A price test Confession of the Dean of a Community College

A price test

What if the cost for a vocational program is lower than for a traditional academic program?

In most cases, vocational programs cost a lot more to run organizations. They have expensive equipment that needs to be maintained, they usually have small classes and it is often difficult to find supportive faculty. Some colleges deal with those higher costs through internal cross-subsidies, which allow the academic sector to cover some of the vocational deficits of vocationalists. Others charge extra fees for vocational programs – whether in the form of course fees or program fees – to help offset additional costs. Most split the difference, charging more but still not enough to offset the full cost.

Apparently, the Western Colorado Community College is flipping the script. It actually charges 40 percent less for vocational programs.

I’m curious. Paul Fain’s article mentions that the WCCC is relying on a large grant to make a financial difference, which answers my first question. But I would be interested to see if this move would affect enrollment, and if so, in which group of students.

While this is probably not the purpose, I can see it playing into the description that liberal arts are “elite”, as opposed to more energy-intensive programs. (If certain students value liberal art and others do not, we can expect liberal art enrollments to be enriched.) There is a deeper historical embarrassment: Classically, “liberal art” was replicated as “service art.” However, there is no denying the widespread concern among students, parents and politicians about the economic benefits.

A few years ago on my own campus, we conducted an behind-the-scenes analysis to see which programs were the most profitable and which were the least. Generally speaking, traditional academic fields subsidize more vocational areas. This came as a shock to some people who loudly and publicly assumed that we were wasting money in the ‘meaningless’ class. In fact, if we were to move away from the liberal industry, we would need more operating funds to survive. The WCCC is using a large grant to fill the gap. The point is, it takes a lot of money to be aggressively energy-intensive.

In the broader market, there is nothing strange about sellers using pricing to encourage sales. If “we” want more students to take vocational courses, there is a consumer-level rationale for discounting those courses. But the general market parallel breaks down quickly when we see “we” in that sentence. A policy may decide that they want more students to go into welding and fewer students to go into history, but if it fails to provide funding to cover the cost of offering welding leaving an institution, it will not work on the scale. This is because the college does not capture the benefits of a programmatic shift. Students who go on to make more money – assuming they do – are not obliged to send more to college. If costs are institutional but benefits are social, we can predict consistently low investment. If “we” is a politics, it should be funded more publicly for student-level concessions. If “we” are the college, then its survival is first and foremost. The two trends of public disinvestment on the one hand and wider public intervention on the other are in increasing tension. He who makes cheap outs in the growing piper still wants to call the tune. Missing third party payer, it is difficult to maintain.

Still, I have to commend WCCC for having the courage to try something unusual. If it works, I predict colleges will make some pretty well-directed arguments to legislators.

Program Note: Due to holidays and some travel, the blog will be closed next week, returning on Monday 6th June.

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