EdFix Episode 28: Can College Level the Playing Field?

Transcript

SANDY BAUM:
I mean, if you look at the distribution of earnings, four-year college graduates earn much more than people who went to high school.

MICHAEL J. FEUER:
Welcome to EdFix, your source for insights about the promise and practice of education. I'm Michael Feuer and I'm very, very happy today to have with me two dear friends and mentors and colleagues in the world of education, research and policy, Dr. Sandy Baum and Dr. Mike McPherson. 

Sandy is a leading expert on issues related to higher education, both from the standpoint of finance, governance, practice and policy, has written extensively about college pricing, student aid, student debt, affordability, and the importance of investments in higher education. She is a frequent commentator on national news and a familiar presence in the halls of the United States Congress where she testifies regularly. In her spare time. Sandy is also a senior fellow at the Urban Institute, was a professor of economics at Skidmore College. Sandy, welcome. It's great to have you with us on EdFix.

Mike McPherson is also a nationally and internationally known economist. Mike's expertise is primarily on the connections between education and economics. He was for about 10 or 11 years the fifth president of the Spencer Foundation, which is the foundation in the United States that is known for its exquisite record of funding education research oriented toward the improvement of educational policy and practice. And before going to Spencer, Mike was the president of McAllister College in St. Paul, Minnesota. He has taught at Williams College. He is the founding co-editor of the Journal of Economics and philosophy, also a senior fellow at the Urban Institute. And I believe Mike is still on the board of TIAA.

In any event, let me start with an observation that is... Because I use the words, policy and practice. And you both have been involved in education policy and also in the improvement of education practice. So I want to start with the policy side. How are we doing as a nation in terms of higher education? Can one or both of you give us just an opening, a little preamble here to set the stage for some of the more detailed questions we'll get into?

MICHAEL MCPHERSON:
So a couple of things come to mind when you ask about that. I'm a big fan, as I know you are Michael, of Albert Hirschman and his writings. I think his favorite essay that he wrote was called In Praise of Possibilism. He had a kind of fundamental optimism about people's ability to resourcefully address a problem to make things better than they would be without their efforts. Not everything obviously is right about American higher education by a long shot, but one of the things I think that both of us, both Sandy and I, would like to see is that we manage to have dialogues that are more about the future of higher education and less about, frankly, student loan forgiveness and other policies that are about "Let's go back to the past and try to fix the past."

That conversation has kind of drowned out a lot of discussion of, "Well, if there are big problems with the student aid system, how about we focus our attention on the rising generation that's going to have to confront that system?" So very future-oriented and I think there are plenty of potentials for us to do better in the future. I don't know. Sandy?

SANDY BAUM:
Yeah. So I guess I would say that I think we are doing much better than much of the public discourse would lead one to believe. I mean, every day you read some article about how people don't believe that higher education is a positive force in the world, or college is so expensive that no one can afford to go anymore. And those things, I mean, what people say in the survey, I don't know, it depends on what the questions they ask and so on, the fact is that higher education does a basically very good job of creating opportunities for a very wide range of people in our society. 

We have a diverse and mostly but not entirely high quality system of higher education. The fact is that people do access it at increasing levels. A diverse population of people access it and mostly have good outcomes. But we have a tendency to focus on the problems as we should because we need to fix them, but we need to fix them in the context of the strong system that we have built and not just try to tear it apart and start over.

MICHAEL J. FEUER:
Say a little bit more about what it is in the data that reassures you that basically the system is doing a lot of good in terms of enrollment, participation rates, minority enrollment, any of those kinds of indicators that could amplify the case that you've just made.

SANDY BAUM:
Well, the share of high school graduates who go on to college, I mean it fluctuates year to year, but is very high by historical standards. The share of students from low income backgrounds, the share of students from underrepresented groups who go to college, again, they fluctuate year to year, but there has been certainly positive change over time, which is not to say we should be satisfied. I mean, it's definitely true that students from high income backgrounds are much more likely to go to college than those from the lower half of the income distribution. We know that if you come from a low income background and you get at least a bachelor's degree, you are quite likely to move up in the socioeconomic scale. And if you don't, you're probably going to be stuck.

So higher education definitely helps individuals to improve their lives. That said, when we talk about higher education, higher education is not monolithic and there are some higher education institutions, some programs, some directions that serve almost no one very well. We need a lot of improvement. There's a lot of stratification within higher education that like rich people go to different colleges from low income people and they have different levels of success. I mean, we have a real problem with getting people into college and not getting them through.

MICHAEL MCPHERSON:
Yeah. I would add to that if I could, there is a very big problem about people not completing their college programs whether they're going for a certificate for an associate's degree or a bachelor's degree. But particularly if you manage to complete a bachelor's program, just in material terms, besides whatever emotional growth or cultural growth you experience, you are very likely to have a much better financial life than you would otherwise. The economic returns to college remain quite high. In fact, they remain historically high. And in our view, they're probably too high because they contribute to the inequality that most of us would like to see reduced. And in our view, the way to bring the returns down to a more normal level would be to have more people complete college, so a bigger supply of college graduates.

But the basic story is still an optimistic one. If you were giving advice to an 18 year old or a 30 year old about, "Should I try to get a college experience?" I think anybody would want to offer, "Yeah, you should. You should be smart about what your interests are and what your preparation is. But if you can have a successful experience in college, it's going to make your life better."

SANDY BAUM:
Can I just add that this all doesn't mean that the answer is that everybody should go to college. Frequently, you see efforts to urge people to hire people who don't have a college education and efforts to offer training outside of higher education institutions as a suggestion that there's something wrong with higher education. And that doesn't really make much sense. I mean, we would solve more of the problems that Mike is talking about if people could have better lives and more successful careers without a college education and everybody didn't have to go because there was no alternative. So it's not a negative about higher education if there are good paths for people outside of it. That doesn't mean there's something wrong with higher education. It means that we structure the world in a better way with more viable options for people.

MICHAEL J. FEUER:
Let me pick up on one of the points that you've both just made, which is about the returns to the investment in higher education. There is still some, shall we say, inflammatory rhetoric out there about how the returns to higher education are either not what they're cracked up to be or that the system is tilted in such a way that people who are able to afford and get into rather more selective colleges either do or do not get a bigger premium in terms of earnings postgraduate, et cetera.

SANDY BAUM:
So, I mean, one issue is that, of course the outcomes are quite varied of higher education. I mean, it is not hard to find people who went to college and didn't complete and ended up worse off than if they hadn't gone. It's not hard to find people who earned a credential and that credential has proved not to be worth much in the labor market and therefore they say, "Well, it wasn't worth it." I mean, if you look at the distribution of earnings, four-year college graduates earn much more than people who went to high school. But you can certainly find a high school graduate who never went to college who earns more than the average four-year college graduates. So it's not like, "Oh, this is a free ticket. You have a degree, you're set for life." There's so many other variables that play into it. And people are much more fond of finding the examples that show higher education in a bad light than they are of showing examples of higher education showing higher education in a good light.

But I would also say that absolutely you said is the system tilted. Absolutely. Tilted is two mild a word. I mean, the system is very biased in favor of people from backgrounds both that are upper income backgrounds and also where their parents also have a college education. If you are growing up in a household that is one low income, and two, your parents didn't go to college, you face all kinds of barriers that other people don't. It's harder for you to prepare for college. It's harder for you to know how to make decisions about applying to and getting into college. It's harder for you to get through college. And you're much more likely to go to a college that has less of a success record and is under resourced. So yeah, the system is very tilted. We definitely need to do something to reduce the inequality of opportunities available to people. So none of anything we've said implies that we're all fine and we shouldn't be worried about inequalities within higher education.

MICHAEL J. FEUER:
Which is of course the main topic of your latest book. I've read the book. I've heard you talk about it at least once. I'm recommending it for my colleagues and students and others because anybody who's interested in, for example, the vision of higher education whether from an institution standpoint, and we will get back to that in a moment, or whether nationally speaking, some of the theme in your book about the effects of inequality, on educational opportunity in the post secondary sector, and the effect of changes in the postsecondary sector on the distribution of earnings and income in the other direction, these are very fundamental and very important points for anybody working on education policy.

But I want to shift to a question about comparing us to other countries. What's your sense of where we stand internationally in terms of both the quality of our postsecondary system? College and universities in particular. But this also relates to your point, Sandy, that we don't have enough other options that are really good. That's where some other countries seem to have done much better than us in that. In general though, where are we internationally?

MICHAEL MCPHERSON:
Well, the world's a big place. I think it's important not to over generalize. I mean, we need to think about Asian countries that have been very successful in recent years. Lots of evidence that that's... I shouldn't say recent years, because I'm really old, but in the last 50 years. Partly in good part because they have aggressively invested in education from early ages.

I think if you look at Northern Europe, to me, the most outstanding thing is the North European countries simply don't let kids grow up in the kind of appalling condition that we let millions of children grow up in this country. And I think that gets reflected in the fact that they have much more uniform opportunity for people regarding college and at life after college. In fact, it's striking that in a country like Norway where college tuition is free, it doesn't mean college is free because people have to live while they're in college, a pretty good fraction of people decide they don't want college and they don't need it because they already have solid foundation and they have opportunities that Americans don't have if they don't have a college education. So I think there's a lot we could learn particularly from Northern Europe where there are a lot of historical similarities to draw on.

SANDY BAUM:
One of the things that people frequently point to is they say, "Oh, there's some countries where college is 'free'. Isn't that great? If we had free college, then we'd be in a better place." But the reality is that in general, when college is tuition free, first as Mike said, even if it's tuition free, still, I mean a big cost of going to college is the cost of your time. If you go to college instead of going to the workforce, then you have given up those wages and that's a very large cost. Somehow you have to find the money to live. So it doesn't mean, "Oh, finances become a non-issue."

But it's also true that in companies that don't charge tuition, it's much more expensive for the state to operate higher education institutions and they tend to have more restricted enrollment. So there are countries where tuition is free at the public institutions and all the rich kids go to them. But then if you want to go to college outside of the limited capacity there, then you have to pay. It's not the perfect system that people tend to think of when they hear the word free.

MICHAEL MCPHERSON:
Well, one thing that's not directly in the higher education mix but certainly is in the career and opportunity mix is I think Germany is the most prominent example of this but it's true in other European countries as well, the strength of apprenticeship systems that allow people to develop skilled craft jobs without going through college. Something I think that's not appreciated enough is that unions are much more powerful in these European countries. Germany has a system called Codetermination in which unions are represented on the boards of companies and they have a real voice in how the companies operate.

One of the reasons we don't have, I think, meaningful apprenticeships to a broad degree in the United States is that it's not in the narrow self-interest of companies to invest in workers who might leave. So in Europe, you have industry-wide unions that say, "We want to make sure you can work somewhere in this industry. We don't care whether you move from one company to another." Not the way things work in the US. And I actually think one of the most hopeful things about the last couple of years has been the rising strength of unions in the US, which I think I is a force for good.

MICHAEL J. FEUER:
But that reminds me of a related issue, which is, and this may get into some of the sort philosophy side, our system of higher education is fundamentally different from most of the other countries of the world. In large part because of the mix of private and public and because of the diversity, and I don't know how many institutions we have now, upwards of 2,000 or more, and great variability both in finance, governance, control, et cetera. You want to just say about whether this is a good or questionable part of American exceptionalism, the way we've structured all of that?

SANDY BAUM:
Well, one thing I was going to say in terms of the comparisons to other countries is that some of the comparisons are quite problematic in the sense that one of the characteristics that relate to what you just described is that many Americans earn college credentials when they're older. So if you compare the share of the population under the age of 30 who goes to college or has a college degree, we look worse than if you count the people who earn their degrees later in life. So most people who earn a large number of people who earn associate degrees and certificates are older than 30. So it's like we have a big second chance concept in this country. People go to college and drop out or don't go to college at all and then they later on get some sort of post-secondary education that helps them in the labor market.

Now, some of them go and don't have good outcomes. But for many people, this is really important. And that variety, I mean, we are serving such a different population of people. Some people want to only talk about today's students as adults who are sort of later in life going back to school. But that's not true. A lot of people go to college when they're 18 years old. And from many people, a residential four-year liberal arts education is absolutely the best thing. Sometimes I think if everybody could do that, that would be great. Everybody obviously can't do that, doesn't want to do that, isn't prepared to do that, but that doesn't mean it's not an important experience. It's important that we do that well. It's also important that we do the job preparation well. And that's part of college in the United States, although some of it could be done outside of higher education institutions.

But preparing people later on in shorter term programs when they have too much going on in their lives to go off. They're not going to a residential college, they don't really have four years to study philosophy. Even if that is their dream and even if it would improve their lives, it's very difficult for them to do, so we need to have a range of institutions to do that. The Public Private Breakdown. I mean, we also have this for-profit sector that does some things well, particularly some short term job training well, but has created much of the difficulty that we face in terms of images of higher education. I mean, a big part of the student debt problem is people borrowing to go off to for-profit institutions where they don't graduate or get a worthless credential. And that sector grew very rapidly and is now diminished considerably. And that's probably a good thing. It shouldn't go away. It does some things well. But it's too easy to take those outcomes and use them to characterize higher education. But the public-private mix works pretty well in this country.

MICHAEL MCPHERSON:
I think that's right. Obviously for the US, it's historically related to the important role of philanthropy that has been prominent in the 19th and 20th, and I guess continues to be prominent in this country. There's a lot of governmental support for putting money into philanthropy through tax breaks, which aren't generally available in other countries. At the same time, I think the competition, which is basically healthy, can at times produce irrational extremes. I think the attempt by the wealthiest institutions to try to get their admissions rate below zero if they possibly can just doesn't really make any sense. The idea that you're drawing fine distinctions among the top 1/10th of 1% of the population in terms of their fitness to go to Stanford or Yale or whatever is crazy and destructive, I think. And it would be great if we could reign it in.

I think there's something similar that goes on when... In the public sector, everybody wants to be a research university, everybody among the four-year institutions. And that seems to me to be risks distracting some sets of institutions from the most important missions that they have. So deans want to have PhD programs. Faculty want to be able to work with graduate students. There are a lot of institutional incentives to build up the research function, but the contribution that many, many institutions are making to society is mainly through what they do for educating undergraduates. I think there is a problem that the way our system works, we don't give nearly as good incentives for teaching well as we do for publishing papers. Our books, which we just did, so in fairness.

MICHAEL J. FEUER:
There's lots of issues here that... First of all, again, to our listeners, a very strong encouragement to pick up the latest book called Can College Level the Playing Field? written by Sandy and Mike, because a lot of what we've been talking about, you will find through the pages of that book amplified and embellished with some real data. And that's very important.

Thank you both so very much. I know we have just scratched the surface on a number of the most challenging issues we face as a nation and maybe as a world. It gives me ever more energy and enthusiasm to stay in the business when I know we have colleagues such as the two of you who bring so much wisdom and care and empathy and humility and empirical evidence into these conversations. It's been a pleasure to speak with you both. I just want to wish you both continued good work, good health, good things, and stay nearby.

SANDY BAUM:
Thank you so much.

MICHAEL MCPHERSON:
Thank you, Michael.

MICHAEL J. FEUER:
And to our listeners, if you enjoyed this episode, subscribe to the EdFix podcast on Apple Podcasts or Spotify or iHeartRadio, Player FM, wherever you listen to your podcasts. Special thanks to my all purpose communications maven Touran Waters for making this possible. Wishing everybody special thanks from all of us.

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