Miller Center Debate: Is the Business Model of Higher Education Broken?

April 29, 2010 — According to the College Board, median family income in the United States increased by 147 percent from 1982 to 2006. However, tuition and fees at American colleges during that time skyrocketed by 439 percent.

Are tuition costs and fees discouraging too many students from attending college? How is the current economic crisis affecting the quality of education?

Four university heads tackled these and other questions during a debate sponsored by the University of Virginia's Miller Center of Public Affairs. The April 27 debate on whether the model of higher education is broken was the third debate of this season's Miller Center National Debates.

William "Brit" Kirwan, chancellor of the University System of Maryland, and Gail Mellow, president of LaGuardia Community College, debated Richard Levin, president of Yale University, and Daniel Hamburger, president and CEO of DeVry Inc.

The debate, moderated by Ray Suarez, senior correspondent for "PBS NewsHour," took place in front of a live audience at the National Press Club in Washington.

Arguing for the resolution, "The business model of higher education is broken," Kirwan stated in his opening remarks that the United States was once the leader in college completion rates. He added that today, however, "we rank somewhere between 10th and 15th."

"To ensure we have the kind of workforce we need to drive a high-performing economy and the upward mobility of low-income students into high-paying jobs … many, including President Obama, are calling for the country to recapture leadership in college completion over this decade," Kirwan said.

According to Kirwan, in order to reach this level of performance in today's difficult economy, the current higher education system must make the transition from high school to college more seamless, base its funding on the number of graduates that a college produces and practice consistent cost-containment.

Arguing against the resolution, Levin countered that the educational business model is not broken because foreign students still want to study in the United States, while other countries, especially Asia, strive to emulate our system.

Levin also stressed the importance of diversity in the American higher education system. "Most countries have only one type of educational institution, or maybe two – all state-run, state-owned and state-controlled," he said.

The U.S., by comparison, has community colleges, state schools, technical and vocational schools, private schools and for-profit institutions, he said. "Students can find the right kind of education that suits them and get the right kind of training that will be best for their own careers."

Levin also remarked that if the American higher education model were truly broken, college enrollment would be decreasing, but it has remained steady.

He stated that despite the burden of debt, a high-cost education is not only a good private investment, but a good public investment as well.

Mellow then countered that the characteristics of a typical college student have changed. "The average age is 25. Eighty percent of those students work. Most are commuting to campus. And 40 percent are part-time," She said.

According to Mellow, community college and for-profit colleges are perfect solutions to accommodate this changing student demographic, but these colleges and their students receive less financial support from the government than their more traditional counterparts.

Hamburger argued that the diversity and flexibility of the higher education business model can make education accessible to all.

He said that funding all types of higher education, focusing more on quality outcomes and making education more accessible through methods such as online learning are essential in order to "serve a much broader range of students and adapt to their needs."

Mellow then responded that the funding of these various educational sectors is very inequitable and that the business model's policies and structures "were set at a time very different than the time we are in now." She added, "It was predicated on a four-year college. It's predicated on a full-time student. It really does not try and think about the future of America, where we want to educate a very different populace."

Levin countered that the community college system can take care of those funding inequities and demographics just fine on its own. He added that student loans, financial aid and Pell grants will also compensate for high tuition costs.

Levin also worried that funding based on graduation rates might lead to lax grading and widespread corruption.

The debaters also discussed the return on investment for a high-cost education, how the burden of debt might influence career choices, the impact of an underfunded and inadequate K-12 system, and the possible gap in quality among the various educational sectors.

Citing the example of "Bonnie," a non-traditional nursing student and mother of three, Hamburger argued in his closing statement that this type of student is now the new norm and that the current higher education model must offer such students the opportunity of a quality education.

"Not too long ago, students like Bonnie might not have had the chance to go back and get a degree," he said. "But today, because of changes in technology, because of how we offer classes to students, and because of our flexible diverse higher education system, she can. And to me, that shows that our system is working."

Kirwan concluded that simply increasing tuition costs, employing temporary budget cuts and turning away worthy, low-income student are not good solutions to the current economic crisis. "I submit this is a strategy of putting our heads in the sand and ignoring the realities of our time," he argued. "This recession is different."

The Miller Center National Debates are produced for broadcast by MacNeil/Lehrer Productions. "PBS NewsHour" airs highlights from each debate, and PBS stations around the country will air them throughout the spring. Check local listings for details.

On May 18, the final Miller Center debate of this season will examine the impact of the Internet on democracy. A Miller Center debate on Feb. 26 asked if Americans need to go to college in order to compete globally. A March 24 debate explored the rationing of costly end-of-life care.

More information, including debate video and a transcript, is online here.

— By Kim Curtis