The Crisis Facing the US Higher Education System: Part Two

A few months ago, I published a blog article about the Crisis in American Higher Education: Evolution and Continuing Disruptions. The article was a summary of a five-part series that outlined a speech I gave for a group of business executives.

Dr. Bjorn Mercer, Department Chair, Communication and World Languages, School of Arts and Humanities at the American Public University System, and I have collaborated on podcasts in the past. We decided that my article would form the basis for a series of podcasts about the current and pending disruption in American higher education. I published Part One  a few weeks ago. What follows below is a link to Part Two of the podcast and the script to the podcast is beneath the link. I hope you enjoy it.

Listen to the Episode: 

Read the Transcript:

Bjorn Mercer: Hello, my name is Dr. Bjorn Mercer and today we’re talking to Dr. Wally Boston, President Emeritus of the American Public University System. And our conversation today is about the crisis in higher education. How did we get here? Welcome, Wally.

Wally Boston: It’s great to be here, Bjorn.

Bjorn Mercer: Excellent. We had a great conversation the other day, the first about the crisis in higher education. And so in your recent articles about how to explain the crisis in higher education, you discussed how we got to this contemporary moment, what has led up to the current situation. And so the first question I have is, given the rapid expansion and availability of open educational resources, or OERs, why do you think the cost of a four-year degree has not come down?

Wally Boston: Great question, Bjorn. I think the simplistic answer is that two-thirds of all students attend traditional institutions and the one third that attend online, probably three quarters of them are attending online classes at traditional institutions. So, they’re not going to cut their online tuition below the cost to attend the campus. I think there are some institutions that, based on their size and scale, could be poised to make cuts that would drastically change the landscape, but no one wants to be the first.

Bjorn Mercer: Nobody wants to be the first to cut those costs. And so why do you think with OERs that hasn’t at least crept into saving a little? And a lot of institutions have these OERs which are zero cost or low cost. Do you think there are savings at the periphery or do you think a lot of these institutions are just ignoring that?

Wally Boston: It’s a great question. I’ll try to start by providing an example here in Texas. The Texas Higher Education Coordinating Board (THECB) regulates all of the higher education institutions in the state of Texas, at least those that are publicly funded, and participates in projects with even some of the private institutions like Rice University for example, in Houston. Recently it was announced that THECB had given a grant to the University of Texas here in Austin, Texas A & M University in College Station. Those are the two big flagships for both of their systems, and Rice University, to develop General Education OER courses. And those General Education OER courses are part of the OER that THECB makes available to all of its institutions.

The question you could ask is if those preeminent Texas institutions have developed a total package course, and they’re available for anyone to use, why wouldn’t someone say the only thing that stops us from awarding you credit since these are bonafide courses, would be that we need to know that you did the work. If there are papers involved, send it through or if there’s testing, have a proctored exam or test. It’s just a matter of time.

Rice University, since it probably charges $75,000 a year, is not going to be the first to do that. But they don’t mind making these free courses available to everybody else. UT Austin and Texas A & M are less selective than Rice, but nonetheless they don’t want to upset the apple cart with the thousands of students that attend their campuses. But there’s got to be, in my opinion, somebody out there that’s going to pick this up and say, “you know what? I don’t mind getting full tuition for the last two years of a degree in these free Gen Ed courses that are available through OER. I’m going to take advantage of them and cut the cost for the first two years.”

Bjorn Mercer: And I love that. That’s a great option for students. If the first two years were low cost or free, that is going to kill many institutions’ revenue stream for the first two years. However, the cost of college has gone up so much. Before we started talking, I just went to the National Center for Educational Statistics and I was just looking at how much tuition cost from 1963 till the present. And it’s gone up at least two and a half times – using real dollars – and just looking at what it costs in the mid-sixties as a parent of kids who are going to go to college in a little while. But you look at the average tuition and it’s about $13,000 for all institutions, that’s including public and private. And that’s a huge difference between around $4,000 back in the sixties.

Wally Boston: In the article that you talked about that I wrote, I used the example of my brother and I who were both in college in the mid-seventies and the cost of tuition my senior year in 1975-76 at Duke, and the current 2022-2023 school year was roughly up 20 times from $4,000 to $84,000. And the cost at Towson University, which was a state institution in Maryland, went up to $25,400 from $2,400, so 10 times. Family incomes didn’t go up that much. I think median family income in the U.S. increased from 75-76 5.7 times. So, you’ve got a 20 x and you’ve got a 10 x. One’s double and one’s four times what the family income went up.

Bjorn Mercer: It’s so curious to think of how much tuition and all the fees have gone up. And so, the next question is, what are some other ways to decrease the cost of a four-year degree? You already talked about OERs and with those Gen Ed courses. What else might there be?

Wally Boston: The first thing that I kind of recommend if I talk to families when their children are still in eighth grade or below, is to see if their public high school has a dual credit program with the local community college. Dual credit programs are not new. They’ve been around for at least two decades. And really if they’re available, offer an amazing opportunity for a high school student to take a class at the community college that counts towards high school graduation and also counts towards a college degree. Here in Texas, Texas has been promoting this for a long time. I think it goes back to Governor Rick Perry who had sought for some institution in Texas to provide a four-year degree for total cost of $10,000. That never happened. But Texas has been big on promoting dual credits and some other states have as well, but I’m just familiar with Texas.

Texas is now up to about 300,000 high school students each year that are participating in dual credit opportunities. And there are some who actually in those four years if they start early enough can earn a two-year degree. So at the same time you graduate from high school, you earn a two-year degree and then you transfer into the state institution. It would’ve been your freshman year but academically you’re a junior. That saves two years’ worth of tuition.

Bjorn Mercer: That is a wonderful option. Again, we talked about a lot of the major state institutions, but there’s a ton of small liberal arts colleges out there today that are really struggling for survival. How will those institutions survive if the demographics are shifting, if we’re in a lower enrollment demographic for the last 10 years overall. How are those going to survive without them dying off or getting gobbled up by other institutions?

Wally Boston: Great question. I’m participating as an outside advisor to a project that’s being coordinated by University of Pennsylvania Professor Bob Zemsky, and for years Dr. Zemsky has maintained that the U.S. should do a true three-year bachelor’s degree, which is what is done in Western Europe. And right now he has a number of institutions, I don’t think I’m allowed to disclose the number, but they’re working through the math and they’re working through the analysis of how they can do it. And it won’t be for every one of their bachelor’s degrees because everybody wants to pilot something and see how it works.

This is all being done academically because Dr. Zemsky is an academic and so he sees no way to have something like this succeed unless the faculty participates and works on it. But the cost to cover reducing one year is recoverable at most institutions. It’s not recoverable at an elite institution. But when you look at our completion rates for four-year degrees, approximately 38% of the people who start – finish in four years, and it’s just under 60%, I think it’s 58%, finish in six years and maybe a little less than that. But nonetheless, there’s a high number, let’s say 50% on average nationwide, of students who don’t return after freshman year.

You hear about student debt. But what you don’t hear about is that for most students the amounts are small. And it’s because really early on they go, “God, do I have to go through four years of this?” Because a lot of Gen Ed courses are simply higher-level repetitions of what they learned in high school. I believe that the pilot schools that are working with this are able to determine which degree they have, target degree, that they could consolidate some courses. The cost for that could be absorbed simply by making the assumption that they’ll reduce that first-year to second-year shrinkage of students because they’ll see a light at the end of the tunnel that, “Hey, I can get this done and I don’t have to waste two years in General Education courses, but I can start taking the courses that I’m designating for my major early on.”

Bjorn Mercer: I think the three-year degree is an absolutely wonderful idea. There’s so many different ways of potentially doing that. It aligns more to what Western Europe already does. It is tough when you look at four years.

Wally Boston: Let me add a complement to the Western Europe statistic. Western Europe has two-year master’s degrees just like we do. Our percentage of students who earn a four-year degree and go onto a master’s degree is around 15%. In Western Europe, it’s 40% – because they’re completing the three-year degree and they can do the two-year masters and it’s only five years. A very high percentage of them are getting their master’s degree.

And when I think about this, I don’t believe that any of these institutions are looking at doing this for an engineering degree for example, or a business degree like accounting that requires a lot of accounting courses in order to pass a CPA exam. But if you think about a general liberal arts degree, and I’ll pull out sociology or psychology, there are these general education distribution requirements of which the two most important are English and math. And they’re also the two that people struggle the most with.

I don’t believe when the faculty’s looking at eliminating some Gen Ed courses that they’re going to eliminate those at all because you’re really not going to get through college if you can’t read, write and do math. And if you can do that, then some of the other courses like that history distribution. Maybe US history is important so you learn a little about our country if you haven’t done that in high school. Maybe political science is important and maybe economics is important. But the last I checked, I think the average college has about 38 credit hours in Gen Ed courses. That’s a lot. Just divide it by three and you’re going to say, “Wow, do we really need 12 courses?”

What used to be called the non-traditional student population is actually the majority of all college students now. Because of demographics, our 18-year-olds who matriculate as freshmen and hopefully graduate in four or five years are less than half of our roughly 16 million overall students who are attending college. And they’re not attending full-time. And so anything you can do to shorten the credits required to graduate is really important for them because when you’re not attending full-time, let’s say your average time to complete is somewhere between six and seven years and that’s if you really work at it. Cutting one fourth of the credit requirement off is going to make that an achievable dream as well.

Bjorn Mercer: Oh, I completely agree. And so this leads us to the next question. Is there any public or private institution that’s doing a great job of keeping tuition affordable?

Wally Boston: Certainly APUS, Bjorn, has done a great job of keeping tuition affordable – specifically for our military students where the Department of Defense’s tuition reimbursement hasn’t increased since 2001 and we’ve pegged our tuition for them to that level. And even for the civilian students, our tuition I think is set at reasonable levels with only two or three tuition increases in the last two decades. There are others. Mitch Daniels, when he was leading Purdue University, got credit for holding tuition flat for eight or 10 years. He’s only 50% of where we are at APUS. But whether that was his idea or he saw it somewhere else, he’s gotten a lot of accolades for that.

And the problem though I see, today, with where most tuitions are is that by saying, okay, we’re just going to hold. That doesn’t help the people that are going to college now. And so, I think that you have to look at other alternatives other than attending a specific institution for four years from day one and look at those dual credit opportunities when you’re in high school. Look at starting at a community college.

In fact, one of the issues that community colleges have is that their graduation rate for community college is around 10%. And the reason it’s so low is so many people leave after a year. Once they get it under their belt, and they complete the courses and they can transfer them through an agreement with the state flagship or another public institution in the state, they say, “Okay, I’m ready for college.” Whether it was them or their parents, they just said, “I’m ready.” And so they’ve gone at a lower tuition rate and they go to another state school. That keeps the tuition down as well.

I think if you do those types of things and take advantage of the state that you live in, and its generosity, and tax structure and willingness to subsidize public education, you can lower the cost.

Bjorn Mercer: So many people are going to school today with a full-time job, taking care of kids, taking care of elder family members. And so anything that institutions could do to help that is a good thing. Whenever we talk about public institutions, it is tough because they keep on raising tuition up and up and up. Even since when I went to the University of Arizona last, they’ve gone up and up. There’s also the complexity that the state doesn’t quite fund them as they used to. And I don’t know enough to go into that in-depth discussion, but I know that the funding structure is complex.

Wally Boston: I think the point at which most scholars who look at, pay attention to, and research tuition increases is the 2008 recession. What happened in 2008, a lot of people lost their jobs. And so the tax revenues to the states shrunk by quite a bit. When tax revenues shrink, the states have to balance their budgets. They’re not like the federal government and get to print money. They have to balance their budget. And so the states had to make cuts. And higher education does not have a mandate for funding like two major components of the state budget, K through 12 education has mandated funding and Medicaid, which is medical services for low income families. And it’s a federal program that requires the states to fund half. So Medicaid has a funding mandate and K through 12 has a funding mandate, but higher ed doesn’t.

And so in 2008 when those revenues went down, a lot of states cut. I think the number of states that initially made cuts was 36 out of the 50. And if you look at the time that was done, the enrollments were still increasing. We peaked nationally in 2010 at our higher ed enrollments at roughly 21 million students. And when the states cut their reimbursement, they allowed the institutions to increase their tuition. And then since 2010 at that peak enrollment, and it took the states a long time to start bringing back some funding, with the lower enrollments, it meant that not only was the state funding dropping, but the number of students who were attending was dropping. And so they had to increase tuition even more to balance the budget.

There are a few states that have come close to returning to the pre-2008 recession per student reimbursement, but it’s not the majority. And I predict that it’s not going to happen. That when you look at the money that was dispersed to states through COVID, it was certainly significant. But it runs out next year [2023] and the states have to spend that money on specific items. They can’t put it in a rainy day fund. It is either use it or lose it, so to speak. I think that states have to sort of look at themselves and say, “Do we really need multiple research universities? Should we just fund our flagship at X, Y, Z cost and ask the other research universities to stand down?”

They’re going through an analysis like that in the state of Kansas right now and they’ve brought in outside consultants. And I think one of the first outcomes is that they are designating which universities in the system can teach some of the lower enrollment degrees like foreign languages for example. It’s creating a little bit of a ruckus but going to have to be done, I think to keep tuition affordable and to satisfy the legislators who say, enough is enough, I only want to reimburse “X.”

Bjorn Mercer: States, they can’t have multiple high profile public institutions that are competing with the 49 other states for the best high profile research institution because then in that kind of scene it’s Armageddon, nobody wins because everybody’s competing for national and international students.

And institutions need to be teaching the citizens of their state first and foremost. And it needs to be affordable, and it needs to be local. If you have your two main state institutions that are really competing with external, that means that they’re kind of forgetting about the people of their state.

Wally Boston: I’ll give you an example of another state that’s not Texas and it’s not Arizona. So, the state of North Carolina last year announced a program in the legislature. They took four state institutions that were in low population areas and announced that if you attended one of those four, you could attend for $2,500 if you’re a state resident. And I believe they later modified that you could attend out of state for a low number as well. It was either the same $2,500 or maybe $3,000. It was a low number. With the goal of picking up the enrollment in those low population areas.

Now, I believe the enrollment has increased, but what’s interesting is when you go to NCES or College Navigator and look at the cost of those institutions, the cost of room and board is still at least $12,000 a year. So, for somebody for whom affordability is a real issue, you either need to figure out a creative way of living off campus with a few guys or girls, or you need to be local and stay at home with your parents versus living on campus.

Bjorn Mercer: That leads us to the last question is what are the roadblocks to going low as in free tuition?

Wally Boston: Well, I think one of the things that nobody wants to be open about is if you offer free tuition to everyone, maybe not everyone is qualified. And so how much money do you waste in not just the cost of offering a college seat to somebody, but also how much of their time do you waste by just… Let’s say they’re only there for a semester, but they’re just incapable of completing the college level work and flunk out. There needs to be a pre-qualification, so to speak. I think admission standards that work. The last time I checked, there are about 17 states that have a free two-year degree. But there are qualifications. I mean several states, I don’t remember the exact number. Actually, it’s a first dollar system where their grant will provide the money for you to attend community college free; not room and board, but tuition free.

Other states are the last dollar in. So if you get Pell Grants, you have to apply the Federal Pell Grants to the tuition first before the state will contribute after that. Now, people look at Pell Grants, Pell Grants are supposed to be not just tuition, but also cost of living. So I think philosophically there’s some people that argue that states shouldn’t do that, but at least there’s some money there. So if a Pell Grant won’t cover that tuition, then the state will step up and provide some additional funding but on a last case in.

I think that if it were me being asked to be a state czar somewhere, I think I’d push for free community college, but I’d also push just as hard for the dual enrollment programs. If you’ve looked at what’s happened because of COVID, community college enrollments have dropped approximately 20% nationwide. And there’s a lot of people trying to explain why those enrollments have dropped. But I guess the good news, the National Student Clearinghouse issued its most recent report for the fall of this year. And while community college enrollments didn’t drop as much this fall, an area where they increased was in dual enrollment.

I think people are starting to get wise, and I think when a community college can see that it can bring up parts of its enrollment by participating in dual enrollment programs with the local high schools. I mean it’s doing what they should be doing, providing a service to the community and allowing people to get out of high school with credits that while they may not apply to out of state institutions, they’re going to be accepted by agreement at least at that community college that provides them.

Bjorn Mercer: And those are all great ideas, because again, throughout this podcast we talk about dual enrollment and it really seems like the best option out there. And other things we could talk about like philosophically, what percentage of the population should go to college, or what is the responsibility of a country to educate a citizenry and to what extent should there be a standard?

I personally love and advocate for a robust liberal arts background where it’s philosophy and theology and writing and reading and history and math because then that sets you up for success in no matter where you go. Although there is also the other side of like, well, we also need more technical education for people who maybe they don’t want to jump into philosophy, which is fine. And then they get a good technical education.

Wally Boston: I ended up being a history major, but I started out as math and moved to chemistry and got to a certain level and just when I looked at some of those higher level math courses and higher level chemistry courses, it was like, wow, they just didn’t seem to be fun. The good news, because we started this conversation out about OERs. I mean, the good news is there’s a lot of content that’s available for free. The bad news is if it’s not sanctioned by somebody, in other words, somebody says, if you do this, I’ll give you credit. As a lifelong learner, you’re learning on your own, unattended so to speak, and your ability to translate that into academic credits is somewhat limited.

I think we are going to see more initiatives like the one that I mentioned in Texas, and I think somebody in Texas is going to find ways to use those Gen Ed courses that are sitting out there. And by the way, I believe they’re available for any institution. I don’t think you have to be in Texas to pull those courses off of the THECBs website and say, “You know what, here you’ve got these courses done by University of Texas at Austin, Texas A & M, College Station and Rice University, why should we go to the cost of developing these courses? Let’s just use them as our own.” And they’re under the OER common license agreement so you just have to give attribution and focus on what we do well in our specialization and primary content for our majors.

Bjorn Mercer: No, completely agree. I think that Texas initiative is wonderful, and I could see if an institution fully invested into that, then they would have to cut faculty because then you wouldn’t need as many faculty for first and second year courses. But it’s also a strategic choice of having to make that decision. And it would be wonderful to see a state where they say, “Look, we’re going to create these OER courses. We’re going to take from OER courses around the country. I mean, you could literally have 50 versions of the same course and you can say, “Students, take one of these versions by all these experts.” Your major expert from every state could create one. And there’d be such a wonderful choice. Absolutely wonderful conversation today, Wally. Any final words?

Wally Boston: I appreciate the opportunity to chat with you, Bjorn, and I’m always glad to do it in the future. We are certainly living in interesting times as it relates to differentiating between content that you’re paying for, the ROI on that content, the free content. I think some people are going to figure out how to work that to a win-win, a win for the student, lower cost tuition and a win for the institution, and that they’re able to direct someone to completing more courses that are theirs.

And I’m going to just call it like I see it and say that all of this occurs online and some of it could occur on a face-to-face environment with the student having gotten their OERs online before they matriculated in an institution. But I think there’s some win-wins out there. I think they’re complex. I think that it takes a bold and innovative leader to say, “I want to do this.” And that’s probably the biggest reason why we haven’t seen a lot of people doing it so far.

Bjorn Mercer: Excellent. Today we were talking with Dr. Wally Boston about the crisis in higher education. My name is Dr. Bjorn Mercer, and thank you for listening.



Subjects of Interest


Higher Education

Independent Schools


Student Persistence