March 1, 2014

The Value of Liberal Arts

Brian Casey, president of DePauw University, on fixing education and why universities may not be so pricey

Historic brick buildings and tree-lined walkways form the campus of DePauw University, a 2,300-student liberal arts college located about an hour west of Indianapolis, in Greencastle, Ind. At its helm since 2008, President Brian W. Casey is both traditionalist and progressive.

A Stanford-trained attorney who began his career at the Wall Street firm Davis Polk & Wardwell, the New Jersey native has served in upper management at some of the country’s top universities. Casey was assistant provost at Brown University and later became associate dean for academic affairs in the Faculty of Arts and Sciences at Harvard University; he taught at both schools. Casey earned a Ph.D. at Harvard, where he specialized in the history of American higher education and American intellectual history. Not surprisingly, he is a staunch advocate of the benefit of a liberal arts education in preparing undergraduates for a host of professional careers. At the same time, he acknowledges the need for business skills as well, and DePauw has begun a sort of “business boot camp” for interested liberal arts students.

With the merits of America’s education system fiercely debated from the pages of the Wall Street Journal to Forward, and the suggestion in some corners that a liberal arts education has outlived its purpose in an increasingly high-tech society, we thought it would be useful and enlightening to talk with a man on the front lines of both debates. Forward asked him about his views on higher education.

American 15-year-old students are ranked 26th in math out of 34 countries in a 2012 study released last year by the Organisation for Economic Co-operation and Development (OECD). Reading and science scores are also middling, and all have dropped since 2009. Do your incoming undergraduates reflect the trend of U.S. students lagging globally?

What’s interesting is that SAT scores and high school GPAs here have either stayed steady or risen a little in the last couple years. The average GPA of students who come in here is a 3.74. But somehow beneath those metrics, there is definitely a need for more writing help. There’s been deterioration in high school education but, more importantly, [students’] primary methods of communication are very casual—online social-media style. I don’t think that in even our best high schools they’re being asked consistently to develop lengthy written forms of expression. They need the ability to think critically and communicate well. If a student sends me a letter and it’s filled with typos, I just dismiss the letter immediately. I immediately make judgments about that person’s basic capacity. And where you live, which is almost exclusively a product of family income, is by far the single most important factor in the quality of [secondary] education available to you. And the way you address it is you fund education, not at the local level, but at higher levels—at state levels.

Do you think the solution should incorporate overseas models such as the one used by Germany, which separates students into professional and trade tracks during secondary education, based on aptitude?

I actually think we have the right system. We have a hyper-competitive higher education market with over 4,000 degree-granting institutions that run the gamut from community colleges to research universities. They’re innovative. They’re flexible. We actually have, and have long been acknowledged as having, the best higher education system in the world. That’s why international students endlessly flock to American colleges and universities.

Even so, costs are prohibitive. In 1973, one year’s tuition at a private four-year college was $10,783 (in 2013 dollars). Today, the cost of one year’s tuition is about $30,000. What is behind this huge increase?

Most people believe tuition increases are driven by two factors. One is the type of industry we’re in—a remarkably labor-intensive and highly educated world. Industries that rely on that type of market, where most of the costs are associated with people—highly educated people—have seen costs grow at almost the exact same rate as higher-education costs have grown. The second thing—and people never speak about this, though it’s remarkably important—is people actually come to colleges demanding significantly more services and amenities than they ever did when even I was going to school 25 years ago. Counselors, coaches, career-service counselors—the amount of infrastructure that surrounds the typical American student right now is so much deeper and richer and more complicated—and therefore more expensive. [Annual] tuition, room and board [at DePauw] is going to be just over $51,000, which is cheaper than many of our peers.

That sticker price is a deterrent to many middle-class families. It seems to perpetuate what many argue is a system of higher education that primarily benefits the wealthy.

A very famous study came out of a Harvard-Stanford collaboration two years ago. It talks about under-matching. Students of modest- to low-income families have significantly less information about how higher education works. They don’t realize the funding available. Students coming from larger public schools that don’t have a counseling enterprise—those students do look at the sticker price and I think they are deterred. Many would be surprised to learn that they would pay nothing to go to Harvard. They’d assume that Harvard is hundreds of thousands of dollars, when if they have family income of $70,000 or less, they’d go for free. For those who do take out loans to go to DePauw, they are graduating with less than $25,000 in debt. You [also] have these loan-forgiveness programs. I think it’s intriguing, loan forgiveness—I went to Stanford for law school, and Stanford has a very robust loan-forgiveness program for graduates who want to do public interest [work], and it did enable more students to go into public interest.

How can schools do a better job of marketing the real cost of higher education to students?

Here’s the challenge: [Colleges] are forbidden from acting in concert by anti-trust laws. There have been efforts to have various national bodies [help explain and market the costs]. For example, DePauw’s a member of the Council of Independent Colleges, an association of 600 private schools. The CIC attempts to put out this information. The Association of American Colleges and Universities also attempts to do this. But most of the analysis and market behavior happens at the level of a guidance counselor talking to a student at a high school about a dozen institutions that might be known to that student. That is why, for larger public schools without that counseling system, you have what’s typically thought of as under-matching, students not going to schools they could not only gain entrance to but also get [financial] support for. I’m not sure what’s going to fix it.

Perhaps the much-talked-about potential of online courses?

A few years ago, we thought that MOOCs (massive open online courses) and online learning would be the great disruption. I still think this will change the market, but we’re also finding that large numbers of students never complete the courses they start online. They have nothing sustaining them, provoking them, guiding them.

Canada has something more akin to a top-down funding system, where secondary education is not dependent on the local tax base. Are you a fan of that?

[Americans] would have significant objections to it. Local cultural control of your schools is highly prized in American culture. People fear funding models that are large scale, whether it’s health care or education. That said, in American higher education, we have had since World War II what can only be described as a voucher system. You can get federally subsidized loans that can carry you to any accredited degree-granting institution in the country. That has produced an incredibly competitive, incredibly innovative higher education model.

There is, as you know, an ongoing debate about the proper purpose of a university education. Shouldn’t colleges and universities, even those providing liberal arts educations, teach their students marketable skills for the workplace?

We have asked our alumni to help us produce hundreds of internships for our students. We have an entire office helping generate these internships and placing students. It’s the name of the game now, and if you don’t do that, your students are perceived, whether right or not, as being underprepared for the world. One of the premier blue-chip corporations in the state of Indiana, Eli Lilly, only hires out of their internship ranks. Proctor & Gamble in Cincinnati takes a similar approach. If we want our students to obtain employment at Lilly or at P&G—and those are great places to work—they have to get internships.

What we decided to try next year is a bit of a business school bridge program—a business school boot camp. For two of their January terms, students can take an intensive Kelley School of Business [at Indiana University] bridge program. For three and a half or four weeks, they’ll be plunging into financial analysis, management, organizational behavior. It’s just a perfect example of taking a student who’s a philosophy major or art history major and saying, OK, that’s fantastic, but we should also provide you these types of skills that are the language of business, actually. We’re expanding our career services option and having students develop a four-year plan. You do have to help them enter the world they’re going to enter.

A troubling trend is the drop-off in government funding for research and development for social sciences and humanities. For instance, the National Science Foundation scrapped its fall 2013 cycle of grants for political science, while the National Endowment for the Humanities saw its budget cut from $167.5 million in 2010 to $139 million in 2013. Are you concerned?

The nation decided, going into World War II, that it would move its basic research infrastructure away from the federal government and from an exclusively national lab model that you see in, say, Europe, and have it be competitive and peer-reviewed. So the vast majority of the nation’s basic research enterprise moved to the colleges and universities, resulting in a 30- to 40-year boom. Silicon Valley was created because Stanford University and Berkeley in California were just producing incredibly valuable basic research that enterprises right around them could start using. It worked remarkably well. So the decision to move away from it, I think, is just shortsighted. In large part, the tech boom that we’re experiencing now is a product of the knowledge generated through government-funded research conducted on university campuses 20 years ago. If we starve the research enterprise, we starve transformation. And we starve commerce 20, 30 years from now. I think it’s frightening.

Deborah L. Cohen is a Chicago-based business journalist who writes about topics including entrepreneurship, personal finance and legal affairs. She was previously a correspondent for Reuters, Crain’s Chicago Business and Bloomberg News.