American Higher Education in Crisis

Ever since the 1990s, America’s economy has been developing quickly, its colleges have had plentiful financial resources and its power has been increasing. America’s higher level education practically became the model for the world. But within the United States, the gap between the rich and the poor has been becoming more and more serious, and tuition for college has been steadily increasing. It is becoming more and more difficult for the average family to afford the cost of college. Education is a means by which people can achieve social mobility. However, at the same time that America’s higher education pursues exceptional standards, it is in danger of losing this capability. Are American colleges, especially famous colleges, ultimately an institution for the privileged or an engine of opportunities? What kind of society will higher education create?

In the background of the huge educational crisis, a book called “Equity and Excellence in American Higher Education” was published in 2005, and won the Outstanding Book Award from the American Education Research Association in 2006. The main author, William G. Bowen, is the unquestionable leader in American higher education scholarship. In 1972, at age 39, he became the president of Princeton University. After leaving this position in 1988, he became the president of The Andrew W. Mellon Foundation (until 2006). “Equity and Excellence in American Higher Education” and Bowen’s “Crossing the Finish Line: Completing College at America’s Public Universities” both looked at American universities. The former emphasizes elite colleges, and the latter emphasizes public universities. Combined, these two books basically compose a comprehensive evaluation of the history of American higher education until today, the current situation in America, and the future of American higher education.

China’s higher education is also experiencing unprecedented transformations. Ever since the 1990s, China’s universities started to expand rapidly. At the beginning of this century, a campaign to build world-class universities began, and the taxpayers’ money all flowed into a few famous universities. However, the quality of education did not improve. On the contrary, it worsened and lead to a structural imbalance in the universities, causing many university students to lose their jobs. Moreover, many students were so far in debt that they almost went bankrupt. The costs of college became more and more difficult for average families to afford. Instead of promoting social equality, colleges intensified the widening of the gap between the rich and the poor. In short, China’s higher education sank into a huge crisis.

In the past 10 years, as China’s higher education has developed, many have cited the American model as the principle element of reform projects. Yet it was at this time that America’s goals, system and policies were misunderstood or distorted. In the book that Bowen principally authored, he gave us a more complete explanation of the American model.

Are Equality and Excellence in Conflict?

On the eve of the American War of Independence, the 13 colonies barely had 750 students studying at college. At that time, those studying at the university level were truly the cream of the crop. In 1940, America began to do research on university education and was in the process of overtaking European universities. For this reason, about 4 percent of Americans over 25 graduated from university. By 2002, this proportion surpassed 25 percent. Of the American population aged between 25 and 35, 39 percent had received a college education. The trend in history is clear: Colleges changed from being an elite institution to a popular institution.

After this elite institution has become an institution for the masses, can college education still guarantee a superior quality? The final evaluation of American higher education has concluded that equality and excellence do not oppose each other; in fact, they can complement each other.

The reasons for this conclusion are as follows:

First of all, universities must cultivate excellence; thus, they cannot reject talented students who are in financial need. Thomas Jefferson, one of America’s founding fathers, pointed out that the goal of American education is to nurture the “natural aristocracy of talent and virtue.”

This so-called “natural aristocracy of talent and virtue” deliberately differentiates itself from European tradition of hereditary aristocracy. Jefferson once said the kings of Europe were not fit to be town mayors in America. America values merit and not family names. Universities select those with the best talent, which should be purely based on ability, and not affected by economic factors.

If we make the university students who are competing to be accepted into university the denominator of a fraction and make the university students accepted into university the numerator, then one can discover that in American history, the denominator has always been increasing faster than the numerator, which is why American colleges are still elite. As proved by many tests, the IQ of American university students has been increasing ever since university was popularized. In its early years, Harvard and Yale only recruited students from aristocratic boarding schools in the New England area; in essence, it was just a local university. Almost all the children of wealthy families could study there. Today it has become a world class university with students around the world competing to be accepted. The IQ of today’s Ivy League students has reached a level unthinkable to those stupid rich children who studied there a couple of hundred years ago.

Second, the development of American society made high demands on the scope and scale of higher level education. American industry continually rose higher and higher, the service industry and high technology industry also flourished and even the manufacturing industry became a white collar industry. For this reason, universities had to make a majority of the population become people who worked with their brains. However, America faced many difficult challenges making this happen. If one compares the proportion of the population between the ages of 25 and 34 that received a college education, in 1991, 30 percent of Americans received a college education. Only Finland (33 percent) and Canada (32 percent) had similar proportions. But by 2002, 51 percent of Canadians, 50 percent of Japanese, 41 percent of Koreans, 40 percent of New Zealanders and 40 percent of Norwegians between the ages of 25 and 34 had college education. All these countries surpassed America (39 percent) and many European countries were close behind. The reason that America lost its leading position after popularizing higher education is not because it was unable to meet the higher quality and number demands, but instead because compulsory education is rather backward. Since the education was unequal, colleges could not provide enough students and compulsory schools were relatively backward.

Third, an excellent university has to maintain its diversity both within and without the classroom. The future leaders of society, which are educated by the elite universities, must understand the classes of society and every corner of their country. For this reason, American universities’ basic mission should be to integrate many races, cultures, and classes. Universities should recruit from every level of society to better reflect society.

Fourth, a participatory democracy requires that the majority of its citizens have a good education so that they can understand an abundance of information and make careful decisions on the basis of that information. If America’s educational resources are used up by a small number of people, then the democratic system will have a crisis due to a lack of participation, which will threaten the democracy itself.

Why American Universities are Exceptional

After establishing the four above objectives, how did American higher education perform? In terms of outstanding ability, the evaluation gives American colleges an A or even A+. None of the universities in other countries can compare with American universities. The book provided a lot of data for evidence, and the facts were all clear.

What caused American schools to become exceptional? There are three main reasons: first, sufficient funds. America spends approximately 2.7 percent of its GDP on higher education. In comparison, most developed Organization for Economic Co-operation and Development (OECD) countries spend 1.3 percent of their GDP on higher education, on average. America spends $22,234 on every college student, which at least double the average OECD country’s expenditure of $10,052 per student.

Second, the reason why America has adequate funds is because of the advantages of its system. America’s higher education is more diverse than Europe’s. In Europe, universities are principally state run and are directly subsidized by taxpayer money. Whereas in America, the elite national schools such as the Ivy League universities are basically all private. This system causes a large amount of non-government funds to flow into higher education. The tuition fees of America’s private universities are not restricted by the government. The price is very high, and the rich families will pay it; at the same time, the college will give money to poor students to give them large scholarships. This open and flexible system allowed American higher education to receive funding from society.

Third, besides funding and system design, the most important reason for American higher education’s success is a sufficient number of students applying to study at university. Just before World War II, America’s compulsory education surpassed Europe’s. This was the solid foundation on which America became a world leader in higher education after the war.

In short, superior financial strength made it possible for America to construct a top quality higher education infrastructure, attract top quality professors and maintain a large scale. Students are a core element of higher education because they guarantee a sufficient number of applicants. Thanks to the popularization and equality of education, more and more people have the opportunity to get an education.

The Weak Points of American Higher Education

As far as equality goes, American universities’ performances are much lower. Their score is barely a B. In the last century, American higher education was improving by leaps and bounds, but by the mid-seventies the progress slowed down considerably. This made it difficult for America to create the “human capital” that the new era needed. This is the failure of American higher education.

Why Would This World-Class Higher Education System Fail?

Looking back at recent history, American universities only established principles of equality in the modern sense in the past thirty or forty years. Traditionally, university education was an institution for the elites, strictly monopolized by the elite social classes. This was the case around the world. America established its country on a grassroots democratic governing system, so it was not the same as old Europe. For example, the goals of university were to promote Jefferson’s idea to train the “natural aristocracy” and not the hereditary aristocracy. Before America became a country, Harvard University had the noble tradition of providing financial aid to the poor. However, this tradition and today’s concept of equality are very different. The current concept of equality has replaced the theory of genius of the past and its goal is to overcome the fixed nature of the social classes and increase social mobility. For this reason, universities continually give low income students extra attention to encourage them to rise above their socio-economic status. The establishment of these value-based goals basically stem from the civil rights movement and the women’s rights movement of the 1960s and early 1970s. People of color were accepted into famous universities and many main universities let men and women study at the same university.

Even though one of America’s founding principles included “all men are created equal,” it took nearly 200 years to make the traditional elite institution called university to adopt the modern conception of equality. Furthermore, putting this value into practice is a difficult and unprecedented process.

Let’s review the efforts and accomplishments of American universities to pursue equality in education during the past 30 or 40 years. In terms of effort, American universities adopted a number of powerful measures which provided financial assistance and support to the weaker classes. The most popular of these measures is to separate the household financial situation from the application process. The university admissions offices do not see the students’ household financial situation; they make a decision purely by looking at the students’ merits. After the admissions process, the universities will think of a way to provide financial aid to help students pay for tuition. In this way, the children of rich families do not have an unfair advantage over the poor students. Of course, in order to implement this policy, universities have to establish their financial strength.

However, the famous Ivy League schools do not make up mainstream American higher education. In order to fully benefit the lower classes, the government must have a complementary policy. Starting in 1965, the federal government gradually improved the student loan system, putting a limit on the interest rates of educational loans, and even creating a period where students did not have to pay back interest on their loans. Furthermore, all kinds of private institutions and individual state governments increased financial aid for low income students who wanted to receive a higher education.

In these past 30 to 40 years, scholarships also experienced revolutionary changes. The top universities not only provided free education for low income students, but also for some students in middle class families. In other words, if a student’s annual household income was below $60,000 to $70,000 (every school has its own policy), then the school would pay for the students tuition, room and board, and other incidental costs. Of course, only a few of the best universities are able to do this. Some other top universities have come close to this goal of a free education, or at least guaranteeing free education for the poorest students. However, most public universities can also give significant financial aid to low income students with help from the government. For example, based on the data on students who applied to get into major state universities in 1999, students from families of the lowest 25th percentile income bracket on average received free tuition as well as $3000 to help pay for living expenses. Even though the annual living expenses and incidental expenses of a college student totals far more than $3000, students can also use loans and income from a part-time job to help pay for these expenses.

One look at these scholarships and it is easy to see why American universities would be considered a paradise for the poor. But a different set of statistics shows that the opposite is true.

Using statistics up to 2000, students from families of the lowest 25th percentile income bracket were first generation college students. Only 9 percent of these students graduated by age 26. On the other hand, students from families of the highest 25th percentile income bracket had at least one parent that had received a college education. When these students reached age 26, 68 percent of them earned a diploma.

Why is it that things are still unequal even though universities and the government are implementing these goals to increase social equality? Why can’t even generous scholarships change this inequality? In this aspect, the ultimate evaluation was extremely complicated.

Education cannot exist in isolation from society. The ills of education are often an extension of society’s ills. America has one of the biggest gaps between the rich and the poor in the Western world. Regarding educational fairness, it does not perform as well as other developed nations, which makes sense. The inequality in American higher education stems from the realities of compulsory education and socioeconomics. The American government has a high degree of separation of powers with the local government. Compulsory education has been in the jurisdiction of local government since the beginning, which means that the funding mostly comes from property taxes from the school district (usually at the town level). This kind of decentralized financial system is more effective than Europe’s centralized government most of the time. Especially when America was first founded, the society had a more equal distribution of wealth, local financial resources were more plentiful, and even citizen’s consideration for the public good was much more than it is today. It was enough to make Tocqueville swoon. Building schools, libraries and other public institutions using local funding was always popular with local society. Everyone competed with each other to build the best institutions. It’s no small wonder that America’s compulsory education quickly surpassed Europe in the second half of the 20th century and the beginning of the 21st century. However, the gap between the rich and poor is becoming more serious every day, and the rich and the poor live in separate communities. Since the real estate in rich communities is very expensive, these communities have ample tax revenue and have ample resources for education. Meanwhile the housing in poor communities is cheaper, causing the tax revenue to dry up quickly, which makes it difficult for the schools to survive. Moreover, the legacy of slavery and segregation still exists in today’s society, causing the education levels of African Americans and Latin Americans to be extremely low. This has dragged down the average level of education of America’s youth.

The only way to solve this problem would be for universities to adopt a series of measures that are out of their reach. These measures would not just include reforming compulsory education, but also involve serious social problems like racism and poverty. Otherwise, no matter how much the universities stressed equality, many children of disadvantaged groups would still have a hard time getting to college. This, however, does not mean that universities are completely helpless. Of those students that did manage to reach the university level, who should get priority? Is the university recruitment process really doing everything in its power to promote social equality? This is a main issue on which universities should focus their attention.

Based on these findings, this evaluation has put forward the following policy suggestions for American higher education. First, universities must keep policies such as Affirmative Action that give preference to African Americans and other minorities. Second, universities should make policies to give preferential treatment to low income students. Third, the government should increase its investment in scholarships and give more financial aid to low income students.

The above evaluation of America’s higher education gives a serious warning to Chinese higher education. The inequality caused by the gap between the rich and the poor was unavoidably reflected in education, which ultimately hindered the formation and speed of accumulation of human capital. This greatly weakened America’s competitiveness. Even though American universities have made this one of their main objectives and have even been using enormous financial resources to battle this problem for several decades, they are no match for the powerful forces of society. The gap between the rich and the poor is even more apparent in China, which will also manifest itself in unequal education. But China’s higher education never set the goals of equality like American higher education did 30 to 40 years ago. China’s universities have always favored the rich. Considering recent trends in population structure and reproductive behaviors, the high income urban dwellers who have been enjoying the best education are having fewer children. Meanwhile, the birth rate of farmers and rural workers, who have been neglected as far as education goes, has always been higher. In the next few decades, this might cause the educational level of the entire population to decrease. At the same time, the population is aging and the size of the labor force is also decreasing. In the future, it will require the Chinese economy to progress from its labor-oriented economy to an added value, creative industry economy, which will increase demands on the quality of labor and education. The current inequality in education hinders the ability of the whole society to improve. In China, both decision makers and public opinion have grossly underestimated the difficulty and the importance of establishing educational equality in a society with such a serious gap between the rich and the poor. America’s experience tells us that even though China will soon establish the goal of equality in education and the policy will be implemented very swiftly, the results in the next few decades are difficult to guarantee. Therefore, the experience of American higher education has undoubtedly made it clear that Chinese universities are in a serious crisis.

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  1. U.S. Higher Education institutions will not admit that the true inequality is based in the wealth and net income of students or their families. Instead, they approach equality through the concepts of “race and ethnicity”.

    Far from solving the inequities in access to education, the “affirmative action” approach worsens the situation, though no one has the will to attack affirmative action.

    The result: those designated as racially “white”, still the majority of the poor in the U.S., have less assistance and fewer opportunities to gain desirable slots in the higher education system.

    The better solution would be to admit that the system is “economically” biased, rather than racially or ethnically biased, and provide subsidies to all U.S. citizens, regardless of race or ethnicity, who fall below realistic, pre-established income levels.

  2. Excellent article, but I must correct you on one point…with the exception of only a couple of institutions (Hillsdale College comes to mind) ALL colleges in the U.S. receive government funding in one form or another.

    The cost of tuition is truly becoming a problem here, as you state, with many students finding themselves coming out of college and just starting into the workforce, with debts equivalent to buying a house.

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