Larry Schweikart: Why Universities Are Failing
FrontPage: First, let’s start with the basics. We are asking if universities can be fixed. But first, tell us briefly what is broken. Then tell us what you think some of the potential solutions are for remedying the problem.
Schweikart: First, and most obvious, universities operate, for all functional purposes, outside the market. They trumpet their "competitive" positions, but in fact most of them are immune to any real market influences. For example, they don't respond to price, because there is absolutely no price competition among universities. Oh, you see some differential among "tiers" of providers---much the way you'd see a difference in price between a Beverly Hills plastic surgeon and one in Cincinnati---but among the major state schools and the large non-Ivy privates, virtually all of the so-called "competition" comes in the form of "student support" that they provide. This "support," of course, is no different than what happens in jewellery stores in malls, where the prices are jacked up double or triple, then prices "slashed" back to where they would normally be. Universities overprice themselves by 30%, then essentially rebate to a majority of students some form of "support" that is already built into the pricing structure.
Second, a corollary of the pricing system is that it has reshaped the way students and parents see costs at the university and the way legislatures fund schools. When you talk to anyone in university advancement, or development, or enrolment, and you argue for cutting tuitions, they all say the same thing: "Students expect support. It's part of our marketing and advertising." Again, that might be well and good in a normal functioning market, because there would always be a high-quality, low-cost alternative that would attract large numbers of top students. But a two-fold "snob" factor is at work: 1) students judge their worth on how much (largely bogus) support they get from a school, and 2) universities measure their success largely by how many top students they attract, regardless of what they have to give away to get them. My own midwestern university just revels in the fact that it is recruiting actively in Florida and Puerto Rico---when kids right here in Dayton might otherwise be able to afford to attend school here if the prices were lower.
I think it is fruitless to be concerned about what is taught on university campuses unless or until we can somehow make schools once again sensitive to costs that are substantially borne by the majority of the consumers....