Spellings Commission Perpetuates the National Misunderstanding of Higher Education Prices
Daniel F. Sullivan, President, St. Lawrence University
August, 2006

The federal Commission on the Future of Higher Education—the so-called “Spellings Commission” since convened by Margaret Spellings, our current Secretary of Education—has just released its report, meant to be a bold outline for how higher education in America should be reformed to meet the needs of students and the nation in the 21st century.  Its summary judgment is that:  “American higher education has become what, in the business world, would be called a mature enterprise: increasingly risk-averse, at times self-satisfied, and unduly expensive.”

A substantial portion of the report is devoted to the issues of access, cost and affordability, and financial aid.  It correctly identifies what has, for me, been the most troubling sign of our failure as a nation to provide an appropriate level of access to hundreds of thousands of able but financially needy students:  “We are especially troubled by gaps in college access for low-income Americans and ethnic and racial minorities.  Notwithstanding our nation’s egalitarian principles, there is ample evidence that qualified young people from families of modest means are far less likely to go to college than their affluent peers with similar qualifications.”  (p. 10)  Indeed, we know that in America today, the probability that a student from the top quartile in family income but in the bottom quartile of educational preparedness and attainment will attend college at the same rate as a student from the lowest quartile in family income but the highest quartile in educational preparedness and attainment.  As a nation we should not let this happen.

In its “Findings Regarding Cost and Affordability” the Commission says:  “Our higher-education financing system is increasingly dysfunctional.  State subsidies are declining; tuition is rising; and cost per student is increasing faster than inflation or family income.  Affordability is directly affected by a financing system that provides limited incentives for colleges and universities to take aggressive steps to improve institutional efficiency and productivity. . . . . . . .  There is no issue that worries the American public more about higher education than the soaring cost of attending college.”  (p. 11)

            In its recommendations the Commission makes several proposals for restructuring the nation’s student financial aid system.  I shall not comment on them specifically here.  The Commission also says:  “This effort requires not only federal investment, but strategies by which colleges and universities contain increases in tuition and fees.”  (p. 19)  And it says:  “An important benchmark . . . . would be that the growth in college tuition not exceed the growth in median family income over a five-year period.”   This, of course, is a carryover from Congressman McKeon’s ill-conceived proposal to impose controls on the growth of college tuition, despite the disclaimer in the following sentence that the Commission opposes price controls.

There is the rub.  If the Commission’s report said that the growth in net college tuition (after financial aid) should not exceed the growth in median family income, I would have more hope that they truly understand the nation’s higher education financing system.  Only the relatively wealthy in America actually pay the sticker price at our independent colleges and universities.  What we should be monitoring, and caring about, is the growth of average net tuition for all students, and especially the growth in average net tuition for students from the nation’s lowest income quartile—those currently eligible for Pell Grants.  To focus on tuition, and not net tuition, is an only partially disguised effort similar to the current administration’s focus on income and estate tax cuts for the wealthy.  The prime beneficiaries of slower rates of increase in tuitions will be high-income families, not students from those families where access to college is most challenging financially.

I am not, of course, advocating thoughtlessness in tuition setting, or inattention to the matter of cost-discipline on campus.  In the very highly competitive admissions and retention environment in which institutions like St. Lawrence function, close, continuous attention to the “value” students and parents receive—the cost/benefit ratio, if you will—is a daily preoccupation.  We must compete in a national and even global market for students that is acutely aware of how we are changing in quality and price relative to our competitors.

I have been president for over 20 years at two national liberal arts colleges both of which are deeply devoted to access.  At St. Lawrence University, a selective national liberal arts college, fully 21% of our students are recipients of federal Pell Grants.  They are from the lowest quartile in family income in the nation.  We monitor average net tuition growth for all students, and we especially monitor average net tuition growth for our lowest income students.  At St. Lawrence, both have grown historically at a far slower rate than tuition itself has grown, and in several years in the last decade they have actually declined in constant dollars.  I believe the same story can be told by countless other independent colleges and universities nationwide.  It is the change in those costs, not the change in tuition itself that affects access and affordability.  Failure to make this critical point clear in their report signals to me that the Commission doesn’t get it, and it makes their entire approach to improving access and affordability suspect.