The tuition Singularity

The Singularity is a future time when, in theory, the pace of technological change becomes so great that we cannot predict the course of future developments of human society. The prediction of such a time was made by Vernor Vinge, and others, popularized by Ray Kurzweil. The basic idea is that technological progress is occurring now at an exponential rate. For example, the number of transistors on commercial microprocessors doubles every 18 months or so (that’s called “Moore’s Law” after Intel founder Gordon Moore).

Exponential growth is a constant relative growth. When we chart an exponential growth process against time, we find that the rate of absolute change naturally proceeds to an “inflection point” at which the change becomes arbitrarily fast. If these changes do not meet some natural limit, they may be interpreted as a Singularity – a point at which the apparent effects of changes in human terms becomes fundamentally different than before.

Universities help to accumulate knowledge, and fulfill an educational role as they bring knowledge to a broader public. For this, students pay tuition. Our monetary system has its own exponential growth process – the rate of inflation, at which a given amount of money purchases less and less value over time. University tuition has been increasing over the past twenty years or more at a rate much three or more times that of inflation. It is clear that at the historic rate of compounding, the tuition bills for U.S. universities are approaching a singularity.

Exponential growth may continue quite a while into the future for technological development. But it cannot proceed indefinitely for tuition dollars. Compared to other economic needs, people can only spend a finite proportion on higher education. A story in Inside Higher Ed profiles the coming tuition crunch, discussing a recent report on college affordability:

In recent years, the report notes, increases in public university tuition have not been used to improve the quality of instruction and other services, but to offset the declines in the relative share of support coming from state appropriations. Looking ahead, the report sees affordability issues created by shifting demographics, in which more of the potential student body will be coming from disadvantaged groups with lower family incomes. Further, based on current government projections, the report suggests that the share of family income required to pay tuition and fees (even after discounting is applied for institutional or other aid) is likely to get too large for many families

Presently the tuition at private research universities is nearly 60 percent of the average family income; at public research universities it is over 11 percent. Over the next 30 years, private tuition will increase to nearly 100 percent of the average family income and public tuition to nearly 30 percent. Those projections seem unduly optimistic to me, considering recent rates of tuition increase and the cost structures of public universities.

Four times the annual family income is a generous home price; homes are generally supported by long-term loans paid over 15 or 30 years, which together with property taxes make up more than 30 percent of the average family income. Long-term student loans have become a larger proportion of private debt. As the proportion of people seeking higher education increases, it is implausible to suppose that a high proportion will see a net increase in family income large enough to justify the expense.

The question naturally arises: what does the student attain from a university that justifies an expenditure of several hundred dollars a week (in 2008 dollars)? The current average monthly tuition cost of a public university is over $700 a month. This adds up to more than $45 per hour of direct instruction.

I don’t think that university tuition will reach a singularity after all. What it will reach is a Malthusian limit, at which students find alternate means of obtaining credentials often enough that further tuition increases yield diminishing returns. For the universities, this won’t very likely be pretty. Government intervention, in the form of tuition supplements or tax credits, may delay this crisis by distributing the cost of education across a broader population than the students and their families. But the fundamentals seem pretty obvious, particularly given the increasing effectiveness of distance learning technologies.

What will happen to university instruction? One can hope it will become more dedicated to outcomes. If you’re a parent of school-age children, consider this:

While many students (and their tuition-paying parents) believe that attending a high quality college will yield higher incomes in post-graduate life, the report says that there is little objective data on the relationships between attending certain colleges and subsequent economic success. No university can legitimately claim that their students learn more than do students graduating from competing universities, the report says.

High cost private colleges may have benefits for some students, but those benefits do not include reliably larger incomes.

And there is this:

The report suggests that public universities are unusual economic organizations in American society in that their costs are so integrated, or bundled. The same professors may perform research (either with or without major outside support), teach (either undergraduates and/or graduate students) and offer service to their institutions, disciplines or society. At a community college, the report says, faculty time is clearly instructional. But measuring the costs of undergraduate education at a research university may be very difficult, and that, in turn, may make cost control nearly impossible, the report says. While the report acknowledges that unbundling is easier said than done, it urges public universities to consider how costs can be separated for closer examination. And it notes that competitors to public universities such as for-profit higher education, which has moved into areas once dominated by public universities have no such difficulty.

This is the biggest complication when comparing tuition costs. At a public research university, professors are generally expected to devote far more time and effort to research than to instruction. This is not universal or uniform, but as an example I spend more than four times as much effort on research, professional service and public dissemination of knowledge as I do on direct instruction, grading, and class preparation. These activities make me a better teacher, and provide my students with learning opportunities that they would not otherwise have. But they vastly complicate the task of quantifying the costs of education.

Even so, research effort is hardly the cost breaker of university education. My salary has increased rather more slowly than inflation (keeping in mind that some components of my total cost of employment, notably health insurance, have grown faster). Meanwhile tuition has sped along at a much higher rate. That money isn’t going into instruction, but it’s not going into research, either.