With ample reason, President Obama has grown impatient with my industry.
In a recent speech at the University of Michigan, he said that while most new jobs in coming decades would require college training,access to higher education is increasingly threatened by runaway tuition growth. “We’re putting colleges on notice: you can’t assume that you’ll just jack up tuition every single year,” he said. “If you can’t stop tuition from going up, then the funding you get from taxpayers each year will go down.”
Because annual federal subsidies to higher education exceed $30 billion, the speech got college administrators’ attention. Yet some experts remain skeptical. Diane Ravitch, for example, the New York University professor and former assistant secretary of education, has urged college presidents to resist the “accountability juggernaut.”
Higher education has long been a primary source of America’s competitive advantage, so government officials would be wise to proceed cautiously. But an examination of the economic forces that have shaped the higher-education market in recent decades suggests that there may be promising opportunities to curb tuition growth.