A few weeks ago, Drexel University asked me to come speak on the question of “What’s Killing Higher Ed.” My answer for Drexel, and for similarly expensive private universities, was vodka. A whole lot of vodka.
Megan Lullally as Karen Walker in TV Sitcom Will & Grace
No, this wasn’t a discussion about on-campus binge-drinking. It was a reference to Kevin Carey’s excellent book on the state of higher education where he quotes the President of George Washington University (GW) comparing college to vodka.
“College is like vodka,” Stephen Tractenberg said. “Vodka is by definition a flavorless beverage. It all tastes the same. But people will spend $30 for a bottle of Absolut vodka because of the brand.”
Essentially, why pay less if you can pay more – and signal that you went to a higher-quality college? Because no one has a clear understanding of what quality in higher education means, universities can build and price themselves to produce a seemingly better-quality brand. Cue fancy buildings, lavish dorms, lazy rivers, top faculty (who rarely teach – or were ever taught how to teach – undergraduates), and of course sports. Since all of these things are expensive to buy, the “cost” of education and thereby the eventual price charged to students, goes through the roof.
Taking advantage of the quality in higher education information gap has worked like a charm at GW. Tuition sticker price tripled there from $14,000 to $39,000 over 20 years, financing a construction spree. Drive by GW and you almost always will see a new building going up. In 20 years, the college expanded from a local commuter school to a university behemoth. As my colleague Michael Dannenberg likes to say, GW has become a real estate company with a university attached.
Meanwhile, student applications to GW number in the tens of thousands, enrollment has spiked, students’ SAT scores have spiked, and their endowment has spiked. Many private universities – like Drexel, NYU, and Northeastern – have followed suit. But the strategy is starting to collapse under its own weight.
Drexel University: The Canary in the Coal Mine
Drexel, based in Philadelphia, followed GW’s trajectory of success and saw its number of student applications spike all the way up to 55,000. Just like at GW, Drexel saw its average SAT score rise, its ranking rise, and the university expand.
But chasing after this input-based model is expensive – and ultimately unsustainable – as students and families begin to shy away from crazy-high sticker prices. Drexel is beginning to reverse course. In 2014, it had to accept 80 percent of applicants in order to fill a freshman class of about 2,900 students. Drexel had only an 8 percent yield rate – the percentage of admitted applicants who choose to attend – the lowest of any college in the country. Every single student attending Drexel got a discount on tuition (on average a 50% off reduction in price) in order to come. In other words, Drexel is struggling to attract enough students to maintain steady growth in its net tuition revenue. That’s not good for its rankings or its bottom line.
Drexel is the canary in the coal mine for other similarly expensive, private four-year colleges. The stats there mirror the trend for private colleges nationwide, where a recent survey found 90 percent of freshmen get some sort of tuition discount, worth on average, over half of sticker price. Half of the private colleges surveyed saw a decline in enrollment due to price sensitivity. A separate survey found that 90 percent of private college admission directors cited losing applicants due to fears of student loan debt.
Education, Stupid
Luckily the path forward may already be paved, thanks to consumers’ increasing wariness about the value of their hard-earned investment and the Obama Administration’s increasing attention to student outcomes. The discussions we’re having right now about how to measure college quality – and what students and families are looking for from a college education – should put all colleges, and particularly expensive private colleges, on notice of the need to demonstrate tangible student results in exchange for public and private investment.
We at Education Reform Now have already laid out one plan for what tangible results should matter most: at a bare minimum, colleges should be judged on their economic diversity, student graduation rates, and student loan repayment rates. And beyond these three key metrics, the nation also has to take a step forward and measure what should be a main marker of higher education quality — college student learning outcomes. It would be prudent for our nation to start a “Higher Ed NAEP” (National Assessment of Educational Progress) to gather baseline student learning outcome data over time, by key institutional and student characteristics, in order see just how much college students are learning.
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Drexel may already be ahead of the curve on some outcome metrics. Thanks to its intensive cooperative education model, it has one of the highest salaries among its peer institutions for students one year and five years out and a strong student loan repayment rate.
Financial outcomes are important to student and families. But most important to the public should be educational outcomes. Unfortunately, many administrators at Drexel scoffed at the idea that education testing could possibly measure everything a college education produces. They’re right. On the other hand, almost all agreed that there are key learning competencies – like critical thinking, writing, and teamwork – that all college graduates should attain.
It’s time for Drexel and other colleges to stop drinking the vodka and instead be upfront with students, families, and the public about the tangible results they’re producing in exchange for astronomically high prices. Otherwise, a massive, massive hangover is on the horizon.