UV Letters

Money Changes Everything

Volume VII, #21

Last weekend I attended the 25th anniversary of the founding of Rumpus, Yale’s tabloid newspaper. The organization had asked Yale’s President to speak to the assembled alumni, but as he was out of town, he sent a written congratulatory greeting thanking Rumpus “for still publishing in paper form. It is reassuring that I can rely on you to provide tinder for my fireplace.”

Learning that no real representative of the University was slated to kick off the reunion, some alumni pranksters took it upon themselves to hire an 86-year-old local actor via Craigslist to portray former Yale Associate Dean “Jonathan James” (a Google-proof name) and write a speech welcoming the group.

The speech started out plausibly. Dean James had been Deputy Dean of Yale College for Student Affairs in the early 1990s. He had helped various Yale Presidents with special projects such as dealing with the unions, preventing grad students from unionizing, and keeping the new campus tabloid from causing too much trouble. Then the speech began to get uncomfortable. Dean James handled municipal officials who “had their hands out”; his job was to keep former Yale President Benno Schmidt “clean.” He talked in graphic detail about his time in Vietnam. And then he told the story of how Rumpus upset a wealthy donor by running an article titled “Three Men and a Courtyard,” which reported on an early morning courtyard tryst that concluded with the participants standing up and waking the entire college by loudly singing the Turkish national anthem (which could not possibly be true, “Dean James” surmised, because “who the heck would recognize the Turkish national anthem?”).

Through it all, Rumpus alumni nodded and laughed nervously. But everyone believed he was a former Dean representing the University. That is until “Dean James” concluded by telling us that as a result of the Turkish story and the upset donor, Yale terminated his employment. As a result, he hasn’t had a steady paycheck in years, can no longer afford his medication, and given the tabloid’s causal role, planned to visit with “each and every one of you” over the course of the reunion to see “what you can afford. I’ll gladly take checks or whatever cash you have on hand.”

At that point, we all figured out it was a prank. Money changes everything.

***

We swore each other everlasting love…
But when we did there was one thing we weren’t really thinking of
And that’s money - Cyndi Lauper, Money Changes Everything

Last month, federal prosecutors charged 10 college basketball coaches, agents, and representatives of apparel companies with bribery, kickback, and other allegations. The charges allege that advisors and coaches profited by funneling recruits to colleges and apparel companies. New reports this week indicate that over two dozen universities are reviewing their basketball programs for similar problems. This new scandal, which the NCAA blames on “bad actors,” comes on the heels of the fake classes scandal at University of North Carolina, which the NCAA concluded last week did not merit any penalty as its rules required member universities to self-report violations of academic policies: because UNC did not concede the legitimacy of the fake courses to the NCAA, “even if the panel had wanted to second-guess the courses – it cannot conclude academic fraud occurred.” One thing the athletes in the fake classes, UNC leaders, and the NCAA have in common: no one has read Kafka.

While former Secretary of State Condoleeza Rice will chair a new commission to recommend changes to college basketball, the ultimate cause of these problems is blindingly obvious: money.

We don’t see corruption in sports where there’s no television or apparel money. Intermediaries aren’t profiting from steering hockey or soccer recruits, let alone athletes in sports like wrestling, tennis or gymnastics, or any women’s sport. The bad behavior is limited to – but may well pervade – the sports that fill weekend TV schedules: men’s basketball and football.

So I was taken aback to read a recent article in Quartz by David Labaree, the Lee L. Jacks Professor of Education at Stanford, titled “Nobel prizes are great, but college football is why American universities dominate the globe.” It it, Labaree argues that football has played a central role in the success of America’s colleges and universities. By establishing the populist bona fides of American higher education, football has mobilized an unprecedented stream of public and private funding and, at the same time, softened higher education’s elitism. He goes onto conclude that because Republicans appear to have fallen out of love with higher education, football is even more important than ever: “History suggests that football is going to be more effective than Nobel prizes in winning back their loyalty.”

While this argument may have held water 25 years ago, it doesn’t today. In fact, Labaree has it backwards: the financial pollution in big time college sports is directly related to – and in fact a metonymy of – higher education’s loss of populist appeal.

America’s colleges and universities have hiked tuition at roughly double the rate of inflation (and recently room, board and student fees at double the level of tuition). Over a 30-year period, that’s the difference between affordable and ridiculous. Ridiculous as in the basis for a Hollywood comedy like the recent Will Ferrell/Amy Poehler film, The House. Ridiculous as in The New York Times interviewing the President of Notre Dame, noting that it would take students more than 4,000 hours (or 100 weeks of full-time work) at prevailing campus wages to pay for half of the annual tuition, and asking him if he thinks God wants families to spend $300,000 for college. Ridiculous as in Duke sophomore Miriam Weeks attributing her involvement in the adult film industry to the cost of college. And ridiculous as in President Trump, in his first remarks on higher education as President, belittling the sector with the term “crippling debt,” bringing to mind one of my favorite headlines from The Onion: “Online University Allows Students To Amass Crippling Debt At Own Pace.”

Contrary to popular belief, unacceptably high tuition isn’t only a problem at private colleges. Tuition has increased faster at the public colleges and universities attended by the majority of students. According to the College Board, public university tuition, fees, room and board averaged about $20,000 last year – more than double the cost of a generation ago (adjusting for inflation). Penn State charges Pennsylvania students $17,416 in base tuition alone, and is now contemplating a mid-year tuition increase.

This quest for the dollar, this financial recklessness on the part of America’s colleges and universities, might have avoided sanction had employment outcomes held up for college graduates. But that’s not what’s happened. While unemployment for college graduates remains low – probably because non-dischargeable student loans are a compelling argument to take any job that funds loan repayment – underemployment has skyrocketed in the past decade. The Rockefeller Foundation found that 49 percent of recent college graduates reported they didn’t need to go to college to do their current jobs. Accenture found 51 percent of 2014 and 2015 graduates considered themselves to be underemployed. The National Bureau of Economic Research estimates that 45% recent college graduates are underemployed.

So why have American colleges and universities lost their populist appeal? Because students have been caught between the Scylla of spiking tuition and the Charybdis of deteriorating employment outcomes. In other words, money has changed everything.

It’s going to take a lot more than football for colleges and universities to regain popularity. In fact, spending more on football will probably make the problem worse. What will it take? The answer – lower prices and better employment outcomes – is as obvious as a tabloid headline, and not nearly as obscure as the Turkish national anthem.

Share your thoughts

University Ventures (UV) is reimagining the future of higher education and creating new pathways from education to employment. UV portfolio companies are making higher education more affordable, pioneering entirely new approaches to learning, and helping employers think differently about how and where they discover talent. UV’s approach draws upon the values and traditions of higher education to play a sustainable role in transforming the path from education to a stronger economic future for students, universities, and employers. UV is led by principals with decades of experience as entrepreneurs, investors, authors, and leaders in higher education.

Comments

- No comments yet. -

Leave a comment

(required; won't be published)

Three articles that tell us where the puck is going in higher education

1. If It’s Going Wrong, It’s Probably Happening At Penn State Pittsburgh Post-Gazette article on how Penn State may hike tuition mid-year if it doesn’t receive an overdue state appropriation, by Bill Schackner. Penn State and Pitt already are among the most expensive public universities in the nation, charging Pennsylvanians a base yearly main campus tuition of $17,416 and $18,130, respectively. Both blame lagging state support. Read more 2. Student Loans Mean No Homes Brookings report on U.S. homeownership blaming higher education – in part or in whole – for two of the four reasons the median age of new homeowners has skyrocketed from 34 to 42 in the past 15 years, by Jenny Schuetz. The share of new homeowners under age 30 declined from 29 percent in 2001 to about 15 percent in 2015. [Reasons include]…
1. Increased regulation of mortgage lending and stricter underwriting criteria;
2. Weak labor markets for young workers, leading them to delay household formation and homeownership;
3. Millennials lower preference for owning rather than renting; and
4. High levels of student loan debt among younger households.
Read more
3. Employers Expect To Pick Up The Slack Austin American-Statesman article on how large retailers like Amazon and Wal-Mart are planning to take responsibility for human capital development of their low-skill employees, by Sebastian Herrera.
Garcia said the company is working toward a future where Amazon is seen as a leader in higher learning, especially for low-skill workers. He said the company wants young adults to consider Amazon as a training option if they can’t – or choose not to – attend college. Read more





Sign up for UV letter

For regular bi-weekly commentary on “where the puck is going” in higher education, sign up for UV letters.