COLLEGES AND universities around the country are feeling the double pinch of inflation and declining enrollment these days, as the baby boom generation passes beyond college age and leaves the higher education establishment with more plant, equipment and faculty than it needs. Some institutions are facing the problem squarely, trimming back their commitments as far as possible. Duke, for example, has announced a policy of retrenchment -- a stark assessment of the university's major strengths and some very tough decisions to end activities that are not central to what it does best. Most institutions are less clear-sighted when viewing bad news, however and many colleges and universities are rather desperately looking to the federal government for increasing subsidies.
The higher education reauthorization bill now ready for conference is not going to be of much help in moving academia to take a more realistic look at its predicament. The House and Senate versions both increase considerably the federal price tag by whopping increases in the student aid programs -- grants and loans to students who attend college. The changes made by the Senate look inexpensive, largely because it employed a bit of sleight-of-hand to remove from view some $3 billion each year by declaring those funds to be "off-budget." The funds would come through the Treasury by the usual means (taxation or borrowing), but the loans would not show as federal expenditures. If one counted those funds, the Senate bill would cost $10 billion or so more in the next five years than the law now on the books.
The main problem with the price tag is that it is a symptom of more serious disorder. Higher education is by no means alone in having overdone -- overbuilt -- a good thing. The health industry, spurred by various federal and state subsidies, created too many hospital beds in the past few years. The automobile industry, believing that consumers would never change their buying habits, invested too heavily in the plants that make big cars. The price of such errors is large, and it is in no way diminished by using more federal funds to ease the pain. Federal incentives should be employed to get necessary changes made, not to make the status quo deceptively bearable.
In higher education, that eventually may mean fewer institutions, more consortium arrangements among colleges, greater reliance on attracting older students and more creativity in selling services to the community. It can't mean something extra for all the federal programs now on the books -- which is the path taken in the pending bill.