The Role Of Public Universities In Making College Affordable

Most Americans seeking higher education go to college at a public, four-year university. But as states across the nation cut back on funding for public institutions, tuition and fees are up.

Mitch Daniels was governor of Indiana from 2005 to 2013 and is now the president of Purdue University. He joins Here & Now's Jeremy Hobson to talk about the role that public universities play in making college affordable.

Why are colleges so expensive?

“Colleges have charged more because they could. I mean, if you tried to design a system almost certain to have excessive costs, it would look pretty much like what we have. Colleges have been selling a product that we have all taken as a necessity. There has been no proof of quality until maybe very recently some attempts to do so to measure or determine where true value is being delivered, where student intellectual growth is occurring, where success later in life is happening. And in the absence of any such proof, people have associated a higher sticker price with quality. And on top of all that, there’s been a massive third party subsidy, primarily from government, which has insulated the purchaser against the costs. It’s thoroughly documented by now that for every dollar the government has infused in the system, with all the best intentions of course, colleges have raised prices as much as 70 cents of that dollar and found ways to spend it.”

"Purdue’s a land grant school. We were put here to open the gates of higher education 150 years ago beyond the elites and the privileged and the wealthy, and that’s still our objective."

Where should cuts be happening at colleges?

“It’s also thoroughly documented that there’s been a so-called amenities arms race – things you wouldn’t have seen on a college campus even a decade or two ago: climbing walls, elaborate dorms, remarkable food. And as a newcomer to higher ed, people are always asking me ‘What’s the biggest surprise?’ I always start with the food, because it’s supposed to be bad and standard, and instead it’s spectacular and bountiful. So things not really related to the academic mission of the school have become part of the terms of competition, so that’s part of it. And, you know, also bookshelves full of studies about the growth of administrative staff and bureaucratic overhead – all this is so. Not faulting anybody here. People did what humans do and the money was there, so they spent it. The former president of Princeton, Bill Bowen – it’s now known as the Bowen rule – colleges will raise spending to meet the revenue.”

Do you think if you took away all those extras college prices would go down?

“I’m not sure you could get all the way back down... but I do think you could moderate that. I mean, not prescribing for anyone else but Purdue, we’re in year three of a tuition freeze and we have pledged ourselves to a fourth year. And we have reduced the cost of room and board. We’ve reduced the costs of textbooks. It’s less expensive to go to Purdue University now than it was three years ago, and yet the quality of our student body is stronger, applications are at record levels. I guarantee you the quality of our faculty is, and the numbers of our faculty, are both increasing. So these things are not impervious to change.”

On the accessibility of college to students of all socioeconomic statuses

“I think you’re seeing it get away from us in far too many places. Some students obtain access alright, but at a very fearsome cost, namely large amounts of debt. I noticed that the new number’s about $29,000 average for those who have taken on debt, which is a very high percentage of all students these days, and that has serious consequences. We’ve now learned in the post-graduation years – it’s a problem for us all by the way, Jeremy. First of all, of course, for the student involved. Secondly, for society. Young people are postponing home ownership, postponing family formation, postponing children, postponing starting businesses – because, in part at least, of student debt. So we’ve built ourselves a significant set of problems here and it’s really good that there’s now such sensitivity and people are working on it.”

Do you worry that by cutting funds you risk hurting the stature of these institutions?

"Young people are postponing home ownership, postponing family formation, postponing children, postponing starting businesses – because, in part at least, of student debt."

“First of all, we added spending to higher education when the recession hit like every state, I think, in the country. There was a one-time small step-back, but Indiana was third in the nation I saw, next to a couple of oil-rich states, in maintaining its higher ed spending. So that’s not at issue here and I suppose that might be one reason we’ve been able to do a little better here at Purdue in holding costs in line, but yes, it’s a major concern. You know, Purdue’s a land grant school. We were put here to open the gates of higher education 150 years ago beyond the elites and the privileged and the wealthy, and that’s still our objective. We’ve just taken our largest freshmen class in many years. One reason, in fact we’re sure, one reason for the surge in applications, beyond Purdue’s academic reputation, is that people know we’re working on affordability for students and they are less likely to suffer big increases. You know, the class that will graduate next spring will have never seen a tuition increase at Purdue University. That’ll be true of the class that follows them.”

What do you think of ideas like Bernie Sander’s that public college should be free?

“Well, I don’t think it’s a very credible idea. First of all, all of this would be borrowed money. It’s an extraordinary amount of money. His numbers did not match or even come close to it when he said he thought he had a way to pay for it. And so all you’d be doing – it’s not debt-free education, it’s all-debt education, and just more of it. And the debt, by the way, would be inflicted on the same young people who are already facing enormous debts run up by us, their elders, and spent not for their future, but spent on current consumption over recent years. So no, I don’t think that’s the answer. And of course, it would only exacerbate the problem of easy money for colleges making it all too easy to increase their spending, say yes to everyone, and leave the system even less efficient than it is now.”