I recently engaged in an exercise with the Southern Regional Education Board (SREB) on the concept of the $10,000 bachelor’s degree. The SREB Educational Technology Cooperative, led by Myk Garn, facilitated a session titled “Affordable Baccalaureate Degrees: Scenario-Based Strategic Planning Workshop.” This concept of the $10,000 BS (BA or whatever) degree seems to have taken on a life of its own in recent months, probably fueled by Prez candidate Rick Perry’s support for such an idea.
It’s difficult to get into a conversation like this without clarifying a few things up front. First and foremost, in my mind anyway, is the following question: are we talking about the price to the students being $10,000, or are we talking about the cost to the institution(s) being $10,000 per graduated student?
Those two things are very, very different.
The data gathered by the SREB showed an average price to the student (tuition, fees, and books) at public colleges and universities of just under $28,000 for a four-year degree, if completed at a university within four years without wasted credits. Using this average figure – we have a price of $28K that we would need to reduce to $10K.
However, this average price is subsidized by taxpayers since we are only talking about public colleges and universities. On average, the amount of state funds that are used per student appears to be 50% of the total revenue collected – which means that the tuition is the other 50% (ignoring smaller amounts of funds from other sources such as grants, much of which is not available to fund basic undergraduate education).
Considering an approximate 50/50 revenue split between tuition and state allocations, the amount of revenue sought by the university to educate a 4-year graduate is about $56K ($28K tuition plus $28K state allocation). Considering that over the long haul, a not-for-profit university should have revenues approximately equal to costs (balanced budgets) – the revenue figure can be assumed to be equal to the institutional cost of educating a student for four years. Using this average cost figure – we have a cost of $56K that we would need to reduce to $10K.
I think it’s pretty obvious that we can really only tackle this issue if we look at reducing student price from $28K to 10K – which would be a 64% reduction in the sticker shock facing our incoming students (on average – with wild swings of highs and lows resulting in that average). The other side of the equation is that we would need to reduce costs from $56K per student to $38K (same reduction of $18K) That also seems to be what Rick Perry was asking for, but it’s always a good idea to enter into these conversations with a clear picture of what you’re trying to do.
This is the first in a series of posts about the $10K degree. In future posts I’ll reveal some of the solutions suggested by the 45+ educators at the SREB meeting, point to some of the other resources on the web related to this issue, and also try to work in some of my own suggestions as to how to make a bachelor’s degree more affordable.