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Hot on Campus | November 5, 2012

Budget defense


Colleges are coming up with creative but self-interested, ways to explain their expenses, financial aid plans, and tuition increases


Students at the University of Michigan now have the opportunity to pay for a class that teaches them why they are paying so much for their classes.

"The Challenge of College Affordability: Financing the University" is a one-credit course that gives university administrators a platform to explain the school's budget--revenue, costs, tuition rates, financial aid--to the 56 students registered for the class.

While college tuition has increased by almost 140 percent in the last 20 years and graduates leave school with an average of $22,000 in student debt, it's no secret that students and parents are paying more attention to the way colleges spend their money. As the resulting debate on the value of college credentials increases, colleges like the University of Michigan, are getting creative at defending their budgets. But some researchers of college affordability question the efficiency and honesty of the credit-earning course approach.

The trend of college financial transparency picked up speed last year with a new federal law that requires colleges to be more clear about the cost of their degrees. In Milwaukee, Marquette University President Rev. Scott R. Pilarz, S.J. put students and administrators side-by-side last year to develop the school's capital budget. In Washington, D.C., American University launched a new website to provide information on college affordability and the school's budget.

But the University of Michigan and several others, including Haverford College in Pennsylvania and Cornell University in Ithaca, N.Y., have begun offering credit-earning courses on the topic, with a slightly different goal. The class at UM is taught by University Provost Phil Hanlon and Vice Provost Martha Pollack, who told The Wall Street Journal that they hope to elevate the thinking on the topic and "tell the school's side of the story" though a balanced, academic approach.

One UM student taking the class, Janee Brown, described the course as myth-busting, challenging her assumptions on where her tuition dollars were being spent.

"I've been impressed with the university's efforts to cut costs," Brown told The WSJ. "But I'm still walking out of here owning $20,000."

Jonathan Robe, research fellow at the Center for College Affordability and Productivity, is skeptical that colleges have the ability to do more than parade their own perspective in a class about their own budget.

"They are very much going to be approaching this from the institution's perspective, basically defending the status quo," Robe said. "When the class is taught by someone who is actually in charge of the institution, it is going to be more of a defense of the operating model colleges already have rather than an a thorough analysis."

The public sometimes does have a skewed view of higher education pricing and costs and could benefit from the colleges' side of the story, Robe said. But the for-credit class is not the best method. Whether the goal is financial transparency or increased understanding of the university's budget perspective, restricting the information to students already enrolled won't be effective, Robe said.

"You're not addressing the broader public that way and that's where a lot of the concern is coming from," Robe said. "It's coming from recent grads that are worried about their high debt, people who graduated 10 and 20 years ago that still have debt, and prospective students questioning if it's worth it to go to college."

Dr. Andrew Gillen, senior researcher for the American Council of Trustees and Alumni, is just one of many who criticize colleges for raising tuition on university life accessories - food, housing, athletic programs and entertainment venues - for the sake of competition. Competition is also the reason why colleges have been less financially transparent, Matthew Hamill, senior vice president for the National Association of College and University Business Officers, told The WSJ.

Jay Schalin, director of state policy analysis at the John William Pope Center for Higher Education Policy, said that in his experience, when public colleges are proactive at making their budgets seem totally in order, it's time to take a closer look.

"It may be a preemptive strike to avoid the kind of serious scrutiny that might uncover something," he said.