David Syphers explains why my 50-year college membership idea will never work
Earlier this month, I wrote an article titled “A 50-year college subscription idea. ”My idea in writing this article was not to offer a fully prepared alternative funding model for higher education. Instead, I wanted to spark creative thinking about how we fund our colleges and universities.
David sypher, professor of physics at Eastern Washington University, took up my challenge to debate and discuss. Below are his thoughts – first emailed and posted here with his consent – on why a 50-year subscription model will never work:
- Most students work in fields unrelated to the specific content of their degrees. Graduation signals the employer, who rarely looks for specific skills related to the degree (although they may look for soft skills acquired upon graduation). So there is little value in going back to school.
- I can’t tell you how many job postings say “prior experience in the industry is required”. So, again, there is little value in going back to school.
- Many graduates relocate, often to another state or even country. In fact, they could no longer attend most of the institution’s courses afterwards.
- $ 200,000 over 50 years instead of $ 100,000 upfront sounds exactly like… a loan. You’re just trying to make it into a loan held by the college instead of a private party – except the college now needs a loan to float the student loan. So you just made college the middleman.
- You are asking students to explicitly commit to a model that will require them to pay for college upon retirement. With student loans, the repayment is variable and people can always believe that they will pay them back quickly.
- Indeed, it is even worse. At 18, the average American will live another 59 years. At 22, still 55. You almost ask them to pay you for life, and these are the traditional age students.
- And that’s the average. Some of them will die sooner. Many without a large estate, and with other creditors (mortgage loans, etc.). Are you going to take this money from their widowers and children?
- For various reasons, the cost of a university education is rising faster than headline inflation (which itself is very difficult to predict in five decades – even Treasury bills or longer-term mortgages are 30 years). Fifty years of inflation, even at just 2%, almost triples the face price. How easy will it be to announce such a high number in advance?
- Good luck in getting alumni contributions to this model.
- Former students will in fact have a perverse incentive to entrench the demise of their alma mater as this could erase their debt (subject to loan support from other institutions).
- When will the student commit to this round of lifelong payments? The retention rate for first-time full-time students in Year 1 to Year 2 at my institution is approximately 75%. Our six-year graduation rate is in the mid-1950s. (My own alma mater has better numbers – 99% and 94%, respectively – but they’re still not 100%.) is it going to be popular to have students paying for services they don’t want for decades? (That’s already a problem with loans, but at least they got what they signed up for there, strictly speaking – they’re paying for borrowing money, and they really got to borrow money. money.)
- One of the problems you are trying to solve is the high upfront cost of college. But you ignore the more obvious solution, which is that community colleges and four-year public schools are already much, much cheaper than private colleges. A four-year-old college student could graduate for the $ 25,000 you’re asking him to pay for one year.
First of all, David – thanks for taking this apart. This is how we will move forward in thinking about the economics of higher education.
Does anyone want to respond to David’s criticisms? Perhaps some original ideas on financing higher education to take us beyond the usual discussions of demographics, discounting and divestment?