of Florida.  Funding for the State University System of Florida went down  more than $1 billion over the last six years, even as enrollment went up by more than 35,000 students.

Other schools have simply stopped or reduced certain functions. The worst example comes from the Golden State.  The California State University System declined to take most transfer students this past year.  Over the past three years the system has rejected about 20,000 students who otherwise qualified for admission.

Sandy Baum of the George Washington University Graduate School of Education and Human Development, told The Wall Street Journal that tuition was a major problem facing higher education: "Unless we make public funding a higher priority, the funds are going to have to come from parents and students."

In a moment of bipartisan unity, both Republican and Democratic leaders have called for tuition reform.  "We can’t just keep subsidizing skyrocketing tuition; we’ll run out of money," President Barack Obama said in his 2012 State of the Union address.  "So let me put colleges and universities on notice: If you can’t stop tuition from going up, the funding you get from taxpayers will go down.  Higher education can’t be a luxury--it is an economic imperative that every family in America should be able to afford."  Later in the year, Governor Rick Perry of Texas said, he wanted to impose a four year tax freeze on state funded colleges and universities.  "If you get out of the University of Texas with a $50,000 debt, I don't know if we've served you well," he explained. "We'll tell an incoming freshman, this is what the university will charge you for four years."

Easy words.  Cheap words. 

Don't get me wrong, there is no doubt that tuition has gone up over the past ten years.  After controlling for inflation, tuition and fees are now 26 percent higher at private four-year colleges, 47 percent at public two-year colleges, and 66 percent at public four-year colleges. Why?  Because they can. This is what the market will bear.  As this chart shows, student loans are the second-largest form of private debt in the United States:

The acronym HELOC stands for home equity line of credit.

Something worth pointing out--student debt has grown rapidly in comparison to other kinds of debt.  Some of this staying power is because consumers have lowered other forms of debt during the recession. Student debt, however, is different, because it represents an investment in a future career and earning power rather than consumption.  Another reason, many people see additional education as an alternative to trying to find a job in a down market. A college degree is an obvious necessity for increased earning power.  People who know and understand that fact and will pay nearly anything for a degree, and colleges know that they know, which is why they get away with fee and tuition increases that are well over the rate of inflation.

I would love it if the President's plan actually happened.  It would lead to a larger pool of students, which would lead to more faculty positions and more salary.  Sad to say, though, it ain't going to happen.  The reasons why are explained in a good article by Timothy Noah in the New Republic.

Still, that is a lot of debt.  What options does a student have?  Several, actually.  Undergraduates can enroll in cheap schools.  Americans at Canadian schools is a growing phenomenon.  Students can also graduate fast, taking heavy loads, doing summer school, graduating a semester or two early.  Another is to major in a field that promises a good rate of return on the investment, which is a fancy way of saying students are gravitating to the fields of study that have the potential for well-paying jobs following graduation.  There might be other options, but the real issue I want to raise is this: how does growing student debt affect the field of history? 

Will students majoring in history decline or increase?  Most of the attention on tuition costs has focused on undergraduates, but it will have an impact on graduate students.  What happens to a history department when funding goes down despite an increase in student numbers?  What will happen to teaching assistant positions as history enrollments decline?  How likely are students with $50,000 in debt to go to graduate school in history?  How likely is it that there will be new positions for these Ph.D.s when they finish their dissertation? 

I don't have the answer to all of those questions, but the general direction of the likely answers do not bode well for those wanting to earn a Ph.D.  In short, these issues suggest that it is going to be harder and more unwise to go to graduate school in history in the near future.

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