Can We Fix American Education During the Current Economic Crisis?

Ernst Frankel

The current economic crisis will force American education to reevaluate and improve the way it is run or managed, for money for education and research will become increasingly scarce as other priorities advance. America spends more on education on a per capita basis than any other country, yet seems to get worse results than many countries with lower education expenditures. While the problems of low quality primary and secondary education and huge wastes of money in our schools has been discussed extensively, little has been published on the effectiveness of higher education in America, except the often self-praising reviews of the accomplishments of America’s elite colleges and universities, which are not only the most expensive in the world, but have increased tuition at a multiple of the rate of inflation every year for some time.

           
How America Compares

America now lags behind most developed and many developing countries in the quality of primary and secondary education, particularly in math and science. Countries with the best educational systems and best performing students invest heavily in teacher education and research. Not only do they usually train teachers at government expense, but also retrain teachers throughout their teaching careers at government expense, often using summer breaks for intensive training. In addition, time is set aside for program and content development.

The percentage of school or education budgets going towards direct teaching and classroom activities in countries with successful educational systems, such as Singapore, Sweden, Finland, etc., is over 50% higher than in the U.S.

In America, too much attention is placed on administration, public/political relations, prestige (mainly via spectator sports), and similar activities which contribute little, if anything, to the educational quality, and often involve or affect only a small minority of students, while consuming the bulk of the budgets.

At the university level, America experienced a huge boom: in the increase in student applications (up 24% between 1995 and 2005) which stimulated a huge construction boom, with $15 billion spent in 2006, a 260% increase since 1997. Much of this is for new prestige labs, although a great deal is spent on new student housing as well; but the recent economic crisis may well prove these expansions foolhardy.

One issue of concern is the major decline in emphasis on traditional areas of education at universities, such as engineering and basic sciences, along with extensive encouragement for the study of biology, life sciences in general, bio-engineering, and similar areas. While these latter are important subjects, the decline in educational offerings in areas such as civil, mechanical, chemical, aeronautical, and ocean engineering, as well as others, is worrisome at a time when our infrastructure, the life blood of our economy, is not only in bad shape but largely outdated and in urgent need of repair.

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Escalating Costs

The cost of higher education in America has skyrocketed in the last 25 years, out of all proportion both to actual costs and to other sectors of the economy. While the consumer price index rose by a tame 108% and medical costs by 250%, costs for higher education went up by an astounding 439%. In other words, they more than quadrupled. While the cost of higher education may be expected to rise at a higher rate than the rate of inflation so as to allow for improvements in education quality, facilities, and equipment, the actual costs rose by a multiple of that, a fact hard to reconcile with the limited increased value of higher education. Even compared with the recent irrational escalation of energy costs, education increases are hard to justify, and in a way are really outrageous, particularly as they are rarely paralleled by improvements in quality.

As neither academic salaries nor maintenance and service costs have increased much above the rate of inflation, the question is really how these institutions justify such an escalation. Some may argue that these prices are based on the popularity of higher education and what the market will bear; others that much of it is the result of price prestige competition, particularly among big name institutions that associate tuition cost with prestige. This is unfortunate and is actually a self-defeating premise.

Teachers and other educators in America are not only underappreciated, but are also generally grossly underpaid. In 2008, an average primary or high school teacher in the U.S. had a salary of $37,200 and $46,800, respectively, about one-third or one-quarter of that of a school principal and barely above that of a manual unskilled worker, nurses assistant, or custodian.

While salaries at American universities are usually appreciably higher, they still do not compare to earnings of private industry professionals in the same field, and are similarly dwarfed by salaries of university executives.

           
Fixing the Problems

The new Democratic administration in America is expected to emphasize and significantly increase funding for primary and secondary educators, as well as provide some encouragement for higher education. Yet the current huge financial crisis, economic stalemate, and debt obligations may result in significant declines in both public and private support for research, at a time when such support is urgently needed to maintain or regain American manufacturing and service competitiveness, as well as solve many of its problems with failing infrastructure, health care systems, and energy dependence.

Many American and foreign corporations are in dire financial straits and may have to cut their internal and external research budgets – items most easily cut without immediate social or market impact. Although this strategy is obviously shortsighted, given the current environment corporations often may be more concerned with survival than growth. We must similarly expect reductions in defense and defense-related research spending as emphasis switches from foreign to domestic interests and from strategic to socio-economic concerns. Another problem is posed by the failure of credit institutions, and particularly those traditionally providing student loans – which will pose new expensive demands on universities to find alternate sources for student financing.

All of this should encourage us to reconsider academic priorities and plans about how to match our educational and research programs with the more immediate needs of the country and the world. While high technology has contributed greatly to humankind, it has largely failed in dealing with or improving the more immediate needs of food, health, energy, and shelter. With increasingly scarce resources available and immediate economic problems rising, it appears that educational institutions should reevaluate their priorities, increase their efficiencies, and develop programs more aligned with the needs of society, both in the short- and medium-term.

Educational institutions such as MIT must review not only their priorities in terms of programs and offerings, but also in the way they do business and manage their expansion plans and investments.

American universities, while benefiting from the largesse of their alumni and other donors, will have to become better guardians of their incomes and endowments – while putting less emphasis on prestige and more on efficiency.

Overhead costs at many universities are unjustifiably large and the result of inefficient management, prestige investments or expenditures, and sometimes outright waste.

The time has come for American institutions of higher learning to be better guardians of the trust and resources put at their disposal in the quest for maintaining this country’s superior educational and research ability. It is particularly important for universities that are rightfully considered leaders in many areas of education and in development of relevant research, both to enhance the knowledge base and to advance solutions to meaningful problems in the interest of improving the state of humankind. Prestige is earned by accomplishment and by success of graduates, not by the building of monuments and wasteful operations.

In these times of financial crisis universities, and particularly MIT, should lead by example and show how to accomplish more with less by cutting out evident waste, eliminating inefficiencies, reducing duplication, improving facility use efficiency, energy use, and more. Opportunities abound in most areas of operations and should be taken to show that we not only identify problems but take a lead in solving them.

At MIT most of the conservation of resources appears to have been taken by the faculty and department staff directly involved in teaching and research.  There appear to be many opportunities for cutting costs in the administration and the many auxiliary activities which should not only review their real needs but lead by example.  MIT’s overhead is nearly the highest among top universities, even after shedding many overhead costs and converting them to direct charges, such as parking, etc.

There are similarly many opportunities for added income, such as enhanced professional-level course offerings, summer sessions, etc., areas in which the Institute used to be much more active.  Most importantly, to achieve greater coordination and cooperation between the faculty and the administration in meeting the increasingly difficult financial challenges, greater transparency of the Institute’s budgets and financial dealings would be beneficial.

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