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What The Media Tell Americans About Free Enterprise

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June 1996


Issue Analysis: No Skepticism Toward College Costs
Networks Don't Ask About Tuition Inflation

Imagine that there's a product or a service that has gone up in price by 239 percent over the past fifteen years and whose cost continues to increase well ahead of the rate of inflation. Imagine further that the company that produces the product or service blames consumers for the steep price increases. Would reporters accept such an excuse at face value? The CEO of the company would surely be seen sweating before the cameras of 60 Minutes or getting stern lectures from Nightline's Ted Koppel, right?

Not if the product is a college education.
The same reporters who are quick to expect the worst -- and demand government action -- when businesses raise prices show a curious lack of curiosity about the shocking rise in college tuition rates over the past several years. In stories about tuition hikes, reporters almost never question the price increases. And they never, ever, bring up the explanation many conservatives and economists point to: government education subsidies help cause the price hikes.

The most recent example of this lack of skepticism came when President Clinton proposed a $1,500 tax credit for students in their first two years of college. On June 4, the day Clinton announced his proposal, no network report even hinted that it might cause tuition increases. CBS's Rita Braver, for example, merely said that it was "aimed at attracting all students into post-high school education." Peter Jennings called it "the latest giveaway in presidential politics." (That's what they always call tax cuts.) Jennings did point out in the next story that "college expenses are growing at twice the rate of inflation." But he didn't ask why or suggest that some argue Clinton's proposal would add to the problem.

This is part of a long pattern in network reporting on higher education. Media Research Center analysts reviewed all 23 stories about higher education financing on the ABC, CBS, CNN, and NBC news shows between June 1, 1995 and June 1, 1996. No reporter in any of the stories mentioned the argument that federal aid helps fuel the escalation in tuition costs.

To be sure, reporters often do point out that tuition costs are increasing dramatically. Many of the stories on higher education focus on families trying to deal with such costs. ABC's Tyler Mathison, on the July 12, 1995 Good Morning America, reported that with costs so high, "it's no wonder more and more American families are borrowing to pay the bills." Many stories are helpful to consumers by pointing out which colleges are the best buys.

But reporters rarely ask why college costs are rising. And when they do, they accept, without challenge, answers they would never accept from industry. Example: CBS's Susan Spencer, on the May 2, 1996 48 Hours. A college administrator told her that he would like to cut costs, but it might hurt the reputation of his school. "So most colleges aren't even trying to cut tuition," Spencer reported. "People might think the quality of education had been cut as well."

CBS had a different attitude toward the recent gasoline price increases. Dan Rather wondered: "Is it the free market at work, the law of supply and demand? Or, is it greed, or something more sinister?" The networks have also demanded explanations for price increases of other products, such as gasoline or breakfast cereals. But the ivory tower is above such questioning.

This omission leads to biased reporting of education policy proposals. CNN's Bobbie Battista, reporting on a speech by First Lady Hillary Rodham Clinton for the June 1, 1995 Inside Politics, said: "Mrs. Clinton also tweaked those who benefited from the U.S. education system and now want to cut it...She didn't name names, but presidential candidate Phil Gramm, who wants to abolish the Department of Education, went to college thanks to government-sponsored loans." And in hundreds of stories over the past year, Bill Clinton repeated his claim that cutting federal aid to students was "extreme" without being asked why taxpayers must continue to finance higher education's largesse.

Only one network reporter even suggested the tuition price increases may not be justified. Former CBS This Morning co-host Harry Smith, on March 12, pointed out that "the private sector, in terms of business out there, has done all this cutting over the last ten years or so to become more competitive." He asked consumer reporter Hattie Kauffman: "Are colleges doing that at all?" But even Smith didn't point out the argument that colleges and universities are shielded from such efficiency because of government subsidies.

Had he read an article by John Hood of the John Locke Foundation, in the May, 1995 issue of Reason, he might have. "Is land for classrooms that much more expensive? Is there a shortage of people becoming professors, bidding up the wages of those currently in colleges and universities? Do books cost more than they used to?" Hood asks. "The short answer is maybe -- but the cost increase in higher education far outpaces increases in any of those expenditures."

According to Hood, there are so many government subsidies at even private colleges and universities that "tuition and fees have only the murkiest relationship to the costs of providing higher education. The 'costs' themselves are essentially arbitrary." Hood explains that federal aid is given to a student based on how much costs exceed the student's "expected family contribution." Since colleges and universities know the average expected family contribution, they can increase tuitions and make more students eligible for aid. "Families will pay more, but a good portion of the tuition hike will be picked up by the government. Hence, colleges and universities can get more money for providing exactly the same service."

Proof? Hood looks at history. "During the 1970s, the real-dollar value of government assistance to higher education, adjusted for the number of full-time students, fell slightly. So did real tuition, room, and board charges for both public and private colleges," he claims. "Throughout the 1980s, however, government assistance per full-time student rose significantly (10 percent, not including loans), accompanied by a 27 percent real rise in public college charges and a staggering 50 percent real rise in private college charges." He points out that revenue from Pell grants rose by more than 25 percent between 1985 and 1992 and that state level grants rose by 15 percent. All the while, college administrators were complaining about "cutbacks" in federal aid and using that as an excuse to raise tuition.

But network reporters don't challenge college administrators about their continuous price increases. Apparently, when it comes to higher education, greed is good, or at least not worthy of criticism.


Rich Noyes


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