USC case study and "Contrarian's Guide to Leadership"
The Economist on Full-Time MBAs

NYRB on the Financialization of Higher Ed

NYRB-FinancingCollegesAs a follow-up on my previous post on the movie "Starving the Beast" (about the attempt to cut state funding for public higher ed), the October 13 issue of the New York Review of Books has a somewhat interesting article on what the author, Rana Faroohar, calls the financialization of higher ed, or "How the financing of colleges may lead to DISASTER!" (all caps hers.) Her review covers seven books on the topic, listed in the picture on the left.

The author worries about for-profits and diploma mills, but also lists the "fall in state funding for public education, budget squeezes at nonprofit state colleges, rising college fees... a growth in student credit availability and debt, stagnant wages and a rising sense of hysteria - that the system of higher education in America is broken and must be fixed." I've never felt a rising sense of hysteria in the 12 years I've been a faculty member, but besides that the author does point at very real issues.

She also does a nice job summarizing the "neoliberal" economic thinking with its push to let the markets decide. "Powerful institutions, and in particular financial institutions end up dominating both the economy and society." A scholar she quotes likens the current trend of financialization to a " 'Copernican revolution' in which business and society have reoriented their orbit around the financial sector," which I thought was well put.

She also touches upon themes covered in "Starving the Beast", such as the push in certain circles to view students as consumers instead of considering education as a public good, and the "tax revolt led by Grover Norquist and supported by the Koch brothers and other rich conservative donors." Her main argument, though, is that there is a clear parallel between the student loan market and the financial crisis. (This is unsurprising, because she published a book called Makers and Takers: The Rise of Finance and the Fall of American Business back in May.)

I have a few objections here and there with the article. For instance, "Thoughtful people can disagree on whether college should be free, and if so for whom, but it's a timely and important question." Actually, I think that question is so outlandish it misses the point. Why should college be free? The real question is: how can we make college affordable for everyone who wants to go? The author herself quotes a passage of a book she reviewed, stating: "what matters is not the level of debt, but the borrower's ability to repay it". But when she discusses how to fix things, she writes: "We should start by making community college the new high school - a basic necessity for every American - and work our way up the educational and economic food chain from there." Um, why? I like the idea but the author doesn't offer any reasons. Not every American will want to go to community college after graduating from high school. It matters to be flexible enough to accommodate many life paths. 

What I like about community colleges is that they offer the ability to improve one's skills while being in a group of like-minded people, anchored in the community. They have the ability to teach a lot of the students and do so face-to-face. When the M.O.O.C. fad fades away and people are left with a genuine desire to improve themselves in an environment that will challenge them to do more than simply watch videos and answer quick multi-choice quizzes to earn a certificate of completion, the community colleges will be the natural place to turn. There is a lot of potential in channeling interest in lifelong learning at the local level, creating stronger communities and fostering economic development on the ground. Community colleges can also play a role in mitigating the rise in college costs if students take freshman/sophomore level courses at their local community college before transferring to a four-year college. 

Yet, it is also important to remember that community colleges are underfunded. They rarely have famous alumni making multi-million-dollars donations. In the best-case scenario, they can find local successful entrepreneurs and businessmen willing to donate to the community, but they usually struggle with understaffing, old buildings, minimal resources. Some students on break from their private university take courses over the summer at the community college by their house, side by side with students who can't go anywhere else. Sections of popular topics can get crowded.

As a second remedy, the author says that "we should also make sure that the degrees being offered actually count for something - too many students are paying far too much for meaningless diplomas in sports marketing or business administration." Um, what's so wrong with sports marketing? and business administration? I assume varsity athletes are most likely to show an interest in sports marketing as a way to turn their college athletic interests into a career after graduation when they can't play sports anymore. Aligning academics with extracurricular activities may not be a bad idea - plenty of books like The One Thing recommend a singleness of purpose, and some varsity athletes will be on fellowships, mitigating the impact of tuition costs. Marketing is a fascinating field. I don't know if the supply of sports marketing grads exceeds the demand, but if that's what students want to major in, what about letting them? If they're old enough to vote, they can also be old enough to pick the major that interests them the most. As for a diploma in business administration, it is so obvious it is a useful degree I'm not quite sure what to say to that, although I think it makes more sense to major in something else in college and then pursue an M.B.A., simply because life experiences gained after college make such a big difference in one's ability to be an effective business administrator (greater emotional intelligence, for starters). 

I liked the part where the author argues we need both STEM and liberal arts "because critical thinking in any field is the most important measure of economic and civic success" but I think her argument that "we must once again start to think about public education as an investment in our future as a nation, the way our leaders did forty years ago." Forty years ago the disparities between the elites and the working class weren't as big so that it was possible to imagine that someone could start from nothing and become a successful businessman. Probably along the way, that person would have gone to a public university, or a private university on scholarship, so that he would be aware that his success was made possible by other people making college financially possible for him, whether taxpayers or donors. Now we are moving toward a two-tiered society where I will venture that the super-elites do not generally send their children to public schools, and mobility between the tiers has decreased. The 1%ers (or whatever you want to call them) don't view paying for other people's children to go to schools they don't care about as an investment in the future. That is their choice to believe that. The question then is how can the opposite opinion gain traction in state governments, so that politicians keep in mind their entire electorate and resist pressure to cut funding to public universities? 


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