The Craigslist Precedent

You know those moments when you say something and the room stops?

At the Rural Talent Lab conference last week, at one point, the MC started calling on people to get their spur-of-the-moment thoughts on what they had heard. I was one of the lucky winners. I hadn’t prepared anything, so I went with the first thing that came to mind. Judging by the responses it got, there may be something here, so I’ll shamelessly use this platform to workshop it.

For context: At my previous community college as well as my current one, dual-enrollment classes run in high schools are typically on the “parent pay” model and at a significantly discounted rate. (We have a grant this year for some targeted scholarships, but as of now, it’s the exception.) Dual enrollment has been the fastest-growing area of enrollment for a while.

I compared the economic effects of dual enrollment on colleges to the economic effects of Craigslist on newspapers. Craigslist allows people to place ads for free online. That siphoned away people who formerly paid for classified ads, which were major revenue streams for newspapers. When that ad revenue dried up, many newspapers tried to make up the difference through spending cuts. Spending cuts led to declining readership, which led to more cuts, until many of them either went out of business or became shells of themselves.

Colleges have long used gen eds as profit centers, with the surplus revenue they generate helping to offset the losses in more labor-intensive courses. A psychology class may have 30 students in it and not need any specialized equipment; a welding class requires quite a bit of specialized equipment and has to be much smaller. Profits from the former can offset losses from the latter. In the metaphor, gen eds work like classified ads.

Dual enrollment has largely focused on gen eds. That makes sense, given the equipment needs of many specialized areas. But for colleges, that has led to revenue declines in their profit centers. At the same time, in service of political and cultural demands, colleges have been expanding their vocational offerings, which are much more expensive to run.

If you shrink your profit centers and grow your loss centers, what do you think is going to happen? Over time, the budgets get out of whack, which can lead to self-reinforcing spirals of cuts. My own state has already seen multiple closures of public college campuses, including one in my own county.

This isn’t an argument against dual enrollment. It’s an argument for changing our business model.

When I raised this at the conference, some folks from other states mentioned that their state doesn’t use a “parent pay” model. Instead, the state reimburses the college at its regular tuition rate. That, alone, would be a game-changer. Not only would it make the institution more sustainable, which is useful, but it would open up the option of college credit to more students. Talent and parental income are not the same thing; taking the latter partially out of the picture should allow more of the former to shine.

Ideally, of course, we’d use public appropriations to cover fixed costs, so tuition would only have to cover variable costs. If tuition is less relevant, then tuition discounts are also less relevant. The catch is that legislators prefer user fees over universal support, on the theory that voters blame legislators for taxes but blame institutions for fees.

Some states give community colleges local monopolies on offering dual enrollment. (My own state allows both public and private four-year colleges to offer it.) In a laissez-faire setting, some schools use DE as a loss leader, effectively setting off a race to the bottom. The local monopoly is much less preferable to making tuition less relevant in the first place, but at least it would stop the most egregious abuses.

My fear is that in the absence of some sort of meaningful structural change to the business model, we’ll follow the trail blazed by newspapers 15 years ago. We’ve seen what happens to a polity without robust journalism holding the powerful to account; I don’t want to see what happens when we sacrifice the productivity of the next generation just as the ranks of the retired hit new records. Educational access at scale requires public support, particularly if we’re going to need new welding bays. No disrespect to Craigslist, but we can do better.