Solutions to the High 'Freaking' Cost of College

04/15/2015 05:15 pm ET | Updated Jun 15, 2015

As I was saying before my house and entire family was frozen into a block of ice for two months, there are solutions to the problems I've been describing over the last several months regarding why college costs so freaking much.

If you recall, two competing theories regarding the high cost of college that seem to be in conflict might, in fact, be reconcilable.

One proposal (the Bennett Hypothesis -- a commonplace critique embraced by both the left and right) claims that our colleges and universities are to blame for skyrocketing tuition costs. According to this theory, throwing more public money, private money and loans into the pot to ensure college for all just motivates "greedy" schools to raise prices and thus never leave a single dollar on the table.

A competing theory, associated with Archibald and Feldman's book Why Does College Cost So Much?, claims that it is the nature of higher education -- a craft industry that employs highly skilled labor -- that leads to hyper-inflation. And if other craft industries (such as dentistry and legal services) have been on a similar cost curve -- regardless of the efficiencies technology has brought to other fields of human and economic endeavor -- why should the cost of education behave any differently?

As I mentioned last time, these two seemingly opposed theories can be reconciled if you realize that schools -- like other organizations -- might spend money they don't have (or are not guaranteed) on worthy projects such as the expansion of course offerings or construction of new research facilities, based on expectations that new money will be found. And since schools always have the option to raise that new money by jacking up tuition, there is a clear mechanism whereby tuition can go up far faster than does the rate of inflation since such rises would represent increased investment vs. simple (and standard inflationary) maintenance.

But if lowering the cost of college becomes a higher priority than institutional growth and expansion, there are two ways organizations (such as private companies) tend to reduce price without going out of business.

The first is by reducing expenses, referred to as "efficiency" or "consolidation" if you're doing the firing and "reckless cost-cutting" if you're the one getting the pink slip. And assuming that installing more efficient light bulbs across campus will not save the kind of money schools need to dramatically reduce tuition, cost reduction is likely to involve changing the nature of a school's programming.

For example (and borrowing from Bill Bennett's book), why should a state university system with seven campuses have anthropology departments at each location, all of them staffed to teach everyone from incoming freshman to outgoing PhDs?

After all, by rearranging and concentrating resources, one campus can have the best anthropology department in the country (if not the world), while the other six schools can suffice with enough anthro faculty to teach an adequate number of undergraduate courses. Students devoted to the field can thus go to the flagship anthropology campus, less-interested undergraduates can be introduced to the field wherever they attend, and the only people who suffer are the high-priced faculty no longer needed within this new efficient configuration.

Now I suspect that even faculty who side with students on debates over college costs and debt would not be happy with solutions like the one proposed above. And their concerns would not just be self-serving since colleges and universities balancing their budgets by reducing what students can learn on campus would indeed represent a dramatic change in the nature of the academy.

An alternative to strategic (or draconian) cost cutting would be another route taken by organizations struggling to bring costs in line with revenue: innovation up to and including product re-definition. For example, if a school costs $40,000 to attend (or $160,000 for a four-year degree), one can reduce that cost by 25 percent by either (1) reducing tuition to $30,000 per year (and making the appropriate cuts to ensure that doesn't lead to bankruptcy); or (2) provide a mechanism whereby students only have to pay full tuition for three out of those four years.

Many programs designed to give students credit for AP classes, transfer credit from community colleges, off-campus course work, or even life experience generate these types of savings by reducing tuition-paying time vs. reducing tuition. And even prestigious colleges are starting to think of ways to let students graduate in "three marvelous years."

While this type of solution means students will not necessarily share their freshman hall with others on the same four-year track, it does provide a revenue-neutral means for colleges and universities to offer degrees at a reduced cost since all seats will be filled by tuition-paying students (albeit some there for three years and other for four). And in such an environment, why shouldn't MOOCs and other alternatives be considered an adequate replacement for some credits -- especially for 101 courses that do not represent anything unique to a particular university?

Of course, we also have the option to simply keep doing what we're doing and hope problems related to the cost of higher education will solve themselves. But we need only look at the fate of the Ottoman Empire (or Sweet Briar College) to get a sense of what to expect from a strategy built around standing still.