America's global economic strength has long been driven by the quality and accessibility of its higher education. This has been particularly true since passage of the GI bill at the close of World War II. The new access it delivered defined another opportunity to live the American Dream.
Now that opportunity is in jeopardy. Consider this:
• In 1970, a student could pay his or her way through the University of Minnesota by working 24 hours a week at a minimum-wage job. Today, it would require an impossible 61 hours.
• The average student today accumulates $30,000 of debt, costs that increase in graduate school. For instance, in medicine the typical debt load is $150,000. This influences students' choices, with specialties gaining and general practice in decline.
• Nationally, student debt totals around $1 trillion. About 15 percent, or $150 billion, is expected to go into default.
These trends will hurt our economy. There will be fewer housing starts, difficulty attracting teachers and doctors, as well as the increased debt itself. Rising costs will also prevent many talented individuals from seeking advanced degrees in areas vital to economic growth. A recent Price-Waterhouse report noted that the United States is losing its "innovative edge" in medical technology to countries like China and Brazil.
Over the past several months, troubling stories have been published in the Star Tribune, Washington Post and Wall Street Journal concerning to the University of Minnesota's administrative bloat and excessive compensation costs. Despite administrators' efforts to brush aside the importance of these rising costs, it is of vital importance that we deal with them and prevent further harm.
The reality is that higher-education leaders have created a financial model that focuses on their importance, and it is spiraling out of control. This is increasingly fueling media criticism and is identified as a cause for sharp increases in tuition. It only exacerbates the problem when many universities, including Minnesota, launch studies to compare their rising costs with those of other spiraling systems and proclaim this to be "the market." In fact, administrative salaries have exploded.