Did Texas Just Discover the Cure for Sky-High Tuition?

Meet the $10,000 bachelor's degree. Gov. Rick Perry says it's a solution for working-class families who want a college education. His critics aren't so optimistic.

AP Photo/Eric Gay

Texas is experimenting with an initiative to help students and families struggling with sky-high college costs: a bachelor's degree for $10,000, including tuition fees and even textbooks. Under a plan he unveiled in 2011, Republican Gov. Rick Perry has called on institutions in his state to develop options for low-cost undergraduate degrees. The idea was greeted with skepticism at first, but lately, it seems to be gaining traction. If it yields success, it could prompt other states to explore similar, more-innovative ways to cut the cost of education.

Limiting the price tag for a degree to $10,000 is no easy feat. In the 2012-13 academic year, the average annual cost of tuition in Texas at a public four-year institution was $8,354, just slightly lower than the national average of $8,655. The high costs are saddling students with huge debt burdens. Nationally, 57 percent of students who earned bachelor's degrees in 2011 from public four-year colleges graduated with debt, and the average debt per borrower was $23,800--up from $20,100 a decade earlier. By Sept. 30, 2011, 9.1 percent of borrowers who entered repayment in 2009-10 defaulted on their federal student loans, the highest default rate since 1996.

In the Lone Star State, 10 institutions have so far responded to the governor's call with unique approaches, ranging from a five-year general-degree pipeline that combines high school, community college, and four-year university credits to a program that relies on competency-based assessments to enable students to complete a degree in organizational leadership in as little as 18 months.

At Angelo State University, admissions will begin in January for a four-year interdisciplinary-studies program through which students can combine three separate minors into one bachelor's degree for an overall cost of $9,974. ASU President Joseph Rallo envisions the program as the perfect fit for an adult who is interested in broadening his skills in order to advance his career, not necessarily a student looking for the traditional college experience.

"The profile that we aim the degree for is the adult student who is interested in a broad degree and at the same time a degree that would be academically rigorous," Rallo said, adding that students must have an ACT score of 27 or above to enter the program and maintain at least a 3.0 grade-point average to continue.

At the University of Texas (Arlington), the university teamed up with Tarrant County community colleges and school districts to create a program that would allow students to obtain a degree in any field for less than $10,000. Students in their junior and senior years of high school will complete dual credit programs already provided by their school districts in order to earn some college credit. The students will go on to spend about a year at community college before finishing their degree at UT Arlington.

"This program would appeal to the most dedicated, focused students who know from high school that they are willing to work hard to maximize their college investments," said Kristin Sullivan, assistant vice president for media relations at UT Arlington.

Catherine Frazier, press secretary for Gov. Perry, said the plan aims to make college "a reasonable goal for all Texans" and will help hold higher-education institutions accountable for reining in costs.

Critics doubt that the initiative will help institutions trim their own costs in providing an education, however. Experts worry that reaching the $10,000 goal involves a scholarship process for students and not real savings for the schools themselves in overhead and instruction.

"I question an artificially set benchmark of $10,000," said Daniel Hurley, director of state relations and policy analysis at the American Association of State Colleges and Universities, adding that the discussion of actually containing the costs of education for the institution is "often missing" from such initiatives.

Indeed, officials acknowledge that most of these programs would only reduce the price tag for the student, not the cost to the institution of providing the degree. While select students might pay less overall, institutions must deliver the same faculty, facilities, time, and knowledge they provide to students paying full price for their degrees.

"I would not frame this $10,000 degree challenge as a cost-efficiency measure for higher education," said Dom Chavez, director of the Texas Higher Education Coordination Board. "It's a cost-efficiency measure for students and parents."

Chavez added that as online learning gains traction and competency-based assessments get students out of the classroom more quickly, officials may begin to bend the cost curve in higher education. But he acknowledged that "we may never get there."

Hurley also questioned the quality and marketplace credibility of such a comparatively cheap degree. He pointed to the public perception that a high-quality education is a financial investment, and expressed concerns that potential employers might look at a $10,000 degree as a second-rate education.

"I think that the universities would really have to go out of their way and their graduates would really have to go out of their way to clearly communicate to the employer community that the quality of the degree" is not compromised, Hurley said, adding that employers recognize that "you get what you pay for."

But some argue that a college degree is no longer worth as much as it once was. A May 2012 study from the Pew Research Center showed that 57 percent of Americans say colleges fail to provide students with good value for money spent, and 75 percent say college is too expensive for most Americans to afford. Another recent study that surveyed traditional college students across the country found that after four full years of college, 36 percent of students showed little to no increase in critical-thinking skills.

While the Pew study also pointed out that, despite cost concerns, graduates do see a payoff--adults with degrees believe they earn $20,000 a year more because of it, and 86 percent say their schooling has been a good investment--Thomas Lindsay, director of the Texas Public Policy Foundation's Center for Higher Education, emphasized that a degree does not go as far in today's job market.

"I think the market has decided, and parents and students have decided, that a college degree is for the most part overvalued," Lindsay said. "What we're getting both in terms of job skills and learning, what you're giving us isn't worth more than $10,000."

The approach that could gain the most traction is one geared toward graduating students with degrees that meet specific needs in the regional labor market. Texas A&M University (San Antonio), for instance, this fall began offering a bachelor's degree in information technology with an emphasis on information security for just $10,026. Students who achieve this degree will graduate into the San Antonio region's booming military and homeland-security industry.

Such degrees are "highly aligned with regional state workforce needs," Chavez said, adding that education officials try to identify key components of the regional market and tailor their programs toward employers' needs. This way, students who graduate from these programs are more likely to get a local job in a field relevant to their degree.

But if universities do not implement significant cost-efficiency measures, these types of programs may not be sustainable in the long run, according to the College Board's Jennifer Ma. Despite a push by several states' governors--including Perry and Florida Gov. Rick Scott--to freeze in-state tuition rates, if state appropriations for education decrease, universities must hike costs to cover the budget gap.

Instead, experts say, states should focus on getting more students to complete their degrees in a timely fashion. Perry has proposed an appropriations process called outcomes-based funding, which ties 10 percent of an institution's state funding for undergraduate education to the number of degrees it awards. Currently, less than 30 percent of students at four-year Texas institutions graduate in four years.

As for the $10,000 degree initiative, the push "has spurred continued innovation, I would say, more in terms of program delivery ... rather than how can we simply cut costs at every corner," Hurley said, adding that after seeing Texas's success, other states may begin looking at new ways to offer students a college education. "From that perspective, I think that time will tell, but [Perry's] call could spur some new ways of delivering college degrees and credentials."