MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Getting a four-year college degree can cost a small fortune, even at public institutions. Annual tuition hikes at public and private universities often outpace the rated inflation. With state funding for a higher education decreasing and federal student loan rates rising many students will be saddled with even greater debt. For some, high tuition will make the American dream of getting a college degree unattainable.

MS. DIANE REHMJoining me to talk about why college is so expensive, Kevin Carey of the New America Foundation, Kim Clark of Money Magazine and Terry Hartle of the American Council on Education. Do join us as you think about your own future or that of your children. Give us a call, 800-433-8850. Send us your email to drshow@wamu.org. Follow us on Facebook or send us a Tweet. Good morning, everybody. Kim Clark, you've been covering this issue for quite a while. Tell us some of the reasons that college costs are going so high.

MS. KIM CLARKWell, there's two basic factors that go into rising tuition. One is the public support, that is the tax support especially for public schools. For example, the amount of money that states sent to public universities and colleges in 2007 was $87 billion. As a result of the recession that's fallen to $72 billion just last year. So in that time the number of students has risen so you have declining support from states, rising enrollment. So if you look at the cost per -- or the tuition subsidy per student, it's fallen from about $9,000 tax subsidy per student to about $6700.

MS. KIM CLARKWell, the public universities have to make up that money somehow, and that's driven pretty much at public universities most of the tuition increases. Private universities is a separate issue. One is they can charge what the market will bear. And there are plenty of people who will pay just about anything to go to Harvard. And the second issue is that a lot of private colleges are finding it's very successful for them to have basically the Macy's strategy, which is to charge very high sticker price and then send back a lot of that to about 75 percent of students as in the form of financial aid.

MS. KIM CLARKSo, you know, oh I'm going to a $60,000 school...

REHMI see.

CLARK...but I got the presidential scholarship so I'm only paying 40. So I got a bargain, right? So the net tuition at private universities hasn't really risen that much in recent years.

REHMKim Clark. She is senior writer for Money Magazine. Terry Hartle, from the perspective of the colleges and universities themselves, how do you see the issue?

MR. TERRY HARTLEWell, I think Kim made a very important point. About 80 percent of all college students attend public colleges and universities. When state budgets cut operating support for public institutions, they typically let tuition go up. Over the last five years, states have cut operating support for public colleges and universities by 25 percent per student and tuition has gone up 27 percent. So there's a very clear relationship between what states do and what the public has to pay to go to a public college or university.

MR. TERRY HARTLEI think more generally, higher education has always been a labor-intensive industry that relies on highly education, well compensated labor and face-to-face contact with students. This is an industry that finds it very difficult to manufacture productivity enhancements that would bring down the cost of doing business.

REHMSo do you see the same issues applying as far as private universities?

HARTLEWell, certainly the most basic characteristic of higher education would be as a labor intensive industry in which productivity enhancements come slowly. We're not very good in higher education at substituting technology or capital for highly educated labor. We're seeing more and more of this online education as growing very rapidly. And obviously this substitutes technology. And that does hold the promise of bringing down the price of post-secondary education.

REHMTerry Hartle. He's senior vice-president of the American Council on Education. Kevin Carey, how do you see it?

MR. KEVIN CAREYWell, it's true, as my colleague said, that public university tuition has gone up over the last five years as state support has gone down. But you know what happened the five years before that? It also went up. In fact, public university tuition and private university tuition have gone up every year for the last 30 consecutive years. They go up when times are good. They go up more when times are bad. But the overwhelming trend has been always increasing the cost of college.

REHMAnd the overwhelming question is why?

CAREYWell, I think colleges are complicated organizations. They spend money on lots of different things. Terry Hartle is right that it's traditionally been a very labor-intensive industry. And he's right that it's been bad at becoming more efficient with technology. Where I think we may have a difference is, I don't think that colleges are bad at using technology to bring prices down because they can't. I think it's because they don't want to. Because who wants to? These are difficult organizational changes to make. And colleges have been able to avoid the kind of efficiencies that other organizations and industries have faced because it's essentially a closed industry.

REHMSo give me an example of a technology that could've been introduced to bring down costs.

CAREYI'll give you an example, a local example. At the Virginia Tech University, a very well known research university here in the Washington D.C. area, they have converted all of their introductory math classes to computer-based courses. They have hundreds upon hundreds of students taking classes like linear algebra, calculus, all on computers with no professors, no lectures, much, much lower cost of labor.

CAREYSo -- and they're doing it -- this is a very reputable university -- the students are learning just as much as they always did. Their tuition hasn't gone down. The universities...

REHMHas not gone down.

CAREYHas not gone down. So the universities are able, sometimes, to realize these efficiencies. It never translates into a lower cost for the student.

REHMOkay. But the conversion to that technology had to cost a fair amount of money.

CAREYYou know, it actually isn't that expensive. I mean, it's -- computer hardware is cheap. Computer connectivity is cheap. You invest the money in developing the course once and then you can use it over and over and over again.

REHMSo what you're saying is, no matter what happens in good times or bad times, whether you convert to certain efficiencies or not, tuitions are still going to go up.

CAREYThat's exactly right.

REHMAnd why do you believe that is?

CAREYBecause colleges are in a kind of a closed market. Two huge realities of American life over the last 30 years, one, it's become more and more important to get a college degree, to get a good job. That's why everyone continues to borrow all this money and send their kids to college. Two, we're really not building very many new colleges or universities. If you want to compete on a level financial playing field in the market, that means accessing federal financial aid.

CAREYThe federal government sends $150 billion a year into the college market in the form of grants and loans. You only have access to that $150 billion a year if you're in a credited college. Who controls the accreditation process? The colleges control the accreditation process. You essentially have to get permission from the existing people in the market in order to compete in the market. And what that basically means is that you have to act a lot like the people that are thee already. And that means being inefficient and not taking advantage of the kind of efficiencies that we've talked about.

REHMSo accreditation, it seems to me, deserves an entirely different and full hour on its own. But putting that aside for just one moment, what about the issues that Kevin has raised, Kim. Do you believe that -- I mean, looking back 30 years and seeing tuitions just continue to rise in good times and bad, what does that say to you?

CLARKWell, it's certainly true that it's in colleges' interest to raise tuition because whenever I would talk to college presidents, even five years ago in good times and they would announce another 5, 7 percent increase, I would say, you know, how long can this go on? And they'd say, every year we raise tuition. Every year we get more applicants.

REHMAnd what are they doing with the money? Is it going to the professors? Is it going to new structures?

CLARKWell, I think that one of the biggest increase in spending on campus is administrators. There's a lot of research that shows that instructors haven't really been getting a lot of the growth in pay. Many more professors that people are being taught by are adjuncts who get very, very low pay.

REHMOr even teaching assistants.

CLARKRight, right. These people do not get -- are not getting rich, but the administrators are doing much better. They're getting raises that, you know, more than right.

REHMSo you're talking about college presidents, vice-presidents and so on.

CLARKRight. And vice-presidents and deans and so on. And the number of them have grown dramatically and their compensation has grown dramatically.

REHMGive me an example.

CLARKWell, of course there are a few famous college presidents that earn millions of dollars.

REHMSuch as...

CLARKOhio State's Gordon -- is it Gee?

CAREYGee.

CLARKAnd I think American University was known for a president who did very well also.

REHMAnd that was in the past, I believe.

CLARKIn the past.

REHMAnd that has been changed somewhat. How do you account for the rising salaries of these administrators, Terry?

HARTLEWell, Kim focused on Gordon Gee and Gordon is an outlier. Focusing on the outliers doesn't usually tell us very much. I was in New York last week, spent some time with Joe McShane the president of Fordham. His salary is zero. So...

REHMThere has got to be a story there.

CAREYThat might be an outlier too.

REHMAnd we'll take a short break here. When we come back, we'll talk to the president of Macalester College.

REHMAnd joining us now by phone, Brian Rosenberg. He's president of Macalester College. That's a private college in St. Paul, MN. Good morning to you, sir.

MR. BRIAN ROSENBERGGood morning. Happy to be with you.

REHMThank you. Tell us the price of tuition and fees at Macalester.

ROSENBERGFor next year, full tuition would be about $45,000 and tuition, room and board would be about $55,000.

REHM$55,000. And what -- this is a hard question to ask. But what do you think students get for their money?

ROSENBERGMm-hmm. Well, one thing that's important to point out is that, as a number of your guests have indicated, most of our students don't pay that. And so last year about 80 percent of the students in our incoming class receive need-based financial aid from the college. What they get is a first-rate education, very, very close interaction with faculty members and staff. Our student-faculty ratio is about 10 to 1.

ROSENBERGAnd so they get close interaction with another, small classes. They get better access to jobs when they graduate, a higher chance of being employed and a higher chance of having a better income and also we think all of the intangible benefits of a first-rate liberal arts education.

REHMOf course, $55,000 a year, assuming room and board, is not cheap.

ROSENBERGIt's a lot of money.

REHMIt's a lot of money. And I realized that you are a very people-intensive place. But what else is that money going for?

ROSENBERGWell, we're a residential institution. And so we have to maintain a campus with over 70 buildings. And we are a place where students don't just go to school but where they live. So it's in many ways like running a small city with all of the infrastructure needs that a small city would have. Areas like the sciences and the arts or various facility is intensive. We have to heat all of this and we have to cool all of this.

ROSENBERGAnd we have to provide insurance and we have to do all of the things that you need to do to make a residential community work. And so it is people-intensive, it's also facilities intensive and all of that does cost a lot of money.

REHMYou perhaps heard Kevin Carey say earlier that for the past 30 years in good times and bad times college tuitions have simply gone up. Has that been the case at Macalester?

ROSENBERGYes. Though one has to distinguish between net tuition, that is the amount of money that we actually take in.

REHMSure.

ROSENBERGAnd gross tuition. So that last year, for instance, our net tuition did not go up. It actually -- our net tuition actually went down because the cost of financial aid went up at about three times the rate of our sticker price. So our sticker price has gone up every year. But the net tuition, the actual amount of money that we take in from our students has not gone up every year.

REHMCan you talk to us a bit about salary, especially administrative salaries. What would be the lowest and the highest administrative salaries at Macalester?

ROSENBERGWell, when people talk about administrators and the rise in the number of administrators, they group together a lot of different categories of employees. So when we talk about administrative growth, we're talking in part about the fact that the services that college provide have changed dramatically since I started teaching 30 years ago. So administrative include people in information technology, which more or less didn't exist when I started teaching.

ROSENBERGAdministrators include all the people in our counseling centers, and those services have grown enormously. All of the people in residential life. So we have people who are classified as administrators who would make as low as $30,000 a year in our residential life area. And then the highest administrative salaries would be obviously for presidents or vice presidents. We have a chief investment officer who manages our endowment.

ROSENBERGThose are the salaries that you read about in The Chronicle. Those are the ones that get all the attention. But the reality is that those salaries actually make up a very, very small percentage of the operating budget of the college.

REHMAnd here's an email, reflecting I think public perception. It's from Gord (ph) who says: Please ask your guest about the salaries similar to corporate CEO for college and university presidents and members of the boards of directors. Those salaries, along with those of football coaches, are the real reason for the rising cost of tuitions. How do you respond?

ROSENBERGWell, first of all, as far as the board of directors go, they don't get paid anything. The boards of virtually all public and private, this wouldn't be true of for-profit institutions. But the members of the board of Macalester don't get paid anything at all. In fact, they absorb all their own expenses and they contribute an enormous amount of money to the institution.

REHMSo you're saying they pay their own travel as well.

ROSENBERGThey pay their own travel. They donate to the college. So there's zero dollars out-flowing…

REHMOkay.

ROSENBERG...to the boards of colleges like Macalester or the boards of public institutions.

REHMRight.

ROSENBERGAnd, you know, as Terry said and as -- it's not very helpful to focus on outliers. So there are college presidents who make a million and a half or two million dollars a year. But by and large the salaries of college presidents are not even remotely comparable to the salaries of CEOs and for-profit industries of comparable size.

ROSENBERGEven if you look at the salaries of the president of Harvard or Yale, which are multibillion dollar operations and compare their salaries to the president and CEOs of publically traded corporations, they are a small fraction. It doesn't seem to me unreasonable for the president of a place like Harvard or Yale to make a million dollars a year given the enormous size, complexity and challenges of that position.

REHMOf course some colleges, universities where football coaches are paid more than presidents.

ROSENBERGAnd if you want to ask me my honest opinion, I think that's ridiculous. Fortunately, we compete in division three athletics where there are no athletic scholarships and where coaches don't get those kinds of salaries. And I would be the last person to justify a college or university paying a football coach or basketball multimillion dollar salaries. I think it reflects a real distortion of priorities in higher education.

REHMAnd may I ask what your salary is?

ROSENBERGMy salary is about $500,000.

REHMAll right. And I know that you, Terry, wanted to make a point.

HARTLEA couple of quick points related to that. Average salary for a public research university president in the United States is $385,000.

REHMWhat about private institutions?

HARTLE$295,000 is the average salary for a president at a four-year private institution. If you go to salary.com and look up the average salary for college president, it comes up as $250,000. So I think this is something that's convenient to point to. It's simple and condemnatory. And we like those explanations regardless of the problem.

REHMKevin Carey, do you want to make a point?

CAREYWell, I think Terry is right in the sense that presidential salaries are not what's driving tuition. Only one person. And frankly, it's true, given the size of some of these organizations, they're not all that large. So we shouldn't focus on those. The overall spending on administration, however, is a different story. I think there is compelling evidence that spending on administrative salaries has increased substantially faster than spending on salaries for professors, which is actually cut down in some cases as we've replaced tenured professors with adjunct professors at a pretty alarming rate across the country.

CAREYWe hear a lot about the cost of technology. Higher education is the only industry that seems to see technology as a class center as opposed to a way to be more productive and provide better services for less money. So we should look away from the presidential salary. Also, on this issue of net price, absolutely true that the sticker price is more than the net price for a lot of students.

CAREYBut students are still paying more even if you look at the net price. So, for example, just 10 years ago. Americans held about $700 billion worth of outstanding credit card debt and about $250 billion in outstanding student loan debt. Ten years later today, credit card debt is about the same. It went up and then it went down. So it's still between seven and $800 billion. Student loan debt is over a trillion dollars.

CAREYIt's quadrupled in 10 years. So whatever discounts we're giving, people are still paying and borrowing a lot.

REHMBrian Rosenberg, what is your feeling in regard to student debt and the fact that many potential students are weighing that debt against what they believe they may be able to get from a college degree.

ROSENBERGIt's a good and complicated question. No student should borrow for college more than he or she thinks is a reasonable amount in his or her circumstances. But it's important to distinguish between borrowing for education which has a return on investment and borrowing for credit card debt or for buying a car, which does not have that return. The minute you drive a car out of the lot, it begins to depreciate.

REHMSure.

ROSENBERGEvery bit of research we have -- and of course there's no guarantee -- but every bit of research we have indicates that on both the societal level, on a personal level, there are few investments of dollars that you could make that have a better return than an investment on education. So a trillion dollars is a big number. It catches a lot of attention. It's been fueled by a number of things.

ROSENBERGIt's been fueled in large part by the rise of for-profit institutions, which 10, 20 years ago occupied virtually no space in higher education. And now their students claim a disproportion of the demand both of government funding and of debt. There are more students in school and so that too has driven the amount of debt up. So a trillion dollars is high. Zero would be too low. What the right number is, it's very, very difficult to say.

ROSENBERGIt's very, very difficult to say. It's also important to note that there are many, many different entry points into the American higher education system. Everybody likes to look at the high tuition, highly selective private institutions. And to be honest, we're one of them. And our cost is very high. But in our same state in Minnesota, you can attend a (word?) , a Minnesota state college and pay $4,000 in tuition. And so students have to be smart consumers.

REHMSure. Of course. And you're listening to "The Diane Rehm Show." Finally, Brian Rosenberg, what is Macalester doing to keep costs down?

ROSENBERGWe are -- we have -- take this year as an example. We have kept our salary increases very, very low. Our employees got a 1 percent increase in their salary this year. We have cut our program budgets by about 5 percent to try to do what we do as well as we're doing it now or better and to be more efficient. We are trying to figure out ways to allow technology to reduce cost. It is in fact very true that technology has not been a cost reducer but it's been a cost driver in higher education.

ROSENBERGIt is not true that we're the only industry in which that's the case. There are others. But we have not yet found a way to make technology a good tool for lowering costs but we're trying to figure out a way to do that. We're offering this summer our first online course for liberal arts college students to see if that might be a way as we move forward to offer an education of equal quality but of lower cost.

ROSENBERGBut at the end of the day, the great challenge for us is that, as Terry said earlier on, we are people-intensive industry. It's what our particular students want. They want close contact with faculty members and staff. We have a very, very high percentage in higher education of staff and faculty with a college degree or higher, the highest of any industry, over 80 percent. And the cost of hiring those people over the last 30 years has gone up.

REHMGone up.

ROSENBERGMuch more rapidly than inflation of the cost of living. So that's the big challenge.

REHMBrian Rosenberg, president of Macalester College. That's a private college in St. Paul, MN. Thanks for joining us.

ROSENBERGMy pleasure.

REHMAnd, Kevin Carey, when he was talking about cost and maintaining cost, you were shaking your head. Why?

CAREYWell, just one point on for-profit colleges. Absolutely true, there's been a big increase in the number of students attending for-profit colleges and students who attend for-profit colleges borrow more on average than others. So they do take up a disproportionate amount of the debt. But most of the debt is not at for-profit colleges. Most of the debt and most of the growth in debt has come in traditional four-year private and public universities.

REHMWhat about the growth of demand on the part of the students for fancy dorms, for additional facilities, for upgraded opportunities on college campuses, Kim?

CLARKRight. That's something I call the resortification of campuses. And it's certainly true. I mean, there's absolutely research that shows that when high school students take tours of campuses, their decisions are increasingly swayed by the amenities rather than the improvement to instruction, let's say. And as result, you've seen room and board cost, which really should be rising with CPI, right?

CLARKRising much faster than CPI. So, for example, I'm going to pick on Macalester, but I'm a big fan of Dr. Rosenberg's, but I'll just pick on them. The room and board contract went up 3.5 percent this year. Well, the CPI is only up 1.5 percent.

REHMAnd they're only giving 1-point raises to their employees. So I don't understand that.

CLARKWell, for example, I looked up the average tuition -- I mean, room and board contract now for this year. It's about $9,000. In 1981, it was about 3,300, so it's almost tripled. I don't think my living cost have tripled since that time.

REHMSo well, how do you account for that?

CLARKRooms have gotten a lot nicer. The food has certainly got a lot nicer.

REHMKim Clark, she's senior writer for Money magazine. She's covered higher education for nearly a decade. When we come back, I'm going to open the phones. We'll hear from as many of you as we can about your own experiences and plans for the future. Stay with us.

REHMAnd we're back. Time to open the phones for your questions. First to Indianapolis. Hi there, Nate.

NATEHey, Diane, how are you doing?

REHMGood, thanks.

NATEI am a total fan of your show. Thanks for taking my call.

REHMSure.

NATEI thought I might just offer your panel a little bit of student insight, not to lose that part of the debate, into the cost kind of focus of colleges. And I currently am a senior at the University of Indianapolis. It's a private school, about 5,000 students. And I wanted to make a quick comment on one of your panelists' mention about the technology kind of focus right now within higher ed. And I did some studies along with professors in a few different departments here at the university.

NATEOne of the things that I did with students is during their interviews over and over again, I heard although they appreciated the cost-saving aspects of those particular classes, they really did miss out with, you know, having those face-to-face discussions with professors. And in my background as -- I'm a secondary education student -- everything that I see in the research shows that, you know, with that face-to-face, you know, time you gain that kind of critical perspective that students receive in the classroom.

REHMKim.

CLARKYeah, he's correct. The studies show that purely online classes do not a great job of teaching. That the best classes -- the most effective way to teach are blended classes where they partner human beings who tutor and, you know, monitor and mentor.

REHMAnd yet these online classes are expanding around the country, Kevin.

CAREYAbsolutely. And keep in mind, a blended class that Kim described would be much, much cheaper than a non-blended class. So when we say blended class we might mean that somebody would spend half as much time in a room with a professor and then the other half of the time online. So there are huge opportunities that we're not taking right now to lower classes in a blended environment.

REHMTerry, what do you make of that?

HARTLEWell, I think that technology is beginning to alter the way postsecondary education is delivered pretty considerably. Kevin earlier was touting Virginia Tech and their course where he noted that the students are teaching themselves linear algebra. I don't think that's a particularly good model. I think that the blended model is very desirable, but it's one that institutions are working at overtime. It's just simply not going to change in a couple of years.

REHMAll right. Go ahead.

CAREYWell, to be clear, the students are not teaching themselves linear algebra. The students are learning linear algebra in a very sophisticated online learning environment that was designed by a PhD mathematician and is overseen by the faculty at Virginia Tech. And all of the data that they have gathered -- and again, Virginia Tech is a high quality science and math oriented university -- suggests that students learn more in this environment than they were before, before they brought the computers in.

REHMTo East Lansing, Mich. Hi there, Will.

WILLHi there. Thanks for having me.

REHMSure.

WILLI wanted to raise a couple of points that I think is important to keep sight of in this debate. One is that if we're talking about cuts and federal and state funding, it's not at all limited to higher education. We're also seeing dramatic cuts across the country in public education at a lower level, K through 12. And so, you know, it's said that -- and simultaneously we're seeing, you know, dramatic increases and other funding priorities to the point where there are now multiple states that are actually spending more on prisons, incarcerations than public education.

WILLSo, you know, it's said -- I've heard it said that a society that doesn't really fund its children is a dead society -- or doesn't invest in its children. And when I think about 20 more years of increasing cuts -- increasing rises in the cost of education combined with costs -- you know, rising costs of, you know, expenses going to prisons and so forth, you know, I don't know where we're going to be.

WILLAnd so I think really this comes down to a matter of public policy. And there is already a lot of students who are waking up to this -- and people who would be students but can't afford to be, who are waking up and demanding that we actually get past the excuses and fund education at all levels because that's what needs to be happening. Believe it or not, there are still countries in the world that fund higher education free for all of their citizens.

REHMYes. Kim.

CLARKNo, it's true. I mean, the countries that do make it free tend to be very wealthy countries, such as those in Scandinavia. We don't have a lot of -- we don't have their oil revenues but it's certainly true that we are threatening, I think, our democracy by limiting educational opportunity in this country.

REHMAll right. To Luanne in Edmond, N.H. Hi there.

LUANNEHello. Hi. Thank you for having me. I love your show.

REHMSure.

LUANNEI am a mother of two children, one who did graduate from college, one who has a lot of debt and didn't graduate from college. And when I heard the president of that college speaking about students should know what they can and can't afford, well, I think it's a bit of a stretch to think that an 18-year-old is going to know what they can or can't afford, or what their future expenses and whatnot are going to be like. What my experience has been that they know very -- they really don't know a whole lot about it.

LUANNEAnd I have heard about some, you know, what would be called predatory lending practices at some universities. And I think I experienced that with my daughter who actually was very smart about her money. And on her last semester she had an internship with next to no expenses, $150, something like that. And the lending officer was pushing and pushing her for her to take all the money she could 2 or $3,000. And so I'll take, you know, any comments off the air.

CLARKWell, it's certainly true that there have been problems, especially prior to the lending collapse of 2008, that there was pretty predatory behavior, especially on the part of private lenders.

CAREYYeah, I agree with the caller. Any system that depends on millions of 18-year-olds making smart financial decisions is kind of a bad system. You're asking people to make judgments today about what their lives are going to be like ten years from now and what kind of job they'll have. And that's a very, very difficult thing to do.

REHMBut surely they wouldn't be making those decisions simply on their own. Surely there would be some parent input.

CAREYYou'd think so but there are a lot of independent students, a lot of people in their, you know, early 20s going to college who don't have that -- or people whose parents themselves did not go to college.

CLARKRight.

CAREYAnd some people who are most vulnerable often have the least amount of good advice to, you know.

CLARKRight. A growing percentage of the college population has parents who did not attend college.

REHMTerry.

HARTLEWe've made it very easy in this country for people to borrow money for higher education. For many years colleges and universities have asked the federal government to allow us to deny federal student loans to broad categories of students who probably shouldn't be borrowing. But since the loans are an entitlement to the student, all the school can do is say yes, they are enrolled and the student is entitled to the loan. So we've asked for the authority to say, no, if you need remedial education you shouldn't take out a student loan, for example. We do not have that authority.

HARTLEWe've also seen a huge rise in private lending. Banks now make loans to students to enable them to go to college. And because student loans can't be discharged in bankruptcy, it's a pretty good investment for the bank because they will get their money back. And once again, we believe...

REHM...from the federal government.

HARTLENo. The private loans are -- the student will have to pay...

REHM...somehow.

HARTLE...even after the debts have been discharged through bankruptcy they're still on the hook for that student loan.

REHMI see. I see.

HARTLEThey could wipe out their home mortgage. Can't wipe out their student loan. And we think that student loans out to be dischargeable under bankruptcy law because that would discourage lenders from making large loans to students who, as Kevin noted, may not realize what they're getting into.

REHMAnd at the same time you've got government interest rates on student loans having gone up because the senate refused to do anything about that. Where is that headed, Kim?

CLARKI don't there's any evidence that there's compromise in the works. Kevin can correct me. But I wanted to point out that the one advantage of the federal student loan is they have a wonderful program called income-based repayment. So if you stick with the federal student loans, you don't have to try to predict how much you're going to make when you graduate because you'll only pay -- I think the current rate is about 10 percent of your disposable income after you graduate. So it's a terrific program and it reduces the risk on students.

REHMAll right. To Pensacola, Fla. Hi, Rene.

RENEOh, Diane, thank you so much.

REHMCertainly.

RENEI don't even know where to begin. I just -- I love you so much. I love what you bring to the table to seize every day.

REHMThank you. Thank you.

RENEThere's so many comments, but I think the most important one is this. I teach reading skills and developmental study at our local community college. We just went four-year with two four-year degrees. We've been challenged by the Rick Scott administration to keep a degree at $10,000. I don't know how they're going to do it if they think that computerized classes are going to be it because it works beautifully with math and science. They never change. But I teach reading skills in prerequisite classes where people have tested and need these skills. They don't call them remedial anymore.

RENEBut my skills are critical thinking skills. And my students are struggling with these -- we call it the redesign. The classes -- put them in front of a computer and they -- when they say they're not self teaching, they are self teaching because they're trying to put -- there's so many points -- so many things that are wrong with it. But my students need a voice. They need somebody reading to them. They need to be listened -- they need to hear the spoken and read words.

REHMAll right, Kevin.

CAREYWell, the use of technology is going to vary tremendously among different kinds of subjects.

REHMOf course.

CAREYAnd there are -- we have a long ways to go to improve these things. There should be a lot of research around these. We should be gathering data about what kinds -- how much students are learning. I think colleges should have to assess how much their students are learning and report that information to the public. So when people are making the kind of informed choices that we're forcing them to make, it's not just about how much money they're going to borrow, but also how much they're going to get in return.

REHMSomeone has sent an email. Matthew says, "How do MOOCs factor into lowering the cost of education? Can they be part of the solution and define them, please."

CLARKRight. Okay. So MOOC is a wonderful acronym that stands for massive open online course. And they have just exploded in the last couple of years.

REHMYes.

CLARKActually the last 18 months. I mean, I think there's something like 4 or 5 million people just taking Coursera courses. And there's another organization called edX and some others. But almost no students are taking these for credit, even though credit is now available. And it's a big puzzle. I have -- I actually took a MOOC and I never finished the final exam because I was busy. And there's no one -- there was no one sort of encouraging me...

REHM...pushing you on.

CLARKRight. So, I mean, this idea that these...

REHMWhat was the course in?

CLARKI took a MOOC on online courses. I wanted to...

REHMI see.

CLARKSo -- but it was a great course. I enjoyed it a lot. And it's not a failure that I didn't finish the course. I learned a lot, but...

REHMAnd there was no charge for it.

CLARKRight. They're wonderful. You can take Harvard courses for free, MIT course for free, Duke, Stanford.

REHMSo how is that likely to change the picture?

HARTLEIt's too soon to tell. MOOCs have been around a couple of years. They have, as has been noted, grown very rapidly. Large numbers of students take them. Most students don't complete them. But they've certainly become a very big force in the educational universe.

REHMBut they've got to find a way to have these paid for at some point, don’t they?

CLARKYeah, they do. It's a real challenge right now. Coursera is using students' performance on the courses to sell that information to recruiters. So that's one way they're trying to make money. So they're thinking of new ways.

REHMInteresting. And you're listening to "The Diane Rehm Show." To Arlington, Texas. Hi there, Gary.

GARYI have an interesting perspective. My mother-in-law and father-in-law both are professors at UTA, University of Texas at Arlington. My mother-in-law left the teaching profession to become an administrative assistant to the chancellor. So I have an inside amusing picture of how much money the administrators make now. It's pathetic. It's sad. The inflation of the administration program, the blossoming as we, in the family, jokingly call the ivory tower, makes you sick.

GARYThe folks live like royalty and yet they're selling a dream to thousands of students that a degree will get them a job.

REHMNow that is one end of the spectrum, Kevin.

CAREYWell, we should know whether people with degrees get jobs or not. Right now the federal government is starting to gather information about programs at for-profit colleges to just gather and publish basic facts like how much money do people who graduate from this program make? Are they able to pay their loans back? What we ought to do is expand that same system of gathering and publishing this information to all program, whether for profit or nonprofit.

REHMTerry.

HARTLEThe federal government is indeed starting to do that with some programs. It's not just for-profit schools. It affects an awful lot of community college programs as well. The challenge is doing this and doing it well. You have to bring an awful lot of data together. You need data on students, you need data on student incomes. That usually means some sort of a big national database. And there have been reservations about doing that.

HARTLECongress, a few years ago, said there will not be a unit record database that would allow you to collect this information. So it's proved challenging because of privacy concerns to put this information together.

REHMAll right. So finally if, in fact, tuition has gone up in the last 30 years given the current situation, the questions regarding, is college worth it, do you expect tuition to continue to climb? How about you, Kevin?

CAREYI think it will continue to climb in the short and midterm, but beyond that, I do think that there's going to be a major technological disruption of higher education. I think the MOOCs are just the first sign of that. It's a classic unsustainable trend. Eventually people will run out of money. There won't be enough money in their pocketbooks. There won't be enough money in the government coffers in order to afford 30 more years of this kind of uncontrollable price spiral.

CAREYThe challenge is making sure that that day of reckoning comes in a way that doesn't hurt the most vulnerable students in society, and actually opens up educational opportunities for them.

REHMKim.

CLARKI agree. I think that the trend is currently absolutely unsustainable. And actually we -- to end on a hopeful note here, there have been a growing number of schools that are announcing tuition freezes, especially in the Midwest, Nebraska, Wisconsin, Minnesota, Indiana. I think schools in those areas have frozen tuition for this year. So there is hope that maybe schools are finally realizing they've sort of hit the ceiling.

REHMTerry.

HARTLEI think current trends are unsustainable. I don't know anyone in higher education who thinks that they are. In the short term, state budgets are getting better. Typically in that circumstance states invest more money in higher education, tuitions increase moderately. And I think we will certainly see that in the years ahead. Long term, I think Kevin's right, the technology will play a very big undefined role in higher education.

REHMTerry Hartle, senior vice-president of the American Council on Education. Kim Clark, senior writer for Money magazine. And Kevin Carey, director of the Education Policy Program at the New American Foundation. Thank you all for being here.

CAREYThank you.

HARTLEThank you.

CLARKThanks.

REHMAnd thanks for listening. I'm Diane Rehm.