Why US colleges are the world's best but way too expensive

Each year, the Times of London produces a rankings guide to the world's best universities. This year's guide has just been released, and the U.K. universities of Oxford and Cambridge top the rankings. American universities remain on top, but are losing ground to Asia and Europe.

Those results speak to the rankings guide's credibility: It is pretty good, but not perfect.

As the Wall Street Journal explains, the guide fails to consider China's use of universities as "journal churning" factories. Producing as many research papers as possible, Chinese universities know they can boost their research value score in comparison to other institutions. The research papers don't need to be useful; they just need to tick a box "one more article." The Times report also overweighs academics (and thus liberals) when assessing colleges. It would be more accurate were the Times to use high-societal achievers such as Pulitzer Prize winners, CEOs, or economists to judge how good universities actually are.

And were these considerations included, the U.S. would retain an unchallenged position as the world's top center for value-assessed research and education. That's because whether it be medical developments, private sector innovation, or impact-based philosophy and history, no other nation comes close to America's knowledge factory. That includes Oxford and Cambridge universities.

Money tells a big part of the tale here. After all, high-end research is rarely cheap.

But considering Oxford University's 2015-2016 research budget was $700 million, were it a U.S. university, it would be only 23rd on the nation's research budget list. Even worse, Cambridge University's $491 million a year would put it in 38th place!

Still, there is one thing that Oxford and Cambridge do better than top U.S. universities: cost-control in other areas. Consider undergraduate tuition.

First off, a quick caveat: U.K. students have their annual tuition capped by the government at $12,041 a year, so it's not fair to contrast those fees with private sector U.S. colleges. That said, if we consider overseas students at Oxford or Cambridge (who do not receive U.K. government subsidies), the rates become comparative. This year, an overseas student at Oxford or Cambridge will pay a maximum tuition of $31,109 or $38,054 (excluding medicine) respectively. While those rates might seem high, they are nothing compared to the U.S.

Trawl through the websites of U.S. Ivy League schools, and you'll find annual tuition fees at Brown come in at $52,213, Dartmouth at $51,468, Yale at $51,400, Princeton at $47,140, and Harvard at $44,990.

Why so much higher?

In part, it's due to the higher salaries of professors. But it's also a consequence of vastly expensive expenditures U.S. colleges make beyond teaching. American colleges spend big in areas such as student accommodations, lecture halls, social facilities, and administration. To be sure, these facilities are far superior to those in Britain, but they carry a heavy cost in the form of tuition outlays. The consequence is that too little of each student's fees is actually spent on education. More problematic, this pricing system means that those from low to middle income backgrounds require government subsidies in order to study. And sadly, thanks to our acceptance that this price inflation is the norm, Americans are accepting its perpetuity.

As I've argued, we need a different approach. We should work to reduce tuition costs by bold federal grant reform and in staffing structure changes. Most of all, we must remind ourselves that the key to a good education is not luxury, but good teaching.

Until reform comes, however, I thoroughly recommend American students look abroad for their undergraduate study. For one, consider my alma mater, King's College London's War Studies department. Studying for a B.A. in War Studies will only cost you $22,231 a year, and in return, you'll learn the ways of spycraft, diplomacy, and statecraft. You'll get to learn from Alessio Patalano and Andrew Lambert!

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Racial Lies and Racism:  Pesky Asians
   
Earlier this month, The New York Times ran an article titled “U.S. Rights Unit Shifts to Study Antiwhite Bias” on its front page. The article says that President Donald Trump’s Justice Department’s civil rights division is going to investigate and sue universities whose affirmative action admissions policies discriminate against white applicants. This is an out-and-out lie. The truth is that the U.S. departments of Justice and Education plan to investigate racial bias in admissions at Harvard and other elite institutions where Asian-Americans are held to far higher standards than other applicants. This type of practice was used during the first half of the 20th century to limit the number of Jews at Harvard and other Ivy League schools.

Drs. Thomas Espenshade and Alexandria Radford documented discrimination against Asians in their 2009 award-winning book, “No Longer Separate, Not Yet Equal: Race and Class in Elite College Admission and Campus Life.” Their research demonstrated that, when controlling for other variables, Asian students faced considerable odds against their admission. To be admitted to elite colleges, Asians needed SAT scores 140 points higher than whites, 270 points higher than Hispanics and 450 points higher than blacks. An Asian applicant with an SAT score of 1500 (out of a possible 1600 on the old SAT) had the same chance of being admitted as a white student with a 1360 score, a Latino with a 1230 and a black student with a 1050 score. Another way of looking at it is that among applicants who had the highest SAT scores (within the 1400-1600 range), 77 percent of blacks were admitted, 48 percent of Hispanics, 40 percent of whites and only 30 percent of Asians.

The case of Austin Jia is typical of what happens to Asian students. In 2015, Jia graduated from high school and had a nearly perfect score of 2340 out of 2400 possible points on the new SAT. His GPA was 4.42, and he had taken 11 Advanced Placement courses in high school. He had been on his school’s debate team, been the tennis team’s captain and played the violin in the all-state orchestra. His applications for admission were rejected at Harvard, Princeton and Columbia universities, as well as at the University of Pennsylvania. Jia said that his rejection was particularly disturbing when certain classmates who had lower scores but were not Asian-American like him were admitted to those Ivy League schools.

California universities present an interesting case. At one time, they also discriminated against Asians in admissions, but now it’s a different story. As of 2008, Asians made up 40 percent of the students enrolled at UCLA and 43 percent at the University of California, Berkeley. Last school year, 42 percent of students at Caltech were Asian. You might ask what accounts for the high numbers. It turns out that in 1996, Proposition 209 (also known as the California Civil Rights Initiative) was approved by California voters. The measure amended the state constitution to prohibit state governmental institutions from considering race, sex or ethnicity in the areas of public employment, public contracting and public education.

The experience of California, where racially discriminatory admissions policy has been reduced, suggests that if Ivy League universities were prohibited from using race as a factor in admissions, the Asian-American admissions rate would rise while the percentages of white, black and Hispanic students would fall. Diversity-crazed college administrators would throw a hissy fit. By the way, diversity-crazed administrators are willing accomplices in the nearly total lack of racial diversity on their basketball teams. It’s not unusual to watch games in which there’s not a single white, Hispanic or Asian player.

Harvard law professor Alan Dershowitz says, “The idea of discriminating against Asians in order to make room for other minorities doesn’t seem right as a matter of principle.” Dershowitz is absolutely right, but he goes astray when he argues that investigating discrimination against whites raises a different set of questions. He says, “Generically, whites have not been the subject of historic discrimination.” Dershowitz’s vision fails to see people as humans, because what human is deserving of racial discrimination?

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How NYU Can Learn from China

When I studied in London last year as part of my university’s exchange program, I experienced first-hand the inefficiencies of monopolies propped up by central authorities. The “central authority” I speak of is not, perhaps, what you are thinking of: the UK government, or worse, the ‘notorious’ European Union. Rather, I use the term to describe my own university, which in many ways operates like a state. I was inspired to write this blog post after reading China’s Great Migration, by Bradley M. Gardner, because of the parallels I saw between the Chinese government’s control over its economy and my university’s control over housing.

I go to New York University, which is known in New York for being egregiously expensive. At NYU’s London campus, the story is the same. In particular, housing costs turn a high tuition bill into a monumental cost of attendance. But it doesn’t have to be this way. NYU is much smaller than a state, but its housing woes reflect the problems caused by governments that limit economic competition and enforce state-run monopolies; it can learn from these experiences.

When I was choosing where to live in London, I was given the option of choosing between three different dorms: two operated by NYU and one operated by a private company called Urbanest, which also rents to students from other universities. In the two NYU dorms, you are most likely to be placed in a double room in a suite. You’ll have a roommate and share a bathroom with three or more other people. That costs about $8,500 per semester.

In Urbanest, you are guaranteed your own room, most likely in a suite with four to eight other rooms. You’ll have your own bathroom in your room, and share a kitchen with the suite. That’s listed on NYU’s housing website at around $10,000 per semester.

I stayed in Urbanest my first semester and an NYU dorm in my second, and I can say that the quality of Urbanest is undeniably better. The beds are comfortable. The kitchens are large and have ceiling-height windows. And Urbanest rents bikes to students for very cheap. None of this is true of the NYU dorms. It makes sense, though—Urbanest is more expensive, so the quality should be better. The problem is, Urbanest is actually not more expensive—for non-NYU students, that is.

As the Bedford Square News reported last year, NYU students who rent a room in Urbanest through the university pay $3,000 more per semester than non-NYU students, who can book directly through Urbanest for around $7,000 per semester. This means that, in reality, the private company is able to provide a superior product while charging much less than NYU.

And there are other, better—and cheaper—options outside of NYU housing. I stayed in three different Airbnbs in London over winter break (NYU kicks students out of the dorms over holiday) all costing from $28 to $44 a night. Taking the highest rate, $44, that’s just over $5000 for the seventeen-week semester—much cheaper than anything NYU provides. Unfortunately, though, living full time in an Airbnb—as well as booking directly through Urbanest—is not actually an option because NYU requires students studying abroad to live in university housing. Students must book through NYU and pay whatever rate the university decides to charge.

While the motivation behind such a policy may be to ensure the university has enough revenue to cover the costs of its dorms so it can guarantee students housing, the market already does a fine job providing housing at higher quality and lower cost.

NYU’s high housing costs are rooted in the same lack of choice that makes state-mandated monopolies inefficient, and NYU would be well-suited to look at the experiences of economies that have been dominated by these monopolies.

One of the best examples of such an economy is China. In his new book, China’s Great Migration, Bradley M. Gardner outlines how the migration of over 260 million Chinese people from rural China to urban centers helped transform the Chinese economy into the second largest in the world. The migration was so large and rapid that it forced the government to greatly loosen its control over the economy.

In 1979, the Chinese government legalized self-employment (private employment) to absorb the millions of unemployed people who could no longer find work in state-owned enterprises. Since then, the number of private firms has grown substantially and, as Gardner notes, these companies have consistently outperformed the SOEs. That’s because the private sector is forced to adapt to the market—to lower costs and improve quality as the market demands cheaper and better products.

State-owned enterprises, on the other hand, lack such adaptability and do not face actual market costs and prices. Just like NYU’s housing, Chinese SOEs that are still viable stay above water only because they enjoy monopolies. In both cases, monopolies created by central planning are inefficient, and the private sector can do a better job.

Mr. Gardner notes that SOEs are the biggest threat to China’s continued development and that China would only benefit from selling off these companies. Similarly, as NYU faces increasing pressure over its cost of attendance, it would do well to end its monopoly on housing and the corresponding price inflations at its campuses abroad, letting the market dictate where students live.

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