TIME: Almanac 1990/1990 Time Magazine Compact Almanac, The (1991)(Time).iso/time/092589/09258900.002

Text File | 1990-09-17 | 8KB | 136 lines

EDUCATION, Page 72

Sticker Shock at the Ivory Tower

Parents are raging over "Chivas Regal" tuitions, but private

colleges are crying poor

By Susan Tifft


    When the College Board released its annual cost survey showing
that private school tuitions would rise an average of 9% this fall,
Kellie Kenner raced for her calculator. Since the 20-year-old
junior entered Emory University two years ago, her total bill,
including tuition, has jumped from $13,900 to $16,100, an increase
of almost 16%. Despite a patchwork quilt of aid that includes
scholarships, loans and an on-campus job, Kenner's father, a train
conductor, must now pay $6,000 out of pocket to send his daughter
to school this year -- $2,000 more than in 1987. To help make ends
meet, her mother recently took a job as a data processor. "I told
my parents I'd go somewhere else," Kenner says, "but they wanted
me to stay."

    As their children register for the new school year, most
parents, like Kenner's, are willing to scrimp and sacrifice. But
they are increasingly outraged at the platinum price tags. For nine
years, hikes in tuition and other fees have averaged roughly twice
the rate of inflation, boosting bills at elite private schools like
Sarah Lawrence and Princeton to the edge of the $20,000-a-year
mark. And the spiral shows no sign of stopping. By 2005, according
to the investment firm Paine Webber, the price of a college
education is likely to climb to $62,894 annually.

    As the bills mount, many parents suspect that institutions are
kicking up their fees at will, knowing that families will pay
almost anything to give their child the cachet of a Harvard or Yale
degree. "It's Chivas Regal pricing," says Kalman Chany, president
of Campus Consultants Inc., a Manhattan-based financial-aid
consulting firm. "The most selective schools can afford to charge
what they want because they've got lines out the door of people who
want to go there."

    College administrators vehemently reject that accusation.
Increasing tuition charges, they say, merely reflect their own
increasing expenses. In particular, they cite soaring costs for
building construction and maintenance; salary-inflating battles to
woo and keep top-flight faculty members, especially in science and
business; and the dizzying price of keeping up with technology,
ranging from computerized card catalogs to the latest in lab
paraphernalia. Hardware and faculty often go hand in hand: when
Duke lured physicist John Madey away from Stanford, it promised to
build a lab for his free-electron laser research. Cost: $5 million.

    Cuts in federal student aid during the Reagan years have also
taken a toll, forcing schools to contribute more from their own
coffers. Like other labor-intensive businesses, colleges feel the
bite of rising fringe benefits. At Brown, for instance, outlays for
employee health-care premiums have quintupled since 1986. Then
there is the need, fostered by feverish admissions competition, to
provide more and better student services -- such as tennis courts
and state-of-the-art gyms.

    Aggressive fund raising has eased the crunch to some extent.
As many as 60 schools are now conducting drives with goals of more
than $100 million; three are seeking to break the $1 billion mark.
But changes in the tax code have made giving less attractive, and
many endowments are still feeling the aftershocks of the 1987
market crash. "How can we look so rich, yet feel so poor?" asks
Donald Kennedy, president of Stanford, which faces a projected $11
million shortfall this year.

    One reason for public skepticism is that some elites convey a
let-them-eat-cake attitude -- a result, no doubt, of their enormous
wealth and the knowledge that they are purveyors of one-of-a-kind
diplomas. Harvard, for example, cautiously spends only 4% to 5% of
the annual income it realizes from its $4.1 billion endowment, the
largest in the country. (In 1988 the yield totaled $184 million.)
The rest is reinvested. Despite its secure position, Harvard felt
the need to jack up this year's tuition and other fees 6.5%, to
$19,395. "What we distribute from endowment may sound low today,
but it did not in 1979," explains Harvard president Derek Bok,
alluding to a period when stock returns were disappointing.

    But even a Harvard cannot afford whatever it wishes. Nearly 60%
of major research universities report that they are cutting back
as they re-examine the long-held and costly belief that they must
offer a full range of disciplines. In April, Washington University
announced plans to shut down its sociology department. Columbia
University is phasing out linguistics. "There has got to be more
focused investment," says Robert Zemsky, director of the higher
education research program at the University of Pennsylvania, which
urged in a report last week that schools close marginal campuses
and adopt more businesslike budgeting practices.

    Calls for fundamental change and bottom-line thinking are sure
to upset some in the education establishment. But the consequences
of not changing are already apparent. Tired of sticker shock at the
pricey privates, more and more families are turning to
state-supported schools, where the total bill this year averages
$6,671 for an in-state resident.

    When the Justice Department announced in August that it was
investigating some 20 private colleges for price fixing in the
areas of tuition and financial aid, the news elicited shocked gasps
from the ivory tower. Last week the Government added six more
schools to the list, including Bryn Mawr and Wellesley. Many
administrators fear that if Washington concludes that students
should be like baseball players -- free agents able to dicker for
the most attractive aid package -- the ensuing bidding wars could
boost charges for less sought-after candidates. "Do we really want
to turn colleges into bazaars where students say, `Cornell offered
me so much, now what can you do to top that?'" asks one college
president. In fact, such free-market decision making is already
common, despite the decades-old practice among many top schools of
meeting annually to discuss the aid packages being offered to their
applicants.

    Whatever comes of the Justice Department inquiry, there is
little relief in sight for most students and their over-extended
parents. The causes that drive up tuition bills today are likely
to worsen in the years to come. One key factor is an imminent
faculty shortage. A study released by the Andrew W. Mellon
Foundation last week predicts that there will be only eight
candidates for every ten teaching positions in the arts and
sciences during the decade starting in 1997, a development that is
certain to inflate professorial salaries. In a time-honored bit of
corner cutting, some schools are already increasing student-faculty
ratios. Others are thinking about involving undergraduates in
teaching and putting their best professors on video.

    None of these expedients is desirable. Yet higher education,
like the health-care industry, must either contain costs now or
risk becoming the monopoly of the wealthy, a condition that would
be socially undesirable. The alternative is ever increasing prices,
with the cost spread among parents, students, federal and state
government, and private donors. Quality, as educators never tire
of saying, costs money -- and there is no easy solution. Laments
Frederick Bohen, senior vice president at Brown University: "We're
talking about a bunch of lousy choices."


-- Sam Allis/Boston, Michael Mason/Atlanta and Janice C.
   Simpson/New York