The Rise of the $10,000 Bachelor’s Degree

October 4, 2012

In 2011, Texas Governor Rick Perry challenged Texas public higher education to develop degrees costing no more than $10,000. This year, a number of schools complied.

Until now, the debate over how best to address the crisis of runaway tuitions has produced calls to action on two fronts: (1) lowering interest rates on federal student loans to enable students to pay more, and/or (2) asking taxpayers to pay more through increasing state subsidies to higher education. But the $10,000 degree stands as a new model, and as a challenge. For the first time, the college-affordability crisis is being approached through focusing us on how institutions might lower costs to students, parents, and taxpayers.

This shift is the first sense in which the $10,000 degree might be considered revolutionary. The second, deeper sense is social-psychological. The very existence of $10,000 degree programs appears likely to spark a revolution of rising expectations on the part of students and their parents. A recent national study finds that 75 percent of prospective students deem college unaffordable. A 2010 survey found that 80 percent of Texans think Texas colleges and universities can be run more efficiently.

These perceptions have a basis in reality. Total student loan debt has risen to roughly $1 trillion, an amount necessary to keep up with tuitions that, nationally, have risen 440 percent in the last 25 years. This rate of increase is twice that of health care costs.

In response, according to a recent Sallie Mae study, “more families report making their college decisions based on the cost they can afford to pay.” The average amount students and their families are paying for college has fallen for two consecutive years.

Another study released this summer shows that approximately one-third of all higher education institutions have unsustainable business models. Too many institutions of higher learning today are overly complex and mired in debt.

Accordingly, the mere announcement of $10,000 degree plans seems likely to spark expectations for more such programs—at every Texas public college and university and, where feasible, in every field of study. It is in this, the deepest sense, that criticisms of the fledgling $10,000-degree program may miss the larger point: The ground has shifted beneath the feet of traditional public higher education in Texas as well as the rest of the country.

In light of the above, a new study I authored (“Anatomy of a Revolution? The Rise of the $10,000 Bachelor’s Degree”) recommends the following:

• Require all Texas public colleges and universities to submit to the Texas Higher Education Coordin-ating Board feasibility studies for crafting $10,000 degrees in their four most popular degree plans as well as for all those they offer in STEM (Science, Technology, Engineering, and Mathematics) subjects.
• Require all these schools to measure and report student learning outcomes at the freshman and senior years through administration of the Collegiate Learning Assessment (CLA). Degree programs costing $10,000 should be subject to the same requirement.
• Institute reforms that tie university funding to student learning outcomes, as measured by the Collegiate Learning Assessment. Such funding should apply equally to traditional as well as to $10,000 degree programs.
• Require all Texas public colleges and universities to list on student transcripts not only the grade the student received for each class, but also the average grade in each class. This would tell prospective employers whether or not a given student’s high grade point average was the product of truly exceptional work or of enrollment in what today’s students call “mick” (for ”Mickey Mouse”) courses.

Thomas K. Lindsay (Ph.D., University of Chicago) is the director of the Center for Higher Education at the Texas Public Policy Foundation.