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No-frills colleges don’t have big costs

Marketplace Staff May 5, 2009

No-frills colleges don’t have big costs

Marketplace Staff May 5, 2009


Kai Ryssdal: Secretary of Education Arne Duncan is out and about today. He’s off on a listening tour to see what parents, teachers and students have to say about No Child Left Behind. President Obama has said he wants to make some changes to the Bush-era education law.

Students who are about to leave high school behind still have some work to do before they can head off to college in the fall. Such as, figuring out how to pay for it. Policy-makers in Pennsylvania are looking for a new way to lower the cost of higher education. Joel Rose reports from Philadelphia.

JOEL ROSE: I’m standing on the campus of the University of Pennsylvania, where a construction crew builds what will eventually be a $14 million fitness center and weight room. These are exactly the kind of perks that prospective students have to come to expect, even as tuition bills keep getting bigger.

JOE Torsella: Somewhere in this educational landscape, there should be a no-frills model.

Joe Torsella is chairman of the Pennsylvania State Board of Education. He says the board is worried that college is becoming too expensive for too many families. So earlier this year, the board recommended that Pennsylvania consider creating a different kind of school, one where you can get a decent education without the fancy dorm rooms, food courts, and athletic facilities.

Torsella: There ought to be this option. And we oughta in the spirit of experimentation see if there is a market for it.

The no-frills model is already popular in Europe, where it’s common for students to live with their parents during college. And there are signs it could work here, too. Richard Vedder directs the Center for College Affordability and Productivity in Washington. Vedder says enrollment is up at community colleges, and at for-profit colleges like the University of Phoenix.

RICHARD Vedder: They are pretty much no-frill universities. They are in office buildings near the freeway with good parking. And these schools are growing very rapidly. So that suggests that perhaps the Pennsylvania experiment might work.

Some traditional four-year colleges are already experimenting with a low-cost approach. The sticker price at Southern New Hampshire University is $35,000 a year. But commuter students in a new pilot program pay less than a third of that. University president Paul LeBlanc says they’re getting the same education without the comforts of campus life.

PAUL LeBlanc: So for them, the ability to take all their classes in the morning, to work, to live at home was the most important. They wanted the academic experience. What they were less interested in were fitness centers and food courts.

LeBlanc says those extras drive up the cost of college for everyone. It might seem crazy for prospective students to put so much emphasis on things that don’t improve the actual education they’re getting. But some economists say it’s perfectly rational.

CHARLES Hatcher: This is all essentially about investing in a good reputation.

Economist and consultant Charles Hatcher says students are trying to send a signal to prospective employers that they are the best of the best.

Hatcher: Students have to do it by going to a reputable school. And schools have to signal to prospective students that they’re that sort of university. And climbing walls or fancy dorm rooms might actually be ways to do that.

When it comes to college, Hatcher says there will always be some consumers who equate price with quality. But Joe Torsella at the Pennsylvania State Board of Education thinks the downturn is starting to chip away at that perception.

Torsella: There are college students who don’t want those amenities. We heard from them. And it certainly seems like there are enough to support one institution that goes in that direction.

Torsella doesn’t expect Pennsylvania to break ground on a new university anytime soon. But he does hope that an existing school finds a way to offer four-year degrees, without the bells and whistles.

In Philadelphia, I’m Joel Rose for Marketplace.

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