princeton term bill

The Open School: I

killing “Tuition” and why there is a long way to go

tl;dr :: what if something like this story of a T-Shirt existed for colleges? “Tuition” fails to tell the story. We have a long way to go towards proactive transparency in education.

Over the past three years, there has been a lot of talk about college affordability and cost transparency. President Obama brought it up in his State of the Union address and mandated that all colleges publicly publish their Tuition and Fees. They set up the “College Affordability and Transparency Center” (CATC) as a clearinghouse for this data and created the “College Scorecard” as a simple way for prospective students to get the low-down on certain schools. These Scorecards, not only over-simplify the information and offer unfair comparisons to the overall dataset, they don’t come close to telling the story prospective students and parents need to hear. The CATC is even less impressive, publishing only basic lists of the highest/lowest Tution and Net prices. It does less—a lot less—than the better known (and harshly criticized) U.S. News and World Report College Rankings.

While the President’s agenda has done a lot to bring the issue to the forefront, very little progress has been made on the transparency ideas he is promoting. By no means is this the fault of the White House. It is lamentable that colleges, especially non-profit colleges —who, ostensibly, serve the public good—have not done this on their own. Do we really need the President to scold us into action? It seems so.

While the CATC and Scorecards might be dull, out-of-date, unfair, poorly advertised, and incomplete, they go a lot further than just about every college’s website. Even on the most specific of Tuition and Fees pages (like this one from my alma mater), colleges do not compare their data to other schools or discuss price increases. Some discuss net prices but, again, not as a comparison to other schools.

We could delve much deeper into critiques or suggestions for improvement in these areas of data comparison and ranking that CATC and the Scorecard are getting at, but this, I would argue, is not the important issue here. While comparisons are useful, they hardly matter: the key figure we are comparing, the cost of tuition, is a meaningless one.

“Tuition” is a Lie

What this word represents has been completely taken for granted. Literally, it means “the charge or fee for instruction” and share a roots with its supposed recipient, the tutor. A long time ago the word represented a very direct, simple exchange between the pupil and the tutor: I pay you to teach me. After the massive expansion of the higher education industry, the meaning is gone, abstracted into the useless generalized rhetoric of financial aid offices.

Recently, for-profit colleges have been loudly called out on these figures. Some of the most profitable of which, spent more money per-student on advertising than they did on instruction. Maybe instead of “Tuition” they should call it “Advertising Budget Fee”. Would we happily spend $25,000 if we knew that we were paying 25% of that for the privilege of receiving spam, direct mail, and telemarketing calls? Tuition indeed. This goes beyond the bastardization of language to outright deception.

Now, I do not believe that most non-profit colleges are as guilty of this as their for-profit counterparts, but we all lie on a spectrum of “Tuition” deceit. I may be wrong, but I have yet to see a single example of a school that truly and prominently displays—on their website to prospective students—where their money is being spent. The general indictment that non-profits, due to “industry pressure”, are acting more and more like for-profit corporations is dismayingly accurate.

While reprehensible, the fact that for-profit schools don’t advertise their true cost breakdowns makes a lot of sense. They have a direct profit incentive to spend less money on instruction as well as a profit motive to hide it. Non-profits on the other hand, ideally, don’t have this motive and should prioritize the service of their students over the preservation of their institutions.

Undoubtedly, non-profit colleges are not spending as much on per-student advertising as the folks at EDMC or the University of Phoenix, but the need for transparency in the cost breakdown stretches to other categories as well. In addition to high advertising budgets, student’s “Tuition” fees go towards increased recreational expenses, building maintenance, student services (another unhelpfully generic category), and other miscellany.

The Grove City College Campus

At nearby Grove City College, there is a giant quote etched into one of the newer buildings that reads “Make the campus beautiful for that too is an education.” The quote, while seemingly nice and inconsequential, serves to conflate the cost of instruction and the cost of buildings and grounds. Surely they are not one and the same. If a student strongly values the beauty, quality, and expense of their campus they can choose to spend money on it. Students should be able to see just how much of their “Tuition” is going towards the maintenance of the Dogwood trees, the manicured acreage, and the upkeep of the castles in which they attend classes.

Of course the issue here is not always that information does not exist. Sometimes, if you dig enough, you can find some good information. The Center for College Affordability and the folks at the Delta Cost Project have both done some excellent work publishing some general reports that discuss these cost breakdowns. Their work, unfortunately, much like this essay will be largely inconsequential if it is never seen by actual students or, more importantly, prospective students and their parents. The only way this will ever happen is if colleges make the honest and responsible choice to adopt a proactive culture of openness. Presidents, Accountants, Admissions Reps, and Web Designers need to collude on how to share more and then share some more.

While Google was unable to point me to any financial or annual reports for any of our local colleges, I was able to dig through the University of Pittsburgh website and find a Financial Report. They bring in a gross revenue of $703,914,000 and a net revenue from Tuition & Fees of $545,698,000. They list classes of “functional expenses” as a note near the end of the report:

As noted in the last sentence, property expenses are not delineated, advertising costs, student retention costs, recreation expenses, etc. are not listed. I bring this up, mostly, as an example in futility. Even after a good bit of informed searching, the best one can find is a few generic accounting lines. If we are to serve our students well, we need to put this information—with greater clarity and detail—front and center to inform their decision process. Not only do we need to lower costs and simplify the transaction between the instructor and the learner, but we need to lay it out there for all to see.

The last few weeks at the Saxifrage School, we are realizing that we, too, have a long way to go in this area. As a not-for-profit that pays no taxes we have a requirement to serve the public good, to serve our students and community to the best degree possible. We do not exist for private profit, but for the profit of those we serve. As such, we should go out of our way to share as much as we possibly can as clearly as we possibly can as prominently as we possibly can. To do this well, there is a lot of exciting and creative work to be done in the field of non-profit accounting. Any takers? Sharing openly and proactively builds a culture of honesty and trust while helping to consistently refine organizations. And it is right.

Old Tuition bill from Bowdoin College, 1823

This old tuition bill is a great example to learn from. They list out everything down to the sweeping, bed-making, and bell! Here’s hoping we can let our past inform our future on certain aspects, and not others: