I don’t have to tell you about today’s strong sentiments that going to college is too expensive, and that those who manage the business of higher education don’t do enough to keep it affordable. We hear this nearly every day in our communities, in the media, and in the halls of Congress.
We have good reason to share the concern. According to the latest report from the College Board, the average annual tuition and fees at public four-year institutions total $8,893, and at private not-for-profit four-year institutions the number is $30,094. The good news: For public institutions the increase is only 2.9 percent this year—the smallest one-year jump in more than 30 years. For private institutions, the increase was 3.8 percent, also lower than recent tuition hikes.
Nevertheless, nearly 60 percent of U.S. undergraduate students nowneed to borrow to go tocollege, and the averagedebt load for those who do—and eventually earna bachelor’s degree—is $25,000. All this comes at a time when holding a degreeis more essential than ever for qualifying for a job in our economy. According toGeorgetown University’s Center on Education andthe Workplace, by 2020, 65 percent of all jobs in the United States will require postsecondary education, up from 28 percent in 1973.
Higher Education’s Long-Term Value
At NACUBO, we are eager and determined to add insight to the public discussion about college costs and access. A key element in the NACUBO long-range strategic plan for 2014–16, recently adopted by our association’s board of directors, is the goal of communicating to the public the value of higher education.
Recently, Liz Clark, NACUBO’s director of congressional relations, represented us at a Department of Education (ED) hearing about President Obama’s proposals to address college costs and make college more affordable. One idea is to develop a new rating system for our colleges and universities based on outcome measures like graduation rates and graduate school placements; and affordability metrics, such as tuition amounts and increases, average loan debt, and number of Pell Grant recipients.
During the hearing, Clark made the point that by increasing the public’s awareness about what it costs to run our institutions, and where our revenue comes from, we can create a clearer understanding of why tuition is what it is. NACUBO also recommended that any rating system accommodate the vast diversity reflected in higher education institutions, and that the ratings be designed so they do not discourage investment in desirable outcomes—like creative thinking and civic responsibility—that are not easily measurable. Most importantly, we encouraged ED to partner with NACUBO in communicating to the public more-understandable financial information that clarifies college and university costs and value.
A More-Enlightening Reporting Model
With regard to financial information, be sure to read this issue’s article, "Reporting Reimagined," which describes NACUBO’s "Blank Slate Project." This volunteer effort seeks to explain more clearly to stakeholders the resources, operations, costs, and results associated with running a college or university. A unified reporting model for public and independent institutions represents a major step toward making a better case in the public forum for the value of higher education. I encourage you to examine the project’s details and goals, and to give us your feedback and support.
With this article, Business Officer launches a Financial Reporting and Management Series, a group of feature articles that focus on further efforts to clarify the business of higher education. Taken together, these proposals and approaches can contribute significantly to the financial and operational transparency that makes for more-informed decision making by students and families, as they consider the path toward educational achievement and why it is so important.
John Walda, NACUBO President and Chief Executive Officer