New Jersey Gov. Chris Christie (R), who is running for president, said that he would like to see colleges unbundle tuition in an interview on Morning Joe on Monday. He said he would like for students and their families to be able to pay for tuition based on what they would like to pay for:
I just paid the bills, I’ve got two in college. Between Princeton and Notre Dame this year it’s $122,000 for the two of them. Secondly, here’s what I’ve suggested out there that we need to do on this, Joe, is we’ve got to make these guys accountable. Have you ever seen a more opaque bill than the college bill? It’s three lines. Tuition, room and board, other fees, $62,000. If you got a bill like that at a restaurant, if you went to a restaurant and had $150 and it just said food, $150, you’d send the bill back to the waiter and say tell me what I’m charged. But instead we, who pay college costs, those three lines, we write it. They should have to detail what they’re spending their money on and secondly, they should be able to unbundle it. We should be able to pay for the things we want to pay for. The reason these costs go up so much is there’s no market test on college tuition.
A few entrepreneurs and policy wonks have argued for unbundling college costs for a while. Robert Litan, nonresident senior fellow at The Brookings Institution and chief economic adviser to Patent Properties Inc., compared university costs to companies challenging major cable companies by unbundling cable packages. Michael Staton, cofounder and CEO of Uversity, a student engagement software company, which was acquired by TargetX, made a similar case in a 2012 draft paper for The American Enterprise Institute:
And some of those components will be much more readily unbundled than others. While it is amusing to think of the spinning off of athletics franchises or dining halls, here I’m going to hone in on the “value added process” job of a university: to serve students. The assumption embedded here is clear: even this value added process can and will be unbundled.
There have been a few critiques of unbundling, one being that students don’t pay for individual classes or professors, they pay for the brand of the university, and often, more expensive colleges are seen as more valuable, as Derek Newton writes in The Atlantic. Newton points out that schools could lose funding for less popular and profitable courses and students may lose a well-rounded education. Another perspective is that the upper middle class will always buy in bundled form. It’s poor students, writes Daniel Luzer in The Washington Monthly, who have traditionally paid and will continue to pay for their college costs this way, not because it’s innovative and competitive, but because the institutions have failed to offer them an affordable education:
In truth, unbundling isn’t about technology; it’s about resource priorities. It’s not that people are seeking out online education because the technology is so magical and wonderful that everyone flocks to it. No, it’s because since 1980, inflation-adjusted tuition at public colleges has more than tripled. People are seeking out online education because the United States increasingly fails to makes real college affordable to working people.
Of course, one winner in the unbundling of universities would be tech companies, which already play a major role in the unbundling of higher education through Massive Open Online Courses at prestigious universities. Although these courses have been touted as revolutionary for low-income students, the students who take them are more likely to live in high-income neighborhoods. Many low-income students already take online classes at for-profit colleges, which can actually be more expensive than comparable colleges, have poor completion rates, and often provide less career opportunities after college.