Hyman Flunks Out

Mark Hyman closes his recent commentary about rising college tuition by saying, "What the public needs is more transparency to determine if public universities are spending the money wisely or if they are simply gouging the students."

I guess one way of being satisfied is to ask for what you already have. Perhaps Hyman is onto some sort of profound vision of life, here. The two more likely explanations (and these aren’t mutually exclusive) are that he wants to baselessly bash educators and/or he’s an idiot.

What Hyman doesn't know (or pretends he doesn't know) is that public universities have a transparent budgeting process. For example, at the University of Iowa (where I spent the last few years), you can find out exactly what every salaried fulltime faculty member, administrator, and staff person makes, down to the penny. In fact, the salaries are published annually in the local newspaper, and you can also find them on the web.

The budget itself is a matter of public record--if you want to look at it, it's there for the asking; you can find out exactly how much Iowa spends on each and every program. And this isn't something unique to Iowa. To be accredited, public universities must make not only their annual budgets, but a host of other financial documents public. You'll find this on just about any public college or university's website when they describe their compliance with the requirements with their accrediting organization.

For example, at the North Central Association of Colleges and Schools (one of the nation's largest accrediting bodies), the need for financial transparency is spelled out in General Institutional Requirement #24:

"It makes available upon request information that accurately describes its financial condition."


Almost all universities and colleges accredited by NCA list each of the NCA's requirements, often adding something about how they specifically meet them. For examples of how various public universities describe their compliance with GIR 24, take look at the University of Colorado, the University of Illinois, and the University of Arizona (these are fairly random examples; if you Google the wording of GIR 24, you can find many, many, many others).

At the University of California at Berkeley, the entire 328-page budget document is available online at the university's website. About the only way Hyman could have more insight into the inner workings of the university would be if he were to personally give Berkeley Chancellor Robert J. Birgeneau a prostate exam.

But wait, you (or, more likely, Hyman) might say. This just gives the public the end product of the budgeting and tuition decisions. What about the process itself? Shouldn't we be allowed to see that?

Yes, you should, which is why you can. Public universities are generally overseen by a state's Board of Regents, a group of officials who oversee the running of institutions of higher learning in their state. Their meetings are open to the public, and a great number of their documents and memos (including those having to do with budgetary proposals) are available online. (For an example of what the Board of Regents is and does, here's a link to the FAQ of the Iowa Board of Regents).

So Hyman's call for more transparency at public universities is a moot point. It already is.

But what about tution? It sure has been going up a lot, hasn't it. Mark's right about that, yes?

Yep. It's been rising significantly, particularly recently. But there are a few things to keep in mind when thinking about these figures.

First, even at private schools, the cost of educating a student is more than what the student pays in tuition. Money comes from other places (grants, endowments, etc.). At the state universities in Iowa, for example, the state has generally picked up over 60% of the costs of operating the institutions. Most private colleges, while having high sticker prices for tuition, also give the majority of their students significant amounts of financial aid (something I myself am grateful for, since, as the child of two public university teachers, I never would have been able to go to the college of my choice if it hadn't been for the financial aid and scholarships I received). So while tuition has gone up, parents and students are generally paying only a fraction of the total cost of the education itself.

And what does that education get you?

Well, in addition to the social and intellectual benefits, it pays off handsomely in raw cash as well. Someone who holds a bachelor's degree will make nearly one million dollars more over his or her lifetime than someone with only a high school degree. In simple terms of return on investment, a college education is still one of the best things you can buy for your money.

Much better than, say, investing little Johnny's tuition money in Sinclair Broadcast Group stock, which, according to Morningstar, has a measly 2.43% yield. As the Morningstar people point out, this return on investment is not only "much lower than the earnings yields of other stocks in its industry, but it is also very low in absolute terms."

So maybe sending Johnny to State U. isn't such a rip off after all.

But this idea of investment presupposes the ability to make that initial investment in the first place. As Hyman points out, for middle to lower class families, it's difficult to realize the awesome return on the investment in a college education if they can't put together the money to make that investment in the first place.

Another good point by Mark. But the question is who or what is to blame for this rise in tuition that makes it more difficult for working class folks to get their children into college. As we've established, the problem can't be from a lack of transparency in the budgets of public universities. So why the sticker shock?

Well, according to Sandra Baum, a senior analyst at the College Board, (the same organization Hyman cites in his own commentary) cutting of state funds, decreased private giving, and rising healthcare costs correlate with rises in tuition.

So, a slow economy, a federal government that places more burden on the states, along with a healthcare system that is based on HMO's and other corporations making huge profits, seems to lead to rising tuition. Hmmmmmm. . ..

But you don't even need to use a chain of cause/effect reasoning to see the links between the current administration’s policies and rising college costs, particularly for lower and working class families.

One of the basic ways people with limited economic means get the money to make that initial investment in college is through Pell Grants. The Bush administration has effectively cut these Pell Grants to families, shifting more and more of the cost onto working and middle class families.

That might not be such a good idea, but is there anything dishonest about it?

For someone who claimed to want to be the "Education President," it does seem a bit underhanded. But it's actually much worse. Bush talked specifically about increasing Pell Grants in his campaign in 2000, but then never funded them as he promised he would. He lied again in 2004, claiming his devotion to Pell Grants showed his commitment to making educational affordable and attainable for all, but then turned around and slashed them less than two months after being "re"-elected.

So yes, Mark, a college education, while being one of the best possible investments one can make, is unfortunately harder to attain for working and middle class kids than it's been in a long time. But don't blame this on the non-existent problem of shady budgeting at public universities. Blame it on the administration that doesn't seem to understand that just as a college education is a wonderful investment for the student, it's also a wonderful collective investment for us as a society, one that will pay off in a host of ways (including financial) down the road.

Blame the self-proclaimed "Education President."

And that's The Counterpoint.

Hyman Index: 2.45 (although this doesn’t quite do justice to the fact that the entire commentary is based on a demonstrably false premise).