editorially speaking More on the Way We Will Be The influence of the "student-as-consumer" trend on the financing of higher education is not limited to student borrowing described on this page last month. Competition among colleges for the "consumer dollar" has prompted some institutions to develon interestine discount schemes that make i t clear that education has b&ome a commodity much like any service-oriented industry. For example: T h e University of Rochester announced it would give a $5,000 grant to all New York residents who enrolled as freshmen in 1995. T h e University of Detroit is offering out-of-state students grants of up to $1950 to match the amount the state gives Michigan students. Some private institutions have begun offering four-year degrees for the price of three, allowing students to cut $12,500 to $25,000 from the cost of their bachelor's degrees. Stevens Institute of Technology and Clark University offer the equivalent of 20% more education-a no-tuition fifth year. Michigan State University guarantees that tuition will not rise higher than the predicted rate of inflation for the next three years. These are typical of the kinds ofresponses that an industry would make when consumers of its oroducts make it clear that they can not or will not pay the sticker price. Such conditions drive rebate schemes ~revalentin the auto industrv which give the impression that the sticker price is not reall; a measure of the market value of the ~roduct.The sticker price is, for many commodities, the fir& guess and is often oDen to "negotiation" thmuzh a variety of tactics. I t is apparent, from thk point of view i f this metaphor, that the customers no longer think education is any different from any other commodity. Education has become another high-priced luxury desired by a lot of people who may not be able to swing the price, hut nevertheless would like to have it. Using market-oriented terminology, the market is trying to find the real price the public is willing to pay for higher education, and those concerned are involved in pricing schemes that could be described as aggressive, creative, or desperate depending on one's point of view. Discount schemes include financial aid based on need are pluliferating Currenr infojmation indicates that fewer than half of all collerre students nav full tuition. \I'lthout linanc~al aid a t this level, a very lar& &her of students would not or could not attend college. Astudy by the Institute for Research in Higher Education a t the University of Pennsylvania over the period of 1981-1993 suggests that (representative kinds of) colleges were increasingly likely over time to offer more financial aid, not just to assist needy students but to increase enrollment and maintain class size--a version of management attempts to keep the factory going. A number of factors have nut hieher education in a financial bind. The cost of a college education has grown far faster than the Consumer Price Index and nersonal income. For example, College Board data indicate'that this year's tuition inflation increase (6%)is twice the rate of inflation. The public is increasingly skeptical and cost conscious as a result of the consumer movement and negative oublicitv about academic life. The competition for topstudeks is i&reasing. Although - universities may have been fighting to control costs for yean, their .;unr,s. h ; ~lren i limited hy the need toaccomUnllke induitr~nlcorporations like m d i w to ,i~~ngfiicilities,
IBM, universities have less control of their payrolls. It was only &r IBM essentially halved the number of its employees world-wide that it became profitable (productive) again. The price of education has hecome a more-or-less consumine oreoccunation for manv of those who have a legitimate &rest & it, which is the basis for the various discount schemes that are increasine in number. In keeoing with the market analogy, it has been observed repea'tedly that the forces that govern the market have never been assuaged by fiddling with prices. The market metaphor, if it is to be believed, does not bode well for many associated with the educational process. The basic market-oriented remedv invariablv lies in controlline costs. Since the primary cost in higher education is the payroll, i t appears that the number of people involved in higher education-predominantly the faculty-will have to decrease or they will have to become more productive. Of course there are some-a few-who would deny the market analogy applies to the education process. Institutions that have remained deliberately small in order to maintain an atmosphere of intimacy and quality learning-liberal arts colleges-find themselves a t a competitive disadvantage with the universities that train facultv. establish the research standards that faculty everywhere pursue, and increasingly claim to offer the same educational values as liberal arts colleges. Increasingly universities claim to offer small classes, residential settings, attentive faculty in addition to more facilities, greater diversity, and a l l l e r range of vocational and professional programs of study. However, no institution, no matter how selective, can claim to be immune to changes in the perceived needs and expectations of students. If luxury cars have, for example, automatic door locks, a non-luxury car manufacturer who introduces automatic door locks into a lower priced line will achieve an advantage. Perhaps the advantage is only transitory, but markets are driven by such momentary advantages even if they are only perceived. Costs have escalated for all comoonents of the educational process. Institutions, which in the 1970's had modest efforts toward the dissemination of their "corporate information" now find themselves s e n d i n g four-color brochures and videos to anyone who wants them, and often to those who do not request them. The advertising costs of doing - business has increased markedly Increasingly, the education market wants to he assured that an investment in any kind of education will prove worthwhile, where the concept of worthwhile is becoming increasinelv -.more sharnlv . "defined in terms of snecific outcomes. Students no longer represent a homogeneous entity that can be treated in a homogeneous way They are less prone to value education for its own sake and are more concerned that the dollars invested should have a tangible retun-a good job. Fewer students are inclined to accept an institution's deinition of what an education should be. They have gotten the upper hand through the d e f ~ t i o n of the market place. Things will never be the way they were. Institutions that recognize the profound changes that are occurring and can accommodate will be the survivors. Others will disappear through "mergers" that may not be successful, or will simply go out of the education business because of the financial pressures. JJL
-
Volume 72 Number 2
February 1995
97
