On Sunday night, Dallas Mavericks owner Mark Cuban posted a blog that calls out higher education as a root cause for unnecessary national debt. On Wednesday, Dr. Dan Jones, president of Texas A&M University-Commerce, addressed Mr. Cuban's concerns.
The following is a transcript of the conversation with Dr. Jones, which will air as part of The President's Perspective, his monthly half-hour radio program on KETR.
Jones: “Mr. Cuban hit on a point that I think all of us in higher education are concerned about, and that is the mounting student debt load. He quoted some of these numbers in his blog, but they’re common knowledge. I mean, we read about this virtually every day. Student debt load is approaching $1 trillion. It’s now bypassed credit card debt in this nation, in terms of just its sheer bulk. And Mr. Cuban uses the term that we are coming up on what he calls a ‘student debt bubble,’ and he equates that to being similar to the housing bubble, or a few years before that, the tech bubble. That’s actually an analogy that I’ve used in describing the situation. Students are graduating with unprecedented amounts of debt. It’s something that we are going to have to get a handle on. When I say ‘we,’ I’m talking about the big, corporate ‘we.’ We in higher education, obviously, need to confront this issue head-on, but this is an issue that surpasses the boundaries of the university campus. This is a societal issue. All of us, our elected officials need to be cognizant of the problem. We need to look at the way that we provide higher education. Are we achieving all of the efficiencies that we can in trying to control costs?
“A larger question that I think we have to deal with as a society is, ‘What is the value BACK to the society of having a high percentage of our citizens with a college degree?’ Let us ask that question with a hard edge. ‘What is that value?’ President Obama has set a very ambitious goal – he wants to get college attainment rate up to 60 percent. That would be a historic high for this nation. We’re hovering in the 30 percent range right now. We think, ‘gosh, what’s it going to take to get there?’ Other OECD countries, developed industrialized nations, are already there. The U.S. is lagging behind Finland. It’s lagging behind Korea and Norway. There are a lot of places that are ahead of the U.S. in terms of college attainment that you wouldn’t necessarily think of as being our competitors. By the way, that’s a fairly recent phenomenon. As recently as the ‘90s, the U.S. led the world in college attainment. We’ve slipped from first to about 11th or 12th in the world within the span of a little over a decade. The world is changing in pretty profound ways. Fahreed Zakaria, a CNN commentator, calls this ‘not the fall of the west, but the rise of the rest.’ I think that’s a very apt way of saying it. This may not be something where the U.S. is doing something wrong, but it may be that other nations are doing something right. We may have to look at what the rest of the world is doing with a little more humility.”
Jerrod Knight: Is it possible that because other countries are having higher success rates when it comes to educating their citizens that maybe we’re moving into a time where globally, an education no longer helps to define, in very clear terms, a class system? That is, the more of the populous that is educated, the less that the educated are among the elites?
“I’ve heard that argument applied here in the U.S. What is the value of a college education? There are a lot of people who went to college and got their degree and said, ‘well, it didn’t help me very much. I’m still looking for a job.’ Or, ‘the job I got is not in my field of study.’ It’s an important question to ask. Would a two-year degree or a technical degree have been better? That depends on the individual.
“Korea is a country with a rising middle class. One of the reasons that college attainment is so high in that nation is because people DO see it as a way to a life of status and privilege. I don’t use those terms lightly. You talk to a Korean high school student, and it’s not, ‘maybe I’ll go to college right when I graduate or maybe I’ll do some other thing.’ No. It’s, ‘I’m going to college.’ We have a partnership with a Korean university and I’ve asked them about the college-going rate of high school students in Korea and they respond, ‘they all go.’ It’s like they don’t know why I’d even ask the question.
“Let me circle back to Mr. Cuban’s blog, because the point he is raising about student debt is an important one. It ties into these larger questions about the value of higher education. One of the statistics that you’ll hear is: the cost of a college education to the consumer (the student and the family) has risen faster than inflation. It has risen faster than even the cost of healthcare in this country. It’s certainly outpaced the Consumer Price Index. If you look back at 15 years worth of data, all that’s true. And then, sometimes, an additional fact is ladled on top: The cost of tuition in the U.S. is higher than in any other industrialized nation. I haven’t verified that, but I don’t question it. What accounts for all of that? When you look at higher education and the funding patterns of higher education in the US in the last 20 years, what we’ve seen (and I’ll try to do this without putting value terms on this, which is difficult to do because I’ve spent my life in colleges and universities, and love what I do) is a massive public disinvestment in higher public education. What I mean by that is that public support has gone down systematically and irretrievably in the last 20 years. In the state of Texas, it began in 2003 and tuition was deregulated. The deal that was made in Texas is the legislature said to the universities, ‘if you’ll stop asking us for money, then we’ll let you set your tuition to whatever you want.’ It was kind of a deal with the devil because it says, ‘next year you’re going to get 10 percent less from the state, so in order to maintain the cost of doing business, you’re going to have to raise tuition.’ That’s been going on for a decade in Texas, and ever longer in other state in the nation. What you’ve seen here is a shifting in terms of cultural value. It ties into lots of other things. What is the role of government? What we’ve seen in the U.S. is an increasing preponderance of the view that the cost of higher education should be borne by the student and his or her family, because that’s where the benefit is going. It should be borne, proportionately less, by society as a whole. That’s a topic for another day.”
JK: It sounds like if there’s anything to argue, it’s, “is there a clear benefit and can you define the benefit by the person?” Education is such a non-standardized thing. Mr. Cuban references folks sitting around in stuffed suits determining what ought and ought not be the curriculum – isn’t this an individualized thing? Isn’t it such that the benefit to two different people going through precisely the same program would be a different thing based on factors like ambition? An analogy might be a driver’s license. Two people obtaining the same driver’s license doesn’t mean they’ll both drive the same vehicle when they leave the DMV, or that they use the license in the same way… And having a license doesn’t mean you get to drive a Maserati. Getting a degree doesn’t mean you get a job – you still have things to do.
“Exactly. How does having a degree help someone accomplish his or her own goals?
“One of the charges he makes that merits a response is that the cost of tuition is being driven up by the ease of securing student loans. I think there’s some merit to that argument, and here’s why. I use healthcare as an analogy. If you look at the rising cost of healthcare in this country, it started to inch upward, and then it started to explode, with Medicaid and Medicare. Now the government’s paying for it, and folks think, ‘what do I care what healthcare costs?’ So, I’m not making that argument, but that argument has been made, and you can make that argument for education. ‘If it’s easy for me, an 18-year-old high school graduate getting ready to go to college, to get a student loan, what do I care how much my education pays? The government is lending me the money. I’ll pay that back later.’
“I think that some of the pressures that consumers would normally bring to bear in the marketplace of higher education have been removed by the ease of access to government funding. I’m going to concede that point up front.
“However, what does that mean for us in public institutions of higher education? It means two things: it means first of all that we need to be right there on the edge of innovation. We need to be leading the charge in finding efficient and effective and high-quality ways in which to deliver education that students can afford. [Mr. Cuban] talks about online education – at A&M-Commerce, we deliver one-third of our education online, or in some form of distance delivery. We’re among the top universities in the state of Texas in doing that. It’s important for us to innovate. We can’t leave that to the proprietary schools. The other piece of advice that we give ourselves, and what we now must pass on to these students is: be smart consumers. There is good value in the educational marketplace, but you have to go find it. Most of the problem that we’re seeing in student debt is from students going to proprietary schools or private institutions with big price tags. There was an article in the New York Times a few weeks ago about a young lady who was graduating from an Ohio institution – a traditional, liberal arts, small, church-affiliated institution. Those are excellent places to get a college education, but they’re expensive. $40k/year, $50K/year. She graduates in four years and has $120K in student debt. She said, ‘nobody told me about this when I came in.’ She was not a smart consumer, but on the other hand, she didn’t get good advice. You have to realize that when you take these loans, you’re going to have to pay them back. That’s what we need to be telling our students.
“There are still tremendous values in public higher education. Go to a community college. Get as many credits as you can, make sure they transfer and count toward your degree. Then come to a place like A&M-Commerce. We’re working on a $10K degree. Total. For four years. We’re going to get there. That’s a tremendous value in higher education. But you have to be a smart consumer. You have to go find them. Even at that age. When we’re looking for cars or TVs, we don’t go in and say, ‘I’m going to buy the most expensive one in the showroom.’ That’s not how we go in. We go in looking for value. We need to train our students, before they even get to the front door of the college admission office, to be looking for value. They’ll find it.”
JK: Those value points need to be as easy to recognize as they are when you go to a showroom floor. You can look at a car and see that it’s likely more expensive. You can look at a sticker price and see what you’re getting into. When it’s such that an 18-year-old can walk into a college ‘showroom’ and see the value and the costs, we’ll be where we’re headed.
“Exactly. They just need to be good consumers. Ultimately they’re purchasing a service. The point is that in the marketplace of higher education, you can find good value. You don’t have to take every loan that you’re eligible for. And you need to make sure that the dollars you borrow are dollars you can pay back.
“I think Mr. Cuban makes a lot of great points in his blog, and I appreciate the fact that he’s bringing these topics to the table for public discussion. I’m very pleased to participate in that discussion, in this forum, because what we’re talking about is the future of our students, and through them, the future of our nation.”
Audio from this chat and other topics will air on Wednesday, June 6th as part of The President's Perspective, a monthly half-hour chat with the CEO of TAMU-C.