The real cost of college education
Every year, fewer high school graduates are going to college. Anecdotal evidence suggests that dire economic straits are forcing certain high school graduates to find a paying job wherever it might be. For a number of reasons, higher education is proving to be a less than ideal life choice.
The new K-to-12 senior high school curriculum attempts to alleviate this situation by enabling the young learners to acquire specialized skills and competencies to improve their employment readiness, whether they decide to go to college or not.
The irony of it all is that investing in a college education is precisely the key to better careers and broader life choices. Unfortunately the need for access overshadows the imperative for quality, which in turn presumes judicious public spending.
Tereso S. Tullao Jr., director of De La Salle University’s Angelo King Institute for Economic and Business Studies, differentiates basic education as a “social good.” This is easy to visualize: In 2015, the term “high school graduate” applies to a distinct social sector. On the other hand, Tullao points out that higher education’s benefits accrue primarily to the individual.
Based on their responses, 56 percent of parents of high school students enrolled in the Department of Education’s City Schools divisions in the National Capital Region would like their children to go to college, earn a degree and embark on a professional career. In the vernacular, these young men and women are called “titulado,” an individual distinction that sets them apart from other members of society.
Just last Aug. 4, Tullao and his research team presented the major findings and policy recommendations of their recently concluded study, “Costing and Financing Philippine Higher Education.” The study was commissioned by the Philippine Business for Education and funded by USAID Philippines. (The other members of the research team are Christopher James Cabuay, Emmanuel Garcia, Dustin Timothy Ang and Rosanina Sayoc.)
The research team was tasked to outline the cost of higher education in terms of instructional costs, indirect costs, other educational costs, and opportunity costs, and to propose measures for government intervention to increase access to higher education as well as address issues of quality, relevance and effectiveness.
Using data from the 2014 and 2015 national budgets, as well as enrollment and graduation figures and average retention rates, the study found that the government shoulders the largest part of the cost for mid-cost state universities and colleges. Meanwhile, the Commission on Higher Education’s faculty database for AY 2012-2013 revealed that the highest teaching cost per unit per student across regions is in the National Capital Region, the P702-P1,319 range assuming 30 students in a class, and the P534-P989 range assuming 40 students. The lowest teaching cost is in the Autonomous Region in Muslim Mindanao, at the P248-P364 and P186-P273 ranges, using the same class-size assumptions.
The study found that out-of-pocket (OOP) expenses have changed minimally over the years. The allowance of students away from home account for 65 percent of total OOP expenses; school supplies, 18 percent; and books, 11 percent. The average total OOP expense ranged between P1,413.33 in 2003 and P1,958.82 in 2009. This is the amount that families spend within six months in addition to tuition, which, the study found, was significant enough to discourage parents from enrolling their children in universities or colleges away from their town or city.
Finally, the study found that the opportunity cost of higher education, or the foregone income of an individual who had gone to college rather than worked after high school, is still relatively high at P49,537.87 per year. This amount, which is at par with the average tuition in private higher education institutions (HEIs), may thus further deter parents and students from seeking tertiary education.
The study also found that basic education continues to receive the lion’s share of the DepEd’s budget—P309.5 billion in 2014, compared to the P38 billion allotted to CHEd and Tesda (Technical Education and Skills Development Authority).
“Aside from widespread poverty, a significant distortion includes imperfect capital markets that limit individuals’ access to credit. Thus, many poor yet competent students are unable to reap the potential returns of higher education,” the research team said.
It added: “[Government] also has a stake in enhancing the social contributions of HEIs by improving the country’s educational infrastructure. Governments primarily intervene through various forms of financial assistance to allow poor but qualified individuals access to higher education.”
Pursuing a college degree doesn’t have to be an “either-or” scenario. As the late Prof. Mario Taguiwalo once said: “Education is about constantly and continually improving how Filipinos learn and how Philippine institutions and social processes help Filipinos learn, or how well our society’s learning systems operate to form every Filipino fully. Education reform is not just about giving people fish or even teaching them how to fish; it is about improving the whole environment for helping people secure food from the sea on a sustainable basis.”
Butch Hernandez ([email protected]) is the executive director of the Eggie Apostol Foundation and education lead for talent development at the IT & Business Process Association of the Philippines.
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