Continuing with our reading of Richard DeMillo’s Revolution in Higher Education: How a Small Band of Innovators Will Make College Accessible and Affordable (2015) (publisher; Amazon): this week we’re discussing chapter 6.
The chapter is entitled “Accessibility”, and focuses on the financial crisis of higher education. “[A] basic understanding of the finances of modern universities, which is what this chapter is about.”(Kindle location 2693)
Demillo takes us through key issues and leading arguments, including: the escalating price of tuition; whether or not higher education is a business; the role of federal financial aid; the growing unsustainability of some campuses; marginal costs; endowments; state subsidies; the variety of campus costs, and their possible unbundling; Bowen and Baumol’s cost disease; faculty productivity.
His conclusions: higher ed is increasingly unsustainable, beyond the top 1%. We need to rethink the business model, probably using technology. And if we don’t, new competitors will emerge.
If universities… do nothing, then a new generation of innovative, responsive, and affordable individuals and organizations will find each other and collaborate to dismantle boundaries.(3019)
In a sense some of this is not new for the book. DeMillo has hit on several of these themes previously, notably sustainability and access. Michael Crow returns as a positive figure.
I admit to being ambivalent at this point. Our current chapter tried to cover an awful lot of ground in a very small space, and did ring many appropriate changes. But it missed many key issues, which are striking by their absence. He sees private institutions as subsidized by endowments (2926), but many – most? – have paltry funds. He rightly assigns staffing the lion’s share of campus costs (2961), but is silent about adjunctification. Moreover, the repetition of themes (and recurrence of Crow) is good for coherence, but seems a bit too much.
- I love DeMillo’s ultimate answer to the “is higher ed a business?” question. Campuses are neither businesses nor nonprofits, but bureaucracies (2760). Heh. (This draws on the work of Anthony Downs, summarized here, I think)
- Here’s one weird passage: “No one would expect a student to check the sticker price at one school and then drive down the road to the next one looking for a better deal” (2914). Isn’t that what many would-be students do, at least on line, if not literally driving from campus to campus?
- Here’s a provocative claim: “The system [of American higher ed] is only viable because of the prevalence of subsidies: state appropriations in the case of public universities, and earnings from endowments and gifts in the case of private institutions.” (2927) In other words being solely tuition dependent won’t fly for many schools. That’s bracing.
- The call for increasing faculty productivity seems theoretical at this stage. It doesn’t address the real politics of what that might mean. Well, I’ll wait for other chapters to see if DeMillo picks this up.
What do you make of it?
Next week, starting December 14th, is chapter 7: Pyramids.
Would you like to follow along? Simply snag a copy of the book from your library or MIT Press or the local bookshop or Amazon (etc.), and get reading. I’ll post about each chapter at the start of each week, so you can add comments there. I’ve set up a tag for all posts: demillorevolution. Twitter’s also a fine place to chat (I’m @BryanAlexander). If you’re into Goodreads, let us know so we can catch up (here’s me).