Higher Education — The Cost, The Price, The Value

Washington and Lee Alumni Magazine Fall 2011 Cover

This summer, the editors W&L: The Magazine of Washington and Lee talked with President Ken Ruscio '76 about two interrelated topics that are not only in the headlines but also very much on President Ruscio's mind: the cost and the price of higher education. Here is our conversation.

Q: These are turbulent and uncertain times, not just for higher education but for our entire economy. As president of Washington and Lee, how are you managing the challenges facing the University?

I have three touchstones. The first is ambition. I take seriously the leadership principle that all of us have an obligation to leave things better than we found them. If that lesson has resonance anywhere, it's at Washington and Lee. For two and a half centuries, this University has constantly improved itself in order to prepare its students for a challenging future. Because we have benefited from the wisdom of those who came before us, we have an obligation to be ever mindful of those who will come after us. In 2007, the trustees endorsed a plan designed to build upon our traditional strengths and enable us to remain distinctive in the world of higher education. It is a uniquely Washington and Lee plan that was appropriate before the economic downturn and now seems even more appropriate.

The second touchstone is discipline. Our ambition is laser-like, not scattered, and even without the necessity of adjusting to new economic realities, we had decided to concentrate on our core mission, pursuing our needs, not our wants. We've had to make some tough choices. Our tuition increases have been restrained. We've set clear priorities in how we spend our resources and identified ways to trim costs on a number of fronts. Because of the direction provided by the strategic plan and the effects of the economic downturn, we have become highly disciplined in our decision-making.

The third touchstone is excellence. Amidst all the turmoil in higher education, there's precious little discussion about how to maintain excellence, at least the kind of academic excellence those of us associated with W&L seem to grasp intuitively. We can't achieve our educational goals without the close personal relationships that characterize everything we do, whether in small classes, in work between students and faculty outside the classroom, in guidance by staff members, or in the friendships that come from spending four years with interesting and bright classmates from all over. In the world of higher education, liberal arts colleges should be the gold standard for excellence. In the liberal arts world, Washington and Lee should be the gold standard.

For two and a half centuries, this University has constantly improved itself in order to prepare its students for a challenging future. Because we have benefited from the wisdom of those who came before us, we have an obligation to be ever mindful of those who will come after us.

Q: You mentioned "turmoil in higher education." What do you mean by that, and what does it mean for Washington and Lee?

During the last couple of decades, colleges and universities have drifted into a pattern of trying to be all things to all people. Large universities promoted their research activities, even as they claimed to be focusing on undergraduate students. Small colleges expanded their programs by offering very specialized degrees, sometimes at the graduate level. The next decade and beyond will bring a period of differentiation, requiring colleges to decide firmly who they are and what makes them distinctive.

While Washington and Lee was not completely immune from the tendency to be all things to all people, we fared better than most. We remained small, and we still have no intention of increasing the size of the student body. We remained committed to finding the very best students, and to recruiting the kind of faculty who are challenged by teaching the very best students. Our careful blend of liberal arts and professional programs in business, law and journalism distinguishes us from other national liberal arts colleges. Our continuing commitment to educating students for character also-sadly, in some ways-sets us apart. When I say this is Washington and Lee's moment of leadership in the liberal arts world, that's what I mean. Our approach to the liberal arts is distinctive and one that other institutions will try to emulate in the coming years. We didn't have to re-teach ourselves how to be distinctive.

Amidst all the turmoil in higher education, there’s precious little discussion about how to maintain excellence, at least the kind of academic excellence those of us associated with Washington and Lee seem to grasp intuitively.Q: In the last year or so, there's been a series of critiques of higher education, sometimes focusing on cost, other times focusing on how students are not learning. How do those critiques apply or not apply to Washington and Lee?

At the risk of over-simplifying, there are two general themes in the critiques. One is that college is unaffordable. The other is that colleges are ineffective. They come together in the conclusion that college isn't worth the investment. The difficulty, though, is that the remedy for high costs often diminishes the ability to provide excellence.

Here's what I mean: America's system of higher education is the most diverse in the world. Public and private institutions, large and small, good and bad, religious and secular, all exist alongside each other. Not in perfect harmony by any means, but in a way that creates a system of enormous variety. The sources of this complexity are historical, political, economic and, in some cases, just serendipitous. But it means that generalizations about higher education must carry the standard disclaimer: It all depends on the type of college under discussion. Broad-brush commentaries crumble under the weight of so many exceptions.

It is particularly difficult for liberal arts colleges to recognize themselves in general discussions of higher education. Less than 5 percent of students reside in liberal arts colleges. And the selective and financially sound institutions, such as W&L, are a minority within that minority. Not only do generalizations about higher education rarely apply to Washington and Lee, but generalizations about liberal arts colleges rarely apply to us.

So when I read commentaries about faculty not teaching anymore, I don't see Washington and Lee in that story. Our faculty have the highest teaching loads among the top national liberal arts colleges. And when I read that college students aren't asked to write papers or speak in class or work directly with faculty on research projects, I am reassured by what we are doing at W&L.

Q: Another part of the critique is that colleges have rested on those claims for years without any formal assessment. How does Washington and Lee know that it is achieving what it claims to be achieving?

When we were writing W&L's mission statement in the late 1980s, the concept of assessment was beginning to get a lot of attention. The group charged with writing the statement was told that we should write it so that we can measure what we say and do. We looked at things like the value of associations between faculty and staff, and at an education that seeks to inculcate honor and integrity. There was an argument that we should take these out, because we're never going to be able to measure those qualities. We finally said, no, we're putting it in there, because it says what we're trying to accomplish.

The understandable effort these days to determine whether a degree is worth it makes life difficult for a college that educates students for lives of integrity and purpose, develops their ability to reason ethically and critically, teaches them to be aware of their obligations to others, helps them discover their individuality even as they commit themselves to the betterment of their community, and sends them forth with the courage of their convictions — as well as the humility to know they still have much to learn.That is not to suggest that we are not actively engaged in assessment. We participate on a regular basis in national studies such as the College Learning Assessment and the National Survey of Student Engagement, among others. We are generally gratified by the results that often show us above our peer institutions on many of these measures. At the same time, we pay attention to areas where the data show that we may not be as effective as we would hope to be.

But to be perfectly candid, the features that define a quality liberal arts education are among the hardest to measure and quantify, so it becomes especially problematic for an institution like W&L when the discussion turns to assessment and accountability. Being asked to prove that you are doing what you claim to be doing is a perfectly legitimate question. But some of the most important outcomes of a liberal arts education, and a Washington and Lee education specifically, do not lend themselves to metrics that inspire a lot of confidence.

Philosophers argue that the mere attempt to measure something like love or friendship strips the concept of its defining characteristics. Attempts to capture our progress in teaching integrity, empathy or trustworthiness are similarly problematic, not simply because it's a technically daunting challenge, but because even the attempt to do so is at odds with the essentially qualitative nature of the concept itself.

To divert ourselves from those educational goals and focus on ones we can accurately measure, just because we can measure them, is to compromise our loftiest ambitions and define away what has historically made a W&L education something more than merely a college education. The understandable effort these days to determine whether a degree is worth it makes life difficult for a college that educates students for lives of integrity and purpose, develops their ability to reason ethically and critically, teaches them to be aware of their obligations to others, helps them discover their individuality even as they commit themselves to the betterment of their community, and sends them forth with the courage of their convictions-as well as the humility to know they still have much to learn. At Washington and Lee, we need enough confidence in the enterprise that we can live with the ambiguity.

Q: You have not yet addressed the other part of the critique you mentioned-the cost of higher education. Isn't afford-ability a challenge for schools like Washington and Lee?

Absolutely. And I have my own personal set of indicators.

When I was at W&L in the 1970s, I had a summer job that enabled me to earn tuition-tuition when I graduated from W&L was $2,400. It was a fantastic summer job, and I worked hard and earned $2,200. It essentially paid my tuition.

The next marker I have is 1990, when my son, Matthew, was born. Kim and I decided to put away $200 a month with the idea that over 18 years, we would invest it, and that it would largely offset the cost of a private higher education.

But today, no student could ever earn tuition over the summer for a place like W&L, or probably any college for that matter; certainly not at a private liberal arts college. If you put yourself in the place of a parent today, saving $200 a month simply doesn't seem enough to cover the sticker price of college, especially for families with a few children. The economics of paying for college may have changed. But so has the psychology. We have a challenge to explain the economics of higher education in the midst of these changing perceptions.

Q: How can that be explained?

For one thing, price and cost are different. The price of a W&L education is about $50,000 per year. The cost is about $70,000. Everyone who attends Washington and Lee, even the so-called full-pay students, receives a discount. Those who do not pay the full sticker price receive a greater discount in the form of financial aid. Some of that financial aid comes from annual revenues and the operating budget. Some of it comes from funds in the endowment dedicated to scholarship support. Thus, the greater the endowment, the greater the ability of the college to provide a quality education. It enables all students to benefit from a high-cost education without paying the full cost, even when they are paying the full price.

It also enables the University to admit the best students regardless of their ability to pay-and one of the markers of quality in a liberal arts college is the overall quality of the students who share a classroom. Unlike a business, Washington and Lee isn't indifferent about who purchases its product. We try to assemble a class defined not by the individual capacity of the students to pay, but by their academic and personal promise.

The sticker price is also not exactly like how a business determines a price for its product. It is the result of a complex three-sided relationship: endowment (or subsidy); the full cost of delivering the service; and the revenue needed annually to meet costs not covered by endowment, including the cost of financial aid to attract highly qualified students who cannot pay the full price. One of the consequences of this triangular relationship is that the stronger the endowment, the less pressure to raise the price to meet costs. That is, in fact, one of the best ways to describe our current strategic plan. We are seeking endowments to support financial aid, which will mean less reliance on tuition revenue to cover the cost of financial aid, which will mean less pressure on the sticker price.

2010 – 11 University Expenses: $125.7 Million

From a purely economic standpoint, in other words, Washington and Lee's circumstances are straightforward, and our strategy makes perfect sense. There are always hard decisions to be made. There are always lines to hold on costs. There are always pleas to do certain things that need to be resisted because they stretch what we mean by "core mission." But structurally we have things lined up as they should be. We have imposed the discipline to do only things we need to do to advance our mission and improve quality, and not do the things we cavalierly want to do just because they're a nice idea.

Q: That's a complicated story to tell prospective students and their families, not to mention donors choosing to invest in Washington and Lee.

Yes, while people like me are immersed in these details every day, I recognize that sometimes the details obscure the basic principles. So here are some shorthand ways of thinking about it.

First, W&L's plan to build endowment to support financial aid is an affordability strategy. It keeps pressure off tuition increases for those who are not receiving financial aid. And it enables us to create what I call a Dean Gilliam approach for the 21st century. I can't tell you how many stories I have heard from alumni who, as students during the '40s, '50s and '60s, found themselves in a financial bind and were rescued by a scholarship somehow created on the spot by Dean Gilliam. We want to admit the very best students regardless of their economic backgrounds. We want to preserve the meritocracy.

Second, here is an indicator I watch carefully. Compared to our peers-the top national liberal arts colleges-our overall costs are below the mean. Within that measure, however, is another data point: the resources we devote to education and instruction, as opposed to what might be called administrative overhead. For us, that is well above the mean. We spend money where it has the greatest direct impact on the education of our students. It is an efficiency indicator, and a quality indicator.

Third, unless we want to become a different college than what we are now, we have to admit to ourselves that the features of the University that ensure academic excellence are and will continue to be costly. Science labs; instruction in the arts, music and theater; information technology; putting students out into the world through study abroad and special projects; small classes with highly qualified faculty-the list goes on. The headwinds of cost facing higher education are strong across the board, but they are especially strong at a high-quality liberal arts college such as Washington and Lee. The answer is to have a clear sense of mission, confidence in who we are, and a commitment to devote our resources to the things that matter.

Expenditure per Student (per year) Bar Graph

Q: It appears that many people see higher education in terms of a commodity instead of an investment these days. Do you think it's still possible to talk about a college education as a long-term investment?

When I went to college nearly 40 years ago, there was a notion that was part of your fiber-you would sacrifice to get a college education. You would sacrifice in the short term because you saw it as a long-term investment. So you would save, you would work very hard in the summer, your parents would make compromises. My father said to me, "You choose your college. I will do whatever it takes to get you through." It's only recently that I realized what that meant for him-a significant commitment that I didn't fully appreciate at the time. A college education wasn't viewed as a product that you consumed. It was viewed much more as a privilege, as an investment over a lifetime.

As we think about how we frame this idea of investment in the future, I believe it has to be a values-based argument, as a philosophical argument about what you're going to get out of higher education: You're going to learn things about yourself and about the world during your four years here that you otherwise would not. And that will serve you well throughout your life.

When I talk with some of our alumni who have led very successful and very well-compensated lives, they tell me that every day, when they come to their office, they are thinking about leadership and integrity, and it's all due to W&L. We have affected the way they do their jobs and the way they lead their lives. These are not isolated stories. I hear repeated testimonials. What I want for my successors is that when they go out and talk to students who are graduating today, they will hear those same stories about our alumni's experiences at Washington and Lee.

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