Florida Career College to Close Doug Lederman Fri, 01/26/2024 - 03:00 AM Byline(s) Doug Lederman from Inside Higher Ed https://ift.tt/avZRfLi
A Pricing Experiment
What if vocational programs cost students less than traditional academic programs?
For the most part,vocational programs cost institutions much more to run. They have expensive equipment that needs to be maintained, they usually have smaller classes, and it’s often harder to find adjunct faculty. Some colleges address those higher costs through internal cross-subsidies, allowing the academic areas to make up some of the financial shortfall of the vocational ones. Others charge extra fees for vocational programs – whether as course fees or program fees – to help offset the extra cost. Most split the difference, charging more but still not enough to offset the full cost.
Apparently, Western Colorado Community College is flipping the script. It’s actually charging 40 percent less for vocational programs.
I’m intrigued. Paul Fain’s article mentions that WCCC is relying on a major donation to make up the financial difference, which answers my first question. But I’ll be interested in seeing whether the move has an effect on enrollments, and if so, among which groups of students.
Although this presumably isn’t the intention, I could see it playing into the narrative that the liberal arts are “elitist,” as opposed to the more workforce-focused programs. (If certain students are priced out of the liberal arts and others aren’t, we could expect to see liberal arts enrollments skew affluent.) There’s a deep historical irony in that: classically, the counterpart of the “liberal arts” was the “servile arts.” But there’s no denying widespread anxiety among students, parents, and politicians about economic payoff.
A few years ago on my own campus, we ran a back-of-the-envelope analysis to see which programs were the most profitable and which the least. Generally speaking, the traditional academic areas subsidize the more vocational ones. That came as a shock to some people who had assumed, loudly and publicly, that we were wasting money on ‘frivolous’ classes. In fact, if we did away with the liberal arts areas, we’d need much more operating funding to survive. WCCC is using a major donation to fill the gap. The point is that being aggressively workforce-focused requires a lot more money.
In the broader market, there’s nothing weird about sellers using pricing to incentivize sales. If “we” want more students to take vocational courses, then there’s a consumer-level argument for offering a discount for those courses. But the parallel to the usual market breaks down quickly when we look at who the “we” is in that sentence. A polity may decide that it wants more students to go into welding and fewer into history, but if it fails to provide the funding to allow an institution to meet the costs of offering welding at a discount, it won’t work at scale. That’s because the college doesn’t capture the benefits of a programmatic shift. Students who go on to make more money – assuming that they do – aren’t obligated to send more of it back to the college. If the costs are institutional but the benefits are social, then we can predict consistent underinvestment. If the “we” is a polity, then it should provide far more public funding to allow for student-level discounting. If the “we” is the college, its survival has to come first. The two trends of public disinvestment on the one side, and greater public intervention on the other, are increasingly in tension. He who increasingly cheaps out on the piper still wants to call the tune. Absent a third-party payer, that’s hard to sustain.
Still, I have to commend WCCC for having the guts to try something unusual. If it works, I foresee colleges making some pretty pointed arguments to legislators.
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Program Note: Due to the holiday and some travel, the blog will be off next week, returning on Monday, June 6.
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