The $10,000 Degree: Instead of increasing financial aid, two states are decreasing college tuition.

National Review ^ | 12/13/2012 | Katrina Trinko

As college costs rise rapidly in most places, Texas and Florida are trying to implement something that has become a radical notion: a degree that costs only $10,000.
Texas governor Rick Perry announced this goal for his state last year. (Perry was inspired by Microsoft founder Bill Gates, who had remarked that online learning ought to make it possible for students to pay just $2,000 per year for college.) In November, Florida governor Rick Scott announced that he, too, wanted to see state colleges offer bachelor’s degrees for $10,000 or less. In Texas, ten colleges have signed on (some of them working together in a partnership), while in Florida, twelve colleges — nearly half of the 23 four-year colleges in the Florida community-college system, which includes both two-year and four-year institutions — either have developed proposals or are in the process of doing so.
Considering that the nation’s public colleges cost $13,000 per year on average for tuition, room, and board, while private colleges cost an average of $32,000 a year, according to the National Center for Education Statistics’ 2010–11 academic-year numbers, Texas and Florida colleges have their work cut out for them. But there is plenty of demand for cheaper degrees: Some 57 percent of Americans think students are not getting enough value for the money they spend, according to a May Pew Research Center survey.
“People have been worried about higher-ed affordability for a long time now,” says Thomas Lindsay, director of the Texas Public Policy Foundation’s Center for Higher Education. “But what that’s always led to is calls on two fronts: one, to make it possible for students to pay for higher tuitions by extending them ever-greater easy money through federally subsidized loans, or two, for taxpayers to pay more money through greater support of higher ed at the state level.” However, the $10,000-degree effort means that “for the first time, we’re [addressing] the affordability issue by actually lowering tuition.”
Richard Vedder, director of the Center for College Affordability and Productivity and a professor at Ohio University, points to a variety of tools that colleges could use to reduce costs — including online education, reduction of administrative staff, and requiring professors to teach more hours. “There’s no reason a public-school education can’t be offered for $10,000 a student,” he remarks.
When Perry first announced the push for $10,000 degrees, he wasn’t greeted with cheers. “When the governor issued this challenge two years ago, during his ‘state of higher education’ address in 2011, there was almost universal panning of the idea, [based on a belief] that there’s no way we can do it,” says Dominic Chavez, a spokesman for the Texas Higher Education Coordinating Board. The attitude toward Perry’s challenge, he continues, was, “You’re going to necessarily reduce rigor if you’re going to do this, because you’re basically going to be printing diplomas, and there’s no way we can offer it at that price, etc., etc.”
Of course, current colleges (at current rates!) are not necessarily delivering much bang for the buck either: According to Richard Arum and Josipha Roksa, authors of the 2011 book Academically Adrift, 36 percent of college students fail to “show any significant improvement over four years” as measured by the Collegiate Learning Assessment.
“So it’s not just that a college degree is unaffordable,” Lindsay remarks. “It’s also very, very low-quality in all too many cases. The higher-ed establishment is an industry that is ripe for disruptive innovation, and that’s what’s happening.”
Texas colleges are trying different ways to reach the $10,000 goal. In a September report for the Texas Public Policy Foundation, Lindsay outlined the various approaches. For instance, Texas A&M University–San Antonio is offering a program under which students first take college-level classes in high school, then attend community college for a year, and finally complete their degrees by attending A&M–San Antonio for the last year. University of Texas of the Permian Basin has launched a program that will cost $10,000 with all courses being taught at the university.
One significant limitation is that so far, the $10,000 programs cover only a few majors. The A&M–San Antonio program offers only a major in information technology, while UTPB has five majors available for $10,000: math, chemistry, geology, computer science, and information systems.
Through the Affordable Baccalaureate Degree Program — which is run by the Texas Higher Education Coordinating Board, Texas A&M University–Commerce, and South Texas College — the Lone Star State is looking at additional ways to reduce costs, such as online courses. Another change that looks promising is letting students test out of classes whose subjects they can master on their own.
A cheaper degree does not necessarily mean a degree that is worth less. “Our colleges will not be developing programs where the academic quality is diminished,” says Randy Hanna, chancellor of the Florida college system. Already, Florida’s colleges have gained acclaim: In 2011, Valencia College won the award for top community college in the country from the Aspen Institute (an “educational and policy studies organization”), while Broward College and Santa Fe College made the Institute’s list of ten finalists for the 2013 award.
Florida, like Texas, is looking at greater use of online courses. Already, says Hanna, “Florida is a big provider of online education. Between 20 and 25 percent of all of our students in the Florida college system take one or more online courses.”
Still, it remains to be proven that colleges can actually reduce the price to $10,000. Neither Florida nor Texas is giving additional subsidies to schools that offer the $10,000 degrees, but schools can draw on the resources (including government funds) they already have to finance the programs.
“It’s not going to be a silver bullet,” admits Chavez. But he thinks Texas could gain in the long term. “We’re working on a number of cost-efficiency recommendations for higher education that, combined with this particular tool, we think will, over the long term, start to bend that cost curve, or at least start to control costs and the inflation that we’ve seen in the last decade or so.”
Vedder thinks it’s important to view $10,000 degrees as an option for those already planning to go to college, not as a technique to attract more students. Vedder says he sees too many students with college degrees working jobs — such as being bartenders or janitors — that they are overqualified for.
But regardless of how these degrees are ultimately utilized, if Texas and Florida succeed, it’s likely that more states will look to introduce similar programs.
“Now that parents and students have begun to hear that there is a $10,000 degree out there,” Lindsay says, “I think what you are going to see [is that] this is going to spread like wildfire.”
— Katrina Trinko is an NRO reporter.