Will $3 Coffee Kill $50,000 Tuitions?

An item in yesterday's newspaper could have real long term significance for institutions like the one at which I work. The story was about Starbucks beginning to offer to pay college tuition for its employees. When I read the headline I was genuinely startled ("Starbucks to Provide Free College Tuition"). But then I read the fine print and found myself saying "oh, for some particular online degree at Arizona State, big deal, seems like a bit of bait and switch."

But then I thought about it a little and noticed the numbers: 135,000 employees and around $500 per credit.  And then I read Joe Nocera's opinion piece.  Now, critics have already pointed out problems with the program (16 June), but the Lumina Foundation representative quoted in the first article had it right: Starbucks is just the first company to do this and the programs will evolve. There's a gigantic population in the US who basically cannot afford to go to college, period. And the jobs available to them without a college education are AT BEST jobs like Starbucks and Best Buy and on and on. If just a few of these companies go down this path, it could quickly become an important way to recruit and retain low wage, high aspiration workers and educational benefits like this will come to define the standard (both price and process) for a growing section of the higher education market.

And places like Arizona State's online degree program are going to capture that market share. And a whole bunch of people and families that are assuming unholy amounts of debt to get a college education are going to start asking why they are paying around a thousand dollars per credit if it's out there for half that.

It will be interesting to see how this unfolds, but it may well be that the company that convinced a world used to paying 50 cents for coffee served immediately to pay, instead, 3 dollars for a coffee they have to wait for, will convince a country full of aspiring young people NOT to consider paying 100-200 thousand dollars for an education.

This confirms a number I have arrived at by other means: unless we can figure out how to increase our productivity by about 100% (translating in practice into halving out price), we will be consigned to the proverbial dustbin of history. I think it can be done without replacing in-person education with all online degrees, but unless those of us in the in-person business start to get really serious about innovation, the only work left for us will be either producing online courses or tutoring kids who are enrolled in them.

Sources

• Joe Nocera "A New College Model: Arizona State Matches Starbucks in Its Trailblazing Ways." NYT  June15, 2014
• starbucks.com  Starbucks College Achievement Plan.
• Richard Pérez-Peña "Starbucks to Provide Free College Education to Thousands of Workers." NYT June 15, 2014
• Richard Pérez-Peña "Critics Point to Drawbacks in Starbucks Tuition Program." NYT June 16, 2014

Who's a Cost Center? : The Higher Ed Work Force Report

The Delta Cost Project, a research group under the American Institutes for Research (AIR) that looks at higher education costs, has released a report titled "Labor Intensive or Labor Expensive? Changing Staffing and Compensation Patterns in Higher Education." 

Unfortunately some of the analysis in the report is easy to misinterpret because it moves back and forth between headcount, FTE, and dollars. Sometimes a trend toward more part time employees looks like growth in workforce, sometimes not. Thus, their figure 1 (here truncated) might indicate growth in workforce at private master's and bachelor's institutions or it might reflect a shift from full time to part time employees.

Still, I think the report deserves a close reading and that the appropriate folks at my own institution should inquire about where we stand on each of the metrics described and then initiate some critical conversations on whether we are pleased or not by the answers.

But in any case, this quote : "You can’t blame faculty salaries for the rise in tuition. Faculty salaries were 'essentially flat' from 2000 to 2012, the report says" from the CoHE article below will probably engender some interesting conversations.

Read More at CoHE

See Also

• Marcus, Jon.  "New Analysis Shows Problematic Boom In Higher Ed Administrators" Huffington Post
• Schuman, Rebecca.  "Doing Higher Ed Right: Increasing education funding! Hiring full-time professors! Are these places for real?" Slate
• Krogstad, Jens Manuel. "Iowa State bucks trend in faculty hires: It's the only U.S. university to both increase faculty and make cuts in all other areas" Des Moines Register

Props to Maia Averett for calling HuffPost to my attention.

Of Restaurant Chains and Higher Education

One need not be a sophisticated economist to see that distribution of American family income makes the high tuition/high discount business model of non-elite, non-public higher education unsustainable. Unfortunately, most of the innovative and entrepreneurial thinking that's taking place in response to that is not, IMHO, very education friendly. But reciting the woes of HE in ever more graphic and data supported ways is like shooting fish in a barrel; real solution ideas are a little harder to come up with.

It will be interesting to see the comments Mr. Selingo's blog post garners.

Read more (see the comments too)

Ten Part Washington Post Series on Higher Education (2013)

Dylan Matthew's ten-part series "TUITION'S TOO DAMN HIGH" on the Washington Post's "WonkBLOGS" appeared this summer. Matthews is a young journalist new to the education beat.  Some criticism of the series emphasized its "book report" quality (in contrast to "real reporting"), but it does a decent job of bringing lots of things folks are talking about onto our radar screens in these short pieces. -DR

Tuition's Too Damn HighDylan Matthews, WaPo Wonkblog

1. Part 1 Why is college so damn expensive?
2. Part 2 Why college is still worth it
3. Part 3 The three stories of rising tuition
4. Part 4 How important are state higher ed cuts?
5. Part 5 Is the economy forcing colleges to spend more?
6. Part 6 Why there's no reason for big universities to rein in spending
7. Part 7 Is government aid actually making college more expensive?
8. Part 8 Are rich kids ruining college for everybody else?
9. Part 9 Can MOOCs solve the college cost crisis?
10. Part 10 How can we fix skyrocketing tuition?

King & Sen. 2013. "The Troubled Future of Colleges and Universities."

King, G. and M. Sen. 2013. "The Troubled Future of Colleges and Universities." PS: Political Science and Politics 46, no. 1: 81--113.