A Stitch in Haste

Interesting piece in the New York Times:

Like many other big public universities, Alabama is plunging into what private colleges have already mastered: scouring the nation in search of students. In swaths of the country, including the northern Plains and the Northeast, the traditional bastion of higher education, the student population promises to decline in the next decade, sometimes precipitously.

So public universities are recruiting far and wide, hoping that out-of-state students will keep enrollments rising, bring in substantial extra money through higher tuition and maintain the caliber of their student bodies.
…
Over all, American colleges are awash in students, stretching some state universities almost to bursting, and the national swell of public high school graduates is not expected to peak until 2009 or so as the children of the baby-boom generation come of age.

But the growth is geographically spotty. … That future has prompted many public universities to form some particularly bold scouting parties, especially in these tight budgetary times.

The demographics of higher education have been signaling trouble ever since I was in grad school fifteen years ago. Putting the regional differences (the focus of the Times piece) aside for the moment, higher education as a whole will face a massive decline in the college-age population after the 2009 peak mentioned in the article.

Now normally a laissez-faire capitalist would say “so what?” Industries expand and contract all the time. They rise, prosper, decline and sometimes even die.

But can you think of a less dynamic industry than higher education? Consider:

–Traditional colleges have tremendous fixed capital. If you have a dormitory, you need to fill it, you can’t just “shrink it” or scrap it, at least not easily.

–Ditto for labor. Two words — “tenure” and “union.”

–Government. First and more obvious — public universities are accountable to politicians rather than shareholders. If you think closing military bases is politically difficult, try shutting down community colleges or the “University of Blue State — Poopsville Campus.” Second is the whole octopus of government financing of education. Which do you think is the more likely response from politicians and educrats: “We have too much college capacity” or “We need to make college even more affordable by throwing even more money at student loans, grants, etc.”?

Expect little or nothing to happen anytime soon. Perhaps a slowdown in new expansion, perhaps a merger or two.

Meanwhile, an irrefutable and unstoppable demographic shift, with huge negative budgetary implications, combined with structural constraints and political realities, results in nothing more productive than retorts of “there is no crisis” or “we can afford to wait a decade or two…”

Sound familiar?

ADDENDUM #1: For a contrary perspective, see this Marginal Revolution post. One utterly astounding quote:

The story of higher education continues to be one of expansion and growth as whole, even though individual campuses may have trouble attracting students and generating income.

Hello?!? We have a term for that in EconoLand: disequilibrium.

ADDENDUM #2: The Times piece also provides an anecdote about how gay students, particularly in viciously anti-gay Alabama, are using the ever-increasing competition for a dwindling applicant pool as the opportunity to flee their home-state bigotry — probably never to return. Go out of your way to cast out the best and the brightest. Brilliant. Be careful what you wish for, bigots, you might get it.

Similar Posts:

• Subsidizing College, Revisited
• The Price of College and the Value of Education — Part One
• Is (Bankrupt) Education a Public Good?
• Feds Propose Vast College Student Database
• The United Politician College Fund?

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