Lies, Damn Lies and College Statistics

Every now and then, someone uses statistics in so misleading a way as to qualify as dishonesty. While I have little patience for ignorance masquerading as knowledge, I have even less for self-interest masquerading as virtue.

I came across a recent article by Debora Spar, the President of Barnard College. Full disclosure: I did my undergraduate work at Columbia University, and my wife is a Barnard College graduate. While I usually enjoy Spar's writings, even when I disagree, and I respect her willingness to take on controversial issues, her article on "Why College Costs So Much" should be easy pickings for anyone with, well, a Barnard degree!

Spar relates how her father attended college in the 1950s for $1,500 per year, and thus graduated with a lot of knowledge but no debt, she attended Georgetown in the 1980s for ~$10,000 per year, and this year, her Barnard college costs $55,000! To Spar's credit, she explains how inflation adjustment and CPI indexing works, and shows that her father's $1,500 is really the equivalent of $13,000 today. So, college has not grown by 36X over the last half century, but only 4.23X in real terms. Certainly 4.23X is much better than 36X, but it still begs the question of why? The question isn't, is a college degree worth 4.23 times more today than fifty years ago, but rather is the differential between a college degree and lack of a college degree 4.23 times more today than fifty years ago?

While those would be interesting to explore via the Bureau of Labor Statistics, the interesting point here is Spar's explanation as to why cost has increased. After all, she says, Barnard doesn't have climbing walls or extremely fancy dorms. So where is the expense? In Spar's words, "expanded access and extended student services".

Expanded Access

In 1955, there was no financial aid, so the only ones who attended college were those who paid cash. As a result, poor families simply did not attend college. In 2013, Barnard offers vast amounts of aid, 25% of its total budget, allowing many more to attend.

I believe her wholeheartedly; Barnard probably does allocate 25% of its budget to financial aid. However, since, by her own admission, this is a major driver of increased cost, what would be comparable access if Barnard charged the same amount in 2013, adjusted for inflation, as it did in 1955, but without aid?

• 1955: $1,500, or 45% of the $3,301 median household income. 45% of American households earned at least 3x this amount.
• 2011: $13,000, or 30% of the $43,000 median household income. 64% of American households earned at least 3x this amount (2009 figures).

This isn't surprising, since real median household income has increased over the last 50 years.

Two conclusions jump out:

1. If Barnard had kept college tuition constant, adjusting for inflation, 19% of American families who could not afford college in 1955 could do so in 2009, without actually harming those who already could.
2. If Barnard actually wanted to help the rest, even at the cost of harming those who already could afford it, it could simply have increased tuition to stay with the 45% of the median household income, rather than inflation, which would have meant an annual bill of $19,350. The additional $6,350 per student would have mean that every 2 students could pay in toto for one more student. Essentially, 1/3 of the students on campus could have attended freely.

If Barnard really wanted those who could afford it to pay for those who could not, they could have gone to the apparent extreme: have every one student pay tuition for  two. Double tuition to $26,000. Sure, only 49.9% of families could have afforded it, but those ~50% would have paid for the other 50%!

Yet Barnard quadrupled tuition over the 50 years, while providing some form of (unspecified) financial aid to 1/4 of the student body; I highly doubt many of them are on tuition-free programs!

This is not to pick on Barnard, although Debora Spar did set herself up by trying publicly to defend the practice; every single college in America has been playing this game, claiming to help the needy while creating ever more people unable to afford, and lining their own pockets. College tuition is unaffordable, but it has nothing to do with helping the poor with financial aid.

To paraphrase the brilliant Benjamin Disraeli, there are lies, damn lies, and college statistics!