Technology and college costs

TECHNOLOGY AND COLLEGE COSTS…. When education policy would come up during the presidential campaign, the candidates didn’t usually turn their attention to No Child Left Behind of pre-kindergarten, they tended to talk about the ever-rising costs of a college education.

That wasn’t surprising, given the enormous burdens families take on to pay tuition costs. Even when state and federal governments pour new resources into student aid programs, the effects are limited as universities keep increasing costs.

In the soon-to-be-published December issue of the Washington Monthly, Kevin Carey, the research and policy manager of Education Sector, an independent think tank in Washington, has a fascinating piece on the apparent contradiction between technology driving down teaching costs, and tuition bills soaring.

For years colleges have insisted that rapidly rising prices are unavoidable because higher education is a labor-intensive business that cannot become more efficient. A forty-minute lecture takes just as long to deliver today as it did a hundred years ago, they say; a ten-page paper takes just as long to grade. Because efficiencies in other industries are driving up the overall cost of skilled labor, colleges have to offer salaries to match, which pushes productivity down. (Economists call this “Baumol’s cost disease,” after the New York University economist who first made the diagnosis.) Regrettable for students, of course, but what can be done?

In fact, this premise is false. Colleges are perfectly capable of becoming more efficient and productive, in the same way that countless other industries have: through technology. And increasingly, they are. One of the untold stories in higher education is that the cost of teaching is starting to decline, but virtually none of those savings are being passed along to students and parents in the form of lower prices. Instead, colleges are pocketing the difference, even as they continue to jack up tuition bills.

This is a classic unsustainable trend. Higher education prices cannot grow faster than inflation and family income forever. If colleges use productivity gains from technology to restrain prices, they’ll continue to thrive in a world that values their product more than ever. If they don’t, they’ll be hammered simultaneously by a frustrated public and new competitors eager to steal their customers. To avoid that fate, colleges will need to do more than just teach better for less. They’ll also need to compete in a whole new way.

And what might that include? Read the piece.

What’s more, readers in the Washington area may be interested in an upcoming event, hosted by Education Sector, focused on this very issue. The panel will be moderated by Inside Higher Ed editor Scott Jaschik, and will feature, among others, Carey and the Monthly’s editor in chief, Paul Glastris. The event begins at 9 a.m., on Tuesday, December 2. Here’s a link to the details.