Research Costs Said to Inflate Undergraduate Tuition Prices

The cost of a college education skyrocketed during the last decade because universities started using undergraduate tuition dollars to subsidize applied research and attract corporate investors, an article in The Atlantic argues.

But that hypothesis is drawing a skeptical reaction from some higher education experts, including Harvard President Neil L. Rudenstine.

"I do know a lot about why fees went up between 1982 and 1987 and it had nothing to do with that," Rudenstine said in an interview this week, when the content of the article was described to him.

The article suggests that the trend of applying tuition money to research costs benefited private corporations in Europe, Japan and the United States at the expense of college students and taxpayers.

"To compete with industry for scientists and engineers, [research universities] have had to pay six-figure salaries and provide support staff and state-of-the-art laboratories and equipment--which can add up to millions of dollars a year," says the article, in the March issue of the magazine.

"The heightened emphasis on capital-intensive applied research has led a number of schools to cut back course offerings and to eliminate entire departments that don't pay for themselves," the article says.

According to some experts, the article does not explain why tuition at liberal arts colleges has kept pace with research universities. And it does not take into account the tight budgetary belts many schools were forced to don during the steep period of inflation in the late 1970s and early 1980s.

"The seventies were a very, very tough time for universities," Rudenstine said, referring to his tenure as provost at Princeton University as an example. Faculty salaries, measured in real terms, dropped significantly in the several years before 1982, even as institutions deferred major maintenance expenses and slashed the development of new programs, he said.

"You cannot see the eighties divorced from the seventies," Rudenstine said. 'Everybody looked from '82 to '87 and said. 'What happened to tuition?' Well why don't we look from '88 to '93? You'll find that fees are well down. We still have our problems...But most of the catching up got done between '82 and '87."

Rudenstine said the link is not as clear as the article seems to suggest.

"If anything has been really watched carefully to try to distinguish it as strongly as possible from undergraduate education, certainly research costs at most of the universities I know anything about have," Rudenstine said. "It's one reason why the sponsor is always asked to pay the direct costs and then to pay what we think is the right share of the indirect costs."

Elliott Negin, managing editor of the American Journalism Review and author of the Atlantic article, said the share of indirect costs paid by corporations may not be enough.

"The company pays an access fee essentially, but it's a lot less than if they had to build their own buildings, hire their own scientists, [or] build their own libraries," Negin said. "It would costs infinitely more money."

According to Arthur Hauptman, a Washington, D.C.-based consultant in higher education policy issues who is quoted in The Atlantic, the story's argument is not entirely sound.

"I think it's an interesting thesis and in some cases it may well have applied", Hauptman said. "The thing that's sort of missing...[whether that tells] the story of the tuition of institutions where 90 percent of the students attend--which are not research universities--where their tuitions went up as fast."

According to Hauptman, who in 1990 concluded a two-year study of rising tuition costs, there are a variety of reasons for the higher fees.

"At public institutions it's clear that state appropriation patterns have a big influence on tuitions", Hauptman said. "In the private sector it's a lot more complicated. The strategy is to compete for declining numbers of students, not through lower prices, but through enhanced services and facilities."

The issue, according to Hauptman, is whether higher costs for necessary investments brought about higher tuitions, or whether the increased fees allowed colleges to make improvements designed to attract students

Rudenstine said the link is not as clear as the article seems to suggest.

"If anything has been really watched carefully to try to distinguish it as strongly as possible from undergraduate education, certainly research costs at most of the universities I know anything about have," Rudenstine said. "It's one reason why the sponsor is always asked to pay the direct costs and then to pay what we think is the right share of the indirect costs."

Elliott Negin, managing editor of the American Journalism Review and author of the Atlantic article, said the share of indirect costs paid by corporations may not be enough.

"The company pays an access fee essentially, but it's a lot less than if they had to build their own buildings, hire their own scientists, [or] build their own libraries," Negin said. "It would costs infinitely more money."

According to Arthur Hauptman, a Washington, D.C.-based consultant in higher education policy issues who is quoted in The Atlantic, the story's argument is not entirely sound.

"I think it's an interesting thesis and in some cases it may well have applied", Hauptman said. "The thing that's sort of missing...[whether that tells] the story of the tuition of institutions where 90 percent of the students attend--which are not research universities--where their tuitions went up as fast."

According to Hauptman, who in 1990 concluded a two-year study of rising tuition costs, there are a variety of reasons for the higher fees.

"At public institutions it's clear that state appropriation patterns have a big influence on tuitions", Hauptman said. "In the private sector it's a lot more complicated. The strategy is to compete for declining numbers of students, not through lower prices, but through enhanced services and facilities."

The issue, according to Hauptman, is whether higher costs for necessary investments brought about higher tuitions, or whether the increased fees allowed colleges to make improvements designed to attract students