Colleges where the middle class need not apply

Note: This was my first "hit" in the world of op-eds. It was syndicated all over the country. Its content ended up being included in a piece of congressional law dealing with college financial aid. Not surpringly it generated some vitriol from the higher education lobbying industry. You know you're doing something right when lobbyists attack you in print.

Washington Post, March 9th, 2001

By Stuart Rojstaczer

The United States has increased access to higher education to such a degree that about two-thirds of all high school graduates go on to college. Increasingly, the poor and middle class at least try college for a year, although for many of them, even the modest cost of state schools quickly becomes burdensome.

But the elite privates have been impervious to such changes. They still cater largely to the wealthy and upper middle class. A 1999 national survey of freshmen indicates that at private colleges and universities such as Northwestern and Stanford, only one-eighth had parents with incomes less than $40,000. In comparison, one-quarter of all freshmen at prestigious public schools such as Michigan and UCLA came from modest-income families. The gap between the privates and publics isn't so much about academic talent as it is about family wealth.

The major culprit responsible for this disparity is the increased cost of private education. As late as the 1970s, private colleges and universities were fiscally responsible, and tuition was reasonably priced relative to family income. Fiscal prudence, however, was abandoned sometime around then.

For the next two decades, these institutions practiced a nearly uniform policy of increasing tuition at a rate of roughly 4 percent above inflation every year (dropping to 2 percent in recent years because of financial windfalls from the booming stock market of the '90s).

Private colleges and universities have simply been unable and unwilling to control their costs. Strongly driven to improve their annual rankings in magazine surveys of colleges and universities, they spend liberally to acquire star faculty members from other institutions and buy other sundry items and services desired by both faculty and students. The result is that instead of minding their bottom line, institutions of higher learning are caught up in an "arms race," each trying to outspend the competition.

Given the sticker shock associated with our advertised tuition and the tens of thousands of dollars in loans that we expect middle-class students to carry, it's no wonder that the demographics of our student body continue to be heavily weighted toward children of the rich.

Wouldn't it be a more positive sign of the egalitarian health of this country if the best private universities and colleges were also the most affordable for those with academic talent? Surprising as it may seem, expecting such a transformation would not be tantamount to expecting manna from heaven. The era of dissuading and shutting out the middle class and poor from elite colleges should and could come to an end.

The increase in American wealth during the 1990s has had many positive economic benefits for elite private colleges and universities. As a result of increases in the value of their own financial portfolios and record giving by individuals and corporations, they have stockpiled wads of cash. The endowments of these institutions are on their way to approaching Bill Gates levels. Harvard's endowment stands at $17 billion, Yale's at $10 billion and Princeton's and Stanford's at $8 billion. Even relative paupers such as my own university have endowments in excess of $2 billion.

A good deal of this new wealth could be used to make college more affordable, and the good news is that some elite colleges and universities have already begun to use their wealth for just that. The first steps were taken by Princeton in 1998, when it began to offer slightly more generous financial aid packages and increased the number of applicants eligible for financial aid. Harvard, Yale, Dartmouth, Stanford and others rapidly followed suit.

But these changes were modest. The financial aid packages were focused on providing loans amounting to tens of thousands of dollars. What middle-class family views $20,000 of debt in a positive way?

This year Princeton has upped the ante to a significant level. It announced that its loans would be replaced with cold, hard scholarships. Middle-class students would be expected to work during the summers and part-time during the school year to make partial payment for school, but whatever costs they could not afford would be borne by the university outright. Future middle-class and lower-class students could leave Princeton with zero debt. That is true affordability!

It's unclear which institutions will feel obligated to follow this path. So far, the reaction has not been all that encouraging. University officials from such places as Duke and Pennsylvania have responded with public statements noting that they aren't nearly as wealthy as Princeton. But Princeton's new program will cost less than $16 million per year, hardly a crushing financial load for any multibillion-dollar institution.

In the working-class neighborhood where I grew up, finances would preclude almost everyone from applying to the university where I now teach. As of right now, the same could be said of just about any elite college except Princeton. We should not be placing these financial hurdles in the academic path of the middle class