CF hear reality check

Economist delivers report on state of liberal arts colleges

The College Faculty received a healthy dose of reality this week when an expert on the funding of higher education spoke about the future of liberal arts colleges. Morty Schapiro, professor of economics and vice-president for planning at the University of Southern California, spoke to the faculty about the critical state of small liberal arts college, saying that to be successful, Oberlin would have to remain in the highest echelon of private liberal arts schools to be perceived as a worthy investment by the richest segment of the market. It is the richest segment, the no-need students, that will keep schools like Oberlin afloat.

Schapiro, who wrote a report on residential liberal arts colleges for the Journal of the American Association of Arts and Sciences, was invited to speak and provide "a ray of hope" on the scary state of small private educational experience.

What he reported was what everyone knew, but no one was brave enough to say. In his research, Schapiro defined liberal arts colleges as modestly selective schools where at least 50 percent of the degrees granted are in the liberal arts. Only 95,000 students are currently enrollment in schools that fit that definition, down from 400,000 in 1945. "To see that part of the higher education sector so imperiled is scary," Schapiro said.

Much of Schapiro's research centered on the economics of education. He analyzed expenditures and revenues for liberal arts colleges and compared them to larger universities. He reported that 37 cents per dollar go to administrative costs at liberal arts colleges compared to only 18 cents per dollar at larger universities.

Schapiro said the high burden was not an efficiency problem, and that in general, liberal arts colleges were more efficient than large research universities. "There are a lot of fixed costs and few people to spread the burden over. People have to understand that to provide this type of service is incredibly expensive," Schapiro said.

So how does a college manage to pay for it all? Schapiro addressed this question when he spoke about the revenues of liberal arts colleges. Because their revenues are inherently less tax-based and less diversified, colleges like Oberlin rely heavily on net tuition revenue. The question becomes, he said, "How can you continue to attract low need and no need students? You need them to pay the bills."

Among the richest segment of those in the higher education market, 26 percent attend private four-year colleges, down from 32 percent in 1981. Only 6 percent of that richest group attend highly selective four-year colleges, a statistic that has remained about the same since 1981.

If the market share of rich students has remained the same for private, highly selective four-year colleges, where has the major decline taken place? Schapiro pointed to a decrease in enrollment by rich students at low and medium selective colleges and warned that there is a "flight to perceived quality" among schools.

"You've got to make sure that Oberlin stays in the highly selective bracket. It is better to be perceived as a luxury good," Schapiro said.

He then gave some suggestions as to how a school can be perceived as a luxury good. "A lot of schools try to save money by changing what they are. Increasing class size is a recipe for disaster," he said.

The second suggestion was to make marketing a priority. By advertising versatility and options, students will be attracted. "You've got to change with the marketplace. The glamour of the professorate is probably not as great as it used to be," he said.

Next, he implored the school to pay attention to appearances by maintaining attractive grounds and buildings. "The two first things to go [after budget cuts] are library acquisitions and operations and maintenance. It's trivial and sounds stupid, but looks really do matter."

Schapiro felt that all of this effort to preserve liberal arts colleges is well worth it. By setting the standards of teaching, liberal arts colleges keep larger institutions from discounting too greatly the value of teaching. "If the liberal arts sector becomes more and more marginalized, there will be no one to keep the research universities honest."