Experts: Streamlining Employee Benefits, Increasing Student Credit Loads Among Ways to Reduce College Costs

WASHINGTON, D.C. — Shortening paths to degrees, getting rid of college deans and basing completion on what students learn instead of seat time were all proffered during a Congressional hearing on Wednesday as effective ways to stem the rising tide of college costs.

“Streamlining costs and reducing tuition in higher education is not just a good idea. It is essential to our future,” said Jamie Merisotis, president of the Lumina Foundation on Education and one of four witnesses who testified at a hearing titled “Keeping College Within Reach: Discussing Ways Institutions Can Streamline Costs and Reduce Tuition.”

The hearing was held Wednesday before the Higher Education and Workforce Training Subcommittee of the House of Representatives Committee on Education and the Workforce.

The partisanship that has rankled Washington politics lately and thwarted the recent Congressional effort to reduce the federal deficit remained evident throughout the hearing.

For instance, in her opening statement, Rep. Virginia Foxx, R-N.C., chairwoman of the subcommittee, cast aspersions on the Obama administration’s initiatives to make college more affordable, such as a recent debt relief measure and the 2009 elimination of banks from the student loan process.

“Clearly, the rise in the cost of higher education in the United States is a problem, but the answer cannot be found in loan forgiveness gimmicks or a federal takeover of the student loan industry,” Foxx said.

Ranking subcommittee member Rep. Ruben Hinojosa, D-Texas, however, credited his fellow Democrats during the 111th Congress for ending the bank-based Federal Family Education Loan Program and replacing it with the William D. Ford Direct Loan program, “making federal college loans more stable and efficient at no cost to taxpayers.”

The partisanship was evident in the questions as well, with Democrats asking the witnesses about the merits of federal TRIO programs designed to provide academic and social support to low-income and first-generation college students, while Republicans posed questions about the benefits of reducing the burden of various federal regulations in higher education.

Besides Merisotis, the witnesses included Jane Wellman, executive director of the Washington, D.C.-based Delta Project on Postsecondary Costs, Productivity and Accountability; Dr. Ronald Manahan, President of Grace College and Seminary in Winona Lake, Ind.; and Tim Foster, president of Colorado Mesa University in Grand Junction, Colo.

Wellman presented data that illustrated what she referred to as the growing “un-evenness” of spending on students between public versus private universities.

Her prepared statement included a graph that showed private bachelor’s degree-granting institutions served about 1 million students in 2009 but spent more than $20 billion on full-time students, whereas public community colleges served between 6 million and 7 million students but spent just $10 billion on full-time students.

She also presented data that show increased tuition — against the backdrop of decreased state and local appropriations per student — has not resulted in increased spending on students. In public community colleges, for example, tuition rose $811 over the past decade, whereas spending only has increased $38 per student. State and local appropriations for the community colleges dropped $346 during the same period, her data show.

“For most institutions, increased revenue is not translating to greater spending,” Wellman said. “Rather than reducing spending, and some would say they can’t anymore, they’re shifting costs to students.”

She also stated that employee benefits in general and health care in particular are the biggest drivers of increased costs.

“If you’re looking for a smoking gun in higher education about where the spending has gone up, the biggest is employee benefits and specifically employee health care,” Wellman said.

Manahan spoke of how Grace College and Seminary has begun offering a three-year baccalaureate program to cut costs.

“Though this option began just this September, very, very early results are positive,” Manahan said, adding that 48 percent of freshman students indicated plans to graduate in three years, and that freshmen are averaging a credit load of nearly 17 credit hours per semester.

“Applications and deposits for next year are up substantially, partly, I think, because of this new option,” Manahan said. He pointed out that the three-year option reduces the cost of a four-year degree by 25 percent.

Foster spoke of how Colorado Mesa University made a contentious decision to get rid of deans to save money to the tune of $500,000.

“Faculty miss them, but student’s don’t,” Foster said in a talk in which he espoused the need for colleges and universities to focus more on the needs of students as their customers.

Merisotis touted four strategies Lumina Foundation espouses to improve productivity in American higher education.

They include moving to “performance funding,” which involves “targeting incentives for colleges and universities to graduate more students with quality degrees and credentials”; using tuition and financial aid to create more student incentives; developing “new models of delivery,” such as accredited, online “competency-based” degrees that are granted on what students have learned versus what Merisotis referred to as “seat time”; and “business efficiencies,” such as forming shared purchasing consortia to save money.