The Affordability Conundrum
Originally published March 2015, Updated March 2017
Dear members of the Berklee community,
College campuses everywhere are very special places; enclaves of thought, activity, learning, growth, questioning. They are concentrations of eager young people seeking to change themselves and the world. I was reminded of this during a recent visit to the campus of Colorado State University in Fort Collins, Colorado. This is a large public institution, and frankly, one about which I knew almost nothing. Despite its vast differences from our highly specialized, urban campus, I felt immediately at home. The bulletin boards were covered with announcements, workshops, seminars, concerts, and sporting events. The tables were filled with students either studying quietly or debating in animated fashion. Funky coffee shops with free Wi-Fi were scattered at the edges of the campus.
And like Berklee College of Music and other colleges across the country, students and their families struggle to afford its tuition. In the case of Colorado State and other public institutions, part of the budget is paid for by the state government (in 2015, state and local funding provided 54 percent of college education revenue on average nationally)1 and most of the rest by students. In the case of private institutions like Berklee, there is very little non-tuition support other than a draw from our endowment, fundraising, and limited government grants.
Before I go into detail about how Berklee College of Music is addressing this affordability conundrum through a set of innovative approaches, let me first address a fundamental question: Why is college so expensive?
Some critics of higher education believe that the cost structure is a runaway train, with no incentives to control expenses and perhaps even perverse incentives to spend ever more. On the surface, this argument makes some sense. The ability of students and families to borrow coupled with the competition to be admitted to college has, critics argue, led to skyrocketing tuitions.
Another critique is that college non-academic services—counseling and health services, state-of-the-art athletic facilities, and other costly accoutrements—have ballooned unnecessarily, creating an unsustainable level of cost.
We need to determine the truth about how much college costs and the rate at which those costs have been increasing. Two variables have complicated the picture. First, in the last decade, particularly accelerating after the fiscal crisis of 2008, state governments on the whole have reduced the level of funding of public higher education. Doing so has put pressure on those budgets and led to some fairly steep tuition increases. Tuition at four-year public universities increased by 33 percent on average nationally between 2008 and 2015.2 This is not a dramatic change in the underlying cost of higher education, but simply a shift in who pays for it—from public funds to private tuition. The second source of even greater confusion is that colleges, in an attempt to be accessible to students from a wide variety of socioeconomic backgrounds, have provided high levels of aid for students from lower income circumstances and less or none for affluent students. Thus, the gross tuition—the number you find when you look up the tuition of a college, and in Berklee College of Music’s case $41,530 per year in 2016–2017—is not the average of what students actually pay. In our case, the overall average tuition is about $30,000.
When we look at the growth of gross tuition, this rate obscures the fact that institutional aid has expanded even more rapidly than tuition growth, leading to much slower growth rates of the average, or net, tuition. According to a New York Times article that cites College Board statistics, the government’s measurement of college tuition inflation—107 percent between 1992 and 2014—is dramatically overstated.3 In fact, over that time span, tuition and fees at private four-year colleges have risen an average of 0.9 percent per year; at public four-year colleges, they've increased an average of 2.2 percent per year (or 22 percent and 60 percent, respectively, over the 22-year period3). These figures take into account increased financial and institutional aid. This rate of growth for private colleges, in particular, is dramatically lower than public perception.
Costs and Context
I do think a few comparisons are warranted. If access to student debt and other financial aid has abetted the growth of college costs, you might expect that similar educational institutions like private K–12 schools that lack access to subsidized student debt would be significantly cheaper, or that other human resource–intensive fields like childcare would be as well. However, at two of the top Boston-area private secondary schools, Buckingham Browne & Nichols and Noble and Greenough, tuition is $43,970 and $46,250, respectively. And before a child even enters the K–12 education system, there’s a price to pay: a full year of infant care at a high quality program in the city of Boston can cost up to $38,000.
Perhaps these institutions are also caught up in the proverbial “arms race” of bells and whistles critics point to. In that case, one would expect prisons to reflect the stripped-down costs of housing and detaining prisoners, and be far cheaper than colleges. To the contrary, the average cost per year to house an inmate in the Massachusetts Department of Correction is $53,040.4
I believe that college costs reflect the general trends of those services that require labor-intensity to increase faster than inflation—education and health care/hospitals being the most obvious examples. Many of the products and services we consume that have had declining costs have radically substituted technology or self-help for labor—bank ATMs, self-service gas stations, online or automated customer service. Our cars and appliances are made with much less human labor than in the past. Other products have become smaller, more compact, and durable due to innovations in design, technology, and materials.
Perhaps then, higher education is ripe for this form of disruption and change. In fact, I agree with that assertion. Despite all the arguments in the world, paying $41,530 for a year of tuition is still a great deal of money for a typical American family, and with students from 105 countries, it is a multiple of the per capita income of many countries from which our students come. On top of the tuition, a student must pay for housing (either on campus or off), food, books, a laptop computer, transportation, and other miscellaneous expenses. The total cost of attending a place like Berklee can exceed $64,000 per year for a student who does not get financial aid or scholarship support.
I have heard some private higher education leaders lament that private education was never imagined to be affordable enough so that any talented student in the world could afford it. While affordability is a huge challenge, I am optimistic and excited that Berklee has some unique programs and innovative options that allow us to achieve dramatically greater affordability. We must encourage our students at Berklee to own the responsibility for their education from both a learning and financial perspective. Given the tools I outline below, students can create a path that is also the most affordable and appropriate for their needs.
1) Credit by Exam
We have a system of allowing students to take placement tests in our core curriculum subjects. If a student can successfully place out of the first levels of harmony and ear training, not only is the student exempt from that course, but he/she also gets full credit at no cost. With the advent of Berklee’s online courses, both the faculty-intensive paid online courses as well as free massive open online courses (MOOCs) on Coursera and edX, an enterprising student can prepare for the Berklee curriculum before even arriving at the campus and use Credit by Exam (CBX) to save time and money. CBX is a tool for affordability, access, and more rapid progress through the curriculum.
2) Credit Transfer Agreements
We have 23 international partner schools and six in the U.S. and Canada empowered to teach the first two years of Berklee College of Music curriculum. Many of these programs were started by Berklee alumni and/or employ many of our alumni as teachers. Every one of them is significantly less expensive than Berklee, both because they are often in lower cost-of-living locations and because their tuition is less. In the U.S., our partners comprise three community colleges (Miami-Dade in Florida; Cuyahoga in Cleveland, Ohio; and Fullerton in California) that are publicly subsidized. While almost every student would rather spend four full years in Boston, not every student can afford to do so, and this option works very well for hundreds of students each year. As an example, our partner school in São Paolo, Brazil, Souza Lima, has an annual tuition of approximately $11,100 per year—dramatically less than Berklee in Boston. And the cost of living in São Paolo is lower than the cost of living in Boston.
At the beginning of the 2016 fall semester, 90 students from Berklee International Network (BIN) schools arrived in Boston, transferring with them a total of 3,288 credits toward their Berklee degrees, a total value of $4.8 million. That translates to a savings of about $53,000 per student.
Other enrolled students for the 2016 fall semester transferred in 1,131 credits from non-BIN schools and colleges or from Berklee Online (see below), a total value of about $1.7 million.
3) Online Credits
We are expanding the number of online credits earned at Berklee Online that can be counted towards an on-campus Bachelor of Music degree. These courses typically cost about 60 percent less per credit hour than on-campus courses. As we have discussed above, a student doesn’t get access to the facilities (rehearsal spaces, practice rooms, studios, concerts, and recitals) or the student services such as counseling (hence the lower tuition), but the course work is taught by Berklee faculty in small class sizes using state-of-the-art online teaching technology.
4) Online Degrees
For some students, coming to the physical campus is impossible either due to work, family, or affordability. Berklee now offers fully online bachelor’s degrees (Bachelor of Professional Studies) in the following: music production; music business; interdisciplinary music studies; songwriting; electronic music production and sound design; and music composition for film, TV, and games. These options also have overall tuition fees of about 60 percent less than the physical campus and allow the student to live anywhere in the world.
Online education—both in its purely remote form, but also in online tutorials used in conjunction with classroom teaching—will become ubiquitous in higher education, especially for content that lends itself to memorization, practice, and drill-and-repeat modes of learning. Online lectures will likely almost fully supplant physical lectures that have little discussion involved. While promoting this as a viable option for some students, we also need to be honest about what is not part of an online education—the physical facilities, extracurricular activities, faculty and staff who serve as mentors and advisors, and counseling services. These are all greatly reduced or nonexistent in the purely online education model.
Some worry that students following these pathways might be getting an education that is inferior to the full, four-year Berklee College of Music experience on the Boston and/or Valencia, Spain, campuses. I would have more sympathy with that argument if we could make Berklee affordable to all who wanted to attend. In my opinion, better to have two years at a good partner school in Tel Aviv, Kuala Lumpur, Miami, or Seoul and graduate from Berklee than run out of funds halfway through the experience and not get a degree. In fact, our research on 922 BIN students over a 15-year period showed that they had an 82 percent graduation rate from Berklee.
Berklee isn’t your typical college. Some of our students come to us later in life, and they’re not looking for a four-year immersive experience, nor do they want to shoulder the expense. They want to sharpen their skills and dive right into the music industry. Through these other pathways to Berklee’s physical campus, a competency-based approach can trump a time-in-seat–based one, and save students significant money and time.
Berklee’s Unique Challenge and Opportunity
Even in cases where students are able to borrow enough to complete their education, I lament sending them off to pursue their careers as performers, songwriters, producers, engineers, teachers, and music therapists with a large debt load to repay. Their ability to pursue their musical destiny is burdened by this debt. Toward that, we’ve worked hard to reduce the amount of debt our students are taking on. Our aggregate student debt peaked in 2010 after the financial crisis. We’ve been able to reduce it even as enrollment has grown—family debt (an aggregate of total borrowing for each family, combining both student and parent debt) has steadily decreased and is down approximately 23 percent over the past five years.
Regardless of the career paths our alumni take, it is our job to help ensure the Berklee journey does not leave a student hamstrung by debt before he or she even gets started. We have an obligation to help make Berklee affordable to people from all walks of life. We are doing this by the traditional means of raising money and expanding scholarship support, which has grown from $9 million in 2003 to a forecasted $47.3 million in 2016–2017—a more than 500 percent increase over 13 years. (With added scholarship funds from the recent merger with Boston Conservatory, our combined institutional total is now estimated at $60.8 million.) But this is unlikely to solve the mismatch between the literally thousands of talented young people with the drive and aptitude to succeed at Berklee and our limited resources. I calculate that we would need $400 million of additional endowment to reduce the debt load of our students to what we consider appropriate levels (currently the preliminary figure for our endowment is $330 million). So while we endeavor to attract donor support to build our endowment, we are obligated to be resourceful and creative in providing alternatives like online education and articulation partners to students who seek a Berklee education.
Indeed, the musical styles we have become so well known for teaching—blues, jazz, rock, bluegrass, Latin, roots, etc.—did not, for the most part, spring from the elite and affluent; they were born in the honky tonks of rural Mississippi, the hamlets and hollows of the Appalachian mountains, and in the streets of Harlem where the music was often one of the only means of expression for populations without the advantages of wealth and power. It’s our obligation to ensure that the next generation of Berklee College of Music students—those who will create the new music traditions of our time—have access to a world-class music education.