Once again, Dean Dad poses an interesting question. He asks what one year of college should cost.
Asking what a year of college “should” cost is kind of a bizarre question. It should cost the accumulated costs of all the things determined to be necessary to provide an education. And remember, we must take care of our folks (I agree, btw) so this must include health care, and retirement, and long and short term disability insurance, and… (on and on…)
Costs are costs. You are really asking what you should “price” the costs to the student.
What follows is a novel idea. I have spent a good bit of time working through this, but will have to hold off on the longer explanation until later.
Let’s start here. Figure out what your costs are. All of them. The fully burdened, bottom line of the college budgeted expenditures.
Then divide that number by the number of students. (Fine, we can use the fictitious “FTE” if you insist, or some other aggregate such as cost/student/credit hour.)
That’s the cost. Pretty simple really, and no politics involved.
Now to get to the real question you are asking… we can work our way down to the next piece. Go back to that really big cost number. Now, take all the money you get from grants, state funding, endowments, and so forth, and subtract that out from the “bottom line” cost figure.
That’s the amount you need to recover from “other sources” to simply break even.
The question starts to get sticky here. What are those “other sources?” At this point, we tend to see that simply as “tuition.” I would propose a new idea.
Let’s stop charging the students tuition, because they aren’t the customers. If they were truly the CUSTOMER we would charge them the full rate from the start. So, instead of creating systems of scholarships, and vouchers, and payment plans, and loans, let’s instead reach out to the REAL customers of the community colleges and the universities–the businesses.
Think about this: get them not to sponsor a scholarship, but rather a chair, or a department, or a college. Put their name on it. Give them full credit. And get enough to put it in a trust, and run that line item from the interest.
NOW, you have students that aren’t overburdened with debt when they leave, that can be hired at a lower wage because honestly, they don’t have to pay 800-1400/month in student loan payments. What they DO get paid when they graduate will then go directly to the economy, supporting those around them–the small and large businesses in the very community you serve.
Let’s get the banks (and student loans) out of the discussion. Let’s make education count again.
And let it start by being honest with ourselves about the real cost of education, the difference between costs and prices, and finally admit who our real “customers” are.