By John F. Ebersole

Over the past few months commentators have appeared on this website to express concern about the state of American higher education.  Most have seen this sector as being in tough shape, and at least one has used the word “catastrophe” in their assessment.

As a sitting, non-profit college president who has lived with the realities of both public and private higher education for more than two decades, I don’t share the belief that the sky is falling.  Yes, higher education faces a great number of challenges, some new and a few unprecedented.  However, many are neither new nor the result of actions over which the sector has control.

Let’s start with cost.  Most critics, including candidates for President, lament the high cost of a degree, suggesting that it is greater than it should be.  Yes, there are private institutions with sticker prices in excess of $50,000 per year.  These Ivy League or “prestige” schools are the basis for alarm and calls for action which regularly appear in the New York Times.  What isn’t made clear is that these prices are conscious decisions by institutions to position themselves as the crème de la crème of American higher education.  They know that each rise in price will be met with a corresponding increase in applications from those equating price with quality, or who are seeking future advantage by graduating from an exclusive school.  What the cries of concern don’t make clear is that virtually no one pays these prices (thanks to discounts of 30% or more), and that the total of those served, collectively, is less than two percent.

Reference to the National Center for Educational Statistics (NCES) Fast Facts data shows that the average cost of a year’s college at a public “four-year” institution was $17,474 in current dollars in 2012-13 (the last year for which complete numbers are available).  This includes not only tuition but also fees, room and board.  These costs fall by half (to $8,926 per year) when considering enrollments in public community colleges.

Private “four-year” institutions reported actual average current year costs (again, tuition plus room and board) of $35,074.  A far cry from the $50,000 per year regularly held up as the norm.  Thus, a student completing two years at a community college and then transferring to either a public or private bachelor’s degree institution could expect to pay something less than $60,000 (public) or $100,000 (private) for four years of study and a bachelor’s degree.  These numbers take into account inflation since 2013.

The belief that college costs more today than in the past is understandable.  State legislatures have cut tax support for education, forcing off-setting increases in public tuition.  At the same time median household income has been falling.  From a high of nearly $58K in 2006, real household income is now below $54K (Federal Reserve data of 10/21/15).  Thus, students are paying a larger amount, as a percentage of family income, at the very time they are attempting to recover from the losses of the Great Recession.

So, if the actual cost of a year’s tuition is less than the prices profiled by media, why the $1.3 trillion student load debt?  Here, the numbers have less to do with the cost of education than with the state of the post 2008 economy.  Without full time jobs, more borrowers have enrolled in college, and used their student loans to cover living expenses.  Recent studies by the Brookings and New America foundations have found that student “over borrowing” is also a major reason for the record debt level.  And, it should be noted that 40% of this $1.3 trillion supports graduate study, where future doctors, lawyers and engineers typically attend class full time and need loans for room and board.

Now for completion rates.  Some critics would have us believe that practically no one graduates from college these days and that those that do are taking longer.  While true that fewer are finishing in four years (six is now the norm), the reason is clear.  More students than ever are working and attending college on a part-time basis.  It is estimated that fewer than 20% of today’s students are studying full time, living on campus, and/or fitting the traditional 18-24 age profile.

The National Student Clearinghouse reports six-year graduation rates of 60.5% for public institutions and 62.5% for privates, at the baccalaureate level.  Community college rates are less (39%), but for reasons that we understand and are openly acknowledged.

A major reason for these lower-than-desired rates is that as many as 40% of entering freshmen at public baccalaureate-awarding institutions need some form of remediation.  For America’s 1,123 community colleges, and their open enrollment policies, this number runs as high as 60% (The College Board).  Faced with this reality, many of those found “not college ready” merely drop out, rather than work on their areas of deficiency.

Another reason for lower community college graduation rates is the fact that a high percentage of new enrollees have no intent to graduate.  Of the many reasons for not doing so, two are primary:  1) the reason for enrollment was to gain a skill, and vocational employment, not a diploma; or, 2) to complete the lower division requirements of a bachelor’s degree, where the tuition rate is low, and then transfer to the institution where graduation occurs.  In the first case, the student leaves when a job is offered.  In the second, when lower division degree requirements have been met.

For those community college students who are seeking an associate degree, 57% of those studying full-time graduate within six years, or just below the rate of “four year” schools.  The fact that it takes as long as six years of full-time study to earn what has historically been seen as a two-year degree, is attributed to the need for remediation and course loads that allow employment.

Finally, let’s look at the ability of higher education to produce workers with the skills and abilities that employers seek.  A number of surveys have reported a significant gap between employer perceptions of job readiness of new grads and those of the graduates themselves, as well as that of their institutions.

A Gallup-Lumina poll in 2014 found that only 13% of business employers “strongly agreed” that college graduates have the skills needed to succeed at work.  However, a separate poll by Gallup, this time with Inside Higher Education (2014), showed 96% of academic officers believing that their institutions were preparing their graduates to perform well in the workplace.

Further muddying the picture, a Harris Interactive-Clegg poll (2013) of 2,000 college students and 1,000 hiring managers found that 80% of current students think they are “very” or “completely” ready for the workplace, while 54% of those doing the hiring (and who had conducted recruiting interviews) agreed.

Accenture’s 2014 College Graduate Employment Survey provides a far more complex picture than that of just differing opinions and perspectives.  Analysis of this data not only points to significant disparities between employer expectations and graduate readiness, but also to cases of graduates being overqualified (41% of graduates did not feel that any degree was needed for the position they held) or having jobs that were “misaligned” with their interests and background (accepted because of the lack of alternative employment).  Other conclusions point to a lack of employer training (essential to performance in rapidly changing fields), the need for more hands-on experience while in college, and better communication between employers and colleges as to future employee needs.

Unrecognized and perhaps unknown is that higher education is responding to these concerns.  The growth in work-study and competency-based education (in which Texas colleges and universities are becoming national leaders) are but two examples.  To date, nearly a thousand schools have initiated competency programs while even more are looking to add a work component (internship, work study, clinical, apprenticeship, etc.) partially as a result of poll findings, and are building entire degrees around agreed-upon core competencies, with employer input as to both what is needed and how it should be determined.

All of this is meant to underscore the point that with all of its faults, like American democracy, our system of higher education is still better than any alternative.  Yes, higher education MUST be concerned about the cost of a degree, the time it takes to complete, and the learning that occurs with attainment.  However, this is not the work of higher education alone.  Employers cannot expect to shift employee job readiness entirely onto the academy, and government needs to recognize the connection between excessive regulation and college costs.  Much of the pressure to increase tuition has come from reduced state support and the tidal wave of new regulations sweeping across the sector.

In closing, it should be noted that Universitas 21, the only ranking agency in the world to assess national higher education systems (as opposed to individual institutions), has recently issued its 2015 results.  Measuring 25 variables, this ranking compares a country’s performance to that of the “best in the world” for each variable.  Overall, the top 10 countries in rank order are:  the United States, Switzerland, Denmark, Finland, Sweden, Canada, the Netherlands, the UK, Singapore and Australia.  Not bad for a country on the verge of (if not in) a catastrophe.