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Straight Talk About College Costs and Prices?
A Short History of the Cost Commission

Armed with a report from the General Accounting Office that said tuition at public colleges and universities had increased 234 percent between 1990–91 and 1994–95, while median household income rose only 82 percent, Republican leaders in Congress set out a year ago to do battle with what they saw as tuition inflation.

Howard P. (Buck) McKeon, a California congressman who is chairman of the House Subcommittee on Postsecondary Education, Training and Lifelong Learning, introduced a bill to create a commission to study the problem.

Initially, the study group was to include people outside higher education “with expertise in the management of business efficiency and cost reduction programs.” However, when the National Commission on the Cost of Higher Education was announced last August, its members were mostly higher education insiders—four college or university presidents, the chancellor of a large public university system, four higher education lobbyists and two faculty members.

There were no outside experts on management efficiency or cost controls, nor were there any representatives of two-year community or technical colleges, which enroll about one-third of the nation’s college students.

The commission’s budget was $650,000. Its staff director was Bruno Manno, a senior fellow at the Hudson Institute, who co-authored a 1996 article that was sharply critical of colleges and universities for charging too much and for offering too many remedial courses.

After meeting several times, and reading half a dozen commissioned research papers, the cost commission wrote a draft report last November, declaring that “as a public good, higher education, far from being expensive, is priceless.” The draft also said that about 75 percent of the nation’s college students pay less than $8,000 a year in tuition, “about what a decent used car would cost.”

This widely-reprinted statement, and the generally self-satisfied tone of the draft report, drew sharp criticism from the commission’s congressional co-sponsors, Representative McKeon and Representative William F. Goodling (R.-PA.), who is chairman of the House Committee on Education and the Workforce.

In early December, Goodling and McKeon issued a statement, reminding commission members that their mandate was “to investigate the rising costs of higher education—not to engage in a debate over whether there is a cost crisis.”

“Any suggestion that we don’t have a crisis flies in the face of common sense,” the two congressmen said. “Every American family knows that college costs are too high.”

By the time the commission’s final report—”Straight Talk about College Costs and Prices”—was submitted to Congress last January, its tone had changed markedly. Most of the language about college being a bargain was gone, replaced by gentle admonitions to college and university leaders to cut costs, make tuition affordable and make their financial decision-making less “opaque.”

The final report rejected federal cost controls, arguing that they would destroy “academic quality in higher education.”

The report dwells at length on the difference between the “price” students pay to attend college and the “cost” of providing higher education. Prices have risen faster than costs, according to the report, because appropriations for higher education declined sharply in many states in the late 1980s and early ’90s.

Most of the report’s recommendations are aimed at Congress, the U.S. Department of Education and accreditation bodies. The general thrust is toward fewer and simpler regulations and less rigorous governmental reporting requirements. Most of the recommendations aimed at higher education institutions call for voluntary actions.

The proposals do not deal with the role of states in the rapid rise in tuitions and other fees.

Since the Cost Commission report was made public in January, it has been discussed at several national meetings of higher education organizations. Two thousand copies of the report have been printed, at the request of the commission, by the American Council on Education and The Oryx Press.

A few of the report’s recommendations have found their way into the Higher Education Reauthorization Act, which funds most of the national student financial aid programs. That legislation has passed out of committee in both the Senate and the House of Representatives but has not yet been voted on by either body.

Few higher education experts expect the report to have a major impact. “My expectations for the commission were quite low,” said one head of a national organization who asked not to be named, “and I was not disappointed.”

—Kristin D. Conklin and William Trombley

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