The Paradox of College: The Rising Cost of Going (and Not Going!) to School

By Derek Thompson

The most important issue in higher education might not be cost control. It might be advertising.

615 college graduation hire.jpg

Have you heard about the dangerous, rising cost of not going to college? In the last 30 years, the typical college tuition has tripled. But over the exact same period, the earnings gap between college-educated adults and high school graduates has also tripled. In 1979, the wage difference was 75%. In 2003, it was 230%.

Over the last three decades, the cost of going to college has increased at nearly the exact same rate as the cost not going to college. How can the price of getting something and not getting something both rise at the same time?

That is the paradox of college costs.

BUYING THEIR ATTENTION

In the fight to put low-income kids on the college track, one of the simplest weapons is also one of the most controversial. It's cash. If a student gets a good grade, he gets some money. If he doesn't get a good grade, he gets no money. Same goes for teachers. If their students succeed, they get richer. If they don't, then they don't.

There are all sorts of problems with measuring the impact of reward programs for successful students. It might be the case that these kids would have succeeded, anyway. The money might enrich teachers blessed, by chance, with smart students. Making a straight line of correlation out of the Gordian Knot of high schoolers' lives and achievement scores is impossible. And the results of America's cash-incentive schemes are mixed.

But maybe cash rewards for college prep programs tell us something valuable about the college paradox. Analyzing education data in Texas from 2010, Northwestern University professor C. Kirabo Jackson compared similar students before and after their schools implemented a cash bonuses program for higher AP-test scores. Jackson also compared students between schools that did implement the new program and schools that didn't.

The results were striking. Students in the cash rewards program took more AP classes. They passed more AP tests. They enrolled in four-year college in higher numbers. They were more likely to graduate. They were more likely to be employed. And, as a result of all of this, their lifetime earnings were higher.How do we know that all this good news was the result of a cash-rewards program? We don't. The Gordian Knot can't be untied. High schools that adopted these programs might have undergone other changes to simultaneously improve their offerings. If a bad school gets a great, dedicated principal, it will improve, with or without a cash-rewards program.

This study doesn't tell us that if you give a low-income student $225 for a 5 on AP History, he will go on to make tens of thousands more dollars in lifetime earnings. But it does suggest that you can create a small plan to capture the attention of under-privileged kids and focus them on achievement and college -- and it might just change their lives.

MAKING COLLEGE STICK

The Texas cash-rewards program is a story about incentives, and income, and wage premiums. It's also a story about advertising. It's a story about getting people's attention.

Advertising isn't always used for the collective good, and most of us don't like feeling as if other people's scheming can fundamentally shape our decisions and behavior. But there is some behavior worth shaping, such as leaning to read and remembering your pills. That's why parents make kids watch educational videos. It's why doctors experiment with adherence strategies to get patients to take their drugs.

The power of grabbing people's attention includes a principle that Malcolm Gladwell, in his book The Tipping Point, called "stickiness." Loud noises can turn our heads. But stickiness is what makes us actually pay attention to the noise. The theme of The Tipping Point is that the secrets to stickiness are often small. Taking graffiti off the walls of New York's subways resulted in fewer crimes. Putting a small gold box in the corner of a Columbia Record Club ad led to a surge in record-buying by mail.

Paying a student $225 is a pittance compared to the cost of going to school. It's pennies compared to the cost of not going to school, too. It is small. It is sticky. And, according to Jackson, it contributed to an utter revolution in attitudes among kids who otherwise would not have gone to college. That's not technically advertising, but it is attention buying. Combined with other small strategies to grab and hold the attention of young people and make them visualize a future that includes college, who knows how much good we can do?

***

We know the rising costs of college, because we can see them. We don't know the rising costs of not going to college, but we have a sense. A 2009 McKinsey report found that if we raised our education performance to the level of Korea, we could grow economy by an extra $2 trillion. We could, in other words, tack on the GDP of Italy.

When 40% of students don't start college and 70% don't have a bachelor's degree, it's safe to say the vast majority of young people haven't been persuaded that college is worth their attention. The entire economy suffers for it. We all need their attention.

Maybe the most important issue in higher education is not cost control. Maybe it's finding better ways to buy young people's attention. Maybe it's advertising.


This article available online at:

http://www.theatlantic.com/business/archive/2012/04/the-paradox-of-college-the-rising-cost-of-going-and-not-going-to-school/256111/